Supporting collaboration between the third and public sectors: evidence review

Findings of research conducted by Scottish Government researchers to better understand current barriers to effective collaboration between third sector organisations and the public sector.

Summary and key findings

This report presents findings of research conducted by Scottish Government researchers to better understand current barriers to effective collaboration between third sector organisations and the public sector – particularly focusing on relationships between the third sector, local government and national government. This research project was guided by the Scottish Council for Voluntary Organisations (SCVO), Third Sector Interface Network (TSI Network), The Convention of Scottish Local Authorities (COSLA) and the Scottish Government to strengthen collaboration between the voluntary sector and national and local government.


This report draws on two sources of data: a rapid review of the existing literature and evidence base relevant to existing barriers to collaboration between the third and public sectors and a set of thirteen qualitative interviews with key stakeholders from four third sector organisations, seven third sector interfaces, and five stakeholders representing local authority perspectives. While the selection of interviewees was designed to give a range of perspectives, the size and diversity of the third sector and the public sector in Scotland mean that a research project of this scale cannot be representative of the full range of views and experiences across those sectors. Given the nature of the collaboration, the focus of the public sector interviews was on local government perspectives, and did not attempt to gather views from across the wider public sector.

Key findings

The rapid literature review and stakeholder interviews highlighted four primary areas that present frequent challenges for collaboration between third sector, local government and national government. Those areas were: funding, meaningful collaboration, procurement and lack of trust, with lack of trust being a cross-cutting concern which affects each of the other identified themes.


Short-term funding

The literature and the interviews identify the current short-term funding model for the third sector as a major barrier to successful collaborative working. Third sector organisations relying on funding from the public sector often receive funding for one year at a time or for specific programmes of work, and do not have certainty that they will receive funding the following year. This creates precarious working conditions for individuals in the third sector, and contributes to high staff turnover and ongoing loss of knowledge and expertise in third sector organisations[1]. Similar issues are experienced within local government, where reducing the size of the workforce has been one of the ways local councils have addressed funding challenges[2]. This leads to increased pressure and demand on the remaining workforce and results in loss of experience and knowledge within local authorities[3].

Both third sector stakeholders and local government stakeholders acknowledged that this is a complex issue, noting that local authorities are constrained by one-year funding settlements from the Scottish Government, which in turn means local authorities can often only commit to one-year funding for third sector organisations. This makes it difficult to build long-lasting relationships or implement long-term strategic programmes of work.

Inflexible funding

Third sector and local government contributors both expressed the view that funding received by third sector organisations and local government is often inflexible, rigidly structured and/or ring-fenced. This poses challenges for organisations to respond flexibly to changes in their operational/delivery context in order to meet the needs of service users and beneficiaries as effectively as possible.

The research identified that reporting requirements on how funding is spent can sometimes be overly complicated[4]. While both third sector and local government stakeholders acknowledged the importance of reporting how funding is spent, they also expressed frustration with complex monitoring, evaluation and reporting requirements. These requirements often demand a lot of staff time and were seen as overly bureaucratic by the stakeholders.

Reductions in funding

An important theme emerging from the interview respondents and the literature was an overall lack of – or reduction in – funding and investment for both local authorities and third sector organisations. Respondents felt that reductions in funding received made it difficult for both third sector and local government to successfully achieve their goals or to work collaboratively. While stakeholders called for increases in funding for third sector organisations, they also acknowledged that it is not easy for local authorities and/or Scottish Government to increase funding for the third sector, in situations where local authorities and/or Scottish Government themselves face budget reductions or constraints.

COVID-19 and funding

Experiences of emergency funds that were put in place by Scottish Government and other stakeholders during COVID-19 were mostly positive, according to the interviewees and the literature[5,6,7]. The COVID-19 emergency funds did not require recipient third sector organisations to provide typical levels of reporting on how the funding was spent, or provide exact plans how the funding would be used in advance, enabling them to be more flexible to respond to the rapidly changing situation, and to spend more time on delivering services. Local authority contributors talked about having flexibility to decide to use some of the emergency funding combined with existing budgets to respond rapidly and effectively to the pandemic.

Funding and trust

These varied issues around funding impeding collaboration between third and public sectors outlined in the literature and stakeholder interviews reflected an underlying problem of lack of trust. Third sector organisations felt that public sector funders were not trusting them, local government stakeholders felt not trusted by the Scottish Government and this lack of trust was reflected in restrictions such as funding having to be spent on pre-specified projects, and extensive monitoring of how the money was spent.

Meaningful collaboration

A lack of 'meaningful collaboration' was the second major barrier to successfully working together that was identified in the literature and stakeholder interviews.

Promoting better understanding between sectors

The research suggests that inadequate understanding between third sector organisations and public sector organisations about the statutory duties and operational challenges that each sector faces can impede meaningful collaboration[8,9,10]. Third sector organisations are not always fully aware of the statutory requirements that local authorities and/or national government are required to operate within. Conversely, local authorities and/or national government may not appreciate the particular challenges that short-term funding creates for third sector organisations, while policymakers may also lack understanding about the third sector and what it does[11].

Promoting equal partnerships

Findings from the research suggest that it is difficult to establish meaningful collaboration if all parties in the collaboration do not feel as though they are equal partners[12]. Interviewees noted that the fact that the public sector awards funding to the third sector can create a power imbalance, with the public sector being perceived to have more power in the relationship. Some interviewees felt that this sometimes created an expectation that the public sector funder might seek to direct the work of the third sector organisations involved, or to make all the decisions around a policy or a project. Instead, respondents felt that third sector organisations should be seen as equal partners with the public sector. Research also showed that third sector organisations expressed frustration about not being listened to by their public sector partners[13], while the public sector can often lack the time and resources required for meaningful engagement with the third sector.

Open communication

Another principle important for meaningful collaboration is open communication between partners. The research suggests that discussing and making clear from the outset what is and is not in scope in a collaboration can help to avoid misunderstandings later[14]. The ability to have open and honest conversations was also raised by many interviewees as essential for healthy partnerships. Honest conversations allow organisations working together to admit that mistakes have been made and discuss what can be done to improve things in the future, without fear of repercussions or allocation of blame.

The research also indicated that a meaningful partnership should lead to partners sharing power and trusting each other[15]. However, despite some positive developments in relation to open communication and working together on shared goals, a number of interviewees expressed frustration about the difficulties of collaborative working when it comes to sharing power.

Building trusted relationships

Findings from the literature suggest that having successful trusted relationships can help partners to overcome some of the barriers outlined above, and those established, trusted relationships can be key to avoiding barriers to collaboration[16]. However, it is important to build institutional collaboration (for example, using Memoranda of Understanding (MOUs) or concordats, where appropriate) that extends beyond personal relationships. Otherwise, there is a risk that when an individual moves to a different post or leaves an organisation, the collaborative working relationship can break down as well[17]. Overreliance on personal relationships is particularly problematic in contexts where staff turnover is high.

Empowerment of communities

Third sector stakeholders said that there is a need for more engagement with communities and small third sector organisations, and particularly a need to support greater empowerment of communities and service users within these relationships[18]. Both third sector and local government interviewees said that giving more power and resources to communities or service users to help themselves was something that the public sector should do more often and more pro-actively.

COVID-19 and meaningful collaboration

Evidence from the research suggested that the public and third sectors were working more collaboratively during the initial COVID-19 lockdown in 2020[19]. A number of interviewees reflected that the COVID-19 pandemic had positively changed their relationships with partners from other sectors. There was agreement among some interviewees that the public sector quickly realised the importance of the third sector as a key part of the pandemic response. Existing relationships became stronger and new ones were built quickly. Moreover, it was also recognised that removal of some of the bureaucratic barriers enabled the third and public sectors to start working together quickly, alongside more joined-up working between sectors.

However, there were concerns that these positive changes arising during the pandemic will not be retained going forward. Interviewees questioned how the more collaborative working approach, increased trust and the feeling of everyone being 'in it together' could be maintained between sectors, with some third sector stakeholders feeling it was not likely to continue.

Public sector procurement and the third sector

Public sector procurement was the third major barrier to successfully working together that was identified in the literature and stakeholder interviews.

Approaches to public procurement

As part of the Procurement Reform (Scotland) Act 2014 Sustainable Procurement Duty, public bodies undertaking regulated procurement, amongst other requirements, are required to consider how they can facilitate the involvement of third sector organisations in their regulated procurements[20]. At the moment, third sector organisations frequently find themselves in competition for the same procurement contracts rather than working collaboratively with each other to achieve common goals[21,22]. Interviewees suggested that more opportunities for collaborative procurement, where local government is allowed more time to prepare tenders and third sector organisations are allowed more time to prepare bids together and apply for contracts as part of a consortium bid, could alleviate this.

Moreover, bidding for public contracts can favour private sector or large third sector organisations over smaller third sector organisations, due to smaller organisations not having sufficient resources to bid for contracts[23]. The research suggested that more flexible and collaborative procurement approaches may be needed in order to further increase successful cross-sector collaboration. Changes to procurement processes, such as making application forms and tendering processes simpler and more accessible could also make a difference[24]. A local authority stakeholder suggested that having engagement officers in local councils who could reach out to local third sector organisations and offer support for responding to tenders could also help third sector organisations. This role is fulfilled to varying degrees by TSIs in some areas.

Competitive tendering

The overarching aim of public sector procurement activity in Scotland continues to be the achievement of value for money for the taxpayer[25]. The Scottish Model of Procurement defines value for money as the best balance of cost, quality and sustainability[26,27]. Moreover, public sector procurement aims to contribute positively to businesses, society and places and communities, as outlined in the Scottish Government Outcomes for Procurement[28].

However, some third and local government stakeholders raised concerns about competitive tendering processes in cases where a disproportionate emphasis is placed on price in comparison with other value considerations. Respondents felt that this can lead to the public sector viewing the third sector as providers of services rather than equal partners[29]. Stakeholders also said that competitive tendering processes could be too long and overly complex. Third sector interviewees said that current procurement practices could be improved to facilitate more collaborative working by using more public social partnerships[30], alliance commissioning[31], grants and direct payments, where appropriate.

A number of third sector interviewees also said that tendered services should focus exclusively on quality and not cost. They did not feel that the implementation of 'best value' was always successful in achieving the right balance of price, quality and sustainability considerations. However, a local government contributor pointed out that constraints on local government budgets mean that even when a local authority would like to tender a service with 100% focus on quality, they are not always able to do that.

Some of the views about competitive tendering were challenged by a local government stakeholder who thought that competitive tendering can provide a fair and transparent opportunity for all organisations to access public sector contracts. While they agreed that price-based competitive tendering can cause problems by driving down prices, they also said that competition in respect to quality is something to be encouraged. Competitive tendering also allows the public sector to demonstrate how they have met their legal obligations around procurement.

Next steps

These research findings will be used to guide engagement with the sector on the design and development of a number of areas of work throughout 2022-2023. These will aim to catalyse and enable positive collaboration, explore practical ways of tackling some of the barriers to collaboration, and focus on learning about what works.

The planned projects include:

  • Working with a range of stakeholders to understand what fair and sustainable funding means across sectors, and to develop a shared understanding of the barriers and enablers to this.
  • Using one Scottish Government funding stream (the Community Capacity and Resilience Fund – CCRF) to test more flexible, trusting and innovative approaches to funding, and learning from the results.
  • Developing a shared understanding of the barriers and enablers of multi-year funding from the perspectives of the third sector, national and local governments.
  • Understanding and building on the results of research into the procurement of third sector services.
  • Developing a knowledge bank on other projects that are underway to reflect on and improve commissioning and procurement across sectors, and share learning.



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