The financial health of charities and other voluntary sector organisations is being put at risk by the re-tendering of social care services, according to new research.

The financial health of charities and other voluntary sector organisations is being put at risk by the re-tendering of social care services, according to new research.

A report by the University of Strathclyde's Scottish Centre for Employment Research and commissioned by the Voluntary Sector Social Services Workforce Unit also found that re-tendering of services was damaging staff morale, and forcing some highly-motivated staff to leave, ultimately undermining the quality of services.

Three voluntary sector organisations which had recently been involved in re-tendering exercises with local authorities were chosen as case studies for the research. Report authors Dr Ian Cunningham and Professor Dennis Nickson assessed the impact re-tendering had on staff and their commitment and examining the implications for service planning in Scotland.

Dr Cunningham said the research had been prompted by anecdotal evidence about the financial pressures on the sector and claims that charities were effectively being asked to subsidise public services.

"Our research found evidence of a highly motivated workforce, with staff prepared to work over and above their contracted responsibilities to meet the needs of care users.

"But the challenging financial environment in the voluntary sector has significant implications for social care workers, including the continued undermining of their terms and conditions of employment.

"Our interviewees also expressed significant concerns about undercutting among care providers and an emphasis on cost in determining which organisation won tenders - a process which can lead to a breakdown in relations among the sector."

The response wasn't all negative, with some staff recognising that tendering could be beneficial if a failing or jaded service could be refreshed as a result.

But some of those taking part suggested that the whole character of the voluntary sector was changing as a result of tendering, with an element of ultra-competitiveness' being encouraged by tenders. "One told us it was like being in Wacky Races, but you're not allowed to be Penelope Pitstop. You have to be Dick Dastardly, throwing tacks under the wheels of your competitors," Dr Cunningham said.

"But that kind of joke hid serious concerns about the cost of the process, and the services that might otherwise be spent on, and the potential of losing highly motivated staff."

Some staff, whose jobs had been transferred between voluntary organisations under TUPE rules, as a result of a change of ownership in a contract, felt powerless - as if they had been made to hand in their notice, he said. Some wondered if this was now going to happen to them every three years.

The financial impact on voluntary organisations which lost tenders could be huge, he said, but an organisation winning a bid could face problems too. "The receiving organisation often had to embark on a lot of care of incoming staff," he added.

The report claims that emotional and motivational upset in organisations can be so significant that line managers should be given support to help them cope with the fall-out.

Prof Nickson said tendering could sever relationships between support workers and carers that had often been built up over significant periods of time. Staff were often shocked and disappointed to discover that their services were being put out to re-tender.

"Many employees expressed dual concerns regarding their employment security and the wellbeing of service users," Prof Nickson added. "It is important that policy makers continue joint working with the unions at national level to campaign against the worst consequences of re-tendering."

The report says the needs of service users and their families shouldn't be forgotten and recommends that local authorities give them more information during re-tendering exercises. It also suggests they should be given a greater voice in whether services should be re-tendered at all.

Judith Midgley, director of the Voluntary Sector Social Services Workforce, said: "The voluntary sector relies on a hugely committed workforce to deliver services to some of the most vulnerable members of our community.

"Our report has shown that re- tendering of care services can significantly undermine the dedication and motivation of hugely skilled staff.

"We would urge employers and policy makers to consider the recommendations made within the report to help maintain high standards among the voluntary social care sector."

Cunningham said further research was necessary on the differences between councils and the way they handle tender exercises.

• Visit www.ccpscotland.org/workforceunit/