This page is part of our decommissioning toolkit.

There has been much work undertaken in recent years to improve the level of engagement between commissioners and providers. The Compact – an agreement between Government and the third sector in England– provides a strong basis for achieving this. The relationship between local commissioners and third sector organisations (TSOs) in their area will often be underpinned by their own Local Compact as well.

However, the Compact is not always used appropriately and is not as embedded in local relationships as it could be. Our research included some people who viewed the Compact as irrelevant to decommissioning and others who viewed it as a potential barrier to effective engagement, even leading at times to adversarial relationships. However we also found that the Compact can be an effective tool for both commissioners and TSOs to address many of the challenges associated with decommissioning.

This practical example illustrates how Compact working can help manage cuts in a collaborative way. It also highlights that this cannot happen overnight: it can only be achieved if the relationship between local third sector organisations and the local commissioner is underpinned by good practice in partnership working, which the Compact is able to shape.

Practical example – Managing funding cuts together


In a local authority area there are good working relationships between the statutory sector and the third sector. Building relationships between statutory and third sector organisations follows the principles of joint working set out in the local Compact and the area has won several awards for its successful Compact working.

What happened?

When significant cuts to budgets were widely expected, the local council, the local CVS and wider third sector organisations decided to use the Compact as a framework to guide how the council and its statutory partners approached the cuts. As a result, there were a range of local initiatives, involving the council, statutory agencies and TSOs, to explore how to mitigate the impact of potential budget cuts on local communities. For example, a half-day conference was organised to identify key problems and discuss priorities.

The council worked with the local voluntary and community sector (VCS) infrastructure body and other consultative bodies to ensure that there was continuing dialogue between commissioners and providers. While the area still expects significant budget reduction, there remains a high level of trust between the council, statutory partners and third sector organisations.


This has resulted in:

  • A range of principles being agreed for allocating the reducing funding pots;
  • Greater appreciation by all parties of the funding challenges and more joint working to find solutions;
  • More transparent funding application and allocation processes enabling difficult decisions to be made together;
  • Work between the council and the Compact Funding and Procurement sub-group (which includes TSO representatives) to explore how to improve value for money; and
  • TSO representatives routinely asked to sit on funding panels.

Table of contents

Decommissioning toolkit: Table of contents

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Understanding the role of TSOs

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Good communication