Charities will compete against each other to provide voluntary services under a new commissioning system.

Councillors have approved the shift of two-thirds of Kingston Council's volunteer grants budget - £1m - to its commissioning budget. The overall cash available will remain the same.

But Hilary Garner, chief executive of Kingston Voluntary Action, said: "There's been no evidence that the corporate grants model is broken.

"There's been no rationale or evidence that contracting will achieve better outcomes."

Voluntary organisations may have to pay VAT on their commissioned funding, he said, whereas this was not the case with grants.

John Trend, director of Oxygen, said the move would pit volunteer groups against each other and force them to spend money on competition, rather than front-line services, without a guarantee of success.

He added: "It's fundamentally flawed. A lot of the efforts we've put into working together, to collaborating, to trying to minimise duplication and things like that, all of that is potentially undermined by a commissioning process."

Surrey Comet:

Hilary Garner, left, and John Trend

Councillor Julie Pickering, lead member for voluntary services, said the change was designed to wring maximum value for money from deals in order to meet an "unprecedented" financial challenge.

She said: "What has happened over the years is that we have developed another part of the council that doesn't have the acute commissioners involved at the level that they should be.

"It's about forging that relationship. You need to get the grants closer to where the money is. You can start to co-produce much more effectively. You can commission grants."

She added: "I would like to see the council double the amount of work it commissions from the voluntary and community sector by 2020."

Coun Rachel Reid, who opposed the change, said: "We could potentially lose some of our key teams in the voluntary sector if they are unsuccessful in bidding.

"I fear that pushing through with this process will risk us alienating those we are seeking to support the council and our residents."

The changes were approved after several weeks of consultation with sector workers.

  • What the consultants said

In a press release Kingston Council said that "the majority of respondents supported the proposals to some extent" and claimed its plans were a "more sustainable way of supporting the vital and excellent work of the borough’s voluntary and community sector."

In their report, consultants QA said: "Some participants felt that commissioning approaches had the potential to address service duplication and fragmentation.

"Other opportunities noted included the potential for long-term planning and more sustainability for organisations with longer contracts.

"However, most participants found it difficult to identify the potential benefits of commissioning for their organisations with a feeling that this was something that larger organisations would derive most benefit from.

"The most significant concern expressed by participants was the risk that their organisation would not receive funding under the proposed system and would be at risk of closure as they were squeezed out by larger charities."

However, some groups did not have much experience of commissioning processes, the report said. Representatives of larger organisations were more likely to see the changes as an opportunity.

Possible benefits included consortium bidding and improved accountability, respondents felt.

QA's report added: "A key issue of concern appears to be the perceived lack of, or communication of, the rationale behind the proposals.

"The majority of participants were very concerned about the proposed changes and the potential impact on their organisations.

"There was also discussion within the groups around the recent change in council leadership and it was apparent that this was a period of uncertainty and change for many participants."

There was also a perception that "that the decision had already been made", QA found.