Why is there a ‘top-slice’ at a cost to my organisation?
A small proportion of any contract funding needs to be allocated to the consortium’s central management functions (the hub) and this is what the top slice pays for. These functions include bidding for contracts, contract management, financial management etc. Without these functions the consortium wouldn’t be able to operate.
The vast majority of the funding (95-90%) will be distributed to members to deliver frontline services on sub-contract and only a small amount (5%-10%) retained. This is part of the founding members’ commitment to ensuring that as much money as possible gets through to the frontline and especially vulnerable and disadvantaged service users, and this, in turn, will be essential in the current climate of austerity and rationalisation.
Of course, this top slice is only applicable if you have secured a sub-contract in the first place (you wouldn’t pay it otherwise).
Also, there will be a commitment to outsourcing consortium management functions, where feasible, to the consortium members and thereby reinvesting the top slice monies into the membership (see point below).