Joining up with the third sector can help local authorities to provide good services on shrinking incomes. But, as ever, there are risks as well as rewards, says Andrew Jepp
Spending cuts have now become a harsh reality for local authorities, which must somehow find ways to provide the same volume and quality of services for a fraction of the budget. One way of doing this is to join up with charitable and social organisations to form mutually beneficial ‘civil society’ partnerships.
The Compact between the government and the third sector in England, which sets out shared principles and guidelines for effective partnership working, notes that the expertise of voluntary organisations will be essential to tackle the social and political challenges facing local government.
Councils will gain from the specialist expertise and community knowledge of charities, which in turn will have more direct involvement in and influence on local government decision-making.
But, as with any partnership, collaboration also brings risk and dilution of control. If these relationships are managed poorly and in isolation, they could be a source of considerable risk.
Carving a more prominent role for voluntary organisations in frontline services will need careful management if it is to succeed and if the vision of a ‘Big Society’ is to become a workable reality.
Inevitably, one of the most pressing risks to the security of partnerships is funding. A recent Charities Aid Foundation survey found that 60% of charities feared their finances would be hit in the coming year, with 41% predicting a drop in voluntary donations. This, coupled with the increased demand for their services, could squeeze the resources of many charities.
These concerns are echoed in the Zurich Municipal report Tough choices. It shows that directors of charitable and social organisations feel ill equipped to deal with budget uncertainty when tackling the risks facing the sector.
There are other potential problems. Involving more organisations in individual areas of public service provision ultimately creates more opportunity for a breakdown in communication, performance or resources. It will also add complexity to local supply chains and networks.
To mitigate these risks, councils need to thoroughly map out all their supply chain commitments and communicate them clearly to every level of the organisation.
Furthermore, councils should involve charitable and social organisations as early as possible in the design of the partnership and give them the opportunity to influence the commissioning of services. Doing so will ensure that supply chains are established in a way that will work best for both parties and keep risks to a minimum.
Councils also face risks if working with organisations that lack a history of public service provision or the necessary systems and quality controls. Many charities already work directly in local government and are hugely experienced, but for others teething problems should be expected.
In all instances, communication will be vital to ensuring the local authority is clear on its demands and charities are open about their abilities. Procurement managers working with private sector contractors should be used to discussing risk and allocating it appropriately. They will need to play to the same strengths when working with charities.
Similarly, a well managed tender process and a clear agreement on how outcomes will be monitored and measured before a contract is signed will be vital to ensuring the longevity and security of any relationship.
Collaboration also brings the opportunity for potential savings. And here the principles of good outsourcing management apply as much to civil society relationships as they do to those in the private sector: prudent financial planning, tight contract management and clear communication should be observed.
Charities can bring a wealth of experience, passion and understanding to public services. Only by recognising the importance of civil society collaboration – and some of its unique challenges – can local government hope to reap its full benefits.
The Big Society could represent a huge opportunity for charities and councils to establish a new era of public service provision, but its success will be no accident. It will take active management and constant monitoring by both parties for its mutual potential to be realised.
Andrew Jepp is head of local government at Zurich Municipal
