04 August 2006
The voluntary sector and private providers face many of the same problems in dealing with the public sector. But they are capable – as competitors and in alliances – of greatly improving service provision
In recent weeks it appears that the voluntary sector has become the weapon of choice for those engaged in the ongoing battle over public service reform.
Everybody wants to get in on the act — the prime minister tells the Future Services Network, a body co-sponsored by the CBI, that the voluntary sector is now 'unstoppable'.
His Labour arch-critic and supposed Brownite outrider, Neal Lawson, agrees, arguing that 'diversity, pluralism and voice can be rooted in the wider use of mutual and voluntary providers of public services'.
Meanwhile, David Cameron has ordered all members of the shadow Cabinet to get their hands dirty through a day of work with the voluntary sector.
The three have different motives. Undoubtedly Blair sees the voluntary sector as a way of sweetening the pill of public sector reform; Cameron probably sees the voluntary sector as in keeping with his shift towards the centre ground. The Left just want ways in which to keep the private sector out.
But all three are essentially chasing a mirage. It's not that the voluntary sector cannot deliver public services — it certainly can, although there is often a question of capacity. What's at issue is the idea that there is some special voluntary sector problem that is blocking it. There isn't.
The issues that non-profit organisations face are, bluntly, the same as those experienced by the private sector. Policy-makers need to face up to that reality.
For sure, voluntary sector organisations often get the rough end of the stick — private providers with shareholders to satisfy would simply refuse to tolerate the idea that a shortfall in funding could be made up from donations.
But the landscape is just the same. The non-profits complain of short contracts that don't leave enough time for them to invest, of contracts that unreasonably push all the risk and many hidden costs on to them, of being forced to pay through delay and cancellation for the public sector's lack of expertise in procurement and commissioning. All of these pitfalls and hurdles are also all too familiar to the CBI's member companies.
For all these reasons and many more, the CBI strongly supports opening up markets to voluntary sector providers, because we know it will increase competition, drive up quality and make public sector commissioners face up to their responsibilities.
We also want to see new partnerships between the private sector and the broader third sector. We don't accept that third-sector providers are automatically closer to their users but we do think they can be or can have an important role as the voice of consumers.
But we also have to recognise that, increasingly, voluntary sector providers are going to be the competition in terms of service provision. And that can only be a good thing.
Private prisons have proved themselves to be 20% cheaper than the traditional public sector and, more than that, they have actually treated prisoners better. In an era of 'get tough' messages on crime there aren't many politicians boasting about that but most know that rehabilitation is more likely to be effective if offenders are treated with humanity.
We could bring some of that sort of impact to the care of offenders and protection of the public outside prison too, if the government would finally get on with the job of opening up the National Offender Management Service's contracts to competition. And, crucially, we could be making the very best use of voluntary sector expertise too.
But we need to do more than just expand existing markets. Ministers should have the courage to ask the voluntary and private sectors what ideas they can bring to wider areas of public service provision.
Even in health — where ministers have shown a willingness to challenge the status quo — reforms have so far only begun to scratch the surface. For example, too many people are still left with second-rate GP services that are based on a nineteenth-century model — a poorly capitalised partnership based in a converted house.
Merely challenging the cosy cartels of doctors that operate in so many parts of Britain is likely to bring quick results; where new providers — perhaps formed on the basis of alliances of private and voluntary bodies — enter the market the effect is likely to be greater still.
In short, a radical approach to the involvement of the third sector would be to the advantage of us all.
Sadly, until now, the government has seemed afraid to make the move. If it doesn't do so, all the talk of the unstoppable momentum behind the voluntary sector amounts to little more than hot air.
Neil Bentley is director of public services at the CBI
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