Closer encounters of the third kind? By Vivienne Russell

14 Aug 08
Voluntary organisations can get to people and places that other service providers struggle to reach. Or can they? The government thinks so but the public administration select committee is not so sure. Vivienne Russell sorts out the fact from the fiction

15 August 2008

Voluntary organisations can get to people and places that other service providers struggle to reach. Or can they? The government thinks so but the public administration select committee is not so sure. Vivienne Russell sorts out the fact from the fiction

Can the third sector really reach places other sectors cannot reach? The government certainly thinks so, and has been pushing for a greater role for the sector in service provision. Ministers extol voluntary organisations' ability to innovate and to get to people who are hard to help or socially excluded.

Indeed, when the cross-party public administration select committee sat down last year to investigate the reality behind the government's rhetoric they heard much anecdotal evidence about the sector's 'Heineken' effect. One example was the social care charity Turning Point. Its chief executive, Lord Victor Adebowale, told the committee that his organisation was able to pull together funds from disparate sources to create a 'bespoke' response to an individual's needs, something the public sector can find tricky to pull off.

'I think that is one of our strengths,' he said. 'I also think that there is evidence from my own organisation that we are able to get at some of those communities that the public sector has struggled to interface with.'

Ann Blackmore, head of policy at the National Council for Voluntary Organisations, concurs. 'A good third sector organisation will be rooted in the community it works with; that may be geographic or it may be by interest group,' she says.

'It should have a greater level of specialism and expertise in its field, it may well have high levels of user engagement in the way that it delivers the service.'

These are persuasive arguments, agrees third sector minister Phil Hope. Partnering with voluntary organisations offers 'real opportunities on the social exclusion agenda', he tells Public Finance. The scale and reach of the sector means it is involved with all aspects of public services, whether it is providing needle exchanges for drug users, helping people with complex needs find work or running day centres for elderly people.

Hope says the people who could benefit most from greater third sector involvement are those struggling to get a job and a home, such as ex-prisoners, people with learning disabilities, those with serious mental health problems and care leavers.

'I want to make sure… that where we've got particular groups of disadvantaged adults, the third sector has an opportunity to do its stuff,' he says.

This growing focus on the third sector has crossed the political divide. The Conservatives got in on the act with their June policy green paper, A stronger society: voluntary action in the twenty-first century. This stated that 'charities and social enterprises can make a huge difference to the effectiveness and humanity with which public services are delivered'.

So when the PASC came out last month and asked where the evidence was to support this view, one was reminded of the little boy who points out that the emperor has no clothes on. 'If the test of distinctiveness is that the third sector offers more specialist knowledge and expertise than other sectors, then we have not been provided with sufficient evidence to prove that claim,' the committee's report said.

'The many fine examples of innovative practice in the third sector do not add up to conclusive evidence that the sector is inherently more innovative.'

Despite some misgivings from third sector leaders – including the chief executive of the Association of Chief Executive of Voluntary Organisations, Stephen Bubb ('Cut to the chase', July 25–31) – this conclusion has been welcomed as providing a much-needed dose of reality into the debate. It is also seen as an opportunity to stop and think through the risks.

Rachael Maskell, national secretary for the not-for-profit sector at trade union Unite, gave evidence to the committee. She says the union has no ideological objection to the third sector providing public services, and acknowledges that it can add value.

'The third sector can travel in places where the public sector can't,' she tells PF. 'But whether you're a social worker working for a local authority, or a social worker working for a mental health charity, you're still a social worker. You're a professional, you'll deliver the best service you possibly can because that's your professional stance. I do take issue [with the idea] that suddenly you move into another sector and you're a totally different being, because you're not.

'There's no harm in looking at how services can be improved, but to say the third sector is going to be all things to all people I just think is slightly naïve.'

Will Werry, chair of CIPFA's Commissioning Joint Committee and another PASC witness, says the report was helpful in setting out what might be achievable in terms of third sector delivery, and pinning down the practicalities behind the ambition.

'The enthusiasts speak of [third-sector delivery] sometimes in a way that I don't think is attainable,' he says. 'What sort of organisations can increase their own capacity immediately to a huge extent? It's just not doable.'

Sarah Wood, director of the Improvement & Development Agency's National Programme for Third Sector Commissioning, also praises the report as helpful and balanced. She agrees that firmer evidence would be useful and has commissioned her own work in this area, asking New Economics Foundation researchers to find facts to back the case for greater use of the third sector.

She says: 'Don't give me soft and floppy things, give me actual case studies that would convince HM Treasury that there's something in this for UK Plc. That's not the whole angle but it is an important bit when it comes to convincing people about the role and worth of the [third] sector. They have to be a bit more hard-headed and business-like as well.'

Even the third sector minister accepts that the evidence is not there at the moment, but says the government is already acting on this. It is investing in the Third Sector Research Centre, to be run by the University of Birmingham in partnership with the University of Southampton. The government's £5m investment is being matched by money from the Economic and Social Research Council and the Barrow Cadbury Trust. The centre will research and analyse the effectiveness and impact of the third sector's work and so begin to build the evidence.

Hope's enthusiasm for the sector appears not to have been dented by the PASC's sobering conclusions and he's quick to see the positives, stressing points of consensus rather than difference.

The committee was mistaken, he insists, to suggest that ministers want a wholesale transfer of services out of the public sector and into the third sector.

'That's never been our aim,' he says. 'Our aim has been to create genuine partnerships between the public sector and the third sector, so each does what it does best and gets the best out of the other. It's a very different concept.

'It's not transferring services, it's about transforming those services in whatever shape the partnership, based on the needs of the user and on what works, can deliver. So, when [the PASC] said there's not been this massive transfer, well, obviously, because that's not what we're about.'

It would be misleading to suggest the committee poured cold water on the whole idea of greater third sector delivery. Indeed, it found much to admire in the sector and called for a mixed economy of provision. But the MPs suggested the government was approaching the problem from the wrong end. Rather than identifying the general virtues of the sector and using it to justify significant policy changes, it would be better to identify the needs of particular users and then work out which organisations are best placed to meet their needs. This 'intelligent commissioning' should be the way forward, and it is attracting support.

Blackmore agrees the starting point should be commissioners thinking through very carefully what outcomes they want to achieve. 'Public sector commissioners need to be better at thinking through what value it is they want,' she tells PF. 'If you want social and environmental benefits, you have to make sure you commission for those.'

Improving the public sector's commissioning function is a central plank of the government's strategy to boost third sector input. Commissioners need to realise what is out there, Hope says. 'If they commission well, they can tap into ideas, resources, new forms of practice, innovation, that haven't been tapped into before because they didn't know about it.'

The government has provided a range of sticks and carrots to promote greater third sector input. For example, two of the 198 national performance indicators for local government are focused on third sector issues. National Indicator 6 examines local participation in volunteering, while National Indicator 7 considers whether the local environment supports a thriving third sector.

Government departments, including Work & Pensions and Health, and agencies, such as the Probation Service, are also developing or have developed strategies for involving the third sector.

'Part of my job as minister for the third sector is to make sure that each of those departments is rightly placing the third sector at the heart of its strategy,' Hope says. 'I call it mainstreaming. It is about making sure that each government department, when it is thinking about the public services for which it is responsible… [ensures] that there are the right levers in place to create at the very least a level playing field for the third sector.'

Another major strand is Wood's national programme for commissioners, which runs three-day training events. Hundreds of commissioners from across the public sector have been put forward to participate in the course, which aims to bust myths about the third sector and provide practical examples of obstacles and how they can be circumvented.

Wood says: 'What I'm looking for at the end of the process is some evangelists who'll go back into their organisations and say, “This is one of the many tools that you have when it comes to commissioning. Don't forget it, use it, here's what it can do for you”.'

One public sector professional who has taken part is Amanda Dunn, lead commissioner for mental health at Suffolk County Council. Dunn told PF the training provided a useful opportunity to share experiences.

'We were with a mixed group, across health, social care and the third sector, a group of people we haven't worked with,' she says. 'We were able to have a discussion about the issues we'd had, the issues they'd had, what had been a good way of working through them. The opportunity to talk through this seriously was really helpful.'

Dunn says she needs no convincing of the value that can be brought by the third sector. Suffolk has a long and successful history of partnering with voluntary organisations to provide mental health services such as housing and community support.

The relationship has evolved over time, Dunn explains, and some very creative and innovative services have emerged. But, she adds, times have changed, and procurement rules, both local and European, mean that funding relationship is no longer sustainable.

'Regulations require us to run an open and fair competition,' Dunn says. 'But there are ways and means of doing that that make it easier or harder for different people to take part in that [competition]. I think it's only by discussion with a full range of providers, both in the third sector and the private sector, about how we do that that we can actually get the best out of the process.'

The harsh realities of the commissioning process could create a tension with the government's ambitions for the third sector. Dunn says all the council's mental health services are currently out to tender and there are 'no guarantees' that third sector organisations will win the contracts just because they have been the historic providers. 'It could be anyone who could come out,' she says.

This is also trade unions' concern. Unite's Rachael Maskell says: 'My fear is that the third sector is going to be abused as a Trojan horse for private enterprise to pick up these contracts, which we know it's been champing at the bit for a long time to do.

'Certainly we're seeing a lot of the small [third sector] organisations go out of the market altogether. They don't have the capacity and they can't afford to put the work in.'

There are also major worries about the effects the process could have on the welfare of the workforce and the quality of the service. As third sector organisations scrabble for contracts, costs are squeezed, employee terms and conditions spiral downwards, staff come under ever-increasing pressure and some organisations choose to pull away from difficult areas to concentrate on services that are easier and more cost-effective, Maskell warns.

'What happens about the most vulnerable in our society as a result of this? Are we going to see people start getting a poor service, falling through the net?'

She adds that the training programme is setting out with the right intentions, and hopes these will be converted into practice. If principles of intelligent commissioning are truly applied, then third sector organisations have a chance of preserving their integrity and quality standards, she says.

But 'if it's about cutting costs, cutting corners, the current mechanism seems to suit that quite well'.


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