30 June 2006
For the Labour government, charity began – and ended – at home. Or the Home Office, at least, where its charitable and voluntary sector policy largely gathered dust after 1997.
Recently the sector was belatedly identified as a vehicle for delivering personalised, improved and cost-effective public services and was moved to the new Department for Communities and Local Government.
Last week, Prime Minister Tony Blair outlined his master plan to devolve increasing responsibility for service delivery to the private and voluntary sectors. Speaking on June 22, Blair said they were often better positioned to provide services to 'hard to reach' groups, such as people with disabilities.
It is a view endorsed by the Conservative chair of the Local Government Association, Sir Sandy Bruce-Lockhart, who welcomed the initiative as a 'self-generating force for physical and social renewal'.
Consequently, what was once a marginal home affair has become a major tenet of the government's public service reforms. Blair's plan is, of course, cross-departmental, and boosted by a bespoke third sector minister: the Cabinet Office's Ed Miliband.
But even a cursory glance at proposals to use voluntary groups to run community hospitals, help incapacity benefit claimants into work and deliver more social services reveals that the DCLG and local authorities are crucial for the policy's success.
However, DCLG ministers are under no illusions about the challenge. Local government minister Phil Woolas told Public Finance that councils' use of the third sector is varied. 'Some councils are very good at it, others are appalling,' he says.
That's not yet a major problem because, outside of the housing sector, just 2% of public spending involves charitable or voluntary organisations.
But Blair wants that to rise significantly. So how will this be achieved when Whitehall wants to be less prescriptive to local authorities? Woolas says the answer lies in councils focusing on outcomes linked to public satisfaction and a simultaneous 'loosening of town hall reins'.
'The government has put a huge amount of extra money into councils – 40% extra in real terms – and the Audit Commission says that councils have improved their services. But the public's satisfaction and expectation has got worse. However, where you have services delivered by charities… then satisfaction levels go up,' Woolas claims.
Longer-term funding is also central to Whitehall's improvement plan. As part of wider DCLG plans to provide three-year financing to local authorities, councils will be expected to plan, on a rolling three-year basis, third sector funding commitments from 2008.
But herein lies the paradox. Woolas says that if he is simultaneously asking councils to be more efficient and effective with their cash, and to plan three-year settlements, then economies of scale must emerge.
'If you do it by economy of scale, then you may damage local communities and you may damage the voluntary and community sector,' the minister acknowledges.
One solution could be to give greater powers to larger charities. Woolas cites Groundwork UK – a federation of local and regional trusts that have pooled expertise and resources at regional levels – as a potential blueprint.
But more familiar hurdles also exist. One is the charitable sector's poor procurement record.
Launching a review of the £220m 'community equipment' market last week, Blair suggested that having better knowledge of local markets allows the third sector to be more flexible.
But Woolas is less sanguine. 'I'm worried about the procurement process. I think the private and voluntary sectors are not getting as a good a deal as they could,' he warns.
Privately, ministers believe that local bodies are hindered by European legislation and procurement 'tick-boxing'.
Blair has promised to break down barriers to the private and voluntary sectors' ability to compete for contracts, and Number 10 last week told PF it could review the legislative framework shortly.
But Woolas adds: 'We can't on the one hand say that we're devolving power and then legislate to say “this is how you should do it”.'
He argues that 'a change of local authority management culture is also crucial'. The biggest step towards that is a 'double devolution' of power: councils helping to create effective local professional bodies representing the third sector.
Charity may traditionally begin at home – but it is quite decidedly moving into local public policy.
PFjun2006
