The Third Sector Delivering Public Services: Developments, Innovations and Challenges 9781447322412

Table of contents :
THE THIRD SECTOR DELIVERING PUBLIC SERVICES
Contents
List of tables, figures and boxes
Tables
Figures
Boxes
Series editor’s foreword
Notes on contributors
1. The third sector delivering public services: setting out the terrain
Defining the third sector and public services
The heart of the matter: key themes in third sector public service delivery
Overview of the structure of the book
Part One. Policy, politics and organisations
2. The history of third sector service delivery in the UK
Public services
Changing relations with the state
The Third Way
Conclusion
3. The context for service delivery: third sector, state and market relationships 1997–2015
The policy and practice domain – New Labour and the Coalition compared
Interface with the state
Interface with the market sector
Interface with the informal sector
Concluding discussion: key continuities and changes
4. Which third sector organisations are involved in the delivery of public services? Evidence from charity accounts and from survey data
Introduction
Public funding for English and Welsh charities
Survey data on organisations
Conclusions
Part Two. Cross-cutting issues for third sector service delivery
5. Spinning with substance? The creation of new third sector organisations from public services
Introduction
What is a spin-out?
Starting the spin: recent policy initiatives
Is there substance behind the spin?
Discussion and conclusion: What can we learn from the spin?
6. Capacity building for competition: the role of infrastructure in third sector service delivery
Introduction
Exploring the field: capacity building and infrastructure
Making a capacity building market
Conclusion: a new map of capacity building?
7. The engagement of volunteers in third sector organisations delivering public services
Introduction
Background: sketching out the context
Policy context
Organisational context
Societal context
Insightful experiences: shifting logics shaping volunteering processes
Conclusion: narrower, shallower and more circumscribed?
8. Valuing third sector achievements in a service delivery context: evaluations and social value
Introduction
Evaluations and social welfare in the UK
The Public Services (Social Value) Act 2012
Evaluations and the third sector in the UK
The creation of social value by TSOs
Social value and evaluation methods
Conclusion
Part Three. Service delivery in key policy fields
9. Navigating a new landscape: the third sector delivering contracted employment services
Introduction
The evolution of contracted employment services in the UK: the role of the third sector
Navigating a new landscape of contracted employment: challenges and strategies for third sector providers
Discussion and conclusion
10. From development to delivery: personalisation and the third sector
Introduction
The third sector in social care
Developing personalisation principles
Designing personalisation policy
Delivering personalisation in practice
Conclusion: debating impact
11. The changing role of housing associations
Introduction
‘Distant uncles’ – history and evolution of housing associations
Looking inwards and outwards
Looking outwards by comparisons between fields
Diversification
Independence and the state interface
The recent past and future
Conclusion
12. Talking up the voluntary sector in criminal justice: market making in rehabilitation
Introduction
The voluntary sector in criminal justice
A ‘rehabilitation revolution’?
The voluntary sector and field shaping
Discussion and conclusions
13. Conclusion
The big picture: how does the third sector sit in the contemporary landscape of public services?
Third sector organisations negotiating tensions: the dilemmas of service delivery
Innovation and change: TSOs promoting and navigating new models of public service improvement
The end of the affair? The prospects for the third sector role in public services
Index

Citation preview

challenging book for decision makers, academics and practitioners alike.” Professor John Diamond, Edge Hill University, UK “An   excellent and wide-ranging text which will be a key reference work

for academics studying the role of the third sector in delivering public services in the UK.” Peter Wells, Sheffield Hallam University, UK This important book is the first edited collection to provide an up-to-date and comprehensive overview of the third sector’s role in public service delivery. Exploring areas such as social enterprise, capacity building, volunteering and social value, the authors provide a platform for academic and policy debates on the topic. Drawing on research carried out at the ESRC-funded Third Sector Research Centre, the book charts the historical development of the state– third sector relationship, and reviews the major debates and controversies accompanying recent shifts in that relationship. It is a valuable resource for social science academics and postgraduate students as well as policymakers and practitioners in the public and third sectors in fields such as criminal justice, health, housing and social care.

James Rees is Anthony Nutt Senior Research Fellow at the Centre for Voluntary Sector Leadership, Open University Business School. His research concentrates on the role of the third sector in public service delivery, cross-sectoral partnership, organisational change and the involvement of citizens. David Mullins is Professor of Housing Policy in the Housing and Communities Research Group at the University of Birmingham. His research interests include the role of the third sector and social enterprise in public service delivery.

PUBLIC POLICY / SOCIAL STUDIES

www.policypress.co.uk @policypress

The third sector delivering public services   Edited by James Rees and David Mullins

“ In a period of change and uncertainty this is a timely, thoughtful and

Third Sector Research Series

The third sector delivering public services Developments, innovations and challenges Edited by James Rees and David Mullins

PolicyPress

The third sector delivering public services [HB] [PRINT].indd 1

01/07/2016 15:47

THE THIRD SECTOR DELIVERING PUBLIC SERVICES Developments, innovations and challenges Edited by James Rees and David Mullins

First published in Great Britain in 2016 by Policy Press North America office: University of Bristol Policy Press 1-9 Old Park Hill c/o The University of Chicago Press Bristol 1427 East 60th Street BS2 8BB Chicago, IL 60637, USA UK t: +1 773 702 7700 t: +44 (0)117 954 5940 f: +1 773-702-9756 [email protected] [email protected] www.policypress.co.uk www.press.uchicago.edu © Policy Press 2016 British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book has been requested ISBN 978-1-4473-2239-9 hardcover ISBN 978-1-4473-2243-6 ePub ISBN 978-1-4473-2244-3 Kindle The right of James Rees and David Mullins to be identified as editors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved: no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior permission of Policy Press. The statements and opinions contained within this publication are solely those of the author and not of the University of Bristol or Policy Press. The University of Bristol and Policy Press disclaim responsibility for any injury to persons or property resulting from any material published in this publication. Policy Press works to counter discrimination on grounds of gender, race, disability, age and sexuality. Cover design by Qube Design Associates, Bristol Front cover image: istock Printed and bound in Great Britain by Clays Ltd, St Ives plc Policy Press uses environmentally responsible print partners

Contents List of tables, figures and boxes Series editor’s foreword John Mohan Notes on contributors one

v vi viii

The third sector delivering public services: setting out the terrain James Rees and David Mullins

1

Part One: Policy, politics and organisations two The history of third sector service delivery in the UK Pete Alcock three The context for service delivery: third sector, state and market relationships 1997–2015 Heather Buckingham and James Rees four Which third sector organisations are involved in the delivery of public services? Evidence from charity accounts and from survey data John Mohan and David Clifford

19 21 41

63

Part Two: Cross-cutting issue for third sector service delivery 85 five Spinning with substance? The creation of new third sector 87 organisations from public services Robin Miller and Fergus Lyon six Capacity building for competition: the role of infrastructure 107 in third sector service delivery Rob Macmillan seven The engagement of volunteers in third sector organisations 127 delivering public services Angela Ellis Paine and Matthew Hill eight Valuing third sector achievements in a service delivery 149 context: evaluations and social value Malin Arvidson and Helen Kara Part Three: Service delivery in key policy fields nine Navigating a new landscape: the third sector delivering contracted employment services Rebecca Taylor, Christopher Damm and James Rees

iii

167 169

The third sector delivering public services

ten

From development to delivery: personalisation and the third sector Jenny Harlock and Robin Miller eleven The changing role of housing associations David Mullins twelve Talking up the voluntary sector in criminal justice: market making in rehabilitation Rob Macmillan thirteen Conclusion James Rees and David Mullins

Index

189

211 233

257

277

iv

List of tables, figures and boxes Tables 4.1 4.2 4.3 5.1 11.1 11.2 11.3 11.4 11.5

Public funding Beneficiary group: proportion of organisations who state that delivering public services is a main role Most important function carried out by respondent and proportion receiving public funds The assumed context, mechanisms and outcomes of spinning out Change in concentration of housing association stock ownership, 2002–07 (groups treated as single entities) Stock distribution by size of private registered provider (PRP), 2014 Initiatives contained within each of the neighbourhood services categories Investment to delier neighbourhood services to improve residents’ lives Influences on housing association Community Investment

68 74 76 95 212 213 221 222 223

Figures 3.1 3.2 4.1 11.1 11.2

The welfare triangle The commissioning cycle model Proportion of organisations involved in public service delivery, by Index of Material Deprivation (IMD) Income by other activities State, market and community influences on Community Investment

42 49 80 220 223

Boxes 5.1

Expected beneficiaries of the Right to Request programme

v

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The third sector delivering public services

Series editor’s foreword John Mohan For over three decades in the UK, governments have sought to restrain or roll back the frontiers of the state, and to expand the scope for third sector involvement in the provision of welfare services. Incorporating a broad range of voluntary organisations, legal forms and individual actions, the third sector now occupies a central place in political debate and social policy discussions. Even if the fiscal constraints of the present era were not in place, frustrations with the limits of top-down state intervention on one hand and the social costs of free markets on the other would have forced a critical appraisal of what can be achieved through voluntary initiative. Yet the contours of recent changes in the third sector remain relatively under-explored in the UK. Even delimiting the ‘loose and baggy monster’, as the sector has been characterised, poses considerable conceptual and measurement challenges: these days the monster is a hybrid, if not a Hydra. Assessing its potentially distinctive contribution is equally problematic: the sector symbolises many different things to different people – a space of uncoerced private action for public good, a school of democracy and participation, a source of social innovation, and a cost-effective and flexible alternative to statutory service provision. Finally, whether the third sector can – and should – be enlisted in the service of public policy is also a contested matter, as are the terms under which it may be so enlisted. And does it have a distinctive impact and added value in its own right, or is that the terrain of claims made by disingenuous politicians or by the sector’s self-interested publicists? Major developments in these issues in the last decade or so provide the rationale for a series which will present new research findings and which addresses key academic and policy debates in relation to the third sector. It is a truism widely acknowledged that there are great expectations of this sector. But continuing on the Dickensian theme, the hard times which face the welfare state necessitate not the small-scale, esoteric regional descriptions and heroic anecdotes which characterise much literature in this field. They call for large-scale and systematic work which addresses significant questions. That was the rationale for the Third Sector Research Centre, from whose first five-year programme of work this volume represents the first book-

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Series editor’s foreword

length output. This series will draw on the work of that centre but it will also welcome proposals for volumes that address its key focus: the organisational base of the third sector and in particular on the roles, resources, responsibilities and relationships of third sector organisations (TSOs). The initial volumes to be commissioned will focus on the UK, but there are also major comparative European projects in which British scholars are involved, and comparative work would be welcome. Currently commissioned work includes studies of below-radar and grassroots community organisations, shedding new light on the ‘dark matter’ of the voluntary sector, and two studies taking longitudinal perspectives: one a mixed-methods study of the changing character of voluntary action in the UK over several decades, and the other an intensive qualitative longitudinal programme of work on change in individual organisations. We begin with James Rees and David Mullins’ edited collection on the role of the third sector in public service delivery. The authors address this from various perspectives: discussing the limitations of the evidence base, providing longer-term perspectives on shifts in policy, considering the different elements of the voluntary sector (including social enterprises and spin-offs from the public sector) and their relationship to public service provision, analysing the role played by volunteers, and assessing the effects on organisations of changing incentive structures and pressures to demonstrate social returns. The authors collectively reject unidirectional characterisations of current policy developments as neoliberal pure and simple, and instead demonstrate the tensions and dilemmas posed for the third sector by changing external conditions. They show how TSOs negotiate these pressures and are able, within what is undoubtedly a tough operating environment, to innovate and find some scope for manoeuvre. Despite the constraints and indeed the possibility of perma-austerity, the authors conclude optimistically that the ability of individuals and communities to organise to meet public needs should not be underestimated. The third sector will continue to be in demand for its potential contribution to the development and reform of public services. The chapters in this book set a benchmark for future studies of this important field. John Mohan, Director, Third Sector Research Centre April 2016

vii

Notes on contributors Pete Alcock is Professor of Social Policy and Administration at the University of Birmingham and was Director of the ESRC Third Sector Research Centre (TSRC) from 2008 to 2014. He has been teaching and researching in social policy for over 30 years and is former Head of the School of Social Sciences. He has written widely on social policy, the third sector, social security, poverty and social exclusion, and anti-poverty policy. Malin Arvidson is a lecturer at the Department of Social Work, Lund University. Prior to this she was research fellow at the TSRC, Southampton University. Her primary research interest is the role and behaviour of third sector organisations (TSOs), and how such organisations are involved in alternative ways of providing welfare services. Her research interests also include evaluations and impact assessments of TSOs, with particular focus on the policy and political context in which evaluations are carried out. Heather Buckingham is a research fellow in the Department of Theology at the University of Birmingham. Prior to this, as a TSRC research fellow, her work focused on relationships between the third sector, the state and the market. She also conducted research on the national leadership of the third sector. Her doctoral research at the University of Southampton explored the impact of government contracting on homelessness organisations, and she contributed to the TSRC’s Futures Dialogues, which addressed key issues for the third sector. Heather’s current research focuses on faith and social engagement in urban contexts. David Clifford is Lecturer in Demography at University of Southampton, and was formerly a research fellow in the TSRC. He has experience of analysing quantitative data, both from regulatory sources and surveys, on third sector organisations in the UK. His work has examined, for example, the geographical distribution of TSOs, patterns in their public funding, and trends in the income growth of charities. Christopher Damm is a research associate at the Centre for Regional Economic and Social Research (CRESR), Sheffield Hallam University. He specialises in quantitative methods and data visualisation but also writes broadly on public services and the third sector. He is in the final

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Notes on contributors

stages of writing up his PhD thesis, undertaken at the University of Birmingham, which explores the impact of service delivery income on third sector organisations. He also previously worked as a part time researcher for TSRC’s Work Programme project. Angela Ellis Paine, University of Birmingham, has been involved in research on and with the third sector for 15 years. Her primary research interests are in volunteering and participation. She joined TSRC as a research fellow in February 2011, contributing to the Theory and Policy and Workforce work streams. Previously Angela was director of the Institute for Volunteering Research. Jenny Harlock, University of Birmingham, joined the Health Services Management Centre in June 2013. Her primary research interests are in health and social care reform, especially the role(s) and implications for the third sector. Previously Jenny was a research fellow at TSRC where she carried out research on the social and economic impact of the third sector in public service delivery. Prior to that she was a Programme Manager with the Department of Health Voluntary Sector Strategic Partnership Programme and led NCVO’s ESRC funded research into personalisation in 2009. Matthew Hill is a senior research officer at the Institute for Volunteering Research, and has experience of a range of research projects relating to the role of volunteers in public service delivery. In addition he has completed research exploring the role of volunteers in education, the environment and is just beginning a three-year project on the role of volunteers in care homes. Matt is also working towards his PhD at Northumbria University exploring issues of volunteer power in voluntary organisations that deliver public services. Helen Kara, Director, We Research It Ltd, and Visiting Fellow, UK National Centre for Research Methods, has been an independent researcher in social care and health since 1999, working with statutory and third sector organisations and partnerships. Her main interest is in research methods, which she writes about and teaches to practitioners and postgraduate students. Helen was an Associate Research Fellow at TSRC from 2012 to 2015. She is on the Board of the UK and Ireland Social Research Association, with lead responsibility for research ethics, and is a Fellow of the Academy of Social Sciences.

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Fergus Lyon, Middlesex University, led the social enterprise strand of the TSRC and has been researching social enterprise issues for the past 15 years in the UK and internationally. Recent work has been focused on how social enterprises can scale up in different ways and how organisations are currently measuring their impact. He is now Deputy Director of the ESRC Centre for the Understanding of Sustainable Prosperity. Rob Macmillan, University of Birmingham, has been a research fellow at the TSRC since 2009, but has been involved in researching different aspects of the third sector for over 15 years. At TSRC he coordinated the ‘Real Times’ qualitative longitudinal study of third sector organisations, as well as contributing to other research programmes on theory, infrastructure and service delivery. His main research interests are around the changing role and organisation of capacity-building and infrastructure support, competition and collaboration between organisations in the third sector, and the challenges of sustainable funding. Robin Miller is Senior Fellow and Director of Evaluation at the Health Services Management Centre at the University of Birmingham. He is a Fellow of the School for Social Care Research and leads on a variety of applied research projects with health and social care organisations, with a particular focus on evaluating and learning from change initiatives. He has previously been a board member and chair of trustees within the housing and charitable sector. His research interests build on his practical experiences in the field, and centre on commissioning and management of integrated services, the role and impact of the voluntary and community sector, and person-centred care. John Mohan is Professor of Social Policy at the University of Birmingham and has been Director of TSRC since 2014. As Deputy Director of the TSRC he led on the programme of quantitative research. He has long-standing substantive research and teaching interests in Social Policy and Human Geography. Much of John’s previous research has focused on health and health care policy, including organisational changes in health care delivery, the public–private mix for health, and the role of non-profit organisations. Other interests include spatial divisions of welfare, urban and regional policy, history of social policy.

x

Notes on contributors

David Mullins is Professor of Housing Policy and leads the Housing and Communities Research Group at the University of Birmingham. His research interests include the governance, management and regulation of housing, housing need and homelessness, the role of third sector organisations and social enterprises in public service delivery. His recent research focuses on community-led housing, including selfhelp and empty homes, organisational hybridity and governance in the housing sector, the future of social housing and the role of social lettings agencies in the private rent sector. He worked with James Rees on the public service delivery stream in TSRC from 2008 to 2013. James Rees is Anthony Nutt Senior Research Fellow at the Centre for Voluntary Sector Leadership, Open University Business School. While at TSRC he led on research on service delivery, concentrating on the transformations in UK public services and role of the third sector. Recent research has examined cross-sector partnerships for public service delivery; the role of the sector in employment services, and the implications of new commissioning arrangements. He also has long-standing research interests in urban and regional governance, neighbourhoods and community. Rebecca Taylor is a Lecturer in Sociology at the University of Southampton and has an interest in work, employment and organisations and, in particular, the relationship between different sectors and institutions in public service delivery. Whilst at TSRC she conducted research on the third sector policy context, the role of third sector organisations in the delivery of employment services, the third sector workforce and a qualitative longitudinal study of third sector organisations.

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ONE

The third sector delivering public services: setting out the terrain James Rees and David Mullins

This book could not have been written a decade ago. From 1997 to the mid-2000s, the UK government strongly promoted the third sector in the delivery of public services, but it was too early to reach research-based judgements about the implications of its expanding role. As part of its wider efforts to ‘modernise’ public services, New Labour matched its rhetoric with a significant injection of resources designed to build and strengthen the relationship between the state and the third sector based on the Third Way idea of a ‘partnership’ (Kendall, 2000; Carmel and Harlock, 2008). In its turn, the Coalition government of 2010–15 promoted a vision of a ‘Big Society’, in which ‘civil society’ would play a stronger role in both service delivery and wider civic life, albeit in a context of austerity in public finances. The Conservative government elected in 2015 appears less receptive, suggesting a potentially more troubling future for the sector. An earlier generation of books reflected the relatively more marginal role the sector then had, but also presciently highlighted the pressures and dilemmas that have faced the sector as its role has grown (see Davis Smith et al, 1995; Harris and Rochester, 2001). Reflecting on this tumultuous 18-year period (1997–2015), the book aims to provide a broad overview of the emerging implications of the third sector’s delivery of public services, informed by research conducted at the Third Sector Research Centre (TSRC). The book focuses on England, reflecting the centre’s focus on that country at a time when devolution was driving policy divergence between the constituent parts of the UK. The English experience is of particular international relevance as it has witnessed a deeper implementation of the market-based policies, which have been a significant feature of public services reform in the UK. Debates about the third sector’s involvement in public service delivery have always taken place in a wider context. Even 20 years ago, Kendall and Knapp commented that one appeal of the voluntary sector was as a ‘way to legitimize constraints on, or even cuts in public

1

The third sector delivering public services

social expenditures at times of fiscal austerity’ (Kendall and Knapp, 1996: 7). These words echo heavily in a period still dominated by the implications of the financial crisis of 2008. Deficit reduction, austerity and the shrinking of the state has been the defining motif of the social policy context shaped by the two governments since 2010. Prime Minister David Cameron’s vision of a ‘Big Society’ was presaged on the idea that ‘we know instinctively that the state is often too inhuman, monolithic and clumsy to tackle our deepest social problems... We know that the best ideas come from the ground up, not the top down’ (BBC, 2010; Alcock, 2013). But the Big Society vision clashed with an alternative, more prosaic, view of public services based on cost reduction and efficiency. The third sector has had to grapple with a range of developments including greater use of the private sector as ‘prime’ contractors and supply chain managers, and payment by results. Services have become increasingly targeted and ‘coercive’ to bring about behaviour change, meanwhile personalisation and innovations in funding such as social investment bonds (SIBs) have transformed the landscape. Thus, the opportunities, challenges and problems experienced by the sector speak to the wider debates on the future of public services. For the third sector itself, involvement with public service delivery has been both high profile and often controversial. While many within the sector welcome the opportunities provided by public service delivery, not least new and perhaps more reliable funding sources, public recognition of its ‘added value’ and perhaps unique contribution to improving and tailoring services; others fear that the embrace by the state is actually an existential threat to the sector and its cherished attributes of independence, voluntarism and as a site for innovation and challenge (Rochester, 2013). The widespread introduction of commercial practices and ‘marketised’ approaches, particularly associated with the Conservative governments, gives particular salience to these concerns (Rees, 2014). Yet others are sceptical of the claims made for the sector in justifying wide-ranging reforms to public services and fear it is a ‘Trojan horse’ for privatisation. These concerns have a long pedigree and shape the questions that authors tackle – based on original research – in the chapters that follow: • What impact does involvement in the delivery of public services have on TSOs and their stakeholders, including volunteers and users? • What does the involvement of TSOs mean for our understanding of the content, purpose, and sustainability of public services?

2

The third sector delivering public services: setting out the terrain

• Does a balance need to be struck in the respective roles of the state and the third sector, which could result in progressive outcomes of improved, responsive and adaptable public services with which to confront some of the major challenges of the 21st century? These questions underpin the book’s overall aim of providing a concise and up-to-date overview of the third sector’s role in England’s public services. In doing so it attempts to strike an analytical balance: between looking in on the third sector (understanding the impact of this new role, and how TSOs have changed), and looking out to the wider terrain of public services and the impact that the involvement of the third sector has had on public services, and may continue to have in the future. All of the contributions draw on research conducted at TSRC, an ESRC- and Cabinet Office funded initiative based at the Universities of Birmingham and Southampton between 2009 and 2014. Public service delivery was a major focus of TSRC’s work, with significant projects on partnerships and collaboration, commissioning and social value, the Work Programme, personalisation, housing and criminal justice.

Defining the third sector and public services Debates over language and terminology always accompany a discussion of the third sector. Here we briefly define what we mean by the third sector, and discuss the practical and conceptual reasons for the usage of this label; a full discussion of the meaning of public services is left for Chapter 2. We conceptualise the third sector as a space of organisational activity located between the state, market and private familial spheres comprising a diversity of organisational types including charities, social enterprises, faith, community and grassroots groups. In the UK, the term is particularly associated with New Labour and its interest in the involvement of non-state actors in public life, reflecting in part the influence of communitarian and Third Way ideas (Giddens, 1998; Levitas, 1998). For some, this association has encouraged a perhaps unfortunate perception that the ‘third sector’ is a rather exclusive, tightly bound label, referring primarily to the largest and most institutionalised organisations in the part of the sector most likely to deliver public services (Evers, 2013). Many commentators prefer the (arguably synonymous) terms voluntary or voluntary and community sector. In 2010 the Coalition abandoned third sector terminology and referred exclusively to ‘civil society’, as in the renamed Office for Civil Society. However, the term remains in use internationally and has deeper historical roots (Wagner, 2012).

3

The third sector delivering public services

Accordingly, this book favours a conception of the third sector that is capacious enough to include a wide range of organisational types and social action (including grassroots organisations), while still retaining its theoretical and descriptive coherence. We also acknowledge that in practice the types of organisation taking part in service delivery come from a smaller population (see Chapter 4). On a more theoretical level, there have tended to be two principal objections to the labelling and definition of a third sector. The first is because of its diversity and doubt over whether the notion of ‘sector’ actually helps us understand this terrain of social activity. If the third sector comprises potentially all of the organisations and activity that are outside of the state and the market, as well as those on the fringes of the private and informally organised activity residing in the private and family spheres, it is also marked by considerable heterogeneity (Powell, 2007; Buckingham, 2012). Further consideration of the ‘moving frontiers’ between the third and the other sectors – through the framework of Evers’ tension field concept – is considered in Chapter 3 (Evers and Laville, 2004). Similarly, the fuzziness and porosity of the borders between the sectors makes definition more difficult and perhaps reflects a growing trend to organisational hybridity in which organisations display (or borrow) characteristics associated with state, market and community sectors (Billis, 2010; Smith, 2010). Second, there have been criticisms that the notion of a ‘third’ sector is essentially a negative or ‘residual’ definition: that it relies on distinguishing a sphere of activity outside of and in distinction to the dominant state and market realms (Alcock and Kendall, 2011). Yet such a definition needn’t assume or imply dominance or subordination and it can remain open to more positive accounts that seek to identify a distinctive sector identity, in particular one underpinned by values of trust, social mission and social innovation. As a result, we argue here for both an inclusive (acknowledging the heterogeneity of the sector) as well as positive (recognising shared attributes, and rejecting a purely residualist account) definition of the sector (Alcock and Kendall, 2011; Milbourne, 2013). Despite these challenges to our understanding of the third sector, and its associated terminology, a broad and positive definition of third sector is buttressed by blending a range of insights from the third sector literature. First, it can be said that even a sector that contains such a diverse constellation of organisational types and sizes, can still be considered united by distinctive values and motivations (Lyons, 2001; Buckingham, 2012; Macmillan, 2013a;). The influential strand of theory associated with the Johns Hopkins Comparative Nonprofit Sector Project (CNP) in the 1990s highlights the structural

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The third sector delivering public services: setting out the terrain

characteristics considered to be distinctive of the organisations that make up the third sector. Salamon and Anheier (1997) proposed a ‘catchall’ definition: comprising organisations that are ‘formal, non-profit distributing, constitutionally independent of the state, self-governing and benefiting from voluntarism’ (Kendall and Knapp, 2003: 6). This definition also has theoretical coherence with the explanations for the sector’s existence: the notion of state and market failure (Salamon, 1987), of the distinctive nature of ‘stakeholder ambiguity’ (Billis and Glennerster, 1998), as well as with Weisbrod’s (1988) ‘economic’ theories of non-profit activity. Similarly, Lyons (2001), identified six sources of distinctiveness: • • • • • •

the centrality of values multiple sources of operating revenue reliance on volunteers, the difficulty of judging performance multiple stakeholders complexity of accountability tensions between senior staff and the boards of organisations.

Nevertheless, the idea of distinctiveness has remained a crucial claim both in maintaining sector identity and distinguishing it from the ‘big realms’ of market and state (Macmillan, 2013a). Finally, in response to the criticism of ‘sectorised’ accounts of social action, another influential body of work has explored the ways in which the voluntary sector has, at various times been constructed and held together for reasons of expediency or opportunism. In 6 and Leat’s (1989) reading, the sector was ‘invented by committee’ – that is, a powerful image of sector was crafted at a critical juncture by key interests in order to achieve political ends. A rather less Machiavellian interpretation was put forward by Alcock (2010), who suggested that sector identity was a reflection of ‘strategic unity’ maintained at least in part as a way to unlock resources and align itself with a generally supportive policy environment in the New Labour period. More recently, Alcock and Kendall (2011) have drawn more attention to the processes of contestation and de-contestation inherent in such policy formulation processes (Alcock and Kendall, 2011). Similarly, according to Carmel and Harlock’s (2008) influential argument, under New Labour the sector was given greater coherence and meaning through its rebranding as the third sector in an attempt to gain policy traction and control over a ‘governable terrain’, which had tangible results in bringing the sector into public service delivery. Inevitably, this ‘constructivist view’ has close links to more normative debates

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The third sector delivering public services

concerned with what the sector should look like, whether for instance it should be considered as being composed of a population of like organisations united by a similar animating spirit, or whether instead, the sector is chronically divided: large service-oriented charities versus the informal and grassroots; professionalism versus voluntarism – for instance (Lipsky and Smith, 1989; Knight, 1993). Suffice it to say, that a deep interest in understanding the shape and internal dynamics of the sector is matched with a long concern in the literature on the impact of public service delivery and instrumental public policy on the coherence and wider ‘health’ of the third sector.

The heart of the matter: key themes in third sector public service delivery The shifting public policy context Despite several decades of public policy that have begun to erode the post-war welfare state settlement, for the majority of English citizens, public services remain essentially synonymous with public sector delivery, as evidenced by the public’s enduring affection for the National Health Service. Yet there is a long history to the voluntary sector’s role in meeting welfare needs and working closely – even in partnership with the state (see Finlayson, 1994; Lewis, 2005, and Chapter 2, this volume). The social policy literature has long recognised this – describing a ‘mixed economy of welfare’ involving the state, private sector, voluntary sector and community/family sector, and a ‘moving frontier’ between them (Finlayson, 1994; Powell, 2007). Beveridge himself, often considered the father of the ‘classic’ post-war welfare state, extolled the close cooperation between public and voluntary agencies (Oppenheimer and Deakin, 2011). Governmental support for extending the contribution of the sector has been quite consistent since 1979, but underpinned by shifting ideological motivations. The Thatcher governments viewed voluntary organisations as alternative providers that could help deliver a mixed and competitive economy of welfare. This led to major change, for example, in housing where third sector housing associations (HAs) became the preferred vehicle for delivery of new social housing as early as 1980, building on the foundations laid for public funding under the Housing Act 1974 (Malpass, 2000). This went further from 1988 onwards as many local authorities transferred their existing housing to HAs in response to financial drivers set by government. By 2010, HAs accounted for the majority of social housing in England (Pawson

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The third sector delivering public services: setting out the terrain

and Mullins, 2010). Similarly, the new public management-inspired reforms to health and social care, especially through the Community Care Act (1990) ultimately resulted in the delivery of over a third of social care services in the sector (Lewis and Glennerster, 1996; Glasby, 2007). Both service fields had been almost entirely dominated by state provision (by local government and the NHS) until 1979. The deepening of this relationship in the 1980s and 90s became associated with a ‘contract culture’ in the third sector, reflecting a widespread belief that the use of contracts had created an environment that was oppositional and did not encourage trust between actors. The resulting disquiet over the way the state was treating the sector led to the creation of a number of ‘state of the sector’ inquiries in the mid-1990s, most notably, the Deakin Commission (Kendall, 2000). This influenced the Labour Party to develop, while in opposition, a more consensual approach in line with Third Way thinking, and which, after 1997, came to be increasingly based on an emphasis on ‘partnership’ with the sector (Lewis, 2005). They created a compact to improve relations with the sector, and invested in infrastructure to promote closer involvement in a range of agendas but especially public services (Carmel and Harlock, 2008). This was an era of ‘hyperactive mainstreaming’, in which early initiatives were concerned with building the third sector role in public services and in particular with new forms of organisation such as social enterprises to fulfil it (Kendall, 2000). In Blair’s second term, the ongoing interest in capacity building in third sector, particularly for service delivery, was reflected in the Treasury’s (2002) ‘cross-cutting review’, which partly gave rise to Futurebuilders and ChangeUp. The 2010 election and the formation of a Conservative-Liberal Democrat Coalition, heralded a change in direction and an initial policy emphasis on (a renewed) localism and the promotion of a ‘Big Society’. Partly, the Big Society notion was based on a belief in crowding out, and envisaged that the state would reduce its interference in civil society, encouraging it to flourish (Alcock, 2013). There was renewed support for mutuals and cooperatives in some fields, as Miller and Lyon explore in the context of efforts to drive ‘spin-outs’ from the public sector in Chapter 5. Since late 2012, with the withering of the Big Society agenda, policy towards the sector has been low key, arguably even absent (Macmillan, 2013b). The specific contours for third sector service delivery were set out in the Open Public Services White Paper (HM Government, 2011), which while superficially supportive of third sector involvement also set out a much more competitive environment defined by centralised commissioning and the extensive use of large-

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The third sector delivering public services

scale contracting with the private sector to deliver ‘reformed’, more efficient and cost-effective services. The Conservatives’ highest profile reforms in this vein have been the Work Programme and the introduction of similar ‘Transforming Rehabilitation’ reforms to probation services (see Chapters 9 and 12 respectively). The increased emphasis on the use of Payment by Results (PbR) to reward specific outcomes, and the determination to implement commercial rigour (and cost reduction) has been in stark contrast to Labour’s reliance on top-down targets alongside a relatively more generous funding; and is evidence of a much less supportive attitude to the sector (see also Chapter 3). Nevertheless, despite shifts in emphasis in government policy, the most pertinent feature of third sector public service delivery has been growth. The 1990s saw a sustained increase in public funds going to the sector, continuing into the first decade of the 21st century. Public funding rose from £9.4 billion in 2000/01 to £15 billion in 2010/11, though it subsequently dipped to £13.7 billion in 2011/12 as the cuts began to have an impact (NCVO, 2014). There has also been a shift from grant to contract funding. Between 2000/01 and 2011/12 statutory grant income almost halved, down from £4.8 billion to £2.6 billion. In contrast, over the same period, contract funding increased from £4.6 billion to £11.1 billion. In 2008 only 36% of TSOs received any public income – the majority have no funding relationship of any sort with the state and it can be assumed that a somewhat smaller proportion are being funded to deliver services (Clifford et al, 2013). More generally, and though comparisons with other sectors are difficult, umbrella body NCVO suggests that the third sector contributes nearly £12 billion to UK gross value added, or about 0.8% of the UK total. What this suggests is that the wider third sector is expansive in scope, but lacks economic ‘weight’. Unfortunately, as Mohan and Clifford show in Chapter 4, informed discussion is made difficult by the lack of robust data across the third sector about the size and geography of third sector delivery. Politics and practice: scrutinising the state-sector relationship in service delivery The relationship between the state and the sector has been an important preoccupation for academic research, not restricted to the specific context of public service delivery. By the 1990s the longer-established history of funding relationships between government and non-profits in the US had already spawned a large research literature that influenced

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The third sector delivering public services: setting out the terrain

debates in the UK over the downsides of the ‘contract culture’ (Lipsky and Smith, 1989; 6 and Kendall, 1997). Such concerns were reflected in an earlier generation of edited collections on the voluntary sector role in public and social policy (Kendall and Knapp, 1996; Harris and Rochester, 2001), and had an impact on policy at the time, not least through the Deakin and CENTRIS reports, which influenced New Labour policy as noted above. Concerns about the impact of service delivery on the sector have been remarkably enduring, as evidenced by more recent forceful criticism of the restraints thought to be placed on the sector advanced by the Civil Exchange (2016), as well as campaign group National Council for Independent Action (Milbourne, 2013; Rochester, 2013; Benson, 2014). Such concerns have focused on the threat of state funding curbing TSOs’ independence of action, their voice and ability to campaign, and their financial sustainability – through, for instance, regulatory and monitoring requirements (Carmel and Harlock, 2008). The academic literature has highlighted the ways that the contracting environment can drive isomorphism in structure and approach, whether by becoming more like the state (bureaucratic, professionalised) and/or the market (commercialised, profit-motivated) and therefore less distinctive (DiMaggio and Powell, 1983; Buckingham, 2009). The implication is that the closer engagement of the sector with service delivery risks ‘killing the golden goose’ – undermining the very attributes and values government sought in the first place (Aiken and Bode, 2009). A more optimistic reading is that despite the risks, service delivery offers opportunities for closer collaboration over policy and design, even creating a situation of mutual dependence. For instance, involvement in service delivery might lend credibility to policy and campaigning work (Kendall and Knapp, 1996; Keast and Brown, 2002). It is also apparent that the shift from grants to contracts has been relevant to the way TSOs have experienced change in the relationship with the state. A range of recent work highlights concerns about the more instrumental use of TSOs as providers, greater interference and control over their activities and heightened uncertainty through the application of competitive tendering (Buckingham, 2012; Rees, 2014, see Chapter 3). Grants are seen by many as a gesture of trust in TSO delivery, with fewer strings attached, contracts as more of a disciplinary mechanism (Larner and Butler, 2005; Unwin, 2005). Many of the chapters engage with these issues, reflecting the ongoing interest in the ‘health’ and vitality of the sector. Indeed, there are reasons to be concerned about the size and scope of the sector’s role, subsequent to the experience of the Coalition

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The third sector delivering public services

period and the election of a majority Conservative government in May 2015. While there are elements of evolution from the Labour period, in particular the wider emphasis on ‘marketisation’, which can be witnessed in growing competition, contestability, and other market mechanisms (see Chapters 5 and 6), there are also clear discontinuities. As noted above, a crucial development for the sector, almost absent a decade ago, is the embedding of a model where government contracts with a small number of large prime contractors who manage a ‘supply chain’ of sub-contractors, transferring the responsibility and risk away from government. In this mixed market, both primes and subcontractors may come from either the public, private or third sectors; in practice, for example, the Work Programme is dominated by the private sector (Damm, 2014). Taken together, the new Conservative hegemony suggests a stark rejection of Labour’s more consensual and supportive approach, and commitment to a more market-based and cost-reductive approach (Macmillan, 2013b). From 2015 in particular, the sector faces a public services environment that is tougher, more commercial, with fewer available resources, and that is arguably more inimical to third sector values. Thus, for many, this will be viewed as tantamount to privatisation of the public services. Pertinent questions are: Can TSOs adapt to and survive in this environment? If not should they withdraw? Do they have the choice to do so? These questions, in the context of reflections on the changing state-sector relationship, provide key themes for many of the chapters in this volume. Another new development facing the sector is the explosion of interest in evidencing impact and outcomes, not least because of the Conservatives’ interest in new funding mechanisms such as SIBs. This is an international trend: governments have sought the involvement of the sector as a way to address some of the problems facing the welfare state. TSOs have been framed as alternative providers competing to improve service quality in a more diverse welfare mix, and viewed as less bureaucratic, cheaper, and bringing a range of inherent attributes and values to the delivery system (Evers and Laville, 2004; Osborne, 2010). In the UK, their advantages have, in short, been seen as their closeness to beneficiaries with specialist needs and communities more generally, their flexibility and ability to innovate and the values base and sense of mission that permeate their work (Buckingham, 2009). At the same time growing expectations have been loaded onto service delivery TSOs, they have increasingly been exhorted to demonstrate the difference they are making with service beneficiaries, measuring the impact of their services to meet monitoring requirements, and demonstrating this convincingly as part of the commissioning process.

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The third sector delivering public services: setting out the terrain

The introduction of the Public Services (Social Value) Act 2012 (SVA) represented an attempt to tilt the playing field towards TSOs in commissioning and procurement, but has placed even more emphasis on the definition of the contested concept of social value (Harlock, 2014). All of these developments deserve to be held up to scrutiny, and the issues related to impact and its evaluation are the particular focus of Arvidson and Kara’s Chapter 8, which scrutinises the utility of different evaluation approaches.

Overview of the structure of the book The book is organised into three main sections. The first considers the wider policy agendas, ‘strategic unity’ and evidence base for studying the third sector as a distinct entity. The second, following Kendall and Knapp (2003). explores the ‘horizontal’ trends and drivers applying to TSOs across policy fields, while the third section focuses in on four specific but contrasting ‘vertical’ policy fields in which TSOs now play an important public service delivery role. Part One of the book sets the crucial historical and policy context for the later chapters, and explores many of the policy and conceptual issues raised in this introduction in more depth. In Chapter 2 Pete Alcock deals in detail with the problematic definition of public services, pointing out that the content and scope of what constitutes public services has never been as settled as some might think, in particular it has rarely involved monolithic provision by the public sector. He then outlines in broad terms the history of third sector involvement in service provision, bringing the story up to the New Labour period and that government’s ‘hyperactive mainstreaming’ of the sector as part of its modernisation efforts. In Chapter 3, Heather Buckingham and James Rees take the story forward after 2010, highlighting and drawing out continuities and differences between the Labour and Coalition governments’ approaches to the sector and civil society more widely. In particular, they attempt to shed more light on the occasionally troubled relationship between the third sector and the state, and explore how policy, politics and ideology have driven real changes to the frontiers between the domains of state, market and informal sectors. In Chapter 4, Mohan and Clifford address an issue that has bedevilled discussions of third sector service delivery for many years, attempting to provide a reasonably comprehensive and reliable picture of the scale and scope of the third sector role in public service delivery. They draw on the best available data from the Charity Commission as well as the National Survey of Charities and Social Enterprises (NSCSE), to show

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the broad scale of public funding for the sector and contrast that with a very broad population of organisations’ perceptions of their role. Part Two reflects a number of key themes affecting the horizontal dimension of the third sector, exploring issues and policy agendas cut across to potentially impact on a wide range of TSOs operating in different vertical service-based ‘silos’ or policy fields. In Chapter 5, Robin Miller and Fergus Lyon explore the policies pursued by Labour and Coalition governments to encourage spin-outs – new TSOs created from former public sector organisations – which have been particularly prevalent in the context of health and the recent reforms to the NHS. They investigate the motivations underpinning the policies, the hoped for outcomes, and begin to assess the implications for our understanding of fundamental changes to delivery and our understanding of the difference ‘third sector-ness’ makes. In Chapter 6, Rob Macmillan focuses on the shifting terrain occupied by the supporting infrastructure that lies behind much service delivery in the third sector, provided through a complex and diverse range of generalist and specialist umbrella bodies. He shows how infrastructure bodies occupy a contested field, asks what role is played by these bodies, and particularly how this changes over time in response to wider contextual and policy developments. In Chapter 7, Angela Ellis Paine and Matthew Hill explore how the role of volunteers has changed as the involvement of third sector organisations in public service delivery has grown. It draws on existing evidence to consider the reasons behind some of these developments, before focusing particularly on the ways in which they have affected the experience of volunteering. In Chapter 8, Malin Arvidson and Helen Kara focus on the concept of ‘social value’, particularly in the context of the SVA, implemented in 2013. They question what is meant by social value, and review in detail how the creation of social value in service delivery can be measured by comparing a variety of evaluation frameworks. In Part Three we turn to the four ‘vertical’ policy fields that have been the subject of research within TSRC. Taylor, Damm and Rees explore the impact of some of the key changes to the service delivery landscape in the context of employment services. They report that despite the undeniable tensions and pressures facing TSOs, they have reacted by first understanding the new environment and then adapted through the reorientation of their services as well as adopting a variety of strategies to navigate the reputational and financial risks. In Chapter 10, Harlock and Miller focus on the social care field, where there has been considerable policy evolution in recent years, exploring in particular, the impact of the cross-cutting personalisation policy

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The third sector delivering public services: setting out the terrain

narrative. They review the sector’s role in development of the policy and its implementation, and assess the impacts and implications on the third sector, including relationships with local authorities and service users. David Mullins, in Chapter 11, deals with the ‘distant uncle’ of the housing association sector, outlining how the tensions between the state, market and community poles of hybridity have played out over a 40-year period of incorporation into public service delivery. The chapter also explores the wider role HAs play as providers of diverse public services (beyond core social housing), and recent dramatic changes in government policy toward the sector. In the final substantive chapter, on offender rehabilitation in criminal justice, Rob Macmillan explores the development of a still unfolding policy area in which the sector is promised a greater role. The chapter reviews the changing policy context around criminal justice and offender supervision, and its likely impact, examining the third sector’s position in the criminal justice field at a crucial early stage of market shaping. It is clear that each of these chapters demonstrates the enduring importance for TSOs of fostering and maintaining relationships with other TSOs, and across sectors: with commissioners, policy makers and increasingly with private sector prime contractors. Finally, although in many ways the book is policy focused and pragmatic, a number of authors adopt, where appropriate, more conceptual and theoretical frameworks where this helps to make sense of change. We return in the final concluding chapter to review the contributions that theoretical viewpoints have made. Research on service delivery within TSRC has been influenced in particular by the organisational theory associated with the New Institutionalism (DiMaggio and Powell, 1983), but also more recent thinking about the way social life is organised through nested and overlapping fields (Fligstein and Mcadam, 2012); and related concepts of hybridity (Billis, 2010; Mullins et al, 2012) and institutional logics (Mullins, 2006). References 6, P. and Kendall, J. (1997) The contract culture in public services: Studies from Britain, Europe and the USA, Arena, Aldershot 6, P and Leat, D. (1989) ‘Inventing the British Voluntary Sector by Committee: from Wolfenden to Deakin’, Non-Profit Studies, 1(2) 33-45 Aiken, M. and Bode, I. (2009) ‘Killing the Golden Goose? Third Sector Organizations and Back-to-Work Programmes in Germany and the UK’. Social Policy and Administration, 43(3) 209–225

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Alcock, P. (2010) ‘A strategic unity: defining the third sector in the UK’, Voluntary Sector Review, 1(1) 5-24 Alcock, P. (2013) ‘The Big Society: A New Policy Environment for the Third Sector?’ in C. Pierson, F. Castles and U. Naumann (eds) The Welfare State Reader, 3rd edn, Oxford: Wiley Alcock, P. and Kendall, J. (2011) ‘Constituting the Third Sector: Processes of Decontestation and Contention under the UK Labour Governments in England’, Voluntas: International Journal of Voluntary and Nonprofit Organizations, 22(3) 450-469 BBC (2010) ‘Big Society proposals outlined’, 18 May, available at http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc. co.uk/2/hi/uk_news/politics/8688860.stm?ad=1 (accessed 4 August 2014) Benson, A. (2014) ‘“The Devil that has come amongst us”: The impact of commissioning and procurement practices’, NCIA Inquiry into the Future of Voluntary Services, Working Paper 6, London: NCIA Billis, D. (ed) (2010) Hybrid Organisations and the Third Sector, Basingstoke: Palgrave Macmillan Billis, D. and Glennerster, H. (1998) ‘Human services and the voluntary sector: towards a theory of comparative advantage’, Journal of Social Policy, 27(1) 79-98 Buckingham, H. (2009) ‘Competition and contracts in the voluntary sector: exploring the implications for homelessness service providers in Southampton’, Policy & Politics, 37(2) 235-54 Buckingham, H. (2012) ‘Capturing diversity: a typology of third sector organisations’ responses to contracting based on empirical evidence from homelessness services’, Journal of Social Policy, 41(3) 569-589 Carmel, E. and Harlock, J. (2008) ‘Instituting the “third sector” as a governable terrain: partnership, procurement and performance in the UK’, Policy & Politics, 36(2) 155-171 Civil Exchange (2016) Independence in question: The voluntary sector in 2016, London: Civil Exchange Clifford, D., Geyne-Rahme, F. and Mohan, J. (2013) ‘Variations between organisations in government funding of third-sector activity: Evidence from the National Survey of Third-sector Organisations in England’, Urban Studies, 50(5) 959-976 Damm, C. (2014) ‘A mid-term review of third sector involvement in the Work Programme’, Voluntary Sector Review, 5(1) 97-116 Davis Smith, J., Rochester, C. and Hedley, R. (eds) (1995) An Introduction to the Voluntary Sector, London: Routledge

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DiMaggio P., and Powell W. (1983) ‘The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields’, American Sociological Review, 48(2) 147-160 Evers, A. (2013) ‘The concept of “civil society”: different understandings and their implications for third sector policies, Voluntary Sector Review, 4(2) 149-164 Evers, A. and Laville, J.-L. (2004) ‘Defining the third sector in Europe’, in A. Evers and J.-L. Laville, The Third Sector in Europe, Edward Elgar, Cheltenham, pp 11-42 Finlayson, G. (1994) Citizen, State, and Social Welfare in Britain 18301990, Oxford: Clarendon Press Fligstein, N. and McAdam, D. (2012) A theory of fields, New York: Oxford University Press Giddens, A. (1998) The Third Way: The Renewal of Social Democracy, Cambridge, MA: Polity Glasby, J. (2007) Understanding Health and Social Care, Bristol: Policy Press Harlock, J. (2014) ‘Diversity and Ambiguity in the English Third Sector: Responding to Contracts and Competition in Public Service Delivery’, in Brandsen, T., Trommel, W., and Verschuere, B. (eds) Manufacturing Civil Society: Principles, Practices and Effects, Basingstoke: Palgrave Harris, M, and Rochester, C. (2001) Voluntary Organisations and Social Policy in Britain, Basingstoke: Palgrave HM Government (2011) Open Public Services White Paper, London: HMSO Keast, R. and Brown, K. (2002) ‘The Government Service Delivery Project: A Case Study of the Push and Pull of Central Government Coordination’, Public Management Review, 4(4) 439-459 Kendall, J. (2000) ‘The mainstreaming of the third sector into public policy in England in the late 1990s: whys and wherefores’, Policy and Politics, 28(4) 541-562. Kendall, J. (2003) The Voluntary Sector, London: Routledge Kendall, J., and Knapp, M. (1996) The voluntary sector in the United Kingdom, Manchester: MUP Knight, B. (1993) Voluntary action, Ovingham and London: CENTRIS. Larner, W. and Butler, M. (2005) ‘Governmentalities of local partnerships: the rise of a “partnering state” in New Zealand’, Studies in Political Economy, 75: 85-108 Levitas, R. (1998) The inclusive society? New Labour and social exclusion, Basingstoke: Palgrave

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Lewis, J. (2005) ‘New Labour’s Approach to the Voluntary Sector: Independence and the Meaning of Partnership’, Social Policy and Society 4(2) 121-131. Lewis, J. and Glennerster, H. (1996) Implementing the New Community Care, Buckingham: Open University Press Lipsky, M. and Smith, S.R. (1989) ‘Nonprofit Organisations, Government, and the Welfare State’, Political Science Quarterly, 104(4) 625-648 Lyons, M. (2001) Third sector: The contribution of nonprofit and cooperative enterprises in Australia, Australia: Allen & Unwin. Macmillan, R. (2013a) ‘“Distinction” in the third sector’, Voluntary Sector Review, 4(1) 39-54 Macmillan, R. (2013b) De-coupling the state and the third sector? The ‘Big Society’ as a spontaneous order, Voluntary Sector Review, 4(2) 185-203 Malpass, P. (2000) Housing Associations and Housing Policy, A Historical Perspective, Basingstoke: Macmillan Milbourne, L. (2013) Voluntary sector in transition: Hard times or opportunities?, Bristol: Policy Press Mullins, D (2006) ‘Competing Institutional Logics? Local accountability and scale and efficiency in an expanding non-profit housing sector’. Public Policy and Administration 21(3) 6-21 Mullins, D., Czischke, D. and van Bortel G. (2012) ‘Exploring the meaning of hybridity and social enterprise in housing organisations’, Housing Studies, 27(4) 405-17 NCVO (2014) UK Civil Society Almanac 2014, London: NCVO Oppenheimer, M. and Deakin, N. (2011) Beveridge and Voluntary Action in Britain and the wider British World, Manchester: MUP Osborne, S.P. (2010) The New Public Governance? Emerging Perspectives on the Theory and Practice of Public Governance, London: Routledge Pawson, H. and Mullins, D. (2010) After Council Housing. Britain’s new social landlords. Basingstoke: Palgrave Macmillan Powell, M. (2007) Understanding the Mixed Economy of Welfare, Bristol: Policy Press Rees, J (2014) ‘Public sector commissioning and the third sector: old wine in new bottles?’, Public Policy and Administration, 29(1) 45-63 Rochester, C. (2013) Rediscovering Voluntary Action: The Beat of a Different Drum, Basingstoke: Palgrave Salamon, L.M. (1987) ‘Of Market Failure, Voluntary Failure, and Third-Party Government: Toward a Theory of GovernmentNonprofit Relations in the Modern Welfare State’, Non-profit and Voluntary Sector Quarterly, 16(1-2) 29-49

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Salamon, L.M. and Anheier, H.K. (1997) Defining the Nonprofit Sector: A Cross-National Analysis, Manchester: MUP Smith, S.R. (2010) ‘Hybridisation and non-profit organisations, The governance challenge’, Policy and Society, 29(3) 219-229 Unwin, J. (2005) The Grantmaking Tango: Issues for Funders, London: The Baring Foundation Wagner, A. (2012) ‘“Third sector” and/or “civil society”: a critical discourse about scholarship relating to intermediate organisations’, Voluntary Sector Review, 3(3) 299-328 Weisbrod, B.A. (1988) The Nonprofit Economy, Massachusetts: Harvard University Press

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PART ONE

Policy, politics and organisations

19

TWO

The history of third sector service delivery in the UK Pete Alcock

This chapter provides a short overview of the history of the developing role of third sector organisations in the delivery of public services in the UK. This is a long and complex history, made more so by some confusion over some of the key terms, which is explained and clarified below. The nature of third sector involvement in public services can be traced back over three centuries, and has been structured by broader changes in relations between the state and the third sector, which are discussed here as a series of phases of relationship change. The most recent ‘partnership’ phase has been associated in particular with the political and policy initiatives introduced by the recent Labour governments to both broaden and deepen government engagement with the sector. This has created opportunities, but also challenges, for third sector organisations involved in public service delivery, which are outlined here and taken up in more detail in some of the later chapters of the book.

Public services What a review of the history of the role of third sector organisations in the delivery of public services reveals, therefore, is that this is a long history. It is a history in which this role has changed to adapt to the differing influences of economic pressures, policy shifts, user needs and new forms of practice. But the engagement of the sector, or rather elements of it, with the needs for and provision of public services is a deep-seated feature of the development of these services, extending over three centuries or more. Those who suggest that it has all come about in the last few decades of policy reform are therefore failing to appreciate this longer history, or choosing to ignore it. However, this is also a complex history; and at the root of this complexity is some confusion, or at least debate, over the meaning, or the application, of some of the key terms involved.

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First, there are different understandings of what is included within the notion of public services, and in practice these need to be appreciated within this longer-term historical context. The most obvious, and the most extensive, understanding of public services is those services that are provided to the public, either collectively or (on an open access basis) to individuals. This understanding also has the longest history. Services for people have been provided for centuries, from housing and sewerage to health and social care – and long before any formal commitment to the provision of these services was recognised as a welfare need or a responsibility of government. In the 19th century in particular, the range and scale of these services expanded significantly, with public agencies, private companies and voluntary organisations all playing important roles in their development, as we will return to discuss briefly below. However, the argument that governments should be responsible for the provision of certain services for the public led to the development of a rather different notion of public services as those services provided by the public agencies of the state. At the end of the 19th century, the political campaigning of the Fabian Society, and other social democratic organisations, focused on the need for the state to intervene to provide a range of welfare services, in large part because of the failure of the market and voluntary action to ensure that comprehensive protection was available to all. And at the beginning of the 20th century, state provision of these services began to expand, in particular under the reforming Liberal governments of the 1900s and 1910s. What is more, it was not only national government that expanded the scope of state public services, local government played a major role in this. Indeed, in education, housing, health and many other welfare services it was local government that, initially at least, was at the forefront of the growth of public services, most notably in the large municipal authorities such as Joseph Chamberlain’s Birmingham (Stoker, 1991). The welfare reforms of the 20th century resulted in the gradual extension and improvement of state-provided public services, culminating in the major national programmes of the post war Labour government, sometimes credited as establishing a ‘welfare state’ in the country (see Timmins, 2001; Lowe, 2005). Despite the establishment of the comprehensive services of the welfare state, however, private provision of welfare services did continue, as did the provider role of voluntary organisations, as discussed below. Indeed, within the welfare state, the activities of non-state providers have flourished, and this gives rise to a third notion of the meaning of public services, as those services which are provided to the public and paid for out of

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The history of third sector service delivery in the UK

public resources (predominantly taxation), but may not necessarily be delivered by public sector agencies. Over the latter decades of the last century and the early decades of this, the use of private and third sector organisations to deliver services funded publicly, usually under contracts agreed with public sector commissioning agencies, has grown significantly. It is this understanding of public services as those services paid for out of public resources that has in practice underpinned much of the recent debate, and controversy, over the role of third sector agencies in delivering these, and which forms the focus for much of what is explored in more detail in the later chapters in this book. This is also an area where there have been the most rapid and significant changes in recent years. However, it is nevertheless a rather narrow conception of what could, and arguably should, be understood by the use of the term public services. It may be that the concerns that some commentators have expressed over the role of third sector involvement in public services are primarily a product of an assumption that it is only this narrower notion that should be the focus of debate about the role of the third sector in public service provision. Second, there has also been some confusion, or at least lack of clarity, over what is understood to be the state or the public sector, in particular, if this is assumed to be one actor. Most discussion of the state in the UK tends to focus on the national government in power at Westminster, and the central government departments (largely based in Whitehall), which are charged with implementing public policy. Westminster is the seat of UK government, and the major departments (such as Work and Pensions, Health or Education) remain responsible for implementing, and to some extent delivering, public services; but in practice the picture is more complex than that. Most significant perhaps, is the impact of the devolution since 1999 of many major welfare services to the separate administrations in Scotland, Wales and Northern Ireland. The parliaments and assemblies here now have responsibility for determining policy in areas such as health, education and housing; and separate national administrative departments have been established to implement these. What is more, this has led to some significant variations in welfare policy across the four nations within the UK, including, in the context of this book, the extent and the terms of commissioning of services from independent providers. And in the light of this, unless where explained separately, the focus of discussion and analysis here is on what has been happening in England only.

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The third sector delivering public services

There has also been another form of devolution from the central state over recent years, at least as regards the implementation of policy in different fields of welfare. In social security, for instance, delivery of benefits is now in the hands of quasi-independent agencies such as the Pensions Agency or Jobcentre Plus; and health policy is delivered by the National Health Service (NHS), which itself operates through separate clinical commissioning groups and foundation trusts. What this means is that in practice, decisions about the extent and the operation of commissioning of services are frequently taken at the level of these quasi-independent agencies, rather than nationally in central government departments, as the research reported in a number of the later chapters reveals. As mentioned above, however, in a number of areas of welfare provision, it is local government rather than central government which is responsible for delivering services, or for the commissioning of other providers. Social care, education and housing are largely the responsibility of local government, and third sector agencies providing services in these and other similar fields need to engage with the departments or directorates within local authorities and the officers working within them. The structure of local government across the UK is also itself complex, and in England there are still some rural areas where there are two levels of local authorities operating, with responsibility for different services areas (Wilson and Game, 2011). And, although, as Stoker (1991) discusses, there has been an increasing level of control over the powers and resources of local government in recent decades, policy and practice still vary significantly across different authorities as a result of variations in political control and management practices. There is a further dimension to the structure and operation of the state in the UK, and that is the role of the supranational agencies of the European Union (EU). Britain’s membership of the EU means that the country must abide by the regulations and procedures laid down by the different directorates of the EU Commission in Brussels. In practice, these mainly exercise a bureaucratic, or procedural, influence over welfare policy, with policy decision making still operating primarily at national government level. However, in some areas these procedural controls can have an important influence, in particular, in the context of this book, over the legal regulation of practices for commissioning and procurement of services. The EU may not be interfering in UK policy making as much as some Eurosceptics allege, but it is still a relevant dimension of public state structure and action.

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The history of third sector service delivery in the UK

Third, and finally, there are different, and indeed contested, understandings of what is meant by the third sector. A range of different terms are used to describe the sector, including the non-profit sector, the non-government sector and the voluntary sector. All have slightly different meanings and may be intended to identify different types or ranges of organisation, but they are often used interchangeably to refer to the sector as a whole, even if there is no complete agreement about what they are referring to (see Alcock, 2010). The Coalition government have also used the term ‘civil society’ to refer to this broader sector, although in practice this concept has a rather different, and more extensive, intellectual pedigree focused on social interaction rather than organisational form (Evers, 2013). This book uses the terminology of ‘the third sector’, in part to include within this a wide range of organisations such as charities, social enterprises and community groups; but it is important to recognise that it is this very diversity of organisational forms and purposes that makes discussion and analysis of the sector so complex, and so controversial. There are many different kinds of third sector organisations, and although many are engaged in different ways with the delivery of public services, there are many more (indeed a majority no doubt) who are not; and we need to be careful to avoid assuming that all face the challenges, and the opportunities, that some do. There is a danger, therefore, in engaging in what some commentators have called ‘sectorisation’ (Rochester, 2013) when examining the role of third sector organisations in the delivery of public services. This is the assumption that there is a unified third sector within which all organisations share similar characteristics and concerns. It is compounded to some extent by the prominent role played by some of the leading infrastructure agencies operating in the field, and seeking to speak on behalf of organisations – for instance, the NCVO and ACEVO, both of which have been active in promoting the role of third sector organisations in public service delivery and of lobbying on their behalf with government agencies. As critics have pointed out, these agencies do speak for some organisations, but they can never speak for all. While we should be cautious about the risks of sectorisation, there is, however, potentially a converse problem. That is the assumption that because all third sector organisations do not share the same concerns, then none do; and that because collective voices cannot be unanimous then they can have no value or influence. In practice, this is obviously not the case, as the influence of agencies like the NCVO and ACEVO over national policy making and practice testifies. It has been argued

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The third sector delivering public services

that even within a diverse and disparate third sector, there may still be a ‘strategic unity’ over certain important issues, and in particular over the forging and managing of relationships with the major agencies of the central and local state (Alcock, 2010). Such a strategic unity may be partial, and fragile, but it does mean that we can, to some extent, talk about the role and interests of the sector when examining relations with government, and engagement with public services.

Changing relations with the state The history of the role of third sector organisations in the delivery of public services therefore needs to be informed by the different understandings of what is meant by public services, how the different aspects of the state exercise their responsibility for these, and how within a diverse third sector those organisations engaging in these activities are able to act, and be understood, collectively. As mentioned, this engagement has a long history, and over the span of the last three centuries it has been altered in form and content, as different organisations have played different roles, and as public policy has changed direction. As Harris (2010) reminds us, however, while this has been a changing relationship, it has not been a new one. The involvement of the third sector in public service delivery and partnership with state agencies has been a continuous, if changing, feature of the development of these services. One way of seeking to understand this history, and the legacy that it has left for current policy makers and practitioners, is to summarise it as a series of phases of engagement, mirroring to some extent the broader development of welfare services within the country as a whole. This was the approach adopted by Lewis (1999) in a review of the changing nature of state and third sector relations. She identified ‘three major shifts’ (Lewis, 1999: 258) in this, each reflecting a greater range of control by the state. Here, these are discussed as four phases in the development of state and sector relations. The first phase was characterised by the role of third sector organisations primarily as direct providers of services. In the 19th century, when public provision through the state was limited or nonexistent in most areas of welfare provision, and private market provision was at best able to meet the needs of only a relatively small section of the population who could afford to pay for services, then it was largely third sector organisations who moved in to fill the gaps created by this public and market ‘failure’.

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The history of third sector service delivery in the UK

Nineteenth-century third sector providers included major charitable organisations responding to the needs of abused and abandoned children, such as the NSPCC and Barnardo’s, both of which still operate to provide these services today. In health and education, the leading early providers were the voluntary hospitals and voluntary schools. Third sector organisations were also innovators in developing mutual protection, in particular for workers, through the Friendly Societies providing insurance-based income support for sickness and unemployment (Harris, 2004). In the second half of the century, much of the work of organisations providing welfare services was coordinated and promoted by the Charity Organisation Society (COS), which sought to provide a more ‘scientific’ approach to philanthropy by trying to overcome the rather haphazard distribution of charitable activity, and to promote an ideological challenge to what leading COS figures saw as the threat of of ‘pauperisation’, by encouraging charities to provide moral as well as financial support (Davis Smith, 1995). The objectives of COS included not only shaping third sector provision of welfare services, but also seeking to promote independent provision as the driving force for the development of public welfare in the UK. This could be seen most prominently in the role of leading COS figures (Booth and the Bosanquets) in the drafting of the Majority Report of the Royal Commission on the Poor Laws of 1909, which argued that charitable and voluntary provision should be at the heart of 20th-century welfare reform. This contrasted with the Minority Report, which was largely the work of the Fabians, Sidney and Beatrice Webb, and argued that it was the state that should take up the responsibility for delivering welfare. Although support for state welfare was only a minority voice in the Commission, this was the direction that was largely followed by government in the early 20th century, with the introduction of social insurance protection, state education and public housing, by a mix of both central and local government. These early welfare state reforms led to a second phase of third sector involvement in public services, with organisations playing something of a complementary role to these new state providers. For instance, the Friendly Societies were used to administer statutory health insurance provision, and voluntary hospitals remained as major providers of acute health care. In the early 20th century, the Webbs (Webb and Webb, 1912) contrasted this complementary role with the provider role, discussed above, through the use of a metaphor, which compared this earlier role to that of ‘parallel bars’, and argued that instead of this, the voluntary sector

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The third sector delivering public services

should aim to operate as an ‘extension ladder’, building on the base of a guarantee of state provided services. As Davis Smith (1995) argues, although not initially taken up, this extension ladder model did begin to provide the basis for the next phase of third sector public service provision after the introduction of the comprehensive ‘welfare state’ reforms of the 1940s. These reforms are often associated with the recommendations of the Beveridge Report of 1942, which argued for social security protection for all, through the state and the end of the involvement of the Friendly Societies. And in the National Insurance, NHS and other post war reforms, such provision was largely introduced, with voluntary hospitals also disappearing, to be taken over by the state. However, Beveridge himself was keen to express his support for a continuing role for voluntary action in public welfare provision, as he explored in his 1948 book on the subject. Here he argued for what was in effect a supplementary role for third sector organisations in delivering the additional or specialist services that the state could not be expected to provide – an extension ladder to the welfare state. And to a significant extent, this is what happened to third sector engagement with public services over the next few decades. Some of this supplementary provision was provided by well-established organisations such as the NSPCC and Barnardo’s, who now worked alongside the newly established local authority children’s departments to provide specialist support and care for vulnerable children. But state welfare also led to the growth of new organisations providing services which supplemented, and in some cases challenged, the work of public agencies. For instance, the hospice movement began to provide the kind of end-of-life care that NHS hospitals could not hope to deliver; and Citizens Advice Bureaux (initially set up to provide wartime advice) began to offer advice and advocacy to help citizens access the social security benefits and other welfare rights that many were not, in practice, aware of or able to pursue themselves. Some of the contradictory implications of this advocacy role were explored in a pamphlet called In and Against the State, by the London Edinburgh Weekend Return Group (LEWRG, 1979), which argued that public services should be challenged and improved from both inside and outside formal state agencies, quoting the example of law centres in providing welfare rights advice. In the latter decades of the last century, however, challenges to state welfare did not only come from left wing critics like the LEWRG. The impact of economic recession in the 1970s and the election of the Conservative governments under Margaret Thatcher led to a

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The history of third sector service delivery in the UK

questioning of the future viability and desirability of the ‘welfare state’, and over time to a range of measures to reduce the scope, and the cost, of public services, and the domination of ‘producer interests’ within them. An important dimension of this shift away from comprehensive public welfare, were moves to encourage alternative providers in the private and third sectors, and even to ‘contract out’ previously publicly delivered services to these alternative providers. The contracting out of public services was criticised by some supporters of state welfare as a ‘privatisation’ of public assets; and in the case of some measures, such as the sale of council houses, this is very largely what happened. The involvement of third sector providers, however, was arguably not such a radical, nor a novel, development, for, as discussed above, third sector agencies had been providing public services alongside state agencies for some time. The main significant change that flowed from the new political and economic situation was the increasing use of private and third sector organisations to deliver the services that were being contracted out by government agencies. This meant that these alternative providers were increasingly funded by public money to deliver these services, generally under contracts specifying service needs and delivery targets. Although much of this contracting out of public services went to private providers, there were some areas of provision where third sector organisations began to play a significant role. This was particularly the case in the provision of social care which, following the ‘community care’ reforms of the 1990s, was largely transferred to alternative providers. Billis and Glennerster (1998) argued that voluntary organisations experienced a particularly competitive advantage in competing for the delivery of human services such as these, because their smaller and flexible operations made them potentially more sensitive to the needs of the users of these services. And a review of the role of voluntary organisations in the delivery of care and support for older people by Kendall (2003) confirmed that these organisations may have had such a comparative advantage at the time in the 1980s and 1990s when these services were being increasingly transferred to alternative providers. The delivery of services under contracts with the public agencies of central and local government from the 1980s and 1990s onwards, led to a new, fourth, phase of engagement with public services, which came to be described by the incoming Labour administration in 1997 as one of partnership between the state and the third sector. The ‘New Labour’ government was keen to promote choice and competition in the provision of a wider mix of welfare services, which they described

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The third sector delivering public services

as a ‘Third Way’, between state and market based provision (Blair, 1998; Giddens, 1998); and this had significant consequences for relations between government and the sector, as we shall discuss below. This new era of partnership and public funding also had significant consequences for the third sector organisations involved in delivering these new public services, however. Most importantly, it led to a major growth in public funding for the sector, in particular, linked to contracts for the delivery of public services. In the first decade of the new century, public income for the sector in England and Wales rose from £8.6 billion to £13.9 billion, with all of this being accounted for by a rise in contract income from £4.3 billion to £10.9 billion (Clark et al, 2012). This greater reliance on contracts was a source of concern for critics both within and outside the sector, some of whom argued that it led to the introduction of a ‘contract culture’ within organisations (Scott and Russell, 2000; and see Kendall, 2003; 78-9; Milbourne, 2013). The problem with contracts for services, these critics argued, was that they introduced intrusive levels of monitoring and accountability into the practices of organisations delivering services, in order to be able to account for the use of public money and report on the meeting of agreed targets for provision. This could lead to a new organisational culture driven by the involvement in contracts, causing ‘mission drift’ as organisations moved away from their initial principles of voluntary action and individual care (Macmillan, 2010), and in extreme cases resulting in tendencies towards ‘isomorphism’ (DiMaggio and Powell, 1983) – where these organisations were transformed to become more and more like the public agencies they were supposed to be replacing. Partnership and contracting were not without their critics, therefore. Nevertheless, under the Labour administrations they became cemented as a new, and more extensive, phase of third sector engagement with the provision of public services, which was accompanied by significant changes in relations with government more generally.

The Third Way Labour’s commitment to the promotion of a Third Way for the development and delivery of public services was at the centre of their approach to the reform of welfare in the first decade of the 21st century. The Third Way was based on a recognition of some of the limitations of the supposedly comprehensive public services of the ‘welfare state’, which by the 1990s were far from comprehensive in practice, in any case, after the changes made by the previous Conservative

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The history of third sector service delivery in the UK

administrations; and in particular, was based on a commitment to encourage a wider range of providers within what was recognised to be a ‘mixed economy’ of service provision. The government’s belief was that potential competition between alternative providers would lead to greater choice for service users and would drive up service standards. This was linked to more general changes in the organisation and development of public services flowing from the impact of New Public Management practices, which shifted the concern of policy makers and practitioners from individual professional judgements to the setting of service targets and the monitoring of providers (Clarke and Newman, 1997; Greener, 2009). Government documents referred to this new policy context as a focus on ‘what works’. This was a pragmatic approach to service provision that was concerned not with who delivered the service, or even how they did this, but only with whether service users were provided with the outcomes that they needed. Whether service provision was working in this way could be assessed and monitored by the setting of targets and the use of independent auditors and inspectors to monitor achievement – for instance, the Audit Commission who had overall responsibility for monitoring of all services provided outside of central government. This pragmatic focus on what works had quite profound effects on all providers of public services, including, therefore, those third sector organisations engaging in some way, and in particular, when they were under contract to deliver specified targets, and accountable for their performance in this. This added to the impact of the contract culture, which the third sector critics had begun to identify. It also made it potentially more difficult for third sector organisations to take on public service delivery where they were not well equipped to meet all the requirements of accountability and monitoring, and to compete for contracts with other providers who might be better able to demonstrate their strengths in this. This was recognised by the Labour government, and they sought to provide support and assistance for third sector organisations to help them to compete for public service contracts and to deliver them effectively. In fact, this support was part of a much broader programme of engagement with the third sector by the UK government under Labour, described by Kendall (2009) as heralding a period of ‘hyperactive mainstreaming’. By 2000, of course, devolution meant that in practice this new policy environment applied only to England, although similar moves were taking place in the new administrations in Scotland, Wales and Northern Ireland (Alcock, 2012).

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The third sector delivering public services

In an earlier discussion of state support for the third sector, Kendall (2003) had distinguished between ‘vertical’ and ‘horizontal’ forms of support. Vertical support was more traditionally provided and was focused on the organisations operating in particular fields, including welfare service fields – for instance, the support provided for Citizens Advice Bureaux through their national agency Citizens Advice. Horizontal support is that provided for the third sector as a whole, or at least for any organisations wanting to apply for it. Central to Labour’s approach to hyperactive mainstreaming was a new commitment to engage with the sector as a whole, and to provide government support for any organisations willing and able to apply for this and take it on, as part of a more inclusive approach to cross-sector working. It took a number of different forms and was driven by a commitment to deepen relations between the state and the sector, and to use public resources to improve the capacities and capabilities of organisations. The introduction of closer relations between the third sector and the state was anticipated in the recommendations of the Deakin Commission (1996), which was established by some of the leading sector agencies in England and reported just before the 1997 election. One of the core recommendations of the commission was that relations could best be improved by the establishment of a ‘concordat’ setting out terms for engagement and requiring both parties to commit themselves to working within these. Labour acted quickly to implement this though the introduction in 1998 of a national Compact in England to provide a framework for dealings between central government departments and third sector organisations, in particular over public service funding. Similar compacts followed shortly after in Scotland, Wales and Northern Ireland; and over the next few years, compacts were developed at local authority level to introduce these principles into local, state and sector relations too (Craig et al, 2002). However, the Compact was a framework for relations, not a legally binding document; it relied on both parties committing to working within it. National guidance was therefore issued on a number of key matters of concern (Home Office, 2005); and later an independent agency, the Compact Commission, was established to oversee its operation, although this too did not have regulatory powers and was later abolished by the Coalition government. Despite the criticisms and the limitations, the Compact became a leading feature of new government commitments to engaging with the third sector. It has also led policy makers to recognise that coordination and partnership may require more than just formal agreement. For third sector organisations to engage with government agencies, and in

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The history of third sector service delivery in the UK

particular to secure funding under contracts to deliver services, then investment may be needed to build up their organisational capabilities and practical skills. There had been examples of government support for organisational development in voluntary action and social enterprise in the 20th century, but this had largely been confined to the vertical fields identified by Kendall (2003). Labour wanted to extend this to horizontal support to build up the capacity of all third sector organisations, whatever the focus of their mission or activity. This was the focus of a cross-cutting review of support, led by the Treasury as part of the 2002 Comprehensive Spending Review (HM Treasury, 2002), from which flowed significant new measures to support the sector, in particular, linked to participation in public service delivery. These were also English initiatives, but again some similar programmes were introduced by the devolved administrations. The first example of this was the Futurebuilders fund, initially £125 million over three years from 2005 to 2008, to provide grants or loans to third sector organisations to help equip them to bid for public funding. The investment in Futurebuilders was expanded to £215 million and continued for 2008 to 2011, although delivery of the programme was transferred to a new independent agency, the Social Investment Business (SIB). The SIB went on to become a major source of investment support for third sector organisations. It also administered the £70 million Communitybuilders fund, established by the Department for Communities and Local Government and the Cabinet Office in 2008 to provide support for small, local and community-based organisations, and the £100 million Social Enterprise Investment Fund (SEIF), established by the Department of Health, to provide support for social enterprises bidding to deliver health and social care services. In addition to the horizontal funding provided through SIB, Labour introduced another programme in 2004 called ChangeUp to provide support for infrastructure agencies delivering capacity building services to third sector organisations, to help them to deliver support for organisations in areas such as workforce development and information technology. ChangeUp provided a further £150 million in new resources, and after 2006 was delivered by a separate government agency called Capacitybuilders. This led some commentators to refer to these horizontal investments as the ‘builders’ programmes; and certainly the theme of investing in building up the capacity of organisations ran through them all.

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The third sector delivering public services

This massive expansion of horizontal investment in third sector organisations and agencies was accompanied by significant developments in the institutional structures and practices within government to support relations with the sector. At first funding for the Voluntary Services Unit in the Home Office, which had led previous coordination of communication with and support for the sector, was increased – with the unit renamed the Active Communities Directorate. This was followed by the establishment of a new Social Enterprise Unit within the Department of Trade and Industry to provide support for the social enterprises that many saw as an important area for organisational development, in particular in the delivery of public services (Peattie and Morley, 2008). Then in 2006, these two units were merged and moved to create a new Office of the Third Sector (OTS) within the Cabinet Office. The OTS was a high profile commitment to the placing of state and third sector relations at the heart of government. Its first Minister was Ed Miliband (later Labour Party leader) and its first director, Campbell Robb, came not from within the civil service but from the leading sector agency the NCVO. The creation of OTS was probably the high water mark of government support for the third sector under Labour, and indeed more generally. Like the other initiatives, it was an English department; but as with the others, similar offices were created in Scotland, Wales and Northern Ireland (though support for social enterprise remained separate here) (Alcock, 2012). OTS had a large budget (most of the ‘builders’ funds flowed through it) and it established close relations with the major infrastructure agencies for the sector, which became ‘strategic partners’ and received core funding from the OTS budget. The creation of OTS was a high water mark because, of course, its creation was followed shortly after by the credit crunch of 2007 and the economic recession of 2008/09, which led to pressures on public expenditure budgets. And after the change of government in 2010, it was retitled the Office for Civil Society (OCS), and suffered massive budgets cuts in the 2010 Spending Review leading to the closure of all the horizontal (builders) programmes and the withdrawal of support for the strategic partners. As discussed in Chapter 3, the policy environment for government relations with, and support for, the third sector has altered significantly under the Coalition, although the Cabinet Office base for formal engagement with the sector has been retained, with the Compact, too still, at least nominally in place. And the broader commitment to encouraging organisations to take on contracts for public service delivery has been continued – and indeed expanded.

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The history of third sector service delivery in the UK

During the first decade of the new century, therefore, relations between the state and the third sector reached new levels of engagement – hyperactive mainstreaming indeed. And this era of partnership led to a major growth in the involvement of organisations in the delivery of public services, as the expansion and restructuring of public income for the sector discussed above reveals. This included major changes in responsibility for social housing, as public stock was transferred to third sector providers (see Chapter 12), and a continued expansion of the leading role that organisations played in the delivery of social care (see Chapter 11). There was also a growing role for the third sector in other policy fields, including employment (see Chapter 10), criminal justice and community health. However, none of this matched the massive expansion of the private sector providers of public services, with large service delivery companies such as Serco, Capita, G4S and A4E able to secure most of the larger contracts from public services commissioning agencies. It was the need to compete with these private companies to win state contracts, and then the controls and accountability that came with the winning of them, that led to the criticisms of third sector involvement in public service delivery that also developed over this period. The positive images of partnership were seen by critics such as Carmel and Harlock (2008) as moves by government to institute the sector as a ‘governable terrain’. Labour’s close relations with the sector, and the support it provided to restructure organisations to help them to secure public service contracts, could mean that, in effect, these organisations became little more than service delivery agents, resulting in mission drift and isomorphism (see Macmillan, 2010). And this could be compounded by the need to compete in open markets for service contracts with large and effective private companies, as is discussed in more detail in Chapter 3. This required third sector organisations to become larger and more professional, and to have robust business plans, strong capital holdings and investment strategies, and tight financial accountability – not the features that had traditionally characterised organised voluntary action, and indeed had been praised a decade earlier by Billis and Glennerster (1998). Where third sector organisations could take on the main features of social enterprise, therefore, then they may have been better placed to secure and deliver contracts; and it is for this reason that the social enterprise model was so strongly promoted by Labour, and since then by the Coalition. However, even here there was evidence of problems for organisations. The SEIF, which had been set up to provide loans to support the business development of organisations wanting to compete

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The third sector delivering public services

for health service contracts, found that, in fact, most applicants for support could not take on the risks of loan funding and were in practice looking only for grants (Hall et al, 2012). The new partnership between the state and the third sector in the delivery of public services offered by Labour’s Third Way did lead to a major expansion of the role of the sector in this activity; and this has set the scene for what might be seen as a new era of heightened (quasi-)market competition for public services under the Coalition government. But it did not come without costs for many of the organisations that were involved in it, as some of the other contributors to this book discuss. It also led some later commentators on the sector to argue that this expansion of state funding and service contracting had resulted in a process of transition for the sector as a whole (Milbourne, 2013), and indeed had potentially threatened the whole basis of independent voluntary action (Rochester, 2013).

Conclusion A review of the history of the involvement of third sector organisations in the delivery of public services reveals that this is a longstanding feature of voluntary action, but also a complex and ever-changing one. In part, this is a product of the confusion over the different understandings of some of the key concepts employed, which at times have meant that critics and commentators are not always in practice referring to the same things. This has applied to the notion of public services, the scope and operation of the state, and the definition of and inclusion within the third sector – and, what is more, the usage of these terms has changed over time. Nevertheless, a broad understanding of all of them reveals that a wide range of organisations has been engaged in different aspects of public service delivery over three centuries, and that this has involved changing relations with different aspects of the various bodies of the UK state. These relations have changed over time, primarily in response to the changing policy environment for welfare services driven by government. They can be grouped into four broad phases, with the role of third sector organisations moving from one of direct providers, when there were few alternative sources of provision, to one of complementing the gradually expanding scale of publicly provided services and meeting major gaps in provision, to one of supplementing (and sometimes challenging) the more comprehensive services developed within the 20th-century welfare state. Finally, at the end of the last century and the beginning of this one, a new model of partnership emerged, in which

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The history of third sector service delivery in the UK

third sector organisations were increasingly supported by the state and funded to deliver services on behalf of a range of public agencies. In general, this could be characterised as an ever deepening and more wide-ranging set of relations between the sector and the state; and it is this more extensive (and potentially contentious) latter phase, and the implications of this for third sector organisations, and for the services that they are providing, that is the primary focus of this book. What this short history of the development of public service provision by the third sector reveals, however, is that there is no single model of delivery and no one form of state engagement or support. In particular, it is important to understand the contrast between the vertical support for third sector service delivery, focused in separate fields of welfare provision, which characterised the earlier phases of third sector involvement, and the horizontal support that was developed for the sector as a whole during the Labour government era of hyperactive mainstreaming. Horizontal support required both government and the third sector itself to develop strategic responses to the relationships between the two – captured in more concrete form by the development and implementation of the Compact. However, this strategic engagement has come at a cost to some organisations, at least in driving significant structural and cultural change within them; and, as some critics have argued, it has challenged the diversity and independence of those many organisations who have not wanted or been able to be party to it. It is important to remember, therefore, that the history of third sector involvement in the delivery of public services, has only ever been a history of one aspect of sector politics and practices. References Alcock, P. (2010) ‘A Strategic Unity: Defining the Third Sector in the UK’, Voluntary Sector Review, 1:1. Alcock, P. (2012) ‘New Policy Spaces: The Impact of Devolution on Third Sector Policy in the UK’, Social Policy and Administration, 46.2: 219-238. Beveridge, Sir W. (1942) Report on Social Insurance and Allied Services, Cmd. 6404, London: HMSO. Beveridge, Sir W. (1948) Voluntary Action, London: Allen & Unwin. Billis, D. and Glennerster, H. (1998) ‘Human services and the voluntary sector: towards a theory of comparative advantage’, Journal of Social Policy, 27.1. Blair, T. (1998) The Third Way, London: Fabian Society.

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Carmel, E. and Harlock, J. (2008) ‘Instituting the “third sector” as a governable terrain: partnership, procurement and performance in the UK’, Policy & Politics, 36.2. Clark, J, Kane, D., Wilding, K and Bass P. (2012) The UK Civil Society Almanac 2012, London: NCVO Publications. Clarke, J. and Newman, J. (1997) The Managerial State, London: Sage. Craig, G., Taylor, M., Wilkinson, M. and Monro, S. (2002) Contract or Trust? The Role of Compacts in Local Governance, Bristol: Policy Press. Davis Smith, J. (1995) ‘The voluntary tradition: philanthropy and self-help in Britain 1500–1945’, in Davis Smith, J., Rochester, C. and Hedley, R. (eds), An Introduction to the Voluntary Sector, London: Routledge. Deakin, N. (1996) Meeting the Challenge of Change: Voluntary Action into the 21st Century, Report of the Commission on the Future of the Voluntary Sector in England, London: NCVO Publications. DiMaggio, P. and Powell, W. (1983) ‘The Iron Cage revisited: institutional isomorphism and collective rationality in organisational fields’, American Sociological Review, 48, 147-60, Evers, A. (2013) ‘The concept of “civil society”: different understandings and their implications for third sector policies’, Voluntary Sector Review, 4.2 Giddens, A. (1998) The Third Way: The Renewal of Social Democracy, Cambridge: Polity Press. Greener, I. (2009) Public Management: A Critical Text, Basingstoke: Palgrave Macmillan. Hall, K., Alcock, P and Millar, R. (2012) ‘Start Up and Sustainability: Marketisation and the Social Enterprise Investment Fund in England’ Journal of Social Policy, 41.4. Harris, B. (2004) The origins of the British welfare state: Society, state and social welfare in England and Wales 1800–1945, Basingstoke: Palgrave Macmillan, Harris, B. (2010) ‘Voluntary action and the state in historical perspective’, Voluntary Sector Review, 1.1. HM Treasury (2002), The Role of the Voluntary and Community Sector in Service Delivery: A Cross Cutting Review, London: HM Treasury. Home Office (2005) Funding and Procurement: Compact Code of God Practice, London: Home Office. Kendall, J. (2003) The Voluntary Sector: Comparative Perspectives in the UK, London: Routledge.

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Kendall, J. (2009), ‘The third sector and the policy process in the UK: ingredients in a hyperactive horizontal policy environment’, in Kendall, J. (ed) Handbook of Third Sector Policy in Europe: Multi-level Processes and Organised Civil Society, Cheltenham: Edward Elgar. Lewis, J. (1999) ‘Reviewing the Relationship between the Voluntary Sector and the State in Britain in the 1990s’, Voluntas: International Journal of Voluntary and Nonprofit Organizations, 10.3. London Edinburgh Weekend Return Group, (1979) In and Against the State, London: LEWRG. Lowe, R. (2005) The Welfare State in Britain since 1945 (3rd edn), Basingstoke: Palgrave. Macmillan, R. (2010) The third sector delivering public services: An evidence review, Birmingham: Third Sector Research Centre, Working Paper 20. Milbourne, L. (2013) Voluntary Sector in Transition: Hard times or new opportunities?, Bristol: Policy Press. Peattie, K, and Morley, A. (2008) Social enterprises: Diversity and dynamics, contexts and contributions, London: Social Enterprise Coalition and Economic and Social Research Council. Rochester, C. (2013) Rediscovering Voluntary Action: The Beat of a Different Drum, Basingstoke: Palgrave Scott, D. and Russell, L. (2000) ‘Contracting: the experience of service delivery agencies’, in Harris, M. and Rochester, C. (eds), Voluntary Organisations and Social Policy in Britain, Basingstoke: Palgrave. Stoker, G. (1991) The Politics of Local Government (2nd edn), London: Macmillan. Timmins, N. (2001) The Five Giants: A Biography of the Welfare State (new edn), London: Harper Collins. Webb, S. and Webb, B. (1912) The Prevention of Destitution, London: Longman. Wilson, D. and Game, C. (2011) Local Government in the United Kingdom (5th edn), Basingstoke: Palgrave.

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THREE

The context for service delivery: third sector, state and market relationships 1997–2015 Heather Buckingham and James Rees This chapter picks up where the last chapter left off, covering in greater detail the New Labour (1997–2010) and Coalition government periods, up to and including the 2015 general election. It has two broad aims: to provide a historical overview of policy, practice and the academic debates that have surrounded the often controversial role of the third sector in public service delivery; and to tease out underlying continuities and points of difference in the stances of these governments towards the sector, as well as resulting changes within the sector itself. Our analysis is framed by the welfare triangle developed by Adalbert Evers. While shifts in discourse and practice are detected, our examination identifies an underlying continuation of trajectories initiated in the early 1980s including movement towards increasingly market-based forms of provision, the reduction of the scale of the welfare state and an aspiration to harness the perceived positive contribution of the third sector. These broad trends reflect Tony Blair and Gordon Brown’s acceptance of the Thatcher legacy within their Third Way governing project, and were echoed by David Cameron’s Big Society rhetoric and George Osborne’s drive to further shrink the state in a new era of austerity. Nevertheless, while New Labour did not confront underlying neoliberalising forces in the way that some of their supporters may have hoped, there were significant practical differences in the way in which they dealt with the third sector, not least through the generous funding and capacity building programmes outlined in the previous chapter. These in no small way contributed to the reshaping of significant parts of the third sector, and as a result, components of the policy and practice landscape have been transformed almost beyond recognition from their pre-1997 state, in many cases, along the lines that researchers had predicted (see for example Harris and Rochester, 2001). The financial crisis of 2007–08 and the deficit reduction and austerity

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The third sector delivering public services

measures introduced since then have seen the flow of government funding to the third sector significantly reduced. Although these cuts have been presented by politicians as an economic imperative, they also correspond quite comfortably with the Big Society agenda’s emphasis on the role of volunteers in meeting social needs. This, too, is a contrast with New Labour’s focus on engaging and resourcing parts of the sector that relied more heavily upon paid staff. Figure 3.1: The welfare triangle

State welfare

Third sector welfare Market welfare

Informal welfare

Source: After Evers (1988)

To explore these changes and continuities systematically and in more detail, we take Evers’ (1988) welfare triangle as a framework for analysis. The welfare triangle represents the welfare mix as comprised of the market, the state and the informal welfare sector, the latter being made up of the support that families, friends and neighbours provide for one another (Rose, 1986). The third (or voluntary) sector is located within a triangular ‘tension field’ between the three other sectors (see Figure 3.1). This model enables us to conceptualise the third sector as that which is non-governmental, and therefore separate from the state; notfor-profit, distinguishing it from the market; and operating at a scale beyond that of individual families and friendship groups. Furthermore, the ‘tension field’ allows us to conceive of some organisations within the third sector being closer to the market, for example, in terms of their values and practices. This, of course, requires some degree of consensus about the primary rationalities or principles that characterise these other sectors. This is a contested, complex and dynamic issue (Alcock, 2010a), and in practice there is a considerable degree of blurring and

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The context for service delivery

overlap between sectors, but for our purposes here it can broadly be surmised that state welfare is based upon some concept of equality and the state’s authority to redistribute resources to achieve this. Market provision is based on the notion of individual choice governed by the competition mechanism and the profit incentive, and informal welfare relies upon principles such as care, reciprocity, solidarity and personal obligation (see Evers, 1988, 1995; Evers and Laville, 2004). Thus, the periphery of the tension field is populated by organisations whose attributes closely resemble those associated with other sectors, and at its centre are organisations that most fully satisfy the characteristics of the third sector. After summarising the policy context in each period, the chapter addresses each interface within the welfare triangle in turn, exploring the third sector’s changing relationship with and likeness to the state, the market and finally, the informal sector under New Labour and the Coalition.

The policy and practice domain – New Labour and the Coalition compared New Labour and the third sector: partnership and paradox A buzzword of the New Labour era, partnership was a key discourse within Tony Blair’s government’s approach to the third sector, and the reinvigoration of civil society was central to the Third Way: it was believed that TSOs provided opportunities for participation in community life that would foster the trust and social capital necessary for civil renewal. Consequently, successive New Labour governments sought to harness the third sector both as a provider of public services and as a channel for active citizenship (Fyfe, 2005). As we saw in the previous chapter, as they did so, a complex and sometimes contradictory array of policy interventions and funding streams were developed (see also Alcock and Scott, 2007: 91-4). The primary mechanism for operationalising greater TSO involvement in service provision was the contract, and formal contractual relations between TSOs and the state became widespread in areas ranging from health, unemployment and social care to conservation and transport. This in some senses replicated the funderprovider split that characterised the Conservatives’ 1991 Community Care Act, but departed from that approach in that the government took on greater responsibility for monitoring and regulating the sector (for example, May et al, 2005). This meant that although the channelling of public funding and the transfer of service provision responsibilities to

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The third sector delivering public services

TSOs increased, local and national government retained a high degree of control. The potential to reduce the cost of providing public services was also an important driver for increased third sector involvement. The active citizenship and community-building functions of the third sector were promoted by the Civil Renewal Unit, established in 2003, and the sector was enrolled in the strategy for Neighbourhood Renewal through Local Strategic Partnerships (LSPs) (Social Exclusion Unit, 2001). Volunteering initiatives were launched (Jochum et al, 2005), while tax reliefs on private giving brought significant benefits for charitable TSOs (Kendall, 2003: 45). However, in spite of these efforts, researchers have tended to agree that it was TSOs’ involvement in public service provision that was more strongly supported and financially resourced under New Labour (Alcock and Scott, 2007: 94). New Labour sought to mainstream the third sector across a range of policy areas (Kendall 2000; 2003) and in many respects created a more favourable environment for TSOs. However, the multiple objectives of their engagement with the sector were not always compatible with each other. The competitive environment created by tendering sat uncomfortably with the rhetorical emphasis on partnership with and among TSOs (Kendall, 2003), and the professional standards required of contracted TSOs often left little room for volunteer involvement and the furtherance of the civil renewal agenda (Alcock and Scott, 2007). Indeed, the eventual shift towards an emphasis on social enterprises as service providers (OTS, 2006) may have been an attempt to sidestep some of this complexity by identifying a subset of organisations that corresponded more readily with their objectives. A Coalition for the era of austerity: the Big Society and the small state The Conservative–Liberal Democrat Coalition announced in its 2010 Agreement, a priority to reduce the deficit and to hold an emergency budget heralding spending cuts. It would support the creation of a ‘Big Society’, and promote devolution through a move towards greater localism, supported by a Localism Act (HM Government, 2011). At the same time, a shift in language saw the replacement of ‘third sector’ with ‘civil society’ in government discourse, most obviously in the renamed Office for Civil Society in the Cabinet Office. Initially, the idea of the Big Society was greeted by some in the sector with a degree of optimism: it was viewed, at face value at least, as an opportunity to strengthen the broad role of civil society, as well as individual giving and voluntary and cooperative behaviour in the context of what was now

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The context for service delivery

called ‘social action’. It also promised an end to top-down targetry and micromanagement in public services (Alcock, 2010b; Taylor, 2011). For advocates close to the Cameron leadership, the Big Society was put forward in opposition to the supposed ‘big state’ technocratic and target-obsessed New Labour era. But within two years its appeal had considerably diminished, and by 2012 Big Society had dropped out of Cameron’s speeches and was largely expunged from government description of its policies and programmes. Criticised from the outset by a broad range of commentators for its ideological vagueness, or as a ‘figleaf for cuts’; it was also soon dismissed by many within the sector because of the problematic contrast with the wider reality of austerity, and the likelihood of direct cuts to existing funding for TSOs from central and local government. Indeed, it was partly mobilisation by the sector – in the context of this climate – that led to the creation of a £100m Transition Fund to help TSOs (or Civil Society Organisations, as the government termed them) adapt to the changing funding environment. However, this too came with strings attached: it was designed to tackle voluntary sector ‘dependency’ on public funding and as the title implied it was a temporary measure, with the ultimate aim of making the sector more self-sustaining and market-like, seemingly more evidence of a partial ‘de-coupling’ of New Labour’s partnership with the sector (Macmillan, 2013b; and see Chapter 6 for more detail). While this in some respects represented a break from the past, there were also clear continuities from the New Labour period, both in the form of policies designed to alter inter-sectoral relationships, and in the form of a renewed determination to shrink the scope and size of the state, a priority associated more with Osborne’s Treasury than with Cameron’s team. Initially at least, the Big Society theme was blended with the earlier motifs of New Labour’s attempts to enhance citizen engagement in public services, with the community right to challenge and take over the running of parts of public services being matched by an employee right to provide, encouraging public sector workers to set up employee-owned cooperatives and mutuals (see Chapter 5). These questions also underpinned a parliamentary debate over the private member’s bill to introduce a ‘Social Value Act’, which would aim to create a ‘level playing field’ for TSOs in the procurement and commissioning of public services. As Teasdale et al (2012) concluded, the debate over the bill exposed tensions between those who wanted to see social enterprises and charities overtly favoured in procurement, and the liberal wing of the Conservative party that stressed free market competition, and the result suggested that the latter won out.

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The third sector delivering public services

Indeed, running in parallel to these policies and arguably more decisive in influencing the policy environment for TSOs was the Open Public Services agenda, which was based on an argument that the ‘old, centralised approach to public service delivery is broken’ (HM Government, 2011: 7). It advocated a programme emphasising outsourcing and diversification of the provider market through greater use of commissioning, with a stronger emphasis on increasing the size of contracts, and a more determined transfer of risk and responsibilities to non-state providers, particularly private sector prime contractors (Rees, 2014). The paper also emphasised the role of greater service user choice, and for power to be decentralised away from Whitehall, consistent with the idea of enhanced localism. In this vision, government’s role was to be largely restricted to ensuring that citizens have fair access to public services through appropriate regulation. The most fully realised application of these principles was in the new Work Programme (see Chapter 9), in which it was soon apparent that delivery would be dominated by large private sector providers (Rees et al, 2013; Damm, 2014). The run up to the 2015 General Election saw the Conservative party place a strong emphasis on civil society, and particularly on faith groups, in meeting social needs at a local level, while maintaining a relatively ‘hands off’ approach to this, both in terms of funding and policy intervention. Notable too at this stage, however, was a discontent among politicians at attempts by third sector and faith leaders to speak critically to political matters, particularly around the negative impacts of austerity measures on deprived communities and marginalised groups (Rees et al, 2015).

Interface with the state New Labour: contracts, monitoring and commissioning Although the regulation of TSOs and use of competitive tendering intensified after 2000, many of the issues identified in the 1990s – including in relation to the New Public Management (NPM) – continued to be pertinent (for example, Taylor and Lewis, 1997). Kendall (2003) summarised these concerns under five headings: 1. formalisation 2. inappropriate regulation 3. threats to autonomy and goal distortion

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The context for service delivery

4. excessive financial insecurity 5. erosion of comparative advantage. As TSO involvement in contracts increased under New Labour, so government monitoring of quality standards and performance in TSO services became more widespread. While the importance of ensuring that contracted TSOs are accountable for their use of public funding, and that their services are consistent and effective, there were concerns about some of the other, sometimes unintended, impacts of monitoring on TSOs. These included concerns about reduced TSO autonomy, both explicitly, through requirements to adopt particular internal reporting and information systems, and more subtly, by influencing organisational priorities and consequently the nature of service delivery (for example, Cairns et al, 2005; Carmel and Harlock, 2008; Buckingham, 2011). For instance, a focus on meeting performance targets could lead to neglect of individuals who are marginalised by government welfare, or of TSO functions that were not measured or regulated (Ilcan and Basok, 2004; Buckingham, 2011). This potential neglect of the intangible aspects of TSO services relates to broader debates about the lack of correspondence between what is actually measured by quality measurement systems, and the outcomes that are important for service users’ wellbeing (Power, 1997). In some senses, the emphasis on performance measurement represented an application of statutory sector conventions onto the third sector. Research suggested that larger TSOs were generally better able to respond to these requirements (Johnson et al, 1998), whereas for smaller TSOs, allocating staff time and resources to quality measurement was more problematic (for example, Cairns et al, 2005). The government’s emphasis on capacity building was arguably intended to resource TSOs to be good ‘partners’ for the state, but in doing so it could also be seen as conforming them to the norms and expectations of that sector (Carmel and Harlock, 2008). As such, it has been argued that New Labour sought primarily to partner with those TSOs that were able and willing to embrace modernisation and had the capacity to report accurately on their activities (McLaughlin, 2004). The use of competitive tendering by local governments as part of the commissioning process was influenced in part by the Best Value requirements introduced as part of the Local Government Act 1999. This saw more stringent requirements being made of organisations bidding for statutory funding, in order to maximise economy, efficiency and effectiveness. This was followed in 2004 by the implementation of Directive 2004/18/EC (European Parliament, 2004) through the

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The third sector delivering public services

UK Procurement Regulations, which led to a further increase in the use of competitive tendering in local government procurement. A National Programme for Third Sector Commissioning was established to help local government commissioners to better understand and respond to the particular characteristics of TSOs, but the tendering and monitoring processes nevertheless led to significant changes for many TSOs. In many cases, TSOs were drawn into increasingly marketised relationships and practices, the consequences of which are considered later in the chapter. Coalition: the rise of commissioning – defining a new relationship between state and sector? Dissatisfaction with the limitations of contracting outlined in the previous section, as well as the relative openness of the partnership culture of the New Labour period, contributed to a readiness for further reform and to the growing policy emphasis on commissioning through the 2000s (Bovaird et al, 2012; Lonsdale, 2012). Like other elements of the NPM-influenced reforms, procurement and commissioning were not new, but for advocates of change, the concept of commissioning held out the prospect of a more inclusive, holistic and deliberative approach. Commissioning has typically been thought of as a cycle, with recursive elements of planning, consultation, purchasing, and then further monitoring and re-specification if necessary (see Figure 3.2). In theory at least, stakeholders and most obviously provider organisations could be engaged at all points of the ‘commissioning cycle’, and the approach was linked to the growing focus on the specification and rewarding of outcomes: hence ‘outcomes-based commissioning’ (Bovaird and Downe, 2006). However, echoing the earlier debates about contracting, research to date has questioned the extent to which revamped commissioning policy has really solved some of the fundamental problems underlying the relationship between commissioners and providers (Martikke and Moxham, 2010; Rees 2014). As we have seen in relation to policy more generally, the Coalition has enthusiastically adopted the commissioning approach but has also placed a renewed and very specific emphasis on the more marketbased and competitive element of it. Central to this was the Open Public Services White Paper, which promoted commissioning as the main mechanism for defining and funding public services, amid five principles: choice, decentralisation, diversity, fairness and accountability (HM Government, 2011). This document also expressed a more

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The context for service delivery Figure 3.2: The commissioning cycle model (a)

Analyse

Plan

Commissioning

Purpose and Guidance Gap Analysis Market Analysis Joint Commissioning Resource Analysis Str ategy Needs Analysis Service Design Purchasing/ Risk Analysis

Contracting

Specification Contract/SLA Purchasing Plan

Resource User Needs Providers

Contract Monitoring & Review

Tendering & Contract Management

Change Management Budget & Market Management

Strategy Monitoring & Review

Review

Do

(b)

ANALYSIS

MONITORING & REVIEW

PLANNING

DELIVERING/ PROCUREMENT

Sources: (a) Bovaird et al (2012); (b) Navca/Reshenia (2010)

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The third sector delivering public services

visible preference for the involvement of the private sector than had been the case in New Labour policy, for example, adopting as ‘business as usual’ the prime provider and supply chain approach used in DWP’s commissioning of employment programmes (see Chapter 9, and Damm, 2014; Rees, 2014). A range of motivations can be identified as underpinning the Coalition government’s enthusiasm for commissioning: a desire to see a greater range of providers and thus enhanced competition; a preference for private sector involvement with its assumed advantages of efficiency and cost control; and as a way to speed up the marketisation of public services (Taylor-Gooby and Stoker, 2011; Benson, 2014). In attempting to coordinate public service reform, the Cabinet Office has sought to promote improved commissioning practice within government and across the public sector (through a Commissioning Academy). This has included the continuation, in a more limited form, of capacity building for the third sector, for instance in preparation for the outsourcing of probation services (see Chapters 6 and 12). Though the period 2010–14 is a relatively narrow window, indications to date suggest that initial supportive words towards the sector have given way to a more openly radical right-wing ideological agenda to reduce the scale and scope of the state. The third sector service delivery element of the Big Society agenda was an early casualty of this shift (see Teasdale et al, 2012). Thus, the explicitly supportive service delivery environment of the New Labour era seems to have been replaced by a policy environment in which private sector organisations often act as intermediaries between the state and TSOs, a change which poses a fundamental challenge to the nature of public services as well as to our understanding of the interface between the state and the third sector.

Interface with the market sector New Labour: competition and enterprise As has been noted already, the transition from grant to contractual funding brought the market principle of competition to bear on third sector providers of government funded services in new ways. However, contracts themselves did not necessarily create more competitive conditions than the grant based arrangements that preceded them (Batsleer and Paton, 1997). Rather, it was the processes by which these contracts were allocated, as well as the scarcity of resources and the number and nature of potential providers, that determined the intensity and effects of competition among TSOs. Local authorities

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The context for service delivery

increasingly adopted competitive tendering as a means of allocating contracts to TSOs, partly in an effort to improve the economy, efficiency and effectiveness of their operations as required by the best value legislation. Later, the implementation of the European Directive 2004/18/EC through the UK Procurement Regulations also contributed to a significant increase in the use of competitive tendering in local government procurement. Decisions made by TSOs are inevitably influenced by the means available to them as well as their values or mission; however, competitive contracting can increase the pressure on organisations to make means-rational rather than value-rational decisions in order to survive, potentially causing them to drift from their original values and purpose, and increasing their likeness to market sector organisations (see DiMaggio and Anheier, 1990: 145; Carmel and Harlock, 2008). Empirical third sector research in the UK identified a range of impacts associated with tendering including: making it more difficult for providers to work collaboratively (Milbourne, 2009), worsening pay and conditions for TSO staff, and adverse impacts on service quality (Scragg, 2008). Attention has also been drawn to the considerable time and skill demands of the tendering process (for example, Cunningham, 2008) and the extent to which these can disadvantage smaller providers (Morris, 2000; Milbourne, 2009). While the tendering process itself generated significant transaction costs for bidding TSOs, competition also encourages providers to divert resources to promoting or marketing themselves and thereby generates further indirect costs (LeGrand, 1991). This is exemplified in the field of homelessness services, where larger TSOs placed a strong emphasis on being seen as the best in their field, and were able to make use of economies of scale to provide specialised legal, marketing and administrative support across multiple contracts held under the government’s Supporting People programme (Buckingham, 2011). The Supporting People programme was launched in April 2003 as a new framework for providing housing-related support to help vulnerable people maintain or improve their ability to live independently. The programme covered multiple client groups including older people, teenage parents and victims of domestic violence. It replaced nine existing government funding streams including Supported Housing Maintenance Grants and Transitional Housing Benefit, and saw TSOs in many different fields of social provision enter into contracts with local government for the provision of support to vulnerable groups. The promotion of social enterprise that began under New Labour reflects a more explicit emphasis on the incorporation of

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The third sector delivering public services

market-related practices and values into the third sector. Macmillan (2013a: 49) notes for example, that ‘social enterprise is frequently invoked and positioned as a modern, entrepreneurial and sustainable organisational development in comparison to traditional or “grantdependent” charities’. However, by dissolving the distinction between ‘earned income’ and income from statutory sources, the shift from grants to contracts arguably expanded and muddied the boundaries of this emerging form of social and economic activity. Coalition: private sector provision and financing, a new challenge to the meaning of public services? As discussed above, the government’s Open Public Services agenda appears at first glance even-handed in its support for both private and third sector providers to challenge traditional public sector models. Yet this belies the adoption of the prime subcontracting model in which predominantly private sector organisations act as managing agents of supply chains of (mixed sector) subcontractors. If these trends continue, one concern is that TSOs will be squeezed out of ‘markets’ in which they have previously been well represented. For example, the Work Programme is delivered through 40 ‘prime’ contracts by 18 contractors: of these only two are TSOs and one was a public sector organisation1; the rest were private sector companies such as Ingeus, G4S and A4e. The low proportion of TSO primes in comparison to earlier DWP programmes led to widespread concern that TSOs were being ‘squeezed out’ of the employment services market (Damm, 2014). Second, because the essence of the new model is one where state-sector relationships are increasingly brokered by private organisations in the wider context of cost reduction, we would expect that the tensions created by contracting discussed already – and the associated isomorphic pressures – will intensify further. The steps that TSOs need to take to adapt to and succeed in this new environment are complex, involving the adoption of a wide range of competencies and practices traditionally associated with private sector management styles. At the commissioning stage, TSOs need high levels of competence to negotiate successfully with potential primes, they need to be able to manipulate data to show they can meet the desired outcomes, and to carry out contract scrutiny, risk assessment and financial modelling (Rees et al, 2013). They also need to have sufficient working capital and resources to take on the risk of a payment by results contract in which payment is weighted towards the end of the contractual period. During delivery, subcontractors are subject to

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The context for service delivery

intensive monitoring, they must operate IT systems and ensure high levels of security, and sometimes adopt formerly alien private sector management practices such as performance based pay and targets. Failure to meet some or all of these requirements was likely to see them exit the programme, perhaps feeling they had been abused as ‘bid candy’ (Butler, 2011). A wider perspective demonstrates other ways in which the market interface has changed. The Coalition has adopted and enhanced all the elements of New Labour policy most obviously supportive of market principles and practice. In particular, the Office for Civil Society (OCS) has continued to promote social enterprise, mutuals and spin-outs, philanthropy and ‘social investment’. The OCS has established a Centre for Social Impact Bonds (SIBs), which aims to increase the uptake of SIBs in the hope that they will drive innovation and allow more TSOs to take part in outcomes-based contracts by providing initial capital to gear up for delivery. SIBs have been criticised as a means of deepening privatisation, transferring risk and abrogating government responsibility for funding public services; as well as on practical grounds relating to their complexity and potential cost (Mythen et al, 2013; Sinclair et al, 2014). Perhaps the most difficult questions for the sector arise if there is a continued confluence of trends that include this ‘privatisation’ of funding, a continued preference for private sector ‘expertise’ and the instrumental targeting of defined groups of the public (offenders, homeless, benefit recipients) who have been targeted to achieve specific policy aims. Will the implication be that forms of partnership or mutual dependence that had previously developed in the ‘partnership era’ – based on a genuinely shared mutual interest and complementary values and missions in the public and third sectors – be distorted and abandoned?

Interface with the informal sector New Labour: left behind or left to it? Some of the characteristics believed to give third sector organisations a comparative advantage in working with vulnerable groups are their independence from the state and their connectedness or embeddedness within local communities. Increased government funding to the sector, and the advantages that large (and not necessarily local) organisations tended to have in tendering for this did little to nurture these attributes, at least among organisations involved in contracting. There were

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The third sector delivering public services

exceptions, where local authorities exercised discretion in terms of retaining existing contracts with trusted local providers, but this was not always possible, and also did not always correspond with the need to rationalise and simplify pathways through services for clients (Buckingham, 2012). However, if we only consider those TSOs involved in government contracts, an important part of the picture is missed. Taking the field of homelessness services as an example, Buckingham (2012) identifies a group of ‘community-based non-contractors’, organisations who chose not to seek government funding for the services they provided. These organisations were resourced entirely by voluntary donations and were staffed mainly by volunteers (some employed a very small paid staff). Being independent from government performance monitoring and the need to compete for contracts, these organisations were in many ways free to pursue their own aims and values. The providers placed a strong emphasis on offering acceptance to service users and building relationships with them. For instance, one volunteer leader commented that: ‘… to me the primary role, aim, is the community, it’s the relationship, it’s building relationships with these people. And I think that’s what we’ve been really touched by, really impacted by … getting to know these guys. They’ve really changed us [the volunteers], and it’s also amazing to know that you know we can help them…’ These organisations tended to serve a wider client group than the contracted TSOs and some had no eligibility criteria: volunteers would serve meals to anyone who came along, without asking about their accommodation or employment status, for example. However, while the more informal nature of these services and the involvement of volunteers contributed to providing an important social environment for service users, these services tended to operate for very limited time periods each week and their representatives acknowledged that time and resource constraints meant that they were not able to provide as much help to as many people as they would have liked to (Buckingham, 2012). This illustrates the discussion in the previous chapter about what constitutes a public service. These services were public in the sense of being publicly available, but they were not resourced by ‘public’ funding, and nor were they a response to public policy priorities. The informality and relational focus of these TSOs’ services arguably places them closest to the informal sector in the welfare triangle. They

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The context for service delivery

correspond with the ‘below the radar’ organisations that have been a key area of TSRC’s research (for example, McCabe and Phillimore, 2012). This seemed to be the area that received least support (funding, capacity building, and so on) under New Labour, yet it was also clear that the contracted homelessness TSOs in the study recognised the importance of this kind of provision. Indeed, some had brokered relationships with more informal TSOs and with local churches whose volunteers could provide informal support to their own clients as a supplementary service. Indeed, the need for this kind of ‘soft’, relational support seemed to have been accentuated by the increasing formalisation and marketisation of other types of TSO. In spite of New Labour’s strategies to promote volunteering, their preference for working with professionalised TSOs may have restricted the scope for volunteer involvement in some third sector contexts (McLaughlin, 2004); however, as the effects of austerity measures have intensified under the Coalition, there seems to have been a resurgence of such activity, or at least increased political and public interest in it. Coalition: still the Cinderella sector in the Big Society? In the early stages of the Coalition government, it was possible to interpret the Big Society agenda as being potentially liberating for the sorts of informal organisations discussed here, with government sometimes presenting it as supportive of greater involvement in the provision of public services. Cameron promised the Big Society would create a more permissive policy environment promoting genuine community ‘empowerment ... freedom ... and responsibility’ (David Cameron, 19 July 2010, quoted in McCabe and Phillimore, 2012); the policy of localism too promised the same downwards and outwards devolution. At the same time, any enlargement of the sector’s role could be framed more negatively: as a forced response to austerity measures, whether that took the form of resistance (lobbying, campaigning, activism), or acquiescence (citizens taking over services, increased volunteering) (see also Taylor, 2011). In contrast to Labour’s more directive approach, which favoured targeted investment in infrastructure or specific programmes with an emphasis on bringing some elements at least of the informal sector into service delivery, the permissive and (largely) unfunded nature of ‘Big Society’ promoted the kind of organic ‘social action’ that could just as easily be oppositional or antagonistic to the state (Macmillan, 2013b). It was perhaps this ‘all things to all men’ messiness that made it so difficult to translate into practice, and hard to pin down its progress.

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The third sector delivering public services

Yet as McCabe and Phillimore (2012) point out, the Big Society still required a supporting policy framework, consisting of the ‘three pillars’ of the Localism Act, OPS, and Community Organisers Programme. Programmes associated with each of these demonstrate, however, how difficult it is to assess its longer-term impact. For instance, the Community Organisers Programme and National Citizens Service have been operating since 2011, but despite the fact that they are being formally evaluated it remains essentially too early to tell what difference they have made to boosting the capacity of the target communities, or in encouraging greater social action. Nor, on the other hand, do the experience of linked initiatives inspire confidence that the transformational aspirations of the Big Society have been met in terms of a step change in the volume and range of activity, and just as importantly, a genuinely facilitative role of the state vis-à-vis the informal sector. In 2013 it became clear that two programmes overseen by the Big Society Network, Your Square Mile and Britain’s Personal Best, were heavily criticised by the National Audit Office: they had essentially failed to achieve anything, and their complex grant funding arrangements put in place by the Cabinet Office’s Social Action Fund and the Big Lottery Fund were investigated by the NAO (NAO, 2014). Equally relevant are the ‘suite of Community Rights’ introduced by the Localism Act 2011, in particular, the Right to Bid and Right to Challenge, which aim to make it easier for community groups to take over buildings and local public services respectively. The take up of these appears to be disappointing: there have been just 22 challenges under RtC, with only two accepted. The question remains of course, have Big Society and localist initiatives made any difference to the ability of ‘below the radar’ informal organisations to contribute in diverse ways to public services? The informal sector is probably as far away as ever from public services, and their future and integrity seems especially uncertain: any potentially positive effects of policy might be negated by the still unfolding backdrop of potentially far-reaching cuts, retrenchment, and increasing social need – such micro organisations may be ‘merely surviving – or dying’ (McCabe and Phillimore, 2012: 4).

Concluding discussion: key continuities and changes Exploring the different interfaces between the third sector and the state, the market and the informal sector has highlighted both continuities and step changes between New Labour and the Coalition, particularly in relation to public services. Returning to the welfare triangle model,

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The context for service delivery

we can consider the influence that these continuities and changes have had – and are having – on TSOs that are involved in public service provision, as well as those that are likely to be influenced indirectly by changes in the nature and coverage of publicly funded services. Considering first the relationship between the third sector and the state, we can trace a continuation of the trend initiated in the 1980s towards the increased contracting out of public service provision both to the private and third sectors. Under New Labour, this saw TSOs increasingly adopting practices associated with the statutory sector, in order to secure government contracts and meet their requirements, in the context of a rhetorical policy emphasis on ‘partnership’. However, since the statutory sector itself continued to be strongly influenced by market principles, increasing partnership with the state saw the TSOs that engaged in this increasingly adopt practices and principles associated with what we might term the marketised state, such as performance measurement, intense competition for contracts, maximising cost efficiency and so on. This approach arguably accentuated a bifurcation within the sector, increasing the differences between TSOs that were engaged in public sector contracts and those that were not, the latter retaining greater scope for involving volunteers, but receiving less direct support from government. The Big Society agenda was posited by the Conservatives as a contrasting approach: one which would continue to promote and even increase the role of the third sector – or civil society, their preferred term – in meeting social needs and building community, but which would liberate it from the bureaucracy and control of the New Labour era (Macmillan, 2013b). In practice, this approach may have accentuated the bifurcation alluded to above: on the one hand, expectations of voluntary activity, particularly at a local level, have increased, but on the other, those TSOs that have remained in the market for providing publicly funded services have had to operate in increasingly marketised conditions, where the relinquishing of government control has been replaced not by greater autonomy, but rather by greater market discipline. This can be seen most clearly in the parts of public services dominated by prime subcontractor type relationships, based on increasing distance from government commissioning agencies. As such, this approach can be seen as a deepening of neo-liberalism, and a means of decoupling public funding from public services, shifting responsibility for wellbeing towards the third and informal sectors and away from the state, and in the process perhaps reshaping how public services are conceived of by taxpayers and recipients – indeed, increasingly portraying these interests as in opposition.

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The third sector delivering public services

A final twist in the plot is that the retrenchment of public services – including those delivered by the third sector, coupled with welfare reform, is placing increased demand upon both the informal and third sectors, particularly in disadvantaged communities where reliance on government provision is high. However, the promotion of larger, highly professionalised TSOs under New Labour and the subsequent upscaling of government contracts under the Coalition mean that in some cases, TSOs that may previously have been in a position to offer support in these contexts have withdrawn due to lack of funding. As such there is likely to be a mismatch, not only between the level of demand (in terms of social need) and capacity, but also between the particular and complex needs of individuals and communities, and the specialist skills and experience that can make a difference. Note Newcastle College Group lost its contract in March 2014 due to ‘poor performance’, the only provider so far to have been removed from the programme. 1

References Alcock, P. (2010a) ‘Building the Big Society: a new policy environment for the third sector in England’, Voluntary Sector Review, 1(3) 379-389 Alcock, P. (2010b) A strategic unity: defining the third sector in the UK, Voluntary Sector Review, 1(1) 5-24 Alcock, P. and Scott, D. (2007) ‘Voluntary and community sector welfare’, in M. Powell (ed), Understanding the mixed economy of welfare, Bristol: Policy Press, pp. 83-105 Batsleer, J. and Paton, R. (1997) ‘Managing voluntary organisations in the contract culture: Continuity or change?’, in P. 6 and J. Kendall, The contract culture in public services: Studies from Britain, Europe and the USA, Arena, Aldershot, pp. 47-56 Benson, A. (2014) ‘The Devil that has come amongst us’. The impact of commissioning and procurement practices, NCIA Inquiry into the Future of Voluntary Services, Working Paper 6, London: NCIA Bovaird, T. and Downe, J. (2006) ‘N generations of reform: a looselycoupled armada or ships that pass in the night?’, International Public Management Journal, 9(4) 429-455 Bovaird, T., Dickinson, H. and Allen, K. (2012) Commissioning across government: review of evidence, Research Report 86, Birmingham: Third Sector Research Centre.

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Buckingham, H. (2011) ‘Hybridity, diversity and the division of labour in the third sector: what can we learn from homelessness organisations in the UK?’, Voluntary Sector Review, 2(2) 157-175 Buckingham, H. (2012) ‘Capturing diversity: a typology of third sector organisations’ responses to contracting based on empirical evidence from homelessness services’, Journal of Social Policy, 41(3) 569-589 Butler, P. (2011) ‘Charities: corporate “bid candy” for the big society?’, Guardian Online, 22 June, http://www.guardian.co.uk/society/ patrick-butler-cuts-blog/2011/jun/22/bid-candy-charities-carvedout-of-work-programme (accessed 11/1/14) Cairns, B., Harris, M., Hutchison, R. and Tricker, M. (2005) ‘Improving performance? The adoption and implementation of quality systems in UK nonprofits’, Nonprofit Management and Leadership, 16(2) 135-151 Carmel, E. and Harlock, J. (2008) ‘Instituting the “third sector” as a governable terrain: Partnership, Procurement and Performance in the UK’, Policy & Politics, 36(1) 155-172 Cunningham, I. (2008) ‘A race to the bottom? Exploring variations in employment conditions in the voluntary sector’, Public Administration, 86(4) 1033-1053. Damm, C. (2014) ‘A mid-term review of third sector involvement in the Work Programme’, Voluntary Sector Review, 5(1) 97-116 DiMaggio, P. J. and Anheier, H. K. (1990) ‘The sociology of nonprofit organizations and sectors’, Annual Review of Sociology, 16, 137-159 Dominey, J. (2012) ‘A mixed market for probation services: Can lessons from the recent past help shape the near future?’, Probation Journal, 59(4) 339-354 European Parliament (2004) Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the Coordination of Procedures for the Award of Public Works Contracts, Public Supply Contracts and Public Service Contracts, http://data.europa.eu/eli/dir/2004/18/oj Evers, A. (1988) ‘Shifts in the welfare mix: introducing a new approach for the study of transformations in welfare and social policy’, in A. Evers and H. Wintersberger (eds), Shifts in the welfare mix: their impact on work, social services and welfare policies, European Centre for Social Welfare Training and Research, Vienna, pp 7-30. Evers, A. (1995) ‘Part of the welfare mix: the third sector as an intermediate area’, Voluntas, 6(2) 159-182 Evers, A. and Laville, J.-L. (2004) ‘Defining the third sector in Europe’, in A. Evers and J.-L. Laville (eds), The Third Sector in Europe, Cheltenham: Edward Elgar, Cheltenham, pp 11-42

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Fyfe, N. R. (2005) ‘Making space for “neo-communitarianism”? The third sector, state and civil society in the UK’, Antipode, 37(3) 536-557 Harris, M, and Rochester, C. (2001) Voluntary Organisations and Social Policy in Britain, Basingstoke: Palgrave HM Government (2011) Open Public Services White Paper, London: HMSO Ilcan, S. and Basok, T. (2004) ‘Community government: voluntary agencies, social justice, and the responsibilization of citizens’, Citizenship Studies, 8(2) 129-144 Jochum, V., Pratten, B. and Wilding, K. (2005) Civil renewal and active citizenship: A guide to the debate, London: NCVO Johnson, N., Jenkinson, S., Kendall, I., Bradshaw, Y. and Blackmore, M. (1998) ‘Regulating for quality in the voluntary sector’, Journal of Social Policy, 27, 307-328 Kendall, J. (2000) ‘The mainstreaming of the third sector into public policy in England in the late 1990s: whys and wherefores’, Policy & Politics, 28(4) 541-562 Kendall, J. (2003) The Voluntary Sector, London: Routledge Le Grand, J. (1991) Quasi-Markets and Social Policy, The Economic Journal, 101(408) 1256-1267 Lonsdale, C. (2012) ‘Procurement and Market Management’, in Glasby, J. (ed) (2012) Commissioning for health and well-being: An introduction, Bristol: Policy Press Macmillan, R. (2013a) ‘“Distinction” in the third sector’, Voluntary Sector Review, 4(1) 39-54 Macmillan, R. (2013b) ‘De-coupling the state and the third sector? The ‘Big Society’ as a spontaneous order’, Voluntary Sector Review, 4(2) 185-203 Martikke, S. and Moxham, C. (2010) ‘Public Sector Commissioning: Experiences of Voluntary Organizations Delivering Health and Social Services’, International Journal of Public Administration, 33: 790-799 May, J., Cloke, P. and Johnsen, S. (2005) ‘Re-phasing neoliberalism: New Labour and Britain’s crisis of street homelessness’, Antipode, 37(4) 703-730 McCabe, A. and Phillimore, J. (2012) ‘All change? Surviving ‘below the radar’: community groups and activities in a Big Society’, Briefing Paper 87, Birmingham: Third Sector Research Centre McLaughlin, K. (2004) ‘Towards a modernized voluntary and community sector?’, Public Management Review, 6(4) 555-562 Milbourne, L. (2009) ‘Remodelling the third sector: advancing collaboration or competition in community-based initiatives’, Journal of Social Policy, 38(2) 277-297

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Morris, D. (2000) Charities in the contract culture: survival of the largest?, Legal Studies, 20(3) 409-427 Mythen, G., Walklate, S. and Kemshall, H. (2013) ‘Decentralizing risk: The role of the voluntary and community sector in the management of offenders’, Criminology and Criminal Justice, 13(4) 363-379 NAO (2014) ‘Investigation into grants from the Big Lottery Fund and the Cabinet Office to the Big Society Network and the Society Network Foundation’, July 2014, http://www.nao.org.uk/wpcontent/uploads/2014/07/Investigation-into-grants-from-theBig-Lottery-Fund-and-the-Cabinet-Office-to-the-Big-SocietyNetwork-and-the-.pdf (accessed 14.11.14) Office of the Third Sector (OTS) (2006) Social enterprise action plan: Scaling new heights, London: Cabinet Office Power, M. (1997) The Audit Society: Rituals of verification, Oxford: Oxford University Press Rees, J (2014), ‘Public sector commissioning and the third sector: old wine in new bottles?’, Public Policy and Administration, 29(1) 45-63 Rees, J., Macmillan, R. and Buckingham, H. (2015) ‘The voluntary and faith sector: “stepping up” or “waving but drowning” in the era of austerity?’, in Foster, L. et al (eds) In Defence of Welfare 2, Bristol: Policy Press Rees, J., Taylor, R. and Damm, C. (2013) Does sector matter? Understanding the experiences of providers in the work programme, Working Paper 92, Birmingham: Third Sector Research Centre. Rose, R. (1986) ‘Common goals but different roles: the state’s contribution to the welfare mix’, in R. Rose and R. Shiratori (eds), The Welfare State East and West, Oxford University Press, Oxford, pp 13-39 Scragg, T. (2008) ‘Reflections on Supporting People: a case study of Outreach3Way’, Housing, Care and Support, 11(1) 16-19 Sinclair, S., McHugh, N., Huckfield, L., Roy, M., and Donaldson, C. (2014) ‘Social Impact Bonds: shifting the boundaries of citizenship’, in Farnsworth, K., Irving, Z. and Fenger, M. (eds) Social Policy Review 26, Bristol: Policy Press Social Exclusion Unit (2001) A New Commitment to Neighbourhood Renewal: National Strategy Action Plan, London: Cabinet Office Taylor Gooby, P. and Stoker, G. (2011) ‘The Coalition Programme: A New Vision for Britain or Politics as Usual?’, The Political Quarterly, 82(1) 4-14 Taylor, M. (2011) ‘Community organising and the Big Society: is Saul Alinsky turning in his grave?’, Voluntary Sector Review 2(2) 259-66

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Taylor, M. and Lewis, J. (1997) ‘Contracting: What does it do to voluntary and non-profit organisations?’, in P. 6 and J. Kendall (eds), The contract culture in public services: Studies from Britain, Europe and the USA, Arena, Aldershot, pp 27-45. Teasdale, S., Alcock, P. and Smith, G. (2012) ‘Legislating for the big society? The case of the Public Services (Social Value) Bill’, Public Money and Management, 32(3): 201-208

62

FOUR

Which third sector organisations are involved in the delivery of public services? Evidence from charity accounts and from survey data John Mohan and David Clifford

Introduction The delivery of public services is an important part of the activities of the third sector but it is difficult to gain a granular picture of which organisations are engaged in it and where they are located. Discussion has tended to focus instead on the level of public funding going to the sector, and to its growth and distribution. It might seem reasonable to assume that those funds are provided so that third sector organisations can deliver services commissioned on behalf of government (central or local), but we show that by no means all those third sector organisations in receipt of public money consider that they are delivering public services. Nor do they necessarily feel that those services are what constitutes the most important elements of their activity. There is, in fact, a long history of payments from statutory authorities to voluntary organisations. Some 80 years ago Braithwaite (1938) demonstrated the significance of public payments to British voluntary organisations, anticipating comments about the ‘shadow state’ (Wolch, 1990) by half a century. And in the US, state payments to charities date back over a century (Salamon, 1987). In the UK, Unell (1979) estimated that fees and charges accounted for nearly 40% of total incoming resources of her sample of (mainly social service) charities. Interestingly, despite subsequent debate about the negative implications of a shift from grants to contracts, only 4% of the income of her sample was provided by grants. Thus, for these organisations, contractual arrangements already seemed to be the norm. The National Council for Voluntary Organisations (NCVO) (2000), reviewing the 1991 to 1997 period, showed that public grants and fees accounted for between 18–20% of income, although this was for a much broader population

63

The third sector delivering public services

of charities. Since 1997, receipts from the public purse have been increasing steadily. NCVO’s widely used series of annual estimates of charity incomes shows that the sector receives substantial public funding from statutory sources, accounting, on some estimates, for over 35% of total incoming resources to the third sector (Clark et al, 2013). These trends have been criticised from both the left and right. For over 30 years, governments have advocated the value of third sector involvement in achieving a growing range of policy goals, but under the Labour government, the third sector was ‘mainstreamed’ into a large range of policy fields (Kendall, 2000). Considerable disquiet has been expressed at the scale of public funding of voluntary organisations. Commentators associate this with a loss of the distinctive characteristics of voluntary action, such as independence, flexibility and responsiveness. Thus, the National Coalition for Independent Action (NCIA) (2015) argues that dependence on public funding means that prominent large national charities have declined to criticise the post-2010 governments, while think tanks strongly associated with conservative views, such as the Institute of Economic Affairs, deplore ‘sock puppet’ charities, doing the government’s bidding, staffed largely by known Labour supporters (for example, Snowdon, 2012). However, discussion of these developments has emphasised statistical aggregates; an organisation-level perspective is missing (Clifford and Mohan, 2016). Yet the distribution of such funding is widely perceived to be uneven and, by some, claimed to be operating to the disadvantage of certain elements of the voluntary sector. For example, a repeated refrain from the Centre for Social Justice (CSJ) has been that the growth of public service contracts is associated with the ‘Tescoisation’ of the charitable sector, whereby large organisations acquire the lion’s share of public funding and have grown at the expense of small organisations (CSJ, 2013). The chapter is divided into two principal sections. We first consider the scale of public funding for registered charities based in England and Wales, capturing and classifying information from charity accounts. We derive estimates of the absolute level of public funding, its distribution across the charity population, and its significance to individual charities. We also consider, where possible, whether or not income is received in the form of grants or contracts. This analysis is informative about the level of public funding of charities, but it does not provide unambiguous information about the extent to which charities are involved in the delivery of public services, since charity accounts do not always describe in detail the uses to which public funding is put. To explore that question, we use the 2010 National Survey of Charities and Social Enterprises (NSCSE) (for England only),

64

Which third sector organisations are involved in the delivery of public services?

which has two distinct advantages. First, it provides information on a wider population of third sector organisations, and second, it provides considerable granularity about the range of income sources, including grants and contracts, on which organisations draw.

Public funding for English and Welsh charities The simple fact of receipt of public money is not easy to identify in charity accounts. Considerable amounts of data are available from regulatory returns, but these do not currently mandate the provision of details of income from particular sources (Morgan, 2010; 2011). Having said that, charities will be required to report income from public sources with effect from 2015.1 Charities report summary figures in broad categories, such as ‘income from charitable activities’, which could encompass several possible sources (for example, fees from individuals, as well as contracts with statutory bodies). In order to estimate the level of public funding, we have worked with NCVO to capture more detailed data from notes to the accounts prepared by charities (see Kane et al, 2013). The work has involved sampling of the charity population, capturing data from their reports and accounts, and classifying the resultant information. The sampling frame was provided by a list of the population of registered charities in England and Wales appearing on the Charity Commission Register (around 160,000 organisations). The sample allows totals to be estimated with some precision (for example, total statutory income across the charitable sector), while also giving insight into proportions (for example, the proportion of organisations in receipt of statutory income). We oversampled the larger charities (those with incomes greater than £1 million) to ensure that totals were well estimated, but we also ensure that we have enough charities of all sizes in our sample so that we get good estimates of income and expenditure for the typical charity. This gives a sample of approximately 10,000 charities. We then capture accounts data for these organisations from copies of the accounts of charities in the sample (downloaded from the Charity Commission website). The focus is on the notes to the accounts, which throw greater light on the sources from which income streams are drawn. As an illustration, charity accounts often aggregate a number of potential sources of income (for example, contracts with a range of public agencies, or fees paid directly by individuals) into one stream (income from charitable activities). These notes will, in most cases,

65

The third sector delivering public services

provide more details about these income sources, such as the identity of the bodies from which income is received. One might expect that identification of a statutory body in the explanatory notes to a charity’s accounts would enable us to state with some degree of confidence that that income relates to the delivery of a service for that body. However, in the absence of detailed knowledge of the funding stream from which the statutory body makes the payment, there is potentially a margin for error. In fact, Morgan (2011: 220) argues that public sector funding is often provided to charities in ambiguous, or even unwritten, agreements in which it is not clear whether the funder intended to create a grant relationship or a contractual relationship. Furthermore, variations in the practices adopted by charity accountants may mean that funding from public sector bodies may or may not be visible in a charity’s accounts, and can be presented in varying ways, rendering it difficult to determine the purpose for which funding has been allocated (particularly grant versus contract income). Therefore, while it is certainly possible to derive estimates of the amount of public money received by charitable organisations, we cannot say with absolute certainty whether those sums are being used to support public service provision or whether they constitute grants to support the core activities of organisations. On the other hand, the extent to which charities are supported by the public purse, and the distribution of public funds across charities, are certainly of interest. We begin with a discussion of the pattern of statutory funding by cause and type. We estimate that in 2009/10 around £16 billion in government funding (at 2010 prices) was received by English and Welsh charities. This accounted for a substantial proportion of the income of the charitable sector in that year – some 34% of all funding for the organisations in our sample of 10,000 charities. The growth of public funding in the first decade of the 21st century was rapid. Total public funding increased (at 2011/12 prices) from £9.4 billion to £15 billion between 2000/01 and 2012/11.1 The balance between grants from and contracts with statutory bodies changed considerably. In 2000/01 the sums from these two sources were roughly equal; by 2010/11 grants accounted for only 20% of statutory funding and contracts for 80%. These aggregate figures conceal a mixture of processes: the direct transfer of formerly public responsibilities into the third sector (Chapter 5), for example, through the establishment of leisure trusts, which continue to receive funding from the local authorities that have divested themselves of

66

Which third sector organisations are involved in the delivery of public services?

responsibilities; the provision of opportunities to the private and non-profit sector to access statutory funds – as in the case of the opening up of education to non-profit and for-profit providers; and the establishment of new entities underwritten with substantial public funds. A recent example is the transfer into charitable ownership of British Waterways (now the Canal and River Trust). A further cautionary note is in order. Some of the largest charities receive very substantial public funds, which they pass onto or invest in others – examples would include the Arts Council (nearly £500 million) or the Adventure Capital Fund (£80 million). The largest single UK charity is the British Council, in receipt of well over half a billion from the state, much of which is to pursue the purposes for which the Council was established, predominantly overseas. On a smaller scale, there are charities such as the Coalfields Regeneration Trust as well as several agencies set up by the previous government (for example, the British Educational Communications and Technology Agency (BECTA), or the Learning and Skills Improvement Service (LSIS), which operate, in part, by making grants available. There is, consequently, the possibility of double counting – for example, of funding received by the Arts Council and then passed on to an arts charity: funding could appear in the accounts of both. In the absence of complete information about the distribution of grants and contracts from all such entities, it is impossible to estimate the extent of this, and it does suggest that estimates of the total amounts and overall proportions of public funding in the voluntary sector can be exaggerated. Public funding is heavily concentrated in a small number of organisations. In our sample of 10,000 charities we identify 17 that receive at least £100 million from the public purse and a further 31 in receipt of at least £50 million. These 48 organisations alone accounted for approximately one third (£5.3 billion) of the £16 billion in public funding to the charitable sector. The largest recipients include five housing associations, four social services charities, and two chains of academies. However, the contentions about dependency on the state raised by Snowdon (2012) are not borne out. He asserts that 27,000 charities receive three quarters of their funding from the state. For those charities with incomes greater than £500,000 (a defensible choice on the grounds that these are required to report income sources in greater detail than smaller charities), we find that some 22% receive at least 75% of their funding from the public sector. Given the size of these charities, the sums are non-trivial but numerically this amounts to around 1550 charities. Comparisons with information from surveys of some 40,000 charities in England indicate that only some 14% regard

67

Number of charities in sample

983

971

413

765

226

516

418

145

104

116

213

180

171

153

143

122

NCVO 2012 classifications

2100 Primary and secondary education

4100 Social services

6200 Housing

10100 Religious congregations and associations

9100 International activities

1100 Culture and arts

8100 Grant-making foundations

6300 Employment and training

2410 Medical research

3400 Other health services

3200 Nursing homes

3100 Hospitals and rehabilitation

5100 Environment

2300 Other education

11200 Professional associations

5200 Animal protection

Table 4.1: Public funding

68 699

740

829

896

1029

1038

1122

1275

1309

1604

2329

2446

2495

3086

4477

6556

Total income (£m)

1.9

2.0

2.3

2.5

2.8

2.9

3.1

3.5

3.6

4.4

6.4

6.7

6.9

8.5

12.3

18.1

Share of total resources

53

150

478

208

96

448

319

72

804

158

770

1023

259

1134

2624

1597

Total income from public sources (£m)

0.4

1.3

4.0

1.7

0.8

3.7

2.7

0.6

6.7

1.3

6.4

8.5

2.2

9.5

21.9

13.3

Share of public funding

7.6

20.3

57.7

23.2

9.3

43.1

28.5

5.7

61.4

9.9

33.1

41.8

10.4

36.8

58.6

24.4

Proportion of income from public funds The third sector delivering public services

160

121

149

8200 Other philanthropic intermediaries

4300 Income support and maintenance

6100 Economic, social and community developments

69 271

285

310

326

343

401

523

609

Total income (£m)

0.7

0.8

0.9

0.9

0.9

1.1

1.4

1.7

Share of total resources

Source: Authors’ analysis of data from charity accounts Notes: c. 7,000 charities in original sample; ICNPO categories with fewer than 100 charities in sample excluded.

133

110

3300 Mental health and crisis intervention

7200 Law and legal services

139

1200 Sports

115

157

2400 Research

7100 Civic and advocacy organisations

Number of charities in sample

NCVO 2012 classifications

163

114

170

50

172

311

170

240

Total income from public sources (£m)

1.4

1.0

1.4

0.4

1.4

2.6

1.4

2.0

Share of public funding

60.0

40.2

54.8

15.4

50.2

77.4

32.5

39.5

Proportion of income from public funds

Which third sector organisations are involved in the delivery of public services?

The third sector delivering public services

the public sector as the source of income that is most important to the achievement of their objectives (Clifford et al, 2013). But saying that an income source is the ‘most important’ one does not mean that it accounts for over 75% of incoming resources. Rather than emphasise individual organisations, we concentrate on subsectors of the charity population. We use the International Classification of Nonprofit Organisations (ICNPO), originally developed by Salamon and Anheier (1996) to provide a more granular classification than that available through the Standard Industrial Classification (SIC) schema. Table 4.1 shows the numbers of organisations for those ICNPO categories with at least 100 charities in our sample. We give the total funding received by these organisations, the total amount of public funding received, and the ratio of public funding to total income. We calculate, for each ICNPO category, its share of total resources, and its share of total public funding. These are quite broad categories, and the multifunctional nature of charities means that some generalisation is inevitable: a charity dealing with mental health may well provide education, training and accommodation in addition to its health function. Subsectors with particularly high proportions of their income from the state included charities working in the fields of mental health (77% of income is derived from statutory bodies), ‘other education’ (58%), employment and training (63%), law and legal services (60%) social services (59%), economic, social and community development (55%) and other philanthropic initiatives and voluntarism promotion (50%), the latter referring mainly to infrastructure bodies for promoting voluntary action locally. These are fields of social action that have been vulnerable to ‘philanthropic insufficiency’ (Salamon, 1987): they are causes that do not find it easy to attract charitable support. The data are cross-sectional, but there is historical evidence that such difficulties are long-standing (for example, Jennings, 1945). Another perspective is provided if we compare the distribution of public funding for subsectors of the charity population to their share of charity resources as a whole (defined in terms of total income). Thus, charities dealing with mental health account for 1.1% of the total income of the sector, but they received 2.6% of public funding – in other words, funding that is disproportionate to their share of the sector’s resources. Employment and training charities receive 3.6% of the sector’s resources, but 6.7% of public funding allocated to charities. Charities dealing with law and legal services account for 1% of total resources, but 1.5% of public funding. The suggestion, therefore, is that public funding is particularly important to charities in these fields.

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Which third sector organisations are involved in the delivery of public services?

Conversely, religious organisations receive a rather lower share of public funding than their share of total resources might lead us to expect. Critics from both sides of the debate need a sense of proportion. Conservatives would surely support plurality of provision of welfare services, so it is not clear why they appear to object when substantial sums of money are allocated by the state to non-profit agencies to pursue purposes for which there is a public mandate. And some figures which they quote are plainly inaccurate. There is no basis for Snowdon’s (2012) estimate that 27,000 charities receive over 75% of their income from government. And relatively few organisations receive the majority of their funding from the state. The assertion that the award of substantial contracts necessarily squeezes out small, local voluntary organisations is not something that can be explored from these sources. However, Backus and Clifford’s (2013) work on income concentration among charities suggested that while large charities had grown more rapidly than small ones, it nevertheless remained the case that small organisations had continued to grow in financial terms.

Survey data on organisations We have thus far demonstrated what can be said using the accounts of registered charities. There is evidence of a concentration of public funding in certain charitable organisations and charitable sectors. But does this unambiguously demonstrate that these organisations are delivering public services? Estimates of the numbers and characteristics of organisations delivering public services cannot reliably be derived using charity reports because those financial returns do not describe in detail what the organisations are doing with the money. Therefore, we turn instead to the National Survey of Charities and Social Enterprises (NSCSE), carried out in 2010, to demonstrate variations between organisations in the extent to which they say they are involved in public service delivery. As the survey is cross-sectional, we cannot easily infer causality but the survey data does provide considerable detail on the patterns, which is not available from any other source. In particular, we emphasise the descriptions given by organisations themselves in response to queries about their principal activities. This reveals some apparent anomalies. The NSCSE was distributed only to organisations which were regarded as satisfying a definition of the third sector devised by the then Labour government. Sampled organisations were non-profits, which could be ‘seen to serve social, cultural and environmental objectives’ in England. Details of the survey, including information about sampling

71

The third sector delivering public services

decisions, are available at the UK Data Archive (https://discover. ukdataservice.ac.uk/catalogue?sn=7347). The survey includes several thousand responses from a broad population of third sector organisations comprising not just charities (approximately 37,000 responses) but also other third sector legal forms: Companies Limited by Guarantee (CLGs), Industrial and Provident Societies (IPSs) and Community Interest Companies (CICs). It is the largest survey of its kind in the world; the nearest equivalent is probably the Canadian National Survey of Nonprofit and Voluntary Organisations (Imagine Canada, 2004), which had around 13,000 responses. The NSCSE was designed to capture information about organisations’ perceptions of the environment for a ‘thriving third sector’. It was conceived as part of the government’s performance management regime for local authorities, and as such, the sample size had to be very large, in order to generate robust indicators for the 149 upper-tier local authorities in England. Over 100,000 questionnaires were distributed and 44,000 were returned. The extensive range of topics covered included sources of funding, subsector of activity, the beneficiary groups, which they serve, and their views on their principal purposes. Considerable additional detail was also available about location (region, local authority, local level of deprivation), scale of operation, and income. Response rates were broadly comparable for organisations of similar size, legal form, and geographical location. We identify organisations involved in delivering public services in the following way. Among the extensive list of activities covered in the survey, organisations were asked about the main roles they undertook. Potential response categories included ‘delivery of public services’. Others were community development and mutual aid; delivery of ‘other’ services; provision of buildings and/or facilities; advocacy, campaigning and representation; capacity building; grant making; providing other finance; advice to individuals; helping people to access services or benefits; emotional support/befriending; providing staff/volunteers; advancing religion and/or spiritual wellbeing; and advancing cultural awareness. In the question about public service delivery, the examples given as prompts in the survey included social housing, health care, day care, counselling, community safety, education and childcare. The response indicated that 24% of third sector organisations were involved in the delivery of public services. However, the proportions varied considerably according to the characteristics, size, location, and funding mix of the organisations. First, considering the size of the organisations, a common feature in analyses of the third sector is the presentation of financial information

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Which third sector organisations are involved in the delivery of public services?

as a proxy for size in terms of income bands (£10,000–£100,000; £100,000–£1 million, and so on). Such an approach hides considerable diversity because most registered charities have an income below £20 000 (the median is currently around £16,000). However, there is a strong association with size, with over half of respondents to the survey in the £1 million plus range declaring that their main role was the delivery of public services. The proportion falls to just over 15% for organisations with an income of £10,000 or less. We should not be surprised at this. The great majority of survey respondents are registered charities (in 2010, 37,000 out of 44,000 respondents), and many of these will be unincorporated associations. Such organisations might be unwise to deliver public services because they risk exposure to liabilities if they do (Morris, 2012). The 2010 survey did not ask whether charities were unincorporated associations. Its predecessor in 2008 found that nearly two thirds of respondents were unincorporated associations, of which only 6% of those with incomes of under £10,000 said that they were involved in public service delivery. We do not know exactly what, if any, public services were being delivered by organisations of this size. In terms of legal form, CICs are the type of organisation most likely to say that they are delivering public services (32%); for charities, the proportion is 25%, while for CLGS and IPSs it is 21% and 23% respectively. CICs were introduced to provide a legal form for social enterprises, which tend to rely more heavily than other third sector organisations on public funding, and their legal form facilitates the pursuit of trading objectives (for example, contracts for service delivery). Thus, the relatively high proportion of such organisations saying that they deliver public services is to be expected. What needs are being met by these organisations? First, the survey asks organisations to describe the principal beneficiary groups which they serve. They are given a range of possibilities (see Table 4.2). This provides information on the proportion of organisations serving these client groups, which say that delivering public services is one of their main roles, and the numbers of respondents doing so. The latter totals more than the population in the survey because groups were allowed to respond to more than one category. It is clear that third sector organisations dealing with particularly disadvantaged groups are very likely to say that their principal purpose is delivery of public services. While nationally, the proportion of organisations that say their main activity is delivery of public services is 24%, for several groups in this table (organisations dealing with carers/parents, homeless people, people with addiction problems, people with mental health needs,

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The third sector delivering public services

victims of crime and their families) the proportion is at least twice that figure. Table 4.2: Beneficiary group: proportion of organisations who state that delivering public services is a main role Beneficiary group

N

%

Confidence intervals Upper bound

Lower bound

Carers/parents

10075

0.57

0.55

0.58

Homeless people

2875

0.56

0.53

0.60

People with addiction problems (e.g. alcohol, drugs)

1846

0.49

0.44

0.53

People with mental health needs

5023

0.48

0.45

0.51

Victims of crime and their families

972

0.47

0.41

0.54

Offenders, ex-offenders

1475

0.45

0.39

0.50

People with learning difficulties

6408

0.42

0.39

0.44

Socially excluded/vulnerable people

6093

0.41

0.38

0.43

People with particular physical health needs

6006

0.35

0.33

0.38

Lesbian, gay, bisexual or transgender people

722

0.34

0.27

0.42

People from Black and minority ethnic communities

6866

0.33

0.31

0.35

People with physical disabilities and/or special needs

12121

0.33

0.31

0.34

Asylum seekers/refugees

1781

0.31

0.27

0.35

People with a particular financial need (including poverty)

8347

0.30

0.28

0.32

Developing world beneficiaries

5508

0.22

0.20

0.24

Other charities, social enterprises and/or voluntary organisations

12875

0.13

0.12

0.14

Faith communities

11746

0.12

0.11

0.13

Animals

1737

0.08

0.05

0.10

Source: Authors’ analysis of 2010 National Survey of Charities and Social Enterprises

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Which third sector organisations are involved in the delivery of public services?

There is a challenge of inference with cross-sectional data of this kind. Do organisations state that they are dealing with vulnerable people, because their purpose is the delivery of public services, or do they say that their main purpose is delivering public services because their main client group is vulnerable sections of the population? We know that there are problems of market failure in the charity sector, such that unpopular causes attract limited philanthropic support. We might anticipate that organisations dealing with such groups would be more reliant on public funding. It is certainly possible that organisations working in these fields could have come into being precisely because of the availability of particular public funding under the Labour governments (1997–2010). An obvious example would be the Supporting People programme, which was designed to provide carefully targeted support for homeless people, and people in vulnerable housing circumstances. The programme largely operated through providing funds directly to voluntary organisations. Other programmes were established in previous decades for similar reasons (for example, Mold and Berridge, 2010). However, the survey only provides information on the registration year for charitable organisations, but not for the other kinds of organisations in the survey. There is some suggestion that the proportion of charities who say that their main purpose is delivering public services increases for charities registered after 2001, compared to charities registered prior to that date, suggesting associations between the Labour government’s policies and the likelihood of delivering public services. What income sources are drawn upon by organisations who say that their main purpose is the provision of public services? Perhaps surprisingly, not all of them actually receive public funding. The baseline proportion of respondents who say they are involved in delivering public services was around 24%. We might expect that these would all be in receipt of public funding, but in fact only 56% (of that 24% of organisations) have public funding. This is higher than for the survey as a whole, but seems somewhat counterintuitive. Would we not expect any organisation that regards its main activity as the delivery of public services to be in receipt of public funding? First, there are variations depending on the activity undertaken by the organisation. For particular client groups, the proportions are much higher: for organisations reporting involvement in public service delivery, whose main client group is people experiencing various dimensions of social exclusion, the proportions receiving statutory funding are as high as 75%. Thus, for subsets of TSOs, the proportion which are delivering public services and receiving public money is much nearer to 100%,

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but even so, by no means all organisations delivering public services are in receipt of public funding. Table 4.3: Most important function carried out by respondent and proportion receiving public funds Number of respondents carrying out specified activity

% receiving public funds

Share of total carrying out specified activity which receive public funding

Helps people to access services/ benefits

2206

69

5.4

Delivery of public services

10781

57.8

22.3

Advice to individuals

3776

54

7.3

Advocacy, campaigning, representation

3885

50

6.9

Provides staff and/ or volunteers

2712

50

4.8

Cap building, other support to TSOs

2220

48.8

3.9

Emotional support/ befriending

3744

46.4

6.2

Community development and mutual aid

6022

44

9.5

Delivery of other services

10101

41.7

15.1

Buildings and/or facilities

6394

41.3

9.4

Advancing cultural awareness

2752

41.1

4.0

Religion and/or spiritual welfare

5340

15.1

2.9

Provides other finance

1324

10.5

0.5

Grant makers

5232

9

1.7

Total

100.0

Source: Authors’ analysis of 2010 National Survey of Charities and Social Enterprises Note: Responses sum to more than the total N of respondents, as organisations could choose more than one category.

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Which third sector organisations are involved in the delivery of public services?

An interpretation of this relates to the respondents’ understanding of the question. Organisations themselves may define what they do primarily as the provision of a particular type of service, rather than responding generally that they are ‘delivering public services’. And organisations which receive public money may see themselves also as operating in more specific fields. There were 28,000 responses from organisations receiving public funding, to a question inviting organisations to identify their most important function. Of these, some 37% described themselves as delivering public services or delivering other services. Other categories included advice, advocacy, community development, and helping people to access services or benefits. One can understand that if an advice provider were to be asked this question, they might characterise their main purpose as a fairly specific area of activity with which they identified, such as ‘providing advice to individuals’ or ‘helping people to access benefits’. It is impossible to determine this from the survey data, but it suggests a way in which we might understand what, at first, appears to be a discrepancy in the survey data. There are also variations between organisations delivering public services in terms of the kind of funding mix that they have. We have broken down receipt of statutory funding into four categories: • • • •

no statutory funding national funding only funding from local statutory bodies only funding from both local and national statutory bodies.

The proportion of organisations which are delivering public services is very different across these categories – varying from 15% to just under 50%. This suggests that receipt of statutory funding is not tied exclusively to the delivery of public services. Such funding may be used for other purposes. An illustration might be capacity building – statutory funding is extremely important to organisations who work to build the capacity of local voluntary organisations, such as Councils for Voluntary Service (CVS). Do these organisations have a distinctive staffing profile – for example, in terms of the numbers of employees they have, or the balance between paid staff and volunteers? The survey data asks questions about banded numbers of volunteers (none, 1–10, 11–20, 21–30, 31–50, 51–100, 101–500, 501+) and employees (none, 1, 2, 3–5, 6–10, 11–30, 31–100, 101+). The larger the organisation, the more likely it

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is to be delivering public services – seven out of 10 organisations that have at least 100 employees say that public services delivery is their main area of activity. There is no relationship between the numbers of volunteers an organisation has and the likelihood of it delivering services; around 20% of organisations in each of the volunteering size bands say that they do so. When we cross reference these two sets of information – the organisations that are entirely run by volunteers, or which have only one or two paid staff – are very unlikely to regard their principal activity as delivering public services, with typically 10–15% of organisations with no or only one employee saying that they do so. This does not mean, of course, that volunteer-led organisations are not involved in supporting public services in some way. So far, our focus has been on the kind of organisations that say that they deliver public services. What about geographical questions such as the scale of operation of organisations, or the locations in which they are based? Again there are some limits to what can be said using cross-sectional information – we do not know why some organisations have been established that operate only at a particular scale. Nor do we know whether respondents to the survey have expanded their geographical reach in response to particular funding opportunities. For example, the availability of public funding for service delivery could have provided opportunities for organisations to expand into new territory, while some of Labour’s regeneration schemes sought to channel money to voluntary organisations, and those schemes by definition were usually targeted at areas of need, identified in terms of indices of deprivation. In the survey, respondents were presented with several options for identifying the scale of their activities: neighbourhood; within local authority; countywide; regional; national; and international. As with other questions, they were requested to respond to as many as seemed appropriate, and also to identify the scale that best described what they did. We find that the principal difference is between organisations operating at the within local authority scale (where nearly 30% of organisations say that their principal role is delivering public services), and organisations operating at the national scale, for whom the corresponding figure is around 15%. For organisations operating at other scales, the proportion is between 20% and 25%. The survey also permits exploration of variations between local authorities. When doing so, we only consider organisations working at the neighbourhood or within-local authority scale. In around 20 of the 150 or so local authorities in the survey, upwards of one third of organisations said that their main activity was the delivery of

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Which third sector organisations are involved in the delivery of public services?

public services, led by Hull (41%), Hammersmith and Fulham (41%), Islington (40%), Plymouth, Bracknell Forest and Peterborough (all 39%). A number of deprived London boroughs (Brent, Camden, Hackney, Lambeth, Southwark and Tower Hamlets) all feature in this list. Perhaps surprisingly, one also finds some relatively disadvantaged local authorities in the bottom 20 on this indicator. Examples of relatively disadvantaged areas in the bottom 20 are local authorities such as North Tyneside, Middlesbrough, or Barnsley. These are places which one might expect to play host to more voluntary organisations involved in public service delivery. Those areas have received substantial public sector funding, through the formulae used to distribute public funding to local governments and the NHS, formulae that reflect general levels of deprivation/prosperity. Furthermore, at the time of the survey, substantial sums would have been channelled to voluntary organisations through funding streams, such as Sure Start, prioritised by the (recently deposed) Labour government. Explanations for the apparent anomaly could be that public funding is being spent directly through public organisations, that contracts were being placed with voluntary organisations not located in these authorities, or that organisations in these places identify more strongly with other fields of activity than with public service delivery. We can also analyse the relationship between public service delivery and neighbourhood deprivation. We restrict consideration just to those organisations operating at the neighbourhood scale. Figure 4.1 shows the proportion of organisations delivering public services on the vertical axis, while the horizontal axis is the index of deprivation, scaled from 100 (least deprived) to zero (most deprived). The proportion of organisations involved in service delivery is relatively constant, but increases sharply at the most disadvantaged end of the distribution, although because of relatively small numbers of organisations in these areas, confidence intervals around the estimates are quite wide. Nevertheless, we can see that around 30% of organisations in the most disadvantaged 10% of neighbourhoods say that their main area of activity is public service delivery (for a comparable argument in relation to the pattern of public funding, see Clifford et al, 2013).

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The third sector delivering public services Figure 4.1 Proportion of organisations involved in public service delivery, by Index of Material Deprivation (IMD) 0.5 –

Population delivering public services

0.4 –

0.3 –

0.2 –

0.1 –

0.0 – 100

90 80 Least deprived

70

50 60 40 Deprivation (percentiles)

30

10 20 Most deprived

0

Conclusions We have presented two different perspectives on public funding to voluntary organisations and the role of voluntary organisations in public service delivery. There clearly are some sectors in which a substantial majority of income is derived from the state, but it is not the case that such reliance is widespread. For small numbers of relatively large charities – those with an annual expenditure of £500,000 or more – we find that just under one quarter receive state funding on this scale. The fields of activity where statutory funding are most important correspond closely with relatively unpopular causes – areas of ‘philanthropic insufficiency’ (Salamon, 1987). There are small numbers of charities that receive very large sums of money – in excess of £50 million in a year – from statutory sources, though some of these have been established by deliberate policy to provide alternatives to statutory provision. The sums involved are also dwarfed by the amounts going to large commercial providers of public services. We do see a concentration of statutory income in a small number of organisations,

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Which third sector organisations are involved in the delivery of public services?

but since resources in the charitable sector in general are also heavily concentrated, we should not be surprised at this. These are financial statistics, and it would appear reasonable to assume that statutory funding is being used for delivery of public services. However, not all of it is – the largest single tranches of public money are allocated by the government to organisations which themselves disburse it further (for example, the Arts Council). To obtain a more disaggregated public service delivery, especially for smaller organisations, we turn to survey data, and we focus on selfdefinition of the most important areas of activity on the part of third sector organisations. We find consistent associations with size, areas of disadvantage, and sectors of activity that historically have been likely to attract relatively little charitable support. Conversely, small, unincorporated and volunteer-led organisations are much less likely to report that public services delivery is a key element of their activities. Perhaps the most interesting finding is the disjuncture between receipt of statutory funding, and the likelihood of reporting engagement in public service delivery. Of those organisations in the survey, which were in receipt of public funds, fewer than 40% characterised their principal purpose as being the delivery of public services. Numerous other activities were reported, often providing a more specific description of the activity of the organisation. Considering very recent debates about whether public funding is being used by voluntary organisations to enable politically inspired lobbying, we found that only 7% of organisations receiving public funds characterised their principal purpose as advocacy (see also Chapter 2 for discussion of the ways in which ‘public’ services are defined). This suggests that concerns about lobbying are exaggerated. How do we interpret the finding that not all respondents in receipt of public money characterised their most important purpose as delivering public services? The vast majority of these organisations are charitable, and they are therefore obliged to act in accordance with definitions of charitable purposes. So it seems that what is important to those organisations is a broader conception of the public good rather than a narrow definition of public service delivery. Third sector organisations might be advised to make more of this, when seeking the support of the public, since this conception of the public interest clearly differentiates what they do from other providers of services. There remain interesting areas for exploration in further work on the role of the third sector in public service delivery. Our data relate to 2010, which allows comparison of the organisation-level financial data and the survey data. But how have organisations adapted

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subsequently to the loss of funding streams, and have they found new roles? Also, has the liberalisation of public service markets under the post-2010 government been associated with an expansion of voluntary sector provision? Thirdly, our analysis is cross-sectional and we need studies of how individual organisations have adapted over time to the changing funding streams available to the voluntary sector. Such studies need a longer temporal frame of reference to capture moves from one funding stream to another and potential changes in the orientation of organisations (for example, moves into new spheres of activity). Answering such questions will require detailed financial histories for individual voluntary organisations as well as records of their funders. The survey data also provides interesting pointers for further investigation – for instance, if organisations are receiving public funding, but do not regard public service delivery as being core to their activities, it would be interesting to know what that public money is being used for. Are organisations part of broader public service delivery chains, contributing specialist areas of expertise to activities being led by larger contractors? And some questions can only be explored through more qualitative avenues – for example, the extent of differences between groups that say that they receive funding and also deliver public services, and those who do neither of these. These questions will remain salient in an era in which great expectations for the voluntary sector are likely to coexist with severe funding challenges. Acknowledgements We are very grateful to James Rees, for his comments on earlier versions of this chapter. Thanks also to Chris Damm for some helpful suggestions. The data on charity incomes analysed in this chapter were the product of TSRC’s successful partnership with NCVO to capture data on a sample of charities’ accounts. Many thanks are due to the team at NCVO, Jenny Clark, David Kane, Karl Wilding and Pete Bass, and to the Centre for Data Digitisation and Analysis at Queen’s University, Belfast, for their contributions to this work. We owe a particular debt to David Kane and Pete Bass for their meticulous work on classification of the income source data. This chapter also draws on data collected as part of the National Survey of Charities and Social Enterprises (NSCSE). We acknowledge the data collectors and principal investigators: the Cabinet Office, Office of the Third Sector, who also sponsored the survey, Ipsos MORI Social Research Institute, and GuideStar UK. The data are deposited at the UK Data Archive. The original data creators, depositors or copyright holders, the funders of the Data Collections and the UK Data

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Archive bear no responsibility for their further analysis or interpretation. Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland. The support of the Economic and Social Research Council (ESRC), the Office for Civil Society (OCS) and the Barrow Cadbury UK Trust is gratefully acknowledged. The work was part of the programme of the joint ESRC, OCS, Barrow Cadbury Third Sector Research Centre and the Centre for Charitable Giving and Philanthropy. Notes http://data.ncvo.org.uk/a/almanac14/how-has-the-funding-mix-changed/ [accessed 06/03/15]

1

https://www.gov.uk/government/uploads/system/uploads/attachment_data/ file/366059/Analysis_of_consultation_responses_and_changes_to_the_annual_return_ for_2015.pdf 2

References Backus, P. and Clifford, D. (2013) ‘Are big charities becoming more dominant? Cross-sectional and longitudinal perspectives’, Journal of Royal Statistical Society: Series A, 176, 761-776 Braithwaite, C. (1938) The Voluntary Citizen. London: Methuen CSJ (Centre for Social Justice) (2013) Social Solutions: enabling grassroots charities to tackle poverty London: Centre for Social Justice Clark, J., Bass, P., Kane, D, and Wilding, K. (2013) The UK Civil Society Almanac 2013, London: National Council for Voluntary Organisations Clifford, D and Mohan, J (2014) ‘The sources of income of English and Welsh charities’, Voluntas, 27, 487–508. Clifford, D., Geyne Rajme, F. and Mohan, J. (2013) ‘Variations between organisations and localities in government funding of third sector activity: Evidence from the National Survey of Third Sector Organisations in England’, Urban Studies, 50, 959-976 Imagine Canada (2004) ‘Cornerstones of community: highlights of the National Survey of nonprofit and Voluntary Organisations Ottawa: Statistics Canada’, available online at: http://sectorsource.ca/ resource/file/cornerstones-community-highlights-national-surveynonprofit-and-voluntary-0 Jennings, H. (1945) ‘Voluntary social services in urban areas’, in Mess, H. (ed) Voluntary social services since 1918, London: Kegan Paul, pp 28-39.

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Kane, D., Clark, J., Clifford, D., Mohan, J., Dobbs, J. and Bass, P. (2013) ‘Collecting and classifying data from charity accounts for England and Wales’, Third Sector Research Centre Working Paper 93 Kendall, J. (2000) ‘The mainstreaming of the third sector into public policy in England in the late 1990s: whys and wherefores’, Policy & Politics, 28, 541-62 Mold, A. and Berridge, V. (2010) Voluntary action and illegal drugs: Health and society in Britain since the 1960s, Basingstoke: Palgrave Macmillan Morgan, G.G. (2010) ‘The use of charitable status as a basis for regulation of nonprofit accounting’. Voluntary Sector Review, 1, 209232. Morgan, G.G. (2011) ‘The use of UK charity accounts data for researching the performance of voluntary organisations’. Voluntary Sector Review, 2, 213-230. Morris, D (2012) ‘Charities and the big society: a doomed coalition?’, Legal Studies, 32, 132-153 National Coalition for Independent Action (2015) Fight or fright: voluntary services in 2015, London: National Coalition for Independent Action, available online at: http://www.independentaction.net/wpcontent/uploads/2015/02/NCIA-Inquiry-summary-report-final.pdf NCVO (2000) The income of voluntary organisations: Report on findings, London: NCVO Salamon, L. (1987) ‘Partners in public service: the scope and theory of government-non-profit relations’, in W.W. Powell (ed) The nonprofit sector: a research handbook, Newhaven, CT: Yale University Press. Salamon, L. and Anheier, H. (1996) The international classification of nonprofit organizations: ICNPO-Revision 1, 1996, Working Papers of the Johns Hopkins Comparative Nonprofit Sector Project, no 19. Snowdon, C. (2012) Sock puppets: How the government lobbies itself and why, Institute of Economic Affairs, Discussion paper 39, available from http://www.iea.org.uk/sites/default/files/publications/files/ DP_Sock%20Puppets_redesigned.pdf Unell, J. (1979) Voluntary social services: Financial resources, London: Bedford Square Press Wolch, J. (1990) The shadow state: Government and voluntary sector in transition, New York: The Foundation Centre.

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PART TWO

Cross-cutting issues for third sector service delivery

85

FIVE

Spinning with substance? The creation of new third sector organisations from public services Robin Miller and Fergus Lyon

Introduction A key theme in this book has been the impact of the changing relationship between the third and public sectors and the consequences of greater reliance on public sector funding for some organisations. Inherent within many of these debates is the notion that third sector organisations begin as autonomous entities that have been developed through voluntary endeavours of individuals or communities. However, in recent policy in England there has been growing interest in spinning out of services from the public sector to situate them in new third sector organisations. On a national level, such moves have been most strikingly encouraged through the Right to Request and the mutuals programmes. Supporters see spin-outs as hybrid organisations in which the public sector workforce are freed from constricting bureaucracy, and allowed to use new business opportunities to innovate and grow to the benefit of their users, communities and staff. For the Labour government, such developments were clearly situated in their interest in social enterprise, whereas the Coalition places a greater emphasis on mutuality and staff ownership. In reality though, there is little to split these governmental visions of spin-outs, with much more evolution than revolution between the two policy periods. Detractors claim that such policies are nothing more than Trojan horses for privatisation, which aim to weaken the role of state rather than strengthen the role of the third sector, that there is no solid evidence that such new models will lead to the expected innovation and efficiency, and that they provide unwelcome competition for existing third sector organisations in a time of public sector austerity (for example, Lister, 2008; Leys and Player, 2011; Unison, 2011; Godden 2012). Whatever one’s perspective on the underlying motivation is, spin-outs raise important questions regarding the relationship between third and

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public sectors. In this chapter we draw upon the research by authors and colleagues in relation to spin-out policies. This includes the rollout and uptake of Right to Request within the NHS, the national evaluation of the Social Enterprise Investment Fund that fuelled the NHS spin-out process, and research studies on innovation within spinouts. Where relevant, we also draw upon work by other academics in relation to these and related policy developments. As well as detailing the key initiatives, we seek to answer the following questions: 1. What was the ‘programme logic’ behind recent spinning out of public services into the third sector? 2. How were the assumed ‘contexts’ and ‘mechanisms’ and connected ‘outcomes’ experienced in practice?

What is a spin-out? For this chapter, we define public sector spin-outs as ‘new third sector organisations originating from public employees who left the public sector as a group’. At present, the spin-outs predominantly refer to themselves as social enterprises and share third sector values in relation to asset locks and limitations on the distribution of surpluses. They are predominantly registered as community interest companies or industrial and provident societies. Spin-outs are distinguished from those teams or delivery units that have been externalised from the public sector into established third or private sector organisations. Similarities between these processes exist, such as a requirement to honour previous terms and conditions under the Transfer of Undertakings (Protection of Employment) Regulations 2006 and a contractual relationship between the new provider and the public sector. There are, though, important differences, with many spin-outs leaving the public sector with an ongoing contract and being able to initially avoid the competitive tendering processes that usually accompany a transfer of service out of the public sector. They also face particular challenges relating to setting up a new organisation. To somewhat confuse matters the Coalition have relabelled this as a mutuals agenda, with a new definition of a ‘public sector mutual’ being ‘an organisation which has left the public sector “parent body” (also known as ‘spinning out’) but continues to deliver public services’. Mutuals are defined in this policy as organisations in which employee control plays a significant role in their operation’ (Mutuals Taskforce, 2011a; 9).

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Spinning with substance?

Starting the spin: recent policy initiatives In this section we outline the major national policies introduced during Labour and Coalition periods that have encouraged and facilitated groups of public sector employees to spin services out into the third sector. It is worth noting that while these policies may be introduced by central government, they rely also on action by local decision makers and policy makers to enact and indeed approve any spin-outs occurring. Furthermore, there have also been initiatives to spin-out services instigated at the local level (Hazenberg, 2013). It is also worth noting that there were national initiatives prior to this policy period that resulted in public services being spun out. These include the sport and recreation services being the basis of ‘new leisure trusts’ (Simmons, 2008) and housing stock transfer (Malpass and Mullins, 2002). Children’s social work practices were first proposed in the Care matters green paper (DfES, 2006) to improve outcomes for lookedafter children and young people. Based on a similar model to general practice (that is, led and owned by professionals) they could take a number of organisational forms, including ‘for profit’ or third sector, with the overall aim being to provide greater consistency and stability of care through improving social work morale, addressing common difficulties in retention of staff, and enabling frontline practitioners to be empowered to make decisions (DfES, 2007). The pilots could be developed through the spinning out of local authority services, but also by existing third or private sector organisations. The Social Care Practices Working Group was established by the Department for Education and Skills in November 2006 to detail how the policy could be implemented. Chaired by Julian Le Grand, it summarised the concerns that lay behind their development as follows – social workers ‘often feel de-motivated, overwhelmed by bureaucracy and deprived of autonomy … it can be argued that the accountability of social workers has become a rule-based managerial accountability, instead of a knowledge-based professional accountability’ (Le Grand, 2007: 5). Six pilots were initially identified and five started in 2009-10, with four of these functioning as independent social work pilots by March 2012 (Stanley et al, 2012). One did not proceed due to the local authority receiving a poor Ofsted inspection of its children’s services and it was decided that the sixth service would be kept in-house. In the end, only one of the four was a spin-out into a social enterprise, with the other three being set up by established third sector organisations or private partnerships.

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The main impetus during the New Labour period to support spinouts came from a number of policies within the Department of Health, seeking to increase the range of organisations delivering NHS services (DoH, 2006). A specific unit within the Department of Health was created to ‘act as a catalyst for change, providing a “hub” of ideas, energy and support for existing social enterprises’ (Hewitt, 2006: 13). The aptly named Social Enterprise Unit oversaw a ‘pathfinder programme’, which was allocated £1.45 million to support 26 social enterprises to either be created or to move into health and social care from other sectors (Tribal, 2009). Launched in autumn 2006, the pathfinder programme included three types of social enterprise – new organisations being created by health or social care professionals, new organisations being set up by multi-agency partnerships involving statutory services and/or voluntary and community groups and/or the commercial sector, and existing social enterprise or third sector organisations looking to expand into health and social care (Tribal, 2009). The pathfinders included five services or service areas that were currently being delivered by the NHS or local authorities, and of which two would subsequently become part of the Right to Request programme. In 2007 the Social Enterprise Investment Fund was established, with a pool of £100 million to stimulate the development and growth of social enterprise in health and social care (Alcock et al, 2012). Between April 2007 and March 2011 the Fund had provided funding of over £80 million, including £8.3 million to NHS services looking to spin out (NAO, 2011). The review of NHS services in England (DoH, 2008a) signalled Labour’s commitment to supporting NHS employees to set up new social enterprises to deliver their services. The Right to Request scheme was open to staff working within primary care trusts and gave them the ‘right’ to submit an ‘expression of interest’ to their boards to set up their services as a social enterprise (DoH, 2008b). The board had to consider this request and decide if there was merit in proceeding to the development of a business case. If approval was given then the aspiring enterprise could apply for funding from the Social Enterprise Investment Fund to provide additional management capacity, obtain specialist advice on issues such as tax, VAT, legalities and corporate finance and to undertake consultation activities. The leaders of the Right to Request could also access a bespoke development programme developed by the School for Social Entrepreneurs (CEEDR and Gregory, 2011). The completed business case was submitted to the PCT board for consideration. The pathfinder programme identified key barriers to spinning out, including the time it takes to launch and

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stabilise; the uncertainty caused by short-term contracts; the loss of the NHS ‘brand’; and the perception by staff that they would lose their favourable terms and conditions (in particular their final salary pension schemes) (Tribal, 2009). Right to Request therefore enabled staff to maintain their terms and conditions of employment and guaranteed the new social enterprises an initial contract of between three and five years before their services would be put out to tender. Assets were to be maintained in public ownership, to prevent them being sold on. The articulated vision was one of ‘independence, flexibility and responsiveness to innovate and improve services and outcomes for patients [through]... creating the conditions where NHS staff can innovate and lead rather than being told what to do … increase investment in communities and improve health and well-being’ (DoH, 2008: 9). Multiple beneficiaries were forecast, including patients, communities, staff and commissioners (see Box 5.1). In 2008 there were 152 primary care trusts, which employed approximately 200,000 staff delivering £10 billion worth of services that were eligible for Right to Request (DoH, 2010). In November 2010, it was estimated that 60 spin-outs would be created. This included those that would comprise the generic range of whole population services typically contained in a provider arm of a primary care trust, and those that were much smaller and would deliver discrete community services (for example, physiotherapy) and/or general services for a focused group of users (for example, primary care for socially excluded groups) (Miller et al, 2012a). By early 2011 a number of the 60 potential spin-outs included in the 2010 prediction had withdrawn. The renewed estimate was that approximately 30 would be in operation by autumn 2011. These would account for £886 million of community services annually and involve the transfer of 24,000 NHS employees (National Audit Office, 2011). The final figures in April 2012 show that 42 social enterprises were launched. They are present in all regions other than the North-East, with particular concentrations in the East of England, Yorkshire/Humber and South West (Miller et al, 2012b).

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Box 5.1: Expected beneficiaries of the Right to Request programme •

Staff (by creating conditions where they can ‘innovate and lead rather than being told what to do’).

•

Patients (through the new organisations having ‘the independence, flexibility and responsiveness to innovate and improve services and outcomes’).

•

Wider communities (‘new organisations would have profits to invest in the community’).

•

Commissioners (through enterprises developing ‘services to address the wider determinants of health’).

•

Public finances (‘organisational efficiency’ would be achieved through less bureaucratic processes and a more engaged staff).

Source: Miller et al, 2012a: 233

In 2010 the Coalition programme for government expressed a commitment to give ‘public sector workers a new right to form employee owned cooperatives and bid to take over the services they deliver. This will empower millions of public sector workers to become their own boss and help them to deliver better services’ (HM Government 2010: 29). While it was recognised that there would be a few areas which were not suitable due to ‘security or operational stability concerns’ (Maude, 2010) this ‘Right to Provide’ was opened up across national and local government with the aim of ‘empower[ing] employees to innovate and redesign services around services users and communities, driving up quality’ (HM Government, 2011: 42). It included a phone- and web-based mutual information service for public sector staff, managers and potential investors, a mutual pathfinder programme of spin-outs, and a £10 million Mutual Support Programme from spring 2011 for the ‘most promising and innovative mutual’ (HM Government, 2011: 43). By June 2014, 130 had applied to the mutual information service, with contact from wide range of public service areas including youth and community and children’s education (Mutuals Taskforce, 2014a,b). In advance of this generic initiative, a health specific Right to Provide was introduced at the start of the Coalition’s term of office to follow on from the Right to Request and was open for 12 months (DoH, 2011). The ‘right’ to demand consideration from the board was now also open to staff

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working in NHS trusts that had not yet achieved NHS foundation trust status. Staff in NHS foundation trusts or local authorities could also make a request, but the government could not insist these requests were listened to due to these organisations’ autonomous governance structures. Instead, the guidance advised that any interested staff would have to negotiate a process with their employing organisation. While more emphasised under the Coalition, both governments promoted the benefits of spin-outs, taking organisational forms based on mutualism and staff ownership. Throughout the Labour period, a number of influential commentators and organisations promoted the potential of mutuals to deliver public services. The NHS was seen as being particularly suitable for such a governance structure and the membership required by NHS foundation trusts can be seen as a step in this direction, in principle at least (Ham and Ellins, 2009). Mutuality in business and service delivery is though clearly not a modern development, with the principles of communal responsibility, ownership and benefit being developed in the cooperative movement, building societies and mutual insurance companies. The Labour government itself promoted such ideals, with Tony Blair writing a foreword to a pamphlet in 1998 in which the main author made the bold suggestion that New Labour should go as far as describing its underlying ethos as ‘mutualism’ rather than ‘socialism’ (Kellner, 1998). That said, Birchall (2008) identifies a contradiction between the sympathetic statements and their lack of intervention to stop ‘the erosion of the mutual business sector through demutualisation’ (2008: 1). Unlike the Right to Request, there were no grants directly available to mutual spin-outs nor the guarantee of a contract, but they were given access to organisations with special knowledge of mutuality. Furthermore, other initiatives sought to improve access to finance and enable transferred staff to access public sector pensions. A Mutuals Taskforce was in place by February 2011 to act as critical friend to the Cabinet Office and wider government but not to directly manage any of the initiatives (Mutuals Taskforce, 2011b). This also had a role in gathering evidence and promoting the concept of the public sector mutual among wider stakeholders. There were initially 12 pathfinder projects with staff groups between under five to over a thousand employees. By 2011 there had been 21 pathfinders that had been ‘formally announced’, of which seven were operational, eight were progressing, three were in early stages and four were no longer going to proceed (Mutuals Taskforce, 2011c). A further NHS specific initiative was launched in July 2014, with a £1 million fund being available for

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up to 10 NHS and foundation NHS trusts to explore the potential benefits of mutual models within acute hospital services (Cabinet Office and DoH, 2014). The final initiative of note in the Coalition period is the smaller scale Adult Social Work Practice pilot programme. Initiated by the Department of Health, this sought to encourage local authorities to consider alternative models for the delivery of their adult care management teams (SCIE, 2013). The so called ‘practices’ were to be operational by 1 February 2012 and run until 31 March 2013 at least. They received up to £20,000 seed funding and development support from a project team and peer network. There were seven pilots in total, of which two were transfers of staff to existing third sector organisations, four were spin-outs to new organisations and one was a local authority owned limited company, which planned to become a community interest company (Manthorpe et al, 2014).

Is there substance behind the spin? The historical development of programmes shows the continuity between the policy periods, with the approach taken by Labour in relation to community health services being developed by the Coalition and extended to a wider range of public services. Any differences were arguably more to do with the wider policy context than any fundamental altering of intent or perspective. Both governments appear to share a similar set of core assumptions in relation to what can be achieved through the spinning-out process and the contexts they were working in (Table 5.1). Context Key to the expressed aims of the spin-out policies is the assumption that a proportion of the public sector work force feels restrained by their organisational bureaucracy, and would welcome the opportunity to deliver services in alternative organisations and indeed sectors. This does appear to be the case, with Hall et al (2012) describing these as ‘jump’ motivations, that is, those factors in the previous context that led aspiring spin-out leaders to believe that services would be better delivered outside of the public sector. Key opportunities mentioned were engaging service recipients in the planning and delivery of service, freeing up funding through service efficiencies that could be reinvested in services, and working with other partners to bring in new resources for local communities. Alongside these benefits for service recipients

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Spinning with substance? Table 5.1: The assumed context, mechanisms and outcomes of spinning out Context

Mechanisms

Outcomes

The public sector workforce is highly motivated, committed and skilled but frustrated by the restrictive bureaucracies in which they work. Public sector workforce views the third sector as more conducive to achieving their values, skills and visions than the public or private sector. Public sector workforce does not necessarily have the competence to run an organisation outside of the public sector. There is a lack of market competition in key areas of public sector service and increasing the provider diversity will strengthen this competition. Senior management/boards and commissioners will be open to services being spun out.

Employee engagement allows public sector staff to explore the implications and then vote on whether to spin out. Spin-out policies provide the capacity, expertise and (in some cases) financial support to set up new third sector organisations. Adopting different governance and legal forms will enable the ex-public sector workforce to adopt the ‘best’ characteristics of the public, private and third sectors. The spin-outs will act as new partners to the public sector and be strong enough to improve the competitiveness of public sector markets.

Spin-outs are able to achieve improved efficiency and productivity. Spin-outs will be able to rapidly innovate service delivery. Spin-outs have a better experience and improved outcomes for their immediate beneficiaries. Spin-outs will improve attendance, retention and motivation in their workforce. Spin-outs will provide additional social values for the wider community and population above the core beneficiaries.

and their communities were more personal motivations for those leading the spin-out. These did not appear to be financial, but rather the opportunities to further develop professional and managerial skills, to have greater autonomy, and to be part of a final major development prior to retirement (Hall et al 2012; Millar et al, 2013). While these ‘jump’ factors were important, there were other strong (and in many cases stronger) contextual issues that are not mentioned in the spin-out policy documents. Hall et al (2012) describe these as ‘push’ factors, of which there were two main types. First, there was the danger that the services (and therefore the staff who worked in them) would be transferred to another public sector body or subject to a tendering exercise. Right to Request spin-out leaders and the senior managers who encouraged them frequently highlight concerns that if they did not spin out they would be taken over by a larger public organisation that may have less interest in the service or its beneficiaries, or a private company more focused on profit (Hall et al, 2012; Hazenburg and Hall 2013). These concerns build on common notions of the different behaviours of the private and public sectors (Powell and Miller, 2014). Spinning out to a new third sector organisation was therefore seen as a

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way of avoiding a greater evil, with the third sector being preferable to the private sector due to the latter’s perceived focus on profit (Hall et al, 2015). The second ‘push’ factor was the likelihood that the services would be shortly subjected to major financial cuts or indeed be axed altogether as they were not seen as a priority. Moving out of the public sector was therefore a survival strategy through its potential to open up new funding opportunities (Hazenburg, 2013). Mechanisms The mutual pathfinder programme is built on the potential benefits of employee engagement and ownership, and these were also highlighted in the Right to Request and Social Work Practice pilots. The sense of a collective venture seemed to have been important to the people leading the spin-outs, with many (but not all) giving the staff members involved the opportunity to vote on the options (Hall et al, 2012, Millar et al, 2013). Lyon et al (2013) emphasise the role of the leaders of the spin-outs in facilitating this engagement by building trust with the staff and guiding them through the complex process. There were spin-outs that were abandoned due to staff opposition and an unfavourable result in such a vote, again emphasising that not all of the public sector workforce are amenable to such a move. Furthermore, it was generally a small number of senior managers or clinicians who were the driving force behind the change and who had to influence and persuade their colleagues to consider and support the spin-out (Miller and Millar, 2011; Hazenberg and Hall, 2013). This was most successful when these leaders had established relationships in place (Lyon et al, 2013). Mirroring the pathfinder programme, workforce concerns regarding job security, stability of provision, and employment terms and conditions were key barriers (Addicott, 2011). In some cases, it was the board or executive team who actually initiated the process, and recruited managers in the service in question to facilitate the spinning out (Lyon et al, 2013). There were also examples of senior public sector managers being apathetic or indeed resistant to the potential of spin-outs. This resulted in organisations not promoting spin-out opportunities to staff and general organisational inertia to any interest, but there is also evidence of them being obstructive and hostile to the proposal and the people leading them (Miller and Millar, 2011, Millar et al, 2013). The disparity in the number of Right to Requests within regions may reflect local contexts and opportunities, but also appears to be related to the interest of the local strategic health authorities (Miller et al, 2012a, b).

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Most studies highlight that people who have worked solely or predominantly in the public sector have initially struggled to take on a number of the key tasks that are involved in planning and implementing a spin-out. Key issues relate to legalities, taxation, financial planning, understanding the competition, branding and marketing (Miller and Millar, 2011; Hazenburg and Hall, 2013). Spin-out leaders reported that senior public sector managers were unfamiliar with how to support the transition. The direct business expertise or funding to purchase such expertise has therefore been seen by the spin-out leaders as essential to the process (Alcock et al, 2012). Affiliated to this technical knowledge has been the confidence of the leaders of the new organisations to operate in their new roles and contexts. Again, the mentoring and bespoke development programmes have been seen as invaluable (Boston Consulting Group, 2013; CEEDR and Gregory 2011). The process of spinning out has been facilitated by the provision of grant and loan finance. For 21 of the 27 health-related social enterprises examined by Sepulveda et al (2014) in England, funding had been provided by the Social Enterprise Investment Fund. This was a loan fund that was also able to provide large grants to those organisations spinning out (Alcock et al, 2012). Financial concerns have also been alleviated by the provision of contracts to those spinning out under the Right to Request, and the further development of new income streams by social enterprises. Of crucial importance are the relationships with commissioners that allow spin-outs to continue to develop and innovate. Lyon et al (2013) identify some of these commissioners as being more supportive of innovation, especially where there was continuity within the commissioning team. Spin-outs display hybrid features drawn from the public, private and third sectors (Doherty et al, 2014; Hall et al, 2015). Spin-out employees refer to third sector values in their engagement with service users and governance, while at the same time emphasising their entrepreneurial flexibility and public service ethos. This hybridity has led to some uncertainty as to what sector they belonged to, and there were attempts to provide alternative descriptions such as being of the ‘independent’ sector or as an ‘NHS provider’. They were also far from being free from public sector control in the form of contractual specifications and monitoring, regulatory requirements and associated inspection processes, and a strong loyalty to and affinity for ‘NHS values’ (Hall et al, 2015). In changing the nature of the third sector, these hybrid forms appear to be consciously creating a blurring of the boundaries between public, private and third sectors.

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Outcomes At present, there is either a lack of detailed and independent impact evaluation or the spin-outs are at too early a stage to have had a realistic opportunity to achieve the expected changes in individual and population outcomes. This is not helped by lack of specific objectives within the policies (NAO, 2011). Personal reports from the organisations suggest that they have been able to make improvements but these can obviously be questioned in relation to their objectivity (Miller et al, 2015). The extent of changes to health outcomes attributable to the spin out process is expected to change over time. Some changes may be expected to be occur at the early stages as the organisation is in a ‘honeymoon period’, while other changes take longer to occur as the organisational values adapt and change in relation to the new context. At present then, we must content ourselves with evidence on key elements of the process although this too is somewhat patchy and of various degrees of robustness. Financially stable organisations would seem to be a key output and requirement of the policies as publicly stated (although those who see them as a means to open up public services to the private sector would suggest that failure would support this aim). There are examples of spin-outs that have lost major contracts and indeed folded (including one in the pathfinder programme), however, all the Right to Request spin-outs are still in operation and growing. Another survey of 27 health and social care spin-outs found that at the time of launch the mean number of contracts was six (with a median of two) and this had grown to a mean of nine contracts with a median of four by 2013 (SEUK, 2013). Despite these positive figures, concerns have been raised regarding the limited assets of the recent spin-outs, which are estimated to be 1% of turnover. This compares with assets of £100 billion to income of £40 billion for the whole of the third sector (SEUK, 2013). Lyon et al (2013) found that innovations were reported in the form of improvement to existing services, new treatments and services being developed, novel approaches to outreach and social marketing, and organisational changes. Interviews with the chief executives of a sample of Right to Request spin-outs reflects this range, with examples being the delivery of 4% efficiencies each year, cessation of patients having to be sent out of area for treatment or care, and the opening of specialist services (Miller et al, 2015). Vickers et al (2014) examine 134 specific innovations in a sample of 30 spin-outs. Interviewees stated that 43% of the innovations could not have happened in the public sector, often due to a combination of reasons such as bureaucratic obstacles, risk

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averseness and lack of support (Lyon et al, 2013). However, it was also found that 19% of the innovations would have happened in the public sector and indeed, in some cases, had originated in the public sector. The spinning out process did though enable an accelerated process of development of such innovations. However, evaluations of the adult social work practice pilots found that staff perceived that they continued to spend their time in similar ways to colleagues employed in the public sector, and a significant majority felt that they were not spending sufficient time working directly with service recipients (Manthorpe et al, 2014). This suggests that one of the key expected innovations, increased contact between social worker and people accessing services, had not yet been achieved. Staff in the adult social work practice pilots had similar experiences to those who remained in the public sector in relation to supervision, but felt that the new organisation offered the potential for greater job satisfaction (Manthorpe et al, 2014). Staff sickness is also used as an indicator of employee satisfaction. There were mixed reports from spin-outs in relation to improvements in sickness absence, with high rates still being encountered by some, while others said that these had substantially reduced (Miller et al, 2015). There is evidence of a change in the terms and conditions of new staff recruited to spin-outs, while those who moved with organisations from the public sector were able to retain their previous terms. That said, renegotiating the public sector terms and conditions that they had inherited is a consideration at least of many of those leading the healthcare spin-outs (Hall et al, 2015). Pressure to make such changes comes from pressures of competitive tendering in a period of austerity, with commissioners looking for organisations to deliver more services for lower costs. This is driving organisations to innovate but it is also putting pressure on spin-outs to offer less favourable pay and terms, a trend that has been observed in third sector providers of adult social care (Cunningham and James, 2014).

Discussion and conclusion: What can we learn from the spin? New Labour and Coalition governments showed similar interest in the potential of developing the third sector through spinning out of public services. This was based on a shared programme logic regarding the context (in particular that elements of the public sector workforce would be interested in managing or working for third sector organisations as a means to sustain and improve their services and

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additional diversity would strengthen associated markets), mechanisms (public sector employees will need skills and mentoring to be successful in this transition, and new organisational forms will combine the best of public, private and third sectors), and the end outcomes (better outcomes for individuals and communities, improved efficiency, and greater satisfaction and motivation for staff members). Encouraging and facilitating this process involved a number of policy levers. Financial and business support are important enablers, with ideally, a mixture of ‘jump’ and ‘push’ factors to act as key motivators for public sector staff to contemplate such a change. Wider policy changes can also help to provide both ‘carrots’ and ‘sticks’ to overcome existing inertia. Senior management and commissioner endorsement is vital, with the initial spin-out visions often beginning with these roles rather than the direct workforce. Such dramatic organisational change requires visionary leadership and entrepreneurial capabilities to both identify the spin-out opportunities, and be able to lead teams through such dramatic change. Those leading the new organisations commonly report a spectrum of perspectives in their organisations regarding the difference that being outside the public sector makes to the vision and values. Indeed, the leaders themselves are often not clear about which sector they should and do belong to (Hall et al, 2015). Furthermore, many have an expressed a wish for hybridity in practice and state a willingness to change allegiances depending on the situation in hand. The combination of business and commercial objectives is familiar territory to others working in the social enterprise sector (Doherty et al, 2014). The issue of the relevance of heritage is a complex one, as some spin-outs originally began as third sector organisations which were nationalised, and many have engaged volunteers and charitable funding for many years. Rather than adopting the cultural norms of the third sector, these organisations draw on multiple values and heritage including their NHS ethos of public service delivery. While the evidence base is currently weak in relation to outcomes, spin-outs do potentially provide a fruitful opportunity to explore such notions due to the explicit wish by policy makers and indeed those leading them to combine the characteristics commonly ascribed to different sectors. Evidence of greater innovation in spin-outs compared to the public sector is emerging (Lyon et al, 2013) but the extent to which this relates to better health outcomes requires more evaluation. The summary of the adult social work practice pilot evaluation report concludes that ‘many of the positive accounts … seemed to be generated not by the characteristic of the innovation so much but as

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a consequence of the energy and enthusiasm that they commanded’ (Manthorpe et al, 2014: 7). This suggests that it is not the nature of the organisation that is important but rather the opportunity and promise that those involved perceive. As they are now independent contracted organisations, the pressures and tensions of the relationship between public sector commissioners and third sector deliverers described elsewhere in this book are also mirrored in the spin-outs. While they may have been given a protected start, competition for their core business is looming on the horizon. Furthermore, their experience of competitive tendering will be less than their rivals in the private and existing third sectors. However, spin-outs are sensitive to this and are therefore actively diversifying their income sources. The duty placed on commissioners to regard social value may provide spin-outs with a competitive advantage over the private sector but equally may make them more vulnerable to existing third sector organisations who (in theory) should have a better defined and articulated mission. In any case, commissioners appear to be struggling to understand and implement this duty, particularly with the current emphasis on financial savings (Harlock, 2014). Commissioners also play a key role in encouraging innovation with some being more active than others in funding novel ways of delivering health services (Lyon et al, 2013). The competitive environment acts as both driver of innovation as organisations try to find ways of delivering higher quality services and reaching more people, and a stifling presence as organisations rely on delivering what they know may work. Successive governments have shared an interest in spinning-out public sector services into new third sector organisations. Their common belief that a proportion of the public sector workforce would be willing to undertake such a move appears to have some justification, although it is important to remember that these opportunities were still only available to a minority of the staff. Going forward, it will be interesting to see how these new organisations find their place in the broader third sector, the extent to which they maintain or lose their public sector roots and the balance they strike between sectoral affiliations and characteristics. In this chapter we have attempted to take an objective view of the spin-out policies, the evidence available of their impact, and what they can tell us about the public and third sectors. Although evidence of their outcomes is still limited, they provide health and social care services for millions. People who are disadvantaged, vulnerable or sick rely on them for support and care that is vital to their continued wellbeing. For all of these stakeholders, it is therefore to be hoped that the spin does indeed have substance.

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References Addicott, R., (2011) Social Enterprise in Healthcare: Promoting Organisational Autonomy and Staff Engagement, London: The Kings Fund Alcock, P., Millar, R., Hall, K., Lyon, F., Nicholls, A. and Gabriel, M., (2012) Start-up and Growth: National Evaluation of the Social Enterprise Investment Fund (SEIF), Report submitted to Department of Health Policy Research Programme Birchall, J. (2008) ‘The “Mutualisation” of Public Services in Britain: a critical commentary’, Journal of Co-operative Studies, 41(2), 5-16. Boston Consulting Group (2013) Soft Finance, Hard Choices: A review of the finance market for public service mutual, London: BCG Cabinet Office and Department of Health (2014) Mutuals in health: pathfinder programme. Downloaded from https://www. gov.uk/government/publications/mutuals-in-health-pathfinderprogrammeCabinet Office CEEDR and Gregory, D. (2011) Evaluation of school for social entrepreneurs right to request programme, London: CEEDR Cunningham, I. and James, P. (2014) ‘Public Service Outsourcing and its Employment Implications in an Era of Austerity: The Case of British Social Care’, Competition & Change, 18(1), 1-19 Department for Education and Skills (2006) Care Matters: Transforming the Lives of Children and Young People in Care. Cm 6932. Norwich: TSO Department for Education and Skills (2007) Care Matters: Time for Change. Cm 7137. Norwich: TSO Department of Health (2006) Our health, our care, our say, London: The Stationery Office Department of Health (2008a) High Quality Care for All – NHS Next Stage Review, London: The Stationery Office Department of Health (2008b) Social Enterprise – Making a Difference. A Guide to the Right to Request, London: The Stationery Office. Department of Health (2010) Plans in place to transform community services. Press release Department of Health (2011) Making Quality Your Business: A Guide to the Right to Provide, London: The Stationery Office Doherty, B., Haugh, H. and Lyon, F. (2014) ‘Social enterprises as hybrid organizations: a review and research agenda’, International Journal of Management Reviews. DOI: 10.1111/ijmr.12028 Godden, J. (2012) Social Work Practice Pilots, England – Adults and Children’s, Birmingham: BASW. Downloaded from http://cdn.basw. co.uk/upload/basw_40815-9.pdf on 04.09.2014

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Hall, K., Miller, R. and Millar, R. (2012) ‘Jumped or Pushed: What Motivates NHS Staff to Set Up a Social Enterprise?’, Social Enterprise Journal, 8(1), 4962 Hall, K., Miller, R., and Millar, R. (2015) ‘Public, Private or Neither? Analysing the publicness of health care social enterprises’,  Public Management Review, (ahead-of-print), 1-19. Ham, C and Ellins, J. (2009) NHS Mutual: Engaging staff and aligning incentives, London: Nuffield Trust Harlock, J. (2014) From outcomes-based commissioning to social value? Implications for performance managing the third sector, Working Paper 123, Birmingham: Third Sector Research Centre Hazenburg, R. (2013) Public service spin-outs: The state of the sector, London: Transition Institute. Downloaded from http://www. transitioninstitute.org.uk/public-services-spin-outs-the-state-of-thesector/ on 04.09.2014. Hazenberg, R. and Hall, K. (2013) The Barriers and Solutions to Public Sector Spin-Outs, London: Capital Ambition Hewitt, P. (2006) Social enterprises in primary and community care, London: Social Enterprise Coalition. HM Government (2010) The Coalition: Our programme for government, Downloaded from http://www.direct.gov.uk/prod_consum_dg/ groups/dg_digitalassets/@dg/@en/documents/digitalasset/ dg_187876.pdf HM Government (2011), Open services white paper, Downloaded from https://www.gov.uk/government/publications/open-publicservices-white-paper Kellner, P (1998) New Mutualism: The Third Way, London: Cooperative Party Le Grand, J. (2007) Consistent Care Matters: Exploring the potential of Social Work Practices. London: Department for Education and Skills Leys, C. and Player, S. (2011) The Plot Against the NHS, Pontypool: Merlin Press Lister, J. (2008) The NHS After 60. For Patients or Profits?, London: Middlesex University Press Lyon, F., Vickers, I., Sepulveda, L., McMullin, C. and Gregory, D. (2013) Process of social innovation in mutual organisations: The case of social enterprises leaving the public sector, London: CEEDR Middlesex University and NESTA. Malpass, P. and Mullins, D. (2002) ‘Local authority housing stock transfer in the UK: from local initiative to national policy’, Housing Studies, 17(4), 673-686.

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SEUK (Social Enterprise UK) (2013) Spin out, Step up. Available at http://www.socialenterprise.org.uk/news/spin-out-step-report-thefinance-challenge-for-health-social-care-spin-outs-1 (downloaded 07.04.2016) Simmons, R. (2008) ‘Harnessing social enterprise for local public services the case of new leisure trusts in the UK’, Public Policy and Administration, 23(3), 278-301. Stanley, N., Austerberry, H., Bilson, A., Farrelly, N., Hargreaves, K., Hollingworth, K, and Strange, V. (2012) Social work practices: Report of the national evaluation, London: DFES. Tribal (2009) Social Enterprise Pathfinder Programme Evaluation: Final Report (London). Unison (2011) Of mutual benefit? Should mutuals, co-operatives and social enterprises deliver public services?, London: Unison. Vickers, I., Lyon, F. and Sepulveda, L. (2014) ‘Innovation in public service spin-outs: forms, processes and learning’, Paper presented at Institute of Small Business and Entrepreneurship Conference, Manchester, 6-8 November 2014.

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Capacity building for competition: the role of infrastructure in third sector service delivery Rob Macmillan

Introduction Third sector service delivery is only one of several purposes of voluntary action, but it has gained a lot of policy, practice and research attention over the last 15–20 years, to the extent that it can eclipse other dimensions of voluntary action. Nonetheless, it is largely through delivering services that the third sector has grown, primarily through contracts with public bodies. The official rationales for such involvement were well articulated during the New Labour years in the Treasury ‘cross-cutting review’ into the role of the voluntary and community sectors in public service delivery, published in September 2002, and which set in train significant investment in the sector over the next eight years (HM Treasury, 2002; McLaughlin, 2004). Drawing explicitly from the theory of the sector’s comparative advantage (Billis and Glennerster, 1998), the cross-cutting review argued that voluntary and community organisations may be best placed to provide services to some groups because they: can bring specialist knowledge and experience to bear; can involve users in the design and delivery of services; are independent of existing structures, and can therefore develop services in new and innovative ways unbound by existing structures and rules; tend to be trusted more than existing public authorities, and can offer less prescriptive, flexible and responsive services (HM Treasury, 2002: 16-17). To this list may be added some broader contextual and ideological reasons for the growing public policy interest in third sector service delivery, namely that the sector is regarded as offering the prospect of providing still effective but lower-cost services beyond the state. However, talking up the sector’s potential role and contribution in this way has long been accompanied by a parallel concern about whether the sector is capable of stepping up to compete for and deliver

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services effectively (HM Treasury, 2002: 16-17; Office of the Third Sector, 2006). In order to enhance third sector service delivery, it is argued, the sector needs support to develop. Successive governments, charitable funders and the third sector itself have sought to address this issue through investment in a range of capacity building programmes and initiatives. As a result of this, an extensive architecture of support has been built around much service delivery in the third sector. This has been provided through a complex and diverse range of generalist and specialist umbrella and support bodies, fulfilling different functions and representing different alliances of third sector organisations at national, regional and local levels, and accompanied by an increasingly visible secondary private market of business development consultancy. This chapter examines this contested field of capacity building and infrastructure to ask what role is played by these bodies, and particularly how this changes over time in response to wider contextual and policy developments. These questions can be considered at two interlinked field-shaping levels. First, at a policy level, different actors have sought over time to lead and shape the agenda on public service delivery. The aim here is to widen the ‘room’ for third sector delivery, by framing debates in terms both of the potentially distinctive contribution the third sector can make, but also the need for investment to build the capacity of third sector organisations (Macmillan, 2010). Second, at a practical level, capacity building in the third sector involves a range of different approaches, such as the provision of direct support and training to strengthen individual frontline organisations but also a coordination role in facilitating the development of networks, partnerships and consortia to promote the position of particularly smaller and local third sector organisations in service delivery. The form and content of these developments has changed significantly over the last decade, as part of a move away from a well-resourced and accommodating environment for the third sector (Macmillan, 2013c). By way of context, the next section sets out to describe the existing field of capacity building and infrastructure, and recent policies to develop it. It is worth noting that there is a long historical legacy of third sector organisations providing public services, and of efforts to promote this role. However, this chapter takes New Labour’s second period of office (from 2001) as a starting point, since this was a time when the debate on supporting the third sector in service delivery intensified, as part of the broader second term theme of transforming public services through contestability and a mixed economy of suppliers. The third part of this chapter examines how the field of infrastructure is changing, with a particular focus on making a market in capacity

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building activities. The chapter concludes with an assessment of how key assumptions about the role of capacity building are changing, both in terms of how it is organised, and what it is for. It is suggested that this amounts to the emergence of a more explicitly ‘positional’ approach to capacity building in an increasingly competitive environment for third sector organisations.

Exploring the field: capacity building and infrastructure There are multiple definitions of both ‘infrastructure’ and ‘capacity building’. For convenience, the definitions offered in the UK in 2004 by the then Labour government are as useful a signpost as any. Here ‘infrastructure’ was defined as ‘the physical facilities, structures, systems, relationships, people, knowledge and skills that exist to support and develop, co-ordinate, represent and promote front line organisations thus enabling them to deliver their missions more effectively’ and capacity building as ‘empowering activity that strengthens the ability of voluntary and community organisations to build their structures, systems, people and skills so that they are better able to define and achieve their objectives’ (Home Office, 2004: 15). Effectively, infrastructure was a set of facilities and resources, while capacity building was a set of activities. Organisations whose main work is advising, supporting and developing other third sector organisations tend to be referred to as ‘infrastructure agencies’ or ‘second tier organisations’, and contrasted with so-called ‘frontline organisations’. Infrastructure support and services can be organised and coordinated in multiple ways, and the field of provision in the UK is a complex array of sometimes overlapping and continuously evolving generalist and specialist organisations, individuals and activities, from the public, private and third sectors, working at neighbourhood, local, subregional, regional and national scales. At local and subregional level, there is a changing patchwork of local third sector infrastructure organisations and networks, such as Rural Community Councils (focusing on rural issues and community development in rural areas), Councils for Voluntary Service (focusing on networking, representation and organisational development), and Volunteer Centres (focusing on volunteer brokerage) (Osborne, 2000). At regional level there are generalist networks aiming to represent and coordinate the sector, such as Voluntary Organisations Network North East and Regional Action West Midlands (Harris et al, 2004). There are a number of national umbrella or membership bodies, such as the National Council for Voluntary Organisations (NCVO), the Association of Chief Executives

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of Voluntary Organisations (ACEVO), and Social Enterprise UK (SEUK), which aim to provide a national voice for the third sector, but who also provide services and direct consultancy support, increasingly for fees, for frontline voluntary and community organisations and social enterprises. In addition, there are national associations of local and subregional infrastructure bodies, such as NAVCA (representing local infrastructure organisations), ACRE (representing Rural Community Councils), and Locality (representing community-led organisations). Alongside generic provision there is a wide range of specialist bodies: by constituency (representing, for example, black, Asian and minority ethnic communities and voluntary organisations, such as Voice4Change England), function (for example, impact measurement, such as New Philanthropy Capital), or policy area (for example, organisations in the children and young people’s field, such as Children England). Beyond the organised third sector infrastructure, there is also a wide range of support offered by local authorities, funding bodies, private sector consultancies and business support agencies, and through peer to peer connections. It is little wonder that this complexity has been vulnerable to the repeated criticism that the supply side of capacity building and infrastructure ‘has developed piecemeal and, while some parts of the sector are well served, the overall coverage is variable in quality and fragile. There are significant gaps in networks and some duplication’ (HM Treasury, 2002: 20). As a result, a continuing policy theme has been the push to create a tidier field of infrastructure; one that is more integrated, coordinated and rationalised. Broadly speaking, it is possible to identify three fundamental roles played by infrastructure – ‘influencing’, ‘developing’ and ‘connecting’1 – which can serve to promote the sector’s role in delivering services. First, infrastructure organisations play a policy and practice influencing role, by attempting to shape the field for third sector service delivery. This involves initiating and engaging in consultation processes; encouraging participation and representation in policy and decisionmaking structures; and campaigning through lobbying and promoting the sector’s interests. It includes intervening directly in debates on new policy agendas and legislation but also in seeking to frame the terms of debate around the value, contribution and potential of the third sector in service delivery. Examples include policy and consultation work and dedicated commissions of inquiry around the Work Programme (see Chapter 9; NCVO, 2012), and the longstanding ACEVO campaign to open up different public services to the third sector (ACEVO, 2003; Aldridge, 2005).

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Second, infrastructure is involved in developing the sector’s potential and capacity to bid for and deliver public services. This includes providing information, advice and guidance, and access to resources; practical support and services for capacity building and organisational development; and to provide or facilitate learning opportunities. Examples here include the now dismantled ChangeUp national hubs of expertise/support services working on, for example, finance, governance and performance (National Audit Office, 2009: 18); and work undertaken by social investment support programmes such as the Adventure Capital Fund, Futurebuilders and the Social Enterprise Investment Fund (Thake and Lingayah, 2009; Hall et al, 2012; Wells, 2012), which were among the first programmes to mix grant and loan funding with hands-on business support. Third, infrastructure is involved in connecting voluntary and community organisations with each other and with organisations in the public and private sector. This includes providing opportunities and structures for networking, brokering relationships and shared resources for the sector and promoting collaboration and joint working. Examples include the establishment of voluntary sector assemblies and shared online forums, providing access to cheaper services through bulk purchase and facilitating the formation of new networks, partnerships, consortia and supply chains. How has this ‘piecemeal’ configuration of organisations and functions arisen? In relation to the third sector’s role in service delivery, we can identify three somewhat overlapping phases since 2001. An early emphasis on investment in building the capacity of individual third sector organisations was overlaid by a second but broader concern, from around 2006 onwards, with changing aspects of the environment in which third sector service delivery operates. Finally in the aftermath of financial crisis and recession, and the subsequent deficit reduction programme implemented by the Coalition and Conservative governments from 2010 onwards, resources for capacity building have diminished dramatically and have become targeted towards particular purposes. The first phase developed rapidly after the publication of the Treasury’s cross-cutting review in 2002. The Labour government invested heavily in building the capacity of the third sector, through the introduction of two main programmes: Futurebuilders and ChangeUp (National Audit Office, 2009; Macmillan, 2011; Wells, 2012). In both cases, the rationale was that individual third sector organisations need support to develop, and without this they are less likely to meet their potential or to be able to play a role in public service delivery. In

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effect, the policy problem to which the Futurebuilders and ChangeUp programmes were the solution was an assumed lack of capacity at individual organisational level and across the sector as a whole. Futurebuilders, a £215m programme of grants, loans and allied business development support, aimed to develop the capacity of third sector organisations to bid for and deliver significant public service contracts in key areas such as health and social care and criminal justice. Loan finance was offered as working and physical capital to help enhance the delivery capability of interested third sector organisations. ChangeUp was a more diffuse and general £230m programme helping ‘frontline’ voluntary and community organisations to reach their potential (in delivering services or in other roles) by significantly improving the local, regional and national infrastructure support available to them. A second phase of debate developed from around 2005–06. Experience from, among others, third sector organisations involved in the Futurebuilders programme, began to highlight the difficulties faced in the commissioning and procurement process. Capacity may have been built, but this did not necessarily mean that public service contracts would follow. Policy attention began to shift towards addressing barriers in the wider environment itself, rather than being solely occupied with a lack of organisational capacity in the third sector. A parallel set of policy interventions developed around the awareness, understanding and capabilities of public sector commissioners with respect to the third sector (Office of the Third Sector, 2006), including a national programme for third sector commissioning, designed to train commissioners in working with the third sector (Shared Intelligence, 2009). However, these two phases were overlaid by a third in the aftermath of the financial crisis and economic downturn of 2008–09, and a political move towards budget deficit reduction financed primarily through reduced public expenditure. Debate in the third sector shifted almost overnight to focus on a concern with organisational survival and resilience in the face of a less accommodating financial environment (Wilding, 2010; Taylor et al, 2012), and subsequently, the impact of austerity on third sector organisations (Buckley et al, 2013). The earlier push to promote the sector’s involvement in service delivery, and the support it needs to realise it, seemed to get lost as other priorities came to the fore. As a result, the Coalition government’s efforts to promote the third sector through the ‘Big Society’ were met with considerable scepticism as a ‘cover for cuts’ (Macmillan, 2013a). Yet the Coalition government also laid out ambitious plans to reshape the state through its ‘Open Public Services’ agenda, involving decentralisation,

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competition and choice, underpinned by the promotion of innovative finance mechanisms, such as social investment and ‘payment by results’ (Cabinet Office, 2011; Rees, 2014; see also Chapter 3). The Coalition and Conservative governments since 2010 appear to adopt a ‘sector neutral’ stance, in not privileging or promoting the third sector’s role in providing public services. In the service of this new agenda, and compared with the pre-Coalition Labour government, support for building capacity for service delivery has been limited and become more targeted. A £10m Investment and Contract Readiness Fund, for example, was opened in 2012 to offer grants of £50K–£150K to pay for business support to prepare social ventures aiming to scale up to receive social investment or win public service contracts. Managed by the Social Investment Business on behalf of the Cabinet Office, it has been suggested that the programme prioritises investment readiness rather than contract readiness, with the aim of developing investable social ventures, which would support the growth of the demand side of a social investment market in England (Brown and McAllister, 2014).

Making a capacity building market The emergence of markets is an important dimension of what might be called a wider ‘unsettlement’ in the field of capacity building and infrastructure, where existing funding streams are withdrawn, and new models of organising infrastructure support and capacity building are in development. This is sometimes characterised as a gradual move towards a ‘demand-led’ approach in which the priorities of frontline organisations and social enterprises are brought to the fore, and thus away from a traditional ‘supply side’ approach which, it is argued, tends to privilege the work of existing voluntary sector infrastructure organisations (Big Lottery Fund, 2012; Buckley et al, 2013). It could be regarded as a relatively straightforward case of ‘marketisation’, yet as discussed below this claim is rather simplistic. The field has not been short of contested debate during its unprecedented growth over the last decade (Macmillan, 2013c; Rochester, 2013). The preferred model for developing the sector has traditionally been to work with and fund the supply side of mainly voluntary sector infrastructure organisations, in order to develop their capacity and improve their support, in order to develop and improve frontline organisations (Home Office, 2004). Over time, this model has come under sustained criticism, to the extent that it is no longer pre-eminent, and now exists in an unsettled state alongside other approaches. The main concerns were that the supply side extends

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beyond the voluntary sector to encompass private sector consultancy, public bodies and some funders, yet this has tended to be neglected in publicly funded programmes. Second, as a result, the interests and voices of frontline organisations tended to be rather subordinate, and third, it was difficult to demonstrate the difference made by, and value for money of, supply side investments. Finally, the resources are simply no longer available to sustain the developed array of different forms of voluntary sector infrastructure. Given the scale of the resources involved, there was a concern that infrastructure organisations were thus able to secure and sustain their own organisations, without much tangible benefit to their member or user frontline organisations. They were accused of ‘hoovering up the money’ (Harris and Schlappa, 2007), and of serving their own interests rather than those of frontline organisations. This view was reinforced by the local ‘consortia’ and national ‘hub’ models preferred in the ChangeUp programme, where earmarked resource allocations would be divided between groups of infrastructure organisations, proposing particular projects, having come together in partnerships to identify priorities and plan a programme of work over the next few years. The suspicion that these consortia in practice amounted to rather closed ‘clubs’ dividing the spoils was hard to shake. A frequent critical refrain suggested it might be more effective to channel some resources directly to frontline voluntary and community organisations – so-called ‘demand-led capacity building’ – in order to improve services and support, and to redress the power imbalance between ‘expert’ infrastructure and frontline organisations assumed to have capacity deficits (Harker and Burkeman, 2007). These tensions gained much more purchase, however, as both political and economic cycles began to change from 2007–08. Policy making attention began to note the prospects for a general election, and questions began to surface about whether all the investment in the voluntary sector, and particularly its infrastructure, was worth it. Had it made a difference – first to frontline organisations, but second to the nature of services and the lives of service users and communities – and, if so, how could you tell? A highly critical select committee report suggested that the beneficial impact of the third sector overall had perhaps been overplayed, with little evidence behind the rhetoric (House of Commons Public Administration Select Committee, 2008). A National Audit Office investigation into the impact of Futurebuilders and ChangeUp reached somewhat equivocal conclusions (National Audit Office, 2009). There were some identifiable benefits, such as improved partnership working between infrastructure organisations,

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improved services for some frontline organisations, and success in gaining access to contracts for public service delivery. This assessment was counterbalanced, however, by poor management and coordination, changing contract specifications and, particularly in respect of ChangeUp, the initial lack of an evaluation framework, which meant that it was not possible or was too early to demonstrate that the programmes had provided good value for money. A slightly more positive picture of the investment in capacity building was painted by official evaluations (TSRC, 2009; Wells et al, 2010), but by then the mood music had shifted against large scale programmes of this kind. For example, the Conservatives in opposition were highly critical of ChangeUp and its delivery body, Capacitybuilders (although less so Futurebuilders) for being centralised, bureaucratic, ridden with conflicts of interest and wastefully complex (Conservative Party, 2008: 42-3; see also Conservative Party, 2010: 3). This prepared the ground for public spending cuts and the development of new priorities. Among other things they recommended that it would be better to target significant support on fewer organisations rather than provide insignificant support to all or most of the sector, and that ‘frontline voluntary organisations should be resourced and empowered to commission the support they need’ from support providers (Conservative Party, 2008: 43). Bubb and Michell (2009) offered a forthright assessment of capacity building in the new context of economic constraint, suggesting that the voluntary sector has had ‘a rather motley collection of disparate initiatives, the result of a sedimentary build-up of good intentions, [and] diffuse pots of money’ (Bubb and Michell, 2009: 75). Instead they called for support for culture change for frontline organisations to prioritise investing in organisational development to build capacity. Drawing inspiration from the gathering debate on ‘personalisation’ in social care, they called for an ‘individual budget’ approach to capacity building, with organisations purchasing support rather than receiving inappropriate and inflexible block-commissioned support services (Bubb and Michell, 2009: 79). The 2010-15 Coalition government in the UK was quick to move on these arguments. A consultation paper, ‘Supporting a stronger civil society’, published in October 2010, argued that the voluntary sector ‘support landscape’ was ‘too confusing and centrally driven’ (Office for Civil Society, 2010: 7). As well as highlighting low-cost alternatives for supporting civil society, such as online, pro bono and peer support, the paper promoted two main developments: bursaries for frontline groups to enable them to access appropriate support from a choice of providers (Office for Civil Society, 2010: 9); and what it saw as a ‘strong case’ for rationalising support services at local and national level

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(Office for Civil Society, 2010: 10). These two themes have become the main guideposts for subsequent developments in the field. Resources for Futurebuilders were directed into other initiatives, and the ChangeUp programme came to an end in 2011 with the closure of Capacitybuilders. In its place the government made £30 million available over 18 months for its Transforming Local Infrastructure (TLI) programme, explicitly described as the last major central government investment in local infrastructure (Big Lottery Fund, 2011a). It was designed to ‘transform’ infrastructure services to make them more effective for frontline organisations, but also crucially, to make them more efficient and less reliant on state funding. ‘Efficiency’ was, in part, code for reorganising the supply side through closer collaboration and integration, potentially leading to rationalisation and merger among infrastructure organisations, while reduced reliance on state funding implied a shift towards the market through the development of alternative income-generating approaches, such as charging fees for the provision of support services. The programme ran from spring 2012 through to autumn 2013 in 74 areas. A review concluded that it had mixed results, but ‘allowed organisations to test new ways of working, to develop new products and services to increase their own sustainability, and to better support local charities and community groups’ (Munro and Mynott, 2014: 4). At the same time, the Big Lottery Fund has been rethinking its own approach to capacity building and infrastructure. Like central government, it has moved away from significant supply side investment (from its £157 million ‘BASIS’ – Building and Sustaining Infrastructure Services – programme) and has instead been developing a new agenda around ‘Building Capabilities’ (Big Lottery Fund 2011b; 2012; Macmillan et al, 2014). Backed by funds of up to £20 million, it has shown an interest in developing more of a ‘demand-led’ approach, which seeks to provide more tailored support for its existing award holders and would-be applicants to build their knowledge, skills and confidence – ‘capabilities’ – rather than simply expand their capacity. Part of this involves the promotion of market-based mechanisms to run alongside existing supply side investments, for example, earmarking resources for frontline voluntary and community organisations through vouchers and development grants to pay for the support they require (Big Lottery Fund, 2014), and the encouragement of TripAdvisorlike online customer feedback mechanisms (Macmillan, 2013c: 390). In summary, there has been a move from grants provided to voluntary sector infrastructure organisations, in order for them to provide services for free, towards an unsettled world where infrastructure organisations

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increasingly charge for services, and frontline voluntary organisations are increasingly expected to pay for support and thus encouraged to shop around. It is possible to link these developments with wider concerns about marketisation in the voluntary sector and in society as a whole (Bruce and Chew, 2011; Sandel, 2012). There may be some mileage in this, yet it can be a rather crude characterisation of a much more complex and contradictory set of processes and field developments. Marketisation does not simply happen in some broad unidirectional process without active agency. Participants in the world of capacity building and infrastructure are engaged in a more contingent process of field shaping in different ways and with different purposes. Some of these projects have the effect of shifting the field in a more ‘market-like’ direction. Markets are always constructed and reshaped through these kinds of projects, both materially and discursively, and they do not all look the same in their structures, participants, power relations and operating principles. If it is perhaps too early to call the emerging field a market, what is clear, however, is that this field has shifted from one concerned with equity and planning (under Labour up to 2010) to one focused more on targeted and selective support (from the 2010 Coalition onwards). A model of large scale investment, with support prioritised through research and mapping of sector support needs, coordinated through partnerships and consortia, and made accessible for potentially any third sector organisation, has been fragmenting. It is perhaps giving way to a model of diminished and targeted investment made available for select types of third sector organisation and specific purposes, with a greater role for market mechanisms in identifying support needs and channelling resources. The development of a more selective support model suggests that capacity building may become an integral element in a more competitive third sector.

Conclusion: a new map of capacity building? Diana Leat has argued that a ‘new map’ of capacity building is needed for an environment that requires everyone to do more with less (Leat, 2011: 17). As we have demonstrated in this chapter, the field of capacity building and voluntary sector infrastructure has been changing dramatically in the last five years, and a new map of capacity building appears to be in production. Broadly speaking, there are two main dimensions to this: its organisation, that is, the reconfiguration of the supply side of capacity building and support for the sector, and, perhaps more fundamentally, its purpose, or changing assumptions about

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what capacity building and infrastructure is for. Each of these points is discussed in turn. Changing organisation and supply of capacity building support The ‘golden age’ of capacity building funding (Buckley et al, 2013: 16), but also policy attention, in the decade lasting roughly from 2002 to 2011–12, has come to an end. The overall shape and direction of the field has changed and continues to evolve as a result. Public funding for infrastructure and capacity building has diminished. Large scale national investment programmes have been withdrawn, to be replaced by smaller, targeted, transitional programmes, such as Transforming Local Infrastructure (£30 million) and BIG Assist (£6 million), designed to help infrastructure organisations adjust to a more challenging environment. Moreover, funding from local authorities has been squeezed, as a knock-on consequence of the wider impact of the deficit reduction programme on local government. Over the last decade this had been a significant source of core funding for local infrastructure organisations, and, where available, for additional projects supported by special regeneration funding programmes. The result has been direct funding cuts, reviews of provision, and efforts to recommission infrastructure and capacity building. In some cases, local authorities have consolidated a range of grants covering several infrastructure organisations into single pots or tenders for a core service. Alongside funding, however, voluntary sector infrastructure’s position in government policy development for the sector as a whole has fragmented and diminished. It is arguably no longer at the centre of policy attention. It began to lose its place in the midst of the postfinancial crash economic downturn and the run-up to the 2010 general election. The range of critical voices about the way infrastructure is organised and works increased, and pressing questions were asked about what had actually been the impact of earlier investment. Hence, the 2010 Coalition government closed Capacitybuilders, and programmes to support the voice of the voluntary sector in policy development at national level have been phased out or consolidated (Macmillan, 2013b). There have been two main consequences of these developments over the last five years. First, there are strong indications, in the absence of firm data, that the field has involved a partial ‘shake out’, involving a concentration of resources in a smaller number of existing providers. There have been a series of mergers and takeovers in the

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sector. For example, NCVO has merged with or taken over several specialist umbrellas and infrastructure agencies: Volunteering England (2013), Charities Evaluation Services (2014) and the Mentoring and Befriending Foundation (2015). At local level, a number of areas have seen significant mergers of local infrastructure organisations, particularly across two-tier local authority areas, including Cumbria (2007), Warwickshire (2008), Herefordshire (2012) and Suffolk (2013). In other areas, such as Leicestershire (2009), Durham (from 2012) and Staffordshire (2013), contracts or grants have been won by or consolidated into single local infrastructure organisations to provide services and support previously undertaken by a range of providers, who have subsequently contracted, closed down or diversified by providing other services. The second major consequence has been the piecemeal and experimental emergence of more of a mixed economy of infrastructure and capacity building. This involves, on the one hand, a greater presence for new providers with a more commercial orientation, such as sole trading consultants and consultancy agencies, and groups focusing on organisational development and fundraising. On the other hand, market-based mechanisms, such as service charges and voucher schemes have gained more of a foothold alongside grants and contracts for infrastructure services provided free at the point of delivery. Marketbased coordination has arisen partly through ‘supply side’ developments, as infrastructure organisations develop fee-charging and membership subscription models as part of broader income generation strategies; and partly through policy interventions, such as the development of various ‘demand-led’ capacity building schemes (Walton and Macmillan, 2014). Changing assumptions about the purpose of capacity building Arguably, however, some more fundamental shifts are occurring beneath the turbulence of policy programmes and the fallout from changing funding regimes. Capacity building and infrastructure support can be said to have ‘manifest’ and ‘latent’ functions (Merton, 1968) for the field of voluntary and community action overall. On the one hand, capacity building is about increasing effectiveness and improving performance, but on the other it is about risk management (for funders), reshaping organisations (for policy makers) and competitive or positional advance (for individual voluntary and community organisations). Ostensibly, capacity building is about the intentional pursuit of improved skills, knowledge and confidence, in order to enhance organisational capabilities, effectiveness and impact, and to enable

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voluntary and community organisations to fulfil their missions. Such a position is affirmed in the recent Change for good report by the Independent Commission on the Future of Local Infrastructure, which advised that the purpose of local infrastructure bodies is: […] to provide services, support and advice to, and promote, local charities, community groups and social enterprises that deliver social action. A good infrastructure body will offer the right mixture of support, challenge, leadership, resource, skills and knowledge. It will also help to foster relationships between the local voluntary sector, public bodies and local business. (Independent Commission on the Future of Local Infrastructure, 2015: 2) This is a fairly common articulation of the manifest purpose of infrastructure and capacity building. However, it can also be seen to fulfil at least three latent functions, which tend not to be so openly discussed or acknowledged. First, providing funds to voluntary and community organisations can be, or even should be, a risky venture, and individual grants or projects may easily go wrong or otherwise fail to fulfil their potential. Funders act as ‘principals’ and funded organisations as ‘agents’. The funding relationship is thus characterised by information asymmetry: funding applicants have more information about their organisation’s strengths and weaknesses than the funding body, and they also face incentives to ‘talk up’ their proposal and downplay any organisational challenges. Funders will have a range of existing grant assessment and due diligence procedures to check grant applications and applicant organisations. But capacity building can act as a form of supplementary insurance policy; a wider, pragmatic and precautionary means for funders, of managing or mitigating the risks of mediocre performance in ineffective organisations, or of outright mismanagement and failure in some. As the service delivery and funding environment becomes increasingly oriented towards outcomes and impact, building the capacity of voluntary and community organisations may increase the chances of higher impact projects and activities. Second, the notion of ‘support’ can be a rather slippery concept, and should be treated with some ambivalence (Macmillan, 2011). It has very positive connotations of providing empowering and nondirective expert help, or seems to involve a set of innocuous and neutral technical interventions for improving the workings and effectiveness of voluntary and community organisations. However, the language

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of ‘support’, arguably, serves to conceal a wider managerial agenda. Capacity building might thus be seen as part of a project for reshaping voluntary and community organisations to become more professional, reliable and compliant as service delivery agents. The context in which capacity building takes place, the policy agenda from which a particular programme of support arises, and the values and background experience of the capacity builders themselves all serve to challenge the idea that capacity building starts from the perspective and capabilities of frontline organisations and what they want to become or achieve. Instead, it can often be used in instrumental ways to remake voluntary organisations in ways which fit currently conceived and politically framed environmental imperatives. For example, a consultation on a new fund to support the sustainability of local voluntary organisations argued that organisations need to be ‘resilient, entrepreneurial and agile’ and the fund would support those organisations ‘to put them on the right pathway to securing the long term future of their services’ (Cabinet Office, 2014: 6, 8, emphasis added). Finally, it is noticeable that discussions of capacity building and infrastructure tend to isolate organisations from their wider contexts. The assumed theory of change and model of intervention posits an individual frontline voluntary or community group, with identifiable, if not immediately known, support needs and developmental priorities. The visible aim of capacity building is focused on helping to strengthen the organisation to enable it to meet its objectives and fulfil its mission. Largely absent from this account is a sense of context or field in which frontline organisations operate. Some discussions and practices of capacity building do embrace a wider view, for example by taking a ‘system’ or ‘field-building’ approach (Leat, 2011), or by supporting collaboration and partnership arrangements among frontline organisations (Baker and Cairns, 2011). But the possibility that external support might be sought primarily to gain competitive advantage over and above rival organisations is rarely discussed, or even acknowledged. Expert external help, typically around fundraising, income generation or strategic direction may be believed to put frontline organisations in better positions in their fields than otherwise, and potentially in a stronger place than other organisations that have not received such support. In an always resource-constrained environment, and one considered to be increasingly competitive, access to capacity building and organisational development may begin to become a strategic business necessity for some frontline organisations. Organisations might fear that they may somehow fall behind or lose out. In the race to secure or gain resources, frontline organisations may become

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more attentive to their organisational development needs. Insofar as they have been able to strengthen their structures and operations over and above others, for example in using the latest performance and impact measurement system, they may be able to ‘steal a march’ in competitive grant application or procurement processes for service delivery contracts. Strengthened organisational capacity then begins to look rather like a ‘positional’ good (Hirsch, 1977) in that its value to an organisation derives from the fact that others do not have it. Capacity building can thus become the perfect accompaniment to a more competitive third sector, and may even serve to create it. Note The three roles are taken from the NCVO’s 2009–12 ‘Value of Infrastructure’ programme, which itself acknowledged earlier work to develop the ‘PERFORM’ outcomes framework, and the ‘Engage, Develop and Influence’ model from the West Midlands network G:Up. 1

Acknowledgements I am grateful for comments from James Rees and two anonymous reviewers on an earlier draft of this chapter. References ACEVO (2003) Replacing the State? The case for third sector public service delivery, London, ACEVO Aldridge, N. (2005) Communities in Control: The New Third Sector Agenda for Public Service Reform, London, ACEVO/Social Market Foundation Baker, L. and Cairns, B. (2011) Supporting collaboration and partnerships in a changing context, London, Big Lottery Fund. Big Lottery Fund (2011a) Transforming local infrastructure: guidance notes, London, Big Lottery Fund Big Lottery Fund (2011b) Building capabilities for impact and legacy: A discussion paper, London, Big Lottery Fund Big Lottery Fund (2012) Building capabilities for impact and legacy, London, Big Lottery Fund Big Lottery Fund (2014) Reaching Communities: Additional funding to build the capabilities of organisations funded though Reaching Communities and Reaching Communities buildings, London, Big Lottery Fund Billis, D. and Glennerster, H. (1998) ‘Human services and the voluntary sector: towards a theory of comparative advantage’, Journal of Social Policy, 27(1): 79–98

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Brown, A. and McAllister, K. (2014) Ready, Willing and Able: An interim review of the Investment and Contract Readiness Fund, London, Boston Consulting Group Bruce, I. and Chew, C. (2011) ‘Debate: The marketization of the voluntary sector’, Public Money and Management 31(3): 155-157 Bubb, S. and Michell, R. (2009) ‘Investing in third-sector capacity’ in Hunter, P. (ed) (2009) Social enterprise for public service: How does the third sector deliver? London, Smith Institute, pp 73-8 Buckley, E., Cairns, B. and Jenkins, R. (2013) Turning a Corner: Transition in the voluntary sector 2012–2013 London, IVAR Cabinet Office (2011) Open Public Services White Paper, Cm 8145, London, Cabinet Office Cabinet Office (2014) Consultation on a New Fund to Support the Sustainability of Voluntary, Community and Social Enterprise Sector Organisations, London, Cabinet Office Conservative Party (2008) A Stronger Society: Voluntary Action in the 21st Century, London, Conservative Party Conservative Party (2010) Big Society not Big Government: Building a Big Society, London, Conservative Party Hall, K., Alcock, P. and Millar, R. (2012) ‘Start Up and Sustainability: Marketisation and the Social Enterprise Investment Fund in England’, Journal of Social Policy, 41(4): 733-749 Harker, A. and Burkeman, S. (2007) Building Blocks: Developing secondtier support for frontline groups, London, City Parochial Foundation Harris, M. and Schlappa, H. (2007) ‘Hoovering up the money’? Delivering government funded capacity building projects to voluntary and community organisations’, Social Policy and Society, 7(2): 135-146 Harris, M., Cairns, B. and Hutchinson, R. (2004) ‘“So many tiers, so many agendas, so many pots of money”: the challenge of English regionalization for voluntary and community organisations’, Social Policy & Administration, 38(5): 525-540 Hirsch, F. (1977) Social Limits to Growth, London, Routledge HM Treasury (2002) The Role of the Voluntary and Community Sector in Service Delivery: A Cross Cutting Review, London, HM Treasury Home Office (2004) ChangeUp: Capacity Building and Infrastructure Framework, London, Home Office. House of Commons Public Administration Select Committee (2008) Public Services and the Third Sector: Rhetoric and Reality Eleventh Report of Session 2007–08 Volume I, London, TSO. Independent Commission on the Future of Local Infrastructure (2015) Change for good: Report of the Independent Commission on the Future of Local Infrastructure, Sheffield, NAVCA.

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Leat, D. (2011) New tools for a new world (or why we need to rethink capacitybuilding), Big Lottery Fund Research 66, London: Big Lottery Fund Macmillan, R. (2010) The third sector delivering public services: an evidence review, TSRC Working Paper 20, Birmingham: Third Sector Research Centre Macmillan, R. (2011) ‘“Supporting” the voluntary sector in an age of austerity: the U.K. coalition government’s consultation on improving support for frontline civil society organisations in England’, Voluntary Sector Review, 2(1): 115-124 Macmillan, R. (2013a) Making sense of the Big Society: perspectives from the third sector, TSRC Working Paper 90, Birmingham: Third Sector Research Centre Macmillan, R. (2013b) ‘De-coupling the state and the third sector? The “Big Society” as a spontaneous order’, Voluntary Sector Review 4(2): 185-203 Macmillan, R. (2013c) ‘Demand-led capacity building, the Big Lottery Fund and market-making in third sector support services’, Voluntary Sector Review, 4(3): 385-394 Macmillan, R. and Ellis-Paine, A., with Kara, H., Dayson, C., Sanderson, E. and Wells, P. (2014) Building Capabilities in the Voluntary Sector: What the evidence tells us, TSRC Research Report 125, Birmingham: Third Sector Research Centre. McLaughlin, K. (2004) ‘Towards a ‘Modernized’ Voluntary and Community Sector? Emerging lessons from government-voluntary and community sector relationships in the UK’, Public Management Review, 6(4): 555-562 Merton, R.K. (1968) Social Theory and Social Structure, New York, The Free Press Munro, E. and Mynott, B. (2014) Analysis of Transforming Local Infrastructure, Sheffield, NAVCA National Audit Office (2009) Building the capacity of the third sector Report by the Comptroller and Auditor General, HC 132, Session 2008–2009, London, The Stationery Office NCVO (2012) The Work Programme: Perceptions and Experiences of the Voluntary Sector, London, NCVO Office for Civil Society (2010) Supporting a Stronger Civil Society: An Office for Civil Society consultation on improving support for frontline civil society organisations, London, Cabinet Office Office of the Third Sector (2006) Partnership in public services: an action plan for third sector involvement, London, OTS

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Osborne, S.P. (2000) ‘Reformulating Wolfenden? The Roles and Impact of Local Development Agencies in Supporting Voluntary and Community Action in the UK’, Local Government Studies, 26(4): 23-48 Rees, J. (2014) ‘Public sector commissioning and the third sector: Old wine in new bottles?’, Public Policy and Administration, 29(1): 45-63 Rochester, C. (2013) Rediscovering Voluntary Action: The Beat of a Different Drum, Basingstoke, Palgrave Macmillan Sandel, M. (2012) What Money Can’t Buy: The Moral Limits of Markets, London, Allen Lane Shared Intelligence (2009) Evaluation of the National Programme for Third Sector Commissioning: Final Report, London, IDeA Taylor, R., Parry J. and Alcock, P. (2012) Crisis, mixed picture or phoney war; the third sector and the 2008/9 recession, TSRC Working Paper 78, Birmingham: Third Sector Research Centre Thake, S. and Lingayah, S. (2009) Investing in Thriving Communities: The final external evaluation report on the Adventure Capital Fund, London, London Metropolitan University/Adventure Capital Fund TSRC (2009) Evaluation of ChangeUp 2004 to 2008: Summative Evaluation Report, Birmingham, Third Sector Research Centre Walton, C. and Macmillan, R. (2014) A brave new world for voluntary sector infrastructure? Vouchers, markets and demand-led capacity building, TSRC Working Paper 118, Birmingham: Third Sector Research Centre Wells, P. (2012) ‘Understanding social investment policy: evidence from the evaluation of Futurebuilders in England’, Voluntary Sector Review, 3(2): 157-178 Wells, P., Chadwick-Coule, T., Dayson, C., Morgan, G., Ambrose, A., Batty, E., Foden, E. and Patmore, B. (2010) Futurebuilders Evaluation – final report, Sheffield: CRESR, Sheffield Hallam University Wilding, K. (2010) ‘Voluntary organisations and the recession’, Voluntary Sector Review, 1 (1): 97-101

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SEVEN

The engagement of volunteers in third sector organisations delivering public services Angela Ellis Paine and Matthew Hill

Introduction As previous chapters have discussed, various reforms have seen an increasing role for third sector organisations (TSOs) in public service delivery. This has been associated with profound changes within TSOs, including professionalisation, formalisation, bureaucratisation and hybridisation. All these developments have significant implications for the space, nature, experience and outcomes of volunteering within TSOs. All too often, however, the ‘voices and concerns’ of volunteers are ignored in accounts of change within the third sector (Macmillan, 2010: 1). Indeed, the concern raised by Russell and Scott almost 20 years ago for the ‘paucity of strategic thinking on the implications for volunteering of the significant changes … in the roles of the statutory and voluntary sectors’ (1997: 13) largely remains unaddressed. This chapter brings together evidence from a number of different sources in an attempt to fill some of that gap. We begin to address the question of how the role and experience of volunteers is changing within TSOs as they become increasingly involved in public service delivery and what the implications might be. We do so by drawing on evidence from previously published literature, from England and elsewhere, as well as drawing on primary evidence from a number of in-depth qualitative case studies. In particular, we draw upon a study of volunteer management in hospice care1 (Hill et al, 2013), and a case study of a small community mediation service (Hill, forthcoming), both of which included interviews with staff, volunteers, service users and funders. Little of this research was explicitly designed to look at how volunteering has been affected by the increased involvement of the third sector in public service delivery, yet together the studies tell compelling stories of volunteering in this context.

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The first section of the chapter explores the context for volunteering in TSOs delivering public services at the policy, organisational and societal levels. The second section explores the implications of changes within this context by drawing out five key shifts in dominant logics within TSOs that are affecting volunteering in complicated and overlapping ways. We conclude by discussing some of the broader implications of these developments.

Background: sketching out the context There is a long history of volunteering within public service delivery, yet very little data to suggest the scale of involvement. Findings from the Community Life survey suggest that approximately 14.3 million UK adults took part in regular, formal volunteering in 2014–15 (Cabinet Office, 2015). Much of this, however, is beyond the scope of this chapter. Focusing on some of the fields of activity traditionally associated with public services, in 2012–13 approximately five million regular formal volunteers were involved in the children’s education or schools, 4.5 million in youth/children’s activities (outside school), three million in health, disability and social welfare and three million in education for adults (Cabinet Office, 2013). Millions more volunteer informally in roles that intersect with public service delivery, such as providing transport or personal care for someone other than a relative who is sick or frail (Cabinet Office, 2013). The annual value of regular social action in and alongside public services in England was recently estimated at £34 billion (Clarence and Gabriel, 2014). Unfortunately, it is not possible to distinguish how much of this activity takes place within public sector organisations and how much in TSOs – the focus of this chapter. Earlier data suggests that while a majority (65%) of volunteering takes place in TSOs, a considerable amount takes place in the public sector (23%) and the private sector (11%) (Low et al, 2007). There are, for example, hundreds of thousands of volunteers involved in the NHS; 300,000 school governors (Clarence and Gabriel, 2014); and nearly 20,000 special constables (Police Specials, 2014). While significant and currently subject to considerable change and debate, volunteering within state/local authority run services is, however, beyond the scope of this book. Here we are concerned primarily with volunteering within TSOs delivering public services. Volunteers are involved in a number of contexts within TSOs delivering public services. Some TSOs place and manage volunteers within state settings such as City Year volunteers visiting schools or Pets as Therapy volunteers visiting local authority care homes.

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Others involve volunteers in third sector settings, such as the 125,000 volunteers involved in hospices across the UK (Scott, 2014) or St John’s Ambulance’s 44,000 volunteers (St John’s Ambulance, 2014). These figures, however, tell us little about the experience of volunteering within TSOs or how it has been affected by recent public service reforms. Before we turn our attention to that, we begin by highlighting some of the major drivers influencing change. Previous chapters have discussed the policy and practice context relating to TSOs and public service delivery; here we focus on additional policy, organisational and societal developments that relate specifically to volunteering within such settings. Crucially, it is the dynamic interaction between these developments that drives the complex and sometimes conflicting manifestation of volunteering in TSOs that deliver public services.

Policy context Increasing the involvement of volunteers in public service delivery was a feature of government rhetoric and policy initiatives throughout much of the last century (Brewis, 2013). It has been particularly prominent since the 1970s, associated with the drive towards a mixed economy of welfare and boosted by the Commission on the Role of the Voluntary Worker in the Social Services (1966–69), led by Geraldine Aves, which investigated the place and scope of volunteers in social services in England and Wales. The subsequent call for an expansion of involvement has proved enduring. Over time, policy makers have offered three broad rationales for involving volunteers in public service delivery: their distinctive contribution; democratising services; and, in quieter tones, cost effectiveness. John Major’s Conservative government (1992–97), for example, emphasised ‘how volunteering could improve the quality of life of service users’ (Zimmeck, 2010: 90). New Labour (1997–2010) stressed volunteers’ ‘added value’ (HM Treasury, 2002; HM Treasury, 2004) and was enthusiastic in its support for volunteering initiatives – one study counted 39 (Finnegan, 2012) – while also reassuring voters that volunteers should not ‘be used to fund statutory services’ (HM Treasury, 2002: 17). The Coalition (2010–15) continued to stress additionality (see for example, DoH, 2011), as does the current Conservative administration (2015-), framing the involvement of volunteers as part of the ‘Big Society’ in order to ‘improve public services, not undermine them’ (Norman, 2010: 5). Similarly, the localism agenda stresses the potential

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role of volunteers in contributing to democratisation associated with a redistribution of power from central government to local communities (Cameron, 2010). Although the Coalition was less inclined than New Labour to fund such an array of volunteering programmes, it supported a number of initiatives including, for example, Step Up to Serve, National Citizen Service, Work Together, and Dementia Friends. These developments, however, must be considered within the wider political context. Volunteering policy is perhaps best characterised as ad hoc and peripheral, and in recent years has been overshadowed by the sharp funding cuts associated with austerity measures. Some commentators fear that together these policy developments suggest the replacement of ‘paid with unpaid labour on a massive scale’ (Coote, 2010). Some of the reforms certainly seem to ‘depend upon [volunteers] for their success’ (Ockenden et al, 2012: 149). And, as the state recedes, there is evidence of a growing number of volunteers within certain services such as libraries (CIPFA, 2013) and leisure facilities (Nichols and Forbes, 2014). There is, however, little evidence to suggest that there has, to date, been a large-scale replacement of paid staff with volunteers in either the voluntary or public sector.

Organisational context As described in detail in other chapters of this book, policy developments associated with welfare pluralism have led to significant change within TSOs, such as the adoption of New Public Management, with associated moves towards bureaucracy, hierarchical authority, accountability, performance monitoring, risk assessment, impact measurement, cost-effectiveness and value for money. Running alongside and associated with these organisational developments has been the rise of formalised volunteer management practices and particularly the adoption of a work-based model of volunteer management (Howlett, 2010; Rochester et al, 2010). Indeed, volunteer management has been identified as one of the specific policy tools used by governments to promote business practices (Carmel and Harlock, 2008) and to build capacity within the sector to deliver public services. It is also, however, something that has been driven by individual TSOs, sector infrastructure bodies, and the ‘volunteering industry’ (Rochester et al, 2010). Formal volunteer management practices are now common among large TSOs. A survey of volunteer management capacity found that the proportion of organisations with paid volunteer managers increases with size, as does the implementation of formal volunteer management

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practices such as written volunteer policies, role descriptions, interviews, training and supervision (Machin and Ellis Paine, 2008).

Societal context Volunteering is not only, however, affected by policy and organisational developments, it is also affected by broader societal trends such as secularisation (Hustinx et al, 2014); marketisation (Rochester, 2013); changing women’s working patterns (Hardill and Baines, 2011); individualism (Musick and Wilson, 2007); and demographic shifts. Hustinx and Lammertyn (2003) suggest that together such developments represent a move from traditional, collective and stable forms of participation, based on group membership and explicitly altruistic motivations, towards more postmodern, reflexive and volatile forms of participation, based on self-actualisation and more instrumental motives. It is important not to overstate these trends, but there is evidence to suggest that some volunteers are becoming more explicitly cause oriented and less organisationally committed (Hustinx and Lammertyn, 2003), and their engagement is becoming more episodic (Macduff, 2005). These societal trends have different implications for the involvement of volunteers, but some seem to be reinforcing policy and organisational drives towards formalisation. Some volunteers, for example, have called for better organisation of their activities (Davis Smith, 1998) and in their push for individual, instrumental outcomes, such as skills development and employability (Low et al, 2007), demand more structured experiences. Others, however, have resisted such changes. Public attitudes are also revealing. Survey data over the last 30 years has consistently shown the overwhelming majority of English respondents feel that it is the government’s responsibility to provide health care and other welfare services (Park et al, 2013). Although opinion polls show some appetite for a greater role in decision making, there is little support for significantly increasing the role of volunteers in public service delivery, especially at the expense of existing paid roles (Defty, 2013).

Insightful experiences: shifting logics shaping volunteering processes We now turn to consider the ways in which these multilevel contexts interact, are negotiated and manifest in complex ways through volunteering processes within TSOs that are delivering public services.

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In particular, we suggest that there has been a shift in dominant logics within TSOs, in part at least as a result of their increased involvement in public service delivery, and this affects the practice, experience and outcomes of volunteering in such settings. We acknowledge the risk of oversimplifying a complex set of factors interacting in a diverse range of organisational settings and of caricaturing the effects. Identifying patterns is tricky, particularly given the relative lack of evidence on this subject. We suggest, however, that despite this complexity, some dominant trends can be identified relating to shifting logics within TSOs. From family/association to business/bureaucracy? The increased role of TSOs in public service delivery and the associated trends of organisational hybridisation (Billis, 2010) and the adoption of new public management have affected ways of working, organising and the culture of TSOs, often with a move from family and/or association to business and/or bureaucratic logics. This has made some of them rather different places to volunteer than they have been historically. This shift was clearly articulated by respondents in the hospice study, where comments included: ‘...I think if you talk to volunteers, their biggest criticism perhaps of the hospice is that we have become a business and maybe lost sight of our primary aim.’ (Paid staff member, hospice) ‘We’re a business now: we were a family. And that’s my opinion over 14 years, and a lot of older volunteers feel the same.’ (Volunteer, hospice) The growing prominence of business and bureaucratic logics can lead to anxiety among volunteers, and indeed paid staff, related to specific pressures such as those associated with meeting contract-based targets (Aiken and Thomson, 2013) and changes in organisational practices, such as business planning. A 2007 survey (Low et al, 2007) revealed that some volunteers felt volunteering was becoming excessively bureaucratic and too much like paid work, leading some to question their ongoing involvement. Garner and Garner (2010) found that although a dissatisfactory experience may not lead to volunteers leaving, it may lead them to express their grievances in more covert ways such as neglecting duties or turning up

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late. As one member of staff in the hospice study reported, the shift to business/bureaucratic logics can result in overt organisational conflict: ‘[some volunteers] said categorically “we don’t need training” and we were able to say to them, “well actually, we’re moving into a very new service and you do need training, and if you don’t go through our training programme which we developed over that time, then you can’t stay with us”. So we had about 60% of clinical facing volunteers walk out, which was the best thing that happened.’ Such shifting logics have also resulted in more formalised and stringent volunteer recruitment and management processes, often with the aim of maximising the contribution made by volunteers to service outcomes while also intending to minimise risk and to enhance the volunteer experience. It is not unusual for volunteers to be asked to complete an application form, attend an interview, and to undergo a Disclosure and Barring Service check. These developments have been appreciated by some with evidence that a smaller proportion of volunteers now report that their volunteering could be much better organised than in the past (Low et al, 2007), and studies are consistent in suggesting that volunteers enjoy their experience and gain a range of benefits from taking part. However, demands of service contracts have affected the recruitment and retention of volunteers in a number of ways. In both the hospice and mediation service studies there was evidence of greater active selection for volunteers, such as more formalised and substantial application and interviewing procedures that emphasise existing skills and previous experience. There was also deselection of some volunteers either unintentionally, through enforcing compulsory training, supervision arrangements and greater demands around paperwork, or intentionally through targeting certain individuals. This raises issues of inclusivity. A key concern within policy ambitions for volunteers to take on more responsibility for the delivery of services has been that affluent communities are in a better position to do so than those that are more deprived (see for example, Kisby, 2010). While under New Labour these tendencies were tempered by specific programmes to increase the diversity of volunteers, including among those with additional support needs, there was little such interest within Coalition policies and programmes, apart from among young people, through initiatives such as the National Citizen Service. While there

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may be an underlying assumption of inclusivity, equality of opportunity, and the value of everyone getting involved, limited attention is currently paid to how this may be achieved. These developments manifest differently in different TSOs, and as Carey et al (2009) remind us, even within one organisation different volunteers will react differently. The hospice data highlighted an important distinction between volunteers who are delivering roles for which they are professionally skilled, such as counsellors or complementary therapists and those who are delivering more general, less formally skilled roles. For ‘professional’ volunteers their role was an extension of their (paid) working life and often came with expectations of formal forms of management. These expectations were less common among the other general volunteers. Duration of involvement may also make a difference: these transitions are likely to be hardest for those who have been involved in the organisation for the longest. From ‘amateur’ to ‘professional’? The effect of professionalisation within TSOs on the range and nature of roles available to volunteers has played out differently in different organisations with: • some seeing the introduction of new ‘professional’ roles for volunteers that have been previously undertaken by paid staff; • some the professionalisation of existing volunteer roles; and • some the displacement of volunteers by professional (paid) staff. As Thornton (1991: 188) argued: Many voluntary organisations will see paid staff as the only way forward. Others will continue to promote their traditional aim of combining quality services and rewarding opportunities for volunteers. In some organisations new opportunities have been created for volunteers to engage in frontline service delivery roles that require specific skills and knowledge and that carry with them high levels of responsibility and autonomy. These roles can also carry with them high workloads and heavy demands (Gaskin, 2005; Hutchison and Ockenden, 2008). They are also often associated with strict selection criteria and a general move away from entry requirements relating to experiential learning associated with social and interpersonal skills,

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towards academic qualifications, technical skills and professional competence (Weeks et al, 1996; Bondi, 2004; Aiken and Thomson, 2013). This may have further implications for the inclusivity/exclusivity of volunteering. The most obvious example of an expansion and professionalisation of volunteer roles at present in England is the call for community groups and individual volunteers to take over the running of local services such as libraries, museums and leisure services, which has provoked considerable debate (Brown, 2013). The number of staff in UK libraries declined by 7% between 2011–12 and 2012–13, while the number of volunteers increased by 45%, although much of this remains within the public sector (CIPFA, 2013). The professionalisation of volunteer roles, McNamee and Peterson (2014) suggest, could be interpreted as organisational leaders valuing volunteers and wanting to structure volunteer positions in similar and equal ways to paid positions but it could also be interpreted as a cost-saving exercise resulting in the substitution of paid staff by volunteers. More generally, over the longer term, however, there is evidence that volunteers are being squeezed out of certain roles within TSOs through the expansion of paid staff. As a result of increasingly stringent contract requirements, and concerns about the ability or appropriateness to involve volunteers in such contexts, paid staff are being brought in to take on the professional roles, while volunteers are restricted to unskilled, trivial and monotonous tasks that are marginal to the organisation’s core functions (Wilson and Pimm, 2006, quoted in Ganesh and McAllum, 2010; see also Geoghegan and Powell, 2006). Although we cannot isolate volunteering in TSOs, trend data suggests that general levels of volunteering have been broadly static over the past decade (Cabinet Office, 2015), while the paid workforce in the third sector has grown considerably (Heywood et al, 2013; see Handy et al, 2007, for similar findings in Canada). It is apparent that some organisations are taking the view that volunteers should not, cannot or will not be involved in complex, skilled roles that require regular commitment in order to provide consistency of support. Restr icted volunteer roles can contr ibute to a feeling of marginalisation and create tensions between volunteers and paid staff, particularly for those who were involved in the organisation from the start (Weeks et al, 1996; Leonard et al, 2004). In some cases it seems there is no space left at all for volunteers (Elstub, 2006; Cloke et al, 2007). It is likely that a range of organisational factors will drive the nature and extent of the effect, including size, age, funding base,

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management structure, ethos and mission. Ellis Paine et al (2010), for example, suggest that volunteer involvement is different in associations compared to shallow or entrenched hybrid organisations: in associations volunteers are positioned as owners and management is implicit; as third sector organisations begin to take on features of businesses and/ or bureaucracies and become shallow hybrids, volunteers are more likely to be positioned as members and start to become subject to ‘management’ albeit fairly informal; in entrenched hybrids volunteers are resources to be utilised and managed through top-down, workbased techniques. Meanwhile, Buckingham’s (2010) study of the responses by TSOs to contracting in homelessness services found that the level of volunteering decreased as the level of contracting increased. Commissioners’ views of the inclusion of volunteers within contracts may be significant, but there is a lack of evidence to indicate how: whether, for example, they consider the inclusion of volunteers within tenders as representing cost effectiveness and added value or as a risk to contract fulfilment. From owner/member to unpaid workers? Volunteering is a relational activity. As indicated in the previous section, the nature of the relationship between the volunteers and the organisation is fundamental – whether they are owners, members or workers, for example. Individual relationships among volunteers, between volunteers and paid staff, and volunteers and service users are central to the volunteering experience. Within the new operating environment, with clearer lines of accountability and a growing number of paid staff, relationships change as volunteers are repositioned from owners or members to unpaid workers. As Fyfe (2005: 553) suggests: ... it is clear that organisations that do professionalise and restructure their services run the risk of disempowering citizens both within organisations as a result of developing a hierarchical structure with clear divisions between volunteers and paid staff, and outside organisations by reproducing bureaucratic-client relationships of government organisations. We shall return to the second part of Fyfe’s argument below, here we focus on the relationship between volunteers and the organisation in general and volunteers and paid staff in particular. As Carmel and Harlock (2008: 166) suggest:

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The discourse also constructs new subject positions for volunteers and staff as (exclusively and mutually exclusively) employees or managers, and therefore reconstructs relationships between volunteers and staff as between employer and employee. As TSOs have become increasingly involved in delivering public services, the dominant model appears to be shifting from one where volunteers are positioned as owners or members to one in which they are positioned and operate as unpaid workers delivering specific services or undertaking narrowly defined tasks. This shift was seen clearly in the hospice study where some volunteers had begun as founders but had been gradually repositioned as deliverers, sitting below paid managers within the organisational hierarchy. Again, however, these developments play out differently across and even within individual TSOs. Carey et al’s (2009) ethnographic study of volunteering within a health-based TSO found that the boundaries between paid staff and volunteers became increasingly distinct, to the point that they were undertaking different roles in different parts of the building. Other studies have found a blurring of roles (Thornton, 1991). Both can cause tensions. As Levine and Fisher (1984) note, volunteers can be seen as a threat to the professionalism of paid staff, and involving volunteers in newly created ‘professional’ roles may not be an easy transition for volunteers or paid staff. In Aiken and Thomson’s (2013) study of a breast-feeding peer support group, paid professionals who came in contact with the volunteer peer supporters were not always welcoming of the service, occasionally provided contradictory advice to service users, and acted as gatekeepers, which together contributed to an intimidating ‘us and them’ atmosphere. The power relations are not, however, straightforward. When volunteering is associated with a strong sense of ownership and/or autonomy, this can be challenging for managers. Volunteers can wield considerable power over paid staff, through the potential threat of withdrawing their time. These issues were apparent in the hospice study: ‘The heart of the problem ... [is] ... a group of people as volunteers having what you might define as perhaps quite unfounded power and control over what is or what isn’t possible, and certainly my experience of a lot of hospices is they feel quite paralysed by that.’ (Paid staff member, hospice)

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Yet, tensions are not inevitable. Within our mediation service case study, an increasingly hierarchical structure of management has been introduced, with the increasing dominance of paid staff in strategic management positions, yet relationships between paid staff and volunteers have remained close, largely positive and, at least overtly, uncontested. It may be significant that many of the volunteer mediators had experience of similar roles as paid professionals outside of the organisation. Finally, relationships among volunteers themselves are also important. As Rochester (2013) argues, conviviality is an important part of voluntary action, and there is a risk that it is being eroded through a combination of the contextual factors outlined above, including those driven by volunteers themselves. Social aspects of volunteering are a significant motivator, and can also affect decisions to stay or quit (Willems et al, 2012). There is some evidence to suggest that pressures to meet targets within contracted services are reducing the time and space available for volunteers to build such relationships (Hutchison and Ockenden, 2008). From peer to client? A number of studies have noted that as volunteer roles have changed so too have relationships between volunteers and service users. Where often service users were considered peers or friends, as volunteer roles have been professionalised and interactions are governed by tighter monitoring and administrative requirements, service users have been recast more as clients (Ganesh and McAllum, 2010). Some evidence suggests the relationship has become more transactional and more distant, with volunteers and service users less likely to share common identities or experiences and a shift in the balance of power (Weeks et al, 1996; Bondi, 2004). When paid staff have assumed the professional roles, and/or volunteers have become less involved in direct service delivery, the level of interaction between service users and volunteers is likely to be reduced, with implications for the quality of these relationships. The high level of policies and procedures governing volunteer activities (Brewis et al, 2010) is seen by many as a positive trend aimed at increasing service quality and client experience. However, evidence also suggests that something can be lost in this process. Part of the distinctive contribution of volunteering is based upon the equality and closeness of the relationship between service users and volunteers

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(Meijs et al, 2012). Changes in this relationship therefore change the potential contribution of volunteering. Thornton’s (1991) review of schemes to involve volunteers as carers for older people found that there had been a blurring of lines between volunteers and professionals, and this was leading to a qualitative change in the service provided. Service users had appreciated the volunteer helpers for their ‘homely’ qualities and their ‘ordinariness’ (Thornton, 1991: 192): they were seen as friends not as professionals. This led Thornton to caution against professionalising services and driving out such qualities that were the elements of the service most appreciated by users and arguing that restricting the time volunteers can spend with service users might undermine the quality of service. The professionalisation of the mediation service we studied has seen the relationship between volunteers and service users recast from peer to peer to professional and client, which has served to distance the two groups. Similarly, Aiken and Thomson’s (2013) study found that being commissioned by a local authority had significant implications for relationships between volunteers and service users. Previously the volunteers had felt they had ‘unending time’ to spend with the mothers they supported, but higher targets and increased paperwork meant that although they saw more mums they had to ‘deal’ with each one more quickly; there was a tension between quality and quantity of service delivery (see also Ganesh and McAllum, 2010). From active citizenship to service? Finally, there may also be implications for the wider outcomes of volunteering. If volunteering continues to be conceptualised and organised as unpaid work, rather than as activism, mutual aid or serious leisure, for example; and if the involvement of volunteers continues to become narrower and shallower, more about consensus than conflict, then there are implications for the ability of volunteering to contribute to society above and beyond its role in service delivery. By enhancing their role in service delivery, and the changes that this brings in terms of professionalisation, formalisation and hybridisation, TSOs may provide more space for unpaid work, but less space for sociability, conviviality, solidarity, contest and debate. As earlier commentators such as Milligan and Fyfe (2005) suggested, volunteering may become more about service and less about active citizenship.

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Conclusion: narrower, shallower and more circumscribed? As the role of TSOs change as a result of involvement in public service delivery, the processes of volunteering therein also change. The motivations and routes into volunteering are being affected, as are the roles, experiences and outcomes of participation. Just as the diversity of TSOs has meant that the impacts of reforms to public service delivery have varied considerably across the sector, so too have the impacts on volunteering. Volunteering is situated within a complex multilayered context, subject to many different pressures coming from a number of different sources including volunteers themselves. Some of the most significant are those associated directly with increased third sector involvement in public service delivery: • • • • • •

hybridisation professionalisation formalisation new public management commissioning work-based models of volunteer management.

Others, such as individualism, consumerism and changing working patterns, come from outside public service agendas but affect it nonetheless. Crucially, it is the complex and sometimes contradictory interaction of these policy, organisational, and societal developments that shape volunteering within TSOs delivering public services. Cutting across these we have identified five particularly strong developmental trajectories affecting the role, experience and outcomes of volunteering, as the dominant logics shift from: • • • • •

family/association to business/bureaucracy amateur to professional member/owner to unpaid worker peer to client active citizenship to service.

It is important not to overstate these shifts; they are far from universal or complete and are likely to be highly differentiated. They will be experienced differently in different public service fields and different parts of the third sector. There is little quantitative evidence with which to assess their pervasiveness. In general, however, we suggest that the more involved a TSO becomes in contracted public service delivery

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the more likely it is that these shifts will be apparent. We suggest that they are less likely to be found in small organisations than larger ones, and less likely in associations than in shallow or entrenched hybrid organisations (Billis, 2010). These shifts have seen many positive developments for volunteering in TSOs including more substantial volunteer management, enhanced training opportunities for volunteers and a more explicit focus on outcomes for volunteers and service users. However, when combined, the dominant trend, we suggest, in TSOs delivering public services is for the spaces for volunteering to be reduced, at conceptual, policy, organisational, and individual levels. This does not necessarily mean that there are fewer volunteers involved. Indeed, in some organisations the number of volunteers is growing, particularly as a response to severe public sector funding cuts. It does seem clear, however, that in the relatively small proportion of TSOs that are most heavily involved in delivering public services, volunteer roles have become narrower, the space for different forms of volunteering has become shallower and the position and power of volunteers has become more circumscribed. This is not, however, inevitable. Not all organisations will respond in the same way to the influences they are subject to (see for example, Buckingham, 2009; 2010; Yarwood, 2011), and neither will all volunteers (see for example Carey et al, 2009). Individual organisations and volunteers within them may resist or reconstitute the shifting logics acting as strategic negotiators rather than passive victims of change. Some TSOs, for example, have actively sought to expand the space for volunteers, broadening and deepening their involvement as part of their commitment to values of service user involvement, solidarity or active citizenship; others have done so out of necessity in response to reduced budgets. It is also important to recognise the different positioning by different volunteers. While some volunteers welcome and, indeed, actively drive these changes, others may challenge the introduction of formal management practices by refusing to take part in training, failing to complete paperwork, reducing their hours, or walking away altogether. Tensions can arise during these transitions, as volunteers (and paid staff and service users) alter their practices to fit the new situation. How well individual volunteers adjust to the new operating environments may depend on a whole range of different factors, including the nature and duration of their involvement within the organisation, their motivations for volunteering, their personal circumstances and values base, and their relationship with other organisational stakeholders.

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The implications of these developments extend beyond the experience of volunteers themselves. While many of the developments may have been designed to improve service outcomes and to enhance efficiency and effectiveness, they may have had other, unintended effects on service quality. Changing relationships between volunteers and service users may, for example, affect service quality and outcomes and not always in a positive way. By narrowing the space for volunteering, the ability of TSOs to live up to expectations for innovative, distinctive, high quality, cost-effective and accessible service delivery could be affected. Moreover, the potential for TSOs to contribute not just to service delivery but also to social inclusion, active citizenship and democratic engagement may be curtailed. There is a need for those involved in volunteering, at all levels, to engage in discussions about the complicated tensions that emerge as a result of these shifting contexts. To consider, for example, how the development of approaches associated with the contracting out of public services to TSOs (and others) affect the nature, experience, motivation and added value of volunteering upon which the success of the service has historically depended. To explore ways in which the advances in volunteer management practice achieved over previous decades can be built upon to enable more sophisticated forms of volunteer management that are sensitive to the multilevel relational pressures discussed in this chapter. More generally, the debate should transcend arguments over the appropriate scale of volunteering in service delivery, and instead focus on the quality of involvement and the essence of its role in public services. It should explore ways to avoid undermining social goods such as active citizenship and the representation of diverse groups within public life. Finally, it is worth viewing these developments within their wider context. Although welfare pluralism has increased the prominence of the third sector in public service delivery, only one quarter of third sector organisations receive statutory funding, suggesting that for a majority of the sector, public service delivery is not a significant part of their activities. Similarly, although volunteering in third sector organisations may have been profoundly affected by involvement in public service delivery, it is likely that much – potentially even most – volunteering takes place outside of such contexts. The changes are significant and in many ways challenging, but they represent only one of many stories that could be told about volunteering in the 21st century.

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Note The Volunteer Management in Palliative Care project was undertaken in partnership between the Institute for Volunteering Research and the International Observatory on End of Life Care, Lancaster University. 1

References Aiken, A. and Thomson, G. (2013) ‘Professionalisation of a breastfeeding peer support service: Issues and experiences of peer supporters’, Midwifery, 29: 145–151 Billis, D. (2010) Hybrid organizations and the third sector: Challenges for practice, theory and policy, Palgrave Macmillan: Basingstoke. Bondi, L. (2004) ‘”A double edged sword”? The professionalisation of counselling in the UK’, Health and Place 10: 319-328. Brewis, G. (2013). Towards a new understanding of volunteering in England before 1960?, IVR Working Paper 2, IVR: London. Brewis, G., Hill, M. and Stevens, D. (2010) Valuing Volunteer Management Skills, Skills Third Sector and IVR Brown, M. (2013) Libraries run by volunteers as councils look to save money, Guardian Online. Available at www.theguardian.com/society/2013/ mar/25/libraries-volunteers-councils-save-money Buckingham, H. (2009) ‘Competition and contracts in the voluntary sector: Exploring the implications for homelessness service providers in Southampton’, Policy & Politics 37(2), 235-54. Buckingham, H. (2010) Capturing diversity: A typology of TSOs responses to contracting based on empirical evidence from homelessness services, TSRC Working Paper 41, Third Sector Research Centre: Birmingham. Cabinet Office (2013) Community Life Survey 2012 to 2013: data. Available at https://www.gov.uk/government/publications/ community-life-survey-2012-to-2013-findings (accessed 14 November 2014) Cabinet Office (2015) Community Life Survey 2014 to 2015: data. Available at https://www.gov.uk/government/publications/ community-life-survey-2014-to-2015-datas (accessed 22 December 2015) Cameron, D. (2010) ‘Big society’ speech, Liverpool, 19 July. Available at www.number10.gov.uk/news/speeches-and-transcripts/2010/07/ big-society-speech-53572 (accessed 18 July 2014) Carey, G., Braunack-Mayer, A. and Barraket, J. (2009) ‘Spaces of care in the third sector: Understanding the effects of professionalization’ Health, 13(4) 629-646.

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Carmel, E. and Harlock, J. (2008) ‘Instituting the third sector as a governable terrain’: Partnerships, procurement and performance in the UK’, Policy & Politics 36(2) 155-171 Clarence, E. and Gabriel, M. (2014) People helping people: the future of public services, NESTA: London CIPFA (2013) CIPFA Library Profile 2013, CIPFA Cloke, P, Johnsen, S, and May, J. (2007) ‘Ethical citizenship? Volunteers and the ethics of providing services for homeless people’, Geoforum, 38 (6), 1089-1101 Coote, A. (2010) Cameron’s ‘empowerment’ scam, Open Democracy Available at www.opendemocracy.net/ourkingdom/anna-coote/ camerons-empowerment-scam (accessed 18 July 2014) Davis Smith, J. (1998) 1997 National survey of volunteering, Home Office: London Defty, A. (2013) ‘Can you tell what it is yet? Public attitudes towards “the Big Society”’, Social Policy and Society 13(1) Department of Health (2011) Strategic vision for volunteering, Department of Health Ellis Paine, A., Ockenden, N. and Stuart, J. (2010). ‘Volunteers in hybrid organizations: A marginalised majority?’, in Billis, D. (ed) Hybrid Organizations and the Third Sector: Challenges for Practice, Theory and Policy, Palgrave Macmillan: Basingstoke Elstub, S. (2006) ‘Towards an inclusive social policy for the UK: The need for democratic deliberation in voluntary and community associations’, Voluntas, 17 (1) 17-39 Finnegan, A. (2012) Promised and Delivered? New Labour’s support of volunteering, Paper presented at the NCVO/VSSN National Research Conference, September 2012. Fyfe, N. (2005) ‘Making space for ‘Neo-communitarianism”? The third sector, state and civil society in the UK’, Antipode 37(3 536-557 Ganesh, S. and McAllum, K. (2010) Volunteering and professionalization: Tensions and trends, Paper presented at the pre-conference in nonprofit organisations, organisational communication division, National Communication Association Annual Conference., San Francisco November 2010. Garner, J. and Garner, L. (2010) ‘Volunteering an opinion: Organisational voice and volunteer retention in non-profit organisations’, Nonprofit and Voluntary Sector Quarterly [online] Gaskin, K. (2005) Reasonable Care? Risk, Risk Management and Volunteering in England: Results of a Survey of Organisations and Individuals, London: Institute for Volunteering Research

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Geoghegan, M, and Powell, F. (2006) ‘Community development, partnership governance and dilemmas of professionalization: Profiling and assessing the case of Ireland’, British Journal of Social Work, 36, 845-861. Handy, F., Mook, L. and Quarter, J. (2007) ‘The interchangeability of paid staff and volunteers in non-profit organisations’, Nonprofit and Voluntary Sector Quarterly, published online 12 October 2007. Hardill, I. and Baines, S. (2011) Enterprising Care?: Unpaid Voluntary Action in the 21st Century, Policy Press: Bristol. Heywood, J., Jochum, V., McHugh, J and McKay, S. (2013) UK Voluntary Sector Workforce Almanac 2013, Skills Third Sector Online. Available at www.3rdsectorworkforce.org.uk/ (accessed 18 July 2014) Hill, M., Morris, S., Ockenden, N. and Payne, S. (2013) Volunteer management in palliative care, NCVO/IVR/VSSN Conference 2013. Hill, M. (forthcoming). The position and power of volunteers in voluntary organisations that deliver public services. PhD thesis, Northumbria University: UK HM Treasury (2002) The role of the voluntary and community sector in service delivery: A cross cutting review, HM Treasury: London. HM Treasury (2004) Exploring the role of the third sector in public service delivery and reform, HM Treasury: London Howlett, S. (2010). ‘Developing volunteer management as a profession’, Voluntary Sector Review 1(3): 355-360 Hustinx, L. and Lammertyn, F. (2003) ‘Collective and Reflexive Styles of Volunteering: A Sociological Modernization Perspective’, Voluntas: International Journal of Voluntary and Nonprofit Organizations 14(2): 167-187 Hustinx, L., Von Essen, J., Haers, J. and Mels, S. (Eds.). (2014) Religion and volunteering: Complex, contested and ambiguous relationships, Springer: New York. Hutchison, R. and Ockenden, N. (2008) The impact of public policy on volunteering in community-based organisations, IVR: London. Kisby, B. (2010) ‘The Big Society: Power to the people?’, The Political Quarterly 81(4): 484-491. Leonard, R, Onyx, J, Hayward-Brown, H. (2004) ‘Volunteer and coordinator perspectives on managing women volunteers’, Non-profit Management and Leadership, 15(2): 205–219. Levine, C. and Fisher, G. (1984) ‘Citizenship and service delivery: The promise of coproduction’, Public Administration Review 44: 178-189 Low, N., Butt, S., Ellis Paine, A. and Davis Smith, J. (2007) Helping Out: A national survey of volunteering and charitable giving, Cabinet Office: London

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Macduff, N. (2005) ‘Societal changes and the rise of the episodic volunteer’ in Brudney, J. (ed) Emerging areas of volunteering, ARNOVA Occasional Paper Series 1(2), ARNOVA: Indianapolis Machin, J. and Ellis Paine, A. (2008) Management Matters: A national survey of volunteer management capacity, Institute for Volunteering Research: London Macmillan, R. (2010) ‘The third sector delivering public services: An evidence review’, TSRC Working Paper 20, Third Sector Research Centre: Birmingham McNamee, L. and Peterson, B. (2014) ‘Reconciling “third space/ place”: Towards a complementary dialectical understanding of volunteer management’, Management Communication Quarterly 28(2): 214-243 Meijs, L., Metz, J., Hoogervorst, N., Van Baren, E. and Lonneke, R. (2012) Comparing the unique value of volunteering to paid work: An empirical analysis, ISTR Conference 2012. Available at www.istr. org/?SienaAbstracts> (accessed 30 July 2012). Milligan, C. and Fyfe, N. (2005) ‘Preserving space for volunteers: Exploring the links between voluntary welfare organisations, volunteering and citizenship’, Urban Studies 42(3): 417-33 Musick, M. and Wilson, J (2007) Volunteers: A social profile, Indiana University Press: Indiana. Nichols, G. and Forbes, D. (2014) The transfer of public leisure facilities to volunteer delivery: Research report, Sheffield University Management School and Newcastle University Norman, J. (2010) The Big Society: The Anatomy of the New Politics, University of Buckingham Press Ockenden, N., Stuart, J. and Hill, M. (2012) ‘The Big Society and volunteering: ambitions and expectations’ in A. Ishkanian and S. Szreter (eds) The Big Society Debate: A New Agenda for Social Policy?, Edward Elgar Publishing, Incorporated. Park, A., Bryson, C., Clery, E., Curtice, J. and Phillips, M. (eds) (2013) British Social Attitudes: the 30th Report, London: NatCen Social Research, available at: www.bsa-30.natcen.ac.uk Police Specials (2014) Welcome to PoliceSpecials.com, available at www. policespecials.com (accessed 14 November 2014) Rochester, C. (2013) Rediscovering Voluntary Action: The Beat of a Different Drum, Palgrave Macmillan: Basingstoke Rochester, C., Ellis Paine, A. and Howlet S. (2010). Volunteering and Society in the 21st Century, Palgrave Macmillan: Basingstoke Russell, L. and Scott, D. (1997) Very active citizens? The impact of contracts on volunteers, University of Manchester: Manchester

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Scott, R. (2014) Volunteers vital to our future, Together for Short Lives and Help the Hospices St Johns Ambulance (2014) Legal and site information. Available at https://www.sja.org.uk/sja/system-pages/legal.aspx (accessed 14 November 2014) Thornton, P. (1991) ‘Subject to contract? Volunteers as providers of community care for elderly people and their supporters’, Journal of Aging Studies 5(2): 181-194 Weeks, J., Aggleton, P., McKevitt, C., Parkinson, K. and TaylorLaybourn, A. (1996) ‘Community and contracts: Tensions and dilemmas in the voluntary sector response to HIV and AIDS’, Policy Studies, 17(2): 107-123 Willems, J., Huybrechts, G., Jegers, M., Vantilborgh, T., Bidee, J. and Pepermans, R. (2012) ‘Volunteer decisions (not) to leave: Reasons to quit versus functional motives to stay’, Human Relations 65(7): 883-900 Yarwood, R. (2011) ‘Voluntary sector geographies, intraorganisational differences and the professionalization of volunteering: A study of land search and rescue organisations in New Zealand’, Environment and Planning C: Government and Policy, 29: 457-472 Zimmeck, M. (2010) ‘Government and Volunteering: Towards a History of Policy and Practice’, in Rochester, C., Ellis Paine, A. and Howlett, S. Volunteering and Society in the 21st Century, Palgrave Macmillan: Basingstoke, pp 84-102

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EIGHT

Valuing third sector achievements in a service delivery context: evaluations and social value Malin Arvidson and Helen Kara

Introduction The concept of social value has long since been used to describe the role and contribution of third sector organisations (TSOs) as social service actors. The concept has been put to the fore with the introduction of the Public Services Social Value Act (SVA) in 2012. In this chapter we make the case that evaluations can play an important role in supporting the goal of the SVA, evidencing the distinct contribution of TSOs within social welfare services, and thereby contributing to levelling the playing field for TSOs aiming to work with social welfare service delivery. The chapter argues that evaluations of organisations and interventions can play an important, dual role in the context of TSOs as social welfare service providers. First, evaluations are rhetorical tools that promote the idea of social value creation as essential in how we value social services. The application of firm evaluation models, that builds on a clearly – albeit contextually dependent – definition of social value, can play a critical role in establishing ‘social value’ as an essential ingredient in commissioning procedures. At policy level, evaluations can support a discourse that places social value firmly within the commissioning and delivering of social welfare services, and so can serve as a rhetorical, or political, tool in debates around the purposes and principles of core social service policies such as the SVA and the Open Public Service Agenda. Second, evaluations can offer ways of illustrating and evidencing how and when social value creation takes place. At organisational level, evaluations can demonstrate the creation of social value and thereby offer organisations a competitive edge in commissioning and other similarly competitive bidding procedures. An introductory section of the chapter provides a discussion about evaluations, followed by an outline of the SVA 2012. We look at the relationship between evaluations and the third sector in the UK, and

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outline the context, that is, public welfare interventions, that guide how and what evaluations are supported. Social value can be defined in different ways, depending on the context in which a service is being offered and on the overarching goals of the organisation. Here we choose to define added social value as services that are socially inclusive. The chapter outlines a definition of social value as social inclusion and discuss how TSOs in theory can create social value. To demonstrate our argument about the dual role of evaluations, we first discuss the use of evaluations as rhetorical, or political tools; the role of the narrative that comes with the evaluation in establishing what principles should guide the way we assess and value social services. Second, we exemplify how social value can be defined and evidenced; using a definition of social value as social inclusion, we identify indicators and other means of evidencing the extent to which a service is socially inclusive. An evaluation can be defined as a specific form of research designed to assess the value of a service or policy. Most evaluations pose overarching questions like: Has the service or organisation achieved what it set out to achieve? What is working well? What is not working well? Why is that? Where, and how, could improvements be made? However, evaluation is not conducted solely to investigate such questions. There are a number of reasons why evaluation may be initiated and carried out. For example, because funders require evaluation of the projects they fund, because managers want to foster organisational learning, or because practitioners want to assess and improve the quality of the service they offer. Perhaps one of the most prevalent reasons for evaluation, in these times of increasing competition for grants and contracts, is to demonstrate the value and qualities of a TSO to commissioners and other potential funders (Arvidson and Lyon, 2013). These different interests may be informed by different professional backgrounds and positions within the organisation. Often, however, they are framed by and interpreted as driven by financial and political motivations of stakeholders, causing evaluations to become contentious arenas ruled by political interests and power asymmetries that come from resource dependence. TSOs are faced with an array of evaluation frameworks today that reflect different preferences regarding evaluation techniques, and arguments about what methods are deemed rigorous and what data is (most) valid. Profound differences can be detected in the underlying motivation for evaluations since they represent different logics, that is, preferences regarding evaluation ideals and the governance of organisations. Hall (2014), for example, identifies scientific, bureaucratic and learning logics that underpin the role of evaluations in

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organisational decision making. These logics are not only noticeable in their different methodological evaluation approaches (from systematic collection and categorisation of data to more open-ended storytelling – what counts as evidence?) but perhaps more critically, in ideals about how goals should be identified and achieved, and about how the organisation should be governed. Hence, questions arise about whether some evaluation logics are incompatible with some organisational cultures. How does an organisational culture that favours flexibility and innovation, based on user-led activities, adapt to an evaluation logic based on pre-defined outputs? As revealed in this introduction, evaluations involve a complex set of activities, and entail managerial skills as well as a critical assessment of relationships with stakeholders and potentially competing logics, or principles, and interests. Organisations need to make strategic decisions regarding priorities in terms of activities and funding. TSOs are increasingly pressured to ‘think impact’ through streamlining their services and applying evidence of what is being achieved, but many resist getting involved with organisational activities such as impact evaluation as they are perceived as unnecessarily costly and also as challenging the very essence, or logic, of how the organisation is run. The impression is perhaps that evaluation practices stem from a world run by principles of cost efficiency, new public management, and profit making, and that such practices are incompatible with organisations that are governed by principles of solidarity, volunteering and altruism. Not only practitioners but also research, based on a competing logics argument, outline the detrimental effect that evaluation practices can have on non-profit organisations. However, developments also show that evaluation frameworks are increasingly sophisticated in addressing these conflicts. The two frameworks referred to later in this chapter, Social Return on Investment (SROI) and the Outcomes Star, are examples of this. The text below outlines the role of evaluations in the context of social welfare policy. An understanding of this context is important since it reveals some of the complexities related to competing preferences and interests that relate to evaluation practices and that TSOs are required to consider.

Evaluations and social welfare in the UK Evaluation is not a recent phenomenon. Ancient texts such as the Bible and Qur’an demonstrate that it has long been a human tendency to judge the worth of experiences, people and relationships. Over the last century, initially in America, evaluation has become increasingly

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formalised. One hundred years ago, the focus was mainly on measuring objectives to see whether they had been achieved. Outcomes and impact first came into play before World War Two in the work of the American education evaluator Ralph Tyler (Hogan, 2007). Evaluation became fully professionalised in the 1970s, with American universities offering courses, and publishers offering journals focused on evaluation (Hogan, 2007). It floundered in the 1980s due to global economic difficulties, but began to flourish again in the 1990s, and the UK Evaluation Society was founded in 1994. While firmly established as a professional activity, the idea of evaluation and auditing all kinds of activities has been seeping through our concept of what constitutes a legitimate organisation. As brilliantly described by Michael Power in his much-read book The audit society: Rituals of verification (1999), this has resulted in managerial activities that have ceremonial rather than real effects on organisational efficiencies. So, as the concept of evaluation becomes increasingly established as a necessary, professionalised organisational activity, it is also more and more questioned based on its political and symbolic as opposed to objective and factual connotations. Within UK politics, the trend towards increasingly auditing and evaluating all kinds of activities, at project, sector and policy levels, can be noted. Throughout the period of New Labour and Coalition government, from 1997 to 2015, evaluation has been lauded by British policy makers as a way of assessing the quality of services and ensuring they offer value for money. For example, New Labour’s flagship Sure Start programmes of the 2000s, in which the public sector and TSOs were required to work together to meet the needs of families with preschool children in areas of deprivation, were expected to spend 3-5% of their sizeable budgets on evaluation. Third sector funders soon caught on, and by the 2010s the Association of Charitable Funders was recommending that its members should evaluate the programmes they funded – which, in practice, meant that funding recipients experienced increasingly onerous monitoring and evaluation requirements. In the Open Public Services White Paper introduced by the Coalition government in 2011 (HM Government, 2011), an emphasis was put on transparency, based on evidence of performance of both specific interventions (what works?) and specific service deliverers (who can deliver?). Here, evaluations at different levels are expected to contribute to improved quality of services, greater efficiency in the delivery of services, and a basis for informed user choice. Again, TSOs operating in this context are likely to experience raised expectations in terms of detailed evaluations that involve both financial auditing and evidence of social impact.

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In other words, over the period 1995-2015, governments have placed evaluations and evidence-based policy at the core of welfare service delivery. There are many theoretical and methodological approaches to evaluation and impact measurement, and as mentioned in the introduction, TSOs have a wide range of frameworks to choose from. As our focus is on TSOs operating in the context of public social welfare delivery it is useful to mention what defines the evaluation context here. The government and sector funders tend to follow the guidance of the lengthy Green book (HM Treasury, 2013) on the economic principles behind evaluation, and the even longer Magenta book (HM Treasury, 2011) on how to design and conduct an evaluation. The Magenta book recommends randomised controlled trials (RCTs) as providing the best evidence of impact (HM Treasury, 2011: 27). RCTs are an experimental design, ideally based on a random sample and a control group. The preference for RCT is an example of the ‘hierarchy of evidence’ (Dickinson et al, 2012), in which some forms of measurement are considered better than others, regardless of potentially relevant factors such as location, political context, and service user group. Critical discussions regarding the preferences of RCT as a ‘gold standard’ (Donaldson et al, 2009) reveal deep-seated disagreements concerning hierarchies of evidence. For TSOs, the choice and implementation of evaluation need to take government preferences and controversies regarding hierarchies of evidence into account. While in this chapter the argument for giving evaluations an important role is linked to the introduction of the SVA, it is also clear that there are other trends and directions within social welfare services that promote evaluations. Hence, our argument for furthering our understanding of the various dimensions of evaluation in the context of third sector service delivery has relevance beyond the reference to the SVA. In order to progress to a concrete discussion about the role of evaluation for TSOs operating in the field of social welfare we use the particular example of social value creation. We begin by outlining the essence of the SVA.

The Public Services (Social Value) Act 2012 The SVA came into force in the UK on 31 January 2013 (HM Government, 2012a). The intention was to ensure that, when awarding contracts with a value over £172,514, commissioners should consider not just cost aspects of a proposed project or bid but its overall value to the community, or ‘everything it is offering’ (Dawson, 2010: 522). The

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SVA ‘require[s] public authorities to have regard to economic, social and environmental wellbeing in connection with public services contracts’ (HM Government, 2012a: 1), and is to be applied to contracts awarded by central government departments and local authorities. Alongside the SVA, the Cabinet Office published a ‘procurement policy note’ (HM Government, 2012b), which offered advice on how and when commissioners should apply the SVA, with particular consideration to the tight economic constraints that were (and are) affecting councils required to accommodate new policies. The policy note states that commissioners and procurers are required ‘at the pre-procurement stage [to] consider how what is to be procured may improve social, environmental and economic wellbeing of the relevant area, and how they might secure any such improvement and to consider the need to consult’ (HM Government, 2012b: point 9). The theory is that by including aspects of ‘social value’ when commissioning for services, decision makers can better establish not just the price of a service, but what added collective benefits a service may generate. The SVA was part of the Coalition government’s ‘open public services’ reform agenda, which aimed to open up service delivery to new providers by creating a ‘truly level playing field between the public, private and voluntary sectors’ (HM Government, 2011: 9). Although not specifically addressed in policy papers, it is clear that evaluations are expected to play an important role in the implementation of the open public services reform through offering evidence of what works and transparency in terms of which welfare actor delivers what (Arvidson, 2016). The SVA does not outline any formal steps that must be followed during procurement and commissioning, hence is not prescriptive in how social value is interpreted more specifically, or how the SVA should be implemented in practice, for example, through open hearings, consultations, or evidence generated through evaluations. So, although instructed to consider social value alongside economic aspects of service delivery, commissioners face challenges in realising the principles of the SVA, as social value is hard to define (Lautermann, 2013). This becomes a particular problem as commissioners face competing goals and priorities (Jones and Liddle, 2011). For example, in times of financial austerity, it is likely that a goal such as the creation of social value through social inclusion and equity in the delivery of services, competes with financial goals of increasing efficiency (Matthews and Hastings, 2013). Policy implementers, such as local authorities and commissioning groups, are bound to experience tensions due to the need to prioritise efficiency (such as acquiring the most health services for a wide population) over equity and social justice (for example,

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distributing health services to the poor, vulnerable and disadvantaged) (Matthews and Hastings, 2013). As shown in a recent review of the SVA, the fact that there are no formal procedures outlined for how to ascertain that social value, potentially makes the Act weak (Young, 2015). However, as there is some discretion in how local authorities and commissioners choose to implement the SVA, we argue that evaluations have an important role to play – in using evaluation frameworks that outline clear definitions and credible evidence of social value creation, TSOs can make the principles of the Act increasingly difficult to ignore. A review of the first two years of the SVA was published in February 2015 (Young, 2015). The review found that the SVA had a positive effect, where it was being used, by encouraging a more holistic approach to commissioning that involves a move from, for example, accounting based on simple monetary input/output reporting to impact evaluations that take the overall community role of TSOs into account. However, the review also found that the SVA had not been widely taken up. Understanding of how to apply the SVA through, for example, social impact evaluations varied, causing inconsistent practices across municipalities. Lack of a definition, and of established ways of measuring social value, were noted as significant barriers to its application. This suggests, in the current climate of austerity where commissioners have competing priorities alongside the ill-defined concept of social value, which is not reflected in legislation beyond the SVA itself, that the implementation of social value is largely being ignored. Furthermore, along with the introduction of the SVA, there is also increasing focus on Payment by Results (PbR) and outcomesbased commissioning (Rees, 2014). These initiatives can be seen as conflicting with SVA, that is, an example of competing logics, with the SVA emphasising a holistic, context-specific definition of ‘added social value’ whereas PbR can be seen as encouraging procurement imperatives guided by standardised measures of cost-effectiveness. The SVA reviewer can see ‘many positive benefits’, and is ‘excited about the Act’s potential’. However, he sees better measurement as ‘essential’ if the Act is to help commissioners make good judgements in allocating funds to service providers (Young, 2015: 5). In other words, there is an opportunity for the principles underlying the Act to become increasingly valid, and we would argue that evaluations offer an important way of supporting this. An informed discussion about the meaning of social value in social welfare services and how accrued social value can be identified and evidenced is of great importance. We argue that the use and continuous development of evaluation frameworks aimed at addressing this is an

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appropriate way of progressing – evaluations require precision in the way core concepts are defined and then translated into evaluation processes that are both feasible and rigorous. Emphasising the role of evaluations does not offer a definitive way of defining, identifying and measuring social value impact. However, it does offer a means of improving the way commissioners, funders, and organisations articulate and support the concept of social value in the context of social welfare services. We argue that, in theory, firm evaluation practices can support a level playing field that allows for organisational diversity among public service providers.

Evaluations and the third sector in the UK TSOs aiming to implement impact evaluation practices are faced with a demanding task that requires high-level managerial skills as well as thoughtful approaches in order to deal with existing controversies within the evaluation field itself, such as the ongoing debate around what counts as evidence. The idea of different ‘evaluation logics’ can be summarised as dilemmas related to how the underlying principles of a chosen evaluation framework may conflict with existing organisational principles and thereby lead to ambivalence as to how goals are identified, prioritised and pursued. TSOs are also often faced with constraints in terms of funding and skills available within the organisation that limit the choices available. Further issues related to evaluation concern the ethical principles guiding relations with clients, with some services being offered and accessed on the basis of anonymity. Nevertheless, increasingly, organisations are taking up the challenges involved in conducting evaluations. Research suggests that TSOs are engaged in evaluations more extensively now than 10 years ago (Ellis and Gregory, 2009; Ogaìn et al, 2012). A study conducted by New Philanthropy Capital (Ogaìn et al, 2012) shows that 75% of charities measure some or all of their work and that 52% have increased their measurement efforts to meet demands from funders. Organisations also actively use evaluations to promote both common causes or principles and individual organisations (Arvidson and Lyon, 2013). As organisations get engaged in the practice of evaluations, their attitudes change from perceiving evaluations as controlling and disempowering to appreciating evaluations as tools they can use to promote certain types of social interventions and to market individual organisations in an environment that is seen as increasingly competitive and evidencefocused (Arvidson and Lyon, 2013). This point is confirmed in Ogaìn et al (2012), who note that although TSOs experience pressure from

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outside to engage in evaluations, they come to value evaluation for its ability to support improvement of quality, efficiency and organisational learning. There are some persistent concerns about the impact of the use of evaluations in charitable work that stem from two closely related aspects of evaluations. First, a key component of evaluations that are recognised as credible tends to be the identification of indicators that represent impact and clear distinctions of what constitutes goals and achievements. This can lead to a pragmatic approach to the evaluation process where the less tangible outcomes are ignored. Through evaluations that focus on the identification of specific indicators and outcomes, evaluation frameworks can end up offering a very fragmented way of assessing what TSOs achieve (Kamerāde, 2015). Some argue that a focus on evidence-based performance, as practised within public services, risks ignoring key aspects of TSOs and functioning (Gibbon and Dey, 2011). We can, for instance, imagine how the outcome of services based on flexibility, where both intervention and goals are open-ended processes, are difficult to pinpoint through indicators only. Hence, if based on indicators of tangible inputs and outcomes, our understanding of the impact of services delivered by TSOs becomes based on a catalogue of recorded events rather than on what is achieved at an aggregate level. Second, the dilemmas related to the so-called logics of evaluations going counter to the logics of charitable work are raised both in research and by practitioners. Evaluations used in, or demanded from, a public sector context may be ruled by institutional imperatives (bureaucracy, hierarchy) that do not coincide with the values of the third sector (non-profit, volunteering, flexibility) (Cordery and Sinclair, 2013). This can lead to evaluations causing negative repercussions on the way staff behave (Moxham and Boaden, 2007; Hwang and Powell, 2009). For example, the scope for innovation and flexibility that originates in a close relationship with service users may be reduced, resulting in staff inadvertently directing attention to other, more tangible, aspects of their work that are more easily identified as inputs/outputs in evaluations (Ebrahim, 2002). Concepts such as goal displacement and mission drift are often used to refer to unintended changes in the way organisations and their staff prioritise what they do, as a result of applying evaluations that represent logics that contradict the values of the organisation.

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The creation of social value by TSOs One assumption about TSOs holds that as the activities of TSOs build on social values – including altruism, compassion, and solidarity – they thus generate wider social values, for example community cohesion and empowerment. But how do these organisational values translate into more tangible action and results? The theory of TSOs’ ‘comparative advantage’ offers a model that clarifies the association between organisational characteristics and the production of social value without relying on an overly normative interpretation of what ideals and motivations underpin the organisation. The concept comes from Billis and Glennerster (1998), who argue that TSOs have an advantage over private and public sector organisations in addressing the needs of disadvantaged service users. Specifically, TSOs are ‘more effective suppliers’ (1998: 87) of services to people that are vulnerable and stigmatised. TSOs’ comparative advantage in ‘dealing with difficult social issues’ (Sargeant and Lee, 2004: 614) derives from the way stakeholders take on multiple roles within the organisation: there are overlapping roles between employer, employee, volunteer, service user and trustee. This, it can be argued, is an inherent structural characteristic that makes TSOs different from private and public sector organisations. An organisational structure based on such overlapping roles renders TSOs flexible and ready to respond to service user needs. It leads to greater informality, and reduces barriers between service providers and users based on prejudice, fear and stigma. Although this advantage may not be exclusive to TSOs (see for example, Hansmann, 1980, who argues that a small for-profit organisation may offer the same structure and advantage), it is claimed that TSOs are more likely than others to have these characteristics. Based on this, we can argue that TSOs are more approachable for groups that often are labelled hard to reach or engage (Jones and Liddle, 2011). As an organisation is able to include and retain client groups that are particularly hard to reach and engage (that is, it is socially inclusive), social value is created. This is an important aspect of the delivery of social services. Research highlights how reaching the hard to reach, or hard to engage, constitutes a prime challenge to public welfare (Kovandžić et al, 2012). For example, access to services is seen as key in addressing health inequalities (Marmot, 2010). Barriers to accessing services can be caused by a service’s opening hours, its geographical location, or the way a service is managed, all which can lead to the alienation of the people for whom the service is intended (Kara and Arvidson, 2015). Hence, social inclusion is not only an aspect that

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potentially distinguishes TSOs from other service providers, but it also constitutes an important contribution in a landscape of diversified service-delivering organisations. Having thus defined ‘added social value’ as a service being socially inclusive, the next step is to identify indicators that can map how and if social inclusion is taking place. We will turn to this in a moment.

Social value and evaluation methods In the context of the SVA, evaluations can perform a dual role as a rhetorical tool supporting the discourse of social value in social welfare services, and a means of illustrating how, and evidencing when, social value is created. In addressing the first role we direct attention to the rhetoric, or the language, of the evaluation framework used. Here we consider evaluations not just as a series of activities aimed at collecting ‘evidence of what works’ but also as tools that actively promote certain values. Although evaluations may primarily, or ideally, be understood as objective means for establishing achievements, they are also political instruments (Greene, 2012; Kushner, 2012). Through a choice of language and indicators, evaluations are expressions of preferences since they make some issues visible, while masking the value and significance of others. The rhetorical framing of the evaluation signals ‘whose knowledge and interests are considered more legitimate’ (Hall, 2014: 310). It directs the audiences (the evaluated, the evaluator, the recipient of the evaluation report) to what are seen as top priorities and to the criteria used for judging success. Concepts such as value for money, efficiency, equity and social inclusion are all normative in that they direct attention to what is to be valued and appreciated. One of the main objections against evaluations expressed from within the third sector is that the logics ruling the context in which evaluations are used, revealed in the language that underpin the presentation of evaluation results, do not correspond with the logics of the sector (nonprofit, idealism). A language that emphasises financial values that accrue to the benefit of tax payers or local authorities separates the reader of an evaluation report from those for whom an intervention is intended (that is, beneficiaries, clients, patients) and from the essence of the organisational logics guiding the works of TSOs. Among evaluation frameworks used by TSOs today we can, however, find some examples of evaluations where the language reflects both a presumed interest in financial values and emphasises principles of social justice and equality, and thereby represents the interest of marginalised groups.

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The Social Return on Investment evaluation framework, better known as SROI, offers a useful example in that it embraces what it assumes is of interest for funders (return on investment) and combines this with a language concerned with inequality/equality. The guidelines to SROI UK specifically state that it ‘seeks to reduce inequality’ by incorporating social, environmental and economic costs and benefits’ (Nicholls et al, 2012: 8). The concept of ‘inequality’ is crucial in how the principles underpinning the use of SROI are presented. The language informs the reader about the wider picture, that is, the impact of including social value in evaluations at an aggregate level. This is quite different from a presentation that emphasises financial returns to investors, that is, what an intervention yields in terms of savings and profits1. For SROI, conceptualising social value as a monetary value is an important way of communicating achievements. Equally important is the presentation of SROI – it communicates the essence of the role TSOs can play as service deliverers, both as individual organisations and at an aggregate level. The ambition of SROI is hence that in the long run this will contribute to the reduction of inequality by placing the ‘social’ on parity with cost efficiency. Views as to whether SROI is successful in achieving this differ, as some argue that by monetising social value, the exercise and end result of SROI eventually challenges organisational mission and misrepresents the achievements of TSOs (Sillanpää, 2013). However, it offers an example of an approach that attempts to straddle financial and political interests that otherwise may be posed as mutually exclusive. Looking at evaluation as a rhetorical tool, we highlight both its political and educational role. Through its rhetoric, that is, the way reporting is framed, the evaluation can support an understanding of the mechanism behind social exclusion by outlining how inclusion/ exclusion happens at the point of access to a service and hence place the way the service is offered at the fore. The social value of a service, defined as the service being socially inclusive, is thus highlighted. This can be done by a description of how services are tailored to reach clients that for various reasons are disadvantaged, hard to reach, hard to engage. So, not only can we ascribe value to the service, or intervention, offered per se, but we can also begin to understand the particular value in the service being designed to reach and retain a group that is otherwise hard to engage. Such a narrative should include how the service is made accessible through the reduction of barriers, which might be both physical/external (for example, costs, location) and cultural/personal (for example, stigma, fear) (Harris et al, 2011).

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This leads us to our next point: the role of evaluations in offering credible ways of illustrating and evidencing social value creation. There are several dimensions to consider here. Who engages with the service? How do they engage with the service? And what is the outcome of this engagement? Based on data, the evaluation should offer evidence of social value (can it be deemed socially inclusive?). This can be done with the use of indicators that support a relevant categorisation of the clients that access the service. Depending on context, this can include gender, age, socio-economic background, educational background, geographical location, and so on. Together with indicators that map the frequency and nature of engagement with the service, the evaluation can reveal both social outreach (who attends the service?) and whether the service is successful in retaining these disadvantaged, vulnerable clients (Schreiner, 2002; Woller, 2006; Copestake, 2014). These dimensions can also be captured through documenting how disadvantaged and underserved people themselves experience the services offered (Greene, 2012). Can they access services in a satisfactory way? And are they offered the same opportunity as others to follow and benefit from an intervention? Qualitative data gained from clients’ own descriptions can evidence ‘how the program is personally valued by participants’ and how it is ‘manifested in meaningful ways in their lives’ (Hall et al, 2011: 199). The Outcomes Star (OS) (MacKeith, 2011) is an evaluation framework used within various social and health service programmes, by both third and public sector organisations. OS provides a useful example here in that it proceeds from the experience of the service user to explore how the service of the evaluated organisation compares with, and complements, that of other service providers and in doing so potentially exposes organisational barriers or advantages from a social inclusion perspective. Through documenting the process of accessing services, the OS can expose strengths and weaknesses in how a service is offered to and accessed by different groups, and support the development of more inclusive approaches. This is of value for the individual organisation being evaluated. If there is evidence that the TSO does indeed offer a comparative advantage in terms of social inclusion, this could justify differences in costs for interventions of very similar character but tailored for different clienteles. It is also of value for commissioners seeking to offer a diversity of service provision that, from an equality of access point of view, includes complementarity and choice for a heterogeneous population.

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Conclusion We argue that evaluations of third sector achievements offer one effective way of promoting the principle of social value when establishing new procedures and norms underpinning the commissioning and delivery of public services and practices related to funding and investment in TSOs. The points raised in this chapter are based on an understanding that evaluations are not purely rational means of establishing what works; they are collaborative procedures involving contestation and negotiations around what is valued and how (Rossi et al, 2004; Barman, 2007; Hall et al, 2011; Kushner, 2012). Evaluations are tailored to highlight policy priorities, or political values. Hence, evaluations are political in that they are always set in contexts where we find ‘the promotion of different values and political stances’ (Greene, 1994: 531; see also Palfrey et al, 2012) and the choice of evaluation approach carries political implications (Rossi et al, 2004). Evaluations can add value to those who are marginalised and likewise ‘embed, ignore, reflect’ underlying inequalities and power relations (Hay, 2012: 47). They can reflect a commissioning or funding policy which prioritises value that falls to particular groups. We have also argued, based on a definition of social value as social inclusion, that TSOs can create social value through structural characteristics (the overlapping roles of people engaged in TSOs) and intentional strategies that make services accessible to groups otherwise hard to engage. We have also given examples of how added social value can be evidenced through evaluations. TSOs engaged in public service delivery, as well as other stakeholders involved in the contracting of services, are faced with the challenge of evidencing and embedding the concept of social value in practice. The 2015 review of the SVA recommended that another review be carried out after a further two years, in the hope that take-up would be wider by then. We argue here that the use and continuous development of evaluation frameworks aimed at addressing how we understand and identify social value in social welfare services is an appropriate way of progressing. However, we recognise that evaluation practices are linked with contentious issues that stem from opposing ideas as to what counts as evidence, and doubts that evaluation results are presented in a ‘truthful’ way. As pointed out in the introduction to this chapter, in theory, consistent and firm evaluation practices can promote social value as core in commissioning processes and thereby support a level playing field that allows for organisational diversity among public service providers. Whether this will happen in practice, depends on creating an institutional setting that allows for trial and error in the

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way services and evaluations are conducted; and where stakeholders can manage to combine the competition involved in commissioning, as well as collaboration with the aim of collective learning. This is likely to be a major challenge. Note 1 See for example, http://www.socialimpactscotland.org.uk/understanding-socialimpact/methods-and-tools/consultant-facilitated-impact-assessment/the-questantprocess/ and http://www.questant.co.uk/

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Ebrahim, A. (2002) ‘Information Struggles: The Role of Information in the Reproduction of NGO-Funder Relationships’, Nonprofit and Voluntary Sector Quarterly, 31(1): 84–114 Ellis, J., Gregory, T. and Services, C.E. (2009) Accountability and learning: developing monitoring and evaluation in the third sector, London: Charities Evaluation Services Gibbon, J. and Dey, C. (2011) ‘Developments in Social Impact Measurement in the Third Sector: Scaling Up or Dumbing Down?’, Social and Environmental Accountability Journal, 31(1): 63–72 Greene, J.C. (1994) ‘Qualitative Program Evaluation: Practice and Promise’, in N.K. Denzin and Y.S. Lincoln (eds), Handbook of Qualitative Research, London: Sage, pp 530–544 Greene, J.C. (2012) ‘Values-engaged evaluation’, in M. Segone (ed), Evaluation for equitable development results. Washington: Unicef, pp 192–210 Hall, J.N., Ahn, J. and Greene, J.C. (2011) ‘Values Engagement in Evaluation: Ideas, Illustrations, and Implications’, American Journal of Evaluation, 33(2): 195–207 Hall, M. (2014) ‘Evaluation Logics in the Third Sector’, Voluntas: International Journal of Voluntary and Nonprofit Organizations, 25: 307336 Hansmann, H.B. (1980) ‘The role of nonprofit enterprise’, The Yale Law Journal, 89: 5 (April 1980): 835-901 Harris, M.F., Furler, J.S., Mercer, S.W. and Willems, SJ. (2011) ‘Equity of access to quality of care in family medicine’, International Journal of Family Medicine Hay, K. (2012) ‘Strengthening equity-focused evaluations through insights from feminist theory and approaches’, in M. Segone (ed), Evaluation for equitable development results. Unicef, pp 39–58 HM Government (2011) Open Public Services White Paper, London: HMSO HM Government (2012a). Public Services (Social Value) Act 2012, London: The Cabinet Office HM Government (2012b) Procurement policy note – the Public Services (Social Value) Act 2012. Advice for commissioners and procurers, London: The Cabinet Office HM Treasury (2011) The Magenta Book: Guidance for evaluation, London: HM Treasury HM Treasury (2013) The Green Book: Appraisal and evaluation in central government, London: HM Treasury, Government Finance Function.

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Hogan, R. (2007) ‘The historical development of program evaluation: exploring the past and present’, Online Journal of Workforce Education and Development II(4): 1-14 Hwang, H. and Powell, W.W. (2009) ‘The rationalization of charity: The influences of professionalism in the nonprofit sector’, Administrative Science Quarterly 54(2): 268-298 Jones, M. and Liddle, J. (2011) ‘Implementing the UK Central Government’s policy agenda for improved third sector engagement: reflecting on issues arising from third sector commissioning workshops’, International Journal of Public Sector Management 24(2): 157–171 Kamerāde, D. (2015) Third sector impacts on human resources and community: a critical review, Third Sector Research Centre Working Paper 134, University of Birmingham Kara, H. and Arvidson M. (2015) ‘To what extent can evaluation frameworks help NGOs to address health inequalities caused by social exclusion?’, Perspectives in Public Health 135: 4 Kovandžić, M., Funnell, E., Hammond, J., Ahmed, A., Edwards, S., Clarke, P., Hibbert, D., et al (2012) ‘The space of access to primary mental health care: a qualitative case study’, Health and Place 18(3): 536-51 Kushner, S. (2012) ‘Case study and equity in evaluation’, in M. Segone (ed) Evaluation for equitable development results, Washington: Unicef, pp 39–58 Lautermann, C. (2013) ‘The ambiguities of (social) value creation: towards an extended understanding of entrepreneurial value creation for society’, Social Enterprise Journal 9(2): 184–202. MacKeith, J. (2011) ‘The development of the Outcomes Star: a participatory approach to assessment and outcomes measurement’, Housing, Care and Support 14(3): 96-106 Matthews, P. and Hastings, A. (2013) ‘Middle-class political activism and middle-class advantage in relation to public services: a realist synthesis of the evidence base’, Social Policy and Administration 47(1): 72–92. doi: 10.111/j.1467-9515.2012.00866.x Marmot, M. (2010) Fair Society, Healthy Lives: Strategic Review of Health Inequalities in England Post-2010. London: The Marmot Review Moxham, C. and Boaden, R. (2007) ‘The impact of performance measurement in the voluntary sector: Identification of contextual and processual factors’, International Journal of Operations & Production Management 27(8): 826–845 Nicholls, J., Lawlor, E., Neitzert, E. and Goodspeed, T. (2012) A guide to social return on investment, Liverpool, SROI-UK

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Ógáin, E.N., Lumley, T. and Pritchard, D. (2012) Impact measurement among charities and social enterprises, London: NPC. Palfrey, C., Thomas, P. and Phillips, C. (2012) Evaluation for the real world: the impact of evidence in policy making, Bristol: Policy Press. Power, M. (1999) The Audit Society. Rituals of Verification, Oxford: Oxford University Press Rees, J. (2014) ‘Public sector commissioning and the third sector: old wine in new bottles’, Public Policy and Administration, , 29(1) 45-63. Rossi, P.H., Lipsey, M.W. and Freeman, H.E. (2004) Evaluation: A Systematic Approach, London: Sage Sargeant, A. and Lee, S. (2004) ‘Trust and relationship commitment in the United Kingdom voluntary sector: determinants of donor behavior’, Psychology & Marketing 21(8), 613–635. Schreiner, M. (2002) ‘Aspects of outreach: a framework for discussion of the social benefits of microfinance’, Journal of International Development 14(5): 591–603. Sillanpää, V. (2013) ‘Measuring the impacts of welfare service innovations’, International Journal of Productivity and Performance Management, 62(5): 474-489 Woller, G. (2006) Evaluating MFIs’ social performance: a measurement tool. Washington: USAID. Young, Lord (2015) Social Value Act Review, London: The Cabinet Office.

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PART THREE

Service delivery in key policy fields

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Navigating a new landscape: the third sector delivering contracted employment services Rebecca Taylor, Christopher Damm and James Rees

Introduction The third sector’s role in the field of employment services has occupied a high profile position in the debate about public service delivery. This is the result of three main factors: the long history and relatively prominent position of third sector organisations (TSOs) in contracted employment services, the fact that the field has undergone waves of innovation and reform since the initial move to contracted services in the late 1990s, and the contentious nature of recent programmes. In particular, the developments wrought by the UK’s Coalition government, elected in 2010, have accelerated previous trends. The two main employment programmes implemented in this period have involved the full adoption of a supply chain contracting model with an intensification of payment by results (PbR) financing. These shifts have created an increasingly commercially managed, more results driven environment with greater resource constraints. In the process, they represent a potentially disruptive juncture in the employment services field, one that has forced TSOs and indeed all providers in the field to understand and adapt to the new landscape or find themselves no longer able to compete (Taylor et al, 2016). While recent governments have sought to promote the sector’s role in this area, public debates have often painted TSOs as relatively passive victims of an exploitative private sector (Butler, 2011) – we suggest the need for a more nuanced understanding of the sector’s role. The chapter explores the questions that underpin the book; in particular, the impact that delivering services has on TSOs. It highlights the shifting balance between providers from different sectors operating in the employment services field and explores how TSOs have made sense of and navigated this changing landscape, considering the implications for the sector’s future role in delivering these services. In the process, it raises more searching questions about

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what the involvement of the third sector means for our understanding of the content, purpose and sustainability of public services more widely. We demonstrate how the shifting role of TSOs in the employment services field sheds light on the way in which wider policy agendas around the role of the state and the financing of public services play out for providers delivering on the ground. The chapter draws on a number of sources to understand the sector’s role in delivering employment services in this new landscape: a review of academic and policy research on employment services (Damm, 2012), and an empirical research project on the Coalition’s flagship employment scheme, the Work Programme (Rees et al, 2013). The empirical research involved interviews at the national level with prime providers, employment services and third sector infrastructure bodies, and a phone survey and interviews with providers (of all sectors) in two areas of England (see Rees et al, 2013 for details). We contrast this with the findings of the evaluation of the Coalition’s other scheme, Work Choice, aimed at those with disabilities (Purvis et al, 2013). The chapter first outlines the evolution of contracted employment services from the 1980s, focusing on the changing role of the third sector in this process. The main part of the chapter describes the contemporary employment services landscape constituted by both the Work Programme and Work Choice, following the formation of the Coalition government in 2010. It then draws on the research on the Work Programme and evidence from the Work Choice evaluation to explore how TSOs have navigated this changing landscape, with particular consideration of two key issues: the financial and strategic risks involved in entering into the programme and the implications of the structural shift in the quasi-marketplace favouring the adoption of a personalised generalist rather than specialist approach to the provision of services – and how providers have acted strategically in relation to this shift. The chapter concludes by considering the implications of these changes for employment TSOs and the sector more generally. We suggest that neither ‘the third sector as victim’ narrative nor the ‘third sector equals small providers of specialist services’ characterisation are useful ways to understand the challenges of such programmes for the sector. These stereotypes mask a more complex reality in which there is a politics of size and position in the supply chain and wider market (Bennett, 2012). TSOs are not a unified or coherent body of organisations and their role in the delivery of employment services and position in the wider field requires a more nuanced account of their different experiences and goals.

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The evolution of contracted employment services in the UK: the role of the third sector Third sector involvement in government employment services for the long-term unemployed has a long pedigree. Bennett (2012) describes how TSOs in the 1980s and early 1990s were able to acquire resources from a wide range of local and national sources to fund temporary employment opportunities and skills training. In particular, the Community Programme distributed national funding from the Manpower Services Commission (a non-departmental government body). These schemes were restricted to socially beneficial projects, making community-based TSOs well placed to bid for contracts. The resulting ‘Intermediate Labour Market’ (ILM) programmes tended to be local, small scale, voluntary, offered a real wage, and often led to a vocational qualification (see also Aiken and Bode, 2009). Under New Labour, however, the emphasis steadily moved towards ‘work first’ inspired schemes, which focused less on work experience opportunities or job skills training, and more on job search skills and matching users to opportunities in the open job market. These new programmes, operating alongside more mainstream provision by Jobcentre Plus, grew rapidly from small scale pilots in the late 1990s to larger schemes such as the New Deal for Disabled People and Employment Zones in the 2000s. The actual services did not differ greatly from public sector provision, though the smaller pilots experimented with greater provider autonomy and outcome contingent payments (Woodfield and Finch, 1999; Hills et al, 2001; Loumidis et al, 2001). These developments created new opportunities for third and private sector organisations to deliver services on a significant scale. For example, TSOs delivered half of the provision in the New Deal for Disabled People (NDDP) ‘innovative schemes’ programme and around 42% of the original NDDP job broker contracts (Hills et al, 2001; Stafford et al, 2007). Later, national schemes further increased the scale of outsourced provision and moved towards a ‘prime contractor’ model. Pathways to Work, aimed at incapacity benefit (IB) claimants, first introduced the concept of ‘supply chains’, with prime contractors commissioned by the DWP to either provide services themselves or subcontract to others (Loumidis et al, 2001). The third sector won 13% of the Pathways prime contracts and 44% of subcontracts, although there were growing concerns that this represented a reduction in market share compared to previous programmes (Mcdonald et al, 2007). This period was characterised by the proliferation of New Deal programmes aimed at

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a diverse array of customer groups (for instance, disabled people, the long- term unemployed and lone parents) each requiring a package of DWP-prescribed treatments. This policy agenda neatly dovetailed with the third sector’s reputation as the home of ‘specialist’ organisations offering provision to particular groups of service users. However, a number of concerns were also raised over the poor treatment of subcontractors in the scheme, many of whom made a loss on provision (Hudson et al, 2010; NAO, 2010; WPC, 2010). By 2008, the DWP was spending nearly £1 billion annually on contracted employment services. The market had developed in a largely piecemeal fashion, resulting in a complex array of programmes and a large number of local contracts (Purvis et al, 2013) with providers from both private, third and public sectors. A DWP command paper described this ‘patchwork of provision’ as ‘inefficient and less effective’, declaring its aim to consolidate the market (DWP, 2007: 87). It therefore began to implement a model of commissioning recommended in the influential Freud Report (Freud, 2007; Grover, 2009), allocating 80% of contracts to just a handful of primes (DWP, 2008). This would, in theory, lead to a reduction in the administrative burden for DWP, larger commercial investment and a transfer of risk to external organisations. In exchange, prime providers would receive increased autonomy and longer, larger contracts (DWP, 2008). The first project to run under the new strategy was the Flexible New Deal (FND) in 2009 with estimates suggesting that almost half of its delivery organisations were from the third sector (Armstrong et al, 2010) primarily at the subcontractor level. The FND payment model was more outcome contingent than for previous New Deals (WPC, 2010; Vegeris et al, 2010). It also marked further rationalisation by offering ‘personalised’ support for diverse user groups within a single overarching programme. Although the FND came to an abrupt end following the election of the Coalition government in 2010, its underlying principles laid the foundations for the landscape that emerged in the period that followed. The evolving structure of contracted employment services in the UK has meant a shifting role for third sector providers over a 30-year period, and these changes have been accompanied by various debates and concerns about the sector’s position in the field. In employment services, as in policy more generally, TSOs have been thought of as being embedded in and trusted by communities, innovative and responsive, providing an ethic of care, and therefore valuable to the wider ‘system’ of provision (Mcdonald et al, 2007; Aiken and Bode, 2009; TSTF, 2009). Yet there is little data available to support these assertions either in general terms or specifically in the context of

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employment services. While throughout the 1990s and early years of the 21st century, the government, via the DWP, were keen to promote the commissioning of third sector providers within their schemes, there was little data available to suggest that the sector’s performance was better or even on a par with private or statutory providers. DWP’s own programme evaluations rarely looked at the sector of providers in their performance measures. On the other hand, it was argued by some within the sector that TSOs had been damaged by involvement in the field, particularly where they were seen to have been marginalised in favour of large corporate interests as the field became increasingly competitive (WPC, 2009; 2011; Butler, 2011; Toynbee, 2011). Third sector subcontractors raised concerns in relation to the Pathways to Work commissioning about reductions in market share, low quality provision and poor treatment (WPC, 2009; 2010). As we go on to show, the debates and concerns about the sector’s position in the employment services field gained momentum as the landscape of employment services shifted following the formation of the Coalition government in the UK in 2010.

Navigating a new landscape of contracted employment: challenges and strategies for third sector providers For third sector organisations involved in the delivery of employment services, the Coalition’s reforms have had a substantial impact on their positions, roles and relationships in the field. Two programmes have dominated the contemporary landscape after 2010 and shaped the experiences of third sector providers. Both Work Choice and the Work Programme involve a supply chain model in which ‘prime’ providers, commissioned by central government, are responsible for delivery in a contract area, and in turn, subcontract to other providers, establishing a web of supply chain relations between providers across the private, third and public sectors. The larger Work Programme is a generic employment support scheme aimed at the majority of those on work-related benefits. Work Choice is a smaller programme aimed specifically at those with disabilities; the only formalised concession to specialist services in a landscape of generalist provision. As noted, the programmes share a core two tier delivery model; at tier one, ‘end to end’ providers support people over the full course of their journey into employment. Primes deliver some ‘end to end’ themselves but generally they subcontract a proportion of delivery to other providers. At tier two, specialists provide additional support to those with higher

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needs at greater distance from the labour market on a spot purchase basis to primes and end-to-end providers. Other aspects of the programmes are quite different. Contract sizes in Work Choice are smaller and the outcome-based element of providers’ fees is much less than the Work Programme. In the latter, the small initial attachment fee was phased out after the first year and most payments required employment to be sustained for between 13 and 24 months. The payments were differentiated by customer groups to incentivise providers to work with the harder to help categories and minimise ‘creaming and parking’ (see Rees et al, 2014). In Work Choice, the significant upfront service fee constituted 70% of the contract price with outcome payments making up the remainder (Purvis, 2013: 28). This makes creaming and parking less likely and there is no differential payment. The programmes also differed in terms of provider autonomy. The minimal service delivery standards in the Work Programme allowed for personalisation (Newton et al, 2012). Work Choice providers were not given the same freedoms and the higher upfront service fee entailed a higher degree of prescription (Purvis, 2013: 28). This new landscape has a range of implications for third sector providers that is partially visible in the shifting sector profiles of providers across the supply chains of the two programmes. Of the 18 organisations who won prime contracts in the Work Programme, 15 were private sector. Only one was third sector, one a mixed private/ third sector partnership and a third a public sector provider (Lane et al, 2013). Further down the supply chain the sector profile of subcontractors was more equal across the private and third sectors (Damm, 2014). In Work Choice, however, the third sector dominated. At prime level there were three TSOs, one industrial and provident society, one self-identified social enterprise and three private sector companies. Notably, the charity Shaw Trust accounts for 16 out of 28 of the prime contracts. TSOs also made up the largest proportion of subcontractors at around 47%. (Purvis et al, 2013). However, understanding the absence of third sector organisations at the top of the Work Programme supply chain and their dominance of the Work Choice supply chain requires a more detailed exploration of how TSOs have navigated this changing landscape, with particular consideration of two crucial issues: the financial and strategic risk of being a provider and the emerging implications of the structural shift in the quasi-marketplace favouring the adoption of a generalist rather than specialist approach to the delivery of services.

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Managing financial and reputational risk The environment determining the scale of financial risk facing providers is complex and determined by a number of interrelated issues: perhaps most notably, the size of the contracts and degree to which contracts are weighted to the financial reward of outcomes; but also the cost of bidding and the risks associated with taking on staff under Transfer of Undertakings (Protection of Employment) (TUPE). To even be accepted on to the bidding framework, potential Work Programme prime contractors had to demonstrate a turnover of £20 million. In contrast to the previous ‘new deals’ era, which was seen to be quite generous in its payments to providers, the outcome-based payment model for the Work Programme means that resources are tighter and the financial risks associated with being a prime, and to a lesser extent, a subcontracted provider are much higher. As one prime respondent put it: ‘With FND, the upfront portion of the payment was so big – it was about a third of the contract value – that actually you could probably afford to not deliver very well, and still make ends meet, still stagger through the contract. In Work Programme you can’t. Categorically, if you don’t deliver, that attachment fee is not enough to run your business on.’ (Private sector prime 11) With little or no attachment fee paid to ‘end to end’ providers when they engage a new participant and outcomes payments only flowing when participant have been in work for a year or more, the organisation has to bear most of the upfront delivery costs. The fact that a majority of the payments come later in the programme effectively increases the risk to providers. For Work Choice providers, on the other hand, the substantial 70% attachment fee means a lower financial risk. These risks are also amplified by the contract size. The larger the size of the contract package area (CPA) across which providers must deliver services, the higher the financial risk. In the Work Programme the CPAs were larger than any previous programme, while in Work Choice – though still relatively large – the CPAs were smaller than the Work Programme, meaning relatively lower levels of financial risk for potential providers. In the Work Programme, the domination of the private sector at the prime level suggested that those risks were indeed too high for non-private sector providers. TSOs faced particular structural financial constraints, which make it harder to compete at this level. Unlike private sector companies, third sector organisations had less opportunity

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to raise the necessary capital borrowing from banks or investors and fewer cash reserves or assets, which they could use to demonstrate their capacity to absorb risk. Prime contracts in the Work Programme became less viable for many organisations, not least TSOs (WPC, 2011). The difficulties for all but the very largest primes may have been exacerbated by so-called ‘price-discounting’ at the commissioning stage by which some providers attempted to ensure market share by undercutting competitors and offering to accept a lower attachment fee in the first years. Potentially, TSOs and public sector providers were less able or less willing to subsidise a loss leader strategy to ensure a position in the programme. Several TSOs interviewed felt that the risks to the organisation of holding a prime contract were too high. One decided against bidding for a prime contract despite the fact that their turnover ‘easily surpassed the DWP requirement’, because they did not want to put their ‘core business at risk’ if anything went wrong with the contract (TSO ‘endto-end’ provider 06). Another that did bid suggested that they had been very strategic about only bidding for one CPA where they were well established and entering into a partnership with a private sector prime so they could deliver in other areas. ‘The restraint we had in choosing one particular area was around cash flow, because it was … you know, we can afford to bid for one contract to be a prime provider, and therefore, we should fully focus on actually doing that and being successful in doing that. (TSO prime 21) Those risks were also operating for ‘end to end’ providers at tier one in the supply chain. Although contract sizes were more manageable at this level, they were nonetheless substantially greater than previous programmes, meaning providers still needed more resources to compete. In Work Choice the contract sizes were smaller than the Work Programme and, with the service fee element, the financial risks were less, yet the evaluation found that financial barriers such as insufficient cash flow and financial stability were still cited as a key reason not to bid for prime and subcontractor contracts. Despite these concerns, third sector providers were relatively successful in achieving prime contracts in Work Choice compared to the Work Programme, suggesting that it was potentially more conducive to third sector participation and/or that it was less appealing to private sector providers. It was not only the downstream financial risk of delivering a contract that deterred potential primes and ‘end to end’ providers, but also the

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upfront cost of bidding for these programmes was seen to be particularly onerous. The submission of multiple individual Expressions of Interest (EOIs) was viewed as burdensome, resource intensive and poorly designed, echoing findings from earlier research on commissioning and contracting (see for example, Buckingham, 2009; Crisp et al, 2011). This respondent was typical in noting the substantial number of staff hours that had gone into submitting multiple speculative EOIs to primes: It caused me a nightmare and we probably had 20 people working on it, 90% of which we knew was worthless because it was only the small amount that would win those bids but we wanted to be in most bids. (TSO specialist provider 08) While providers from all sectors noted this issue, private sector providers were more sanguine seeing the resourcing of the bidding process as part of the game they needed to play to compete in the market. For third sector providers it was more difficult to justify this kind of outlay. Financial risk also came in the form of the potential pension liability for providers taking on ex-local authority staff via TUPE – a concern for several potential providers. One prime noted that several local authorities (LAs) who they had been keen to work with as subcontractors pulled out because they were unwilling to take ‘TUPE’d’ staff: “a lot of them wouldn’t accept the responsibility that was involved in a DWP transfer” (Private sector prime 03). This was echoed by accounts from the Work Choice evaluation: ‘One organisation that was interested in bidding as a prime provider via a consortium stated that the financial liability guarantees that DWP required were too high for most of the organisations they wished to work with.’ (Purvis et al, 2013: 68) However, more generally, financial risks were not of the same magnitude for all TSOs. While some were unable to bid for Work Programme Prime contracts because they did not have the required capital, others were very confident about their financial capacity to engage in the programme. This TSO argued that they were able to participate in the programme because they had generated a substantial surplus in previous programmes:

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‘We had to go back to our board and say to them, basically, look, we’ve made this massive surplus. […] we actually took two really good years, and we banked the money. We didn’t use it; we banked it. We knew we were coming into lean times, so we went into the Work Programme with £1 million in the bank.’ (TSO ‘end-to-end’ provider 24) Financial risk was not the only category of risk facing providers. However, it was third sector providers who grappled with the reputational and strategic risk of participating. Issues including the mandatory nature of the programme and the use of sanctions to ensure the compliance of benefit recipients were particular areas of concern for some TSOs in the Work Programme who felt that engaging in this would conflict with their mission and ethos. Several TSOs suggested that bidding for prime contracts was out of the question because they could not compromise their mission to the extent that this would require: ‘I don’t think we could hold up and say, “We won’t be associated with job outcomes and mandation, and sanctions,” if we were a prime, [it] wouldn’t quite work.’ (TSO specialist provider 27) TSOs talked about internal concerns and discussion that went on prior to and during the commissioning stage that focused on the implications of bidding in terms of the organisation’s mission. In addition, the controversial nature of the programme was also a significant concern to TSOs who had built up a ‘brand’, related to their charitable mission or viewed campaigning as a significant part of their activity and therefore cherished their independence from the statutory sector. They expressed some anxiety that association with the Work Programme could damage their public reputation and their perceived independence. One large national disability charity operating specialist contracts noted that they had already seen a backlash to their involvement and were ‘very conscious’ of the risk to them of being associated with the Programme: ‘This is the first time we’ve worked on something that’s got such a high media profile, such a high political profile. The reputational risk potentially to us is enormous. And we’ve already had comments on our own Twitter and Facebook about why we are working with the Work Programme.’ (TSO specialist provider 20)

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In contrast, in Work Choice, it was private and statutory sector providers who described feeling uncertain of their capacity to win contracts. Private sector providers who were unsuccessful in Work Choice were concerned that their level of specialist disability experience was not adequate. Local authority potential primes faced challenges around the geographical coverage. Many needed to form a special purpose vehicle (SPV) with an adjoining LA in order to bid, although this was not always viable given the limitations on organisational flexibility caused by being governed by specific statutory requirements and financial regulations. (Purvis et al, 2013: 68) What we see in a comparison of the experiences and positions of the third sector in the two programmes is a complex web of risks associated with different roles in the two programmes. TSOs had sought to understand and assess those risks based on their own financial capacity, commitment to mission and reputation and their understanding of a shifting employment services landscape. While some saw the risks of competing as too high, others saw the risks of not competing and thus not being part of the landscape as outweighing the financial risks of ‘staying in’. Service orientation – from a ‘specialist’ to a ‘generalist’ approach to employment services delivery A second set of issues emerged relating to the delivery of generalist and specialist services that providers had to navigate as they bid for positions in the supply chain and began delivering services in the new programmes. The New Labour era created a plethora of prescriptive (that is, DWP-defined) services for predefined customer groups (disabled people, the long-term unemployed, lone parents), which encouraged many providers to specialise in the delivery of services to these groups. The Work Programme, and to a lesser extent, Work Choice represented a shift in emphasis if not always explicitly, at least functionally, from specialist to generalist services (Rees et al, 2014). In the new rationalised model with the specialist programmes gone, providers had autonomy over the frequency and type of services they provided but on condition that these were tailored or personalised to a broader range of customer types who would be coming through the programme. In the Work Programme, providers bidding for end-toend contracts were expected to provide generalist employment support across large geographical areas to a very diverse range of customer groups. This was seen by some as a positive development:

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‘[Previously] you had such a mishmash of programmes and you siloed people. And once you siloed people then they hide behind a label, “Oh, I’m a lone parent, I can’t do that,” “Oh, I’m on incapacity, I can’t do that.” So once you silo people they learn the label.’ (TSO ‘end-to-end’ provider 18) Within the Work Programme ‘end-to-end’ contracts providing generic support to a broad range of customers involved security and certainty over volumes and a closer relationship with primes. Several third sector organisations noted their aim had been to demonstrate that they had the capacity to be contracted as an end-to-end provider and this was about ‘staying in the market’. Specialist providers were no longer firmly embedded in the supply chain and found themselves with more tenuous ‘partnerships’ based on spot purchase or service level agreements and dependent on individual advisors’ knowledge and discretion for referrals rather than contractual requirement. For small and third sector providers who were more likely to have been offering support to a particular client group rather than their private or public sector peers, the specialist roles in the programme no longer offered them a viable contract. What you’re seeing is a lot of charities that have been used to delivering ‘end to end’ and now having to face the reality that they’re just going to be called upon when their specialist area is needed. (TS stakeholder 01) Although Work Choice was a specialist disability programme overall, the same structure prevailed and ‘end-to-end’ providers were expected to deliver a more fixed set of services to all customers, while specialists provided add on services usually through spot purchase contracts. Given the emerging distinction between the value of end to end and specialist contracts, some organisations had undergone a fundamental reorientation of their services in order to continue to compete for the new, more generic contracts in the employment services market. One TSO provider with a strong disability ‘identity’ said they were now working with lone parents and those with mental health problems, a trajectory that had culminated in them becoming an end to end provider on the Work Programme. Although private sector providers were more likely to be offering general rather than specialist employment services in the first place, some faced the same pressure to reorient or broaden out their remit in order to stay in the market. One private sector training provider strategically bought out another

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smaller training company that would enable them to offer a more generic service in order to underpin their bid to be a provider in the Work Programme. Another reorientation strategy was for providers to simply buy in specialist expertise that they might have looked for in a tier two provider. One provider explained that they had had several referrals of ex-offenders but, unable to find a partner working locally with these clients, had eventually resorted to employing a freelance specialist to work on an outreach basis. Importantly, however, they were funding this post out of money from reserves rather than income from the programme. Other ‘end-to-end’ subcontractors noted that the only way to make the contracts financially viable was to keep as much of the delivery as possible in house and where possible to crosssubsidise from other contracts (see also Newton et al, 2012). While several agencies had succeeded in reorienting their services recently or during the operation of the programme, this highlighted a key difference between the sectors in relation to their ability to respond to changing demands of the market. Buying in staff or acquiring other agencies in order to change the shape of existing provision, was not an option for many TSOs who did not have the financial resources or the ability to access credit in the way their private sector counterparts could. In fact, TSOs that were successful in achieving ‘end to end’ contracts tended to be those who were not specialists but had always worked in generic employment support. Other TSOs found themselves delivering generic provision even though they were not experienced in this area of delivery. Some had not understood that the geographical nature of the referrals would mean they saw very few of their specialist client group and would instead be dealing with a broad range of clients whose needs may have been unfamiliar to them. One Work Programme public sector provider described the response of their third sector subcontractors: ‘Initially it was, “Oh my God, we’re not used to working with Fred,” you know, “we’re used to working with Mary,” but I think people have adapted and appreciate the fact that that’s how it is, basically. (Public sector ‘end-to-end’ provider 19) At the same time, some were also constrained by their particular mission or values in terms of the changes they could or indeed wanted to make to their services. Where third sector providers were keen to participate in the programme, those whose mission focused on a particular client group had to take a strategic decision to shift their focus and broaden

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out their remit to include other groups. Other TSOs had chosen not to move into generalist provision but to operate within the programme as a specialist provider focused on supporting a particular disability group – they had steered away from reorienting their services and in their view, compromising their mission. Instead they sought broad geographical coverage at tier two in the programme so they could continue to serve as best they could their (low incidence, widely dispersed) client group as a specialist provider. For these providers employment services constituted their core work and the lack of referrals was frustrating as they could see themselves being pushed out of the market. One local provider with expertise in supporting young people into employment was now looking at education funding to keep the organisation operating: ‘But that’s a different industry, you know, this is how I’m having to look differently, where do I look for funding for next year to keep the doors open here because [prime] have not [given me any referrals].’ (TSO specialist provider 22) In Work Choice, a similar shift was visible. The evaluation noted low use of specialist providers within the programme, their exit from the supply chain, and the reorientation of services by other providers towards pan-disability ‘end-to-end’ provision (Purvis et al, 2013: 78). Echoing the Work Programme disability providers, one TSO explained, “Predominantly we’ve always been mental health and learning disability orientated but with Work Choice in terms of employment we’re now very much pan-disability” (Purvis et al, 2013: 74). Similarly, primes and ‘end to end’ providers in Work Choice noted that they were meeting specialist needs themselves rather than using tier two providers in the chain. Third sector providers, in attempting to understand the new landscape were engaging with both financial and reputation risk but also attempting to understand and position themselves in relation to evolving programmatic priorities around providing generalist but personalised support. This had implications for their organisational mission and focus, and as with financial and reputation risk, they weighed up the positive aspects of remaining a provider in the field with the negative aspects of having to reorient their services. For some, the shift to generalist provision was an obvious decision, for others with fewer resources or a strong commitment to their mission, reorientation was not possible or desirable and this group were clearly

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struggling to maintain their position in the evolving landscape of employment services.

Discussion and conclusion In this chapter, as in the research that underpinned it, we set out to examine the role of the third sector in delivering contracted employment services. Our aim was to explore how changes in the way in which services are delivered, particularly recent developments towards a supply chain model with outcome-based funding, have impacted on third sector providers in the ‘field’ of employment services (Taylor et al, 2016). In doing so, we have echoed the questions that underpin this book about the impact that delivering services has on TSOs. Over the course of the research, we were also interested to explore whether and how third sector providers’ experience differs from providers in the public and private sector – it was therefore an attempt to address a gap in previous work on employment services, which lacked such a comparative perspective; and to explore the ways in which participants perceived that the behaviour and contributions of organisations from different sectors differed (or not) (Rees et al, 2013). The contemporary landscape of national employment services provision is defined by two programmes. Together these constitute the field; organisations operating in the field must position themselves in relation to one or both of the programmes. In this chapter we sought to compare the experiences of providers on both programmes to provide a broader perspective on the field as a whole. The chapter throws a spotlight on the shifting balance between providers from different sectors operating in the employment services field and explores how TSOs have made sense of and navigated this changing landscape. A key finding has been that third sector providers are far from a homogeneous group: our research provided a more nuanced account of their different roles and experiences, highlighting their diversity and therefore challenged some of the normative assumptions about what the sector is and what it does, which continue to play out in some of the debates about the sector’s involvement in public services. The narrative of TSOs as passive victims of a corporatist agenda does nothing to capture the highly strategic and financially savvy operations of many in the field. While some were committed to serving their particular client base and sought ways to do this within a generalist focused market, others shifted their provision to meet these criteria while finding creative ways to continue to meet the needs of particular client groups. Nevertheless,

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differences between organisations, both inter-sectoral and within sector, were overridden to a considerable extent by some of the top-down, systemic pressures, which impacted on all organisations and a new and ‘unsettled’ environment, which organisations found themselves having to navigate. We have highlighted two key themes here (though they are not exhaustive): the new heightened environment of risk and the systemic shift towards a more generic mode of delivery. Financial risk appears to be considerably higher in the Work Programme than in previous programmes and in Work Choice, flowing from the more stringent model of PbR and the more ‘commercial’ rigours dictated by its commissioning in an austere environment. The need to demonstrate financial capacity and a variety of professional and commercial capacities has arguably impacted in a variable way on all organisations depending on their resources and capacity/expertise, but risk is also a complex matter of dealing with both upfront and downstream costs. Certainly it is unlikely to be as clear cut as the argument that all TSOs were being systematically ‘squeezed out’ of the market. The existence of the work choice programme offered some TSOs an opportunity to participate on a less risky basis. On the other hand, TSOs do seem to be more exposed to other forms of risk: threats to reputation and independence for instance; but again these are modulated by intrinsic organisational qualities such as culture, and the decisions made by boards of trustees, and so forth (see Considine et al, 2014 for a similar discussion). It is clear that within the field of employment services there has been a considerable shift away from specialist programmes towards programmes directed at most benefit recipients, meaning that many providers are expected to deliver much more generic services. Elsewhere we have drawn on field theory (Fligstein and Mcadam, 2012), arguing that these changes created an ‘episode of contention’ in the field of employment services; organisations first strove to understand the new environment and then adapt to it (Taylor et al, 2016). A number of adaptation strategies are visible in the empirical research and it does seem that sectoral differences come into play here: for example, it appears that private sector organisations are more likely to take commercial approaches, such as the purchase of other companies, while TSOs are more constrained and slower to adapt. However, TSOs are not a homogenous group and they respond in various ways to shifting policy agendas (Heins and Bennett, 2015). In the transition from specialist to generalist, some organisations have successfully adapted, others have not. In common with our general findings, it is not at all clear that these outcomes align clearly with sector, but it does seem more likely

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that TSOs struggle to adapt. For many, their focus is inevitably, and rightly, on a defined beneficiary group and it may be anathema to widen out their potential client groups in response to changes in the wider (quasi) market, and greater resistance from a variety of stakeholders to such realignments. Combined with a potential lack of ‘commercial savvy’, capacity and resources, this could suggest a slowness to react. By contrast we would suggest private sector organisations are more likely to follow the market without hesitation. Ultimately perhaps, those judged to have been ‘successful’ combine an outward-looking stance, a market-scanning mentality, and showed flexibility in how they meet the needs of beneficiaries. Of course this is by no means an easy balancing act. In the process of exploring the role of TSOs in delivering employment services, our chapter touches on a more fundamental question raised in the book about what the involvement of the third sector means for our understanding of the content, purpose and sustainability of public services more widely. We have demonstrated how the shifting role of TSOs in the employment services field signals the way in which wider policy agendas around the role of the state and the financing of public services play out for providers delivering on the ground. The shifting landscape has seen the rhetoric of the third sector’s added value swept aside by the push towards a rationalised contracting system that shifts financial risk from the state to large providers. This brings us, finally, to the implications for the third sector’s role in the future of contracted employment services, which, of course, largely depends on the policy developments that shape employment programmes over the coming years. While the Work Programme and Work Choice look set to continue, the 2015 autumn spending review suggested that a new specialist programme supporting those with health conditions and disabilities might be on the horizon (DWP, 2015). It remains to be seen how this programme will be structured, however its health and disability focus may offer opportunities to TSOs. On the other hand, the likely continuation of a model heavily weighted to PbR with constrained resources and large contract sizes, all of which result in increased financial risk for the provider, will penalise smaller third sector organisations unable to bear that risk. A continuation of the shift to generalist provision within a supply chain model also seems likely to significantly reduce the role for specialist providers in the field and here too some third sector organisations may struggle to remain in the market. More generally, what may counter these trends is if evaluations of the existing programmes find that generalist provision is failing to meet the needs of those at a substantial distance from the labour market.

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Rees, J., Whitworth, A. and Carter, E. (2014) ‘Support for all in the UK Work Programme? Differential payments, same old problem,’ Social Policy and Administration 48(2): 221-239. Stafford, B., Bell, S., Kornfield, R., Lam, K., Orr, L., Ashworth, K., Adelman, L., Davis, A., Hartfree, Y., Hill, K. and Greenberg, D. (2007) New Deal for Disabled People: Third synthesis report – key findings from the evaluation, Research Report No. 430, London: DWP Taylor, R., Rees, J. and Damm, C. (2016), ‘UK employment services: understanding provider strategies in a dynamic strategic action field’, Policy & Politics, published online September 2014 Third Sector Task Force (TSTF) (2009) ‘Welfare to Work reform: the third sector’s role: Final Report’, 4 February, London: Association of Chief Executives of Voluntary Organisations Toynbee, P. (2011) ‘This benefits bonanza is more big Serco than big society’, Guardian online, 4 April 2011. Vegeris, S., Vowden, K., Bertram, C., Davidson, R., Durante, L., Hudson, M., Husain, F., Mackinnon, K. and Smeaton, D. (2010) Jobseekers Regime and Flexible New Deal Evaluation: A report on qualitative research findings, Research Report No 706, London: DWP Woodfield, K. and Finch, H. (1999) New Deal for Lone Parents: Evaluation of the voluntary sector innovative schemes, Research Report No 89, London: Department for Social Security (now Department for Work and Pensions). Work and Pensions Select Committee (WPC) (2009) DWP’s Commissioning Strategy and the Flexible New Deal, HC 59-I, 25 Februrary, London: WPC. WPC (2010) Management and Administration of Contracted Employment Programmes, HC 101, 3 March, London: WPC. WPC (2011) Work Programme: providers and contracting arrangements, HC 718, 27 April, London: WPC.

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From development to delivery: personalisation and the third sector Jenny Harlock and Robin Miller

Introduction Personalisation emerged as a dominant policy narrative for the reform of adult social care in England in the early 2000s, and at the end of the New Labour period it looked set to become a major paradigm in other public policy areas too (Needham, 2011). While its influence outside social care has since waned somewhat, its principles and terminology remain at the heart of the new Care Act 2014 in England and within key healthcare reforms, such as the introduction of personal health budgets. Personalisation claims to offer increased choice and control for service users through the implementation of personal budgets, along with the provision of more personalised services, tailored around people’s particular circumstances. Third sector organisations (TSOs) were highly instrumental in the developments that led to personalisation as the key adult social care policy direction, and continue to play a major role in the shaping of practice and delivery on the ground. Yet personalisation is an ambiguous and controversial policy development, which has simultaneously been promoted and contested by those with very different interest and perspectives (Needham and Glasby, 2014). Depending on your persuasion, it can be seen as a mechanism to achieve an individualistic neo-liberal marketplace of public sector competition, or as an empowering process that enables disadvantaged people to collectively shape and influence the types and availability of services on offer (Beresford, 2014). This chapter examines the role and perspective(s) of the third sector in these debates. We trace the key role of the disability and service-user led movement in developing the principles of personalisation – particularly choice and control – in England. We then critically examine the designing of personalisation in government policy, linking personalisation to policies aimed at the expansion of the adult social care market. We

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go on to assess the implications and impacts of delivering personalisation for TSOs. We conclude with current challenges facing personalisation in adult social care and public services more generally, and what this means for the third sector and its relationships with the public sector. We address the wider themes of the book in the following ways: • We recognise the role of the third sector as an innovator or catalyst for a new model of public services provision – in this case personalisation – then adopted and implemented more widely across the public sector (‘looking out’). • We consider the implications of this new model of public service provision for third sector organisations delivering public services and their relationship with government (‘looking in’). • We acknowledge the role of the third sector as an advocate for people using and accessing public services, beyond that simply of service deliverer.

The third sector in social care Before we examine the role of the third sector in developing and delivering personalisation, it is important to place the third sector’s wider role in social care service delivery in context. Social care is the largest subsector of the third sector in terms of both the volume and breadth of services provided (Clark et al, 2012; Dickinson et al, 2012). There are approximately 31,100 third sector organisations working in social care (Clark et al, 2012: 54), and IFF Research (2007) estimates the share of the (total) £18 billion adult social care market provided by TSOs to be worth £7.1 billion. Services and activities provided by TSOs in adult social care range from specialist provision for people with complex needs and conditions, to preventative services and support such as transport and shopping services, gardening and home maintenance, befriending, day care, social activities and information and advice services (IFF, 2007). TSOs working in adult social care also often span boundaries with health and other welfare services for disabled and elderly adults, and with mental health, alcohol and drug services (Taylor, 2002). Brenton (1985) and Lewis (1995) have attributed the high proportion of third sector activity in adult social care to the fact that social care developed in a more incremental and piecemeal fashion across local authorities in the post-war period than other centrally administered areas of welfare. Thus, the third sector remained a primary source of

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formally organised provision for those in need of social care support early on (see also Chapter 2, this volume). Later, as dissatisfaction with top-down state services grew, a wave of new TSOs emerged in the 1970s and 1980s led by service users, disabled people, and (often marginalised) communities. This led to a vast division of TSOs advocating for a variety of different voices and offering alternative types of services and support (Brenton, 1985). These organisations played a significant role in promoting the early principles and ideals of what we now know as personalisation – greater choice, independence and autonomy over services and greater say in how they should be run. The number of TSOs in adult social care increased yet further following the 1990 NHS and Community Care Act (Kendall and Knapp, 1996), which forced a general ‘opening up’ (Stoker, 1999) of local government services to providers from the private and third sectors via competitive contracting. As a consequence, a significant proportion of the adult social care provision that was previously delivered by the public sector has now been transferred to the private and third sectors. More recently, moves towards preventative and community based provision in adult social care pledge a greater role for TSOs as sources of local support with greater community knowledge and networks (Taylor, 2002). Continuing mistrust of state agencies among service users, and reluctance and/or difficulties in accessing state provision can also partly explain the prolonged dominance of the third sector as an alternative source of social care support for the otherwise ‘hard to reach’ (Lewis, 1995). Such developments have resulted in the myriad of organisations that comprise the contemporary third sector in adult social care, encompassing a variety of backgrounds, roles and aims: as direct service providers, advocacy groups, policy and campaigning organisations, and those focused on building awareness and knowledge through research (although many TSOs will do more than one – or even all – of these activities (Clark et al, 2012). This diversity is reflected in the number of different business models of third sector organisation that exist in adult social care (IFF Research, 2007), combining practices from both the public, private and third sectors (Brandsen et al, 2005; Evers, 2005). There is an unusually high number of TSOs with a large proportion of service users in their governance structures, for example, user-led and peer support organisations (Brenton, 1985; IFF Research, 2007), and the recent interest by national government in spinning out of remaining public services into TSOs has seen the externalisation of the care management function and emergence of a greater number of mutual organisations (see Chapter 6, this volume).

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This diversity of business models, origins and aims among TSOs in adult social care has implications for how TSOs have interpreted and responded to personalisation, and it is to the role of the third sector in the development of the principles of personalisation – ‘looking out’ – that we now turn.

Developing personalisation principles Different schools of thought contributed to the development of personalisation in its current form. In this section we consider those that involved the third sector, but it is also important to remember that a significant influence in its adoption was the potential for service userheld budgets to facilitate the reduction of the delivery role of the public sector through the fostering of a more diverse marketplace in adult social services. This has been an aspiration of successive governments over the last three decades. In relation to the third sector role, the starting point that is often given is the Union of the Physically Impaired Against Segregation. This was a campaigning organisation inspired by the independent living movement in the USA, which was instrumental in the redefining of disability as a social rather than a physical issue in the UK (Gardner, 2014). This perspective emphasised the importance of enabling people with disabilities to take greater control of their lives as equal members of society, and underpinned the arguments for reform of state welfare promoted by many of the newly emerging TSOs in the 1970s and 1980s. In the 1980s, this perspective influenced the local authority in Hampshire to provide individual payments for people to move out of residential care into the community, with a third sector organisation (the Leonard Cheshire Foundation) administering the trust into which the payments were made. A similar arrangement was seen in Scotland with the Edinburgh Voluntary Organisation Council holding the funding in the Lothian area (Glasby and Littlechild, 2009). The British Council for Disabled People and the Spinal Injuries Association advocated for payments to be made direct to people with disabilities and be available throughout the country, and commissioned an influential research project comparing such models with more traditional arrangements (Zarb and Nadash, 1994). More broadly, groups within the selfadvocacy and survivor movements were pushing for greater rights for people with disabilities and/or mental health problems and the closure of long-stay institutions (Needham, 2011). A requirement for local authorities to provide cash instead of care for people aged between 18 and 65 was finally introduced through the

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Direct Payments Act 1996. Restrictions on purchasing options and low-take up among service users led to arguments for more flexible individualised budgets, and the opportunities were subsequently expanded to carers, disabled children, older people and mental health service users (Glendinning, 2008). The term ‘personalisation’ is generally attributed to the commentator Charles Leadbeater in 2004, as a descriptor of service models that seek to enable people who access public services to be seen as equal partners with professionals and service deliverers. Direct payments could be seen as one mechanism to promote such approaches, but in their original format could also be criticised, as the recipient still had to go through a professionallyled eligibility process before they received their ‘gift’ from the public sector. A ‘social innovation network’ led by the organisation In Control argued that the nature of this entitlement should be made clear at the beginning, rather than the end, of the process so that people had greater clarity about the resources that they could direct and control (Alakeson, 2014). In Control used pilot projects to produce evidence on the cost-effectiveness of such individualised budget models supported by resource allocation systems that could then be used to promote the approach to government (Poll et al, 2006; Needham, 2011). Individual budgets were then piloted nationally for a range of service user groups between 2005 and 2007 in 13 local authorities (see Glendinning et al, 2008). Early indications suggested that service user experiences were mixed, but mental health service users and physically and learning disabled adults were more positive about the initiative (Glendinning et al, 2008). However, attempts to integrate multiple funding streams from different government agencies into a single individual budget were seen to be problematic, thus the implementation shifted back to a focus on a personal budget for social care and more recently in healthcare.

Designing personalisation policy In large part, due to the lobbying and negotiating of the third sector, and in particular In Control, the UK government published Putting people first: A shared vision and commitment to the transformation of adult social care in 2007 (HM Government, 2007). This concordat officially established the concept of personalisation in public policy and was signed by the Department of Health, five other central government departments and representatives from the private and third sectors in the adult social care sector. It set out a new vision and model for the delivery and management of adult social care services in England based on a number of key principles:

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• investment in universal services that help people lead fuller lives as citizens, for example transport, leisure, and community facilities such as local libraries; • a shift away from acute, intensive and often more expensive services towards preventative and rehabilitative strategies; • an emphasis on building social capital through, for example, volunteering and the co-production of services (involving service users, their families and carers in the design and delivery of services); • self-directed support and the introduction of personal budgets for everyone eligible for publicly-funded adult social care in England (except in emergency circumstances). The vision was accompanied by a three-year social care reform grant totalling £520 million available to local authorities to make the necessary changes. Of the four elements of Putting people first, the introduction of personal budgets received the most political attention, and local authorities were expected to have 30% of service users operating personal budgets by 2011 (DoH, 2008). Personal budgets built on the earlier models of direct payments and individual budgets. As such, they aimed to offer increased choice, control and independence for service users by combining the principles of self-directed support – greater self-assessment, self-definition of needs and desired outcomes, and opportunity to determine how those needs should be met – with a transparent and upfront allocation of money. This was to be a radical departure from a social care system in which assessments, allocation of resources and care packages were hitherto dominated by care professionals. With appropriate support, service users were to play a greater role in decision making about how to make use of available resources to meet their needs,1 and service users were to have access to a more flexible and tailored range of goods and services to meet their support needs. A major underlying policy ambition of Putting people first was thus to significantly expand the adult social care market of (personalised) services (Carr and Robbins, 2009). Service users would drive this market via their personal budgets, particularly if taken as a direct payment, and local authorities would have an important role in shaping and influencing the market by continuing to strategically commission some services (National Market Development Forum, 2010). A crucial part of expanding the adult social care market was supporting the voluntary and community sector to respond and extend its provision by ‘providing different services, providing services differently, and supporting service user voice and choice’ (Harlock, 2010). How this

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could be achieved, and the range of support that TSOs could offer, was the key focus of a call for evidence from the Cabinet Office in 2009, led by Anne Macguire MP. These ambitions provoked different reactions from TSOs. The National Council for Voluntary Organisations (NCVO) emphasised the importance of the sector in providing niche or specialist services for people with very specific needs, and for people from minority groups who had been historically underserved by generic statutory agencies: ‘operating at the frontline, VCOs [voluntary and community organisations] are often highly aware of local need and can identify gaps in provision and meet the shortfalls’ (Harlock, 2009: 7). NCVO went on to suggest that strategic engagement with the third sector may help to address the lack of service diversity and specialisation in certain areas, while local public sector commissioners would have a key role in balancing the individual needs of service users and the wider, collective needs of the local population (Harlock, 2009). Other third sector bodies – most notably NAAPS and Community Catalysts – advocated the development of micro-markets of very small providers, including those operated by service users, to improve responsiveness and foster greater control and autonomy for service users (NAAPS/ DoH, 2009a; 2009b; DoH, 2010; Community Catalysts, 2011). Importantly for such smaller or niche TSOs, personalisation in the form of personal budgets presented a potential opportunity to expand and tailor their provision by promoting more flexible, smaller scale or one-to-one arrangements with service users, and removing barriers to entry to traditional public service delivery markets (NAAPS/DoH 2009a; Community Catalysts, 2011; Dickinson and Glasby, 2010; Lockwood, 2014). The importance of government’s role in building the capacity of providers to respond to personal budgets was meanwhile stressed strongly by the Commission on Personalisation, established by ACEVO with a cross-section of third sector leaders and policy makers in 2009 to explore ways of implementing the reforms (ACEVO, 2009). The Commission set out a number of roles and recommendations for local authorities, including support for third sector providers to transition to personal budgets, and establishing the conditions and regulatory frameworks that would enable TSOs and frontline professionals to deliver more personalised services (ACEVO, 2009: 5-6). The National Market Development Forum (NMDF) (comprised of influential cross-sector provider organisations) similarly focused on the marketshaping responsibilities of local authorities. Key roles identified were investing and developing local services that could respond to diverse

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needs, building market intelligence about available services, and facilitating (flexible) working conditions to enable different types of providers to emerge (such as User Led Organisations, Personal Assistants, and mutual/cooperative organisations) (NMDF, 2010). Third sector infrastructure organisations meanwhile were to be crucial to building local third sector capacity and awareness to engage with the personalisation reforms (Dayson, 2011). For some in the third sector then, personalisation appeared to promise the reform of orthodox public sector contracting models that had arguably stifled its ability to deliver flexible, responsive, person-centred care (Dickinson and Glasby, 2010). For such TSOs, personalisation presented an opportunity to provide services more closely aligned with user need, in line with organisational ethos and values. Yet there were also concerns among TSOs about abuse or exploitation of vulnerable service users in a largely unregulated social care market, as well as the availability of appropriate support for service users to understand, plan and purchase the support options available to them (Harlock, 2009). Age UK, for example, expressed concern about the potential (administrative) burdens of managing personal budgets for both service users and their carers, especially among the frail elderly or those with limited capacity (Orellana, 2010). Supporting service user (and carer) voice and choice were therefore identified as key roles for the third sector, to be delivered through brokerage, advocacy, advice and help with support planning (Ellis Paine et al, 2014). These latter roles in particular were to be led locally by user-led organisations (ULOs), staffed by service users themselves and pioneered by the disability and independent living movements as alternative forms of support. ULOs would be an important source of peer/mutual support for service users in managing their personal budgets, particularly if taken as a direct payment (HM Government, 2009), as well as (sometimes) providing direct services, thereby increasing the diversity of the adult social care market. The creation of a ULO in each local authority area was therefore an additional key target under the social care reform grant that accompanied Putting people first (DoH, 2008). Looking forwards: Think Local Act Personal Commitment to the principles of Putting people first was renewed and revamped by the Coalition government in the form of the Think Local Act Personal (TLAP) partnership in 2010 (see www. thinklocalactpersonal.org.uk), which brought together an expanded cross-sectorial group of organisations to take forward personalisation.

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This includes TSOs, which undertake the range of functions outlined in the earlier section – representation, delivery and service/thought development. The TLAP partnership has continued the emphasis on market diversity and stressed the importance of local community development, including the voluntary and community sector, to deliver on this ambition (see also the Open Public Services White Paper: HM Government, 2011). However, a series of challenges face the current TLAP partnership. The shift to preventative services, community-based provision, and co-productive approaches to support planning and delivery under Putting people first have been recognised by the TLAP partnership as particularly challenging areas to implement, substantiating the early reservations of the Association of Directors of Adult Social Services (ADASS) that targets on these areas were the least likely to be achieved (ADASS, 2009). Meanwhile, surveys undertaken by ADASS and TLAP – the Personal Budgets Outcomes and Evaluation Tool (POET) Survey – in 2011 and 2013 have highlighted concerns about the implementation of personal budgets. ADASS (2011), for example, found that while personal budget numbers doubled from 2010 to 2011 to almost 340,000 (35% of eligible service users and carers), nearly all of the 2010–11 increase came in the form of council-managed budgets. The POET Survey, in turn, has raised concerns that the high numbers of council-managed budgets being implemented are preventing real choice and control for service users, with councils paying only lip service to these principles (TLAP, 2011; 2013). The key focus for TLAP has thus been to identify and address some of the barriers to implementation of personalisation. To this end it has published a series of milestones collectively called Making it real, designed to support social care agencies from all sectors progress with implementation of personalisation (see TLAP, 2016), and a Personalisation action plan (TLAP, 2014), along with other resources. A personalisation summit held in 2013 with the (Liberal Democrat) Care Services Minister, Norman Lamb MP, agreed the renewal of the TLAP partnership from 2014 until 2017 to continue to steer personalisation nationally, and personalisation has recently been ratified in statute in the Care Act 2014. Yet the Coalition government, on the whole, remained at a distance from further policy development, with the TLAP partnership located at arms length from government and with significantly reduced funding. The continued ‘hands off’ approach by government, combined with severe public sector financial restraint, has led some commentators to question if the momentum of policy appears to weakening (Beresford, 2014; also Carr, 2014). It is in the

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context of such challenges that we turn in the following section to consider what the impacts of personalisation have been on the third sector – ‘looking in’, as the sector is increasingly expected to deliver the personalisation agenda.

Delivering personalisation in practice Grasping the precise extent and nature of the impact of personalisation on the third sector is a significant undertaking (Dickinson and Glasby, 2010). Existing research has, inevitably, tended to focus on service users’ perspectives and experiences of personalisation, particularly personal budgets (see for example, Glendinning et al, 2008; Rabiee et al, 2009). The evidence base regarding the impact of personalisation on the third sector is, by comparison, relatively limited, with published literature and research being mainly speculative or small-scale in nature. In addition, as discussed above, local authorities are at widely varying stages of implementation of the reforms (ADASS, 2011; TLAP, 2011), and personalisation is likely to be interpreted differently in practice by local authorities. This will inevitably have implications for how TSOs experience the reforms. There is evidence, meanwhile, that TSOs themselves differ considerably in their awareness and interpretation of personalisation, depending on their particular role(s), goal(s), and capacity (Bartlett and Leadbeater, 2008; Harlock, 2010; Dayson, 2011). This mixed picture was still present in 2013 in the case study local authority investigated by Donovan et al (2013). Forty-two per cent of their third sector respondents thought that their boards ‘lacked a clear understanding’, and 72% reported that they had not yet developed a plan for organisational change to enable them to adapt to the potential challenges. Recently, in relation to carers’ services, Miller and Larkin (2013) found that although the TSOs interviewed were aware of personalisation, they disagreed on what personalisation means in practice for their organisations and how much it is actually changing the social care system in which they operated. Notwithstanding the varied pace of implementation among local authorities and mixed reactions among TSOs, responding to the challenges and opportunities posed by personalisation has been a major focus for those working in adult social care. Back office systems and processes, business models and marketing, and staff working patterns and styles, are some of the areas identified as requiring significant change by providers, while supporting service users to plan, access support and manage personal budgets is said to be crucial to help service

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users successfully navigate an expanded market of services (ACEVO, 2009; Harlock, 2009; SCIE/VODG, 2009). Managing individual purchasing arrangements A particular challenge for the third sector concerns the intended shift away from block or wholesale contracting with local authorities towards individual purchasing with service users, and possible impacts on service continuity and financial stability during the transition (Harlock, 2009; Needham, 2010). This will have particular implications for providers that rely on such wholesale contracts or service user referrals from adult social care departments for their core business. Other organisations have been fearful of issues of late or non-payment by personal budget holders (Glendinning et al, 2008), how to approach debt recovery from service users (Wilberforce et al, 2012), and services being used intermittently, irregularly or disrupted at short notice (for example, if a client is admitted to hospital) (ESRC, 2009). Adapting back office systems and administrative processes to handle multiple, individual payment arrangements, and the possibility of increased transactional costs (resources expended in the direct procurement and management of services) have also been key areas of operational concern for some providers. The most commonly identified costs relate to managing accounts and processing payments, with additional invoicing and associated administration felt to be a potential burden for some smaller providers (Wilberforce et al, 2012). Sanderson and Miller (2014) have also pointed out that there are implications for financial accountability with personal or provider managed budgets: TSOs that are holding personal budgets on behalf of service recipients have to maintain a ring fence around this funding and be able to account to the individual (rather than to the local authority) for how it has been used. How far there have been disruptions to existing relationships with local authorities as a result of personalisation is unclear however. In many cases contracts have continued to be operated between service providers and local authorities through managed budgets or by negotiating ‘spot contracts’ with providers, where a block contractual arrangement is effectively divided up into a number of individual support packages (ADASS, 2011; Wilberforce et al, 2012). This is an approach that local authorities may adopt to avoid destabilising an organisation or the local market, thereby protecting service continuity and sustainability. A small number of providers have been able to access financial and non-financial support from commissioners to assist them

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in the change process, such as training in accountancy, grants to develop technology systems to assist with administration, or even taking on payroll functions for providers; yet on the whole, grants programmes that support back office functions are rare (Dayson, 2011). Moreover, as local authorities experience significant cuts in budgets, such support – where it is offered – is likely to be dismantled (Wilberforce et al, 2012). Moving from ‘wholesale’ to ‘retail’ The intended shift towards personal budgets has implied the adoption of a ‘retail’ rather than ‘wholesale’ business model among providers, as service users begin to commission directly from TSOs (Needham, 2010). Dayson (2011) highlights the challenge for TSOs in adopting different marketing strategies to reflect the shift in purchasing decisions to individuals, their families and support brokers, and the likely need for greater resources and investment into such marketing activities. Costing and pricing models need to adapt and reflect the new purchase price of services to individuals – taking account of any possible ebbs and flow in usage – and the value for money of services vis-à-vis other providers (Dayson, 2011). Providers might also expect to see changes in demand regarding the nature and type of support from users and they need to respond accordingly with a different service ‘offer’. Evidence from Baxter et al (2008), for example, suggested early on that there may be less demand for residential care and day centres and an increase in demand for personal assistants, home care and types of informal support (such as gardening and shopping). User-led, mutual and micro-organisations that offer alternative forms of support delivery (for example, by other service users) may expect to play a greater role as personal budgets are rolled out and the principles of choice and control become more embedded in practice; and some TSOs are focusing on helping service users with support planning and budget management and accessing services through brokerage (Ellis Paine et al, 2014). How far demand for services is changing as a result of personalisation remains unclear, however. There is evidence to suggest that changes in demand for services may be gradual rather than dramatic as budget holders take time to build their confidence and become accustomed to developing their support plans (Baxter et al, 2008). Local authorities also continue to significantly shape and influence local service provision through their strategic investment, and/or through the continuation of existing service agreements with providers as they implement personalisation in different ways. In addition, demographic changes mean that there continues to be a need for certain services such

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as residential and nursing care. In terms of the third sector, Miller and Larkin (2013) point out that appetite to change in response to personalisation and the various risks associated with it will vary across organisations: for example, some of the trustee boards in their study were uncomfortable spending charitable funds on developing marketing material and setting up services that may not then be bought by sufficient numbers of individuals. Other factors such as organisational capacity, access to reserves, the nature of existing relationships with service users and local authorities, availability of support, and prior experience of direct payments, are said to further influence organisations’ willingness and capability to engage with the personalisation reforms (Wilberforce et al, 2012). Workforce and staffing Although the intended shift towards personal budgets has been met with trepidation by some TSOs, the provision of more user-focused, personalised and responsive services has been met with far less contention. Providing services in this way has significant implications for workforce organisation and staff, however, and for some providers, personalisation potentially means a shift away from forms of provision that have traditionally been resource-led or driven by local authority preferences. To develop user-focused and responsive services, providers have been advised to engage in effective dialogue with users from the start when planning and designing services, and capture learning to help improve and transform existing services (SCIE/VODG, 2009; Sanderson and Miller, 2014). It has been argued that being userfocused is an ongoing process and requires organisations to continually listen and revise their services in response to changes in users’ needs and goals. Integrating tools and systems such as user-led reviews and evaluations can help organisations to better understand and assess how they are meeting users’ needs and persistently feed this back into the service (Sanderson and Miller, 2014). Care in particular is an area where personal relationships, trust and working with the user to understand their specific circumstances and needs is common (Moriarty et al, 2014). This means that recruitment of staff might depend not only on holding the necessary skills and experience, but also the right values, with the necessary flexibility in organisational systems and processes in order to facilitate these ways of working (Pile, 2014; Hart, 2014). Personalisation has the potential to require changes to staff working patterns, as users may require support at different times, particularly in areas such as home help and personal care where they may request

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support later at night or earlier in the morning. In some cases, frontline staff may need retraining to develop person-centred skills and approaches where previously their roles have been task-oriented. For example, managers within Cunningham and Nickson’s (2010) in-depth study of three TSOs anticipated considerable changes to their workforce management approaches. These included introducing new recruitment practices in which the skills and experience of staff members were more closely tailored to the needs and interests of the individuals receiving support, more flexible working hours, new performance management frameworks centred on the satisfaction of the service recipient, and additional training to enable a different culture in respect of risk taking by individuals. Personalisation has also been expected to give rise to a greater employment of personal assistants and alternative models of employment, for example, through the use of pooled budgets (Lockwood, 2014). This has implications for service users as they take on the responsibilities of becoming employers, and for staff as they negotiate new terms and conditions of employment. In response, some social care provider managers have reported concerns regarding the poaching of their trained staff by personal budget recipients who have fewer overheads and more flexibility regarding pay scales (Baxter et al, 2011). However, there may be other trade-offs with such employment models, such as a reduction in flexible working hours (for example, less opportunity to change shifts with colleagues), and the loss of team support. Finally, in the face of uncertain demand for services, there are concerns that some providers will move staff onto zero hours or minimum contracts; similarly, there are concerns that if commissioners use personalisation as a means to reduce the hourly rates of care that they purchase then this will lead to TSOs having to reduce the pay of their staff (Cunningham, 2011). How widely these risks will be experienced in reality remains to be seen, however.

Conclusion: debating impact The study of the role of the third sector in promoting new models of public service provision has been referred to as ‘looking out’ in the introduction to this volume, and the personalisation journey provides a remarkable example. Yet, the design of personalisation in government policy has taken on a specific form. Choice has been firmly interpreted as consumer choice, expressed and exercised in a marketplace of services through personal budgets. Within this new system, a key challenge for the third sector is how best to implement

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personalisation, as responsibility for delivery is pushed back onto the third sector (‘looking in’). Some commentators have recently questioned whether the current dominant conception of personalisation as personal budgets is the best – or only – way to facilitate the increased independence, control and autonomy for service users envisaged by early movements (Ferguson, 2007; Daly, 2012; Lymbery, 2012). These commentators argue that there needs to be at least equal attention to the importance of actively working with service users to co-produce support plans that featured in early conceptions of personalisation; meanwhile the promotion of alternative forms of (user-led) support has also been at the heart of recent work by the disability and independent living movement, alongside notions of citizenship, participation, and inclusion. Yet direct payments and personal budgets continue to attract the deep commitment of disability activists and others, and the enhanced independence and autonomy experienced by these groups is widely valued (Glasby and Littlechild, 2009; Needham and Glasby, 2014). There is, therefore, a concern among many disability and other user-led organisations to improve the implementation of personal budgets, particularly in a time of continued austerity. There are fears that budgets are being used as a screen for cost cutting, and that social services staff feel pressured to limit eligibility and process people through the system as quickly as possible without sufficient attention to their options (Duffy, 2014). Processes of resource allocation have therefore been subject to increasing attention and scrutiny (Duffy, 2011; Beresford, 2014). With the embodiment of its principles within the Care Act 2014, personalisation is likely to continue to shape national and local adult social care practice. Its adoption within other aspects of the public sector has been more hesitant; however, the introduction of personal budgets within the new system for children and young people with special needs, and the roll-out of personal health budgets (including a ‘right to have’ for people eligible for continuing healthcare funding), indicate that the current approach in adult social care will continue to influence the development of personalisation in other public service areas (Alakeson, 2014). Undoubtedly, these sectors will face similar difficulties in realising the principles of personalisation in practice, due to similar barriers of established cultures, financial pressures and system complexity. These implementation challenges are articulated within the TLAP Personalisation action plan: Another critical challenge is addressing the wide variation of people’s experience of personal budgets. While outcomes

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appear to be better for many people using them, it is clear that the process involved too often comes with delays, restrictions, disproportionate bureaucracy and confusion. It is also clear that some groups are not benefitting to the extent that they should, including older people and people with mental health needs. (TLAP, 2014: 22) These are challenges for the third sector as much as the public sector who commission them. Furthermore, it remains to be seen if those who are frustrated with the realities of personalisation will choose to stick with the concept as a rallying cry, or instead develop a new vision for how people accessing adult social care can be better supported. Of one thing we can be certain – the third sector will be at the heart of the debates. Note Service users could choose to manage their personal budget in a number of ways: as a direct cash payment, as a virtual budget, where the local authority continues to purchase and organise services for users, as an Individual Service Fund where a service provider holds the budget and delivers services as required by the individual, or alternatively, a trusted third party can be appointed to manage the budget on the user’s behalf. 1

References ACEVO (2009) Making it Personal: A social market revolution, The Interim Report of the Commission on Personalisation. Available at www.acevo. org/document.doc?id=240 (accessed 9 March 2015) Alakeson, V. (2014) “Where next for Personal Health Budgets?” in Needham, C. and Glasby, J. (eds) Debates in Personalisation: Bristol: Policy Press ADASS (Association of Directors of Adult Social Services) (2009) Putting People First: Measuring Progress, London: Local Government Association/ADASS ADASS (2011) ADASS Personal Budgets Survey 2011, The Results. Available at http://www.thinklocalactpersonal.org.uk/_library/ Resources/Personalisation/Personalisation_advice/2011/ADASS_ Survey_March_2011_Summary_Results__29_6_11.pdf (accessed 9 March 2015) Bartlett, J. and Leadbeater, C. (2008) Personal Budgets: the impact on the third sector. London: Demos

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Baxter, K., Wilberforce, M. and Glendinning, C. (2011) ‘Personal budgets and the workforce implications for social care providers: expectations and early experiences’, Social Policy and Society, 10(1): 55-65. Baxter, K., Glendinning, C., Clarke, S. and Greener, I. (2008) Domiciliary care agency responses to increased user choice, York: Social Policy Research Unit, University of York Beresford, P. (2014) Personalisation, Bristol: Policy Press Brandsen, T., van de Donk, W. and Putters, K. (2005) “Griffins or Chameleons? Hybridity as an Inevitable and Permanent Characteristic of the Third Sector”, International Journal of Public Administration, 28: 749-765 Brenton, M. (1985) The Voluntary Sector in British Social Services, London: Longman Carr, S. (2014) ‘Personalisation, participation and policy construction – a critique of influences and understandings’, in Beresford, P. (ed) Personalisation, Bristol: Policy Press Carr, S. and Robbins, D. (2009) Research briefing 20: The implementation of individual budget schemes in adult social care, London: Social Care Institute for Excellence Clark, J., Kane, D., Wilding, K., and Bass, P. (2012) The UK Civil Society Almanac, London: National Council for Voluntary Organisations Community Catalysts (2011) Enterprise for All. Available at http:// www.communitycatalysts.co.uk/wp-content/uploads/2011/09/ Enterprise-for-all.pdf (accessed 9 March 2015) Cunningham, I. and Nickson, D. (2010) Personalisation and its Implications for Work and Employment in the Voluntary Sector, Glasgow: University of Strathclyde. Available at http://strathprints.strath. ac.uk/30955/1/Personalisation_20Report_20Final_2015th_20Nov ember.pdf (accessed 9 March 2015) Cunningham, I. (2011) Employment conditions in the Scottish social care voluntary sector: impact of public funding constraints in the context of economic recession, Glasgow: Voluntary Sector Social Services Workforce Unit. Available at https://pure.strath.ac.uk/portal/files/7853826/Employ ment_20Conditions_20Report.pdf (accessed 11 March 2015) Daly, G. (2012) ‘Citizenship, choice and care: an examination of the promotion of choice in the provision of adult social care’, Research, Policy and Planning, 29(3): 179-198 Dayson, C. (2011) ‘The personalisation agenda: implications for organisational development and capacity building in the voluntary sector’, Voluntary Sector Review, 2 1): 97–105

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DH (Department of Health) (2008) Local authority circular LAC (DH) (2008)1: Transforming social care, London: DH DH (2010) A Vision for Adult Social Care: Capable Communities and Active Citizens, London: DH Dickinson, H., Allen, K., Alcock, P., Macmillan, R., Glasby, J. (2012) The Role of the Third Sector in Delivering Social Care, Scoping Review for the NIHR School for Social Care Research, TSRC/HSMC. Available at http://www.birmingham.ac.uk/generic/tsrc/documents/tsrc/ reports/external/SSCR-Scoping-Review-2-web.pdf (accessed 9 March 2015) Dickinson, H. and J. Glasby (2010) The personalisation agenda: Implications for the third sector, Third Sector Research Centre Working Paper 30, Birmingham: University of Birmingham Donovan, B., Gilbert, T., Moran, B., Stanley, S., Barnett, S. and Hocking, D. (2013) ‘Readiness of boards of trustees in non-profit and voluntary sector organisations to meet the adult care “personalisation agenda”: A case study of a single English county’, Journal of Social Work, DOI: 10.1177/1468017313476780 Duffy, S. (2011) Simplify the RAS, Centre for Welfare Reform. Available at http://www.centreforwelfarereform.org/library/by-az/simplifythe-ras.html (accessed 9 March 2015) Duffy, S. (2014) Personalisation was supposed to empower vulnerable citizens. It failed. Available at http://www.theguardian.com/publicleaders-network/2014/jan/30/personalisation-social-care-supportbureaucracy-service-failure (accessed 9 March 2015) Ellis Paine, A., Taylor, R., Needham, C., Littlechild, R. and Buckingham, H. (2014) Maximising older people’s use of personal budgets: Programme evaluation summary, Third Sector Research Centre Briefing Paper 128, Birmingham: University of Birmingham ESRC (2009) Impact of personal budgets on third sector providers of social care, ESRC Seminar Series: Mapping the Public Policy Landscape, Swindon: ESRC/ACEVO. Evers, A. (2005) ‘Mixed welfare systems and hybrid organizations: changes in the governance and provision of social services’, International Journal of Public Administration 28(9): 737-48 Ferguson, I. (2007) ‘Increasing User Choice or Privatizing Risk? The Antinomies of Personalization’, British Journal of Social Work 37: 387-403 Gardner, A. (2014) Personalisation in Social Work, London: Sage Glasby, J. and Littlechild, R. (2009) Direct Payments and Personal Budgets: Putting Personalisation into Practice, Bristol: The Policy Press

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Glendinning, C. (2008) ‘Increasing Choice and Control for Older and Disabled People: A Critical Review of New Developments in England’, Social Policy and Administration, 42(5): 451-469 Glendinning, C., Challis, D., Fernandez, J., Jacobs, S, Jones, K., Knapp, M., Manthorpe, J., Moran, N., Netten, A., Stevens, M. and M. Wilberforce (2008) Evaluation of the Individual Budgets Pilot Programme: Final Report, York: Social Policy Research Unit, University of York. Harlock, J. (2009) Personalisation: Rhetoric to Reality, London: National Council for Voluntary Organisations (NCVO) Harlock, J. (2010) ‘Personalisation: emerging implications for the voluntary and community sector’, Voluntary Sector Review 1(3): 371378 Hart, V. (2014) “A view from social work practice” in Needham, C. and Glasby, J. (eds.) Debates in Personalisation: Bristol: Policy Press HM Government (2007) Putting People First: A shared vision and commitment to the transformation of adult social care, London: HM Government HM Government (2009) Putting People First: Working together with userled organisations, London: Department of Health HM Government (2011) Open Public Services White Paper, Cm 8145, London: The Stationery Office IFF Research (2007) Third Sector Market Mapping, London: The Stationery Office Kendall, J. and Knapp. M. (1996) The Voluntary Sector in the UK, Manchester: Manchester University Press Leadbeater, C. (2004) Personalisation through participation: a new script for public services. London: Demos Lewis, J. (1995) The Voluntary Sector, the State and Social Work in Britain: the Charity Organisation Society/Family Welfare Association since 1869, Cheltenham: Edward Elgar Lockwood, S. (2014) ‘Beyond “being an employer”: Developing micro markets’, in Needham, C. and Glasby, J. (eds) Debates in Personalisation: Bristol: Policy Press Lymbery, M. (2012) ‘Social Work and Personalisation’, British Journal of Social Work, 42: 783-792 Miller, R. and Larkin, M. (2013) Personalisation: the beginning of a new dawn or the end of the road for third sector support for carers?,Third Sector Research Centre Working Paper 104, Birmingham: University of Birmingham. Moriarty, J., Manthorpe, J. and Cornes, M. (2014) ‘Skills social care workers need to support personalisation’, Social Care and Neurodisability, 5(2): 83-90

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National Market Development Forum (NMDF) (2010) National Market Development Forum Papers, available at http://www. thinklocalactpersonal.org.uk//_library/PPF/NCAS/NMDF_ Briefing_Paper_Merged.pdf accessed 9 March 2015 from NAAPS/DH (2009a) Supporting micro-market development: key messages for local authorities, London: DH NAAPS/DH (2009b) Supporting micro-market development: a concise, practical guide for local authorities, London: DH Needham, C. (2010) Commissioning for personalisation: From the fringes to the mainstream, London: Public Management and Policy Association Needham, C. (2011) Personalising Public Services, Understanding the personalisation narrative, Bristol: Policy Press Needham, C. and Glasby, J. (eds) (2014) Debates in Personalisation, Bristol: Policy Press. Orellana, K. (2010) Personalisation in Practice: Lessons from Experience. Making Personal Budgets, Support Planning and Brokerage Work for People in Later Life, London: Age UK Pile, H. (2014) ‘What about the workforce?’, in Needham, C. and Glasby, J. (eds.) Debates in Personalisation: Bristol: Policy Press Poll, C., Duffy, S., Hatton, C., Sanderson, H., and Routledge, M. (2006) A Report on In Control’s First Phase, 2003–2005, London: In Control Rabiee, P., Moran, N. and C. Glendinning (2009) ‘Individual Budgets: Lessons from Early Users’ Experiences’, British Journal of Social Work, 39: 918-935 Sanderson, H. and Miller, R. (2014) The individual service funds handbook: implementing personal budgets in provider organisations, London: Jessica Kingsley SCIE/VODG (2009) Personalisation briefing 13: Implications for voluntary sector providers, London: Social Care Institute for Excellence Stoker, G (1999) The new management of British local governance, London: Macmillan. Taylor, M. (2002) ‘Government, the third sector and the Ccontract culture: The UK experience so far’, in Ascoli, U. and Ranci, C. (eds) Dilemmas of the Welfare Mix, the New Structure of Welfare in an Era of Privatization, New York: Springer TLAP (2011) National Personal Budgets Survey 2011. Available at http://www.thinklocalactpersonal.org.uk/_library/Resources/ Personalisation/Personalisation_advice/2011/POET_surveys_ June_2011_-_EMBARGOED.pdf (accessed 9 March 2015).

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TLAP (2013) National Personal Budgets Survey 2013. Available at http:// www.thinklocalactpersonal.org.uk/_library/POETSummaryFINAL. pdf (accessed 9 March 2015) TLAP (2014) Personalisation Action Plan: Key activity underway in advance of the Care Bill. Available at http://www.thinklocalactpersonal.org. uk/_library/PersonalisationActionPlanFINAL.pdf (accessed 9 March 2015) TLAP (2016) Making it real. Available at: http://www. thinklocalactpersonal.org.uk/browse/mir/ (accessed March 2016). Wilberforce, M., Baxter, K. and Glendinning, C. (2012) ‘Efficiency, choice and control in social care commissioning’, Public Money & Management, 32(4): 249-256 Zarb, G. and Nadash, P. (1994) Cashing in on independence: comparing the costs and benefits of cash and services, London: BCODP

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ELEVEN

The changing role of housing associations David Mullins

Introduction Housing is perhaps the ideal field in which to explore the argument that something has changed in public services involving the replacement of monolithic, hierarchical public sector organisations with a wider range of agencies funded and regulated by government. This chapter draws on a series of Third Sector Research Centre (TSRC) studies (referenced throughout the chapter) to assess changing roles for housing associations and other housing TSOs involved in public housing services. Tensions between state, market and community drivers of hybridity are revealed, with underlying implications for the independence, funding, activities and potential to challenge state policies by TSOs. Rather than being ‘distant uncles’ of the third sector (Mullins, 2010: 3), and despite having developed a distinct organisational field, housing associations have been at the centre of recent changes in the funding, role and independence of the third sector. The market share of local authorities in the field of subsidised housing for low income groups in England has certainly declined from their zenith in 1979 when one in every three households rented housing from a local authority, to the present day when fewer than one in 12 is a council tenant. A large part of this change is accounted for by the growth of housing associations, non-profit distributing third sector bodies, who had a virtual monopoly of state capital subsidies for new housing from 1980 to 2010, and to whom over half of local authorities have now transferred their entire housing stock. Their market share has grown from one in 50 households in 1980 to one in 10 today.1 However, this neat depiction of a shift of housing from state monopoly providers to a third sector field is complicated by a number of factors. Not least a change in which most public housing subsidy now reaches low-income households through personal subsidies rather than capital subsidies. Housing benefit has been one of the fastest increasing parts of

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The third sector delivering public services

the welfare budget, now standing at £24 billion2 and a significant share of this has supported the growth of the private rented sector, which is rapidly becoming the main tenure for low-income households seeking accommodation. Moreover, as the housing association sector has grown so too have individual associations, with the largest now having over 120,000 homes3. This is much more than most councils ever had. The largest 20 associations now account for over 30% of the entire housing association sector stock and this share has gradually increased in recent years through a process of merger and consolidation at the larger end of the sector4 (see Tables 11.1 and 11.2). Are such large-scale nonprofit sector landlords any less monolithic or hierarchical than local authorities? The wider geographical dispersion of their stock suggests that they may be less responsive to local communities than were the municipal landlords. Table 11.1: Change in concentration of housing association stock ownership, 2002–07 (groups treated as single entities) 20 largest groups/HAs

50 largest groups/HAs

100 largest groups/HAs

200 largest groups/HAs

% of stock in ownership of each cohort 2002

26.3

45.7

64.5

85.5

2007

29.2

50.0

70.2

91.0

2007 excl. post-2002 transfer HAs

32.0

53.8

73.6

91.4

Source: Pawson and Sosenko, 2008, RSR data

Data on sector concentration of stock in the larger associations (Pawson and Sosenko, 2008) may be compared with wider work on ‘Tescoisation’ of the third sector by Backus and Clifford (2010). Some fields such as health have become more concentrated, while others, such as education, have become substantially less concentrated. ‘Tescoisation’ claims have not always been supported, for example, in the social care field where the largest organisations have not grown faster than medium-sized ones. In housing, the trend has been somewhere in between with the largest 20 housing associations being quite dominant, but their dominance has increased at a relatively slow rate in relation to the growth of the sector as a whole; and most organisations in the field continue to be small.5 Table 11.2 shows the size distribution of all ‘private registered providers’, most of which are housing associations, in 2014. Despite the dominance of a few large associations in stock ownership, a much

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The changing role of housing associations

larger number of smaller associations still predominate as the majority of organisations in the sector. Table 11.2: Stock distribution by size of private registered provider (PRP), 2014 All PRPs Size of RP

No. PRPs

Percentage of PRPs

No. Stock

Percentage of stock

0

149

9.5%

0

0%

1-5

72

4.6%

240

0%

6-25

382

24.3%

5,237

0.2%

26-100

367

23.4%

19,756

0.8%

101-250

128

8.2%

19,975

0.8%

251-999

147

9.4%

74,754

2.9%

1,000-2,500

75

4.8%

120,214

4.7%

2,501-10,000

178

11.3%

937,568

36.4%

Over 10,000

72

4.6%

1,396,847

54.3%

Source: Homes and Communities Agency, 2014

‘Distant uncles’ – history and evolution of housing associations With some notable exceptions (Kendall, 2003; Purkis, 2010) it is relatively unusual for the dramatic growth of the housing association sector over the past 30 years to be given much attention in general reviews of the third sector (but see housing chapters in Harris and Rochester, 2001 and Billis, 2010). TSRC work on housing has tracked the continued growth of the housing association sector and associated hybridisation as these organisations have moved from local and associational origins, through successive injections of low risk state funding followed by massive private loans to become ‘organic hybrids’ apparently fitting Billis’s (2010) description of a move from associational origins to a blurred public and private melange (Mullins, 2010; Mullins et al, 2013; Mullins and Jones 2015). Housing associations might be considered as the ‘distant uncles’ of the voluntary sector (Mullins, 2010: 3) with ‘battle scars’ and stories to tell about their long-term experience of ‘mainstreaming’ (Kendall, 2000), to which few in the wider third sector really listen. The historic and longer-term scaling up of the third sector in housing often seems to be a barrier rather than a conduit to sharing learning today on what happens when the third sector becomes the main arm of public

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The third sector delivering public services

service delivery in a particular field. Another factor highlighted by our analysis of the evolution and structure of the organisational field occupied by housing associations (DiMaggio and Powell, 1983; Scott, 1995, Mullins, 2010) is the way in which housing associations have developed their own institutions (trade bodies, regulators, specialist consultants and norms) and organisational field, interacting in only limited ways with the wider voluntary sector. One approach to understanding this lengthy history of this sector is to consider the ‘social origins’ of housing associations and following Salamon and Anheier (1998) to relate these origins to shifts in the welfare regime and societal responses to these (Mullins, 2000). Organisations established in response to one set of regime influences have proved adept at transforming to meet the circumstances in subsequent periods (Mullins, 2010). A long-run process of merger and amalgamation has seen organisations with very different origins and traditions incorporated into groups and streamlined entities (Pawson and Sosenko, 2008) with heritage being just one influence on contemporary values and strategies. Moreover, while history matters at sector level, a majority of the largest housing associations today are the products of recent history (Malpass, 2000), including the million homes imported through large-scale stock transfers from local authorities since 1988 (Pawson and Mullins, 2010). The ‘mainstreaming’ of third sector providers in housing occurred a decade or so before the process of third sector mainstreaming under New Labour described by Kendall (2000). The inflow of state resources into this part of the third sector started with the 1974 Housing Act and continues to this day, albeit on much less generous terms. Commercialisation processes were also earlier to strike at the heart of housing associations’ operations and purposes with the introduction of private finance after the 1988 Housing Act. Since 1974, housing associations have received £46 billion of public subsidy in the form of grants for new construction. This has provided HAs with a platform for hybridisation unique in the third sector in England. In 2014, the largest 336 HAs (each with over 1,000 properties) had assets valued at £13 billion, an annual turnover of £15.6 billion and a net surplus after tax of £2.35 billion (HCA, 2015). This asset and balance sheet strength has placed the sector in a qualitatively different place to other third sector organisations dependent on year on year revenue funding, grants and trading without this unique level of assets to borrow against. Not only do housing assets enable associations to grow to an extent independently of state finance by acting as cover for loans, but these assets also attract rental income and a further state subsidy in the

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The changing role of housing associations

form of housing benefit. This gives a high degree of certainty to cash flow (perhaps dented a little by recent welfare reforms ending direct payments to landlords for most non-elderly tenants). The absence of such an asset base and certain income stream makes it less clear what lessons other third sector organisations can learn from housing, apart from buying a few properties which, as we shall see below, some community led organisations have begun to do. Private loans now exceed historic subsidy in the sector at around £59 billion. This enabled dramatic reductions in public subsidy for new homes from almost 100% in the 1970s to under 20% today (HCA, 2014). This significant shift in resource dependencies required priority to be given to loan repayments and lenders’ covenants. Further change to reduce these dependencies has involved public bond issues and private placements to raise funding. By 2016 there had been 62 public bond issues of more than £10 million by English housing associations (Social Housing, January 2016, p 32). Access to this form of finance was creating incentives for building even larger scale professionalised organisations through merger. This has been more marked in the housing sector than almost any other part of the third sector. The finance director of an association party to the largest merger to date commented that the merger ‘opened a whole range of options from commercial paper to 30-year money and developing at scale would mean more joint ventures which may require a different kind of funding’. (Social Housing, January 2016, p 5). Credit ratings became important symbols of organisational success.

Looking inwards and outwards In the introduction to this book we distinguished between research which looks in on the third sector (understanding the impact of this new role, and how TSOs have changed), and that which looks out to the wider terrain of public services and the impact that the third sector has had on these services. The next two sections consider both kinds of research in relation to third sector housing organisations. Like many third sector researchers, my research gaze has predominantly looked inwards towards this part of the sector, tracking the relentless process of change as ever larger associations diversified into wider activities, becoming ever more entwined with government agendas even as resource dependencies were shifting away from state and towards more commercial sources of finance. A series of Delphi panel studies with senior actors within the sector starting just before the election of new Labour in 1997 and continuing to the middle

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The third sector delivering public services

of the Coalition term in 2013 has provided rich insights into these internal transformation processes (Mullins and Riseborough, 1997; 2000; Mullins, 2006; Mullins and Jones, 2015). Some processes that are well evidenced in the housing sector have included large scale sector restructuring through mergers and group structures and diversification of funding sources and activities in response to declining state subsidies (Rees et al, 2012). The adoption of systems-based approaches such as call centres, customer relationship management, asset management and procurement frameworks has displaced more personal approaches such as local estate management offices, tenant involvement in governance and decision making, and local partnership relationships in procurement. While most of these trends have been apparent since the panel studies began in 1996, there has been an increasing emphasis over time on more commercial and professionalised approaches (Mullins and Jones, 2015). However, research on housing can also contribute to the wider task of looking out to the wider terrain of public services and the impact of third sector involvement on the service delivery landscape. The Delphi panel studies place a major emphasis on key actor perceptions of how the world outside their organisations was changing and therefore how their organisations should adapt to change in the policy and wider societal landscape. Recent years have also seen the contested adoption of a variety of public policy agendas such as welfare conditionality, linkage between housing entitlements and ‘work readiness’ and the adoption of a new cross-subsidy system for new building, requiring rent increases to within 20% of market levels, less secure tenancies and sales of high value assets in expensive locations to enable more new homes to be built for the same amount of subsidy. Change accelerated after the 2015 election with the manifesto proposal for a right to buy for housing association tenants and rent reductions of 1% a year for four years (Mullins and Jones, 2015). This was swiftly followed by the ONS reclassification of housing associations as public bodies, undermining the long-standing advantage of association borrowing being off the public balance sheet. Speculation raged that this would be followed by a wider privatisation of associations, with some associations already pressing to disengage from state funding and regulation altogether.6 Further change was heralded by a policy shift to support starter homes for sale rather than affordable rented homes. The external changes to public services that have raised the greatest concerns among the panel in recent years have been welfare reforms, starting with the notorious ‘bedroom tax’, and continuing with

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The changing role of housing associations

universal credit and challenges implied for tenants’ personal banking arrangements and ability to manage household budgets, and thereby continue to support their landlords’ income stream. Other austerity measures adopted by the Coalition government led to reduced local government and third sector services in housing association neighbourhoods used by their tenants. The responses of associations to these external changes are discussed in the sections on diversification, independence and the state interface towards the end of this chapter.

Looking outwards by comparisons between fields A parallel strand of TSRC research has explored change in smaller and less formalised third sector housing organisations involved in renovating empty homes in England. Further TSRC research looked at housing related support services in Northern Ireland. Comparison with these fields has clarified the ways in which hybridisation has changed not just the ethos and purpose of housing associations but their core activities. Research on the impact of public funding for ‘unregistered’ community groups to purchase or repair and renovate empty homes for social use concluded that the contribution these organisations made was qualitatively different to that which would have been achieved by large housing associations (Mullins, 2010; Mullins et al, 2011). It is unlikely that large housing associations would have had the local knowledge or perseverance required to track down and negotiate with empty home owners, nor would their mode of organisation have enabled such a strong focus on training, apprenticeship and local employment impacts of the refurbishment programmes. More fundamentally, renovation and refurbishment of street properties, once the bread and butter of housing associations, is an activity that is hardly found in the sector to day. This is primarily because it is messy, hard to organise and supervise, is focused on people rather than systems and does not lend itself to larger scale procurement and delivery at scale in the way that new greenfield housebuilding does. It also generates lower financial returns than large scale housebuilding. Thus, within TSRC’s housing work programme we have seen the whole organisational life cycle of what happens when voluntary organisations become engaged in public policy, incorporate norms of large scale procurement and delivery at scale, and thereby grow out of the very tasks that they were set up to deliver. True to form, the voluntary sector then fills the gaps in public services as a new cohort of closer-to-the-ground community groups engages with the ‘wicked problem’ of empty homes at the street level. This process of

217

The third sector delivering public services

ecological succession to reoccupy the street property/empty homes niche is completed and new generation of housing projects begins to cohere into a ‘sector’ in much the same way as the ‘voluntary housing sector’ did in the 1960s and 1970s. Again, this has been aided by a public funding programme (Empty Homes Community Grants Programme), albeit less generous and much shorter-term than the Housing Association Grant and later ‘Mini-HAG’ programmes on which today’s mega-housing associations cut their teeth in the 1970s and 1980s. The weaning of this fledgling empty homes sector onto commercial loans and ‘social investment’ to supplement much less generous grant funding has been more immediate and brutal than the gradual transition experience of hybridisation experienced by housing associations. The ownership of assets, achieved by some in the sector through the ‘purchase and refurbish’ grant option, does put some organisations in a more sustainable position than annual grant-based TSOs with a reliable benefit backed ‘free income stream’. However, in comparison with housing associations, the asset cover for further long-term loan finance remains quite limited (Mullins and Sacranie, 2014; 2015). Another glimpse into alternative forms of third sector housing identity was provided by TSRC research undertaken in Northern Ireland on partnerships between housing associations and TSO partners specialising in support services such as hostels and day centres for homeless people, and mental health services for former long-stay hospital patients (Mullins and Acheson, 2014). The support organisations, funded under the Supporting People programme, which had remained ring-fenced in Northern Ireland unlike England, were found to have enacted different forms of hybridity with a stronger emphasis on third sector than on market and state drivers compared to their housing association partners. In one case, a TSO in the homelessness field harnessed its charitable and social mission identity to secure resource transfers for additional services such as gym and leisure facilities for residents, funded from a corporate social responsibility income. Additional projects were sometimes staffed by volunteers recruited from across Europe in response to the social mission of the TSO. Local volunteers were involved in fundraising and local partners were also involved in expanding support services available to residents. This TSO consciously harnessed its identity as ‘working with ... the poorest of the poor, so people who may be other homeless providers would struggle to work with’. Far from being a historic ‘principal ownership‘ (Billis, 2010) that has been eroded over time through compromises with state and market, we interpreted these identities

218

The changing role of housing associations

as actively constructed and strategically deployed to contest state or market dominance (Mullins and Acheson, 2014).

Diversification While the comparison with empty homes community projects highlights some of the activities that housing associations have abandoned in the course of their transition into the mainstream and their hybridisation towards both state and market, other strands of the TSRC housing research programme were more focused on the new activities that associations have been taking on. It could be argued that diversification is another dimension of change through which the boundaries of third sector organisations have become blurred with field and industry identities. Housing association turnover from activities other than social housing has shown continuous growth over recent years as revealed by global accounts published by the regulator for the largest 336 associations who account for 95% of housing stock. The provision of housing for rent is the main activity for the majority of housing associations. 2.6 million general needs homes were owned by housing associations in 2014 with a turnover of just over £13 billion and an operating surplus of £3.9 billion (HCA, 2015). Using global accounts data, diversification is represented by four main types of activities other than social rent: 1. first tranches on shared ownership sales; 2. other social housing; 3. non-social housing sales; 4. non-social housing other. These activities not only enabled a wider range of housing needs to be met and more mixed customer base to develop, but income from sales began to constitute an important income stream in its own right, providing the potential to cross-subsidise housing for rent, particularly in periods of rising property prices. As Figure 11.1 shows, income from non-social housing activities has been increasing in recent years in three out of the four categories (with other social housing being the only area of reduction). However, the income from all four areas together (£2.3 billion) is equivalent to only about 17.5% of social rent income. Moreover, the surpluses from all four areas total is just £220 million or just 6% of the social rent surplus.

219

The third sector delivering public services Figure 11.1: Income by other activities

3000 Other income (£m)

2500 724

639

259

231

180

1000

757

722

814

500

775

795

600

2014

2013

2012

2000 1500

604

0 First tranche shared ownership sales

Other social housing

Non-social housing sales

Non-social housing other

Source: Homes and Communities Agency, 2015

Other social housing activities are actually shown as making a loss, which could account for their reduced scale between 2012 and 2014. Recent diversification has also focused on activities known in the sector as ‘community investment’. The roots of community investment can be traced back to the 1990s when there was a recognition of the need for ‘housing plus’ to enable housing organisations to tackle the social exclusion of their residents (Clapham and Evans, 1998). An initial regulatory backlash sought to restrict the extent of non-core activities (Housing Corporation, 1999) but this was subsequently softened (Housing Corporation, 2000). Later stock transfer landlords were positively encouraged through stock transfer guidance to attend to the wider wellbeing, employment and training needs of their residents in order to support the policy mantra of the time to build ‘sustainable communities’ (ODPM, 2003). Many housing associations have longstanding commitments to wider activities to support their residents and communities ‘reflecting the different values and purposes of the founders and supporters of each association’ (Mullins et al, 2001: 1718). In 2006-07 the NHF conducted a first audit of neighbourhood services and facilities provided by housing associations to uncover the scale and scope of housing associations activity beyond housing (NHF, 2008). This study was a significant landmark in quantifying a previously uncertain area of activity that is often seen as close to the values base of housing associations as independent social purpose organisations (Mullins and Riseborough, 2000). The audit was important for third sector studies because it provided a set of definitions for the types of

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The changing role of housing associations

community activities housing associations are involved in and a basis for ongoing comparisons within the sector and potentially with other third sector organisations providing similar services. It provided a useful classification of the types of community investment activities the sector is engaged in (Table 11.3 below) and the relative scale of different types of activity (Table 11.4 below). A second audit was conducted in 2011 (NHF, 2012). Pritchard-Wilkes (2014) has compared activities common to the two audits and shown the apparent rise in community investment by housing associations in a time of austerity. Table 11.3: Initiatives contained within each of the neighbourhood services categories Category

Example of project areas

Creating better places to live

Energy efficient measures, caretakers, environmental improvements, handyperson schemes

Safer, stronger communities

Tackling antisocial behaviour, community events, youth activities, community development and involvement

Promoting independence

Tenancy and pre-tenancy support, welfare and benefits advice, fuel poverty initiatives and community finance schemes

Health and wellbeing

Older people’s health and wellbeing services, adaptations, mental health initiatives, family intervention work and healthy eating initiatives

Learning and skills

Parenting skills, childcare provision, capacity building, advice and guidance, confidence building/independent living and foyers

Jobs and training

Job search, youth enterprise projects, local employment initiatives, building trade skills, voluntary work placements and life skills

Source: Pritchard-Wilkes, 2014, based on Building futures: Neighbourhood audit, NHF, 2008; 2012.

While there were some inconsistencies in sample and methodology between the two audits, Table 11.4 shows increases in investment by HAs themselves and in leveraged investment from partners. The data also indicate increases in staff projects and beneficiaries. This appears to support the view of the NHF Chief Executive quoted at the start of the audit report that: ‘Times are tough but housing associations are still investing in people and places – over half a billion pounds in 2010–11. Why? Precisely because times are tough’ (NHF, 2012: 5).

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The third sector delivering public services Table 11.4: Investment to deliver neighbourhood services to improve residents’ lives Neighbourhood services

2006–07 (millions)

Initiatives to improve the lives and wellbeing of residents and their neighbourhoods

2010–11 (millions)

Total investment

£365

Total investment

£746.5

Housing organisations

£242

Housing organisations

£529.5

External funding

£123

External funding

£217

Source: Pritchard- Wilkes 2014, based on Building futures: Neighbourhood audit, NHF 2008; 2012.

However, reasons for such diversification are difficult to infer from the data themselves, but may be considered in relation to two competing drivers. Social drivers suggest that associations have diversified for mission-based reasons with the impact of austerity and welfare reform on their tenants being the latest such reason. Commercial drivers suggest that the underlying reasons relate more to the business strategy of associations. Diversification into market rent and shared ownership products lends itself to this explanation, particularly as it can be seen as a response to declining grant rates and the imposed need to crosssubsidise the development of new social rented housing. Community investment activities may be subject to similarly mixed motives. In some associations an attempt is made to balance commercial and social return by measuring the social value of investment (Mulgan, 2010). Such calculation is sometimes argued to provide a basis for making decisions between investing in housing or in community projects. The need for associations to undertake such calculations may be seen as an indication of the extent to which community investment is now core business (Wilkes and Mullins, 2012). In 2011 a TSRC think piece reviewed the history and rationale for community investment. It explored the different approaches taken by housing associations and considered whether this leads to community empowerment (Mullins, 2011). Four ideal-typical approaches to investment decisions were identified based on market, state and community drivers of housing association strategies (see Figure 11.2). Table 11.5 summarises the four main options emerging as strategy based, relationship based, contract based, or partnership based.

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The changing role of housing associations Table 11.5: Influences on housing association Community Investment 1. Strategy based

CSR becomes the corporate planning framework and priorities for social and community investment activities are set and monitored corporately.

2. Local relationship based

Priorities are set locally by local managers in partnership with residents and local community organisations.

3. Contract based

Priorities are set externally by contracts won from state (and local state) who are seen has having the legitimacy to make these decisions.

4. Partnership based

Priorities are negotiated externally through partnerships with other social actors (this is a strong theme for NHF and is evidenced in the NHF audit by the leverage of partner contributions).

Source: Based on Mullins and Sacranie, 2009, following Gruis, 2008; Evers and Laville, 2004 and Brandsen et al, 2005

Figure 11.2: State, market and community influences on Community Investment

STATE

4. Partnership based

3. Contract based

2. Local relationship based

1. Strategy based

SOCIETY

MARKET

Source: Based on Mullins and Sacranie, 2009, following Gruis, 2008; Evers and Laville, 2004 and Brandsen et al, 2005

Mullins (2011) concluded that local relationship and partnership approaches are more likely to achieve community empowerment than either contract based or corporate strategy driven approaches. This is because the former pay closer attention to civil society and local community links and generate the trust and sensitivity necessary to translate investment into empowerment.

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Independence and the state interface Housing associations’ experiences of becoming the main providers in a public service field is of considerable relevance to other voluntary organisations, not least in relation to implications for their independence. Purkis (2010) has argued that involvement in mass service delivery has led to a withering away of core characteristics of housing associations as voluntary organisations: independence, relationships with users and communities, campaigning and voluntarism. In particular, he drew attention to the changing character of large associations which ‘have become commercial in character and lost their civil society heart beat’ (Purkis, 2010: 14). Our most recent Delphi panel study in 2013–14 has highlighted the continued contestation of ideas of independence despite extensive incorporation of many aspects of state regulation, policy and even ideology (Mullins and Jones, 2015). As Purkis noted in 2010, campaigning against policies that appear hostile to the traditional mission of social housing has not been a very marked feature of larger housing associations. However, recent state policy towards social housing and its users has become increasingly detrimental to the underlying social purposes of many housing associations. Contentious policies include the National Affordable Housing Programme, welfare reform and a ‘creeping conditionality’ in which social housing is seen as a benefit that has to be earned rather than a right. These reforms have rendered social housing less affordable, less secure and less of a buffer to the wider precariousness low-income households face in other areas of their lives such as the labour market or as new migrants. ‘What has changed is that the sector is now saying social housing is a treat and there is talk of conditionality – both access and behaviour within social housing on the basis of deserving it.’ (Case 21) Some panel members appear to support the underlying discourse of the need to break cultures of welfare dependency and to use social housing as a tool of behaviour modification: ‘… For me we need to be changing the way we work with that low income group … we should be setting some pretty challenging targets about encouraging as many as possible to achieve levels of personal financial independence ...’ (Case 12)

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However, other organisations were keen to avoid implication in policies such as conditionality and sanctions and were looking for a more campaigning rather than a more commercial edge: ‘The 2033 NATFED vision (NHF, 2014) – makes me a good estate agent!! The heart and soul of the movement is not there – it doesn’t talk about poverty, homelessness, refugees etc. …We need to keep values that are wider than housing about need, poverty. We’re going back to Cathy Come Home.’ (Case 16) This trend is exemplified by another organisation’s development of a social justice strand in its organisational strategies: ‘We are committed to poverty and inequality reduction, this asks us searching questions in relation to rent policy… The time was right after the crisis in 2008 ... people were hurt ... the eventual government response was not really about social justice. Social justice was the thing we needed to do now. It’s not a project it’s a way of life … it’s the stuff that we do every day.’ (Case 26) Associations are encouraged to ‘do more with less’ by a funding system that sees grant as a minority top-up sum (15-20% of scheme costs) to internally generated resources. Debate concerns the limits to this process, balancing asset gearing and risk and the ability to use assets owned by independent organisations not wishing to use them for new building on the terms now available. This battle to harness historic public subsidy to minimise current subsidy levels per property is at the forefront of the debate over the independence of housing associations from the state: ‘We are wrong to deny that we take a massive amount from the public purse and we still beg for grant. Unless we are prepared to buy ourselves out of grant we need to be realistic and there’s still something historically good for me to be an arm of public policy for the good of all.’ (Case 16)

The recent past and future Under five years of the Coalition government, the housing association sector continued to grow, albeit at a rather slower rate than in previous decades (HCA, 2014). This was partly as a result of the drying up of

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the stock transfer programme and a small-scale return to new municipal housing investment. It was mostly the result of capital spending on social rental housing being a big loser in austerity-driven public spending settlements (HCA, 2014: 6-7). The continued policy choice for low income renters and even homeless households accepted by local authorities was for private landlordism despite concerns at the escalating housing benefit budget and economic arguments that capital subsidy for social rented housing would be more rational. Moreover, the focus of most new housing policies was to attempt to revive the flagging home ownership sector through Help to Buy, the planning system and heroic statements of targets to restore housing supply to address the yawning gap between household formation and new housing starts. But how were housing associations affected by the wider approaches of the Coalition government towards the third sector? As we have seen earlier in the book, promotion of the Big Society and localism concepts was confined to the first few years of the Coalition. While of some help to the fledgling community-led housing sector through measures such as the empty homes programme described earlier in this chapter and neighbourhood planning, these agendas barely touched the activities of mainstream housing associations. Despite social housing being allocated an entire chapter in the Localism Act 2011, there were no measures to promote greater local control or participation in housing associations by communities. Indeed the ‘right to manage’ remains confined to local authority tenants. Instead, the Localism Act 2011 provisions for social housing were mainly concerned with policies to restrict access to local housing registers, increase discretionary conditions for access to social housing and deem private renting a reasonable offer to homeless households regardless of their preferences (Mullins, 2012). The Open Public Services White Paper (HM Government, 2010), which initially supported third sector involvement but on the whole extended centralised commissioning and large-scale procurement to private sector-led ‘supply chains’, again was only marginally relevant to housing associations. Procurement of new social housing had been confined to a small group of large-scale housing association ‘investment partners’ for many years. Although in line with open public service principles, private profit distributing companies were eligible for direct receipt of grant from 2008, only a small percentage of the programme went to anyone other than housing associations. By 2014 there were 27 for profit providers registered with the Homes and Communities Agency with just over 550 homes in management – over half of which were shared ownership properties.

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Housing association diversification into other activities might be seen as a consequence of open public services, with some notable acquisitions of leisure centres, housing advice services, furniture recycling schemes, even libraries and museums that had lost local authority funding and which would otherwise have gone under. However, it could equally be argued that large-scale procurement, prime contracting, and supply chain arrangements were not particularly conducive to housing association engagement for non-core services in which large-scale investment, associated risk and possibly low returns, as a result of cut throat competition for contracts, could not easily be justified to their boards. Indeed, there is evidence that housing association involvement in employment and training activities was reconfigured by the advent of the Work Programme. Significant previous involvement in the Future Jobs Fund and locally-contracted employment and training projects was not replicated in the Work Programme, despite considerable preparatory work by the National Housing Federation. In the period after the 2015 election there was a further period of re-alignment of public service delivery within the broad parameters of managing the national debt and reducing public borrowing. Housing associations remained in principle relatively attractive partners for government because of their exclusion from public borrowing and ability to deliver housing at low cost to the taxpayer to bridge the yawning gap between housing needs and supply. However, the mood appeared to shift after the election with ONS declaring associations to be public bodies, and with ministers apparently disenchanted with lack of delivery on new homes, deciding to focus much more exclusively on home ownership. Planning policies that had previously allowed local authorities to negotiate a proportion of affordable rented housing as part of new housing developments were weakened in favour of incentives for housebuilders to provide more ‘starter homes’ for sale. Within the rented sector, the case still needs to be accepted that better long-term value for money will come from capital subsidy and relatively low rents for social housing, rather than personal subsidy in which there is little link between public investment and the quality and cost of the housing secured. The hybrid financial model and potential for cross subsidy within housing associations, whereby long-term capital investment is recycled into new provision and commercial surpluses from housing for sale, shared ownership and market rent, which can lower the cost of social rented homes, may remain attractive to politicians. However, as recent times have seen, there is a danger that over-exploitation of these advantages to extract benefits for the tax payer at the expense of

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organisational independence and mission, and the interests of existing tenants, could lead to withdrawal of associations from investment partnerships with the state. Similarly, there are dangers that large housing associations taking too independent a line to pursue balance sheet strength at the expense of social purposes will continue to lose the trust of politicians and the public, leading to the traumas currently being experienced by the formerly independent Dutch housing association sector as the state seeks to re-establish control and direction (Wonen 6, 2014). Perhaps the biggest latent threat to the housing association model in the future lies with hybridisation away from an associational model towards a marketised but publicly directed model (in line with Billis, 2010). Such hybridisation could destroy bonds with civil society and with tenants that were once central to associations but which have become diluted. Growth and entwinement with a hostile public policy agenda threaten further dilution as housing rights become conditional and housing itself is seen as simply a tool of behaviour modification rather than a social right. By adopting hybridity as an organisational model rather than just an analytical framework, housing associations could have a powerful planning tool in which interests can be rebalanced. Policies that emphasise the community pole of hybridity and third sector identities to counteract strong state and market drivers are still possible. As we have seen, some housing associations have responded to austerity by supporting their residents and local community organisations to sustain the cuts. Furthermore, some large associations are seeing tenant involvement as a way to rebuild their legitimacy and to promote greater value for money, as the title of a recent report puts it, An investment not a cost (Bliss et al, 2015). This later example indicates that strengthening the community pole of hybrid associations could also generate financial benefits.

Conclusion English housing associations have been transformed into mainstream providers of public services. This process has been so profound as to lead some commentators to regard housing associations as quite distant from the mainstream third sector, usually as a result of their financial strength and commercially driven approach. Yet our research, which has focused both inwards on housing associations themselves and outwards on their impacts on the nature of public services, has highlighted just how relevant their experience is for understanding the wider processes of change being experienced across the sector today and covered in

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this book. Comparisons with other housing third sector organisations such as community-led empty homes projects and homelessness support organisations have highlighted the potential for different forms of hybridisation and differentiation of TSOs by purpose, activities and conscious harnessing of different elements of hybrid identities. Other work has illuminated organisational hybridity arising from the diversification of housing associations into new forms of activity, particularly those associated with ‘community investment’ (Mullins, 2011; Sacranie, 2012). As well as being an extension of the boundaries of these hybrid organisations, the adoption of community investment activities has itself been subject to hybrid market, state and community drivers. Choices to partner with local communities or to adopt contract or corporate models have had markedly different outcomes for community empowerment. Furthermore, the transformation of the policy framework into one that increasingly challenges the mission of many housing associations is leading some to review the balance of advantage between state funding and independence (Mullins and Jones, 2015). The future role of housing TSOs could involve the adoption of hybridity as an organisational model rather than just an analytical framework. If adopted, this could become a powerful strategic tool to rebalance interests rather than assuming an inevitable path for housing associations from community to state and thence to the market. Notes https://www.gov.uk/government/statistical-data-sets/live-tables-on-dwelling-stockincluding-vacants

1

https://www.gov.uk/government/statistics/benefit-expenditure-and-caseloadtables-2014 2

Subject to expected merger of Circle (65,000) and Affinity Sutton (58,000) approved by Boards in December 2015 being completed in summer 2016.

3

4

https://www.gov.uk/government/statistics/statistical-data-return-2013-to-2014

However, in the more competitive environment after the 2015 election several ‘megamergers’ between some of the largest associations (Affinity Sutton/Circle (123,000 homes), and East Thames/Hyde/L&Q (135,000 homes)) were being proposed. If these were to proceed they would advance the Tescoisation hypothesis considerably.

5

6

https://redbrickblog.wordpress.com/2015/08/02/mrsad-and-mr-angry/

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References Backus, P. and Clifford, D. (2010) Trends in the concentration of income among charities. TSRC Working Paper 39. Birmingham: TSRC Billis, D. (ed) (2010) Hybrid organisations and the third sector, Basingstoke: Palgrave Macmillan Bliss, N., Lambert, B., Halfacre, C., Bell, T. and Mullins, D. (2015) An investment not a cost. The business benefits of tenant involvement, CLG Brandsen, T., van de Donk, W. and Putters, K. (2005) ‘Griffins or Chameleons? Hybridity as a Permanent and Inevitable Characteristic of the Third Sector’, International Journal of Public Administration, 28, 749–765 Clapham, D. and Evans, A. (1998) From Exclusion to Inclusion. London: Hastoe Housing Association DiMaggio, P.J. and Powell, W.W. (1983) ‘The Iron Cage Revisited: Institutional isomorphism and collective rationality in organizational fields’, American Sociological Review, 48: 147-160 Evers, A. and Laville, J.L. (eds) (2004).The Third Sector in Europe. Globalization and welfare. Edward Elgar Publishing Gruis, V. (2008) ‘Organisational archetypes for Dutch housing associations’, Environment and Planning C: Government and Policy, 26(6): 1077–1092 Harris, M, and Rochester, C. (2001) Voluntary organisations and social policy in Britain, Basingstoke: Palgrave HM Government (2010) Open Public Services White Paper Homes and Communities Agency (2015) Global Accounts of Housing Associations. HCA, London Homes and Communities Agency (2014) Private Registered Provider Social Housing Stock in England, HCA, London Housing Corporation (1999) Regulating Diversity, Discussion Paper. London: Housing Corporation Housing Corporation (2000) Regulating a Diverse Sector: The Housing Corporation’s Policy, London: Housing Corporation. Kendall, J. (2000) ‘The mainstreaming of the third sector into public policy in England in the late 1990s: whys and wherefores’, Policy & Politics, 28(4): 541-562 Kendall, J. (2003) The Voluntary Sector. London: Routledge Malpass, P. (2000) Housing associations and housing policy: A historical perspective. Basingstoke, Macmillan Mulgan, G. (2010) Measuring Social Value, Stanford: Social Innovation Review Mullins, D (2000) ‘Social Origins and Transformations: The Changing role of English Housing Associations’, Voluntas 11(3): 255-275

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Mullins, D. (2006) ‘Exploring Change in Housing Associations using the Delphi method’, Housing Studies 21(2): 227-251 Mullins, D. (2010a) Housing Associations, TSRC Working Paper 16 Birmingham: TSRC Mullins, D. (2010b) Self-help housing: could it play a greater role?, TSRC Working Paper 11. Birmingham: TSRC Mullins, D. (2011) Community Investment and Community Empowerment. TSRC and HACT. Mullins, D. (2012) ‘The Reform of Social Housing’, in Raine, J. and Staite, C. (eds) The world will be your oyster? Perspectives on the Localism Act, Birmingham, Institute of Local Studies, University of Birmingham (www.inlogov.bham.ac.uk) Mullins, D. and Acheson, N. (2014) ‘Competing Drivers of Hybridity: Third Sector Housing Organisations in Northern Ireland’, Voluntas 25(6): 1606-1629 Mullins, D.  and Jones, T. (2015) ‘From “contractors to the state” to “protectors of public value”? Relations between non-profit housing hybrids and the state in England’, Voluntary Sector Review. Available as fast-tracked article at www.ingentaconnect.com/content/ tpp/vsr/pre-prints;content-pp_VSR-D-15-00020R2 Mullins, D. and Riseborough, M. (1997) Changing with the times. Critical interpretations of the repositioning of housing associations, School of Public Policy Occasional Paper 12, University of Birmingham Mullins, D. and Riseborough, M. (2000). What are housing associations becoming? Final report of Changing with the Times project, Housing Research at CURS No 7. Mullins, D. and Sacranie, H. (2009) ‘Corporate Social Responsibility and the Transformation of Housing Organisations’, European Network for Housing Research Conference, Prague, July Mullins D and Sacranie, H. (2014) Evaluation of the Empty Homes Community Grants Programme: Midlands Baseline Case Study Report, Working Paper 2, Housing and Communities Research Group, University of Birmingham Mullins, D. and Sacranie, H. (2015) ‘Building a Legacy: The Impact of Empty Homes Community Grants Programme in the North East and Yorkshire’ Working Paper 3, Housing and Communities Research Group, University of Birmingham Mullins, D., Czischke, D. and van Bortel, G. (2013) Hybridising Housing Organisations. Meanings, Concepts and Processes of Social Enterprise. Routledge Mullins, D., Jones, T. and Teesdale (2011) Self-help housing – Towards a greater role. TSRC Working Paper 54, Birmingham: TSRC

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Mullins, D., Latto, S., Hall, S. and Srbljanin, A. (2001) Mapping Diversity. Registered social landlords, diversity and regulation in the West Midlands. Housing Research at CURS No 10. NHF (National Housing Federation) (2008) In business for neighbourhoods: the evidence. The scale and scope of housing associations activity beyond housing. London: NHF. NHF (2008a) Peers’ Second Reading Briefing, 28 April 2008, pp 2, 4. NHF (2012) Building Futures: Neighbourhood Audit, Summary and Key Findings. London: National Housing Federation NHF (2014) Ambition to Deliver. Housing Associations Unbounded. Office of the Deputy Prime Minster (2003) Stock Transfer Guidance Manual. London, ODPM Pawson, H. and Mullins, D. (2010) After council housing. Britain’s social landlords. Basingstoke: Palgrave Macmillan Pawson, H. and Sosenko, F. (2008) Sector restructuring. Housing Corporation Sector Study 61, London: Housing Corporation Pritchard-Wilkes, C. (2014) ‘Social impact measurement : constructing an institution within third sector housing organisations’,University of Birmingham, PhD thesis Purkis, A. (2010) Housing Associations in England and the Future of Voluntary Organisations. London: The Baring Foundation Rees, J., Mullins, D. and Bovaird, T. (2012) Partnership Working. TSRC Working Paper 88. Sacranie, H. (2012) ‘Hybridity enacted in a large english housing association: A tale of strategy, culture and community investment’, Housing Studies 27(4): 533-52. Salamon, L. and Anheier, H. (1998) ‘Social Origins of Civil Society. Explaining the non-profit sector cross-nationally’, Voluntas, 9(3): 213–48 Scott, W.R. (1995). Institutions and Organizations, London, Sage Publishing Wilkes V and Mullins D (2012) Community investment by social housing organisations: measuring the impact. TSRC Survey Report, March 2012. Wonen 6 (2014) Dutch Housing Professors’ Report on Parliamentary Commission into Dutch Housing Associations, 30 October.

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TWELVE

Talking up the voluntary sector in criminal justice: market making in rehabilitation Rob Macmillan

“Transforming Rehabilitation is the most unprecedented disruption of the system that we have ever seen in this field. We will all have views on its risks, justness and wisdom but periods of disruption are undoubtedly when possibilities open up for new kinds of action that are not available during periods of stability. So painful though it is, such an opportunity is rare and we need to try and shape it.” Julian Corner, LankellyChase Foundation, 29 January 2014

Introduction In a written ministerial statement to Parliament on 29 October 2014, Chris Grayling, the Justice Secretary at the time, announced the preferred bidders in a competition to outsource 21 offender rehabilitation contracts in England and Wales. These contracts, estimated to be worth anywhere between £5 billion and £20 billion in total over 10 years, form a core component of the UK Coalition government and subsequently, the majority Conservative government’s ‘Transforming Rehabilitation’ strategy (Ministry of Justice, 2013d) designed to open up probation services to a diverse range of providers, release resources and improve rehabilitation outcomes. The accompanying press release suggests that as a result of the announcement the voluntary sector will be ‘at the forefront of a new fight against reoffending’ with winning bids involving partnerships between large private companies and ‘some of Britain’s biggest and most successful rehabilitation charities’ (Ministry of Justice, 2014a). The ministerial statement is at pains to highlight the third sector’s central place in the reform process: ‘You will see that we have a strong and diverse market, with Preferred Bidders in all but one of the

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21 contract areas including voluntary and social sector organisations as “top tier” partners in their bids’ (Ministry of Justice, 2014b). Thus, in a core and long established public service – probation – we have a statement extolling the presence of a strong and diverse market, with a role for voluntary and community organisations. It is interesting to reflect upon why such great play has been made for the diversity of the market. The Ministry of Justice appears to have been anticipating potential criticism for a lack of evident voluntary sector involvement. Indeed, Frances Crook, Chief Executive of the Howard League for Penal Reform, commented that ‘As we expected, the big winner of the probation sell-off is not the voluntary sector but large private companies run for profit’ (Burne James, 2014). Clearly, the terms in which the reforms are being judged at least partly involve the inclusion of the voluntary sector. It is partly because the Coalition government sought quite explicitly to ‘open public services’ up to new providers, including voluntary organisations and social enterprises (Cabinet Office, 2010). But it is also a reflection of earlier criticism surrounding the government’s Work Programme (see Chapter 9), another largescale commissioning exercise where the role of the voluntary sector had been vaunted. In a speech to the Centre for Social Justice in July 2013, Chris Grayling claimed that: ‘There is no question of us paying only lip-service to the voluntary and community sector as we transform rehabilitation. I am determined to ensure these organisations are right at the heart of our approach, delivering it on the ground – working at every level, and forming genuine partnerships with other providers. I genuinely mean that’ (Centre for Social Justice, 2013: 5). In evidence to the Justice Committee he argued that appropriate lessons would be learned in rehabilitation from the experience of voluntary organisations in the Work Programme bidding process (House of Commons Justice Committee, 2014: Ev.50). Arguably, the ‘Transforming Rehabilitation’ strategy represents a seismic shift in the criminal justice landscape. Under the policy, new organisations have been established or have entered the field, older ones have ceased to function, and new relationships, priorities and practices are being forged. In opposition and in the subsequent Coalition agreement, the Conservatives had promised a ‘rehabilitation revolution’ by opening probation services to new providers, and using a payment by results model to reward success in reducing rates of reoffending (Conservative Party, 2008; Cabinet Office, 2010). Behind the rhetoric of revolution, however, it is safe to say that the field has been undergoing an ‘unsettlement’ (Fligstein and McAdam, 2012), in

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which a concerted attempt has been made to construct a new market for rehabilitation services. The new arrangements were introduced from 2014 and 2015. It will be some time before the role, position and experience of voluntary organisations or the overall outcomes of the new system can be fully judged. In advance of such an assessment, this chapter provides an examination of the voluntary sector’s position in the criminal justice field at a crucial early stage of market shaping. In part, this draws from involvement in work undertaken for the Ministry of Justice in 2013 to set out an action plan for building the capacity of voluntary and community organisations to be involved in the ‘Transforming Rehabilitation’ process (3SC-Third Sector Research Centre, 2013). Using field theory in particular (Fligstein, 2001; Fligstein and McAdam, 2012), the chapter assesses the attempts by voluntary and community sector organisations and their advocates to establish, maintain and advance a viable footing in the emerging landscape of criminal justice. The discussion begins with an overview of the changing policy context around criminal justice and offender supervision, and its likely impact on the voluntary sector, followed by a description of the sector’s existing role and position in criminal justice. This provides some context for current efforts to restructure aspects of rehabilitation. The focus then shifts towards reviewing the ‘Transforming Rehabilitation’ proposals and process, concentrating in particular on the debates around the position and potential role that could be played by the voluntary sector in the new approach. The chapter then outlines and analyses a series of discursive field shaping interventions during the period 2010 to 2015, which sought to secure a legitimate place for the voluntary sector in the changing field of rehabilitation services. The chapter concludes by considering the implications for the voluntary sector in criminal justice. The term ‘voluntary sector’ is used throughout the discussion, but this is simply a shorthand description. It is worth signalling at this stage that the idea of a ‘sector’ tends to overplay the coherence of what is, in fact, a highly diverse field of voluntary and community organisations working with offenders. These organisations have varying experiences and challenges, and different degrees of awareness and interest in Transforming Rehabilitation.

The voluntary sector in criminal justice In recent years the voluntary sector has played an increasingly prominent role in the resettlement of offenders, although the involvement of charities and voluntary organisations in criminal justice work has a

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much longer and often pioneering history (Mills et al, 2011). The probation service, formally established through legislation in 1907, had earlier roots in the charitable sector through the work of court missionaries working under the auspices of the Church of England Temperance Society in the 1870s (Moseley, 2006: 28; NOMS, 2007; Mair and Burke, 2012). As the 20th century progressed, the boundaries shifted and probation activities gradually became consolidated in the public sector. The voluntary sector effectively became a supplement to state-led activity in criminal justice, particularly with the advent of the post-1945 welfare state (Dominey, 2012: 341). However, since the 1980s successive governments have sought to promote the voluntary sector’s role in working with offenders, as part of wider institutional reforms in probation and prisons. Until the Coalition government’s movement towards ‘Transforming Rehabilitation’, this has arguably involved only tentative and incremental steps. The uneasy ‘partnership’ initiatives between probation and the voluntary sector in the 1990s (Nellis, 1995; Gibbs, 2001) were followed by the promotion of commissioning and ‘contestability’ between public, private and voluntary sectors in the mid-2000s (Burke and Collett, 2010), which led finally to a legislative basis for greater competition in the Offender Management Act 2007 (Mills et al, 2011; Dominey, 2012). Nonetheless, taken as whole these incremental developments have involved a subtle recasting of the relationship between probation and the voluntary sector: from one where the voluntary sector is seen as a niche provider and complementary ‘partner’ to the public sector, to one where it is increasingly seen, not without controversy, as an ‘alternative’ provider of mainstream and core probation services (Corcoran, 2011). The three terms of the New Labour government from 1997 through to 2010 involved more substantial restructuring in the criminal justice system, particularly through the establishment of the National Offender Management Service (NOMS) in 2004, and subsequently the Offender Management Act 2007. NOMS was an attempt to bring the work of prisons and probation together, with a practice model promoting the idea of seamless ‘end-to-end offender management’. It was important in terms of delivery, however, because of its explicit promotion of competition in order to improve the quality of services and gain financial efficiencies. The Carter Review of ‘correctional services’ (Carter, 2003), which led directly to the establishment of NOMS, for example, argued that there was very limited ‘contestability’ in probation services, and that ‘effectiveness and value for money can be further improved through greater use of competition from private

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and voluntary providers’ (Carter, 2003: 25). Its first Chief Executive, Martin Narey, argued that the purpose of contestability was to put some ‘tension’ into the system in order to ensure value for money (Burke and Collett, 2010: 243). NOMS would take an overview and commissioning role, as part of an envisaged separation between purchasers and providers. Under the Offender Management Act 2007 the Secretary of State gained direct powers to contract with independent providers (Dominey, 2012: 343). A target to increase the proportion of the budget of Probation Boards (which subsequently became Probation Trusts) outsourced to other providers to 10% by March 2008 met with a rather mixed response, and only led to a small increase in private and voluntary sector provision (Chambers, 2010: 27; Thomson, 2010: 3). Despite extensive promotion of the role of the voluntary sector in probation (Tarry, 2006), Mills et al (2011: 199) note that the NOMS-era during New Labour had actually provided few opportunities for the sector, and left it feeling, in the words of one respondent, “fragile and nervous” as the 2010 election was approaching. Alongside the growing policy interest in the role of the voluntary sector in criminal justice, research on the field has also flourished in recent years, and continues to grow (Corcoran and Hucklesby, 2013; Hucklesby and Corcoran, 2016). From this a clearer overall picture of the voluntary sector working with offenders has emerged, together with a deeper sense of the dilemmas faced by many organisations in the changing criminal justice field. Gojkovic et al (2011) use existing datasets to provide an overall map of the criminal justice voluntary sector. Using the 2008 National Survey of Third Sector Organisations (NSTSO), the authors find a core group of 1,743 third sector organisations in England for whom offenders are the main beneficiary group. However, the inclusion of a wider periphery of third sector organisations, where offenders are one of a number of beneficiary groups if not the main one, provides a total of 18,830 (Gojkovic et al, 2011: 19). Analysis of the follow up 2010 National Survey of Charities and Social Enterprise (NSCSE) suggests a figure of 1,475 third sector organisations in England whose main clients are offenders, ex-offenders and their families, with a wider figure of 13,586 organisations (Centre for Social Justice, 2013: 12). These aggregates contain wide variations in types of organisation, with evidence that the criminal justice voluntary sector is more polarised than the third sector as a whole. Most organisations are very small with few or no paid employees. Gojkovic et al (2011: 18) estimate that three fifths of the 1,743 core TSOs in criminal justice

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have an income of less than £100,000 per year (61%) and nearly two thirds operate at a local level (county level or below) (65%). Meanwhile, there are few large third sector organisations operating in the field: only 9% have an income of £1 million or more per year (Gojkovic et al, 2011: 18). Of these there are a handful of very large household name charities and social enterprises working at a national or international level, such as Nacro, Turning Point, Catch-22 and Crime Reduction Initiatives, which between them had a total income of £341.5 million in 2014–15.1 Gojkovic et al (2011) also suggest that third sector organisations working in criminal justice are somewhat more reliant on grants and contracts than third sector organisations as a whole. From the same analysis of the 2010 NSTSO dataset, Clifford et al (2013: 966) report that 59% of TSOs working with offenders, exoffenders and their families receive public funding, indicating, perhaps, significant exposure to the Coalition and Conservative governments’ deficit reduction strategy based on planned cuts in public expenditure. The importance of public funding to the criminal justice voluntary sector is also highlighted in wider research into the experiences and position of voluntary organisations working with offenders. A common thread running through much recent research and commentary is concern around the dilemmas for organisations in getting closer to the state through funding arrangements and new policy developments. The move from the margins towards the mainstream of criminal justice policy has not necessarily been a comfortable experience. Academic research broadly highlights two main clusters of issues facing voluntary organisations in closer alliances with the state: issues around independence and distinctiveness of voluntary organisations, on the one hand; and the prospects for smaller organisations in an emerging commissioning environment, on the other. Providing a range of core rehabilitation services for offenders, often under contract, has been accompanied by a growing concern that voluntary organisations would gradually be transformed as they are drawn closer into what Gough (2012: 4) calls ‘the state’s network of punishment’. There are fears that the voluntary sector’s independence of purpose or mission, and its ability to campaign, are being compromised, alongside a deeper worry that its distinctive ethos and approach are being undermined (Neilson, 2009; Vennard and Hedderman, 2009; Maguire, 2012; Stacey 2012). Mythen et al (2013: 364), for example, suggest that smaller voluntary organisations may have ‘little option but to accept a dominant economic discourse of risk where measures of reconviction and value for money come to supersede the principle of ‘moral good’ that has historically underpinned activities and policy

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making in the sector’. Likewise Mills et al (2011: 205) note the fear expressed by their respondents that commissioning arrangements mean that ‘the voluntary sector will be shaped by the state and the private sector in their own image, with requirements to conform to certain standards a condition for engaging in partnerships,’ although they also note that some organisations ‘have found time and space to engage in advocacy, especially if it is an essential part of their history and their organisational values that pre-date contractual relationships’ (Mills et al, 2011: 207). It is worth noting that research to date tends to report the voluntary sector’s fears and risks of closer engagement, rather than provide more concrete examples of actual compromise and loss. Nonetheless, the findings appear to say something about the sector’s priorities, preoccupations and perceptions of itself, as a distinctive sphere with positive attributes, such as closeness to marginalised service users. Claims for distinctiveness should be treated as value claims as much as descriptions of reality (Macmillan, 2013). The second main thread in the emerging research literature notes the polarisation in the criminal justice voluntary sector between very large, professionalised agencies, and the greater number of smaller and less formal voluntary and community organisations. It reports the concern that smaller organisations are likely to be disadvantaged in the gradual development of an increasingly demanding commissioning environment, which privileges larger scale contracts tendered through formal procurement processes (Corcoran, 2011; Mills et al, 2011; Maguire, 2012; Corcoran and Hucklesby, 2013; Centre for Social Justice, 2013; Livingstone, 2014). Dominey (2012: 345), for example, argues that ‘any increase in the formal contractual relationship between the state and the voluntary sector benefits larger business-focused organizations at the expense of smaller, local or distinctive ones’. The result is that smaller and local organisations may be vulnerable in the competition for funding and profile, expressing concern at the ‘voracious’ competition from ‘big nationals’ for relatively small, local contracts (Maguire, 2012: 491; Livingstone, 2014: 35). Smaller organisations have fewer resources available to engage with and influence new policy agendas, networks and commissioning frameworks, or to produce the kinds of performance data through which they can gain greater legitimacy, or simply to bid for contracts (Mills et al, 2011). This leads to a broader concern about loss of market diversity, if smaller, local and more specialised groups are themselves driven out or marginalised in the criminal justice field (Livingstone, 2014).

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The variation in estimates for the number of third sector organisations working in criminal justice, and the differences between them in terms of size, capabilities and interests, poses a fundamental challenge to the idea that it is a coherent sub-sector at all. Corcoran (2011: 33), for example, uses the term ‘penal voluntary sector’ but notes that this concept is neither theoretically drawn nor empirical welldefined, while Tomczak (2014: 473) notes that ‘the limits of the penal voluntary sector are blurry’. In these circumstances a ‘field’ conception may be theoretically advantageous (Fligstein and McAdam, 2012), defined as a space in which actors and organisations with some form of common orientation (criminal justice, voluntary sector) might increasingly associate with each other, or be associated together, but where the terms and focus of that orientation and the limits of the field are themselves at stake. This perspective draws attention to field building and consolidation processes, including naming, describing and mapping, as elements of a construction project always in progress. A field-theoretic perspective also allows for an acknowledgement of diversity across the field, and recognition that participants have different interests. Alongside this, field participants develop their own coordinating infrastructure, where actors aim to organise and promote the interests of the field as a whole. In the penal or criminal justice voluntary sector, the establishment of Clinks in 1998 as an umbrella for supporting voluntary and community organisations working with offenders in prisons and the community is a case in point, although earlier coordinating efforts through the Central Discharged Prisoners’ Aid Society/National Association of Discharged Prisoners’ Aid Societies (later becoming NACRO) are also noteworthy (Martin et al, 2016). Clinks’ formation coincides with the mainstreaming of the voluntary sector in the policy process under the 1997–2010 Labour government (Kendall, 2003). Its purpose is to support, represent and campaign for the voluntary and community sector working with offenders in England and Wales (Clinks, 2016). It has grown considerably since its establishment, with an income in 2014–15 of £1.5 million, and in 2016 reported extensive reach through 613 members and 9,753 e-bulletin subscribers (Clinks, 2016: 10, 11). This reach, coupled with research, support, consultation and representation activity suggests that the field of the criminal justice voluntary sector is becoming more ‘organised’, even if it does not speak with one voice. In field theoretical terms, Clinks’ role may in part be seen as one of a number of potential ‘internal governance units’ in the field (Fligstein and McAdam, 2012: 95), charged with generating and disseminating information about the field both to its members

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and outside audiences (for example, government bodies), liaising and lobbying on behalf of members, and in some cases seeking to develop certification schemes for field membership. In the case of significant policy developments such as ‘Transforming Rehabilitation’, as we shall see, its role is partly about describing the state of the criminal justice voluntary sector, but also about articulating its concerns as part of wider positioning in a changing field.

A ‘rehabilitation revolution’? This section outlines the main features of the ‘Transforming Rehabilitation’ (TR) policy agenda, and how it has developed over the period from 2010 to 2015. The main aim for the policy is to change the approach to reducing reoffending. The main mechanism for achieving this is to reconfigure the institutional landscape of core probation services, by increasing competition, bringing in new providers, and rewarding ‘success’ in reducing reoffending through a ‘payment by results’ regime. Previously the probation service was responsible for supervising all eligible offenders. Under TR the caseload is divided between high risk offenders, which are supervised by a new National Probation Service (NPS) overseen by the Ministry of Justice and NOMS, and low and medium risk offenders, supervised by the new set of 21 Community Rehabilitation Companies (CRCs), established following a national competition, and no longer under state ownership. As a result of this institutional reconfiguration, the 35 Probation Trusts established under New Labour’s Offender Management Act 2007 ceased operations in June 2014, with probation staff transferring to either the NPS or the CRCs. The public sector NPS is responsible for overall risk assessment and the management of key court functions. Under the Offender Rehabilitation Act 2014, effective from 2015, rehabilitation efforts have also been extended to those serving shortterm custodial sentences, which had previously been excluded from statutory supervision. Alongside the push to reduce reoffending, the process is designed to generate cost savings, partly to accommodate a larger caseload involving those released from short sentences, but also because the overall budget for the Ministry of Justice declined under the Coalition and Conservative governments’ wider deficit reduction strategy. The combination of wholesale institutional reform and drastic cuts in budgets thus epitomises Taylor-Gooby’s suggestion that a rapid but risky twin strategy of retrenchment and public sector restructuring is currently being pursued (Taylor-Gooby, 2012).

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The policy process leading to ‘Transforming Rehabilitation’ developed broadly through four phases over 2010 to 2015, involving three large scale consultation exercises in 2010, 2012 and 2013.2 Despite some notable changes in direction, over time the proposals became more concrete, and the terms of consultation narrowed to specific aspects and implementation issues. First, during the second half of 2010 and the first half of 2011, the Coalition government developed and consulted on a Green Paper, Breaking the cycle (Ministry of Justice, 2010). The paper stated the government’s combined aims of punishing offenders, protecting the public and reducing reoffending. For the latter, more effective rehabilitation was required. This would arise through greater competition, and holding providers to account by only paying them for outcomes – payment by results (PbR). The existing network of 35 local Probation Trusts would have a continuing role as local strategic leads for managing offenders, but their services would be increasingly subject to competition (Ministry of Justice, 2010: 46). From the middle of 2011, a second phase of policy development centred on a review of probation services. This was prompted by the publication of a parliamentary select committee report (House of Commons Justice Committee, 2011), which noted the scope for increasing the contribution of the private and voluntary sectors in rehabilitation, and called for clarity over the government’s intentions for probation, including which aspects of the service would be open to competition (House of Commons Justice Committee, 2011: 112). The review culminated in a consultation paper Punishment and reform: Effective probation services in March 2012 (Ministry of Justice, 2012). The paper extols the virtues of competition in improving quality and gaining value for money. It proposes to open the market and extend competition for the supervision and rehabilitation of lower risk offenders ‘to the innovation and energy of the widest possible range of providers’ (Ministry of Justice, 2012: 1), with an aim to ‘compete’3 approximately 60% of the £1 billion budget for community offender services (Ministry of Justice, 2012: 14). The paper proposes a local commissioning model, based on a split between purchasers and providers. Probation trusts would become local commissioning bodies, although concerns about scale and capability are used to signal the likelihood that there may be a consolidation into fewer larger trusts (Ministry of Justice, 2012: 20). Following a Cabinet reshuffle in September 2012, Chris Grayling replaced Ken Clarke as Justice Secretary. A third phase of policy development began, accompanied by a noticeable sense of urgency, suggesting perhaps a government concerned that it would run out of

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time to introduce a complex and wholesale restructuring of probation services before the 2015 election. The new minister’s speech to the Centre for Social Justice in November 2012 reiterated the need for a ‘revolution’ in rehabilitation, built on payment by results, involving ‘a process of rapid change to the way we deal with offenders that will be at the heart of the work that we do between now and the election’ (Grayling, 2012). A further consultation paper, Transforming rehabilitation (Ministry of Justice, 2013b), was released in January 2013, but with a compressed period for consultation. The paper reiterated the general direction of travel towards competition among a diverse range of providers of rehabilitation services, working within a payment by results framework, where management of high-risk offenders would be retained in the public sector. However, it signalled a move away from a model of local commissioning through Probation Trusts, towards a national commissioning function to increase efficiency and reduce duplication and complexity. Bundles of services would be procured in geographical lots, involving: … a market model that supports a wide range of lead providers, and partnerships which bring in the particular skills of local and specialist organisations … We are keen to see partnerships between VCS organisations, or private and VCS providers, coming forward to compete for contracts. (Ministry of Justice, 2013b: 16) Since the lots would be bigger than Probation Trust areas, the paper suggests a new structure for public sector probation services will be needed. A fourth phase in the policy development process began with the publication of the Ministry of Justice’s final strategy: Transforming rehabilitation – A strategy for reform, in May 2013 (Ministry of Justice, 2013d), and an accompanying timetable for a national competition to deliver rehabilitation services across England and Wales, and for the new structure to be in place by April 2015. The strategy outlines a division of the probation caseload between high risk offenders on the one hand, and medium and low risk offenders on the other. The former would be supervised in the public sector, by staff in a new National Probation Service (NPS). The latter would become the responsibility of independent Community Rehabilitation Companies (CRCs), established through a national competition in 21 contract package areas (an increase from the 16 suggested in the earlier consultation paper).

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These contracts would be based on payment by results, although the details of the precise payment mechanism were still to be decided. Staff would be transferred either into the NPS or the CRCs from existing Probation Trusts, which would cease to operate from June 2014. The competition for CRC contracts would run as a two-stage process from September 2013 through to the end of autumn 2014, with an expectation that lead bidders would develop partnerships, but also supply chains, with large and small organisations in the voluntary and community sector: ‘to bring in the best of the public, private and voluntary sectors’ (Ministry of Justice, 2013d: 3). Finally, new legislation would be introduced, mandating rehabilitative work with offenders serving short-term sentences. The outcome of this prolonged consultation and policy development process is that a new market for rehabilitation services is being constructed, based on independent prime contractors delivering through supply chains of sub-contracted providers. There appears to have been some eagerness amongst policy makers to include the voluntary sector as part of this process, using two main mechanisms. First, funding for capacity building activities was made available to support the involvement of the sector in the process (3SC-Third Sector Research Centre, 2013), including a ‘partnership finder’ matching service, and legal advice for negotiating commercial contracts. Second, a set of principles of ‘market stewardship’ were outlined which, together with an ‘Industry Standard Partnering Agreement’ (IPSA), are designed to set the terms of the relationships between ‘prime’ (tier 1) and ‘subcontractors’ (tiers 2 and 3) (Ministry of Justice, 2013e). TR as an expression of competition and markets is arguably the latest stage in a longer-term process, dating back as far as the New Labour government’s approach to criminal justice. The establishment of NOMS can be seen as a key turning point in these developments, with its explicit aim of creating a market in ‘correctional services’ (Carter, 2003), although for some the results have been underwhelming (Chambers, 2010). Some commentators see continuity in approach across governments from New Labour to the Coalition (Dominey, 2012: 339; Stacey, 2012: 409) in the emphasis on competition, commissioning and bringing in providers from beyond the public sector, albeit with some new twists and points of emphasis. The stress on ‘payment by results’ is seen as a distinctive mechanism for gaining ‘more from less’ in a period of public spending cuts (Dominey, 2012: 345). Mythen et al (2013: 375) go further, suggesting that ‘What is unique … is the targeting of and appeal to the VCS and the degree of burden that voluntary agencies

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are being expected to shoulder’. What is clear is that the ‘Transforming Rehabilitation’ agenda has in part been made possible because of key features of New Labour’s approach and architecture: particularly the establishment of NOMS, the principles of competition and the powers given to the Secretary of State in the Offender Management Act 2007 to contract with ‘any person’ to deliver probation services. In 2012 the Ministry of Justice argued that the 2007 Act had not met its aim of broadening competition, and thus indicated its intention ‘to use the scope provided by the 2007 Act to open significantly more probation services to competition, including some aspects of offender management’ (Ministry of Justice, 2012: 14). The next section concentrates on how the voluntary sector has responded to the latest strategy for opening up probation services and creating a market in rehabilitation services.

The voluntary sector and field shaping Mythen et al (2013: 367) descr ibe how the ‘Transfor ming Rehabilitation’ agenda envisages a central role for the voluntary sector in offender management and rehabilitation services, arguing that, ‘It encourages agencies in the VCS to situate and brand themselves and jostle for optimum position in a fluid “mixed market” of provision’. What, then, are the mechanisms through which this ‘jostling for position’ occurs? How has the voluntary sector, and its advocates, sought to promote the cause of voluntary and community organisations in the unsettled space of rehabilitation? The analysis here is based on a close review of key policy developments over the period 2010–15, and informed by work to develop a capacity building action plan to support the involvement of voluntary and community organisations in the ‘Transforming Rehabilitation’ agenda (3SC-Third Sector Research Centre, 2013). The focus is on consultation responses, parliamentary committee submissions and evidence, commissions and research reports, which all provide a portrait of how the voluntary sector should be understood and positioned, coupled with articulations of concern about how the voluntary sector might fare in a reconfigured field of criminal justice. Overall, with few exceptions, debate and commentary is generally supportive of enhancing the voluntary sector’s role in rehabilitation. It is, for the most part, an accommodating discursive environment for the sector, being promoted by politicians, officials and think tanks. The sector’s current and potential contribution in criminal justice is ‘talked up’, and associated with innovation, flexibility and specialist

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work with marginalised groups of offenders and those considered hardest to help (Centre for Social Justice, 2013). This is coupled with some concerns expressed about the overall capacity and fragility of the sector, particularly during a period of austerity (Clinks, 2011b). A positive tone tends to be struck in published formal responses and interventions from voluntary organisations in the ongoing debate around rehabilitation and probation. The reform process is pitched as a welcome opportunity for many organisations in the sector. But as well as an opportunity, the proposals are represented, arguably with good reason, as a threat. Overall, there have been four main dimensions of a voluntary sector contribution to the ‘Transforming Rehabilitation’ policy process, which tend to take the form of expressions of concern about the emerging proposals, with suggestions for change designed to provide more ‘room’ for the voluntary sector. Although they often appear as quite technical interventions about specific issues, they also have a strategic purpose as field-shaping efforts to create greater space for the sector. The four dimensions cover first, issues around ‘payment by results’ (discussed at length below), but also, the relationships between voluntary organisations as subcontractors to potential prime contractors (where the sector has argued for standard contracts, transparent processes, and the establishment of principles of engagement and supply chain management); the proposed scale of contracts envisaged (where the sector has argued for smaller, local contracts to increase the opportunities for smaller organisations to engage); and finally building the capabilities of the voluntary sector organisations (where the case was made for dedicated resources to build the capacity of voluntary organisations to engage in the reforms). More attention is given to ‘payment by results’ (PbR) here because it perhaps represents one of the most significant challenges for voluntary and community organisations in the emerging agenda; the area where voluntary and community organisations face being all but frozen out of the market. Right from the start of the promised ‘rehabilitation revolution’, politicians and policy makers have promoted the idea that independent providers of services for offenders should only be paid for tangible results in reducing reoffending. Fox and Albertson (2011: 397) suggest that PbR is attractive to governments as it offers the prospect of rewarding success in meeting valued outcomes (in this case reducing the costs associated with offending), rather than paying for inputs or outputs. The risk of failure is transferred to the provider, since they will not get paid unless and until demonstrable reductions in reoffending have occurred. In theory, however, this risk

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is accompanied by greater freedom and incentives for providers to work in whatever way they choose in order to achieve the results. A number of challenges to this approach are identified in the literature, including uncertainty in conceptualising and measuring outcomes, patchy evidence on ‘what works’, difficulties in assigning successful outcomes to multiple contributing interventions and agencies, cash flow implications for providers, gaming and the challenge of realising cashable savings. It is suggested that the risks may be too high, and the rewards too uncertain for potential investors and providers to enter the market (Fox and Albertson, 2011: 410). For the voluntary sector PbR is a very high stakes issue, determining whether there is a place for voluntary action at all in the new market, and if so, how can it be created. Consultation responses and submissions tended to welcome the direction towards rewarding outcomes, and particularly the support a PbR model might offer for a less prescriptive approach to service delivery (Clinks, 2011a; Criminal Justice Alliance, 2011). However, this is coupled with considerable concern at the implications for voluntary organisations. With limited resources and reserves, the cash flow implications are too great and they would for the most part be unable to absorb the cost of upfront service delivery in advance of payment for results. Myriad submissions and reports point this out, with a particular reference to the challenges for smaller organisations. The Clinks response to the Breaking the cycle Green Paper consultation, for example, notes that: ‘We are broadly supportive of the principles informing Payment by Results (PBR) but there is a great deal of concern in the Sector about the reality of PBR for small and medium sized VCS organisations’ (Clinks, 2011a: 9). The government’s intention to establish and learn from PbR pilots was welcomed, although there was some unease about the commitment to roll out PbR across all rehabilitation service providers by 2015 (Ministry of Justice, 2010). Alongside the general unease around the implications of PbR, interventions in the debate focus on quite technical issues about the advantages and disadvantages of different approaches to structuring the payment model, for example, what would be the balance, if any, between deferred payments assigned to results, and any upfront payment for initial engagement with offenders; what would be the time period over which the results (that is, non-offending) would be assessed; and what counts as a ‘result’ to attract payment. Although technical, voluntary sector contributions to these debates suggest that the precise design of the PbR model matters for the ability of voluntary organisations to participate in the new market. For example, a Clinks

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research report from 2011 highlights concern among respondents that ‘commissioners would seek to implement a “pure” model withholding the entire amount of funding until outcomes have been evidenced. This would represent a very significant challenge to most VCS organisations, especially those that are small and locally based’ (Clinks, 2011b: 13). It suggests that voluntary organisations favour ‘social impact bonds’ (SIBs) over pure PbR models for facilitating the sector’s engagement, because in the former, upfront service delivery is paid for, and thus risk absorbed by independent investors rather than providers (Clinks, 2011a: 13; see also Corcoran and Hucklesby, 2013: 3). A report to the Ministry of Justice from the ‘Reducing Reoffending Third Sector Advisory Group’ recommended full upfront payment for service, with a repayable ‘at risk’ element if outcomes were not achieved, or, if PbR payments were to be deferred, at least 70% of the payment should be upfront (Frazer and Hayes, 2011: 17). Over time, however, it is noticeable that the demand for a full PbR model was relaxed. The June 2011 government response to the Breaking the cycle consultation was bullish in its claim that: ‘We will pioneer a world first – a system where we only pay for results, delivered by a diverse range of providers from all sectors. This principle will underpin all our work on reoffending’ (Ministry of Justice, 2011: 7, emphasis added). Yet just over 18 months later the ‘Transforming Rehabilitation’ consultation in January 2013 stated that: ‘To ensure that the system is properly focused on reducing reoffending and deploying more effective interventions, providers will in future only be paid in full when they reduce reconviction rates in their area’ (Ministry of Justice, 2013b: 5, emphasis added). It is a subtle shift from ‘only pay for results’ to ‘only pay in full for results’, but it suggests a fundamental change in approach, with significant implications for the eventual shape of the market. The final model involves two kinds of financial mechanisms: ‘Our payment structure will incentivise providers to reduce reoffending by combining “fee for service” elements, where we need to see services in place for all offenders to make the system work in practice, with “payment by results” elements linked to success’ (Ministry of Justice, 2013d: 14, emphasis added). ‘Making the system work in practice’ is a coded way of acknowledging that the proposals would not otherwise have been attractive enough to encourage independent providers, particularly from the private sector, to bid for contracts. A guaranteed service fee element reduces the risk for all providers, and structures the market in such a way as to make some voluntary sector involvement more feasible than otherwise.

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The government preferred the simplicity and focus of a ‘binary’ measure of reoffending, that is, whether or not an individual has been reconvicted within a set period of time. However, voluntary sector advocates were not alone in arguing that this risks creating perverse incentives for providers to work more intensively with those least likely to reoffend, while simultaneously avoiding the more challenging cases, and even abandoning support for them if they have reoffended. Voluntary sector interventions made reference to growing research on the complex and uneven processes involved in offenders’ desistance journeys away from crime, suggesting that a ‘frequency’ measure of reoffending would be preferable, and that a range of intermediate and proxy outcomes, for example, in employment, and housing, should also be rewarded (Criminal Justice Alliance, 2011; Frazer and Hayes, 2011). That this relates to positioning the voluntary sector in a future market for rehabilitation can be seen, for example, in Clinks’ response to the consultation on Punishment and reform: Effective probation services (Ministry of Justice, 2012), which argued that ‘contractual requirements may not provide scope for achieving interim measures (distance travelled) or demonstrating the quality of support provided…These issues are not easily captured in straightforward outcome focused approaches to working with offenders and measuring success. However, they relate quite closely to the kinds of approaches and values embodied by many VCS organisations and services’ (Clinks, 2012: 8). The final proposals for the ‘Transforming Rehabilitation’ payment model identify a specific definition of results that would trigger ‘success payments’ when providers ‘achieve an offender’s complete desistance from crime for a 12 month period’ (Ministry of Justice, 2013d: 1415). In an attempt to avoid perverse incentives for working only with individuals thought least likely to reoffend, the model also adds a ‘frequency’ measure, taking into account the wider total number of reoffences committed by the whole group of offenders a provider is working with. However, even as the competition stage of Transforming Rehabilitation commenced, the exact payment model, for example, the crucial balance between the ‘fee for service’ and PbR elements, remained unresolved.

Discussion and conclusions It is tempting to name the policy developments and organisational responses associated with the Transforming Rehabilitation agenda as neo-liberal – or New Public Management –inspired ‘marketisation’ (or in this case, privatisation) of criminal justice. However, New Labour’s

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development of ‘contestability’ and commissioning through NOMS was also described as ‘marketisation’ (Burke and Collett, 2010; Stacey, 2012; Bowen and Donoghue, 2013). The same concept has been used to describe both sets of processes, and yet the Transforming Rehabilitation agenda is a world away from New Labour’s development of NOMS and commissioning. There is some high-level consistency, broadly involving the use or extension of market mechanisms in criminal justice. But beyond this, the concept has little discernment or analytical purchase. Yet marketisation is also a familiar theme in the emerging literature on the voluntary sector in criminal justice (see, for example, Corcoran, 2011; Gough, 2012; Maguire, 2012; Mythen et al, 2013). Tomczak (2014: 470-1) notes the rise of ‘a marketised understanding of the penal voluntary sector’ and is concerned that this tends to overlook the agency and diversity of the voluntary sector. The risk is that labelling these developments as marketisation, with an implied sense that wider and immutable trends or forces are at work, might unintentionally limit thought and foreclose analysis. It would be fruitful then to think beyond the label towards a new research agenda seeking a more nuanced account of the processes through which actual fields or markets are framed, shaped and structured. The analysis presented in this chapter has been offered as a starting point in this endeavour. It has been informed by the idea of ‘field shaping’ or ‘market making’, that is, the continuous efforts by various field participants to shape the emerging field or market to secure or advance their interests (Fligstein, 1996; 2001). It has highlighted the ways voluntary sector participants and advocates sought to intervene in the decision-making processes about the structuring of a market. In doing so, they are involved in a discursive framing project, sending messages to themselves and crucially to other field participants about the characteristics and contribution of the voluntary sector, as well as how it might find a place in the emerging market. Fligstein (1996) argues that actors in markets seek to generate stability and control in order to survive. In pursuing this they formulate and apply what he calls a ‘conception of control’, that is: ‘a worldview that allows actors to interpret the actions of others and a reflection of how the market is structured … [including] … tactics for competition or cooperation, and the hierarchy or status ordering of firms in a given market’ (Fligstein, 1996: 658). A ‘conception of control’ is an understanding of how a field or market is structured and works, and simultaneously a discursive project to change it. While the concept tends to concentrate on actors in firms in private markets for goods and services, it can fruitfully apply to the whole range of actors in any

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field, including here the range of stakeholders in the unsettled space of criminal justice. A ‘conception of control’, then, is a discursive frame through which actors attempt to create and circulate compelling narratives in order to promote their ‘room’ to operate in a field or market, and in this case to shape and secure a footing in a reconfigured criminal justice field. Clearly, parts of the voluntary sector in criminal justice, including large national agencies and umbrella bodies, have been highly active in seeking to shape the policy agenda, providing some challenges to the idea that the sector is relatively passive in the face of large scale trends or policy processes. This is not to suggest that its interventions are necessarily influential or telling. Rather, it is to recognise the active role voluntary organisations and their advocates play in trying to find a foothold for the sector, or parts of it, in a changing field or an emerging market. This occurs through efforts to ‘talk up’ the voluntary sector’s role and contribution, but also to identify and respond to developments or proposals that may challenge its position or undermine its interests. Through these processes, voluntary organisations attempt to frame debates, creating narratives of contribution, opportunity and jeopardy. They are not alone in this, of course: the same can be said of other field participants, including politicians and policy makers, professional associations, other (private sector) providers, think tanks, and researchers. All of these field participants are engaged in active processes of field shaping and market making, using whatever discursive and material resources and influence they can to shape the space to secure their own position, where importantly some will have more leverage than others. Over the period 2010 to 2015 a very significant restructuring of a field, a profession and a set of social policy activities has been proposed, debated and developed, and some early implementation milestones have been reached. In October 2014 the then Justice Secretary announced that there were eight preferred bidders for the 21 CRC ‘contract package areas’. Four private sector-led partnerships have subsequently taken the lion’s share, being the eventual contractors for 16 of the 21 contracts, worth three quarters of the total anticipated annual value of the work.4 Thus, the Transforming Rehabilitation competition for contracts appears to have created a rather concentrated ‘market’, with signs of continued oligopoly in offender management (Bastow, 2014). It is not clear, at the time of writing, what the balance of resources will be between the large private sector companies and members of their wider partnerships and supply chains. Nor will it be obvious

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for some time what difference Transforming Rehabilitation will make for the voluntary sector in criminal justice as a whole. Will the claims for the sector’s potential contribution, and the fears expressed about the model, be realised in practice? Will some voluntary and community organisations find a place within the new supply chains, and if so what kinds of organisation are they, what role will they play and under what terms? What will be the impact of the new market on the wider ecology of criminal justice services, including on those voluntary and community organisations trying to continue their work outside of the new CRC supply chains? These questions call for close monitoring and tracking over time, as the new market settles in, and the agenda moves on from policy formulation into the early stages of implementation (Clinks, 2015). Notes The exact figures for 2014–15 are: Crime Reduction Initiatives (now ‘Change, Grow, Live’), £141.3 million; Turning Point, £100.5 million; Catch-22, £57.9 million (12 months apportioned figure to March 2015) and Nacro, £41.8 million. Source: Accounts filed with the Charity Commission; apportioned figure supplied directly from Catch-22, with thanks.

1

In total, it is estimated that over 2000 formal responses to these three consultation exercises were received (Ministry of Justice, 2011; 2013a; 2013c).

2

Curiously, many papers emanating from NOMS and the Ministry of Justice during this time refer to the fact that they intend ‘to compete’ services. Yet they are not competitors in the process. They actually mean that they intend to ‘organise a competition’ or ‘subject services to competition’.

3

The four partnerships winning the largest shares of the new market are: Purple Futures (Interserve, with charities/social enterprises 3SC, Addaction, P3 and Shelter) – 22%; Sodexo Justice Services with Nacro – 21%; MTCNovo (Management Training Corporation, with a cross-sector consortium including charity A Band of Brothers) – 17%; and Working Links –14%. 4

Acknowledgements Thanks are due to Isobel Livingstone, Philippa Tomczak, James Rees and two anonymous reviewers for comments and suggestions on earlier versions of this chapter.

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References 3SC-Third Sector Research Centre (2013) The voluntary and community sector in criminal justice: a capacity building action plan , London, Ministry of Justice Bastow, S. (2014) ‘Transforming Rehabilitation: evolution not revolution’, Criminal Justice Matters, 97: 10-11 Bowen, P. and Donoghue, J. (2013) ‘Digging up the grassroots? The impact of marketisation and managerialism on local justice, 1997 to 2013’ British Journal of Community Justice, 11(2-3): 9-20 Burke, L. and Collett, S. (2010) ‘People are not things: What New Labour has done to Probation’ Probation Journal, 57(3): 232-249 Burne J.S. (2014) ‘MoJ announces voluntary groups among preferred bidders in Transforming Rehabilitation programme’, Third Sector, 29 October Cabinet Office (2010) The Coalition: our programme for government London, Cabinet Office Carter, P. (2003) Managing Offenders, Reducing Crime – A new approach London, Prime Minister’s Strategy Unit Centre for Social Justice (2013) The new probation landscape: Why the voluntary sector matters if we are going to reduce reoffending, London, Centre for Social Justice Chambers, M. (2010) Carter but smarter: Transforming offender management, reducing reoffending, London, Policy Exchange Clifford, D., Geyne-Rahme, F. and Mohan, J. (2013) ‘Variations between Organisations and Localities in Government Funding of Third-sector Activity: Evidence from the National Survey of Thirdsector Organisations in England’, Urban Studies, 50(5):959–976 Clinks (2011a) Clinks response to the Ministry of Justice’s Green Paper: “Breaking the Cycle: Effective Punishment, Rehabilitation and Sentencing of Offenders”, London, Clinks. Clinks (2011b) When the Dust Settles: The impact of a changing landscape on the Voluntary and Community Sector working to reduce reoffending and address community safety, London, Clinks Clinks (2012) Clinks’ response to the Ministry of Justice’s consultation: ‘Punishment and Reform: Effective Probation Services’, London, Clinks Clinks (2015) Early doors: The voluntary sector’s role in Transforming Rehabilitation (London, Clinks). Clinks (2016) Transformed? the voluntary sector in criminal justice: Annual Review 2015, London, Clinks Conservative Party (2008) Prisons With a Purpose: Our Sentencing and Rehabilitation Revolution to Break the Cycle of Crime, London, Conservative Party

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Corcoran, M. (2011) ‘Dilemmas of institutionalization in the penal voluntary sector’, Critical Social Policy, 31(1): 30–52 Corcoran, M. and Hucklesby, A. (2013) The Third Sector in Criminal Justice: Briefing paper, Leeds, University of Leeds Corner, J. (2014) ‘What is the nature of the opportunity that Transforming Rehabilitation represents?’, Speech at the Clinks Annual General Meeting, 29 January. Criminal Justice Alliance (2011) Response to ‘Breaking the Cycle: Effective Punishment, Rehabilitation and Sentencing of Offenders’, London, Criminal Justice Alliance Dominey, J. (2012) ‘A mixed market for probation services: Can lessons from the recent past help shape the near future?’, Probation Journal, 59(4): 339–354 Fligstein, N. (1996) ‘Markets as politics: A political-cultural approach to market institutions’, American Sociological Review, 61(4): 656-673 Fligstein, N. (2001) The Architecture of Markets: An Economic Sociology of Twenty-First-Century Capitalist Societies, Princeton, Princeton University Press Fligstein, N. and McAdam, D. (2012) A Theory of Fields, Oxford, Oxford University Press Fox, C. and Albertson, K. (2011) ‘Payment by results and social impact bonds in the criminal justice sector: New challenges for the concept of evidence-based policy?’, Criminology and Criminal Justice, 11(5): 395-413 Frazer, L. and Hayes, C. (2011) MoJ Reducing Reoffending Third Sector Advisory Group – A Report from the Task and Finish Group on ‘Competition, Commissioning and the VCS’, London, Clinks Gibbs, A. (2001) ‘Partnerships between the Probation Service and Voluntary Sector Organisations’, British Journal of Social Work, 31(1): 15-27 Gojkovic, D., Mills, A. and Meek, R. (2011) Scoping the involvement of third sector organisations in the seven resettlement pathways for offenders, TSRC Working Paper 57, Birmingham, TSRC Gough, D. (2012) ‘“Revolution”: Marketisation, the penal system and the voluntary sector’, in Silvestri, A. (ed)Critical reflections: social and criminal justice in the first year of Coalition government, London, Centre for Crime and Justice Studies), pp 20-21 Grayling, C. (2012) ‘Rehabilitation revolution: the next steps’, Speech at the Centre for Social Justice, 20 November. Available at https://. www.gov.uk/government/speeches/rehabilitation-revolution-thenext-steps (accessed 3 March 2015)

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House of Commons Justice Committee (2011) The role of the Probation Service, Eighth Report of Session 2010-12, HC 519, 3 Vols, published 27 July, London, TSO House of Commons Justice Committee (2014) Crime reduction policies: a coordinated approach?, First Report of Session 2014-15, HC 307, published 26 June, London, TSO Hucklesby, A. and Corcoran, M. (eds) (2016) The Voluntary Sector and Criminal Justice, Basingstoke, Palgrave Kendall, J. (2003) The Voluntary Sector: Comparative Perspectives in the UK, London, Routledge Livingstone, I. (2014) More than a provider: The role of the voluntary sector in the commissioning of offender services, London, Clinks Macmillan, R. (2013) ‘“Distinction” in the third sector’, Voluntary Sector Review, 4(1): 39-54 Maguire, M. (2012) ‘Big Society, the voluntary sector and the marketization of criminal justice’, Criminology and Criminal Justice, 12(5): 483-494. Mair, G. and Burke, L. (2012) Redemption, Rehabilitation and Risk Management: A history of probation, Abingdon, Routledge Martin, C., Frazer, L., Cumbo, E., Hayes, C. and O’Donahue, K. (2016) ‘Paved with Good Intentions: The Way Ahead for Voluntary, Community and Social Enterprise Sector Organisations’ in Hucklesby, A. and Corcoran, M. (eds) (2016) The Voluntary Sector and Criminal Justice, Basingstoke, Palgrave, pp 15-42 Mills, A., Meek, R. and Gojkovic, D. (2011) ‘Exploring the relationship between the voluntary sector and the state in criminal justice’, Voluntary Sector Review, 2(2): 193-211 Ministry of Justice (2010) Breaking the Cycle: Effective Punishment, Rehabilitation and Sentencing of Offenders, Cm 7972, London, Ministry of Justice Ministry of Justice (2011) Breaking the Cycle: Government Response, Cm 8070, London, Ministry of Justice Ministry of Justice (2012) Punishment and Reform: Effective Probation Services, Cm 8333, London, Ministry of Justice Ministry of Justice (2013a) Punishment and Reform: Effective Probation Services: Summary of consultation responses, London, Ministry of Justice Ministry of Justice (2013b) Transforming Rehabilitation: A revolution in the way we manage offenders, Cm 8517, London, Ministry of Justice Ministry of Justice (2013c) Transforming Rehabilitation – Summary of Responses (London, Ministry of Justice). Ministry of Justice (2013d) Transforming Rehabilitation – A Strategy for Reform, Cm 8619, London, Ministry of Justice

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Ministry of Justice (2013e) Principles of Competition – Transforming Rehabilitation Programme, London, Ministry of Justice Ministry of Justice (2014a) ‘Voluntary sector at forefront of new fight against reoffending’, Press release, 29 October. Ministry of Justice (2014b) ‘Written Ministerial Statement: Ministry of Justice Update’, 29 October, London, Ministry of Justice Moseley, J. (2006) ‘Throwing away the key: The historical and modern context of charities working in the criminal justice system’ in Tarry, N. (ed) Returning to its roots: A new role for the third sector in Probation, London, Social Market Foundation, pp 27-35 Mythen, G., Walklate, S. and Kemshall, H. (2013) ‘Decentralizing risk: The role of the voluntary and community sector in the management of offenders’, Criminology and Criminal Justice, 13(4): 363-379 Neilson, A. (2009) ‘A Crisis of Identity: NACRO’s bid to run a prison and what it means for the voluntary sector’, The Howard Journal of Criminal Justice, 48(4): 401–410 Nellis, M. (1995) ‘Probation partnerships, voluntary action and community justice’, Social Policy and Administration, 29(2): 91-109 NOMS (2007) A Century of Cutting Crime, 1907–2007, London, NOMS Stacey, C. (2012) ‘The marketization of the Criminal Justice System: Who is the customer?’, Probation Journal, 59(4): 406-14 Tarry, N. (ed) (2006) Returning to its Roots? A New Role for the Third Sector in Probation, London, Social Market Foundation Taylor-Gooby, P. (2012) ‘Root and branch restructuring to achieve major cuts: The social policy programme of the 2010 UK Coalition Government’, Social Policy & Administration, 46(1): 61-82 Thomson, M. (2010) Criminal justice outsourcing: what is the potential role of the voluntary and community sector?, London, Clinks Tomczak, P.J. (2014) ‘The penal voluntary sector in England and Wales: Beyond neoliberalism?’, Criminology and Criminal Justice, 14(4): 470-486 Vennard, J. and Hedderman, C. (2009) ‘Helping offenders into employment: How far is voluntary sector expertise valued in a contracting-out environment?’, Criminology and Criminal Justice, 9(2): 225–245

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Conclusion James Rees and David Mullins

The third sector’s involvement in public service delivery is undoubtedly a high profile and much debated aspect of the sector’s overall role in society. It is one that is both very deeply rooted and long-sustained, but also one that has grown rapidly in the last 15 years. Arguably there has, until recently, been a relative dearth of empirical academic research seeking to understand the content, consequences and controversies of this engagement. This volume, in bringing together contributions from a wide range of academics who have been part of the Third Sector Research Centre, has been an attempt to address that gap in as coherent and comprehensive a manner as possible. Public service delivery remains controversial, both for many within the sector (‘looking in’) and for those equally concerned with the future of public services (‘looking out’). As Rob Macmillan has recently put it, two narratives seem to consistently frame contemporary debates in this area. The first, a narrative of necessity and transition, suggests that TSOs need to adapt to a changing and highly challenging operating environment by becoming more professional and business-like, more efficient and impact-focused. Such calls are often associated with government (New Labour just as much as the Coalition) but also with national sector bodies. This narrative often implies a move closer to the market and to private sector modes of behaviour as a way to survive and even, perhaps, to thrive. From a more critical standpoint, there comes a narrative of jeopardy and loss, in which TSOs are drifting away from their distinctive moorings in civil society into the mainstream, adopting more hybrid characteristics in their entanglements with both the state and the private sector (Milbourne, 2013; Rochester, 2013; Benson, 2014); and such hybridisation is rarely seen as a contest in which civil society values can be reasserted (Mullins and Acheson, 2014). Both narratives seem to point to a wider truth (again, ‘looking out’) of the continued adoption of commercial approaches and a process of marketisation within public services; but with perhaps a growing preference for large private sector providers over the third sector in recent years in

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several sectors (employment services and criminal justice) compared to housing where large non-profits, previously the ‘preferred providers’ had been holding their own in the climate of ‘open public services’. Many aspects of the current service delivery landscape can be taken as evidence of these, Chapters 5, 7, 9, 10 and 11 in particular). Yet how far have we got in evidencing and addressing some of these dilemmas in a more systematic manner? As almost all of the chapters in this book demonstrate, certainly these tensions are real, and can be seen to have been having an impact. But still more needs to be done to understand the variety of experiences between different parts of a hugely diverse sector. This point about complexity and perspective reminds us of the enduring relevance of Kendall’s (2003) idea of thinking of the sector’s engagement in terms of its horizontal and vertical dimensions. This insight has guided the structure of this book, in terms of reflecting issues that cut across the sector as a whole, in Part Two: volunteering, spin-outs, impact measurement; followed by the consideration of individual services fields in Part Three, which in turn often exemplify other horizontal issues – for instance how recent changes in social care reflect on the personalisation agenda, and the recent policy obsession with outcomes and payment by results. We return to what more needs to be researched towards the end of this brief concluding chapter.

The big picture: how does the third sector sit in the contemporary landscape of public services? One concern of this book has been to take a more detached view of contemporary active debates on, and in the third sector. We suggest that recent controversies are often not as ‘new’ as they might seem, and this book starts out by making the case that the clarification of some of the key terms involved – especially ‘third sector’ and ‘public services’ – can assist, as well as setting the current role in public services in its historical context. As Pete Alcock clearly demonstrates in Chapter 2, the third sector service delivery role is not new. It has long been a core part of the sector’s identity and contribution to the public good. But as we also know, it has undergone a series of shifts determined largely by changing policy and political attitudes to the delivery of services and the nature of the welfare state. New Labour was particularly marked in its enthusiasm to ‘partner’ with the sector, to boost its involvement in different service delivery fields, and to invest in the means to boost its capacity (see also Kendall, 2000; Carmel and Harlock, 2008; and Chapter 6, this volume). In many ways, concerns over apparent

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‘threats’ to the sector: to cherished attributes of independence, voice and authenticity, have played out throughout this long history, and some scepticism is required towards claims that any particular period represents novel crisis or transition. Moreover, there has sometimes been confusion over understandings of what constitutes public services. As Alcock makes clear, it is largely the notion of public services as those provided to the public and paid for out of public resources, but not necessarily delivered by public sector agencies, that forms the predominant terrain for the services discussed in this book. This terrain has proved most controversial, yet it is also a rather narrow conception of what is meant by public services. As Alcock argues, ‘it may be that the concerns that some commentators have expressed over the role of third sector involvement in public services are primarily a product of an assumption that it is only this narrower notion that should be the focus of debate about the role of the third sector in public service provision’. This more nuanced understanding helps us appreciate how complex shifts in forms of delivery and funding mechanisms (for example changes in the mixture of providers, ‘diversification’ of supply) are not necessarily best captured by unidirectional terms such as ‘privatisation’. Whereas ‘privatisation’ assumes a unilinear shift of services from state to market, the term ‘hybridisation’ better captures the possibility of different welfare mixes arising from the presence of the third sector and of a degree of challenge to both state and market modes from civil society engagement (see Chapter 11). Clearly though, continued changes involving the third sector’s role in public services will undoubtedly raise new questions about the nature of public services. Building on this, Buckingham and Rees show in Chapter 3 that the ‘relational’ and dynamic picture that emerges from considering third sector service delivery within the framework of the welfare triangle, and the conception of the third sector being located within a tension field in which state, market and informal sector drivers, are contested rather than being separate from state and market. Such a perspective also helps to make sense of the notion of the marked hybridity that seems to be becoming an everyday reality for parts of the service-delivering third sector (see especially Chapters 5 and 11); and avoids the conceptual pitfalls of ‘sectorisation’. Chapter 3 draws out the key continuities and breaks between the New Labour and Coalition periods. First, it reminds us that the third sector was central to New Labour’s ‘partnership’ project, and this was accompanied by a deepening of the relationship that was accompanied by new mechanisms of control, especially the increasing use of contracts (Larner and Butler, 2005). In contrast, the

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Big Society was posed in opposition to this, heralding a relaxation of control and ‘red tape’ – yet ultimately, the agenda was a much looser and less coherent approach, and its promises were regarded by most as a let down. Underlying continuities are evident in the evolving governance of relations between the state and sector. Buckingham and Rees note that under New Labour, the emphasis on performance management represented an extension of statutory sector conventions into the third sector. In the second and third Labour terms and the Coalition period, a further redefinition of the interface between sector and state occurred – one in which commissioning was viewed as a tool to introduce greater competition, provider diversity and as a route to further marketisation. Furthermore, the increased involvement of the private sector – for instance as prime contractors – further disrupts the interface between sector and state. It is clear too, that the extension of these policies and mechanisms drive the tensions within organisations and with their stakeholders that are explored in many of the chapters. One contribution of the dynamic tension field approach proposed here is the problematisation of unidirectional concepts such as privatisation. Yet marketisation is clearly a significant and ongoing trend that has had a major impact within the field. Macmillan in Chapter 12 reminds us that we also need a nuanced approach to understanding ‘marketisation’. Considering each interface in turn, Buckingham and Rees first identify the continuation of the trend initiated in the 1980s towards contracting out of service provision to the third and private sectors, at the same time the increasing adoption of market principles meant the development of the ‘marketised state’. Within this terrain of an increasingly marketised state we see the greatest blurring of boundaries, and the greatest extent of hybridisation. It may be that it has created a bifurcation of the sector: a split between those willing and able to contract and those who keep well clear. For those that remain within the market for providing publicly-funded services, the relinquishing of government control has been replaced not by greater autonomy, but rather by greater market discipline. This can be seen most clearly in the parts of public services dominated by primesubcontractor type relationships, based on increasing distance from government commissioning agencies. Finally then, the climate of austerity, and the associated decoupling of funding from public services suggests a shifting of responsibility towards the third and informal sectors. The consequences of this remain very unclear, yet as Buckingham and Rees note, a clear suggestion is of ‘increased demand upon both the informal and third

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sectors, particularly in disadvantaged communities where reliance on government provision is high’. Mohan and Clifford show just how difficult it is to find solid quantitative ground on which to base our diverse empirical investigations of service delivery. Nevertheless, they show how the headline data are consistent with the broad historical picture painted by Alcock, Buckingham and Rees. The big picture is undoubtedly the significance of public funding – accounting in the post-1997 period for over 35% of total third sector income – and the considerable growth experienced by the sector in its involvement in public service delivery. As we know from NCVO’s almanac, total public funding increased (at 2011–12 prices) from £9.4 billion to £15 billion between 2000–01 and 2011–12, a clear reflection of New Labour’s mainstreaming project. Part of Mohan and Clifford’s concern is to show how the relative paucity of the evidence base has allowed competing claims to flourish. From across the political spectrum the growth of the relationship has stoked fears of dependence, including in the ideas of the growth of toothless ‘sock puppet’ charities and ‘Tescoisation’, though as they point out, ‘discussion of these trends and their implications has tended to focus on statistical aggregates and an organisation-level perspective is missing’. They show that such fears are misplaced, there is evidence of concentration of resources in certain charitable organisations and charitable sectors – but there is no basis for the claims made by Snowdon (2012) about sock puppets – as they note, ‘critics from both sides of the debate need a sense of proportion’ (see also Backus and Clifford, 2013). As Mohan and Clifford point out, however, the data they discuss do not unambiguously demonstrate that these organisations are delivering public services. Using responses from the large National Survey of Charities and Social Enterprises (NSCSE), in the survey data we find variations in the extent to which organisations say they are involved in public service delivery. Indeed, being in receipt of public money does not necessarily mean that they consider they are delivering public services. Despite receiving public funding they may not consider that their most important activity. This is an important reminder that there can be ambiguity over whether public payments are to support service delivery – and it shows that detailed qualitative research remains necessary.

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Third sector organisations negotiating tensions: the dilemmas of service delivery A second concern of this volume has been to consider and deepen our understanding of the impacts of the public service delivery agenda on the sector, with a particular focus on the parts of the sector that are most closely involved – a gaze we likened to ‘looking in’ at the sector. In different ways, almost all of the chapters in Parts Two and Three reflect on this important theme of how deepening engagement in public service delivery has had an impact on the sector. All of the chapters demonstrate that involvement in service delivery places tensions and poses dilemmas for organisations. In Chapter 5, Miller and Lyon show how one consistent policy emphasis between New Labour and the Coalition has been the promotion of the movement of groups of public sector employees out of the public sector, creating new third sector organisations. That emphasis, hinting at a somewhat unspoken underlying motivation for encouraging spin-outs, has clearly varied somewhat between the two periods. Differences between periods ‘were arguably more to do with the wider policy context than any fundamental altering of intent or perspective’, and were underpinned by a similar set of assumptions about what spinning out would achieve. So one might expect that such organisations have been undergoing a somewhat unsettling process. Miller and Lyon ask, ‘is it possible to create a third sector organisation from a service that has a public sector history, culture, and values?’ To a degree, senior staff involved in spin-outs have experienced tensions from the beginning of the process. Research to date by the authors and their colleagues suggests that agencies experience a combination of push and pull factors, with spinning out being seen as a lesser evil compared to private sector takeover, and as a possible way to outflank expected financial cuts. Once again, the idea of hybridity has proved to be a useful conceptual frame to make sense of these changes. Billis’s (2010) notion of ‘enacted’ rather than ‘organic’ hybridity captures well the process whereby spinouts are blurring boundaries between public, private and third sectors in these fields, by design rather than by evolution. In a very pragmatic sense, Miller and Lyon note: Spin-out employees refer to third sector values in their engagement with service users and governance, while at the same time emphasising their entrepreneurial flexibility and public service ethos. This hybridity has led to some

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uncertainty as to what sector they belonged to, and there were attempts to provide alternative descriptions, such as being of the ‘independent’ sector as an ‘NHS provider’. (Miller and Lyon, Chapter 5) Nor were they newly ‘free’ from public sector control, regulation and monitoring. So while it is clear that this process is not ‘privatisation’ – though it may very well facilitate marketisation, at least in the medium to longer term – it does contribute to a real shift in how we understand part of the third sector. For while it is still relatively early to assess longer-term outcomes, the evidence base is still rather thin. What seems undeniable is that these organisations draw on multiple values and heritage, including a form of ‘public’ ethos. Parallels with earlier work on ‘stock transfer’ of local authority housing (Pawson and Mullins, 2010) are strong. In housing, the experience of over 20 years of creation of enacted hybrids, has made them more market orientated than their local authority forebears, yet in some ways more accountable to tenants and communities. These ‘enacted hybrids remained aligned to state priorities through funding and regulation, and exemplified a nuanced hybridisation process rather than outright privatisation (Pawson and Mullins, 2010). Nevertheless, some critics have interpreted this hybrid phase as a staging post to full privatisation in the longer term, a critique that might also be applied to more recent health spin-outs. The role of volunteers has sometimes seemed like a forgotten, marginal and marginalised aspect of third sector public service delivery agenda – ‘voices and concerns’ of volunteers have often been ignored in accounts of change in this part of the sector. In Chapter 7, Ellis Paine and Hill neatly sum up the picture: ‘Volunteering policy is perhaps best characterised as ad hoc and peripheral, and in recent years has been overshadowed by the sharp funding cuts associated with the Coalition’s austerity measures.’ Yet as they also remind us, there is a long history of volunteering throughout the public services landscape – and again, despite a weakness in systematic data in relation to volunteering – with its contribution to English public services estimated at £34 billion, its scale seems undeniable. Arguably too, interest in volunteering has rarely been higher than following on from the Coalition’s Big Society focus. There has been concern to understand whether – and in what ways – volunteers are taking over public services as parts of the state recede from delivery (but again, the evidence base is patchy). Focusing on these gaps, Ellis Paine and Hill’s central contribution is to shine a

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light on the ways that volunteering has been affected by the increased involvement of the sector in public service delivery. Involvement has meant the introduction of New Public Managementrelated practices such as formalisation of roles, increased monitoring, and in particular the adoption of volunteer management practices. Ellis Paine and Hill detail how ‘there has been a shift in dominant logics within TSOs, in part at least, as a result of their increased involvement in public service delivery, and this affects the practice, experience, outcomes and very conception of volunteering in such settings’. Volunteering is a relational activity and growing tensions and divisions are apparent in the role of volunteers within service delivery organisations. Among the shifts they draw attention to is the move from volunteers being positioned as owners or members to one where they are positioned and operate as unpaid workers delivering specific services or undertaking narrowly defined tasks. This has consequences in growing tensions emerging between unpaid workers, and paid workers, and between unpaid workers and managers. Finally, this is also having an impact on the crucial relationship between volunteers and users, for example, recasting dynamics from peer-to-peer to professional-client. Ellis Paine and Hill conclude that one outcome seems to have been that ‘volunteer roles have become narrower, the space for different forms of volunteering has become shallower and the position and power of volunteers has become more circumscribed’. Yet dynamics can play out very differently in different organisations and a key message of the chapter, like many of the others in this volume, is that organisations are not passive victims of policy agendas and pervasive societal trends (such as individualisation) but instead actively shape, resist and constitute their responses and interactions with society and local communities. Very clearly this is deserving of further scrutiny, as ‘there are implications for the ability of volunteering to contribute to society above and beyond its role in service delivery’ (Ellis Paine and Hill, Chapter 7). We see these tensions play out in each of the policy fields covered in this volume, often reflecting a number of long-running concerns as outlined in the introduction. This is a particular theme of the contributions in Part Three. As Macmillan puts it in Chapter 12, in his discussion of the still unfolding restructuring and outsourcing of probation services, which echoes discussions in many parts of the sector: A common thread running through much recent research and commentary is concern around the dilemmas for organisations in getting closer to the state through funding

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arrangements and new policy developments… [and in particular that they will] … gradually be transformed as they are drawn closer into what Gough (2012: 4) calls ‘the state’s network of punishment’. Arguably, this reflects the key dilemma facing almost all TSOs in ‘partnering’ with or otherwise coming into the orbit of the state. He suggests there are two main clusters of concerns: fears about loss of independence and distinctiveness, and the potentially narrowing prospects for smaller organisations in a more competitive environment. In particular, in the criminal justice field there are acute concerns that TSOs will be drawn into the same ways of working and especially an overwhelming punitive logic when working within the close embrace of the state – echoing fears in other fields such as homelessness (Buckingham, 2009; 2012) and housing (see Chapter 11). As Mills et al (2011: 205) put it, the fear is that the ‘sector will be shaped by the state and the private sector in their own image, with requirements to conform to certain standards a condition for engaging in partnerships’. However, as Macmillan makes clear, it is very important to remember that TSOs clearly do retain an element of leeway for critical engagement through, for example, campaigning and lobbying. A degree of control can also be retained by those organisations with diverse resource streams, including charitable income and volunteer labour, to avoid resource dependence on the state and to reduce ‘contamination’ by punitive agendas (Mullins and Acheson, 2014). Many of these fears are long running, much discussed, and arguably perhaps, irresolvable. They could perhaps be considered part and parcel of the ‘pact’ that TSOs make when engaging in service delivery or indeed any form of engagement with the state. However, again, as Chapter 3 makes clear (and other chapters exemplify), it is important to keep sight of wider trends and influences – relating to policy and, crucially, resources – that influence and cut across sectoral boundaries and interfaces, and to understand which trends and drivers are particularly dominant. In Chapter 9, Taylor et al discuss such tensions using the language of risk – reflecting the discourse in play in employment services. Here, the recent dominance by the Work Programme and Work Choice exacerbated tensions experienced by providers. Several contingent factors were apparent here; the deferred payment system Payment by Results (PbR), the consequent uncertainties over longer-term success and sustainability for providers, and the considerable ‘unknowns’ around

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the economy and labour market. There is no single message based on the sectoral position of providers, instead: [there] is a complex web of risks associated with different roles in the two programmes. Each organisation [negotiates those] risks based on their own financial capacity, commitment to mission and reputation and their understanding of a shifting employment services landscape. Whilst some saw the risks of competing as too high others saw the risks of not competing and thus not being part of the landscape as outweighing the financial risks of ‘staying in’. TSRC’s work has also problematised the discourse evident in recent critical debates on the Work Programme that suggested a uniformly negative impact on the voluntary sector (Civil Exchange, 2016; Benson, 2014). In fact, as Chapter 9 shows, the experience, position in the field, and financial impact is highly individual to organisations, and far from being passive victims they are actively making decisions about risk exposure and strategy. The strategic action field theory perspective adopted by the authors here (Fligstein and McAdam, 2013; Taylor et al, 2015) makes these dynamics clearer. Broadly similar processes – and consequent tensions –have affected the housing association sector over a longer time period. Mullins argues that the ‘distant uncle’ moniker is both undeserved and belies a range of learning that can be drawn from the transition of housing associations from a ‘voluntary housing movement’ into mainstream public service providers. It is clear, first, that the provision of housing by housing associations is a crucial and very significant part of the overall public services landscape. They now provide over half of all social housing in England, and their role in building new affordable housing with public subsidy has yet to be significantly challenged by the private sector. That history has generated tensions aplenty, including similar issues of independence and contaminating policy agendas found in the employment and criminal justice fields. Mullins argues that: Recent state policy towards social housing and its users has become increasingly detrimental to the underlying social purposes of many housing associations. Contentious policies include the National Affordable Housing Programme, welfare reform and a ‘creeping conditionality’ are leading more associations to challenge public policies. These reforms have rendered social housing less affordable, less

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secure and less of a buffer to the wider precariousness lowincome households face in other areas of their lives such as the labour market or as new migrants.’ This suggests that the campaigning role, which had been lost in housing (Purkis, 2010) may be reborn, as recent campaigns such as SHOUT, Priced Out and Generation Rent signify (see Chapter 11). Not least among the tensions in housing is a polarisation between a small number of very large providers and a majority of smaller organisations (with parallels to Backus and Clifford’s (2013) Tescoisation metaphor. Beyond this, one of the most interesting findings to emerge from TSRC work on housing is a new image of organisational ecology. Mullins shows that gaps left in housing provision by the scaling up, professionalising and commercialising direction of the housing association sector are now being filled by a ‘new cohort’ of smaller organisations. This is particularly evident in street-level regeneration of older and empty housing, which once formed the core interest of housing associations, but is now too small-scale and messy to attract them, in comparison to large-scale new building. Using a metaphor of ecological succession, it is argued that these niches are now being reoccupied by ‘self-help’ and ‘community-led’ housing organisations with the local links and knowledge to exploit that niche and bring empty homes into use. This is a timely reminder that a key attribute of the third sector is fulfilling new needs and innovating (discussed further in the next section). Another key insight here is the deepening of our understanding – visible in some of the other service fields discussed in this volume – of the complex picture of a myriad of sub-sectors in interacting, and proximate fields.

Innovation and change: TSOs promoting and navigating new models of public service improvement The third sector has long been considered a sphere in which social innovations are generated and disseminated for the benefit of society. As Chapter 2 pointed out, it was a key reason for New Labour’s support for ‘mainstreaming’ of the sector. Indeed, the third sector literature has long drawn attention to the innovative potential of the sector, as well as its role in advocating for minority groups and communities, campaigning for social change, and embedding innovations that become accepted practice. Equally, commentators have been consistently alert to perceived threats to the ability of TSOs to retain their autonomy and independence in this regard. Throughout this volume, authors

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have paid heed to both issues, in turn showing how TSOs are active rather than passive agents within public policy trends and agendas. Greater freedom to innovate has been one of the key rationales underpinning policies such as the Right to Request and the Mutuals programme, which encourages spin-outs from the public sector into the third sector (there is in many ways an additional expectation that such innovation will be more rapid). Supporters see spin-outs as new hybrid organisations in which the workforce are ‘freed from constricting bureaucracy, and allowed to use new business opportunities to innovate and grow to the benefit of their users, communities and staff’. As Miller and Lyon outline in Chapter 5, there are clearly similarities with the expectations placed on social enterprise as a form that encourages greater social innovation and solutions to ‘wicked problems’ afflicting public services. However, as they comment, it remains too early to assess whether the outcomes come anywhere near to matching the aspirations. There are indications that innovation is indeed happening, for instance, respondents from a sample of 30 spin-outs stated that 43% of 134 specific innovations couldn’t have happened in the public sector because of bureaucratic obstacles or risk aversion (Lyon et al, 2013). Other evidence is more conflicted, suggesting that staff perceive that their working lives have changed little. So overall, although it seems that innovation is emerging it remains to be evaluated how this relates to better outcomes, and as they suggest it is perhaps not ‘the nature of the organisation that is important but rather the opportunity and promise that those involved perceive’ (Miller and Lyon, Chapter 5). But another central aspect of interest around innovation is the possibility that core parts of the third sector have developed or driven innovation through their own advocacy and campaigning. As Harlock and Miller argue in Chapter 10, personalisation provides a ‘remarkable’ example of the role of the third sector in promoting new models of public service provision – providing us with another opportunity to consider ‘looking out’ to wider trends affecting and driving change across public services, and indeed society more widely. Personalisation is a story with its origins within the innovatory heart of the sector, which has gone on to change the way people think of and expect a response of public service delivery. Focusing in this case on the field of adult social care, they also highlight again that tensions are very apparent, as they note, ‘Choice has been firmly interpreted as consumer choice, expressed and exercised in a marketplace of services through personal budgets. Within this new system, a key challenge for the third sector is how best to implement personalisation, as responsibility for delivery is pushed back onto the third sector’ (Harlock and Miller, Chapter 10).

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In particular, the disability and service user-led movement played a key role in developing the principles of personalisation. Such activists, campaigners and associated supportive organisations wanted to see the reshaping of services to be much more responsive and accountable to the individual service user and their circumstances. But Harlock and Miller also show how policy developments in relation to personalisation have increasingly been harnessed to the wider governmental interest in expanding consumer choice the adult social care ‘marketplace’, and they go on to reflect the emerging impacts this is having on TSOs, particularly in the light of long-term austerity. So, in the sense of ‘looking out’ first, they observe the way in which the third sector was instrumental in developing the principles of personalisation – particularly choice and control – and in gaining its acceptance through lobbying and negotiation, particularly by the organisation In Control – which led to government acceptance in around 2007. Second, focusing ‘back in’ on impacts on the sector, they draw attention to the idea that TSOs will have to move from a ‘wholesale’ to a ‘retail’ business model, including ‘adopting different marketing strategies to reflect the shift in purchasing decisions to individuals, their families and support brokers, and the likely need for greater resources and investment into such marketing activities’. They also detail the many ways in which personalisation is expected to have quite profound impacts on the workforce and staffing patterns. It is clear, therefore, that the original impetus for the development of personalisation principles have undergone complex shifts through gradual implementation and has had and will continue to have complex ramifications for the sector within a wider ‘market’ of adult social care (and other related fields). In the case of employment services too, what we have arguably witnessed is a long sweep of innovation with the voluntary sector having developed many of the detailed and local approaches, which have been shown to have made a difference in moving individuals closer to work, and which have gradually adopted in wider approaches to unemployment and worklessness. Over the longer term, evolution of the contracted out approach to employment services in the UK has been the desire of policy makers to bring voluntary sector expertise and approaches into the mainstream of public services (Aiken and Bode, 2009; Damm, 2014). The more recent history of innovation within employment programmes – especially since the reforms initiated by the influential Freud report in 2007 – has arguably been much more complex, and conflicted. On the one hand, what has been witnessed has been more like systemic innovation, with efforts from the top down to shift the way in which services are delivered and particularly

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the way resources are allocated. Indeed, the changes that all providers have been forced to adapt to have been immense, with the Work Programme alone involving the adoption in full of a single programme for all participants (and greater scale), the full prime-subcontractor supply chain model, and most significantly the introduction of more rigorous payment by results. On the other, as Chapter 9 shows, TSO providers have been forced to adapt quite rapidly to this ‘unsettlement’ in the field – this doesn’t mean that innovation isn’t occurring – indeed what seems to have shifted is the extent to which ‘successful’ TSOs in such programmes are those that can accurately read the shifting ‘signals’ in the market environment, respond and adapt to the pressures and risks that they face. Innovation in the housing field through diversification and ‘community investment’ activities is another key theme of Chapter 11. Detailed evidence from two audits by the National Housing Association shows the sheer range of social welfare services now provided by housing associations in response to ‘tough times’. Mullins argues that such innovation can be attributed to either social or to commercial drivers and that differences in motivation and method can bring considerable differences in the outcomes of such activity for community empowerment. In the recent context of austerity, housing associations were making hard choices about which welfare gaps to fill and some were turning to social impact measurement to legitimise such decisions (Pritchard-Wilkes, 2014). Arguably then, what we can suggest is that however one views innovation, there is now an accelerating pace of change, forcing TSOs to adapt quickly to a more ‘commercial’, competitive and marketised environment. Innovation in this reading is multidimensional – involving developments that stem from very different origins – in the different spheres discussed in Chapter 3 and elsewhere, but also from the userled and activist citizen direction, from the influence of transformations occurring in the nature of the state, and finally from the market sector. As Mullins puts it in Chapter 11, innovation decisions in relation to diversification may be ‘strategy based, contract based, partnership based or local relationship based’, each with very different impacts for community empowerment.

The end of the affair? The prospects for the third sector role in public services We finish this book with a set of questions and propositions for the future. Despite the considerable uncertainties over the political

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landscape of the UK and more narrowly within England, it will almost certainly remain the case that the third sector will be in demand for its potential contribution to the further development and reform of public services. The wider context for the next five years will include continued pressure on public finance – even an era of ‘perma-austerity’. The third sector is likely to remain an attractive part of proposed solutions. What are we to make of calls for third sector involvement? A gloomy scenario suggests: • long-term austerity; • subsidiary to and driven by state and market; • scaling up and hybridised and out of civil society/community control; • loss of identity and tailored, personalised and co-productive services. On the other hand, some reasons to be more optimistic might stem from propositions that: • TSOs continue to be more trusted than other sectors; • despite cuts in resources, contracts and regulation, and marketisation, TSOs continue to exert active agency; • TSOs will continue to innovate, fill gaps, develop new types of volunteering. One point to remember is the often symbolic use of the sector in public discourse – the ‘charity sector’ has a high degree of trust with much of the public and has been protected, in Salamon’s phrase, by a ‘myth of pure virtue’. This was clearly the case in the Coalition years – its involvement in the Work Programme was heralded as a ‘triumph for the Big Society’ by Chris Grayling. The same minister by now at the Ministry of Justice aimed to show that lessons had been learned and the third sector would have an even bigger role in the probation reforms. Yet as we point out in this book (especially Chapters 4, 9 and 12), in reality the role is much smaller and arguably supplemental to the public sector, and increasingly the private sector. It may well be the case that the third sector is simply a more palatable way to soften the impact of politically contentious reforms involving contracting out, reductions in service availability and quality, which in turn will be viewed by many as privatisation. As many of the chapters make clear, the sector has clearly been affected by a strong trend towards marketisation, which has impacted deeply in terms of the tensions and stresses they experience. In

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drawing a multidimensional picture of the sector’s place in the wider field of public services, Chapter 3 suggests that service delivering TSOs are part of a ‘marketised state’. However, as this book also makes clear, the picture is far from uniform between different service fields. Organisations in different fields are affected in different ways – and despite many of the popular claims made recently – it is, in fact, impossible to sketch out a single narrative. Organisations find themselves in very different positions based on their trajectories within the sector (or a subsector), their resource dependencies, and their own behaviours, missions, cultures and strategies. For example, is the housing association sector any less monolithic than what was once a dominant council-provided social housing sector? Even within the single Work Programme, a plethora of TSOs may be so different from each other that they appear to have little in common – reflecting the point made by Kendall (2003) about the ‘vertical’ and ‘horizontal’ dimensions of third sector activity. Furthermore, marketisation as a description of these processes is too simple. Research that ‘focuses in’ on third sector organisations and their understanding and interpretations of their operating environments, tends to show how they may not be the passive ‘victims’ of policy. Instead, as Macmillan (Chapter 6) suggests, we ‘recognise the active role voluntary organisations and their advocates play in trying to create, maintain and advance “room” for the sector in a changing field or an emerging market, by efforts to “talk up” the role and contribution of the sector, but also to identify and respond to concerns which may challenge its position.’ A number of the chapters have drawn in particular on Fligstein and McAdam’s (2012) influential strategic action field perspective to suggest some more creative ways in which TSOs constitute their roles in public service ‘markets’. What does it all mean for the future vitality, indeed existence of the third sector? We have noted the apparent trend towards a splintering of the sector between those ready, willing and able to engage in public service delivery and the wider constellation of organisations and informal activity broadly conceived of as civil society. In many ways this represents a partial renewal of an old debate, reflecting for instance Barry Knight’s proposal to split the sector for practical purposes (Knight, 1993), and what is perhaps equally striking is the idea that there is a gradual settling down of roles and the balance of responsibilities within a new emerging welfare mix. It also suggests that the ‘strategic unity’ in the third sector, most apparent in the New Labour years, appears to have dissolved, a natural corollary perhaps of the ‘de-coupling’ of the state and sector from its

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former embrace in partnership (Alcock, 2010; Macmillan, 2013). Could a partnership approach be re-invigorated by a government of a different complexion and what implications might this have for the prime contractor models promoted under the open public services framework? Could a shift away from big government to big society be recast by a similar rejection of ‘big market’ solutions such as the Work Programme and large scale procurement? Might economies of scope and local knowledge be given greater currency over economies of scale to generate the kinds of wider outcomes found in the empty homes community grants programme (see Chapter 11)? One answer is that in the future as in the past, we are likely to see many different types of change occurring at the same time in line with ideas of complexity. Just as economies of scale appear to be winning the day, leading to mergers and rationalisation of services, new gaps may emerge to which small, locally based TSOs are best placed to respond. This book has provided a sense of increasing complexity of the public service landscape. Chapter 5 sketches the growing profile of spin-outs, mutuals, social enterprise, social entrepreneurship. Social investment is arguably an even bigger part of the overall shift. Diversification too is a distinct dimension of complexity and hybridity, as Chapter 11 shows. But it is not only housing associations that may flex their boundaries to provide new services, but it is certainly an approach that has long roots in the housing field. Now, within an austerity framework, housing associations are often the best-resourced local TSOs to make strategic choices about filling gaps in welfare, blending social and commercial approaches in various ways. Equally, it does not seem apparent that individual service delivering TSOs, have been entirely shackled by their involvement, nor, more importantly perhaps, has the entirety of the sector and civil society more widely been silenced in advocating improvement and change. The evidence presented here leads us to predict that some key future changes to public services will come from the third sector itself, rather than being solely driven by the market and the state. In the internet age, crowd sourcing and funding provide real alternatives to public contracts or profit seeking investments. While resources are scarce, the ability of individuals and communities to organise to meet public needs should not be underestimated. Dissatisfaction with transformed and formalised volunteering opportunities within marketised welfare organisations may lead to new forms of voluntary action to fill the gaps left by the formal sector.

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References Aiken, M. and Bode, I. (2009) ‘Killing the Golden Goose? Third Sector Organizations and Back-to-Work Programmes in Germany and the UK’. Social Policy and Administration, 43(3) 209–225 Alcock, P. (2010) ‘A strategic unity: defining the third sector in the UK’, Voluntary Sector Review, 1(1) 5-24 Backus, P. and Clifford, D. (2013) ‘Are big charities becoming more dominant? Cross-sectional and longitudinal perspectives’. Journal of Royal Statistical Society: Series A, 176, 761-776 Benson, A. (2014) ‘The Devil that has come amongst us’: The impact of commissioning and procurement practices, NCIA Inquiry into the Future of Voluntary Services, Working Paper 6, London: NCIA Billis, D. (ed) (2010) Hybrid Organisations and the Third Sector, Basingstoke: Palgrave Macmillan Buckingham, H. (2009) ‘Competition and contracts in the voluntary sector: exploring the implications for homelessness service providers in Southampton’, Policy & Politics, 37(2): 235-54 Buckingham, H. (2012) ‘Capturing diversity: a typology of third sector organisations’ responses to contracting based on empirical evidence from homelessness services’, Journal of Social Policy, 41(3) 569-589 Carmel, E. and Harlock, J. (2008) ‘Instituting the “third sector” as a governable terrain: partnership, procurement and performance in the UK’, Policy & Politics, 36(2) 155-171 Civil Exchange (2016) Independence in question: The voluntary sector in 2016, London: Civil Exchange Damm, C. (2014) ‘A mid-term review of third sector involvement in the Work Programme’, Voluntary Sector Review, 5(1): 97-116 Fligstein, N. and McAdam, D. (2012) A theory of fields, New York: Oxford University Press Kendall, J. (2000) ‘The mainstreaming of the third sector into public policy in England in the late 1990s: whys and wherefores’, Policy & Politics 28(4): 541-562 Kendall, J. (2003) The Voluntary Sector, Routledge, London Knight, B. (1993) Voluntary action, Ovingham and London: CENTRIS Larner, W. and Butler, M. (2005) ‘Governmentalities of local partnerships: the rise of a “partnering state” in New Zealand’, Studies in Political Economy, 75: 85-108 Lyon, F., Vickers, I., Sepulveda, L., McMullin, C. and Gregory, D. (2013) Process of social innovation in mutual organisations: The case of social enterprises leaving the public sector, London: CEEDR Middlesex University and NESTA

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Macmillan, R. (2013) ‘Decoupling the state and the third sector? The “Big Society” as a spontaneous order’, Voluntary Sector Review, 4(2): 185-203 Milbourne, L. (2013) Voluntary sector in transition: Hard times or opportunities?, Bristol: Policy Press Mills, A., Meek, R. and Gojkovic, D. (2011) ‘Exploring the relationship between the voluntary sector and the state in criminal justice’, Voluntary Sector Review, 2(2): 193-211 Mullins, D. and Acheson, N. (2014) ‘Competing drivers of hybridity: third sector housing organisations in Northern Ireland’, Voluntas 25(6): 1606-1629 Pawson, H. and Mullins, D. (2010) After council housing: Britain’s social landlords, Basingstoke: Palgrave Macmillan Pritchard-Wilkes, C. (2014) Social impact measurement: constructing an institution within third sector housing organisations – University of Birmingham, PhD thesis Purkis, A. (2010) Housing Associations in England and the Future of Voluntary Organisations, London: The Baring Foundation Rochester, C. (2013) Rediscovering Voluntary Action: The Beat of a Different Drum, Basingstoke: Palgrave Snowdon, C (2012) Sock puppets: How the government lobbies itself and why, Institute of Economic Affairs, Discussion paper 39 Taylor, R., Rees, J. and Damm, C. (2014) ‘UK employment services: understanding provider strategies in a dynamic strategic action field’, Policy & Politics, published online September 2014

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Index

Index References to figures and tables are shown in italics

6, P. 5

A accountability 30, 31, 47 ACEVO (Association of Chief Executives of Voluntary Organisations) 110, 195 active citizenship 44 ADASS (Association of Directors of Adult Social Services) 197 Adult Social Work Practice pilot programme 94, 99, 100–1 Aiken, A. 137, 139 Albertson, K. 246–7 Alcock, P. 5 Anheier, H.K. 5, 214 Association of Chief Executives of Voluntary Organisations (ACEVO) 110, 195 Association of Directors of Adult Social Services (ADASS) 197

B Backus, P. 71, 212 Baxter, K. 200 Bennett, H. 171 Best Value 47 Beveridge Report 28 Big Lottery Fund 116 Big Society 1, 2, 7, 44–6, 55–6, 57, 129 Billis, D. 29, 158, 262 Birchall, J. 93 Braithwaite, C. 63 Breaking the cycle (Green Paper) 242, 247, 248 Brenton, M. 190 Britain’s Personal Best 56 Bubb, S. 115 Buckingham, H. 54, 136

C Cameron, D. 2, 45, 55 capacity building and infrastructure and Coalition government 112–13, 115–16, 118–19 and connecting organisations 111 definition of 109 demand-led 113, 114, 116, 119 and developing potential 111 existing field of 109–13 and frontline organisations 112, 113–17 and influencing policy and practice 110 and marketisation 113–17, 119 and New Labour 33–4, 47, 109–13 a new map of 117–22 and personalisation reforms 195–6 purpose of 110–11, 119–22 and rehabilitation of offenders 244 and role of infrastructure agencies 109, 110, 113–14, 116–17, 118–21 Care matters (Green Paper) 89 Carey, G. 134, 137 Carmel, E. 5, 35, 136–7 Carter Review 236–7 Centre for Social Justice (CSJ) 64 ChangeUp 33, 11, 112, 114–15, 116 charities and beneficiary groups 73–5, 74 funding mix of 77 and geographical focus 78–9 and neighbourhood deprivation 79, 80 and public service delivery 71–83, 74, 76, 80 scale of activities of 78–9 scale of public funding 64–71, 68–9 staffing profile of 77–8 Charity Organisation Society (COS) 27 children’s social work 89

277

The third sector delivering public services CICs (Community Interest Companies) 73 Civil Renewal Unit 44 CLGs (Companies Limited by Guarantee) 73 Clifford, D. 71, 212, 238 Clinks 240–1, 247–8, 249 Coalition government 7 Big Society 1, 2, 7, 44–6, 55–6, 57, 129 and capacity building and infrastructure 112–13, 115–16, 118–19 and commissioning 48–50, 52–3, 57 and employment services 169, 173–83 and evaluation 152 and housing associations 225–7 and informal sector 55–6 and interface with the state 48–50, 260 and the market 52–3 and personalisation reforms 196–7 and Public Services (Social Value) Act (2012) 153–6 and spin-outs 92–4, 262 Transforming Rehabilitation 233–5, 241–5 and volunteers 129–30 Commission on Personalisation 195 commissioning Coalition government 46, 48–50, 52 cycle of 49 New Labour 47–8 and social value 149–50, 153–6, 158–61 see also employment services; rehabilitation of offenders; spin-outs Community Catalysts 195 Community Interest Companies (CICs) 73 Community Organisers Programme 56 Community Rehabilitation Companies (CRCs) 241, 243–4, 251 Compacts 32–3 Companies Limited by Guarantee (CLGs) 73 competitive tendering 47–8, 50–1 Conservative party 46, 115 contracts and capacity-building 112–13 and Coalition government 48–50, 52–3, 57 funding from 8, 9, 10, 30, 66

and New Labour 43–4, 46–7, 50–1, 53–5, 57 and public service delivery 7–10, 29–31, 35–6 subcontracting 10, 52–3, 57, 171–2, 173, 174, 181 and volunteers 136, 142 see also employment services; rehabilitation of offenders; spin-outs Corcoran, M. 240 Corner, J. 233 COS (Charity Organisation Society) 27 CRCs (Community Rehabilitation Companies) 241, 243–4, 251 criminal justice system see rehabilitation of offenders Crook, F. 234 CSJ (Centre for Social Justice) 64 Cunningham, I. 202

D Davis Smith, J. 28 Dawson, A. 154 Dayson, C. 200 Deakin Commission 7, 32 devolution 23–4 direct payments 193 Dominey, J. 239, 244 Donovan, B. 198

E Ellis Paine, A. 136 employment services and challenges for third sector 173–83 evolution of 171–3 and financial risk 175–8, 184 future role of third sector 185–6 and innovation and change 269–70 and reputational risk 178–9 specialist to generalist approach 179–83, 184–5 and tensions of service delivery 265–6 empty homes sector 217–19, 267 European Union 24 evaluation definition and role of 150–1, 161 methods of 153, 159–61 and social value 149, 159–61 and social welfare policy 151–3

278

Index stock ownership of 212–13, 212, 213 tensions of service delivery 266–7 Hustinx, L. 131 hyperactive mainstreaming 31–2, 35

and third sector 156–7 Evers, A. 42

F Fisher, G. 137 Flexible New Deal (FND) 172 Fligstein, N. 250 Fox , C. 246–7 Freud Report 172 Futurebuilders programme 33, 112, 114–15, 116 Fyfe, N. 136

I In Control 193 Independent Commission on the Future of Local Infrastructure 120 Industrial and Provident Societies (IPSs) 73 informal sector 53–6 Institute of Economic Affairs 64 isomorphism 9, 30, 35

G Garner, J. 132–3 Garner, L. 132–3 Glennerster, H. 29, 158 Gojkovic, D. 237–8 Gough, D. 238 Grayling, C. 233, 234, 242, 243 Greene, J.C. 162

K Kendall, J. 1–2, 5, 29, 31–2, 46–7, 258 Knapp, M. 1–2, 5

L

H Hall, J.N. 161 Hall, K. 94, 95 Hall, M. 150–1, 159 Harlock, J. 5, 35, 136–7, 194, 195 Harris, B. 26 Hay, K. 162 Hewitt, P. 90 history of third sector and changing relations with state 26–30 and public services 21–6 Third Way 29–36 homelessness 54–5, 218–19 hospices (case study) 132, 133, 137 housing associations 6–7 assets of 214–15 and community investment 220–3, 221–3, 270 diversification of 219–23, 220–3, 227 empty homes sector 216–19, 267 evolution of 213–15 and external changes 216–19 future of 227–8 and homelessness 218–19 hybridisation 227–8 and independence 224–5 innovation and change 270 internal transformation of 215–16 recent past 225–8

Labour party see New Labour Lammertyn, F. 131 Larkin, M. 198, 201 Le Grand, J. 89 Leat, D. 5, 117 Lee, S. 158 Levine, C. 137 Lewis, J. 26, 190 Local Government Act (1999) 47 Localism Act (2011) 56, 226 Low, N. 132 Lyon, F. 96, 97, 98 Lyons, M. 5

M Macmillan, R. 52 Making it real 197 Manthorpe, J. 101 markets and capacity building and infrastructure 113–17 and rehabilitation of offenders 250–2 third sector interface with 50–3 McCabe, A. 56 McNamee, L. 135 mediation service (case study) 133, 138, 139 Michell, R. 115 Miller, R. 198, 199, 201 Mills, A. 237, 239 mission drift 30, 35 Morgan, G.G. 66

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The third sector delivering public services Mullins, D. 220, 223 Munro, E. 116 mutualism 88, 92–4 Mynott, B. 116 Mythen, G. 238–9, 244–5

N NAAPS 195 Narey, Martin 237 National Citizen Service 56 National Coalition for Independent Action (NCIA) 64 National Council for Voluntary Organisations (NCVO) 25, 63–4, 195 National Housing Federation (NHF) 220–1 National Market Development Forum (NMDF) 195–6 National Offender Management Service (NOMS) 236–7, 244 National Probation Service (NPS) 241, 243–4 National Programme for Third Sector Commissioning 48 National Survey of Charities and Social Enterprises (NSCSE) 71–2 NCIA (National Coalition for Independent Action) 64 NCVO (National Council for Voluntary Organisations) 25, 63–4, 195 New Deal 171–2 New Labour 5, 7 capacity building and infrastructure 33–4, 47, 109–13 and contracts 43–4, 46–7, 50–1, 53–5, 57 and criminal justice system 236–7 and employment services 171–3 and evaluation 152 and formal sector 53–5 and interface with the state 46–8, 57, 260 and the market 50–2 partnership discourse 43–4 and personalisation reforms 193–6 rehabilitation of offenders 236–7, 244–5, 249–50 and relationship with state 29–30, 260 and spin-outs 89–91, 92, 93, 262 Third Way 7, 30–6, 43–4 and volunteers 129

New Philanthropy Capital 156 NHF (National Housing Federation) 220–1 NHS, spin-outs 90–1, 93–4 Nicholls, J. 160 Nickson, D. 202 NMDF (National Market Development Forum) 195–6 NOMS (National Offender Management Service) 236–7, 244 Norman, J. 129 Northern Ireland, housing 218–19 NPS (National Probation Service) 241, 243–4 NSCSE (National Survey of Charities and Social Enterprises) 71–2

O Ockenden, N. 130 OCS (Office for Civil Society) 34, 53, 115–16 Offender Management Act (2007) 236, 237, 245 Offender Rehabilitation Act (2014) 241 offender supervision see rehabilitation of offenders Office for Civil Society (OCS) 34, 53, 115–16 Office of the Third Sector (OTS) 34 Ógáin, E.N. 156, 157 Open Public Services agenda 46, 52, 112–13, 154 White Paper 7–8, 48, 50, 152, 226 organisational development see capacity building and infrastructure OTS (Office of the Third Sector) 34 Outcomes Star 161

P Pathways to Work 171, 173 Payment by Results (PbR) 155, 184, 185, 244, 246–9 personalisation concerns about 196, 197 development of 192–3 impact of 202–4 implementation of 198–204 individual purchasing arrangements 199–200 new business model 200–1, 268–9 policy design 193–8 Think Local Act Personal 196–8

280

Index third sector role in social care 190–2 and workforce issues 201–2 Peterson, B. 135 Phillimore, J. 56 POET Survey 197 Power, M. 152 Pritchard-Wilkes, C. 221 probation service see rehabilitation of offenders public bonds 215 public services, concept of 22–3, 259 Punishment and reform: Effective probation services 242, 249 Purkis, A. 224 Purvis, A. 177, 179, 182 Putting people first 193–4, 197

R randomised controlled trials 153 rehabilitation of offenders and conception of control 250–1 and marketisation 250–2 measure of reoffending 249 new arrangements 233–5, 241–5 and New Labour 236–7, 244–5, 249–50 Payment by Results (PbR) 246–9 role of third sector 237–41 and small organisations 239 tensions of service delivery 264–5 third sector response 245–9 third sector role 233–41, 244–53 Transforming Rehabilitation’s main features 241–5 Right to Provide 92–3 Right to Request programme 90–1, 92, 95, 96, 97, 98 Rochester, C. 138 Royal Commission on the Poor Laws (1909) 27 Russell, L. 127

S Salamon, L.M. 5, 70 Sanderson, H. 199 Sargeant, A. 158 Scott, D. 127 sectorisation 25 Sepulveda, L. 97 service users and Third Way 30–1 and volunteers 54, 138–9, 142 see also personalisation

SIBs 53, 248 Snowdon, C. 67, 71 social care see personalisation; social work and spin-outs Social Care Practices Working Group 89 Social Enterprise Investment Fund (SEIF) 33, 35–6, 90, 97 social enterprise model 35–6, 51–2 Social Enterprise Unit 34, 90 Social Impact Bonds (SIBs) 53, 248 Social Investment Business (SIB) 33 Social Return on Investment framework (SROI) 160 social value concept of 149–50 creation of by TSOs 158–9 and evaluation methods 159–61 Public Services (Social Value) Act (2012) 45, 153–6 social work, and spin-outs 89, 94, 99, 100–1 spin-outs aims of 94–5 barriers to 96–7 and Coalition government 92–4, 262 and commissioning 101 context of 94–6, 95 definition of 88 funding of 97 hybridisation 97, 100, 262–3 and innovation 98–9, 268 jump factors 94–5 and major national policies 89–94 mechanisms of 95, 96–7 and New Labour 89–91, 92, 93, 262 and outcomes 95, 98–9, 100–1 push factors 95–6 staffing issues 96, 99 tensions of service delivery 262–3 SROI (Social Return on Investment) 160 Stoker, G. 24 subcontracting 10, 52–3, 57, 171–2, 173, 174, 181 Supporting People programme 51

T Taylor-Gooby, P. 241 Teasdale, S. 45 Think Local Act Personal (TLAP) 196–8, 203–4 third sector (general)

281

The third sector delivering public services and contemporary public services 258–61 definition of 3–6, 25 growth of 8 history of 21–37 and informal sector 53–6 and innovation and change 267–70 and marketisation 50–3, 272 New Labour and Coalition compared 43–6 prospects for 270–3 public policy context of 6–8 relationship with state 8–11, 26–30, 46–50, 57, 264–5 and service delivery 8–11, 261–7 two narratives of 257–8 Third Way 7, 30–6, 43–4 Thomson, G. 137, 139 Thornton, P. 134, 139 TLAP (Think Local Act Personal) 196–8, 203–4 Tomczak, P.J. 240, 250 Transforming Local Infrastructure (TLI) 116 Transforming rehabilitation (consultation paper) 243 Transforming Rehabilitation strategy see rehabilitation of offenders

relationship with organisation 136–8, 264 relationship with service users 138–9, 142, 264 restricted roles of 135, 264 scale of 77–8, 128–9 shifting logics of 131–42, 264 societal context of 131 tensions of service delivery 263–4

W Webb, B. 27–8 Webb, S. 27–8 welfare triangle 42, 42–3, 56–8 Work Choice 173–7, 179, 180, 182, 184 Work Programme 52, 173–82, 184

Z Zimmeck, M. 129

U Unell, J. 63 Union of the Physically Impaired Against Segregation 192 users see service users

V Vickers, I. 98 volunteers and active citizenship 139 and bureaucracy 132–4 and contracting 136, 142 and inclusivity 133–4 and informal sector 54–5 and local authority commissioning 139 organisational context of 130–1 and paid staff 136–8 policy context of 129–30 pressures on 140 professionalisation of 134–6, 139 and public service delivery 77–8 recruitment of 133

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challenging book for decision makers, academics and practitioners alike.” Professor John Diamond, Edge Hill University, UK “An   excellent and wide-ranging text which will be a key reference work

for academics studying the role of the third sector in delivering public services in the UK.” Peter Wells, Sheffield Hallam University, UK This important book is the first edited collection to provide an up-to-date and comprehensive overview of the third sector’s role in public service delivery. Exploring areas such as social enterprise, capacity building, volunteering and social value, the authors provide a platform for academic and policy debates on the topic. Drawing on research carried out at the ESRC-funded Third Sector Research Centre, the book charts the historical development of the state– third sector relationship, and reviews the major debates and controversies accompanying recent shifts in that relationship. It is a valuable resource for social science academics and postgraduate students as well as policymakers and practitioners in the public and third sectors in fields such as criminal justice, health, housing and social care.

James Rees is Anthony Nutt Senior Research Fellow at the Centre for Voluntary Sector Leadership, Open University Business School. His research concentrates on the role of the third sector in public service delivery, cross-sectoral partnership, organisational change and the involvement of citizens. David Mullins is Professor of Housing Policy in the Housing and Communities Research Group at the University of Birmingham. His research interests include the role of the third sector and social enterprise in public service delivery.

PUBLIC POLICY / SOCIAL STUDIES

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The third sector delivering public services   Edited by James Rees and David Mullins

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The third sector delivering public services Developments, innovations and challenges Edited by James Rees and David Mullins

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