The Blog

Time for a Real 'Civil Society' - Not Just Contracted Public Services

I know that a few public sector bodies are developing collaborative alliances with the voluntary and community sector rather than simply contracting with it. However, in reality, the latter are in a small minority and the trend, sadly, is in the opposite direction.

Across the public, and voluntary and social sectors, one frequently hears the phrase, 'Third Sector Commissioning'.

Of course, all too often, what is actually meant is not 'commissioning' - but 'procurement' from the sector not the sector in control of its own destiny. And also, one has to question whether a true 'strategic commissioning' approach actually can (or should) differentiate between providers, even though it can and should be underpinned by values and principles based on social value and a public service ethos.

'Third sector commissioning' tends to mean buying services from social and voluntary sector organisations - and not always to the benefit of these organisations.

Reliance on procurement is a 'disaster'

Successive governments and local government leaders have, over the last two decades, been keen to expand the competition of supply for public services based on a pluralism of suppliers. Within this context, at different times and in different services, the balance of favours has swung between the public, business and social sectors. The net effect has been that an increasing range of public services has been subject to competitive procurement. This model of procurement (which is based on the unholy alliance of the requirements of EU public procurement regulations being combined with the UK's strict, risk adverse and usually narrow compliance to these regulations), has changed very little since the days of Compulsory Competitive Tendering (CCT) introduced by Mrs Thatcher's government.

Of course, there have been some revisions to elements of the public procurement process and consequential contract models but frankly, such revisions have been modest at best. As a consequence, far from a commissioning and procurement mechanism designed to encourage and support charities, voluntary and community groups and the wider social and even SME sectors - we now face the 'truly' bizarre position of this sector being literally 'shoe-horned' into procurement processes designed for large corporates.

I know that a few public sector bodies are developing collaborative alliances with the voluntary and community sector rather than simply contracting with it. However, in reality, the latter are in a small minority and the trend, sadly, is in the opposite direction.

The intellectual in me says that there has been an emphasis on a contracting-based model of public services which owes more to a neo-liberal view of society and the economy, than to a social-based approach that values community and solidarity, and one that recognises the strengths and assets available within communities across the country.

More significantly, perhaps, the pragmatist in me says that this market-based approach is far from social sector friendly. And ironically, the processes that it has introduced are not appropriate for smaller companies in the business sector either. So much for the mantra of encouraging new suppliers and diversity of supply!

What is more, if the government and local authorities would pause and 'think' for a moment, is that many of these procurement processes are totally unsuitable for complex services and for securing complex outcomes. They may be fit for back office support services and for refuse collection services, but hardly for securing the outcomes required from mental health or children's services.

And scarily, it get's worse!

Today, we now find ourselves in a 'Kafka'esque' world, where these problems are being further compounded by the application of the latest 'fads' in public procurement and contracting - namely payment by results (PBR). And as if that was not bad enough, they are still 'further' compounded by the introduction of prime sub-contractor providers (or, as the probation service outsourcing refers to them - 'tier one', 'tier two' and 'tier three' - with 'tier one' being prime contractors in all but name). The latter simply serves to drive a wedge between the public sector and service providers; denies the voluntary and community sector a direct voice to the public sector; and all too often transfers risk to those least able to manage or hold it


The latest EU procurement regulations may marginally improve but not significantly reform the system.

Consequently, social sector and SME organisations are now typically finding themselves being 'excluded' from opportunities because their balance sheets are too small. They are also 'forced' into a relationship with 'large' business sector contractors, and consequently finding themselves with little (or highly restricted) direct contact with public sector commissioners and policy makers.

Charities and the wider social sector can often deliver public services as well as, and often even better, than the public sector - but to do this, they need the right level of fees, the right form of contracts, and the right operating environment. Rather than the stifling and restrictive nature of arms-length contracting (driven by traditional, narrow, public procurement cultures), they rightly prefer partnerships and often grants. They are most certainly at their very best when they can: innovate and act responsively to meet the needs and choices of their beneficiaries; have the resources to employ staff on decent wages, terms and conditions and to support volunteers; experiment and invest for change; and provide voice for their members and beneficiaries.

The wrong kind of contracting and price-driven competition, with inappropriate transfer of risks is steadily and inexorably diminishing the social sector's strengths and contributions; its creativity; and undermining its independence. At the same time, as far as the business SME sector is concerned, well they take one look at this scenario and understandably, mostly avoid unrealistic procurement 'opportunities' like the plague.

The irony is truly painful

The bitter irony of this situation is that charities and the wider social sector have felt that they have had little option but to embrace the competition arrangements and the current public sector commissioning and procurement, as these seem to be the only opportunities available to finance services and meet the needs of beneficiaries. Also, and to my and many others' deep frustration, those organisations dependent on such contracts have typically felt hesitant to challenge the system. They have lost their voice - all too often, perhaps, because they fear a loss of contracts and consequently income.

The national membership bodies which represent the interests of such organisations need to campaign hard on this. They have been far too complacent and accepting of the current system for too long - assuming that it would bring benefits and finance for their members. They have failed to articulate an alternative approach based on the strengths and values of the sector; and neither have they resisted the move to put markets ahead of a Civil Society with strong social values. This has been a tragic error.

Complacency has ruled for too long

Apparently so, for the Government and the wider public sector, faced with no serious, co-ordinated and sustained challenge has been able to argue that their commitment to public service competition is 'supported' by charities and the wider social sector as well as businesses. Unbelievable!

I recognise that the Public Services Social Value Act has the potential to make a difference and is very welcome. However, whilst it can be used by progressive, public bodies and individuals to promote values-based public procurement, the sad and stark reality is that the Act does not in fact challenge the concept of procurement in place of collaborative alliances and partnerships as I have outlined above.

Now is the time for a radical rethink

Surely, now is the time for a radical rethink, and to adopt a very different approach to public service delivery, especially for complex and personal services, which includes public sector provision, some increases in social sector provision and genuine partnerships between the two. The social sector must also be able to contribute to policy development and to the strategic commissioning process itself. The public sector can use grant aid and contracting to support the development of the social sector's service capacity and its voice role, as well as enabling it to innovate and deliver public services. Some services will be contracted and some charities and social sector bodies will wish to compete for services against themselves and the business sector. However, this should 'not' be the only approach.

A better value based way

Most contemporary social, economic and environmental needs and challenges can be addressed by the public, and voluntary and social sectors, and partnerships between them.

So, with less than two years to a general election and the whole public sector facing unprecedented financial and demand challenges, I believe there needs to be a new settlement. This requires the social and voluntary sector, and in particular, its national leaders, to challenge the current market and procurement-based public services; and to make the case for a strong public sector - partnering and supporting a strong Civil Society, based on the values of solidarity, community, fairness, equality and service.