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Earlier this week I attended Progress’s Purple Book event on the future of public services. Despite something of a sparse turnout – in fact, perhaps because of it – what emerged during the session was quite a thoughtful, pragmatic and detailed reflection on both the previous and current governments’ attempts to radically transform the way in which public services are delivered. It was particularly nice to see speaker Patrick Diamond’s intelligent critic of policy from a No 10 perspective being grounded by the views of Peter John, leader of Southwark Council, who had some interesting insights on the kind of nuanced impact that Coalition policy is having on service users and staff.

Of all the things that emerged during the session, I found Peter John’s simple rebuttal of the Community Right to Challenge scheme the most salient. Introduced last year through the Localism Bill, the purpose of this new initiative is to allow community groups and other third sector organisations the chance to bid for and to take over the running of public services typically provided by the local authority. According to Peter John, the difficulty with the Community Right to Challenge scheme is that once a third sector group puts forward a request to run a public service, the council then needs to automatically put the service out to tender to everybody else. This comes with both a price tag and a risk that the community group who challenged for the service may not even get the contract, either because they don’t have the time and data to put together a compelling case, or because the process takes so long that by the time they do hear back on their application they will have already gone under.

What is seemingly a simple process for opening up public services turns out to be riddled with unseen caveats for smaller third sector organisations. The same is true for something like payment by results, where new providers from all sectors are encouraged to come in, deliver a service and be paid according to their impact, whether that’s getting unemployed people back into work or helping drug users make their way out of addiction. As many have already pointed out, payment by results often leads to the problem of ‘skimming’, whereby the organisation with the prime contract (typically large private companies) take the easy cases and leave the intransigent ones for smaller organisations to plug away at. Worse still, many small charities are sent little or no referrals at all from these prime contractors.

Another case in point is the increasing number of volunteer centres that are being used as free training centres by Work Programme providers. According to Patrick Butler, what these providers see in volunteer centres is an easy and practically cost-free way of giving their clients work experience and making them ‘work-ready’. In one case, a WP provider was said to have asked a volunteer centre if it would round up a team of volunteers to help it run a CV workshop for those on its books. In a sign that WP providers do indeed recognise this as exploitation, in some cases they have explicitly told their clients not to mention that the provider sent them. No doubt this presents something of a moral dilemma for charities; should they support these genuinely needy individuals, or should they say no, given that they would be footing the bill for something somebody else is financially benefiting from? In a tough financial climate, it is not surprising that many opt for the latter.

What all of these examples remind us is that with public policy (and in particular the Localism Bill) the devil is nearly always in the detail. On the face of it, the third sector has never had it so good; more opportunities to provide public services and greater access to new sources of finance. But ask anybody on the frontline and the picture is radically different. In reality, crude exploitation by private companies and an ill thought through system of public service delivery handover mean that many third sector organisations are buckling under the pressure, with some questioning whether they are likely to make it through the coming months, let alone the next few years.

And there was everybody thinking that the third sector was the future. If this really is still to be the case, perhaps it's about time we began reading the disclaimer and talking seriously about the detail, however politically unattractive that sounds.


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