Select Committee on Public Administration Appendices to the Minutes of Evidence

Memorandum by Shaw Trust (PSR 17)


  Shaw Trust is a registered charity with a mission to enable disabled and disadvantaged people to find and keep work.

  Since Shaw Trust was established in 1982 it has provided public services on behalf of government departments as well as developing new and innovative approaches to the provision of work related services, often with support direct from major companies and also charitable trusts.

  Today Shaw Trust is the largest not-for-profit provider of Workstep, under contract to the Employment Service. This contract provides over £10 million per annum to Shaw Trust to support over 2000 severely disabled people in employment.

  Shaw Trust is also a significant provider of Job Broking services within the New Deal for Disabled People. We have been awarded contracts from the Employment service, with a total value of £11 million. The job-broking service is due to run for 2.5 years and during this time we expect to find employment for 4,000 people on Incapacity Benefit.

  Alongside these contracts with central government departments, Shaw Trust also has a range of contracts with Local Authorities up and down the country. These are primarily with Social Service departments as they contract out part of their provision in support of disabled and disadvantaged people within the local community. The total value of these contracts currently is in the region of £4 million each year.


  Our comments at this stage are given in response to question 18 within your "Issues and Questions" paper

  (18)   If there are to be rules regulating private sector involvement in public services, should they apply also to, for example, the voluntary sector? Should there be less stringent regulation where profit is not involved?

  Shaw Trust believes that the rules governing the regulation of public service involvement should be applied with equal stringency to both private and voluntary sector. There should be no less accountability simply because an organisation operates on a not-for-profit basis. However, the issue is perhaps less about whether the voluntary sector should be more or less regulated than the private sector and more about how such regulation should be structured.

  It is our experience that, when public services contract out a service to a third party, this is often done hand in hand with the establishment of complex systems to count and measure, in great detail, each element of the activity. In some contracts this amounts to the government department implementing a 100 per cent check on all information relating to clients who are participating in the programme in question. This appears to conflict with the second of the Prime Ministers declared three pillars of reform; to give power to "the frontline professionals and set them free to innovate and develop the services needed."

  We would contend that, rather than developing laborious systems to measure inputs to a programme, contracts should be designed so that there are clear objectives, targets and quality measures in place against which the contractor must prove achievement. We would then expect the audit process to concentrate on programme outcomes rather than programme inputs.

  This is an issue that appears to confront private and voluntary sector alike. We believe that it has a particularly detrimental affect on the voluntary sector because such organisations are often poorly resourced to manage such a level of administration.

  If we accept that regulations should be equally stringent for private and voluntary sector alike, then there is one significant area where action is needed to ensure a level playing field for the voluntary sector. This could be simply resolved by ensuring that all areas of government operated within the spirit as well as the letter of the Compact1[3] [4], in terms of contracts as well as grants.

  There is a major issue for the voluntary sector, when competing for contracts, about being driven out of the contracting process by application of a system which is heavily dependent on payment against outcomes. We are supportive of the principle of outcome related funding but the impact on the cash flow of a voluntary organisation can be severe. We would suggest a payment structure whereby, for voluntary sector contractors, payment is made on assumption that outcomes will be achieved and redeemed against future payments when this does not occur. If the spirit of the Compact was applied, this problem could be easily circumvented. We are currently experiencing reluctance within some government departments to extend the compact's application to contracts as well as grants and would welcome the PASCs views on this in relation to the reform of public services as a whole.


  We recognise that the PASC is focussing its attention, at this stage, on the concept of a Public Service Ethos and the involvement of the Private sector. We believe that there would be merit in the Committee extending this brief to include the Voluntary Sector.

  As you know, the role of the Voluntary Sector in the delivery of Public Services is currently being examined as part of the 2002 Spending Review and Shaw Trust is playing an active part in this process. We would hope that the PASC would use the findings of this review as a contribution to the wider debate on the reform of public services rather than as an end in itself. We believe that the debate about the role of the voluntary sector in the delivery of Public Services should be conducted in a forum that is wider than the terms of the 2002 Spending Review.

  Shaw Trust would be pleased to participate further in this inquiry, should the PASC decide to widen its view to include the involvement of the voluntary sector in the delivery of public services.

November 2001

3   Compact on Relations between Government and the Voluntary and Community Sector in England, Home Office 1998. Back

4   Compact-Funding: a code of good practice, Home Office. Back

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