Memorandum by the NCVO (CVP 07)
1. INTRODUCTION
1.1 NCVO is the largest general membership
body for charities and voluntary and community organisations in
England. NCVO has sister councils in Wales, Scotland and Northern
Ireland. Established in 1919, NCVO gives voice to over 3,500 organisations
ranging from large "household name" charities to small
self help groups involved in all areas of voluntary and social
action at the local level. NCVO champions the cause of the voluntary
sector. It believes that the voluntary sector enriches society
and should be promoted and supported. It works to increase the
effectiveness of the sector, to identify unmet needs and to encourage
initiatives to meet those needs. It does this by providing a wide
range of information, advice and support services and representing
the views of the sector to government and policy-makers.
1.2 This submission:
— describes the various roles that
voluntary and community organisations play in relation to choice
and voice in public services;
— outlines NCVO's expertise in relation
to this Inquiry; and
— sets out NCVO's views on the questions
posed by the Public Administration Select Committee.
1.3 NCVO welcomes this opportunity to submit
written evidence to the Public Administration Select Committee
Inquiry into Choice and Voice in Public Services. We would be
happy to provide further information by giving oral evidence to
the Committee.
2. ROLE OF
THE VOLUNTARY
AND COMMUNITY
SECTOR IN
PUBLIC SERVICE
DELIVERY
2.1 Voluntary and community organisations
(VCOs) have always been important in relation to public services.
VCOs play a variety of roles in relation to both choice and voice:
— as providers of public services (funded
under contract or through grants) VCOs help contribute to the
range of services available to the public. They contribute to
choice as an alternative provider either for the commissioning
public sector agency or for the individual service user;
— through advice, information and advocacy
VCOs can assist individuals or communities who wish to make use
of choice in public services; and
— as advocate, adviser or lobbyist
VCOs can enable the voice of individuals or communities to be
taken into account when public services are designed and/or delivered.
2.2 In the last few years the emphasis has
been on the role that VCOs can play as a provider of public services.
Government has recognised that the sector can play an important
role in its agenda to modernise public services and to increase
choice. The role of voluntary and community organisations in public
service delivery was one of the seven cross cutting themes of
the Spending Review 2002. The review considered:
— the extent to which the sector already
delivered public services;
— the scope for taking on a greater
role;
— the barriers preventing VCOs from
delivering public services; and
— made recommendations to enable the
sector to play a greater role.
2.3 Voluntary and community organisations
are interested in helping to deliver public services where they
believe that they can do so in ways which benefit the end user:
this is often referred to as the added value of the VCS. A statutory
provider may contract with a VCO to deliver services for a variety
reasons, including:
— it has specialist knowledge and skills
that the public sector lacks—for example drug or alcohol
rehabilitation services;
— it can fill a niche in the market
that is too small or specialist to be cost effective for the public
or private sectors;
— as a specialist in the field across
a region or nationally, levels of expertise and the potential
for economies of scale are greater than for a local statutory
agency;
— the community it is providing the
service to has higher levels of trust and confidence in an independent
voluntary organisation than they would a statutory agency—this
is true for many homeless services;
— it is based in the local community
and therefore has a greater knowledge and understanding of local
needs and preferences;
— it can develop services in ways which
meet the social, cultural or religious preferences of particular
groups more effectively than a single statutory provider can;
— it has the capacity to develop new
and innovative services more quickly than a statutory agency can;
and
— it can help the statutory provider
to offer a range of services for customers to choose from.
Size and scope of the voluntary and community
sector
2.4 NCVO's 2004 UK Voluntary Sector Almanac
shows that in 2001-02 the total income of the UK voluntary sector
was £20.8 billion, that the sector had a workforce of 569,000
paid employees and that the sector contributed £7.2 billion
to Gross Domestic Product (GDP). The Almanac also shows that 37%
of the sector's total income derived from the statutory sector.
Increases in statutory income were largely the result of more
earned income (ie contracts) not more grants. However the greatest
growth in income and the highest levels of statutory income are
found in the larger voluntary organisations (those with an annual
income in excess of £100,000). Whilst this is a significant
part of the sector's income it represents only a tiny proportion
of the amount government spends on public service delivery.
3. NCVO'S EXPERTISE
IN RELATION
TO THIS
INQUIRY
3.1 The role of the VCS in public service
delivery, how that role is understood, and the implications that
delivering public services can have for the VCS have been key
areas of work for NCVO for many years. Relevant areas of work
are summarised below. All of the documents mentioned in this submission
can be made available to the Select Committee if required.
Treasury cross cutting review
3.2 NCVO contributed actively to the cross
cutting review. Stuart Etherington, NCVO's Chief Executive, was
a member of the Treasury Advisory Group. In addition, each of
the five working groups that developed recommendations for the
final report included NCVO staff and/or trustees.
3.3 We made a detailed submission to the
Treasury review which was informed by extensive consultation with
our members. In addition, we undertook a separate review of the
role of service delivery in rural areas. We submitted a separate
paper on rural service delivery to the Treasury.
Implementation of the cross cutting review recommendations
3.4 NCVO has played an active role in taking
forward many of the recommendations of the cross cutting review.
In particular we have helped develop the proposals for the new
futurebuilders[3]
fund. A member of NCVO's Policy Team was seconded to the Treasury
on a part-time basis for six months to help develop proposals
in relation to futurebuilders and to undertake consultations with
the sector. NCVO now forms part of the consortium which will provide
information and advice to voluntary and community organisations
that bid for funding from futurebuilders.
3.5 We have been working with others in
the sector to promote understanding of the principle of full cost
recovery. A key recommendation in the cross cutting review was
the recognition by the Treasury that it is entirely legitimate
for VCOs to include in contract and grant bids an appropriate
proportion of their overhead costs. The Association of Chief Executives
of Voluntary Organisations (ACEVO) have developed a template to
help VCOs calculate contract and grant bids on a full cost recovery
basis.
3.6 We are currently working with the National
Audit Office on a study to review the extent to which some of
the key recommendations of the cross cutting review have been
implemented by government departments.
Local delivery and local government
3.7 The recommendations of the cross cutting
review apply primarily to central government. However the majority
of VCOs governmental relationships are at the local level, not
with national government. NCVO has therefore developed a significant
strand of work around the relationship between local government
and the VCS. This has included work on best value (including a
guide to best value for the VCS and a guide on demonstrating best
value when bidding for contracts to deliver local services) and
on community leadership and community representation.
Implications of public service delivery
3.8 We have commissioned research based
on 12 case studies to help improve our understanding of the impact
of public service delivery (and the cross cutting review) on VCOs.
We aim to publish the findings of this research during the summer.
3.9 Over the past year we have published
three major policy discussion papers which review the implications
of public service delivery and working more closely with government
for VCOs:
— A little bit of give and take: voluntary
sector accountability within cross-sectoral partnerships;
— Voluntary sector added value; and
— Standing apart, working together:
a study of the myths and realities of voluntary and community
sector independence.
3.10 Stuart Etherington, NCVO' s Chief Exectuive,
is a member of Future Services, a group set up between NCVO, the
CBI and the National Consumer Council and facilitated by LLM to
review how user perspectives are taken into account in public
services. In addition, Ann Blackmore, NCVO's Head of Policy, was
a member of the Advisory Group for a recent research report published
by the New Local Government Network, Making choices: how can choice
improve local public services.
4. NCVO RESPONSE
TO QUESTIONS
AND ISSUES
RAISED BY
THE PASC
Defining what choice means in the public sector
4.1 In order to define choice there
needs to be clarity as to the purpose of choice and who the choice
is for. Choice may be directed at individual services users, at
particular communities (which may be geographic, for example a
particular neighbourhood, or a group with shared interests or
concerns, for example those in residential care) or it may be
for the statutory provider to choose from a range of potential
contractors.
4.2 Choice should not be seen as a euphemism
for competition and the market. Nor should choice be seen as an
end in itself. The primary purpose of choice should be to improve
the quality of services available to the user. Competition and
market mechanisms may play a part. But this will not necessarily
be the case: there have, for example, been recent cases of local
authority residents making clear their desire to stay as council
tenants and not be offered alternative landlords.
4.3 Choice may mean a variety of providers
are offered to a service user. But it can also mean a single provider
offering a range of choices for the way a particular service will
be provided.
4.4 It seems reasonable to assume that the
nature of choice will (and should) vary depending on the type
of provision or service. It is the role of the statutory sector
to balance the needs and preferences of individuals against the
interests of their wider community. A statutory provider must
also take account of effectiveness and efficiency. So, for example,
individual choice is unlikely to be appropriate for refuse collection
services—where a local authority is most likely to choose
between a number of providers on an authority wide basis; but
recycling services may be better suited to a neighbourhood solution;
and personal care should take account of individual needs and
preferences.
The concept of customers of public services
4.5 When providing a public service it is
important to be clear who is the customer. The issue for many
voluntary organisations delivering services under contract is
that whilst they may consider the end user to be the customer,
the statutory body for whom they are delivering the public service
is also their customer. The reality is that most public services
have a variety of customers—or stakeholders. The danger
with the promotion of choice is that all the focus is on one customer,
rather than on the range of stakeholders. Contracts need to make
clear the relationship between different parties and be clear
how contractors need to take account of other stakeholders.
Mechanisms for expressing choice
4.6 Two opposing problems can emerge when
encouraging individuals or communities to express choice preferences:
— firstly, expectations can be unrealistic
if mechanisms for choice are not carefully explained and managed;
but also
— if offered too many choices or too
much information the public can become overwhelmed and opt out
of choice—this appears to have happened with energy providers
for example.
4.7 A concern that many in the VCS have
with choice is that the choice is for the contracting service
provider, not the end user. It is often easier for the contracting
authority to negotiate a single block contract with one agency.
Such an approach can exclude small, locally based or specialist
providers (who may be from the voluntary or private sector). However,
whilst such an option might be easier for the statutory agency
and appear to be the most cost effective solution, if real choice
is to be provided to the end user it might be more appropriate
to develop a package or consortium approach which would allow
specialist and locally based services to be provided more effectively.
4.8 Where a variety of choices are made
available to communities or individuals clear information needs
to be provided about the choices available to them and honest
and impartial information about the differences between different
options. VCOs can play an important role providing advice and
information to service users, particulary vulnerable people, about
the options available to them.
4.9 Whilst targets, league tables, surveys
and complaints systems can play a part, they do not necessarily
provide meaningful information. There has been increasing research
recently to suggest that targets and league tables do not improve
performance, instead they can provide perverse incentives for
service providers to focus on those items that are the subject
of targets at the expense of other activities. And the reality
is that all service users would prefer to access services from
an organisation at the top of the league table—even if every
organisation is performing to a level considered acceptable or
good. Clearly not everyone can use the top performing service
provider. This means that service users may feel dissatisfied
even when they are receiving an appropriate service to a high
standard.
Choice and equity
4.10 One of the distinctions between the
public sector and other sectors (including the VCS) is that when
undertaking any activity, including delivering public services,
the public sector must operate equitably. It must also operate
in the wider public interest, not in the interests of a particular
individual or community. Equity is widely understood to mean that
people have access to the services they need regardless of where
they live, their gender, race or their income. Introducing a greater
element of choice into the agenda inevitably makes it harder to
balance the needs of the whole community against individuals or
groups and can increase the risk of creating or exacerbating unfairness.
4.11 Promoting choice does not necessarily
mean that there will be losers. In many cases it depends on the
service being provided. There is no reason why, for example, a
meals on wheels service cannot ensure that every customer receives
their choice. However for many services if there are not to be
winners and losers it will depend on sufficient capacity existing
to meet the choices of each individual or community.
4.12 It is often the case that the private
sector will "cream-skim" the least resource intensive,
most profitable services, whilst many voluntary organisations
tend to provide services to the most disadvantaged communities
and the individuals, which tend to be more expensive. This should
not be an issue if contracts are costed properly. Contracts should
be developed based on the actual costs of delivering a particular
service, not a block contract or per capita basis that applies
across the board to all contractors. Statutory providers should
expect to purchase services on a full cost recovery basis. If
choice is to be extended government must recognise that it has
to meet the costs of choice; it cannot expect other sectors to
subsidise choice.
Information for users
4.13 As already said in paragraph 4.8 above,
if service users are to be able to utilise choices available to
them (and in order to ensure equity) it is essential that they
have easy access to clear and impartial information about the
options available to them. Statutory bodies have a responsibility
to ensure that this information is made available, whether or
not they directly provide the service.
4.14 Voluntary and community organisations
play an important role in helping people to understand and access
the choices available to them, particularly vulnerable people
or those communities which the statutory sector often finds it
hard to access. VCOs can also help statutory agencies to decide
(in consultation with users) what information users need in order
to make decisions, and to ensure that information is made available
in appropriate formats.
4.15 If public services are to be reformed
or developed in ways which increase the need for users to make
informed choices, then resources also need to be set aside to
fund those organisations that provide the necessary information,
advice and support. This a clear part of the costs of the choice
agenda. It should not be assumed that VCOs have the capacity or
resources to provide increasing levels of support to users to
support and/or subsidise the government's reform of public services.
Voice and public services
4.16 There is a tendency in the public services
debate to focus on choice rather than voice. However in many cases
users do not want greater choice—or it may not be viable.
People want to know that their needs and concerns are being taken
into account when public services are designed and delivered—to
know that they are being listened to. It is important that as
much attention is given to ensuring that voice mechanisms are
effective as is given to promoting choice.
4.17 Voice can be treated as an individual
or a community mechanism. All too often the debate focuses on
the individual rather than the community. However, the role of
government is to balance the competing interests of some individuals
with those of the wider community. It is important therefore that
when encouraging individuals or communities to express their preferences
or needs that expectations are managed. Being asked what service
you want or how you want it delivered does not mean that every
individual (or even every community) will get what they want.
Consultation should be about those things that the individual
or community really can have a say over. And it should include
a feedback process to ensure that those consulted know the outcome
of the consultation and the reasons for decisions.
4.18 Voice is also about much more than
ensuring that a complaints system is in place. Complaints should
be seen as the final stage in the process when other aspects of
voice (or indeed choice) have gone wrong. Of course the fundamental
mechanism for voice in public service delivery is that most (but
not all) public service providers are accountable to the community
through the democratic system—voting in national or local
elections. However the electoral system is a very blunt instrument.
There need to be more targeted mechanisms for engaging stakeholders.
It should include a range of mechanisms that are adapted for different
circumstances and different services and which are directed at
both individuals and communities.
4.19 Voluntary and community organisations
can play an important role here because they can help statutory
authorities to access particular communities, they can help to
facilitate consultations, and they can act as advocates for individuals
or parts of the community. There can be a tendency in parts of
government to see the VCS as a service provider and either fail
to recognise its role in advocacy, or even to argue that it is
not appropriate for the VCS to both provide services and undertake
an advocacy role. Some parts of government also put a lot of emphasis
on talking to "real" people, rather than to representative
and advocacy groups. However VCOs can play a valuable role in
bringing people and communities together and giving them a collective
voice. Government needs to recognise (at all levels) the important
role that VCOs play as advocates and the contribution that this
role can make to improving public services.
4.20 Many voluntary and community organisations
have a lot of experience of direct user engagement in services.
Many VCOs are user driven, and there has been a move to ensure
that mechanisms are in place to enable stakeholders (which for
VCOs might be users, donors, members or funders) to contributue
directly to the work of organisations. An example of greater user
focus is the RNID changing its name from the Royal National Institute
for the Deaf to the Royal National Institute of the Deaf. Greater
user engagement helps to ensure that services are more appropriately
targeted and delivered. It also gives the users a greater sense
of ownership of the services they receive.
Devolution and diversity
4.21 Voice should be capable of being exercised
at all levels of public service provision. As has already been
said, the applicability of choice will vary between services.
However there is scope to increase community engagement, community
voice and community choice in services specific to particular
communities (of interest or geographic). Whilst some services
need to be determined or delivered on an authority-wide, regional
or national basis, others do not. And where they can be delivered
in a way that makes them closer to the user, every effort should
be made to do so.
4.22 Achieving greater diversity in the
services available to the public, in order to reflect diverse
needs and preferences, should be one of the driving forces behind
offering choice. Diversity is about the needs of the public, not
about the providers. Diversity is not achieved by having a mix
of good and bad performers, nor is diversity about unique selling
points of the providers. Diversity is about providers recognising
that in many services one size does not fit all, and that services
should be provided in ways which respect and address the different
needs and preferences of different individuals and communities.
In order to meet the needs of a diverse community, services may
need to be purchased from specialist providers (those with a "unique
selling point" such as a faith school), but could equally
be provided by a single mainstream provider offering different
choices.
Choice and the public good
4.23 There is a strong case to say that
whilst the consumer generally should be sovereign in public services,
that does not necessarily mean that each individual consumer can
be sovereign. As has already been commented, the statutory sector
has to develop and deliver services which balance competing demands
from the public (or different "publics") and endeavour
to ensure equity. Services must be designed and delivered in ways
which promote the public good (not the convenience of the provider)
but in the case of many services that may mean that compromise
is necessary.
4.24 If choice is to be expanded in public
services thought will also need to be given to the impact that
the choices people make can have more widely. This has been recognised
in relation to equity (discussed above). However it should also
be recognised that choices made in one field of public policy
can impact on other social policy aims or the wider public good:
for example, if large numbers of parents choose to send their
children to a school that is further away from home, social objectives
of increasing the amount of exercise undertaken by children and
reducing car use may both be affected, whilst local social capital
and social cohesion may be weakened because those families feel
less tied in to the local community.
4.25 Whilst individual choice can have risks
of wider public benefit and social cohesion, encouraging greater
voice and choice for communities can help to enhance understanding
of community benefit: where individuals come together to make
decisions about their local community then they have to take account
of competing demands and what meets the needs of the community
as a whole.
Capacity in public services
4.26 Giving an increasing role to community
voice and choice when developing and delivering public services
may have some cost implications—depending on how it is done.
Offering the consumer the choice of a range of different providers
or different services may have cost implications. Encouraging
providers to develop services in ways which takes account of preferences
or which builds in the scope for choice will have lower cost implications.
However it should be borne in mind that if the purpose of choice
and voice is to improve public services so that they better meet
the needs of users, then any increase in costs should be offset
by an increase in the effectiveness of those services.
4.27 Allowing greater choice may mean that
extra capacity is needed: the private sector provides choice by
costing in excess capacity. The public sector may choose to go
down this route. If it does so it should not expect the costs
of providing extra capacity to be transferred to providers in
other sectors.
4.28 However greater choice can also be
achieved by taking greater account of voice at the very earliest
stages of designing and developing a service. Allowing greater
voice and choice may mean that it takes longer to set up and develop
a service—this may result in an increased up front cost.
But it should mean that in the longer term services can be delivered
more effectively and that there are higher levels of customer
satisfaction.
4.29 Given our comments above, it should
not be assumed that user charges are an inevitable outcome of
greater choice. Instead choice and voice need to be understood
more broadly. User charges move public services further down the
route of individualised rather than public services. There is
also a significant risk that user charges create inequity: charges
limit choice to those that can afford to pay.
Raising standards
4.30 A key part of the government's agenda
in relation to public services is to raise standards. However
care should be taken not to assume that promoting choice will
automatically enhance standards and accountability. It is not
necessarily the case that standards will be driven up because
the customer has the choice of other providers. Evidence from
the private sector and the privatised utilities show that very
often the consumer does not change provider, the normal comment
is that they do not want choice they just want services provided
properly, added to which they rarely have confidence that other
providers will perform any better. Added to this, it is often
the case that many service users do not realistically have other
choices.
4.31 Increasing the role of voice may help
to improve standards, however. If service providers are more aware
of the needs and concerns of service users, they should be able
to develop more effective services that reflect those needs and
concerns.
Policy Team
NCVO
April 2004
3 Futurebuilders is a capital investment programme
of £125 million over three years which is intended to help
increase the capacity of voluntary and community sector service
delivery organisations. Back
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