Select Committee on Public Accounts Thirty-Second Report


1  Engaging with the voluntary sector

1. Whitehall lacks expertise in working with the voluntary sector, limiting the role which the voluntary sector can play in delivering public services. Progress has been made in developing a better and more professional relationship but there has been only a fragmented approach to developing the capacity of departmental staffs to work with the sector. The Home Office saw a need to move from a situation where the voluntary sector was often brought in at short notice to meet an urgent requirement, to a situation where longer term plans to engage the voluntary sector in the delivery of public services were made at the outset.[2]

2. In its evidence, the Home Office agreed that the voluntary sector could undertake some activities more effectively than the public or the private sector. The pressure for efficiency and effectiveness in performance management should encourage the use of the voluntary sector where the sector provided best value for money. Civil servants might be unsure how to engage with the voluntary sector but similar difficulties existed within the sector itself, with staff who were not always best placed to sell services to government. Incentives for engaging with the voluntary sector were unclear, and the Home Office was working with the National School of Government and the Office of Government Commerce to develop training courses to enhance skills and understanding. Recent "Compact Plus" proposals by the Home Office would introduce a Compact Commissioner who should have powers to accredit or disaccredit departments which did not follow Compact[3] principles.[4]

3. The Home Office has a target to increase the role of the sector in public services by 5% by 2006. It agreed that this target was not a very demanding or exacting one. Central government spending with the sector was about £2.75 billion in the past year, which although a significant sum for the voluntary sector, was only some 0.6% of central government spending. There was a need for a more meaningful and stretching target. After 2006, a new target was likely to signal further upward movement in spending with the sector, but the Home Office would be consulting within government and the sector before recommending any new target. The Home Office had not set a quantified target for its own spending with the voluntary sector but instead had looked to identify key areas where the voluntary sector could take a larger role.[5]

4. Spending with the sector was on an upward trend but had fluctuated significantly over the years (Figure 1). Expenditure had peaked in the 1990s but had then fallen back quite sharply. It was rising slowly now. The Home Office was aiming to improve the quality of data on total spending, the type of funding and where it was going. The Home Office had established a State of the Sector Panel of 4,500 voluntary organisations and was asking them at regular intervals about their experience of doing business with government, about funding and about relationships.[6]Figure 1: Central government funding has increased in recent years

5. The Department agreed that it might have been easier for large charities to move ahead more quickly in service provision than smaller ones. To address this issue, funds were being made available through FutureBuilders[7] to build the capacity of voluntary sector organisations to deliver public services. The proportion of funds going to smaller organisations and to multi-ethnic minority organisations was monitored. The bureaucracy surrounding applications for funding and the monitoring of expenditure and activity imposed subsequently might also deter new entrants. The Home Office believed, however, that there was good growth amongst new organisations. The FutureBuilders Fund provided assistance to organisations to work up new ideas for service delivery to promote to government.[8]

6. Citizens in some areas may suffer because there are not enough charities bidding for funds on their behalf. The voluntary sector may favour middle class communities over the poorest and ethnic communities. The Home Office agreed that one of the hardest challenges was engaging voluntary organisations within poorer areas but it was trying to increase the level of volunteering from those areas in response. The Department's data on voluntary sector funding by geographic area and on a demographic basis was limited. It was often easiest to find volunteers in better off areas, and so it was important that departments considered whether the spread of funding within programmes needed to be adjusted to better reflect need.[9]


2   Qq 5, 29, 45 Back

3   An understanding between government and the voluntary sector on how they should work together, agreed in 1998. Back

4   Qq 11, 13 Back

5   Qq 16, 18, 32-40, 59-60 Back

6   Qq 46-47, 51-52 Back

7   A government investment fund established in 2004, which uses mostly loan finance to increase the role that the voluntary sector plays in public service delivery. Back

8   Qq 50, 107 Back

9   Qq 55, 97-100 Back


 
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Prepared 2 March 2006