Rolling back the State?
39. The rhetoric of "transformation" could
easily be taken to imply that the Government was looking to transfer
whole swathes of services out of the public sector and in to the
third or private sectors. Taken to extremes, this might suggest
a reversal of the process of government taking responsibility
for services first developed in the third sector (as described
in paragraph 5). We heard evidence to this effect from Dave Prentis,
the general secretary of Unison:
In a nutshell, is this really about rolling back
the frontiers of the State or is it about public service improvement?
We would argue very strongly that it is about an ideological rolling
back of the frontiers of the State and not at all about improving
services.[41]
40. It was beyond the remit of this inquiry to consider
the ideological motivation behind the drive to open up competition
between suppliers in a public services market. We have considered
such issues before.[42]
This inquiry has been limited to the particular role of the third
sector in the delivery of public services. As we have noted, the
provision of services by third sector organisations is only one
part of the service transformation agenda, but it is a growing
part of that agenda. The value of government contracts for third
sector organisations has been rising steeply: from around £2
billion in 1996/97 to £6.884 billion in 2005/06, the latest
year for which such figures are available.[43]
This is certainly of great significance to the sector.
41. The apparent pace of change has led many to question
whether there has been a shift away from a tradition of the third
sector providing valuable "niche" services—filling
gaps in statutory provision, often with a view to those services
eventually being provided by the State—and towards the provision
of "mainstream" public services through third sector
organisations. Martin Narey, the Chief Executive of Barnardo's
and an enthusiastic advocate of commissioning services, saw such
a development as positive:
I do not agree with the niche point, there is
no reason why the voluntary sector cannot work in very wide-ranging
services and in a whole range of activities.[44]
42. The suggestion that the sector is moving into
mainstream service provision is further fuelled by the Government's
refusal to rule out any particular services as being unsuitable
for provision by third sector organisations. Campbell Robb, the
Director General of the Office of the Third Sector, told us that
government had 'never ruled anything in or ruled anything out'
in terms of areas where it would be inappropriate for the third
sector to take on roles currently delivered by the State.[45]
Ed Miliband echoed this, explaining that the five broad policy
areas identified for growth in the Third Sector Action Plan "were
not a finite list but rather an indication of where some significant
opportunities lie to use the skills and expertise of the third
sector".[46]
43. Yet it was clear under questioning that ministers
had drawn some limits, even if not clearly defined, to the scope
for third sector involvement. For example, Mr Miliband thought
that it was highly unlikely that the Fire Service would be run
by the third sector during his political career.[47]
Similarly, he mentioned national defence as an area where it made
sense to have a uniform pattern of activity and centralised structure,
not usually cited as strengths of the third sector.[48]
44. Stuart Etherington, the Chief Executive of the
NCVO, explained why, in practice, there were limits as to how
far the Government might look to expand the role of the third
sector:
I do not think there will be this massive step-change
that is being talked about. I think it will be far more incremental
than that … You are talking about very different types of
animal …
The sector does not do everything that the public
sector does or should. If I am a taxpayer, I would expect a similar
type of service, with a similar response, in Newport as I would
in Penzance. But we do not do everything. We do discretion. The
voluntary sector is not about equity …[49]
45. The truth is that the scale of change being proposed
is easily exaggerated. This may be down to the language of transformation
and the refusal to rule out any services from transfer or to set
a limit in terms of a proportion of public spending. Yet we heard
that the actual proportion of public spending going to the third
sector, although rising, is still in the region of 2%.[50]
This figure puts the whole debate into context. Campbell Robb
stressed that 'the third sector is tiny in comparison to the public
sector, and the amount that is delivered is still tiny in comparison
to what is delivered by the private sector'.[51]
If the programme truly is rolling back the boundaries of the State,
it is curiously under-powered. There is a marked contrast here
with the language now being used by the Opposition, who talk of
re-branding the sector as the First Sector and looking to open
up the delivery of a wide range of services. [52]
46. Even within the third sector itself there is
some scepticism about the idea of a transformation in the scale
of activity. Joyce Moseley from Rainer felt that some provision
was 'going the other way actually and getting taken back in house'.[53]
Lord Adebowale (from the social enterprise Turning Point), who
has also been at the forefront of the debate on this agenda, told
us:
I think "hype" might be a good word
actually in the sense that I have not noticed any massive shift
in the paradigm …[54]
47. Campbell Robb told us that the mass transfer
of services to the third sector was "absolutely not"
the Government's intention:
It is not about identifying areas where the whole
of that particular service can be taken out. It is about finding
those kinds of examples where they really make a difference and,
wherever possible, creating the right environment where commissioners
and others can have the tools and the organisations to get that
to scale if we want it to happen.[55]
Ed Miliband echoed this distinction, telling us that
government would not "automatically transfer services into
a particular sector because we simply assume in advance that it
will always be superior…this is not the basis on which these
judgements should be made".[56]
Richard Gutch, the Chief Executive of Futurebuilders England which
was then managing the Futurebuilders fund, told us that the fund
only invested in organisations if there was going to be a clear
improvement in delivery for service users:
We are not interested in investing in an organisation
just so it can take over something that used to be in the public
sector and then run it in exactly the same way. We are looking
for a significant improvement.[57]
48. As our witnesses told us, third sector organisations
are ill-equipped to provide universality and equity to service
users. Whatever transformation of public services is about, it
should not be about transferring responsibility for delivering
large areas of public service out of the State and into the third
sector. It appears that government accepts this. Despite the emphasis
given in government publications to involving the third sector,
only 2% of public service spending is on third sector delivery.
The debate on the transformative capacity of the third sector
is a rhetorical storm in a fiscal teacup.
49. It is notable that the Government no longer has
a quantitative target for the scale of the third sector's contribution
to public service delivery. In 2002 a PSA target was set to raise
the sector's contribution by 5% by 2005-6 (not, admittedly, a
hugely challenging target). By the next spending review in 2004,
the numerical target had been removed, and the emphasis subtly
changed. The Government's goal became an increase in the capacity
of the sector as well as its overall contribution. More recently,
there has been a move away from targets for sectoral involvement
in particular services; for example, the Ministry of Justice has
recently abandoned its target that 10% of probation services under
the National Offender Management Service should be delivered by
third sector organisations.
50. The Cabinet Secretary, Sir Gus O'Donnell, explained
to us that the Government is no longer actively pursuing an absolute
increase in the contribution of third sector organisations to
the delivery of services:
The emphasis in public policy has evolved away
from increasing the absolute size of the third sector's contribution
to public service delivery, and towards creating a more supportive
environment which enables better commissioning of third sector
organisations and more ready adoption of third sector innovation
where appropriate. This is reflected in the policy programme set
out in the third sector review.
An absolute increase in the contribution of third
sector organisations to the delivery of public services is not
included in the new CSR 2007 PSA indicator for a thriving third
sector. Instead we are measuring the proportion of people volunteering
and the number of people employed by the sector.[58]
51. This is a significant evolution of policy. The
Government's position has moved from actively pursuing the transfer
of services to allowing a more ready transfer "where appropriate".
We support that change of emphasis. However, it immediately prompts
a further question: how to judge where it is indeed appropriate
for services to be provided by the third sector. We consider
this question, in all its complexity, in the next chapter.
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