Memorandum from Rainer
ABOUT RAINER
Rainer is the national charity for under-supported
young people and young adults. Last year we worked with 14,000
people in 115 communities across the country.
The charity's routes lie in two large philanthropic
organisations:
— The Rainer Foundation, founded in
1876 which gave rise to the modern probation service.
— The Royal Philanthropic Society incorporated
in 1806 which was "the first active and organised endeavour
to arrest the progress of crime and vice by prevention rather
than by punishment".
Today, at the end of our 200th anniversary,
Rainer works with young people who are living on the margins of
society: in or leaving care or custody, involved in or on the
fringes of crime, out of work, struggling at school, homeless
or facing young parenthood without the safety net of a supportive
family.
The majority (82%) of our services are funded
through contracts with local authorities, although we also develop
innovative approaches and pilot new services funded by voluntary
income. Our turnover for the year ending 2006 was £22 million.
Rainer is unusual amongst large, statutory-funded
voluntary organisations in that we make extensive use of volunteers.
We have almost as many volunteers as paid staff. They provide
support to young people by acting as mentors or appropriate adults
(attending police stations to support young people whose parents
cannot be there).
A further part of our work is to inform and
influence public policy based on the expertise and experience
of our staff and the young people we support.
For further information visit www.raineronline.org
INTRODUCTION
In this response we have focused on those areas
most relevant to our work, where we have direct experience.
First we will address questions around the benefits
of contestability and the strengths of the third sector. Then
we will focus on issues around commissioning and contracting including
the effectiveness of current processes. Finally, we will address
the impact of commissioning on voluntary organisations and, in
particular, fears around increasing bureaucracy and loss of independence.
It is important to note that the voluntary or
third sector is incredibly diverse; a "loose and baggy monster".[1]
There are some 170,000 general charities registered with the Charity
Commission and as many as 350,000 voluntary and community organisations.
Rainer's response to this consultation comes
from a particular perspective—that of a relatively large
voluntary organisation primarily concerned with service delivery
and innovation, and receiving the majority of its funding from
statutory contracts.
Just as the sector is diverse, the role that
voluntary organisations play is also varied. While this particular
inquiry is focused on public service delivery it should not be
forgotten that this is just one aspect of voluntary organisations'
work, alongside campaigning and community development/strengthening
civil society. It is not always easy to separate these roles.
For example, a charity that involves many volunteers from the
local area within its projects is also, arguably, building social
capital within a community as well as delivering a direct service.
Voluntary organisations are therefore valuable well beyond the
specific services they deliver under statutory contracts.
1. THE BENEFITS
OF CONTESTABILITY
1(a) Have services which have been transferred
to third sector organisations shown improvements in quality?
There are two elements to this question. First,
what are the benefits of transferring a particular service to
the Third Sector? Second, what are the benefits of introducing
social market forces into an area of public service?
Many of the benefits from contestability arise
not from large-scale transfers from one sector to another but
from opening up the possibility for the best provider, from
across the different sectors, to deliver a service. In Rainer's
experience there are good and bad providers within each sector
and it can be highly misleading to attribute characteristics according
to which sector an organisation belongs to (there are, for example,
some incredibly passionate staff within some public sector agencies).
We would therefore put forward two arguments in favour of contestability
and greater involvement of the voluntary sector:
The general impact of contestability
There is some evidence that quasi-markets have
had a positive impact across public service areas from education
through drug and alcohol treatment and into criminal justice.
It is often not just the services that are transferred to other
providers that improve. The impact of competitive forces and the
threat of transfer can spur improvements within existing service
providers.[2]
It is important, therefore, not to judge the overall impact of
contestability on improvements within those services transferred
to other providers. The argument is that "a rising tide floats
all boats".
However, for this effect to hold it is important
that (a) the aims of contestability are clearly around service
improvement and not reducing costs and (b) that an impartial,
efficient and outcome-focused approach to commissioning is in
place. Unfortunately, we are a long, long way from this in many
areas of public policy (see answers to section 3 below).
Specific improvements in quality
Having made the point above about the overall
impact of contestability it is certainly possible to point
to specific examples of a project or service which has thrived
on being transferred to the third sector.
Education—Rainer City Training
Rainer City Training, based in Portsmouth began
life as part of the local authority education service. Although
it still maintains a close working relationship with the local
authority it now has the independence and flexibility to engage
with under-supported young people who have fallen through the
mainstream education system.
Young people access the project on referral
from Jobcentre plus, Connexions, the Youth Offending Team and
many other local agencies. Many service users are classed as Not
in Education, Employment, or Training (NEET) and may have additional
support needs.
Around 660 young people throughout Hampshire
take part in Rainer City Training programmes each year. Last year
it exceeded the target progression rate for the Learning and Skills
Council and so far this year over 80% of young people have progressed
to further education and employment—a figure that is well
above the regional target of 55%.
Criminal Justice—Rainer Northamptonshire
In Northampton, Rainer's Bail and Remand service
aims to support young people who are awaiting a court appearance,
preventing further offending. It provides an intensive support
and monitoring programme as an alternative to custody and is highly
valued by the courts and other statutory partners. This is a further
example of a service that may have previously been provided by
statutory agencies (and indeed still is in many parts of the country).
Over the last year the service achieved a startling
rate of success, preventing offending whilst on bail amongst 93%
of the young people it supported. This was achieved at a fraction
of the cost (both human and financial) of the young person being
remanded into custody. The service manager won a national justice
award in 2006 for his work with young offenders.
"Court representatives viewed the (Rainer)
bail team as providing an indispensable service, and the (Rainer)
remand carer team as a valuable resource" HM Inspector of
Probation Report on Northamptonshire Youth Offending Service,
2006.
These are two specific examples of high-quality
services, measured in terms of the targets/outcomes set out for
them explicitly in terms of public policy. However, many of the
strengths of voluntary organisations also lie in the different
approaches that they can take in delivering those outcomes (see
section 2).
1(b) Is a loss of accountability a threat
of commissioning services?
No. There are extensive measures of accountability
already in place—both directly through the contracting process
and through the variety of inspection and regulation regimes which
voluntary organisations fall within.
In fact, for many organisations regulation and
accountability requirements are already excessive and Rainer welcomes
Government's commitment to streamlining regulation through the
Better Regulation Taskforce.
One academic report found that voluntary organisations
could spend as much as 40% of individual labour hours dealing
with contracts,[3]
with much of this time being taken up with reporting requirements.
One of the strengths of many voluntary organisations
is that their work cuts across statutory services and government
departments. Yet this can mean that they suffer multiple reporting
and accountability requirements. For example, one very large organisation
was subject to five different regulatory regimes in addition to
the requirements from the Charity Commission.
The process of tendering or bidding for contracts
also involves hefty areas of accountability. Pre-Qualifying Questionnaires
are incredibly detailed and often require large amounts of evidence
including copies of organisational policies and procedures.
Rainer is in favour of appropriate accountability
and transparency but, if anything, current commissioning processes
and inspection regimes result in excessive and often needlessly
duplicated processes rather than a loss of accountability.
2. STRENGTHS
OF THE
THIRD SECTOR
2(a) Is there evidence that where services
are provided by the third sector, they are popular with those
who use them?
Yes. In Rainer's experience this is the area
where the clearest evidence exists. In our own case, 96% of our
service users are satisfied or very satisfied with the service
they receive from Rainer (Rainer survey, 2006) and 92% of them
said that Rainer helped them to develop a more positive routine
or better lifestyle.
At the individual project level, there are numerous
examples of young people willing to engage with voluntary providers
where they have disengaged from other services. Much of this may
be down to a more flexible approach taken by individual voluntary
providers, or it may be driven by a distrust of statutory agencies,
particularly amongst those who have previously been in trouble
with the law or those groups such as homeless people or young
runaways who state that they are more comfortable approaching
a voluntary agency.
In terms of direct evidence:
— One third of the new referrals received
by Rainer City Training (see case study above) are as a direct
result of recommendations from existing service users.
— Rainer South Yorkshire provides education
and support to young people and young adults referred from probation
and criminal justice agencies. Participants frequently continue
to access the service well beyond the requirements of the referring
agency. Last year Rainer South Yorkshire worked with nearly 300
people. Over 100 gained City and Guilds basic skill qualifications
and over 80 entered mainstream education, training or employment.
— Rainer Lambeth Youth Inclusion Project
works with those young people most at-risk of crime in the local
area. Despite being a voluntary programme (ie young people are
not forced to attend) the scheme has been highly effective at
engaging young people and has seen arrest rates amongst the core
client group fall by more than 75%.
In more anecdotal terms, service users frequently
cite the attitudes of staff, flexibility of the service and distinctiveness
from statutory agencies as valuable.
2(c) Do public services provided by the third
sector more accurately reflect the changing needs of those that
use them?
2(d) Is there evidence that contracting to
the third sector leads to greater scope for innovation?
Yes. If third sector providers are allowed the
necessary flexibility.
These characteristics are closely interrelated.
Innovation is often the result of an unmet need amongst service
users. A number of new approaches to social problems began within
the third sector, from needle exchanges (piloted by third sector
organisations in London before being introduced as part of official
government policy) to family support centres (piloted by Shelter
and NCH and now rolled out as part of the Respect Action Plan).
These, along with many other examples, illustrate
the way that third sector organisations adapt new programmes in
response to the specific needs of service users. However, this
innovative role can be severely hampered by poor commissioning
and contracting. Too often, faced with the difficulty of measuring
outcomes from services, commissioners focus on process measures
instead. This can lead to unnecessary constraints on the way third
sector organisations deliver services and can undermine the very
strengths that attracted commissioners to third sector organisations
in the first instance.[4]
Rainer has repeatedly argued for the focus of
commissioning to rest on outcomes rather than simply outputs
or processes. A more streamlined regulatory and accountability
programme could give commissioners the confidence in individual
organisations and allow them flexibility to meet policy objectives
in the most appropriate way for their service users. Unfortunately,
contracts are currently `micro managed' with highly specified
conditions relating to almost every aspect of the service to be
delivered. This results in unnecessarily complex contracting processes,
a less flexible response to individual needs and a lessening of
the improvements offered by contestability (since any provider
winning a contract will be forced to deliver services in exactly
the same way—as set out in that contract).
Again, innovation is not the sole preserve of
the third sector. Nor is it a characteristic of every third sector
organisation. But the structure of third sector organisations,
their ability to cut across government programmes and funding
streams, the passion of staff or volunteers, and the fact that
many third sector organisations are started by individuals or
local communities in response to a particular need means that
there is arguably greater capacity for innovation within third
sector organisations.
3. COMMISSIONING
In this section we address the whole of question
3 and question 4(d).
There is no doubt that contestability within
public services has been a major driver in the growth of the third
sector over the past two decades. Government funding is now the
largest source of income for the sector, with contracting overtaking
grant programmes in providing the majority of that government
funding.[5]
Rainer's own rapid growth over the past six years has also largely
been driven by statutory funding.
Stability
Unfortunately, for many providers, this has
not yet lead to increased stability. Too many statutory contracts
are for relatively short time periods, including a large number
of annual contracts. Recent commitments to pass the benefits of
the Comprehensive Spending Review 3-year budgeting cycle on to
the sector are extremely welcome, as is the commitment from the
Chair of the Local Government Association to end the use of annual
contracts. Third sector providers have to be able to plan beyond
the next 12 months if they are to achieve stability and be able
to focus on meeting the needs of those they support.
Similarly, delays in payments and in contract
start dates can cause enormous problems. Rainer has, on a number
of occasions, been in the position of having to continue a service
whose contract has passed the renewal date, on fairly vague verbal
funding agreements from partners. Often, the reason for delays
lies with bureaucratic processes and particularly budgetary issues
within local authorities. This can result in staff receiving warnings
of redundancy and can have an enormously negative impact on morale.
Smaller organisations may face much more serious problems as they
will be more reliant on individual contracts. It is unacceptable
that any voluntary organisation should have to accept such risks
and leads to unnecessary problems in the long term. In other instances
other organisations have been forced to lay off staff and close
services, only to reopen them and start recruitment six months
later, due to the delays in funding agreements.
Bureaucracy and loss of independence
Much of the concern about contracting's impact
on the third sector is motivated by worries that voluntary organisations
that take on large amounts of statutory funding will become more
bureaucratic and less independent.[6]
However, in Rainer's experience it is not statutory
funding per se that poses a risk to flexibility or innovation.
It is the manner in which such funding is awarded and the accompanying
contracting and regulatory requirements, along with the structure
and response of individual organisations.
For example, an organisation may receive more
than 95% of its funding through government contracts. But if those
contracts are long-term, cover the full costs of the organisation
and, crucially, specify desired outcomes rather than detailed
process measures there is no reason why that funding should have
a negative impact on the organisation.
Smith and Lipsky's analysis of the contracting
process in America emphasises the role that regulation plays in
growing bureaucracy amongst voluntary providers and Rainer would
again emphasise the importance of more streamlined regulatory
processes, particularly those that may otherwise be repeated unnecessarily
by different commissioners. For example, for one tender Rainer
had to produce extensive pre-qualifying questionnaire documents,
accompanied by multiple copies of many of our internal documents,
despite the fact that we had worked with that local authority
for almost a decade. We have faced similar problems on a number
of occasions, wasting an enormous amount of staff time.
Some of the best partnerships with commissioners
come where voluntary organisations are involved early in the planning
process, identifying and scoping the need and agreeing suitable
outcomes against which to measure success.
Addressing these concerns about regulation would
also better-enable smaller voluntary organisations to engage in
contracting, limiting the polarisation of the sector. Regulation
and form-filling is one of the most common complaints from small
local community groups.[7]
Another aspect of these concerns relates to
organisations who may be forced to alter their mission or values
in pursuing stable funding from government. From Rainer's perspective,
careful consideration is given to whether particular contracts
or programmes fit with our core values and charitable objectives.
There are many examples of contracts that would have allowed the
organisation to grow significantly but which did not fit within
these criteria and so were not pursued. Equally, part of many
voluntary organisation's roles involve lobbying government to
prioritise the client groups they represent, campaigning to expand
services where needs are not being met.
These debates are also far from new. In the
mid 1800s Rainer ran a reform school for young offenders. At the
time it was funded through a range of voluntary donations but
the trustees were approached by the governor of Newgate Jail.
He wanted to refer young people to the school, paying a fixed
amount per year for their upkeep. Though they faced financial
uncertainty, trustees were concerned about a loss of independence.
Their response was interesting, and still relevant
today. They agreed to accept the governor's proposal providing
that for each boy referred the "case shall appear to the
Committee to be within the spirit and regulations of the Establishment".
In other words, they agreed to enter into the
contract, so long as the work fit with the aims and values of
the charity. Despite the modern situation becoming more complex
and involving a multiplicity of such contracts Rainer believes
that a similar core approach can and should be taken by voluntary
organisations today.
Campaigning and criticism of government
One particular area where concerns about independence
have been raised relates to campaigning, and specifically whether
growing dependence on statutory funding would limit organisations'
willingness to criticise government. Though this is a valid concern,
it is mitigated in the case of larger organisations where the
sheer number of different funding providers will limit the dependence
on a single agency. In Rainer's case, we work in 115 communities
across the country, limiting how much an individual contract could
pose a risk to independence.
A second safeguard exists within the voluntary
sector compact and the appointment of a Compact Commissioner.
The compact protects a voluntary organisation's right to campaign
without the fear of funding being withdrawn and this has been
successfully tested through some early complaints.
Finally, the extent to which an organisation's
staff, volunteers and service users play a part in campaigning
should not be underestimated. A specific need or particular problem
encountered by service users cannot easily be overruled by funding
considerations, even if directors or trustees (who are often passionate
about the issues themselves) were tempted to do so.
Other concerns about contracting
Commissioning processes are extremely varied
across the country and there are some local authorities who successfully
manage the social market for particular services. This involves
making sure that they are well-informed about; local need, effective
approaches to these needs and existing local services. The best
commissioners have a clear set of objectives, often spanning across
different departments or organisations and agreed at a senior
level. Finally, they minimise the transaction costs of commissioning
by providing simplified, long-term contracts.
Unfortunately there are numerous examples of
poor commissioning. In addition to the examples mentioned above,
Rainer has experienced:
— Poor tendering documents, lacking
clarity about the service required and focusing too heavily on
process and staffing issues.
— Final decisions being taken irrespective
of the stated aims of commissioning.
— Repeated requirements for the same
information in different formats and irrespective of existing
services delivered for the same commissioner.
— Presentations/pitches for services
being cancelled at the last minute.
— Contracts being awarded purely on
price, with commissioning seen as a cost-cutting exercise.
While these are serious issues for an organisation
of Rainer's size, they can be disastrous for smaller organisations.
In order to maximise the benefits of contestability
and the social market approach it is vital that commissioning
processes are improved. Commissioning is a difficult process,
requiring quite specialised knowledge. Rainer supports the planned
training programme to support key commissioners working with the
voluntary sector and the involvement of the Better Regulation
Taskforce already alluded to. In addition, we would like to see
the introduction of standard terms and conditions for many service
delivery contracts. Finally, a more streamlined, centralised approach
to registration and regulation for service delivery agencies would
reduce the amount of bureaucracy involved and help ensure their
independence.
The special role of volunteers
One important area for the third sector not
yet covered is the role of volunteers. Smith and Lipsky, highlight
the shift from volunteers to paid staff as a key characteristic
in the process of "bureaucratisation". They note that
many contracts exclude volunteers or insist on paid staff only.
In Rainer's experience volunteers have a crucial role to play,
both in providing an effective service to the young people we
support and in ensuring the organisation goes beyond that service
to fully engage with and to built trust with those people we support.
Rainer has almost as many volunteers as paid
staff and for some young people a volunteer mentor can be the
only responsible adult in their lives who is not paid to be there.
This relationship can provide something special alongside the
professional support offered by staff.
Volunteering policy, and particularly ensuring
that the costs of training and supporting volunteers are properly
funded, cannot be separated from questions about contestability.
Conclusion
This is a timely and important enquiry from
the Committee, at a point where the role of the third sector is
high up the political agenda.
The commissioning process lies at the heart
of the current approach to the third sector and can either maximise
or severely limit the impact that voluntary organisations can
have. It is vital, therefore, that we get this commissioning process
right, enabling the social market to work efficiently and protecting
the third sector from unnecessary bureaucracy and burdensome regulation.
The growing role of the third sector within
a range of public services, facilitated through a social market
approach, offers us the chance to dramatically improve the support
available to some of society's most vulnerable groups. It is vital
that we take that chance, and that is dependent on effective commissioning.
February 2007
1 Kendall, J and Knapp, M (1995) A loose and baggy
monster: boundaries, definitions and typologies in Davis-Smith,
J, Rochester, C and Hedley, R (Eds) An Introduction to the
Voluntary Sector, London:Routledge. Back
2
Le Grand, J (2003) "Motivation, Agency and Public Policy"
Oxford University Press. Back
3
Scott, D W and Russell, L "Contracting: the experience
of service delivery agencies" in Harris, M and Rochester,
C (eds) (2001) "Voluntary organisations and social policy
in Britain; perspectives on change and choice", Palgrave. Back
4
See Smith, S & Lipsky, M (1993) "Nonprofits for
Hire; the Welfare State in the Age of Contracting". Back
5
NCVO Voluntary Sector Almanaac 2006. Back
6
See for example Seddon, N (2007) "Who Cares?" Civitas
or "Breakdown Britain volume 6" from the Centre for
Social Justice. Back
7
Breakdown Britain vol 6. Back
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