Memorandum from Amicus
Amicus is the UK's second largest trade union
with 1.2 million members across the private and public sectors.
Our members work in a range of industries including manufacturing,
financial services, print, media, construction and not for profit
sectors, local government, education and the health service.
As a trade union, Amicus is one of the few stakeholder
organisations representing the needs of the workforce in the third
sector. Our experience in other sectors, both public and private,
puts us in a unique position to evaluate what works well in the
sector, as well as to identify where there are gaps or scope for
improvement.
EXECUTIVE SUMMARY
— Amicus is a major stakeholder in
both the third sector and public sector.
— Amicus welcomes the new focus on
supporting infrastructure in the third sector but thinks much
more needs to be done.
— The third sector is a valuable partner
to public services but this is what it should be—a partner
not a replacement.
— Amicus is against the marketisation
of public services and thinks that the project of involving the
third sector in reform lacks clarity and an effective evidence
base.
— It is important not to over-simplify
the issue—the third sector covers vast numbers of different
types of organisations and these roles should be properly audited.
— Third sector organisations have always
had a role in public services but this should be about improving
services and adding value to them not taking on their provision.
— Amicus is against the creation of
new third sector organisations for the express aim of outsourcing
public sector jobs—such as the NHS pathfinders.
— Commissioning is having a negative
effect on many organisations in the third sector including on
their independence, work-force and their ability to work collaboratively.
— Amicus members report that the "new
atmosphere of competition" is damaging services and reducing
workplace terms and conditions in both the third and public sectors.
— Amicus proposes a more measured and
collaborative approach to public service reform based on our six
public service values.
THE AMICUS
CASE IN
DETAIL
Amicus the Union
1. Amicus has over 30,000 members in the
third sector and more than 150,000 public sector members in areas
as diverse as local authorities, the health service, Royal Mail,
education, prisons and the MOD. This makes Amicus a major stakeholder
in both the third sector and public sector.
Commitment to the third sector
2. The Government has shown a welcome commitment
to the third sector and Amicus acknowledges the work that the
Office of the Third Sector is doing to tackle some of the biggest
issues affecting the sector. However more needs to be done.
Employment in the third sector
3. The sector's infrastructure is woefully
inadequate when compared to other sectors. Recent evidence shows
that wages are 20% lower on average than the public and private
sectors.[17]
Job insecurity caused by funding pressures and short-term contracts
means that staff turnover in the sector is unnecessarily high.
The People Count 2006 survey found that on average one fifth (21%)
of all employees in the sector left their jobs last year—the
national average for all jobs is 16%.[18]
As a result approximately 77% of voluntary and community sector
organisations have experienced retention difficulties in the past
year.[19]
4. In addition public and private sector
spending on training and development is, on average, over 50%
higher than the third sector.[20]
This has a major impact on skills in the sector.
5. Amicus members also report that pension
provision varies drastically between different organisations and
high staff turnover means that many people have little or no meaningful
pension provision. Poor pension provision disproportionately impacts
on women especially as in the Third Sector there is very little
pension portability.
6. The National Council of Voluntary Organisations
(NCVO) claims that 38% of the voluntary sector workforce is employed
on a part-time basis and an estimated 1.1 million full-time UK
workers would be needed to replace formal volunteers at a cost
of approximately £25.4 billion (based on the national average
wage), well over twice the number of full-time equivalent paid
employees in the voluntary sector.[21]
7. The sector is also predominantly staffed
and managed by women.[22]
Raising the employment standards in the sector would therefore
have a significant impact on the historic gender pay gap and tacit
discrimination against women in British employment structures.
Framework for the sector
8. In the light of this Amicus is arguing
for a national framework to cover all working conditions including
rights for volunteers, longer and better designed funding cycles,
flexible working, a commitment to life-long learning through a
"university for the third sector" and a Sector Skills
Council as well as a sector-wide pension system. These ideas are
developed further in Amicus' response to the Third Sector Review.[23]
PUBLIC SERVICE
REFORM AND
AMICUS
9. Amicus recognises the importance of public
service reform to meet the changing needs of service users and
the modern world. Amicus further welcomes the increased levels
of investment brought in by the Government over the last 10 years.
The Government itself has acknowledged that the quality of peoples'
experiences of public services depends upon the individuals who
deliver them.[24]
It is therefore vital that any initiative to reform public services
is done with the support and involvement of employees rather than
at their expense.
10. Amicus values public services and believes
that good public services are worth investing in. Any reforms
must be well evidenced and piloted, sustainable and properly financed.
In the light of this Amicus has launched a campaign focusing around
six public services values that Amicus believes should underpin
any further changes to public services—namely Valuing public
service users and staff, Accountability, Long-term commitment,
Universal Access, End to market madness and Sustainability. These
are explored further in a paper we have published on Valuing Public
Services.[25]
11. Third sector organisations have always
had a major role in public services. Organisations have often
developed to fill the gaps and influence the development of our
public services. They have been involved in improving the services
through developing new innovative services that add value to those
provided by the state. Amicus believes that this role should be
supported and recognised more widely.
12. It is important not to over-simplify
this. The term third sector covers a vast array of different types
of organisations and their roles and actions need to be carefully
evaluated if they are to have a positive impact on public services.
Too often this debate is framed around the idea that the public
sector is bureaucratic and inefficient whereas the third sector
is a panacea to every problem. Amicus rejects this position as
ideologically driven and lacking in evidence. Both the third sector
and the public sector contain examples of good and bad practice
and the reasons are often nothing to do with which sector they
belong to.
13. Amicus calls for all services to be
properly analysed and audited through the collaborative involvement
of all stakeholders including trade unions.
14. Amicus' policy is clear—Amicus
is "opposed to all forms of privatisation of public services
... Public services must be provided on the basis of human need
not the drive for profit".[26]
15. While Amicus' policies predominantly
focus on the private rather than third sector it is difficult
to separate the two sectors from the Government's rhetoric of
public service reform. A major aim is "the introduction of
greater competition and contestability in the provision of public
services,"[27]
or as PASC rightly described it, opening "markets for public
services to new suppliers from the private and third sector."[28]
Not only is this policy completely opposed by Amicus members in
the public sector but many Amicus members in the Community and
Not for Profit sector are seeing that while their sector has much
to offer public services it is increasingly being used as an outrider
for the privatisation of public services.
16. Housing associations offer the clearest
example of how the sector is being used to these ends. Amicus
members in both housing associations and council housing have
raised major concerns over recent press releases about housing
associations considering flotation on the stock exchange[29]
and the recent recognition of a profit-making company as a "social
landlord".[30]
Amicus members see social housing as a vital public service and
work for both the public sector and non-profit organisations because
they value the services and the needs of service users above their
own financial gain. They do not want housing associations to be
used as a stepping stone to full privatisation.[31]
17. Many organisations are being forced
by funding or cuts in state provision to take on delivering services
wholesale. Sheila Brown, Chief Executive of BDF New Life, raised
this issue when discussing the provision of equipment for disabled
children: "We started off by supporting the state, and now
we are replacing it... the Government talks about a partnership
with the voluntary sector, but it's not a partnership—it's
a replacement".[32]
Amicus is against the marketisation of statutory public services
and their transferral to the third sector. Amicus believes that
one of the state's key roles is to guarantee a basic standard
of life to all its citizens. It should not be down to charity
alone to provide for the fundamental needs of people in the UK
to have a reasonable quality of life.
18. In particular Amicus is against the
creation of new third sector organisations for the express aim
of outsourcing public sector jobs—such as the NHS pathfinders.
There is a big difference between bringing organisations with
a long history of innovative work closer to public services and
the Government actively creating new organisations with no grassroots
legitimacy as a vehicle to outsource public sector work and jobs.
19. Amicus is concerned that the aim of
this policy seems to be to transfer risk and responsibility for
public service delivery away from government and onto other organisations.[33]
It also seems to be about cutting costs to compensate for budget
deficits caused by expensive PFI contracts and consultancy fees.
The result of this policy will be the fragmentation of vital public
services such as the NHS and ultimately a poorer service for users.[34]
20. Amicus also has concerns about the levels
of bureaucracy that opening markets will cause. This is especially
true for the policy of "double devolution" and bureaucracy
which creates the extra cost of two tiers of commissioning drawing
public money away from front line services. This process seems
to work against the principles of the Gershon review.
USER LED
SERVICES AND
COLLABORATIVE REFORM
21. Amicus fully supports the idea of user
led public services and users being involved in the performance
assessment and improvement of their local services. Appropriate
and effective mechanisms need to be developed for this to happen.
As major stakeholders, user led third sector organisations should
be involved with designing and reforming public services.
22. Amicus is concerned that badly designed
user engagement schemes could increase bureaucracy with negligible
benefits. Any scheme needs to be effectively tested before being
rolled out.
CHOICE
23. Similarly Amicus rejects the idea that
choice between pluralities of service deliverers is the best way
to build user led services. The agenda undermines universality
and increases long-term private sector involvement in the provision
of our public services.[35]
Evidence from both the House of Commons Public Administration
Select Committee[36]
and the National Consumer Council[37]
found that people were more interested in choosing how and when
to access services than choosing between service providers.
THE INVOLVEMENT
OF STAFF
24. Amicus recognises that the experience
of public service users depend on the staff delivering those services.
User engagement with public services works best when partnered
with the engagement of staff. It is not the case that the interests
of users and staff are intrinsically opposed. In fact, empowered
users require empowered workers. The benefits of bringing staff
and service users together to improve services have also been
explored by the National Consumer Council in its Shared Solutions
project.[38]
25. Amicus recognises the positive work
the Government is doing to support volunteering. Amicus is keen
to see UK citizens being more involved in society and encouraging
participation and volunteering as a way to support public services.
However volunteers should never be used to replace the trained
and skilled public service professionals that are needed to guarantee
a good service to all.
26. Amicus strongly opposes policies that
require public service job cuts and cuts to public sector worker
pensions to finance government spending plans and believes our
public services require more and better trained public servants
not fewer.[39]
DEMAND
27. Amicus is concerned that there is little
or no evidence about the popularity and demand for the extension
of voluntary sector organisations to deliver public services.
Much of the vocal support for these policies comes from employer
groups such as the Association of Chief Executives of Voluntary
Organisations (Acevo) or the Confederation of British Industry
(CBI). The campaign by the CBI to push for a system of competitive
neutrality in public service contracts is a good example of this
and is part of a campaign to bypass the third sector and privatise
public services rather than constructively reform them.
ACCOUNTABILITY
28. Amicus is concerned about any loss of
accountability that could be associated with third sector organisations
delivering public services. Under state delivery there are clear
avenues for holding services to account through the election of
public representatives. Amicus recognises that some third sector
organisations do have a high level of services accountability
through their links with different community groups and users
as well as public auditors. These are valuable additions to the
traditional structures of public accountability but should not
be used to replace them.
SUSTAINABILITY
29. Amicus believes that part of the problem
of facing public services is the Government's "permanent
revolution" in public service reform and the constant political
battle over the amount of money available to public services.
Public service reform needs to be based on a long term commitment
to funding and a sustainable approach to reform.
QUALITY
30. There seems little evidence to suggest
that opening up services to different suppliers is leading to
better quality services. In fact, the experience of Amicus members
is that much of the Government's reform agenda is ideologically
driven and actually leading to the deterioration of service quality
(see below). One major concern is the fragmentation of services
caused by commissioning and subcontracting. This reduces the ability
of the various services to plan and cooperate effectively.[40]
IMPACT OF
COMMISSIONING ON
THE THIRD
SECTOR
31. The experience of Amicus' members is
that commissioning and contestable tendering is having a negative
effect on many organisations in the third sector. The move away
from grant funding to service delivery contracts is leading to
a reduction of the independence of many organisations removing
much of their ability to innovate and advocate on behalf of service
users. A recent online poll carried out by the Directory of Social
Change showed that more than 72% of respondents agreed that increased
voluntary sector involvement in public service delivery was changing
the spirit of the sector by moving it away from its voluntary
routes and tying it down with contractual relationships. Government
cost-cutting and the erosion of charity independence were also
major concerns.[41]
Similarly the recent Charity Commission survey showed that "only
26% of charities delivering public services felt they were free
to make decisions without pressure to conform to their funders'
wishes".[42]
32. These concerns seem to agree with the
experience of many in the Australian voluntary sector where these
policies were originally developed. The Australian Institute has
highlighted that the advocacy role of organisations has been curbed
by the need for government funding. They report "implicit
pressure to censor themselves". 90% of respondents believed
that dissenting organisations risked having their funding cut.
Three-quarters (74%) believed that NGOs were being pressured to
make their public statements conform with government policy.[43]
Several Australian newspapers have also reported that "organisations
that have been critical of the Government, such as the Australian
Council of Social Service and the Brotherhood of St Laurence,
have been frozen out of debates".[44]
FUNDING
33. Amicus members report that contestability
is damaging services and leading to a race to the bottom in workplace
terms and conditions in both the third and public sectors. To
win bids organisations are cutting wages, training and pension
provision. Although the Government claims that bids are based
on "value for money", in practice "best value"
often means "cheapest price".
34. For example the Citizens Advice Bureau
(CAB) in Manchester had to cut staff terms and training in order
to win service bids. Amicus members in the Refugee Legal Service
report a funding contract leading to a three year pay freeze for
all staff. If they didn't accept this the contract would have
gone elsewhere including possibly to the private sector. In three
recent cases—involving Stonham Housing, Stoke CAB and NCH—this
is exactly what has happened. These are all large not-for-profit
organisations, but they were out bid by loss leading private companies.
COMPETITION AND
COLLABORATIVE WORKING
35. Amicus members working in Save the Children,
NCH, Children's Society, Barnardos and NSPCC report that competitive
funding has led to a reduction in collaborative working amongst
the major children's charities. Our workplace representatives
report a new culture of fear that information sharing could lead
to them losing funding to another organisation.
EQUAL PAY
AND TWO
TIER WORKFORCE
36. The commissioning process has led to
problems with equal pay and the two tier workforce. As was mentioned
earlier voluntary sector staff are often paid less than their
counterparts in the public sector. At the same time employees
within the voluntary sector are often on variable terms due to
the funding contracts that pay for their work. This raises major
issues around equal pay as some projects are better funded and
thus some staff have better terms than others.
FULL COST
RECOVERY
37. Contracts that are given to the third
sector need to be much better developed and funded. The Office
for the Third Sector told Amicus that only 57% of all public funding
for the third sector currently achieves Full Cost Recovery. Worse
still the Charity Commission recently reported that only 12% of
charities say they achieve full cost recovery for all public services
they deliver.[45]
For example a survey by RNIB and National Association of Local
Societies for Visually Impaired People (2006) showed that of 108
contracts won by 32 visual impairment voluntary organisations
half were under-funded by at least 10%, a quarter were under-funded
by 25% and nearly a tenth were under funded by 75%. Amicus recognises
the work that government is doing to improve funding contracts
but much more needs to be done so that contracts meet the full
costs incurred by the organisations that deliver them.
38. Despite the welcome commitments from
government to extend the length of funding contracts, over two
thirds of all funding agreements for public service delivery are
still for only one year.[46]
Amicus' report "Short term funding, short term thinking"[47]
illustrates the concerns that our members have about funding contracts.
Funding systems need to be far less bureaucratic and labour intensive.
The current system is excluding organisations that have not got
the capacity to bid and further exacerbating the divide between
large and small organisations. Contracts should cover all the
costs associated with them including administration and the bidding
process. Many contracts need to be much longer and there should
be a much better system of contract renewal. Amicus suggests automatic
renewal to successful organisations that are delivering well.
These issues are also highlighted by ACEVO in its "Surer
Funding"[48]
survey and by the National Audit Office in its document "Working
with the Third Sector".[49]
39. Amicus members working for Peace and
Reconciliation in Belfast have reported a positive approach to
designing and implementing funding contracts for their work. Competitive
funding in this environment is inappropriate as some voluntary
sector organisations in the field could be perceived to be part
of a specific community and thus funding one over another could
lead to accusations of bias and sectarianism. Instead a system
of collective bidding and cooperative funding has been developed
whereby funders and bidding organisations get together to design
the project and share the funding cooperatively between all concerned.
Amicus sees this as a positive way forward to develop third sector
funding.
A PARTNER NOT
A REPLACEMENT
40. In conclusion, Amicus proposes a more
measured and collaborative approach to public service reform based
on our six public service values. The third sector is a valuable
partner to public services but this is what it should be—a
partner not a replacement.
March 2007
17 Croner Reward 2007. Back
18
People Count Survey 2006. Back
19
Ibid. Back
20
Ibid. Back
21
NCVO Almanac 2006. Back
22
People Count Survey 2006. Back
23
Amicus response to the Third Sector Review, 2006
http://www.epolitix.com/NR/rdonlyres/576DB637-9DD0-44A1-B04D-9131F1C4BEA8/0/AmicusresponsetotheThirdSectorReview.pdf. Back
24
HM Treasury, "Cross Cutting Review of the Public Sector
Labour Market", November 2002. Back
25
Amicus, "Valuing Public Services", 2007 http://www.amicustheunion.org/PDF/Valuing-Public-Services.pdf Back
26
Decisions of Amicus Policy Conference 2005
http://www.amicustheunion.org/pdf/2005policydecisions.pdf Back
27
Prime Minister's Strategy Unit, "The UK Government's Approach
to Public Service Reform", June 2006. Back
28
Public Administration Select Committee: Inquiry Commissioning
Public Services from the Third Sector
http://www.parliament.uk/parliamentary_committees/public_administration_select_committee/pasccommissioning.cfm Back
29
Inside Housing, "Flotation considered by many of sector's
big hitters", 26 January 2007. Back
30
Housing Corporation press release, "First ever private
housing manager wins Corporation accreditation", 30 January
2007. Back
31
Amicus response to the Cave review, February 2007
http://www.amicustheunion.org/pdf/CaveReviewSubmission2007.pdf Back
32
Quoted in Third Sector, 29 November 2006. Back
33
Ann Blackmore NCVO, "How voluntary sector organisations
can help transform public services", June 2006-http://www.ncvo-vol.org.uk/uploadedFiles/NCVO/Policy/Public_Services/Transform%20Report%20-%20Final.pdf Back
34
Amicus response to "Health Reform in England: update and
commissioning framework", 2006
http://www.epolitix.com/NR/rdonlyres/30AD076C-5B1F-408F-861B-DB4FE56A9C80/0/AmicusResponsetoHealthReforminEngland_updateandcommissioningframework2.pdf Back
35
Decisions of Amicus Policy Conference 2005
http://www.amicustheunion.org/pdf/2005policydecisions.pdf Back
36
Choice, Voice and Public Services Fourth Report of Session 2004-05. Back
37
"Engaging the user-NCVO workshop", 15 November 2004
Philip Cullum, Deputy Chief Executive, National Consumer Council.
Also in the House of Commons Public administration Select Committee
Choice, Voice and Public Services Fourth Report of Session 2004-05. Back
38
http://www.ncc.org.uk/publicservices/index.htm Back
39
Decisions of Amicus Policy Conference 2005
http://www.amicustheunion.org/pdf/2005policydecisions.pdf Back
40
Amicus response to "Health Reform in England: update and
commissioning framework", 2006, http://www.epolitix.com/NR/rdonlyres/30AD076C-5B1F-408F-861B-DB4FE56A9C80/0/AmicusResponsetoHealthReforminEngland_updateandcommissioningframework2.pdf Back
41
Graham Leigh, "All change" Society Guardian, 23 November
2006 http://society.guardian.co.uk/voluntary/comment/0,,1955275,00.html Back
42
Charity Commission, "Stand and Deliver: the future for
charities delivering public services", February 2007. Back
43
The Australian Institute, "Government Gags Community Voice",
2 June 2004 http://www.tai.org.au/documents/downloads/MR171.pdf Back
44
Sarah Maddison and Clive Hamilton, "The repression of the
bleeding hearts", Sydney Morning Herald, 27 January 2007
http://www.smh.com.au/news/national/the-repression-of-the-bleeding-hearts/2007/01/26/1169788693380.html
"Silencing the Critics", The Age, 27 January 2007.
http://www.theage.com.au/news/opinion/silencing-the-critics/2007/01/26/1169788690664.html
Patrick Allington "Silencing Dissent: How the Australian
Government is Controlling Public Opinion and Stifling Debate",
The Australian, 3 February 2007
http://www.theaustralian.news.com.au/story/0,20867,21142636-5003900,00.html
and Back
45
Charity Commission, "Stand and Deliver: the future for
charities delivering public services", February 2007. Back
46
Charity Commission, "Stand and Deliver: the future for
charities delivering public services", February 2007. Back
47
Amicus, "Short Term Funding-Short Term Thinking" 2006
http://www.amicustheunion.org/pdf/Funding%20Survey.pdf Back
48
ACEVO Commission of Inquiry Report, "Surer Funding",
November 2004. Back
49
National Audit Office, "Working with the Third Sector",
published June 2005. Back
| 
