Memorandum from Rt hon Ed Miliband MP
I am writing to follow up on the two outstanding
questions from 20 November 2007 when Phil Hope MP, as Minister
for the Third Sector, and I gave evidence to the Public Administration
Select Committee.
There were two questions we agreed to provide
further information on. The first from Paul Rowen MP about third
sector contracts with the Government and the second from yourself
about pre-appointment hearings in respect of public appointments
and whether there is a need for legislation.
Paul Rowen MP asked about the range of contracts
that the third sector has recently won across different departments
of Government.
Let me briefly take this opportunity to reiterate
the Government's approach to commissioning and the third sector.
We want to take action to ensure an environment where each sector—public,
private and third sector—can play to its strengths. This
means ensuring that, where third sector organisations wish to
do so, they can engage with the public sector with a view to playing
a greater role in public service delivery. Our policies are aimed
at helping those third sector organisations that are well placed
to deliver public services, to compete on a level playing field
when bidding for contracts.
To pick up on a point you asked about in your
last question to me at the Committee, it is obviously for the
commissioning process to determine who wins the contracts, private
sector, third sector or public sector. Third sector organisations
often have a closeness of relationship with the users of their
services which places them in an advantageous position in terms
of understanding and meeting personal needs and tackling difficult
social issues. Thus, the third sector has the potential to make
an important contribution and as I stated before the Committee
I would expect the amount of third sector delivery to increase.
What I sought to do at the Committee is draw
a distinction between an approach which will involve greater third
sector delivery in a number of areas where they are well placed
to deliver a service, and an approach which says we automatically
transfer services into a particular sector because we simply assume
in advance that it will always be superior. As some of your third
sector witnesses said, this is not the basis on which these judgements
should be made.
What is important is to ensure that in areas
where the third sector can make a contribution, it is open to
them to bid for contracts. The public services action plan for
third sector involvement (Partnership in Public Services: An
action plan for third sector involvement) published in December
2006, should be seen in this context, ensuring that we open up
specific areas of public services to the possibility of third
sector delivery. It set out five broad areas of public service
delivery in which we expect a growing role for the third sector.
This was not a finite list but rather an indication of where some
significant opportunities lie to use the skills and expertise
of the third sector. Although we are moving along a long journey
of culture change, we have already seen results in each of the
areas identified in the plan:
DWP: EMPLOYMENT SERVICES
In the area of welfare to work provision, a
number of third sector organisations bring a specialism to bear
in terms of knowledge of particular sources of disadvantage, local
area knowledge and user credibility. As I mentioned above, the
recent commissioning process carried out by DWP in the Pathways
to Work area has seen a significant increase in the role of the
third sector in public service delivery. Out of the 15 Pathways
to Work prime contractor contracts that DWP awarded in the first
phase, two were awarded to third sector organisations, worth a
total of over £40 million. Moreover, around half of the sub-contractors
to the successful primary contractors were third sector organisations.
Phase two contracts have now also been announced. Of the eight
organisations selected to run the primary contracts, four are
from the third sector, representing 40% of the total value of
the Phase 2 programme. It is expected that again, around half
of the subcontractors in Phase 2 will be from the third sector.
MINISTRY OF
JUSTICE: NATIONAL
OFFENDER MANAGEMENT
AND CORRECTIONAL
SERVICES
The National Offender Management Service (NOMS)
was created to deliver end to end offender management. The third
sector is pioneering new ways of working with offenders. For example,
the St Giles' Trust which runs a peer advice programme—training
prisoners to provide housing advice to other prisoners. These
kinds of services show that third sector organisations can often
reach out further than the public or private sector in this particular
area.
NOMS has already funded a pilot looking into
providing peer mentoring support for young adult offenders to
be delivered by a group of third sector organisations and is currently
consulting on a specific third sector action plan.
NOMS will invest £2.2 million for three
years from April 2008 in a new National Infrastructure Grants
Programme to fund third sector capacity-building, voice for the
sector, volunteering and mentoring development. From April 2008,
NOMS will begin to commission prison and probation services and
will provide the opportunity for third sector organisations to
compete for contracts to deliver offender management services.
DEPARTMENT FOR
INNOVATION AND
SKILLS: LEARNING
AND SKILLS
Third sector organisations are often well placed
to deliver learning and skills services to those who are hard
to reach. The Learning and Skills Council (LSC) has recently opened
up its procurement process which has resulted in 43 new contracts
across the third sector, worth £7.6 million. Going forward,
all regional commissioning plans for learning and skills prepared
by the LSC will highlight where the third sector might contribute.
Moreover, the LSC has been supporting the Quality Improvement
Agency, the body that works to improve the learning and skills
sector, in offering one-to-one support on the tendering process
to 70 third sector organisations.
DEPARTMENT FOR
CHILDREN, SCHOOLS
AND FAMILIES:
CHILDREN'S
SERVICES AND
EDUCATION
The third sector has for some time made a very
important and growing contribution to child care provision. The
proportion of child care provision for full day care by the third
sector has risen by over 300% in the last five years amounting
now to some 23% of full day care. The third sector now accounts
for the provision of nearly 70% of sessional care (that is, specific
sessions of childcare, rather than full time care during the whole
day). In addition, nearly 44% of out-of -school care is provided
by the third sector.
The Department is opening up further opportunities
for the third sector through its Children's Plan, which was developed
in consultation with the sector. The plan emphasises the importance
of prevention and early intervention—an area of traditional
strength for the children's voluntary sector.
DEPARTMENT OF
HEALTH: HEALTH
AND SOCIAL
CARE
The third sector is already playing an increasingly
important role in the delivery of health and social care. For
example, in the provision of community equipment to facilitate
independent living. The Department of Health has worked with stakeholders
to develop a retail model for delivering community equipment services,
which enables people to present their prescription for free equipment
to a range of providers, which can include the private and third
sector. Oldham, Cheshire and Manchester are already using this
model, which has seen third sector organisations such as Independent
Living Centres and Age Concern become retailers of community equipment.
In addition, some local authorities and PCTs in England, such
as Leicestershire, have opened up aspects of community equipment
services to contestability resulting in third sector organisations
such as the British Red Cross wining several contracts.
The Department has also set up a Social Enterprise
Fund, worth £73 million over a four year period, to stimulate
and encourage the development of a vibrant social enterprise sector
in the delivery of health and social care services. In addition,
26 pathfinders were established to demonstrate best practice in
innovative service delivery and the experience gained from them
and other social enterprises that receive investment from the
fund will inform the development of further investment.
Since the publication of the Office of the Third
Sector's public services action plan on 6 December 2006 there
has been good progress on the specific actions listed in the plan.
I enclose a copy of the "one year on" review document,
published on 5 December 2007, which gives more detail.
In addition to the action plan, there have been
further developments across sectors. For example, there has been
a large increase in third sector involvement in public sector
delivery, particularly in waste and recycling, for which the Department
for Environment, Food and Rural Affairs has responsibility. An
estimated 1,000 third sector organisations in England are currently
operating in waste and recycling. Third sector organisations typically
run recycling and composting schemes, or handle specialised waste
such as furniture, white goods and IT equipment which are refurbished
and distributed to low income families or community groups. In
addition these organisations sometimes deliver added benefits
to the community through employing disadvantaged and/or long term
unemployed people to undertake collections, refurbishment and
sales.
One recent example illustrates the contribution
of the third sector in this area. In November 2007, a leading
social enterprise, ECT Recycling, the UK's largest community recycling
provider, signed a new multi-million pound 10-year contract with
Bath and North East Somerset Council to provide doorstep recycling
to the borough's 75,000 households.
I hope the above summary is helpful. I would
be pleased to provide you with any further information you need
on any aspect of commissioning from the third sector.
Let me finally turn to your question about pre-appointment
hearings in respect of public appointments. We are currently compiling
a list of suitable appointments for pre-appointment scrutiny and
in that context, we are considering whether these appointments
would necessitate legislation. We also look forward to your report
on public appointments.
May I end by thanking you and the other members
of the Committee for undertaking the third sector inquiry and
I look forward to the final report. I am copying this letter to
the other members of the Committee.
January 2008
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