Memorandum from Age Concern
Age Concern England is the national partner
in a federation of 380 organisations, which deliver services funded
by contract, by other arrangements with statutory funders, and
by voluntary income, to around one million older people per year
in every locality in England. Together, Age Concern is probably
the biggest independent provider of health, social care and supporting
services to older people. Age Concern England provides infrastructure
support to local Age Concerns, and campaigns and represents older
people at national level.
This letter is in response to the Public Administration
Select Committee's consultation on the Government's policies relating
to the third sector in public services delivery.
Age Concern has clear evidence that our own
delivery has often been more successful than that of prior statutory
sector direct provision. This includes increased welfare benefits
maximisation from contracted-out advice services, and improved
outcomes from contracted out case-finding and assessment (identifying
people in need of services who are not receiving them, and ensuring
that help is provided). And we have evidence of our own services
having impact where there was no prior provider, particularly
in community-based services designed to prevent unnecessary admissions
to hospital, and health promotion.
We also have evidence where our own provision
seems to have broadly equal performance to that of statutory provision,
such as in certain health promotion activities. To date we have
little evidence of relative performance against private sector
providers, as we tend to operate in different areas of activity.
However, this may change in the future.
This is not evidence that third sector provision
is necessarily superior in specific types of public service activity,
merely that one third sector provider has produced good results
in certain services in certain areas of the country. Age Concern
believes that there are certain Third Sector providers which are
very good at the provision of certain services, are well-placed
to provide them, and where expanded provision may be of benefit
to service-users. Our position, however, is that the best possible
provider should be contracted to deliver services. The "best
provider" is the one that delivers the best outcomes as defined
by service-users, within limits of cost-effectiveness. Public
sector procurement has a duty to select providers on this basis
alone, and to be effectively "sector neutral".
Where the evidence seems to be most clear, is
that "whole-systems" approaches involving the statutory,
local third sector and other providers seem to be the most effective.
Initial evidence from the Government's Partnerships for Older
People Projects (POPPS) is an excellent example of this, established
joint working between third sector organisations and the Pension
Service is another.
Age Concern has concerns about the wider agenda
of contestability. Whilst welcoming the provision of choice for
service-users, the quasi-market which it is intended will provide
this, has not been modelled in detail and has some potential flaws.
This includes a requirement for surplus capacity provided by sustainable
and competing organisations. This situation is unlikely to spontaneously
arise, and may be impossible to achieve, leading to a real danger
of market collapse. One area of the market dynamic which is very
difficult for third sector providers in particular is that commissioners,
operating as single local purchasing agents, have great market
power, leading to smaller organisations being under pressure to
accept unfair or disproportionate levels of risk in contracting.
It is likely that this is the main barrier to the creation of
a "level playing field", not any specific cross-sectoral
issues. Until a truly level-playing field can be created, by improving
good practice in commissioning and contracting based on the best
interests of service-users and communities, it is likely that
special assistance to third sector organisations is necessary.
Certainly, unfair contracting practises towards third sector organisations
have persisted despite decades of contracting-out in social care.
The involvement of more third sector, and more
private sector, providers does have the potential to deliver greater
innovation by the input of different ways of thinking, and this
can be demonstrated through a huge list of examples of innovative
approaches by commissioned independent providers. The scope for
innovation will be further increased if commissioning is based
less on the type of service to be commissioned, and more on the
basis of demonstrated outcomes for service-users, which is the
intention, if not yet the reality, of government policy.
Age Concern is unsure whether there is a "polarisation"
of the sector, although there is certainly a trend where larger
public service-providing organisations are expanding rapidly.
This would not be a concern as long as all the diverse organisations
in the third sector were thriving and working more closely together.
We are concerned that this may not be the case, although we have
examples of large Age Concerns working with smaller organisations
through community development initiatives, or facilitating networks
and partnerships which involve small groups.
Where there does appear to be a serious risk
is in the loss of "independent" services previously
funded by statutory organisations on a more arms-length basis
than contracting (such as grants or service level agreements),
and services which do not directly meet key government targets.
These include information and advice services, and independent
one-to-one advocacy support. Age Concern has completed a study
of its own information and advice services, which has shown a
projected decline in funding of one-third over the next three
years. If "choice" and personalisation of services through
Direct Payments and Individual Budgets, is to be to the benefit
of service-users, this independent support is essential.
February 2007
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