Memorandum from Partnership for Young
London
Partnership for Young London is the strategic
regional youth unit for voluntary and maintained sector organisations
in London, with a remit covering youth work, services to young
people, and 14 to 19 education. Members of Partnership for Young
London include 29 of the 33 local authority youth services, the
five London Connexions sub-regional partnerships, and 17 voluntary
youth organisations (for a full list, see Appendix 1).
1. What are the benefits of contestability
to the users of public services?
(b) Is loss of accountability a threat of
commissioning services? If so, how can this best be managed?
Where contracts and service specifications are
properly written and based on accurate needs assessment and knowledge
of the service, loss of accountability is not a significant threat
of commissioning services. The difficulties arise when a local
authority's commissioning processes take place through a centralised
commissioning team where there is little understanding of the
intricacies and discrete skills involved in a particular area
of work (eg youth work), and in effectively meeting the needs
of disadvantaged or targeted groups of young people. The importance
of clear accountability is rivalled by the importance of ensuring
effective, quality outcomes for service users rather than using
cost implications as the main decision tool for specialist services.
2. Is the third sector more likely to provide
better public services than the state or private sector?
(c) Do public services provided by the third
sector more accurately reflect the changing needs of those that
use them?
In themselves, services provided by the third
sector, whether targeted or universal, do not necessarily reflect
need more accurately than those provided by local authorities,
although smaller voluntary and community sector (VCS) projects
have often arisen in response to local need. However, we would
argue that the VCS is currently able to respond more quickly and
effectively to changing needs. Commissioning services from
the VCS is seen as a way to deliver on specific targets; however,
the constraints of contractual obligations and the impact of a
five year contractual cycle on developing services to meet emerging
needs may remove the very flexibility that makes the VCS an attractive
option for service delivery. To guard against this, we need to
protect the ability of the VCS to develop services through flexible
contractual arrangements that take into account the fast-changing
nature of specialist and targeted services in particular. Effective
commissioning, whether from the VCS or elsewhere, is based on
the assumption of complete, specific and accurate needs analyses,
supported by interagency co-operation and in-depth knowledge of
a local area. Where this is not the case, where a particular area
or issue is not identified as a key target in a local authority's
Children and Young People's Plan or Local Area Agreement, it risks
being overlooked.
3. Does commissioning benefit the third sector?
(a) Will contractual relationships with the
state improve stability within the third sector?
Whether contractual relationships with the state
will improve stability within the VCS depends on the continued
availability of funding, the length of contracts, and the arrangements
for termination. There is good practice emerging from local authorities
in London in developing three and five year contracts with VCS
organisations (some with two-year extension facilities) to deliver
public services. This in itself can help to promote stability.
However, a reliance on contractual service delivery could, in
the longer term, result in increased instability, assuming large
numbers of VCS organisations decide to provide services in this
way: competition with the private sector; the potential loss of
core and project funding from local authorities and other state
sources (which will impact particularly on small VCS groups).
Many local authorities also ask VCS organisations to obtain match-funding—there
is a danger of seeing the VCS as a "quick fix" to service
delivery problems, but this is not a sustainable approach.
Contractual relationships with the VCS will
only increase and maintain stability if they are supported by
additional capacity-building activities, such as awarding small
strategic grants to enable the local VCS to develop, and providing
training to ensure VCS organisations have adequately trained staff
and appropriate procedures in place to be able to compete on a
"level playing field" with private sector providers.
Some local authorities are also actively promoting mergers between
small local VCS organisations, who will no longer be able to rely
on the local authority to supply core funding under the new commissioning
arrangements.
(b) Will close involvement with service provision
prevent third sector organisations retaining the ability to be
critical of government?
We do not believe that this will be the case,
although it will require a commitment from government to ensure
that VCS organisations retain their independence in terms of their
ability to be critical of local and national government's policy
and practice. Some VCS organisations will choose not to engage
in public service delivery; the distinction must be made between
these organisations that hold a campaigning remit, and those that
deliver public services. That said, VCS organisations, especially
on a local level, must be confident that speaking out will not
result in the loss or non-continuation of a public service contract—local
councillors must be held to account, through mechanisms such as
the Compact, for their decisions in this regard. Government, whether
local or national, must acknowledge the importance of the VCS
in acting as a critic and monitor of government policy, and the
VCS must be proactive in holding local and national government
to account.
(c) Is there a risk that the service providers
will become increasingly bureaucratic?
VCS members of Partnership for Young London
and other voluntary agencies we have contact with have voiced
significant concern around the inconsistencies in commissioning
processes across different public sector agencies, over the extent
of the supporting documentation they are required to supply when
tendering for services, and around the reporting requirements
they will be subject to if successful. Many organisations would
be unable to meet the current local authority reporting requirements
without engaging additional staff and instituting more bureaucratic
arrangements to collect the required data. While we recognise
the importance of proving the effectiveness of services, such
an increase in bureaucracy must be avoided in order to retain
the flexibility of the VCS. It must not become an extension of
local government bound by the same constraints—this was
not the intention of the Government when instituting this approach
to service delivery. Local government need to consider what information
is necessary, what procedures can be made uniform, and what can
be dispensed with.
(d) Is there a risk that third sector organisations
will lose their independence, their identity or their distinctive
ethos?
Most VCS organisations have a very clear perception
of their own identity, and many have been delivering projects
and services that are partially or totally funded by "the
state" for years without losing their independence. In reality,
public confusion around who provides what, and who is accountable
should problems arise, is more of an immediate risk. There is
also a danger that VCS organisations, newly driven by the need
to meet targets, will have no choice but to succumb to the "tick
box" culture that is often cited as a major problem within
public sector organisations. Continuing in this vein, there exists
a very real concern that VCS organisations delivering public services
will, unavoidably, begin to shape their activities around available
funding, rather than undertaking action in line with the mission
outlined in their constitution.
(e) Might the third sector become more polarised
between large service providing organisations and more radical
groups? If so, would this matter?
This is a distinct possibility. However, such
polarisation is more likely to take place between large VCS organisations
and those that are of a smaller size. Certainly many VCS organisations
that Partnership for Young London works with have no intention
of engaging in public service delivery, for reasons of ethos,
remit, size and capacity, inclination, and staffing complement
(eg paid staff versus volunteers). However, those that do intend
to bid for commissioned services in London face immense difficulties
in keeping track of delivery opportunities across 33 boroughs,
let alone dealing with 33 different procurement procedures and
reporting requirements. Taking time out to respond to tenders
may also have a negative impact on current service or project
delivery, which may in itself discourage VCS organisations (both
large and small) from such activity. We may well be faced with
a situation where those organisations that are actually best placed
to deliver a particular service are forced to "opt out"
of doing so as a result of these barriers, assuming they are even
aware of the opportunity in the first place.
Where the VCS has an effective local or regional
umbrella structure, this is likely to increase the involvement
of VCS organisations in commissioning and being commissioned.
However, there is significant concern in the sector over the future
of small, specialist organisations, and some local authorities,
having recognised this, are making special arrangements to cater
for them and grow their capacity to engage with the new commissioning
agenda.
4. Does commissioning services from the third
sector have any benefits for the state?
(a) Does the state risk losing control of
service delivery in a way which might be damaging?
Central co-ordination at a local level is key
to ensuring high standards of service delivery when commissioning,
and clarity is required with regard to the outcomes and qualities
of each commissioned service, for VCS organisations in how they
"market" what they can offer, and in the ability to
monitor services and provide evidence of their impact. To avoid
"losing control" of service delivery, some sense of
appropriate interventions, outcomes and benchmarking need to be
agreed.
It is increasingly important that local authorities
consider the implications of cross-borough service delivery, and
that they take into account the mobility of their target group
when commissioning services. Voluntary organisations unrestricted
by conventional borough boundaries are well placed to help in
doing this. To ensure effective service delivery, local authorities
need to be aware of activities outside their borough boundaries,
whether led by the voluntary, statutory or private sectors. How
does their service specification take account of similar services
provided in neighbouring boroughs? Where does sub-regional commissioning
play a part? These are crucial questions that must be answered
if "the state" is to retain an accurate overview and
some measure of control of the services being delivered in any
geographical areas.
(b) What capacity will the state need to ensure
that it can be an intelligent customer of services?
Currently, local authorities lack the capacity
(especially within services for young people) to work alongside
VCS organisations to support them to effectively compete for public
sector contracts. Councils for Voluntary Services and other support
organisations are working hard to support VCS organisations to
engage with the new approach, but are also limited by time, funding
and capacity. This needs to be resolved on a practical level.
The "state" will also need to ensure that there is a
clear delineation between commissioner and provider, particularly
when the local authority is one of the bidders to deliver a service,
along with those from the third and private sectors.
In commissioning services for young people,
the state needs to ensure that local commissioners have a clear
understanding about the values and principles of youth work, and
of the depth and quality of those services currently in place.
This applies across the board—commissioners must not attach
more importance to cost than to learning or developmental outcomes
for young people.
(c) How is duplication of effort in order
to monitor and manage contracts best avoided?
Duplication of effort is not only an issue for
the state with regard to commissioned services, but for the VCS.
The increasingly localised agenda is causing difficulties in London,
where services need to be more integrated across borough boundaries
than elsewhere, especially at secondary and tertiary levels, and
when considering the mobile nature of young people. The difficulty
for VCS organisations working in multiple boroughs or pan-London
in engaging with 33 different local authority arrangements is
not being addressed. Most do not have the capacity to contact
each individual authority to discover what is being commissioned
and when. The creation of some form of central resource advertising
all tendering opportunities within children and young people's
services would ensure that all organisations were aware of available
opportunities available, avoid the high levels of duplication
of work that are currently occurring (in discovering which local
authorities are commissioning services), and enable local authorities
to discover the best possible provider for each commissioned service.
5. What are the financial implications of
providing services through the third sector compared with directly
provided state services?
(a) Are services cheaper to provide?
VCS services can often appear more costly as
a result of producing figures to attain full cost recovery in
delivering public services. A recent survey by the Charity Commission
discovered that only 12% of charities delivering public services
achieve full cost recovery all of the time, leaving the other
88% with a serious funding gap that, in time, will have an impact
on the quality and sustainability of the services they provide.
The Chair of the Charity Commission, Dame Suzi Leather, stated
in an article in the Guardian (21 February 2007) that "...
with 88% of charities failing to achieve full cost recovery for
service delivery, can we really sustain the belief that this can
be in the best interests of charities, beneficiaries, or the sector
as a whole?". This is an issue that will need to be immediately
addressed if the Government is to continue down the route of commissioning
public services from the third sector.
(b) Are there "hidden costs", such
as contract oversight?
There are a number of "hidden" costs
when commissioning services, and in providing public services
through the third sector. Some of these are related to preparing
the third sector for public service delivery; others to the delivery
of services itself. Seed funding for the local VCS may be required
and the time (and therefore cost) implications of recruiting staff
to deliver new contracts must be considered. Conversely, VCS organisations
are required to produce figures that include core costs, and can
thus seem to be more expensive in providing services than the
state sector, which does not always account for costs in the same
way. It may also be necessary or advisable for a local authority
to continue to fund existing VCS providers while moving over to
a commissioned approach, in order to give them the opportunity
to develop to a point where they are capable of meeting new reporting
requirements and procedures. A number of local authorities in
London and no doubt elsewhere have discrete training budgets to
support VCS groups in delivering services for the local authority;
others run small strategic grants programmes to capacity-build
the local voluntary sector.
6. Are the costs and benefits to the state
the same when commissioned from the third and private sectors?
Commissioning services from the VCS brings a
wide range of benefits to the state, including the scope for different
VCS groups to work together to deliver a better, multi-faceted
public service than organisations could if working alone; the
ability of VCS organisations to bring in match-funding; the knowledge
and relationships VCS organisations have developed with regard
to certain targeted groups; and the added value they can provide.
However, the state will need to institute, on local and regional
levels, appropriate capacity building measures to develop a strong
VCS that can deliver what is requested of it. This will include
ensuring services are accurately costed, taking into account long-term
capital costs (such as building maintenance, replacement equipment,
etc) that have not yet come to light. Finally, the involvement
of the VCS with local authorities when they are establishing their
commissioning and procurement models is crucial to ensuring a
smooth transition to the new approach to service delivery, and
to ensuring quality for service users.
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