Examination of Witnesses (Questions 80
- 99)
TUESDAY 12 JUNE 2007
DR NEIL
BENTLEY, MR
DAVE PRENTIS,
MR WILL
WERRY AND
MS RACHAEL
MASKELL
Q80 Mr Prentice: And that
is not ideological?
Dr Bentley: No, because what we
are saying is that the best provider should provide. It should
be the private sector where it is appropriate, the public sector
where it is appropriate, or the voluntary sector.
Q81 Mr Prentice: We have spent
a lot of time talking about terms and conditions, Dave Prentis
talked about the two tier work force, we heard about pensions,
we heard in the union's memorandum about turnover in the voluntary
sector, low pay in the voluntary sector—it is all documented
in memoranda put to the Committee—so are you saying it is
possible to have a level playing field when that is the reality
on the ground?
Dr Bentley: It is possible, yes.
Mr Werry: If I may, in a way everybody
is right in this debate! There is an important point behind it
which is that you have to ask yourself, if the third sector is
to get more work, by what mechanism are they going to get it?
One way is to go for grants, of course, but my feeling is that
does not have very much future in it for one reason—because
the third sector keeps saying: "We want full recovery of
costs", and it is a bit hard to have any arrangement of full
recovery of costs without people saying: "Well, OK, we are
going to pay you all your costs but what exactly are you going
to do if you are going to charge us the full cost?" So no
power on earth can stop it becoming a contract, so really what
we are talking about is contracts. If, indeed, they are biggish
contracts we are talking about, and additional big contracts,
it could very well be that the client authority has said: "These
are a good idea, we will put them up for competition", and
it could very well be that unfamiliar biggish third sector bodies
will be beaten by the private sector. Nobody can stop that either.
Q82 Mr Prentice: It is like
the force of nature?
Mr Werry: Well, there is the propriety
in the law and all sorts of things that come into play when you
are putting work up for competition. You cannot say that is only
in a particular sector. Anybody who is legally qualified to tender
can.
Q83 Mr Prentice: You speak
for the local authorities, do you not? Why were leisure trusts
created, and is it a good thing they were?
Mr Werry: I am sure it is a good
thing but they are outside of the competition, in a way. Very
often businesses have been sold but the key thing about a leisure
activity is the property and all the facilities and so forth,
and the authority leases those. The authority usually retains
them.
Q84 Mr Prentice: This sounds
like a three card card trick. The unions would say that this is
just the way of privatising public services, the creation of leisure
trusts.
Mr Werry: They could do but they
are up against the difficulty that most of them are voluntary
and the staff, by and large, have had a say in the sale of their
organisations.
Q85 Mr Prentice: I am looking
at the UNISON memorandum here and they say that Trafford Community
and Leisure Trust and Wigan Leisure and Culture Trust were both
set up as charities after it became possible for charities to
provide public services which public authorities have a statutory
duty to provide. UNISON has grave worries about these organisations
which emerge merely to boost competition often by removing sections
of the public sector. Now, these leisure trusts are all over the
country.
Mr Werry: They are indeed.
Q86 Mr Prentice: And they
have taken work from local authorities?
Mr Werry: It is not quite true
to say they boost competition, that is a bit of a technicality,
but they certainly boost rolling back the frontiers of the State,
and what is more it is about to go a stage further because there
is a good bit of pressure now on authorities not to retain the
assets. A virtue is being made of giving or selling the assets
to the trustees or whatever.
Dr Bentley: Are those leisure
trusts, and I do not know to be honest, delivering a better service,
a more efficient and more innovative service than the local authority
was able to do? That is surely the question, because public service
reform is about delivering a better service to the public and
in all of this debate the public get lost. We are supposed to
be thinking about the outcomes of public service delivery, not
getting caught up in debates around who is doing what and why.
It is about efficiency, innovation, and better value for money.
Q87 Chairman: Do we know the
answer to that question, Will?
Mr Werry: It is certainly true
to say that they have a reputation for providing a rather insecure
service, or at any rate the private sector competitors have. The
incidence of bankruptcies and so forth has been fairly alarming.
Q88 Mr Prentice: This is one
of the problems, that the Government is ideologically committed
to moving great tranches of public services to the private sector
and the third sector, and there is not the evidence, and if there
is you will tell me because you used to be the auditor in Birmingham,
on the ground about how these third sector organisations perform
in practice. So where is the evidence? Can you tell the Committee
where the evidence is that the third sector performs well in these
circumstances?
Mr Werry: It has never been my
business to look for it but I have to agree that in the highways
and byways where I have been I have seen no evidence of it, either
way.
Q89 Mr Prentice: So it is
all ideological, is it not?
Mr Werry: It is surprising that
a major national exercise is based on—
Q90 Mr Prentice: No evidence?
Mr Werry: —supposition.
Dr Bentley: I do not represent
the voluntary sector and cannot talk on their behalf but if there
is no evidence to say that these leisure trusts are not delivering
a good service then why are so many local authorities procuring
them to deliver it?
Q91 Mr Prentice: I was not
just talking about leisure trusts but about the third sector generally,
and I quote in my defence this document that has been produced
by the third sector chief executives, Acevo, and it says here
on the need for better evidence: "Although politicians have
championed the third sector role in service delivery for nearly
a decade, data on the quantity—let alone the impact—of
third sector provision remains inadequate."[9]
And that is the chief executives of the organisations you are
talking about saying the evidence is not there.
Ms Maskell: Certainly Amicus in
all its dealings with the third sector has been asking: "Give
us the evidence", and they have come back and said to us:
"There is not the evidence base, we need to build it".
So we are all searching for the questions you are searching for.
But one thing I would like to draw out rhetorically is "Are
we creating an environment where people are good at winning contracts
or good at delivering services?", and if we look behind that
at what the voluntary sector is, the majority of voluntary sector
organisations are run by volunteers. They are not experts at filling
out the contracts, in order to know which buttons to press to
win the bids for their organisation. Their expertise is delivering
to service users and getting that niche service to the people
that really matter, and therefore if we are looking at the whole
contractual environment we have not seen any evidence that if
you have a contract and you can put the right words in the right
boxes you are going to deliver a better service. That is the question
we have been seeking, and today I think confirms there is not
the evidence base for this whole public service reform on contestability.
Mr Prentis: This is what you as
a Committee are going to have to look at. In a nutshell, is this
really about rolling back the frontiers of the State or is it
about public service improvement? We would argue very strongly
that it is about an ideological rolling back of the frontiers
of the State and not at all about improving services. We have
no evidence and we believe there should be an evidence-based approach
to public service provision. There is diversity there that everything
we do is based on taxpayers' money, and we should be ensuring
that it improves our public service, from wherever it is going
to be provided. There is no evidence base whatsoever about this
push into the voluntary sector that says this whole approach is
a model for improving public service delivery. The biggest disappointment
about the work that is going on really is that people in position
seem to talk about how we can do it, not whether or not it is
right that we should do it, to improve the service.
Q92 Paul Flynn: We have had
interesting role reversals in that we have a leader of the CBI
telling us he does not believe in compulsory competitive tendering
and a leader of a trade union saying he believes in people working
for nothing as volunteers. The Bill that introduced competitive
compulsory tendering in July 1987 was wildly applauded by the
CBI at the time, and we were told by the then Government that
it would not reduce standards at all because you could measure
the price of the contracts and so on but also the quality of contracts,
and there was no danger of an erosion of contracts. Where were
you on the road to Damascus when you changed your mind?
Dr Bentley: Learning from what
actually happened on the ground: that there was a huge drive from
public authorities and local authorities to drive down costs,
and that affected quality of services and the quality of services
that alternative private sector providers were able to deliver.
That is what we do not want to see happening in the voluntary
sector or for other providers, which is why we keep talking about
quality of public service provision, and that needs to be properly
funded by the public sector. Coming back to employment terms and
conditions as well as the quality of service delivery, we have
learned from those mistakes. We may have said at the time that
that was the right thing to do but we have learned and we are
no longer saying that CCT[10]
was good. We have learned from that and we have got to move on
from that and not return to it.
Q93 Paul Flynn: So what is
the major change? Most government policies from all parties is
evidence free. It is ideological and based on prejudice, bias
or the first thing that came into the Prime Minister's head. Policies
are not based on evidence per se. Why should we think now that
we can go ahead into this section and have effective services?
Are we not going to repeat what we did with CCT?
Dr Bentley: Not if we start from
where I am starting from and talking about partnership. One of
the things we have been advocating recently, particularly in local
government, is a national forum for supplier dialogue between
local authorities and suppliers to make sure they all understand
what it is they want to achieve and can work together to deliver.
Q94 Paul Flynn: Mr Prentis,
is your enthusiasm for voluntary work curbed when those volunteers
take the job from your low paid workers?
Mr Prentis: It is an issue, of
course, and I said at the beginning it is surprising that a general
secretary of a trade union would say this, but when you look at
the trade union we have 40,000 volunteers, shop stewards who represent
our members for free. There is an issue in our society, and it
is at the heart of public service provision and the ethos of it,
that all of us have rights in our democratic society but I also
believe people have responsibility to give back whatever they
can, and I think the volunteer movement is tremendous within our
society. It gets people involved in their communities. There is
community in our country and people are involved, and I have seen
it in hospices and I have seen volunteers working with people
who are dying and thinking how can they possibly do it? I have
seen it when I was having chemotherapy myself after major surgery
and listening to the volunteers in the next beds suffering very
badly from cancer. It is a tremendous thing to be able to volunteer
and I think the way in which we are now bringing the profit motive
into public service and saying that everything can have a value
and a cost means we are going to undermine what has been an essential
component of our country, not in recent times but going back 100/200
years. I think that is something that is worth keeping.
Q95 Paul Flynn: If we want
to look at evidence of what is likely to happen by handing huge
numbers of public services over to the third sector we have to
look at America, where this has happened, and to a great extent,
where they have Nicholas Ridley's paradise of meeting now and
again dishing out the contract and that is it. Do you regard what
has happened in America as paradise, hell or purgatory?
Mr Prentis: It is not something
that you could regard as relevant to this country, unless you
are looking for mistakes. But, extending the remit of this Committee,
if you look at the Local Government Bill which Labour is now putting
through Parliament, there is no doubt that built into it are all
the ideas that Ridley had in the 1980s, that local authorities
could become just commissioners of work meeting once a year to
sign contracts, and the voluntary sector are going to be sucked
into this new approach. The point I will make is that there is
no evidence that this is being done to improve services; it is
merely about process and who provides the services. But in everything
we do, in any change we make, we should ask will this improve
the service to the user? We get dismissed as a producer interest,
but our members are public service workers who provide services
and also use the services themselves, and the interests of the
user have to be paramount. Changes that are happening now are
not perceived by our communities as improving the services that
they have—it is all about markets and competition and politicians.
When you go out and knock on the door in the next election and
ask about public services and markets and competition, you think
they are going to vote for you?
Q96 Paul Flynn: Is the CBI
agog at the American experience?
Dr Bentley: We have not looked
into it and we do not represent the voluntary sector, I am afraid,
but we have learned from the experience of the private sector
and we believe we have evidence which shows that public service
outcomes have improved. The LEAs that were outsourced at the end
of the 1990s and that were failing their GCSE results at A* to
Cs are three times higher than the average of other LEAs. In the
prison estate, the decency agenda, the time spent out of cells
in constructive activities, has been taken up across the Prison
Service. In two public sector prisons we had competitions which
ended up bringing back the management of those prisons into the
public sector, based on the improvements that had been adopted.
In the Health Service waiting lists have been cut by the involvement
of the private sector, and in local government we are seeing improvements,
for example, involving users in street scene management contracts.
These are the sorts of innovations that are helping to improve
the delivery of service so it does not become about process necessarily
but about delivering a better public service.
Q97 Paul Flynn: Ms Maskell,
you referred to I think 60,000 you represent who are involved
in the not-for-profit area. Can there be a more bleak and less
helpful title than "not-for-profit"? Why are they not
called "more-than-profit? "Social gain"? Why should
anyone define themselves by what they do not do rather than what
they do do? I realise it is not your phrase but if we went out
calling ourselves the "not-the-sleaze" party or "not-the-slum"
party I do not think we would sell ourselves very well!
Ms Maskell: Certainly the title
of the sector is one of constant debate and is constantly changing
and "not profit", "non profit, "third sector
community" and "voluntary sector", all have been
titles not adequately describing the sector, so as organisations
and as a sector itself it continues to evolve its title, but what
is behind it is the fact that organisations themselves recognise
it is about service; it is not about their own financial margins;
and it is not about making a profit out of the system, and that
is really what drives and motivates the sector.
Q98 Paul Flynn: You made a
key point saying that the danger is the contracts are going to
go to those skilled at winning contracts rather than those skilled
in delivering services. We are all aware of this, I think. There
are people who are very good at getting grants and writing prospectuses
and so on. Is this a major problem now? Is the area of winning
contracts becoming specialist where you can have some ramshackle
organisation that is there with the service, and you do not know
until you are way down the line that they have failed to deliver?
Is this a real threat?
Ms Maskell: It is, and it is a
threat to service delivery. One of the things that we have found
is that within an organisation, for instance, a project manager
whose role is really about strategic development of service and
also overseeing staff and delivering service is now full time
bidding for the next round of resources, so what you are doing
within organisations is concentrating their focus on winning contracts
but also forcing them to be involved in subcontracting work themselves
in order to deliver services, and what they are not doing is delivering
the services. So for an organisation, say a project manager, with
around £32,000 that they will get paid, before they delivered
the service and today they are trying to get more resources for
their organisation. It cannot be a good use of public money, and
one of the things we are finding is that voluntary income to these
organisations is dropping because people do not want to pay for
what we have already paid for in our taxation system, and also
the number of volunteers is dropping.
Q99 Paul Flynn: Is there any
added value from the third sector? We were told about Bulky Bob's
in our Liverpool and Warrington group that collect bulky items
and then recycle them to a great extent, and they are employing
mainly ex-offenders and mostly ex-convicts. Is this an example
of added value in the public sector?
Ms Maskell: I would say yes, and
there are lots of opportunities for added value. If an organisation
is drawn into the mainstream delivery of services it is not able
to do the additionality which is really why it is there in the
first place. So what we are finding is organisations—I can
think of a large children's charity which both of us worked closely
with, and that organisation is totally reorganised, restructured,
and has given itself a new identity and a new emphasis in order
to win contracts to run services as opposed to doing what it traditionally
did. Now, I think it is sad day when contracts are driving what
organisations are about, as opposed to organisations driving what
the services need.
9 Acevo, The Case for Change: Third Sector Provision
of Employment Services, October 2006 Back
10
Compulsory Competitive Tendering. Back
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