Examination of Witnesses (Questions 110
- 119)
THURSDAY 5 JULY 2007
MR JOHN
STOKER, MR
CAMPBELL ROBB
AND MR
RICHARD GUTCH
Q110 Chairman: Welcome to
our inquiry. We are delighted to have with us Campbell Robb, Director-General
of the Office of Third Sector in the Cabinet Office, John Stoker,
who is the Commissioner for The Compact, and Richard Gutch, who
is the Chief Executive of Futurebuilders England Ltd. Thank you
very much indeed for coming along. We have invited you together
so that we can stimulate some discussion amongst you. You have
all given us some interesting written material and we are grateful
for that. That means we do not have to ask you to say anything
at length to start with but we are very happy for you to say something
briefly if you would like to.
Mr Robb: I would welcome that.
I am really looking forward to this. Thank you for the opportunity.
We have a new Minister for the Third Sector, Phil Hope, who was
appointed recently. We are delighted by his appointment. He has
a lot of experience in the third sector and was previously the
chair of the all-party group on voluntary organisations and charities.
Ed Miliband has been voted to be the Chancellor of the Duchy of
Lancaster with overall responsibility for this area. Whilst we
are talking particularly about service delivery, we have a much
wider agenda in the Office of the Third Sector. We have a whole
range of roles for the sector and this is only one part of what
we are doing. Where those charities and voluntary organisations,
the third sector organisations, really want to play a part, we
make sure they have the capacity to do that and that government
is a particularly good partner in doing that. That is the aim
of what we are trying to do. It is not just about service delivery
but about all aspects of those services. It is about the creation
of services and the design of services. I hope that is something
we can also discuss when we get into the discussion about that
wider role for the sector, because a lot of the more significant
campaigning charities, for example, the RNIB[1]
and the Refugee Council, deliver services but also have a very
strong in their independent voice and that is something that we
really welcome. We have put in place a series of measures, particularly,
in the Action Plan, which I think has been circulated to you,
and I am really looking forward to having a debate and discussion
with you.[2]
Q111 Chairman: Thank you very
much indeed. John, would you like to continue?
Mr Stoker: Chairman, I have a
couple of preliminary points about Compacts. They are about relationships
which go a lot wider than financial ones—although we are
obviously talking about commissioning today and that is quite
an important bit of the background. Although they have something
of the character of books of rules, about how you behave together
in partnerships, the aspiration for the longer term is that they
are one route to changing people's basic working cultures and
assumptions and practices, so that we might wind up over time
with a mainstream working culture which favours partnership between
the sectors. So there is that aspirational aspect to them as well.
I have three, I suppose, headline concerns in the commissioning
area at the moment. Firstly, although, as I have said, Compacts
are much more than books of rules, and there is good practice
in observation of the books of rules bits, there is also some
inconsistency and a lack of full delivery of the book of rules
bit and that can be an obstacle to the development of the more
positive working culture that is a longer term aspiration. I have
a bit of a concern, as well, about a side effect of the trend
in financing relationships away from grant and towards procurement,
in so far as it risks inculcating in public-sector people the
idea that the commissioning relationship is all they have to concentrate
on to the exclusion of the wider relationship between the sectors,
which is part of the Compact arrangement and which is not disconnected
simply because you go into this new relationship. Finally, that
movement towards a procurement model and away from grants poses
some special issues for some smaller local bodies that traditionally
have been grant financed. I would like to encourage public commissioning
authorities to think about those issues and to do what they can
to mitigate effects in that area in the way that they do their
commissioning.
Q112 Chairman: And Richard.
Mr Gutch: Thank you and thank
you for inviting me today. I would like to give a quick bit of
background and update on Futurebuilders. It was the result of
a Treasury review in 2002 that was looking at whether the third
sector could be playing a bigger role in public service delivery.
It concluded that it could but it was being held back by not having
access to finance to grow and develop its capacity, and by having
quite a lot of skills and systems weaknesses, in terms of business
planning, financial planning, IT, that were holding it back in
terms of winning contracts. The fund, which is now a £150
million fund, provides investment to third sector organisations
to help them develop the capacity to deliver public services.
At the moment we are working in five areas: health and social
care, education and learning, children and young people, crime,
and community cohesion, but from next April, the fund is going
to be working in all forms of public service delivery. We have
offered over £100 million in investments to 225 organisations.
It is important to be clear: we do not fund the delivery of the
services ourselves. We are helping the organisation to get to
a point where they can win contracts from local authorities, PCTs,
Learning and Skills Councils, which will fund the ongoing provision
of the service. We mainly lend money. This raised eyebrows initially,
in the early days of Futurebuilders, but the concept is that the
organisation prices the cost of the loan into their service price
when they negotiate with a commissioner in just the way that a
private sector provider would, except, of course, they are working
on a non-profit distributing basis. Finally, Futurebuilders England
Ltd is itself an independent non-profit company. It was set up
by Charity Bank, NCVO,[3]
Northern Rock Foundation and Unity Trust Bank who successfully
won a tender from the Treasury to manage the fund. We have a contract,
which is now with the Cabinet Office, to manage the fund, so we
are an independent company though obviously working under contract
to the Government.
Q113 Chairman: Perhaps we
could start broadly and then focus on some specific areas. One
of the emerging themes coming out of our inquiry is the distance
between rhetoric and reality in this area; that is the distance
between some of the rather high-flown statements about what the
third sector is going to do for us in terms of public services
and the rather modest presence that it has and then some of the
issues surrounding that. Let us try to have a go at this again.
Can you tell me what the Government position is. How much of the
public sector does the Government think could be run by third
sector organisations?
Mr Robb: The Government has not
set any targets in this way for this. As it stands, what we are
talking about is quite a small proportion of public services more
generally. There are a number of estimates around that but, for
example, the estimate most commonly used about the NHS is that
less than 2% of all the delivery of the money spent through the
NHS is spent on the third sector, so it is a particularly small
part of the wider agenda. The Government is not necessarily interested
in a blanket approach to this. It is not saying that all third
sector organisations are unequivocally better than all public
sector or all private sector organisations. It is interested in
finding where third sector organisations can deliver better services
for users, and, where that is the case, ensuring that those organisations
have the capacity to do that, are contracted with properly and
paid properly to do that. It is not about a blanket approach;
it is finding those places where they can really add value and
create a partnership between the public sector and the third sector.
Q114 Chairman: It wants to
increase the role but it does not know by how much.
Mr Robb: It has not ever set a
target for that in that sense. The nature of problems we are facing
as a society are always evolving. One of the biggest and best
things about the third sector tends to be its innovative approach
to solving new problems as they arise. You could say now, "We
want to do it in this area," and in two years a whole new
set of solutions are created by the third sector that then you
would want to support. So there is no set target but we want to
find where it can do it best.
Q115 Chairman: The paper that
you produced at the end of last year—
Mr Robb: The Action Plan.
Q116 Chairman: —talked
about five main areas.
Mr Robb: Yes.
Q117 Chairman: The position
is that we do not know how much in general the Government wants
to turn to the third sector to provide but we do know that those
five areas are—
Mr Robb: There are specific areas
that we think, working with other departments, we might be able
to investigate with the third sector. Substance abuse is the example
we have talked about before. Stopping re-offending by people who
come out of prison is an area where there is evidence, for example
from Crime Concern, that they have a particularly strong record.
We would want to explore those areas to see if there is more the
third sector can do in particular areas.
Q118 Chairman: On the Futurebuilders
side, do you see yourself matching these areas? Would you have
a similar agenda?
Mr Gutch: Yes. Obviously we will
be embracing all those areas from next April. I think the Government
has set a policy context within which local commissioners and
local third sector providers can operate. It is really a matter
for how the commissioners and the third sector providers respond
to that policy context before one can answer your question. We
have lots of examples of local commissioners and providers doing
really imaginative things. I mentioned in our evidence an organisation
called Building Blocks Solutions. That works in the East Midlands
providing a service to seven GP practices, providing non medical
support to people with mental health problems. The GP has a choice:
they will either refer them for acute care or to formal counselling
or to this social enterprise that will provide a listening ear
to people, to help them sort out the problems that are making
them depressed. It will point them in the right direction, whether
it is to relationship counselling, debt counselling or whatever,
and that service has been evaluated with extremely positive results.
It is saving the GP practices money and it is providing patients
with a much better option than simply being prescribed medication.
I could see that happening in every GP practice in the country.
At the moment it is only happening in seven.
Q119 Chairman: It is difficult
to get a sense of whether we are talking about a series of interesting
experiments or a wholesale transfer of mainstream public services
into a different provider model. Campbell, you are shaking your
head.
Mr Robb: Absolutely not. That
is not the Government's intention at all. The Government's intention
is, wherever possible, to use the third sector as a partner or
as a delivery mechanism to transform public service to the end
benefit of users. It is not about identifying areas where the
whole of that particular service can be taken out. It is about
finding those kinds of examples where they really make a difference
and, wherever possible, creating the right environment where commissioners
and others can have the tools and the organisations to get that
to scale if we want it to happen. The areas that we have identified
in our plan are areas where we believe there are characteristics
which the third sector provides: innovation; flexibility; closeness
to users. That is not to say that the public sector does not do
those as well but we will look at those to see if there are better
solutions to current public sector engagement. The Government
has not talked about and certainly in that document is not talking
about a transfer.
1 Royal National Institute of Build People Back
2
Cabinet Office, Partnership in Public Services: An action
plan for third sector involvement, December 2006 Back
3
The National Council for Voluntary Organisations Back
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