Examination of Witnesses (Questions 120
- 139)
THURSDAY 5 JULY 2007
MR JOHN
STOKER, MR
CAMPBELL ROBB
AND MR
RICHARD GUTCH
Q120 Chairman: The Opposition,
of course, has done. It is talking about social responsibility
which seems to involve basically saying the state has failed and
the solution to all social problems is to be found in the third
sector.
Mr Robb: I am sorry, who is saying
that?
Q121 Chairman: The Conservative
opposition, the alternative government, which is a hugely radical
perspective. If I worry about the lack of reality in some of the
current stuff, this seems to me to go into the realm of fantasy.
Perhaps I should not look at you, perhaps I should look at the
others.
Mr Gutch: Could I comment on that
point. We only invest if there is going to be a clear improvement
in public service delivery. We are not interested in investing
in an organisation just so it can take over something that used
to be in the public sector and then run it in exactly the same
way. We are looking for a significant improvement. The acid test
for whoever's policy it is must be: "Is this going to result
in better services for users, for patients, for people on the
ground?" That is the test that we always look at.
Q122 Chairman: The other thing
we are discovering is that the evidence base for this is either
thin or non-existent. Obviously we have had this recent report
from the NCC[4]
which is not terribly positive in terms of these great claims
that are being made for the extra value that you get from third
sector delivery. Is there a serious evidential base for moving
in this direction?
Mr Gutch: I would say there is
not at the moment. There are certain reasons why the third sector
has the potential to improve public services and it is to do with
the way it is structured, its independence, the fact that it is
not bound by departmental boundaries and the fact that it can
involve users in the running of the organisation. These are all
things which provide the potential to deliver really good services,
but I think you are absolutely right: there is not yet a good
evidence base. One of the things that we say to every one of our
investees is, "You must prove your case. You must be able
to measure the outcomes, the difference you are making."
Part of our investment is often to help you do that. In the example
I gave earlier, the evaluation they did was funded by Futurebuilders:
they talked to the patients, they talked to the doctors to build
up that evidence base. But, yes, it is a long way from being there
and it does not follow necessarily that, just because it is a
third sector organisation, it is going to be better, but I think
there are certain things about the way the sector is structured
which give it the potential to do some things really well.
Q123 Chairman: Before I hand
over to colleagues, could I ask John one question. In your paper
you were flagging up some real concerns. In particular, you were
flagging up whether some aspects of this Compact, this agreement
between the Government and the third sector, is consistent with
the competitive environment of the contracting and tendering process.[5]
You say, "Difficulties arise with the financial commitments
partly because most competitively funded services where the third
sector is involved in delivery are not exclusive to them as providers.
They are bid for also by others in the private or public sector."
Then you say, "On a `level playing field' it may not be straightforward
for commissioners to deliver consistently and fully the Compact
financial undertakings to third sector partners unless these have
been built into the terms of the programme concerned at the outset".
That is an explosive statement, is it not, the idea that somehow
the nature of the competitive market in which the third sector
is now being required to operate is inconsistent, as you are saying,
with financial undertakings given in terms of the Compact?
Mr Stoker: It does not have to
be and should not be. I am not saying there is anything intrinsic
about this; it is really the way that the procurement is managed
in relation to the commitments that are being given in the Compact
more than anything about an inbuilt clash. I am saying that sometimes
people do not think early enough, when they are designing procurement
procedures for services, about how they are going to observe their
commitments. From memory, the Compact itself, in the funding and
procurement code, does very clearly make the commitment from Government
that all the Compact commitments, whether they are about procurement
or whether they are wider ones, are consistent with rules of government
accounting and European Union procurement. It is a question of
management rather than a problem about basic compatibility, I
think.
Q124 Chairman: But the issue
comes back often to this question of whether the third sector
should be treated like everybody else or whether, in fact, because
of undertakings that have been given, they should be treated differently.
That seems to me to be a rather fundamental issue.
Mr Stoker: If the Compact was
delivered, they would be treated in some ways differently. That
is partly because there are commitments to consultation which
are in there: commitments to a voice at the table when needs are
being defined and programmes are being put together to meet them;
special consideration for black and minority ethnic groups and
community groups. These are all there. They do not exist in the
same way for other sectors. If you read what the Compact says,
in some specified areas the Government is saying that it and its
agencies will behave in particular ways, and it might not with
other sectors that did not have the same social value and the
same effect on community cohesion, the same ability to create
social capital
Chairman: Let me bring colleagues in.
Q125 Jenny Willott: You have
been talking about the role of the voluntary sector in this area
of work as being to improve services. It sounds like you are really
talking about the third sector coming up with good ideas, piloting
them in small areas with small organisations and then the idea
being nicked by the public sector and carried out on a broader
scale across the country as a whole. Is that a fair assessment
of what often happens?
Mr Robb: It is one of the models.
I recently visited a great project in Coventry. You say, "This
is fantastic. Where else are they doing that?" and they say,
"In Cornwall". You say, "How is it in Coventry
and Cornwall?" and they say, "Because the person who
set the project up here moved to Cornwall". That is how good
practice is shared, by people changing jobs. It is obviously not
a good way to do it. When there are good ideas and they look like
they will work across the board, like the one Richard was describing,
we are interested in how we get that to scale, how we support
that, how the Government shares that good practice. But that is
only one model. Turning Point gave evidence.[6]
They are a national organisation, delivering public services on
a national scale, in what they consider to be innovative ways
which provide them better than they would be by other providers.
There is a whole mix of things that we are looking to do and it
is not just about the delivery, as I was saying before. We want
to introduce commissioning which involves users, sometimes in
the design of the service, sometimes using the third sector to
help them do that. There is a whole range of models that we want
to have, and that is just one of them.
Mr Gutch: As Campbell says, there
are all kinds of situations. Mention was made of Turning Point.
Turning Point are developing five rehabilitation centres in different
parts of the country for people with drug and alcohol related
mental health problems. They describe these as "Priory style
centres but at not-for-profit prices". At the moment PCTs
are paying for a lot of people with those kinds of problems to
be treated, and the only way they can get them treated is in the
private sector. Turning Point is helping to develop a quality
service on a non-profit basis. That, if you like, is the reverse
of what you said. The point about user involvement is really important.
One of our investments is in Barnet Voice for Mental Health, which
is the establishment of a safe house for people with mental health
problems, where they can go at weekends or if they have a crisis
and cannot get into the state system very easily. It is run entirely
by people with personal experience of mental health problems themselves.
Peacemaker, another organisation in which we invest, is run by
a group of Asian people who were caught up in the Oldham disturbances
in the North West. They are doing community cohesion work in schools,
in communities and with local authorities, rooted in their own
experience of those problems. I do not think you would ever find
a private sector organisation that would be able to work in quite
those two ways, because, as I said earlier, it is to do with the
way third sector organisations are structured that they can involve
people directly on their boards, in the delivery of services and
so on.
Q126 Jenny Willott: A lot
of the areas you have just mentioned are issues that are difficult
politically, around race, drug abuse and things like that. Could
it be seen as a way to palm off to the voluntary sector issues
that are slightly difficult politically?
Mr Gutch: They are not being palmed
off. They are being paid for by the public purse.
Q127 Jenny Willott: But it
puts it at arm's length.
Mr Gutch: It is to do with the
ability to take risks. I think it is true that third sector organisations,
because of their independence, are better placed to take risks.
Mr Robb: On many occasions the
users themselves are afraid of the state. Drug users and others
have a difficult relationship with the state. The third sector
organisations can often act as a mediator and ensure that people
can get closer to what they need and to some employment services
as well. That is a very positive thing, that the state is using
an intermediary to begin the process of getting people back into
society through drug rehabilitation and other things. There are
advantages to that. This is commissioned by public sector commissioners,
who are looking at this through a lens of: What is the best value
for money? What is the best service? What is the best end point
to the user? It is not a matter of palming off difficult issues
at all.
Q128 Jenny Willott: In terms
of the role of the third sector and their involvement, is it necessary
for them to deliver the services? Or would you achieve the same
improvement in public services by just involving them in the design
of services and ensuring that you have much better user involvement
in the design and then leaving it to the public sector to deliver?
Mr Robb: Both, is the answer to
the question. We would want to see much more third sector engagement
in the understanding of which services should be used in a local
area; where residents are talked to using a third sector organisation
perhaps as a consultation mechanism to understand what users want
from a particular service, say for mental health, then it might
be that the public sector or the local authority is best placed
to deliver that. That would be absolutely fine, if that were the
case, but sometimes the local authority or the commissioner might
judge that the third sector provider was the best provider to
do that. Again, it is not a blanket approach, but we believe there
is an advantage in involving the third sector in all these different
areas, and, just because you are involved in designing a service,
does not mean you should end up delivering it. It might mean that
you are best placed to do so, but it might mean that other people
are best placed to do so too.
Q129 Jenny Willott: What is
the disadvantage of using voluntary sector organisations to deliver
services?
Mr Gutch: One of the reasons why
Futurebuilders was set up was because there was a concern from
a lot of public sector commissioners that the sector did not have
the capacity to be a very reliable partner in the delivery of
services. They might have lots of good ideas but they do not always
have the systems in place to back them up. I think that is one
of the worries that a lot of commissioners have and that is one
of the reasons why we are trying to work with commissioners and
say, "Look, if you are interested in perhaps commissioning
more from the third sector in particular services areas, we can
invest in organisations to help them get stronger, to level the
playing field so they can compete better, and overcome that concern
about them perhaps not being sufficiently businesslike to enter
into a larger, longer contract."
Mr Robb: I would not say it is
a disadvantage but there is an issue of scale. Many of you are
in constituencies where you have programmes which you think are
absolutely fantastic, many of which are very small local organisations,
and there is that problem of how you transfer a really good idea
throughout the country. Sometimes that should be the job of the
public sector. Occasionally it might be that you want a voluntary
sector organisation to deliver that but they only have the capacity
to do it in one or two regions. So there is an issue around scale,
and the ability of certain services to go nationwide if you want
them to.
Mr Stoker: It is a bit difficult
to generalise on this. The answer will be different in different
places, at different times, in different circumstances, in different
services. The one thing that we probably all regard as fundamental—the
real basic assumption—is that you have the services delivered
by people who are best placed to do that. Sometimes that will
be the public sector directly, sometimes that will be the private
sector, sometimes it will be a voluntary and community sector
organisation. It depends very much on what the service is, where
it is happening, down to personalities when you are talking about
the local scale at which some of these things happen, but the
bottom line is always the quality of the service provided to the
user.
Q130 Jenny Willott: What is
the disadvantage to the third sector of delivering these services?
Mr Gutch: There is a potential
disadvantage of their agenda getting distorted. Obviously the
whole concept of commissioning is that you have to provide what
the purchaser wants to buy. One of the things that voluntary organisations
have to be very clear about and their trustees have to be very
clear about is "Would getting involved in this particular
bit of public service delivery be consistent with our mission,
consistent with what this organisation is there to do and the
values it brings to it?" That is an assessment every single
organisation needs to make for itself. I think it is very wise
to try to retain the capacity to do other things besides just
delivering public services under contract, so you retain that
ability to campaign, to try out new things that commissioners
do not want to pay for. I think you are very wise not to have
all your eggs in one basket.
Q131 Jenny Willott: My background
is the voluntary sector. We used to deliver public services to
some extent and one of the issues we had in delivering the public
services was resentment by the public sector of our involvement.
I used to run Victim Support South Wales. Our ability to do our
job relied fundamentally on the police's buy-in to our services.
If they did not pass our information on and they did not contact
people, we were not able to do so. How much of a problem is that?
If you are talking about increasing the role of the voluntary
sector in delivering public services, has any work been done at
looking at the relationship between the public and voluntary sectors
and how you overcome those problems?
Mr Robb: The Office is running
a programme with the IDeA[7].
Over the next two years we want to work with 2,000 commissioners
across public services, local and national, to make sure that
we are finding the right balance. The Government is becoming a
really good partner in this, across the board, to understand that
and to begin to examine how commissioners can work with the authority.
The disadvantage to any partnership is when one of the partners
does not understand the benefits that the other one brings. Part
of the Office of the Third Sector and the Action Plan is about
making sure that the Government, where it wants to deliver public
services with the third sector, is a really good partner. In doing
that, it gets it right, it understands it and it sees the benefits
it brings. We have a whole series of measures which we think will
begin to do that, to help the public sector to see where the benefits
are and to get it right when it does do that. If we can get that
right, to go back to your earlier question, that will be about
that whole range of issues, not just the delivery of the service
or the mechanisms of doing it. It will be involving them early,
right through the board, and seeing the benefit for users. I am
happy to talk in more detail about some of the programmes if you
want, but we do have a number of programmes in place to do exactly
that. Futurebuilders itself does a lot of work with commissioners,
in advance of giving its grants, to make sure that the partnership
is in place to deliver the service.
Q132 Jenny Willott: We went
to New York last year and looked at how they commission and deliver
public services through the voluntary sector there. One of the
things which came out very strongly from that was that the voluntary
sector there is now so huge and powerful that they are not innovative
any more and the innovative ideas are now coming from the public
sector because it is much smaller. Do you perceive there is a
risk that might happen here if we do scale up the delivery of
public sector services through the voluntary sector?
Mr Robb: You did mention you had
been to New York in our previous session. It goes back to the
question partly of scale. The third sector is tiny in comparison
to the public sector, and the amount that is delivered is still
tiny in comparison to what is delivered by the private sector,
so we are nowhere near that kind of situation. The big trick the
Government has to get right is to get the things it wants from
the third sector—that innovation, that flexibility in the
contracting process—and that it does not squeeze it out
in the big bear hug that you have with the state. You have to
find a way to ensure—and this is what the Office is involved
in in the programmes we have, having issues like the Compact Commissioner
and Futurebuilders—that you retain the flexibility, the
innovation, the excitement, the risk-taking, at the same time
as ensuring you have good use of public money and you are getting
the desired effect for users. That is the path we are on in the
Office and that we want to get to through the Action Plan. We
are absolutely clear that we do not want to squeeze out the very
best from the third sector.
Mr Gutch: Interestingly, when
I worked at NCVO, I went in 1990 to the States and wrote a report
called Contracting Lessons from the US which perhaps you
might be interested to see.[8]
That also highlighted the danger that the sector can get too large,
too bureaucratic and lose what was the whole idea about it, what
was special about it. I think we have an example of that, to some
extent, with housing associations in this country. They have grown
and grown and there has been a need almost to reinvent some of
the things that were special about housing associations, in terms
of providing for groups of people who are at a real disadvantage
in getting access to housing. I think the trick lies in the commissioner
specifying the service appropriately. If they specify about needing
to involve local people to work with local communities, that is
going to point in the direction of organisations that are not
multinational charities but have found ways of retaining that
local route which I think is often so important.
Mr Stoker: A lot of organisations
in the third sector would say to you that they are a long way
from running out of ideas, because they would like more scope
in the current commissioning arrangements to implement their ideas.
One thing I hear quite often is that the way that services are
specified does not favour the transformation which is the aspiration
of the third sector participant, because they are really quite
closely specified on a model that the commissioner really has
pretty much firm in its own mind. They would like a bit more scope,
please, for their bright ideas, if anything.
Mr Robb: If you look at some of
the very big organisations—and you had Turning Point here—they
are what you would consider to be large, £100 million organisations.
They are some of the most innovative care providers in this country.
They are getting to scale but still retaining, because of their
trustees, because of their management, because of their ethos,
that which is special and different and innovative about it. They
believe very passionately that they can grow bigger and still
deliver a service. Lord Adebowale definitely believes that Turning
Point can grow bigger and still deliver a service which is innovative,
flexible and close to the user. It is not necessarily just a big
and small thing. Small organisations can be stifled as well. I
just wanted to be clear that it is not just about that; it is
not just scale that can create that kind of problem that you may
fear.
Mr Gutch: I think partnerships
are often the way forward between the larger nationals and local
organisations. We are doing quite a lot of work with some of the
bigger charities, working in partnership with a number of local
groups in a particular area.
Chairman: That was very interesting.
Q133 Julie Morgan: Do you
think it is possible to be critical of government/local authorities
when you are in receipt of contracts with them?
Mr Robb: Absolutely, yes. I do
believe that. Both in my current role and my previous role at
NCVO I absolutely passionately believe that some of the biggest
critics of local authorities and the government are organisations
that are in receipt of funding. The Refugee Council is a perfect
example which took money from the Government to help do the assessment
programme and was one of the strongest critics of the Government's
refugee policy. I think it is entirely possible to do that. We
have to make sure—this is the job of the Office and other
bits of government, the very existence of John and the Compact—that
organisations do not feel they are under threat when they do that.
It is one of the first lines in the Compact that the Government
is committed to allowing organisations to be critical and to be
in receipt of funding. We have to make sure we live up to that
and the Office wants to do that both at national and local level
and we have to make that happen. The interesting issue about scale
here is that the danger of self-censorship perhaps happens more
at a local level, when you are a small organisation in receipt
and your total funding comes from that local authority. That makes
you more vulnerable in a particular area to do that and there
is a lot of evidence emerging that local Compacts are beginning
to be a good mechanism for giving people confidence not to self-censor.
In answer to your question: yes, I do believe that but we have
to really work at it.
Q134 Julie Morgan: I certainly
think at a local level it is more difficult. My background is
in the voluntary sector as well and I think that in delivering
services for a local authority you are inhibited in what you say.
Mr Stoker: My experience is the
same as yours. You do quite often hear people who say that they
have a frustration or they feel that part of the deal in the local
Compact has not been delivered, but they grit their teeth and
they do not confront it because they are afraid that there might
be damage to relationships. The view I take on this is that you
can only judge this locally because personalities are obviously
going to be quite an element in this. But my first instinct would
always be to encourage people to make the challenge and call the
bluff because that is the only way that you are ever going to
move attitudes and practices on, even if it might get you into
conflict locally on occasions. I suppose, fundamentally, here
we are, we have these local Compacts, we have the Compact at national
level. To attitudes which say, "We know it is there but we
are a bit too anxious to try to rely on it" there is no system
answer. If you have a system and you decide not to use it, the
system has failed you. My first advice is always to be courageous
about this and to confront it. Of course you can do that in a
constructive way; you do not have to do it abrasively. The Advocacy
Programme, dealing largely with national things, based at the
NCVO, does say that, although they are often involved in circumstances
of disagreement and conflict, there is often a constructive path
out. You can actually work constructively with people to get through
problems
Mr Gutch: Clearly there is a danger
but an awful lot depends on how you go about it. The reason why
a voluntary organisation, in a sense, is able to speak out is
because of the experience of its users. It always has to go back
to that. If it seems to be adopting an ideological position, rather
than talking about the experience of the people it is working
with, then I think that risk becomes higher. What makes it legitimate
for it to campaign is if it is talking about its users' experience.
Q135 Julie Morgan: I want
to ask you about the accountability of third sector organisations.
What rights do the users have in third sector organisations? We
know they have rights with public services. What are the differences?
Mr Gutch: One of the themes perhaps
of all our answers is that this is varied. I could not claim that
every single third sector organisation is incredibly accountable
to its users, but I would say it is certain that a lot are and
if they have any sense they need to be working on that all the
time. A legitimate question for people to ask is: What gives you
the right to say this or do this? It has to be the fact that you
are in touch with your users, with your local community, if that
is the kind of organisation you are. It is up to the organisation
to get that right.
Mr Robb: I agree with what Richard
is saying. There is a lot of work going on now in the third sector,
led by many of the umbrella organisations, to take this forward
and to make voluntary organisations, third sector organisations,
really understand their accountability mechanisms and become more
transparent and accountable. They are accountable through the
commissioning process, which is a separate issue. Also, we as
the Government recognise that if we want organisations to play
a greater role in service delivery, and that is because of users,
we also have to make sure that those small organisations have
the capacity to do so promptly and the ability to do that. We
fund organisations like Capacitybuilders, to get down to the local
level, to give frontline organisations the understanding and the
means and the ability to make sure they are speaking on behalf
of the users that are regularly in touch with them. Over the next
few years, we want to make sure that we can support the sector
to get up to speed on this and make sure it is good. As Richard
says, it is variable. Some organisations are extraordinarily good
at this. Some of the mental health charities and others have spent
a lot of time getting users on to their boards, into their actions
and employing staff so that they really are at the forefront of
some of this work.
Q136 Julie Morgan: If you
are receiving a service from a third sector organisation and you
are dissatisfied with that service, do you have any less rights
than if you are receiving it from a local authority?
Mr Robb: Nearly all third sector
organisations should have complaints mechanisms that do that.
It depends on whether it is a service funded by the local authority
as well. There is the Charity Commission obviously. There is the
Fundraising Standards Board now if your concern is about fundraising.
If it is through a commissioned piece of work through the local
authority then, ultimately, you could go back to the local authority
to say that you were unhappy with the service. The recent NCC
survey work seemed to suggest that third sector organisations
were achieving a level of satisfaction equal to and in some areas
better than other service providers.
Q137 Chairman: On that point,
the evidence is troubling, is it not? The Charity Commission survey
last year found that 69% of charities did not have any complaints
processes at all, including 40% of those charities which were
providing public services. The Independent Complaints Reviewer
for the Charity Commission has told us, "In this growing
area of public service, the citizen remains unprotected by redress
mechanisms other than the courts."[9]
Surely, for a sector which claims to put users first, that is
a worrying finding, is it not?
Mr Robb: One of the things we
will be working on, through our commissioning programme and with
commissioners, is ensuring that those contracted to provide public
service delivery have adequate means of redress for service users
if they feel the service is not up to what they want it to do.
We will work with people to make sure that is the possible. A
great deal of very small, tiny charities may not need that, but
the figure we will be most interested in is the 40% of organisations
that they say are delivering public services that do not have
complaints mechanisms. We would want to work with commissioners,
the sector and others, through support for the sector, to make
sure that the service users feel they have adequate redress through
the normal mechanisms that you would have in other sectors.
Q138 Julie Morgan: But you
have no surety that they have.
Mr Robb: This is partly the responsibility
of local commissioners and whoever is buying the service. Central
government cannot manage all of those contracts between a local
area and a local authority. If they are buying a service from
a local charity, it would be not unreasonable for them to say,
"What are the mechanisms by which we can find out if there
are complaints about this service?" or "What are your
mechanisms to do that?" That has to be done on a contract
by contract basis. We would expect and hope to find ways that
make that appropriate for very different organisations. You would
not want the same redress mechanisms for a small £10,000
contract as you would for a £2 million contract to do something
else. We would expect that to be done through the commissioners
and the contractors primarily.
Q139 Julie Morgan: If you
are in receipt of a service from a local authority, you have clear
ways of redress which could end up with the Ombudsman, for example.
Is this clear—
Mr Robb: This should be through
the contracting mechanism. In a contract that you take out with
a local authority, the local authority would normally, I would
assume—and, Richard, you might know more about the contracts
themselves—have that mechanism of redress in that, built
into the contract.
4 The National Consumer Council Back
5
Cabinet Office, The Compact, November 1998, Cm 4100 Back
6
Qq 1-55 Back
7
Improvement and Development Agency Back
8
NCVO Publications, Contracting Lessons from the US Back
9
Ev 240 Back
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