Memorandum from the National Council for
Voluntary Organisations (NCVO)
EXECUTIVE SUMMARY
1.1 NCVO is the largest general membership body
for voluntary and community organisations (VCOs) in England. Established
in 1919, NCVO represents over 8,300 organisations, from large
"household name" charities to small groups involved
in all areas of voluntary and community action at a local level.
NCVO champions voluntary action. Our vision is of a society in
which people are inspired to make a positive difference within
their communities. A vibrant voluntary and community sector (VCS)
deserves a strong voice and the best support. NCVO works to provide
that voice and support.
1.2 NCVO supports efforts to devolve power to
local people and communities as part of building a vibrant civil
society. We have long argued that power and decision-making should
be devolved to the local level where possible; and that public
services should be commissioned and delivered in partnership with
the people and communities they serve.
1.3 Localism is not solely about public service
delivery, but about stimulating new forms of participatory democracy,
allowing a full range of people and communities a voice to influence
decision making and building the ability of communities to have
a real influence over the policies that affect them. A vibrant
civil society is central to the good society. The starting point
for measuring the effectiveness of services should be the positive
difference that these services add to the lives of individuals
and communities.
1.4 Along with clarity of purpose in seeking
to de-centralise decision making, there should also be an acknowledgement
of the limits of this approach. Local diversity, with services
tailored to meet local need, is positive but a role for central
government should remain in:
- leading on good funding practice;
- setting standards and ensuring that they're met;
- making and managing functioning markets in public
services; and
- tackling barriers to promoting new, innovative
approaches
1.5 Decision making should be devolved to the
right level, not necessarily the lowest level, in accordance with
local need. This may vary, according to the nature of the particular
service, community or issue. A uniform model will not be possible,
and one community may need to be served by decision makers at
various different levels depending on the issue.
1.6 There are also limits to de-centralisation
as a mechanism for driving improvement. Positive change will not
come simply through transferring services from one sector to another
or a change in the level at which decisions are taken.
1.7 The Total Place initiative offered some positive
early insights into the potential of place-based budgeting. This
holistic, user-centred approach which focuses on need should be
expanded to drive effective public services. The VCS has a unique
and important role to play in the delivery of needs-focused services.
1.8 There should be an enhanced role for local
government in a decentralised model of public service delivery.
However, voluntary and community organisations have a vital role
to play, working with their users and members to identify need
and design, deliver and evaluate public services. Partnership
working between local government and the VCS will therefore be
essential in ensuring that de-centralised public services better
meet the needs of local people and communities and maximising
and recognising local resources. Whilst the ultimate aim may be
to transfer power to communities and individuals, local authorities
will retain an important role in funding, supporting civil society
and in designing, delivering and monitoring the effectiveness
of funding.
1.9 A strong Compact, at both local and national
level, is important in managing an effective partnership relationship
between the statutory sector and the VCS. The Compact is a vital
tool in delivering better partnership working at the local level.
The principles of localism are closely aligned with the principles
of the Compact; to deliver local activities based on local need,
identified through local engagement.
The extent to which decentralisation leads to
more effective public service delivery; and what the limits are,
or should be of localism
2.1 More effective public service delivery can
best be achieved by:
- placing the
agenda of citizens and communities at the heart of the reform
process;
- ensuring public services are designed and delivered
in a way that enables the voice of citizens and communities
to be heard and acted upon, as well as providing them with a market
choice;
- a holistic approach, which provides effective,
joined up services to citizens; and
- applying a more sophisticated understanding of
the efficiency agenda, which gives as much weight to effectiveness
as it does to cost savings.
2.2 Enabling people to co-produce services,
involving them in their design and delivery, is likely to lead
to more efficient and effective public services. This will require
more systematic engagement and involvement of communities, enabling
them to identify their needs and design solutions to meet those
needs. This is often best done at a local level. However, there
are also examples where service users are not well-represented
at this level (eg people with a rare medical condition) and therefore
it is essential that decisions are taken at the most appropriate
level: decentralisation alone will not bring about improvements
in public services.
2.3 VCOs have a vital contribution to make,
bringing both an awareness of local needs and particular skills
and experience of involving service users and communities, particularly
those that are the "hardest to reach", giving them a
voice, as well as a choice. It is essential that local authorities
understand and support these roles over and above any role they
may play in service delivery.
2.4 Decision makers must take full account of
the valuable role that the VCS plays in providing voice and advocating
on behalf of a full range of people and communities, including
the most vulnerable and marginalised. Identifying need, including
unmet need, in communities is important and changes to public
services, including decentralisation should take place through
consultation and partnership with the VCS.
RECOMMENDATIONS:
- De-centralisation is an important element of
making public services more effective, but should not be seen
as the complete solutions.
- Local Government should work in partnership with
the VCS, which has a unique reach into a wide range of communities.
2.5 Local diversity, and the design and delivery
of services that reflect local needs are to be welcomed. However,
it is important that minimum standards are protected to allow
equality of access and provision. With the abolition of some accountability
measures, including the Audit Commission, and statutory indicators,
there will need to be adequate safeguards in place to ensure consistency.
There must be a culture of accountability and evaluation to create
ongoing and positive and evidenced change.
RECOMMENDATIONS:
- Government to consider which scrutiny and oversight
measures will be necessary to maintain standards in a more de-centralised
context.
- For the Government at all levels to ensure robust
equality impact assessments are conducted before changes to service
provision and budget allocations are made. Equality impact assessments
should take place early in the service design process and be open
and transparent.
- Government and the VCS to draw up key tests to
assess the effectiveness of locally delivered services. The level
at which this work should take place will vary.
The lessons for decentralisation from Total Place,
and the potential to build on the work done under that initiative,
particularly through place-based budgeting.
3.1 There were positive early results from the
Total Place initiative. An approach which is focused on need and
led by the needs of users and communities will be an important
part of improving public services, as people's needs cut across
public sector silos. The adoption of place based budgeting will
require cultural as well as structural change in the public sector.
Holistic approaches to meeting need are led by users and communities,
and not determined by administrative boundaries. The Total Place
pilots looked at spending and didn't advance much into solutions.
3.2 Place based budgeting can promote better
commissioning processes: assessment of need and capacity; designing
solutions; delivering services; evaluating for change and should
be an important part of the solution for the Government in seeking
to protect frontline services in a period of fiscal retrenchment
as resources can be allocated more effectively.
3.3 However, to realise the full potential of
this approach, government will need to employ a degree of flexibility.
For example, place based budgeting may highlight the need for
increased investment in preventative services, where upfront investment
will yield considerable savings in the medium to long term, as
well as improved community well-being.
3.4 There is a particular role for the VCS in
place based budgeting to maximise community resources and bring
in significant needs/resources evidence and to employ innovation,
as the VCS has unique strengths and abilities in identifying need,
designing services with users at their heart and employs a range
of innovative approaches to public service delivery.
3.5 There are a number of potential barriers
to place based budgeting, including:
- The need to understand and commit to outcomes.
- Sharing the risk of outcomes not being met.
- Measuring and distributing shared savings and
proportional rewards for all parties.
- Being able to staff and structure truly person-centred
(and implicitly risk-taking) services.
- Barriers to financial transparency and co-operation
between funding services.
- Upfront investment to cover both acute and preventative
services.
- Cultural, workforce and administrative barriers
to shared budget and service development.
- Learning how to share risk on investments into
new services and new infrastructures.
3.6 The relationship between place based budgeting
and the "right to bid" proposals will require close
examination. The potential for communities to own and run services
is one way of engaging service users and local communities. However,
service providers will also need to work in partnership with local
communities, including through co-production. Local government
must look closely at the commissioning process, to ensure that
the process of identifying need and designing services is effective
in a model where communities can bid to run services. Communities
will need to be equipped with the skills and confidence to take
on these responsibilities, to be able to compete fairly against
more established players in the market.
RECOMMENDATIONS:
- A place based approach should extend beyond budgets.
The whole approach to identifying need, commissioning and procurement
and the design and delivery of services should enable individuals
and communities to co-produce services. Savings may also be achieved,
but this must not be the primary driver for a move toward a more
place-based approach.
- For place based budgeting to be successful, agreed
outcomes between the VCS and other partners are necessary. This
will require good partnership working, with clear lines of accountability
agreed in advance. Government at all levels should commit to partnership
working with the VCS, and there should be joined up working across
Whitehall to achieve this.
- For "right to bid" proposals to be
balanced with a holistic approach, ensuring that commissioning
processes identify and meet local need.
- A place based approach will require a degree
of workforce change—central government should play a role
in sharing development practice across agencies and Whitehall
staff's own skills through mentoring or other work.
The role of local government in a decentralised
model of local public service delivery, and the extent to which
localism can and should extend to other local agents
4.1 Local government should have an enhanced
role in public service commissioning under a decentralised model.
Whilst the ultimate aim is to devolve power to communities, there
is a valuable role for local government in providing support,
resources and expertise to civil society.
Local authorities are likely to remain
a primary decision maker in commissioning and procuring public
services.
4.2 Local government will play a leadership role
in commissioning, co-ordinating with different sectors where necessary.
The role of users, citizens and communities in commissioning is
important to ensure that services meet the needs of local users.
4.3 It is important that local government is
equipped with the right powers and resources to be able to take
on an enhanced decision making role. The suggested end to a ring-fencing
of local authority budgets would be a welcome development in giving
them the freedom to make decisions flexibly, responding to local
needs. All communities should be involved in the process of identifying
need and this evidence needs to inform service design and delivery
in a meaningful way. Local government should share best practice
to drive greater effectiveness and higher standards and there
may be a role for central government in co-ordinating this activity.
4.4 The majority of funding to the VCS is channelled
through local government and the role and status of local government
in a decentralised model is therefore of importance to civil society.[1]
Local authorities should work with the local VCS to empower local
communities to set the agenda and identify priorities for their
area.
4.5 To achieve genuine de-centralisation, and
to build communities with the capacity and confidence to play
a full role in policy making, will require genuine partnership
between all statutory and non statutory sectors, including community
representatives, government, the VCS and the private sector. Relationships
will need to be based on trust and accountability. There is a
need for both formal structures, to bring together partners from
different sectors and for local Compacts to be used in managing
relationships.
4.6 A strong, well understood Compact is important
in managing the relationship between the Government and the VCS.
In the context of de-centralisation, it is important that local
Compacts are drawn up between local government and the VCS and
that both sectors are committed to it.
4.7 The VCS is grounded in local communities
and localism is central to the ethos of the sector.
RECOMMENDATIONS:
- Central government should equip local government
with the powers and resources it needs to play an enhanced role
in decision making.
- There must be a full role for the VCS in identifying
need and designing and delivering services, including through
partnerships with local government, with the private sector and
with Local Enterprise Partnerships.
- Early adoption of a robust, well understood and
well publicised set of Compact commitments.
- For local authorities to have to adopt meaningful
Compacts.
- A Compact ombudsman, responsible to Parliament,
would be an important step to managing the relationship between
civil society and the state.
4.8 NCVO members report wide variation in the
ways in which local authorities are dealing with current financial
and economic challenges. Local government should aim to make long
term decisions based on evidence, in the context of reduced funding.
De-centralisation and an enhanced role for local government increases
the urgency of this.
4.9 Some local authorities are dealing effectively
with reduced funding whilst fostering good relationships with
the VCS and therefore protecting service delivery. For example,
lessons learned from the London Borough of Merton are:
- Early, open discussion based on mutual trust
is vital to underpin the relationship.
- Putting the needs of communities rather than
organisations first allows a shared starting point and common
objectives.
- Separating out grant and contract funding allows
clearer thinking about each.
- The VCS has to be ready to adapt to tighter circumstances.
- Local public bodies need to recognise and value
the sector's expertise.[2]
RECOMMENDATIONS:
- For central government to provide guidance on
how local authorities should be managing the need to reduce spending
and for best practice examples to be disseminated to promote good
funding practice. This could be done in partnership between the
Government, NCVO and representatives of local government including
the LGA.
- For the Spending Review settlements to oblige
all departments to take the impact of their decisions on the VCS
into account. For DCLG, this obligation should feed down to local
government.
The action which will be necessary on the part
of Whitehall departments to achieve effective decentralised public
service delivery
5.1 Action from Whitehall will be necessary in
driving effective decentralised public service delivery. There
will still be an important role for central government in setting
and maintaining standards, providing clear frameworks for service
delivery and sending a signal to local authorities about the way
in which the relationship between all levels of government and
the VCS should work (for example in ensuring that an end to ring
fencing does not precipitate a sharp drop in funds to VCS projects—particularly
those that serve marginalised, vulnerable and excluded members
of the community). Central government must work to ensure a level
playing field in public services, without which there cannot be
a fully functioning, plural, competitive market. The role of Whitehall
is not, therefore, simply to devolve power and reduce its role
in public services.
5.2 The need to reduce spending must not result
in sharp, quick cuts to budgets in the VCS. Whilst the majority
of funding to the VCS comes from local authorities, central government
has an essential role in setting overall spending and in providing
frameworks within which local authorities operate.
5.3 Effective public service delivery requires
effective funding, with decisions made on a long term, strategic
basis. Good funding practice driven from the centre will help
to mitigate the impact of reduced overall funding and help to
build much needed resilience in the VCS. Central government should
set out clear guidelines on improved funding mechanisms, including:
- Longer term funding (set for the period of the
forthcoming Spending Review where possible).
- Proportionate requirements attached to funding.
- A comprehensive understanding of the full range
of types of funding available, and when these are appropriate.
- Accessible funding for a full range of VCOs with
the application process to be less complex.
- Adoption of the intelligent funding model.
- An approach to funding which takes full account
of the social value added by the VCS in identifying need, designing
and delivering services.
5.4 Effective delivery of decentralised public
services will also require a fully functioning market and there
is a clear role for central government in making changes to create
a level playing field. NCVO has called on government to examine
in detail the required changes in market making and management,
including changes to:
- Tax and fiscal policy, including Gift Aid and
VAT (particularly shared services VAT).
- Commissioning.
- Allow local public sector organisations to pool
budgets.
- Procurement.[3]
RECOMMENDATIONS:
- Whitehall should retain an important role in
setting standards and the frameworks for public services and provide
useful and meaningful guidance to local authorities and local
decision makers.
- For good funding practice to be put at the heart
of government decision making and to mitigate against the worst
potential impacts of reduced spending.
- For Central Government to work with the VCS to
develop detailed recommendations to create a level playing field,
which will be a pre-requisite for genuinely localised, plural
models of service delivery.
- For Central Government to examine commissioning
processes in the light of "right to bid" proposals,
to take a lead in ensuring that local authorities have the ability
to build skills and confidence for communities to derive maximum
benefit from these proposals.
October 2010
1 NCVO (2010) The UK Civil Society Almanac 2010
showed that 52% of statutory funding to the VCS came from
local government in 2007/8 (the most recent available figures). Back
2
Compact Voice (2010) Why is Merton handling budget cuts so
well? Available at:
http://www.compactvoice.org.uk/content/why-merton-handling-budget-cuts-so-well Back
3
NCVO (2010) Response to Treasury Spending Review. Available
at:
http://www.ncvo-vol.org.uk/sites/default/files/SR_final.pdf Back
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