The Big Society - Public Administration Committee Contents

Written evidence submitted by Sue Ryder (BS 106)


Sue Ryder is a charitable provider of health and social care services across the UK. We care for people with long term or complex conditions and disabilities. We operate in a range of environments with community and home-based care delivery alongside our hospices and neurological care centres. Last year we provided 4 million hours of care and delivered 1.2 million home visits.

We work closely with PCTs, local authorities and local communities in the delivery of care. This makes us uniquely placed to comment on the interface between health and social care as a provider of both across the care continuum.

With a 9,000 strong volunteer workforce, we believe we are part of the government's "Big Society". We look forward to seeing greater policy definition and tangible examples of best practice from charities the size of Sue Ryder.

Most of the focus of the Big Society thus far has concentrated on community empowerment and social action. Until we know what kind of funding and structures will be available for the public service reform agenda, it will be challenging to embed the Big Society across the board. We are therefore disappointed by the delays to the publication of the public service reform white paper, as this will add much needed "meat to the bones".

Below we have addressed the most relevant questions raised by the Committee.

A definition of what the "Big Society" is or should be

We have examined the government's definition of the "Big Society" which presents their vision for the policy. In this evidence paper we have chosen not to deviate too far from their definition. We are conscious of "mission creep" in this area resulting from the different interpretations of the definition already in circulation. We have, however, outlined the components we believe should be contained within the government's definition and key themes.

The government's definition of the Big Society is centred on three themes; community empowerment, opening up public services and social action.

Community Empowerment

While we welcome the opportunity to include local people in making decisions about the shape of their area, we want to ensure the whole community, including the hard to reach and vulnerable, are listened to and not just those who shout the loudest. This cannot be achieved without time and financial investment from the local body seeking views.

Sue Ryder works with hard to reach and vulnerable individuals with health and social care needs. We strive to find innovative ways of canvassing their opinions through a selection of mediums. For example, we recognise that not all individuals are able to complete our annual survey so we provide volunteers to assist our service users and ensure their voices are still heard. We are then able to tailor and adapt our services accordingly.

Though volunteers are used for this task, they need support and coordination from a paid workforce. We are unsure the government and local bodies have considered this added cost of meaningful local engagement.

Opening Up Public Services

We welcome the opportunity for charities to tender for, and ultimately deliver a greater volume of public services. Charities such as Sue Ryder invest in the services we provide ensuring that the care is high in quality, innovative and cost effective.

We are yet to see detailed information on what the reform of public service delivery will mean in practice to the Big Society. However, it is our belief that the two agendas are, indeed, heavily entwined. As such, it is important that there are no barriers to the involvement of charities in public service delivery.

Since January 2011 Sue Ryder has been running a campaign on irrecoverable VAT for charities. The campaign centres on the inequity of the NHS being able to recover VAT on certain non business supplies (including catering, laundry, waste disposal), while charities providing the same services are not. This means that when services are transferred from the NHS into the charity sector there is an immediate "VAT gap".

We know that this issue will become more pronounced as the government's agenda gains pace and more services are transferred from the state to the charity sector.

There are two ways of filling the "VAT gap":

—  The commissioning authority (PCTs now, and GP Consortia in the future) could agree to allow extra funding in the agreement to fill the "VAT gap". However, this practice will never become widespread as it would simply discourage commissioning authorities from purchasing services from charities.

—  Charities could use donated funds to plug the "VAT gap". However, when people donate to a charity such as Sue Ryder, they do so for their money to go towards or to support the delivery of care. They do not envisage these funds ending up with the Treasury in VAT payments.

Under both of these options the Treasury will receive increased irrecoverable VAT payments as a result of the transfer of the services. This is an unintended consequence of the Big Society, NHS and public service reform agendas.

Irrecoverable VAT affects all of Sue Ryder's services. If our hospices and care centres were run by the NHS, they would be able to recover a significant proportion of the VAT incurred on non business supplies. For example, if our Cheltenham hospice, Leckhampton Court, was run by the NHS it would be able to recover approximately 57% of the £44,000 VAT incurred in this area each year.

These funds would allow the hospice to:

—  employ a nurse for around 44 weeks or;

—  provide 1,500 bereavement sessions for families who have lost a loved one; or

—  provide 2,500 hours of support from a carer.

We understand that it is not realistic to ask the government to give charities the ability to recover all VAT in the current economic climate. We hope that in the future they will look to create discrete VAT recovery schemes. Our current campaign simply calls for the government to ensure that services transferred to charities in the future, as a result of the government's agenda will be able to recover the same VAT on non business supplies as the NHS.

The Government can stop this situation from worsening by amending section 41 of the 1994 VAT Act, bringing charities providing healthcare services and the NHS onto a level playing field in relation to VAT recovery.

Our proposal can apply to all services transferred from the NHS to the charity sector after the date of the legislation's amendment. This would mean that the Treasury would not lose out on funds they currently receive; they would maintain the existing position in relation to VAT recovery on health services.

We believe this is a simple and discrete solution to a problem faced directly as a result of the government's agenda. It is similar to the government's amendment to Section 33 of the 1994 VAT Act to allow academy schools the same VAT recovery as local authorities.

Social Action

We agree that social action is important in encouraging a big society. Again, we are not confident that this has been "costed" and we believe that significant time and financial investment will be needed in order to ensure that the most vulnerable are able to play an active part in society.

Fair Funding

We believe that fair funding is critical to ensuring the big society vision is delivered. We would add this to the government's key themes. As it stands, we believe issues such as the VAT burden which we have highlighted will act as a barrier to the vision.

Charities often subsidise the services they provide. A good example of this can be seen in the hospice sector where Sue Ryder funds on average over half of all activities. However, there must a careful delineation between what the state provides and what charities are expected to provide. At the moment this line does not seem clear and the rhetoric from the government instead focuses on charities "taking on what they can" in light of public spending cuts. This is not sustainable, nor is it likely to encourage public confidence in the government or the charity sector.

The role and capacity for the voluntary and community sector to deliver local public services including appropriateness of using charitable income or volunteer labour to subsidise costs

As mentioned above, the hospice sector already heavily subsidises the services it provides. This should not be viewed as a model for future charitable service delivery. Fundamental questions need to be asked in relation to charities subsidising public service costs.

The palliative care funding review is looking at some of these questions for our sector. It is currently running a questionnaire to ascertain which hospice provided services should be provided by the state, society or individuals.

This model and consultative approach could be replicated by the government on a wider scale when looking to inform its thinking around public services' funding.

It is critical that this issue is examined with care. We are currently seeing a broad-brush approach to cutting services, with those that could be deemed "life enhancing" such as day care or bereavement services, being cut disproportionately. These services are often provided and funded by charities. However, the government must not lose sight of their importance. In addition to meeting an immediate need, ie the need for bereavement care after a relative has died, they can also be seen as preventative, stopping someone from needing intensive support at a greater expense down the line.


We believe there are barriers to the government's current Big Society vision. These include:

—  Little policy definition which leads to "mission creep" and a lack of momentum behind meaningful reform.

—  A lack of clarity about what services the charity sector is expected to fund. It is still unclear the extent to which the government's vision and it's expansion is based on political ideology or necessity as a result of reductions in public spending.

—  Barriers to the creation of a level playing field for charities such as the VAT issue raised above.

We would be happy to provide you with more information on any element of this briefing, either in writing or through an oral evidence session.

March 2011

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Prepared 14 December 2011