In praise of… grant funding

In praise of… grant funding
Martin Sime, Third Force News
02.07.10

There’s a school of thought out there that all will be well if only the third sector can win some more contracts from government. For at least the last decade, but probably for the last 30 years, this has been expressed through a de­sire to see us playa bigger role in the delivery of public services. Only last week, new UK Govern­ment ministers Lords Freud and Wei were saying the very same thing.

Much good work has been under­taken to make this possible. Com­missioners have been trained in our ways; various methodologies have been developed to capture the added value that third sector deliv­ery brings; political commitments have been made to scale down and de-risk contracts to enable our play­ers to compete. The emerging con­tractual framework for the Work Programme will either benchmark progress or expose empty rhetoric.

But the downside to all of this is beginning to loom large at the start of this so-called "age of austerity" . Everyone now knows that compet­itive tendering of care contracts has driven down price, wages and qual­ity; we can expect more’ of the same. With a few honourable ex­ceptions, our sector is unable to exert much influence on the content of such contracts – co-production is apparently ruled out by procure­ment rules – so we are relegated to a provider role in competition with each other and the private sector. In other words, the third sector is there to deliver what the state wants.

Aside from claims that this has dampened our advocacy and cam­paigning appetite, there are wider negative consequences. Some ideo­logical zealots, enthusiastically sup­ported by Scottish Enterprise and others who should know better, pro-nounce the era of grant funding to be at an end. More "business-like" contracts will make us more enter­prising and, somehow, more sus­tainable. Grants are bad because they breed dependency and so we head to the marketplace, where price is king.

An emerging paradox exposes the danger in all of this. What’s left of the grant funded sector tends to be the informal stuff – befriending, drop-in, self help and community­led initiatives. Government, mostly local government, makes a grant contribution to such services be­cause it recognises a value in what is being done. The relationships are different. Independence, innovation and community involvement are much more prevalent in such grant funded regimes.

However, it is widely recognised that such funding will be fIrst in the fIring line of cuts – exposed by the short term nature of most grants and a retrenchment mindset in much of the public sector. This is throwing the baby out with the bath water. Shutting com­munity transport means that ambu­lances have to be sent out to collect stranded patients; reducing grants to pensioner lunch clubs increases so­cial isolation which in turn leads to more formal and more expensive interventions; closing healthy living initiatives will cost more in the long run.

The SCVO Manifesto, Doing Things Differently has struck a chord with many in the last few months. The explicit message in the face of our public expenditure crisis is that government needs to value the informal networks of commu­nity action, of people doing things for themselves and each other, much more than is evident today. As a society we need more, not less community action as part of the so­lution.

The implicit message is that we need to protect and extend grant funding as a good way for the state to make investments in our work without seeking to dominate or con­trol what is delivered. Doing things differently needs to be rather more than just outsourcing.

Grant funding is ever more nec­essary in today’s world. It can live side by side with procurement and markets but cannot be replaced by them. I have written before about the flaws in the Big Society pro­gramme down south. Its view of the third sector is entirely instrumental – we are there to do the govern­ment’s bidding (and we might get paid if we deliver results). Such an approach won’t get the best from the third sector or from community action. It may help to reduce the size of the state and to shave a few pounds off the cost. But it will re­duce our sector to agency status and, ultimately, hole us below the waterline in terms of our most pre­cious asset – public trust and confi­dence.

The challenge for Scotland’s po­litical parties and public sector is to produce a convincing narrative backed by plans which inspire citi­zens to believe that what they do they can make a contribution and make a difference. Believe it or not, grant funding is the best means to this end.