Sector must beware of losing its independence, warns panel

Sector must beware of losing its independence, warns panel
Civil Society, by Tania Mason
The independence of the voluntary sector is under threat from several angles, threats that were heightened in 2011 by public spending cuts, and new public service delivery models, the panel examining the state of the sector’s independence has concluded.

In its first report, the Panel on the Independence of the Voluntary Sector lists a number of factors that are putting the sector’s unique independent status at risk, and urges charities to ensure their boards are aware of the problem.

The Panel says the issue is vitally important to the sector because if it becomes indistinguishable from the statutory or private sectors, it will lose the public trust on which it depends for volunteers, donations, and tax benefits.  And all of society would be the poorer for it.

“Losing independence can be a gradual, almost imperceptible process, that was neither intended nor foreseen; it can also be contagious, as organisations compete with one another at a time of scarce resources,” the Panel said in its report. “It may be defined by what is not said, or not done, rather than by what is.”  Panel members also warned that once the sector’s unique contribution is lost, it will not be recoverable.

The report added: “There is a danger that parts of the voluntary sector which deliver public services could in effect become not-for-profit businesses, virtually interchangeable with the private sector.”  This could badly reduce the whole sector’s reach and influence, it warns.

The Panel calls on the government and the private sector to help protect the sector’s independence by including social value in contracts, encouraging advocacy on behalf of those without a voice, and working to remove barriers to smaller organisations taking part in service delivery.

And it calls on trustee boards to ensure that the protection of independence, and of their organisation’s mission and purpose, are built into self-audits and risk registers.
Service delivery

One of the biggest threats comes from the fact that nearly one-third of sector groups now say they deliver public services, and research by the Panel suggests that the way public services are commissioned gives cause for concern.  The Work Programme is a prime example – despite the government saying it expected 35 to 40 per cent of the programme to be delivered by the sector, just 20 per cent of contract value has gone to the sector and commissioning arrangements appear to have had an implicit bias against the sector.
The report documents the problems with the Work Programme in some detail.

Other challenges identified by the Panel are:

The sector’s inability to influence design, delivery and funding models;
The increasing blurring of boundaries between the three sectors – on this it highlights the growing adoption of the term ‘social enterprise’ by both for-profit and civil society organisations;
The risk of charities censoring themselves in order to maintain their statutory funding;
The risk that independence may slip down the priority list for trustee boards preoccupied with ensuring the survival of their charity, and
The need for a regulatory environment that protects rather than hinders independence.

Panel chair Dame Anne Owers said: “These challenges are particularly acute at a time of reduced public sector funding and individual giving – organisations can be faced with accepting sub-optimal delivery arrangements or diversion from core purpose as a price for survival.

“The greatest effect is likely to be on smaller organisations and those that deliver services to vulnerable and marginalised individuals, which currently rely heavily on state funding and are unlikely to replace it through donations.”

The Panel received 35 responses to its initial consultation on the issue, but none were from large national charities. “It is unclear why this is,” the report said. “On one hand, it could indicate that their size and reach makes them more resilient, at least for the moment; equally, it could be that independence has slipped down their order of priorities.”  The panel committed to talk to large service-providing charities about the issue during 2012.

Dame Anne concluded: “Government of all parties have stressed the importance of the sector. That needs to be more than a soft, unfocused admiration for a Big Society or third sector.”

The Panel will continue to monitor the status of the sector’s independence throughout 2012 and will report again in a year’s time.