The great state sell-off
The large-scale transfer of public services to the voluntary sector is imminent but, as Tash Shifrin reports, the move could undermine the public perception of charities
In Leicester’s Euston Street is a warehouse filled with all manner of useful things: wheelchairs, walking aids, commodes, specially adapted beds – the essential kit that helps thousands of infirm, disabled and older people live independent lives at home.
More than 7,500 people call the Leicester depot every month and usually receive the item they need within a week. Every item is bar-coded and tracked to record its use.
This community equipment service has been praised by the Audit Commission as a model of its kind amid a generally patchy picture nationwide. But rather than being run by the NHS or the local council, the Leicester service is run by a charity, the British Red Cross, under contract to the local councils and health services covering Leicestershire and Rutland.
The charity’s chief executive, Sir Nicholas Young, explains: ‘Equipment loan is traditionally done very badly by the NHS and social services, but it happens that the Red Cross has been delivering equipment services not just in Leicestershire but also around the country.’
The charity is able to link the Leicester equipment service – and two other public sector contracts in Doncaster and in Barnet, north London – to the charity’s own provision, such as its home-from-hospital transport scheme, which, Young says, offers a little extra that the state could not provide.
The provision of independent living aids for disabled people is one of the areas that charity leaders have singled out for a wholescale transfer to the voluntary sector.
In a report published this week, the Association of Chief Executives of Voluntary Organisations (Acevo) and the Social Market Foundation thinktank say charities are ready to run huge swaths of our public services. It calls on the government to transfer assets and funding in four key areas – children’s services, correctional services in the justice system, employment services, and independent living aids for disabled people – within the next 18 months.
Although public sector funds already account for the largest slice of charities’ incomes – 37% according to latest figures – what the report, Communities in Control, proposes is a ‘dramatically increased’ role for the voluntary sector.
‘We want to see the state transferring substantial sums of money to third sector organisations to enable them to take over the delivery of public services, as happened with housing associations in the 1980s,’ says Nick Aldridge, author of the report.
In 1974, housing associations managed just 100,000 homes in the UK. They now manage more than 1.8m and provide almost all new social housing.
Aldridge also points to Australia, where the government has withdrawn from the direct provision of employment training. Instead, it commissions and regulates both the voluntary and private sectors in equal measure to deliver this publicly-funded service.
Closer to home, the Red Cross is now in a consortium with the RNID charity for deaf and hard of hearing people and the Royal National Institute for the Blind (RNIB) to set up a virtual equipment store for independent living aids that NHS and local authorities across the country will be able to use. John Low, RNID chief executive, compares it to ‘a trading zone like eBay’.
He explains: ‘We paid the Department of Health £1 for the rights to run it. They set it up but didn’t have the resources to run it, so we said we’ll do it, we’ll take it over. If it’s successful, individual local authorities will subscribe and it will be self-funding.’
Low argues that, between them, the Red Cross, RNIB and RNID have real expertise in delivering this sort of equipment to blind, deaf or disabled people – and have a real connection with these service users that state services lack.
The RNID’s experience of dramatically bringing down the price of digital hearing aids to the NHS and modernising NHS audiology services is evidence that, as well as delivering contracts nationwide, charities can greatly improve services.
But the call for a transfer of public services to the voluntary sector is deeply controversial. The National Council for Voluntary Organisations (NCVO) has expressed concern at the Acevo proposals, warning that too much focus on public service delivery could ‘warp the public perception’ of the role of charities and undermine, if not overshadow, their campaigning and advocacy roles.
Ann Blackmore, the NCVO’s policy officer, warns: ‘There’s a danger that if you take over large-scale public sector contracts, you take on more of the characteristics of the public sector.’ She says the NCVO is not against public service delivery, but it has to be in ‘the right circumstances’, where it does not inhibit campaigning work, independence or advocacy for service users.
Lord (Richard) Best, director of the Joseph Rowntree Foundation and Joseph Rowntree Housing Trust, believes that the takeover of public housing brought gains and losses. Shifting the ownership of the housing stock provided an opportunity ‘to get loads of money in from the private sector’. On the other hand, it allows associations to borrow loads of money, even if they are not up to the job, and ‘detaches housing from political control and the democratic process’.
He adds that some associations have become quieter than the campaigning advocates they once were. ‘On balance, I’d say those housing associations that have grown [from council stock transfers] have definitely become much more cautious in terms of campaigning and speaking out. But I don’t think that’s inevitable.’
Chris Hanvey, director of operations at Barnardo’s children’s charity, also urges caution. ‘The role of the voluntary sector is not to fulfil or meet the government’s public service agenda,’ he says.
Barnardo’s does some work under contract, but he stresses that this is not its ‘primary purpose’. Instead, Hanvey promotes ‘getting alongside’ central or local government agencies to influence the kind of provision they offer, rather than stepping in as providers.
Claire Tickell, chief executive of children’s charity NCH, which is running one of the government’s Sure Start programmes in Nuneaton, describes the £30m the charity receives from donors as ‘disproportionately significant’, even though its £170m income from contract work is far larger.
The donated money ‘allows us to prosecute our values, be a critical friend and think proactively about meeting contemporary need – sometimes that’s about the children that nobody wants to fund,’ she says, citing young asylum seekers as an example.
The debate has been further stirred by a Charity Commission ruling earlier this year that gave charitable status to Wigan Leisure and Culture Trust, a not-for-profit body that was formed from Wigan council’s former leisure department.
The Wigan decision muddies the water in the public service debate. This is not an existing charity with special expertise to bring to the table, but the ‘charitisation’ of a former council department. The controversial ruling allows charitable funds to be used to subsidise statutory services – a move that many suspect will be used to bail out cash-strapped public services with charity money.
This is not what Aldridge is seeking. ‘That would defeat the point,’ he says. ‘The only reason to use the third sector is because of its focus on users, its freedom to be innovative, and the fact that it is driven by its mission. What we would not want to see is the same old services, but reconstituted off the government’s books.’
But he is confident that traditional charities will soon be as familiar as private contractors in the public sector. ‘It is no longer a question of whether the third sector takes over significant tranches of public service delivery from the state,’ he says. ‘It is a question of when, and of how well this is managed.’
Source: Guardian Society