Will the sector’s voice be heard?

Independent Budget Review – Third Sector Roundtable.   A briefing to support the IBR roundtable discussion between representatives from the Third Sector and the Cabinet Secretary for Finance & Sustainable Development on the 22nd September 2010.

The Challenge

At the Comprehensive Spending Review on 20th October, we are expecting a wake-up call to a major downsizing of our public sector budgets. This will subsequently lead to a major shock to the Scottish Budget and we expect that the full reality of the austerity drive will hit all sectors early in 2011.

Nevertheless, for the Third Sector, the impact of the public expenditure reductions is already being felt. It has led to short-term panic cuts by public authorities – of so-called ‘non-essential’ services – and is already damaging our capacity to deliver. This comes just at a time in the current financial climate when the services that voluntary organisations provide to the most vulnerable are needed the most, and thus very much essential.

For our sector, the cuts are also exacerbating pre-existing funding constraints on our sector such as poor procurement practice, the move away from grants and a lack of parity for our sector in negotiating terms of contracts.

The Independent Budget Review has been a welcome development in helping Scotland to kick-start this debate. This briefing aims to cover the main points from a Third Sector perspective.

Points raised by the IBR: A Third Sector perspective

IBR:  Politicians and civil society need to engage in debate about transforming public service delivery in Scotland.

This is a clear call for the Third Sector to play a full and meaningful part in this vital discussion for the future form and function of Scotland’s public services. This must go beyond the tokenistic ‘place at the table’ for a third sector representative on a Community Planning Partnership.

It ought to include consideration of how co-production can become more widely practiced, how social impact bonds can lead a change to more preventative approaches and how “intelligent collaboration” between civil society and the state can replace commissioning as the means for securing delivery by the third sector of a much wider range of interventions.

IBR:  Ring-fencing budgets against cuts are not recommended

Social problems do not fit neatly under departmental headings. It will simply mean deeper cuts in other areas, and will also act as a barrier to reform. For example, we all now recognise that ring-fencing spending on the NHS would be short-sighted, as health outcomes (and costs) are heavily influenced by interplay with other interventions such as sport, education, transport and rehabilitation.

IBR:  Radical redesign in the way some services are provided may be required

A radical redesign of public services will be essential to meet demand and make public services sustainable. This will require a much greater focus on alternative models or approaches to delivering public services. We can no longer solely rely on the sticking-plaster approach of prisons, hospitals and institutional care.

A limited focus on shared services or tinkering with the system will not be adequate. The blocks to this, including structural barriers and institutional protectionism must be overcome. This is about culture change.

IBR:  The panel envisaged mainstream roles for the private and voluntary/ third sectors as collaborative partners in the delivery of public services.

This briefing provides some suggestions on how to take our sector’s role forward based on a set of clear principles.

Principles that should underpin the Scottish Budget

Coproduction – The main contention here is that we must do public services with people, not to people. An important concept in focussing minds on prevention is to think through the impact of service interventions. By putting communities and the organisations that support them at the heart of service design, planning and delivery (i.e. co-production), not only will difficult changes to our public services be better informed, but there will be greater buy-in from the users of these services themselves when difficult choices need to be made.

Prevention – Shared services and the efficiency savings agenda will not be sufficient to tackle the projected gap between demand and service supply. If we are to genuinely meet the needs of an ageing population, higher unemployment and increasing inequality during the age of austerity, then we will need to radically change public services to focus on prevention.

Learning from what already works – We are not starting from a blank sheet of paper here. There are already incredibly effective alternative approaches to public services delivered by a host of Third Sector organisations, often in partnership with public and private sectors. We need to recognise and identify these services, to learn from, replicate and scale-up what works.

Enabling people to help and support each other is a key element of the reform agenda.   Rather than seeing this as replacing public sector workers with free volunteers, the debate needs to be cast around how to encourage and support citizens who want to make a difference to their communities.  In particular we need to see older people and the unemployed as a resource.

An assessment of what the Third Sector can bring to the table

The Third Sector can and should play its full part in the design, planning and delivery of public services. It can bring a number of unique qualities to the mix. In particular, a focus on quality, trust and prevention:

Quality – Third Sector organisations often involves its users at all levels of the organization, including its governance. Not only does this ensure much more informed service design but by bringing members of the community together in this way it can also strengthen the communities’ resilience and social capital. Recent evidence on service gradings presented by the Care Commission suggested that the sector delivers higher quality care services than either the public or private sector.

Trust – A recent Mori poll shows that Scotland’s third sector is better trusted than local authorities, banks and the police . The strength of the Charity brand is universally recognised as a core asset and is a testament to the trust placed by the public in the Third Sector. The trust placed in the sector is critical to its unique ability to reach the most vulnerable in our society.

Prevention – Much of the Sector’s work is rooted in the community and is therefore close to the source of emergent problems. By encouraging mutual support, volunteering and a care for others and the environment, the sector helps tackle root causes before they become acute.

Listed below are examples of alternative models or approaches that the Third Sector can bring to the table:

• Community-based alternatives to health and social care reduce pressure on hospital beds and in-patient facilities by supporting community care, particularly in hospice outreach, home helps, support for carers, self-help and mutual support groups, and through the provision of community-led structured activities and sports. By 2031, numbers of those aged 85+ will go up by 144%. If we continue down current paths, by 2031 a new 50-bed care home would be needed every two weeks to meet demand
• Alternatives to custody and routes out of prison are diverting individuals from Scotland’s burgeoning prison population through addiction treatment programmes in communities, sector-led employability programmes, befriending and mutual support groups
• Tackling poverty and inequality – for example, credit unions, housing associations and co-operatives more generally play a major part in providing cost-effective solutions to tackling economic inequality and multiple deprivation in Scotland’s communities
• Most grass-roots sport is delivered through the third sector.  This plays an important role preventing ill health, but also in helping individuals develop life skills and confidence, and building community cohesion. 
• Developing skills and tackling unemployment.  Third sector employment initiatives build skills, particularly among young and long-term unemployed people; make use of existing skills, eg retraining people facing redundancy; and they provide direct community benefit
• Alternatives to waste.  The third sector plays an increasingly large role in the green economy, in areas such as renewables and recycling.  It does this through community-led renewable energy initiatives, recycling social enterprises and environmental volunteering projects.

Conclusion

Whatever our view of the cause, we are facing the most radical shake-up of the public budget since the post-war years, and this will require the most radical shake-up of our approach to public services that we have seen yet. Doing more of the same is not an option. We need think about how we will do things differently.

Unfortunately, a number of public authorities appear to think that alternative models or approaches of delivering services merely implies adopting different legal forms to do the same thing (LLPs, arms-length companies etc.) or simple reorganisation of internal departments. This simplistic and inadequate approach has not yet been challenged. We will need a much more radical conception of alternative models based on the principles outlines above.

A radical approach to public services requires a focus on co-production, prevention and learning from what already works. The Third Sector has a role to play in helping to bring its quality, trust and focus on prevention to the heart of this transformation.

Our interest in the outcome of the Scottish spending review and budget ought not to be characterised as defensive or protectionist.   The challenge to us is to work together more cohesively to champion new public service interventions which make a difference to the lives of the people we work with and to develop models which are scalable, cost effective and sustainable.

The challenge for the Scottish Government is to champion our case for parity of esteem for the third sector in the public service arena and to take whatever steps are necessary to enable our work to flourish