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February 21, 2018

Size matters

In the wake of the crisis that has engulfed Oxfam and to some extent, the many other global NGOs delivering aid around the world, the impression is that part of the problem is to do with their scale. That while the vast majority of staff are doing important and life-saving work, the organisations themselves have become corporate juggernauts, disconnected from the day to day reality of their work on the ground. Bigger is better is the dominant culture in so many walks of life and none more so than in public procurement. There is of course, an alternative perspective.


Read the full report – Saving money by doing the right thing

At a time of austerity cuts and mounting demand, the challenge for communities and the organisations that serve them has never been greater. How do we ensure that key public services meet people’s needs and support the development of communities we all want to live in?

 The response by some government departments and local authorities to this challenge is clear – they feel that savings can be made by standardising community services and up-scaling local delivery to multi-million pound contracts, delivered by multi-million pound organisations. While this approach has had some major high profile set-backs, the underlying assumption – that the difficulties facing the funding of public services will be met through scale and standardisation – is not being challenged.

Locality and Vanguard have been working together to examine the issues and are able to demonstrate that big services and scale are incredible wasteful and damaging to local communities.

This report is the most comprehensive study ever carried out on the demand placed on public services in the UK and the impact of up-scaling contracts on community based services. The findings in this report are based on the cumulative results of hundreds of in-depth studies into hundreds of thousands of demands placed on the public and third sectors in the UK over the past three years.

It is the first study of its kind to discriminate between artificial demand for public services – generated only as a result of an organisation not taking the right action – and the real demand experienced by the person who needs help. The two main causes of increasing demand, discovered empirically in the studies, are the belief in ‘economies of scale’ and the belief in the standardisation of services. Together, these beliefs prevent organisations from understanding and meeting people’s needs.

The extent of failure demand is enormous (‘demand caused by a failure to do something or do something right for the customer’, John Seddon, 2003). Vanguard analysis suggests that it accounts for 80% of demand into health and social care services. In Melvyn’s case, (a 75 year old ex-miner with health problems) this meant 29 separate assessments, by 30 teams, in seven agencies, over two years without having his health and social care needs met. Melvyn’s life changed from one of independence, to a confusing and frustrating experience over which he struggles to have any control.

The effects of scale principles on the most disadvantaged and vulnerable people helped by local third sector organisations (TSOs) are described in the report. The belief that ‘economies of scale’ are achieved by commissioning large public sector contracts has a number of damaging consequences, with no increase in efficiency.