Friday, February 3, 2012

Talk I gave at yesterday's Guardian Public Services Summit

"I think my value here today is that I have a few different lines of sight on the issues in hand. I am probably best known as a social entrepreneur and my work in the public sector developing spin-out ventures. I am also a chair of a large national charity and, on top of this a county councilor in Suffolk. This all gives me a distinct vantage point on our sector.

Today I am going to talk about what’s good, what’s bad and what’s ahead.


Let’s get the bad out of the way first. This is a very tough year for the charity and SE sector. If the public sector thinks its had a hard time, come to see us. Third Sector magazine told last week of 70,000 job losses in 2011 on a workforce of less than a million. Both grants and contracts are under pressure. Grants from Councils are being hit hard – 40% in Liverpool last year and 35% in Notts this year, pending a review by CLG.

This means that the sector is caught in the headlights, preoccupied with short-term survival and incapable often to get together the responses needed for longer term success. Whatever the public sector might be looking for from these sectors just now, it has found a sector that has been at its most introspective and least innovative for some time. And this is at a time when the business models of many charities most need to change to adapt to the new need-contours in our society.

I see this myself both as a Councillor. From the Council we see a preoccupied third sector that now, less than ever, can get itself organized well enough to become a strategic partner.

As a Chair, of VA I see our particular survival battles getting in the way of renewing a business model well behind the curve in terms of what commissioners will now pay for. We’re still living in 2006 while they are thinking about 2018, and the financial constraints then.

Other bad news. It is clear that Big Society is no longer on everyone’s lips and that the attention of this Government has shifted to the delivery of economic recovery. Public sector reform for the sector has been a distinctly mixed bag. The Open Public Services White Paper – which spoke of diversity of supply – was a damp squib.

And the biggest story of the year has been the abject failure of SEs and charities to make the Work Programme successful as sub-contractors to private ‘prime’ contractors. According to TS magazine this week, many are experiencing cash flow problems and considering withdrawal.

So what’s good. Well, plenty, fortunately. The recession is having the effect of winnowing out some of the less effective and forcing sensible merger and consolidation in places. This is long overdue. We’re also seeing some innovative responses to the new world we are in. Look for example at what Scope are doing – raising a bond for several million pounds and using this to develop their retail operation. Turning the recession to their distinct advantage.

We’re also seeing charities making their presence felt in the campaigning field, a sure sign that the sector as a voice for the vulnerable is alive and well in 2012.

Further to this, we are seeing the inexorable rise of the social enterprise agenda. This is expressed in increasing number of public sector spin-outs – which marry the public service ethos with a commercial mindset. We also have the Right to Challenge and the Social Value Bill, both of which create significant opportunities for social enterprises to play a greater role in the provision of public services. Last but not least, we are seeing more funding mechanisms like Big Society Capital being created which are designed to provide access to funds for scaling successful social solutions.

So, finally, what of the future? Short-term, I think it’s going to continue to be very slow-going for these sectors. So many organizations are in turnaround that it’s going to take a long time for many of them to re-find their originality and innovation. However, after this I am more optimistic. Why? Because there is I believe a decent strategic space opening up for SEs and charities in between traditional public sector provision and a private sector which is no longer held in unquestioning regard. With better capitalization and better commissioning there is an opening field.

Which brings me to my final point – about commissioning. One goes to events where all people talk about is how poor commissioning is and how it needs to change so that SEs and charities can change. They are right, but only to a point. These organizations are not always easy to commission and can be very wooly about deliverables.

Both sides need to change. At the moment, I think that commissioning and procurement are too much like supermarket shopping – everything has to be neat, tidy and super-planned by volume providers. What we need, I think, is something a bit more like a souk, or bazaar, where there’s a wider variety of characters, some weird and wonderful products and some very interesting conversations on price and quality, a more open place, a more fluid one.

But a richness and diversity you will seldom find down at Tesco. I think that is one direction for commissioning and procurement in the future we’d be advised to create.

I think that’s my time up – thank you for listening"

1 comment:

Audrey Ludwig said...

Your comments about commissioners requiring thing too neat and tidy are spot on. From my perpective from a small BME led charity in Suffolk, the commissioners shy clear of the slightly risky, slightly untidy but very grass roots led work, where outcomes are not predictable but very much directed by community demand. They forget capacity building in favour of slick brochures and piecharts