Response to the public services white paper: will open public services lead to a future of private/third sector partnerships?

By John Copps 11 July 2011

This afternoon saw the launch of the much-awaited (and much-delayed) government white paper, which announced plans for the future of public services. As expected, charities feature prominently.

The main thrust of the paper is to open up contracts for tax payer-funded services to a wider range of providers. This means more charities and private companies running public services. If you think this sounds familiar that’s because it is – this policy has a long history.

The major points in the paper to affect charities are:

  • Commissioners will be forced to allow private companies, charities and community groups to bid to run services. The white paper says there is ‘no ideological presumption’ about who should deliver public services.
  • Decision-making will be ‘decentralised to the lowest appropriate level’ – with the aim that parish councillors, mayors, or newly elected police commissioners, get more say over how money is spent.
  • There is a renewed committment to the Community Right to Buy, social impact bonds, open data, and a number of other new initiatives to assist charities and mutuals wanting to deliver public services.
  • Speaking at the launch, The Prime Minister described “ending the old big-government, top-down way of running public services, and putting power in people’s hands”. Sir Stephen Bubb said that Public Service reform will have succeeded when public servants “say that they work for the public not the state”.

So, what are we to make of these plans and what do they imply for charities?

Over the last decade, we’ve seen a clear shift in government’s relationship with the charitable sector, towards something more formal and prescribed. Even with its keenness on ‘putting power in people’s hands’ and ‘local control’, I can’t see the white paper doing anything but push us further in this direction (despite the Conservative party’s pre-election enthusiasm for grant funding).

No doubt this will mean more opportunities for charities to bid for government money, with all the issues that implies. Trustees and managers will have to make their decisions carefully.

Perhaps the most fascinating question is whether charities are ready to do the sort of public service delivery that government wants. Of course, some already do – and do so very well (think Barnardo’s or Leonard Cheshire). But many will not have the skills, experience or capital to do so at the scale being asked of them.

The white paper offers some recognition of this but underestimates the challenges ahead. Sure we’ve got a new social investment bank, but we’ve lost much of the sector’s capacity building initiatives and local support infrastructure is really feeling the pinch.

I know this concern is shared by public sector commissioners. Last week, a senior civil servant said to me that whilst most charities he works with have the ‘right ethos’ they are still ‘unprofessional’.

One possibility for charities intent on delivering public services is partnership with the private sector – to manage contracts, to finance and invest, and to add capacity. This is already happening and I expect to see more. See for example, Disability charity Contact a Family has teamed up with Serco, and Catch-22, Turning Point and Serco are working together at HMP Belmarsh in South East London.

Whether this a good thing depends on the relationships that develop. I understand that during the consultation there was much controversy from departments over the ‘any willing provider’ principle, with opponents arguing that there are good reasons to exclude for-profit providers in some public services. Charities too must be wary of the risks of partnering with companies that prioritse the interests of shareholders.

Overall, the white paper reflects the direction we’ve been heading and there are few surprises. As always, this sort of announcement doesn’t itself change very much: the rhetoric might be radical but it is about local authorities and what they decide to make of it. Wresting any degree of control from commissioners will be no easy task.

In the end, the public doesn’t care too much about who delivers public services – and the government now agrees. It’s quality we all want. Charities shouldn’t forget this.

Later in the year, NPC will be producing a guide for commissioners and charity managers on charities delivering public services – modelled on our popular Little blue book. Watch this space for more information.