Testing the Big Society

Earlier this year, on April 1st, a small part of the Big Society was born. In Berkshire West, the healthcare charity Sue Ryder took over the Duchess of Kent hospice in Reading, and with it the delivery of all in-patient specialist palliative care services in the district. The transfer is part of the NHS’s Transforming Community Services agenda, and is (believed to be) the first time a voluntary sector organisations has taken over an NHS-run hospice.

This is big news, both for the Big Society agenda and for Sue Ryder.

For the charity, taking on the Duchess of Kent hospice will increase their reach without (proportionally) increasing their fundraising burden. Firstly, it can be incorporated within their existing management structure, realising efficiencies of scale. Secondly, It is a state-funded service, so the charity will receive a far greater level of funding for the hospice than they would normally expect. But the benefits are not just financial. As the sole provider of in-patient specialist palliative care, Sue Ryder will be able to consolidate the work they already do in the area, and provide consistency for service users. In its press release, Sue Ryder committed to using the opportunity to “improve access and increased support for patients in the Berkshire West communities”.

For proponents of the Big Society, the contract will provide a test case for further commissioning of public services from charity sector providers. It’s yet to be seen what the measures of success will be, but cost-savings and (we hope) quality improvement must be high on the agenda.

In the short term, the project’s most visible impact might be on Sue Ryder’s campaign for a review of VAT recovery rules. Whilst local authorities, limited companies and NHS providers who are delivering healthcare services can reclaim a portion of their VAT, charities cannot. Thus, as services in Berkshire West transfer to Sue Ryder, the Treasury will benefit from increased VAT receipts; the government will earn more for delivering less. And it’s not insignificant amounts: Sue Ryder has estimated that the January VAT increase alone will cost the charity an additional £1m per annum, which is equivalent to 50,000hrs of in-patient care. Now that Sue Ryder is, in effect, delivering services in place of the PCT, it will surely be hard to continue to justify denying them the favourable VAT recovery enjoyed by others.

This is a project NPC will be following closely. If successful, it could pave the way for more charity sector providers to take on public services. Irrespective, it will certainly generate some lessons to be learned by other charities thinking of doing so. We’ll be watching closely to see how Sue Ryder gets on.