Word on the Street

By Klaushofer, Alex | Public Finance, July 7, 2006 | Go to article overview

Word on the Street


Klaushofer, Alex, Public Finance


Four ministers and the PM himself - it was an impressive turnout for a single event by anyone's standards. The government was out in force at last month's 'three sector summit', determined to show its commitment to getting the voluntary sector fully aboard its public sector reform programme.

Tony Blair talked of 'removing the barriers'; third sector minister Ed Miliband, six weeks into the job, spoke warmly of the need to 'deliver in partnership'. One by one, the line-up, which included local government minister Phil Woolas, Work and Pensions secretary John Button and care services minister Ivan Lewis, presented the audience with a dazzling array of pledges and initiatives. These included giving the sector a part in the state's traditional role of providing disabled people with wheelchairs and other equipment, and launching a cross-government action plan to improve commissioning arrangements.

The conference might prove to be a turning point in the relationship between the government and the voluntary sector. It was organised by the Future Services Network, a coalition formed in April by the Association of Chief Executives of Voluntary Organisations, the CBI business lobby and the National Consumer Council to put the user at the heart of the mixed public service economy.

Ministers have also been busy over the past few months, launching schemes to make life easier for charities. A new Office of the Third sector was established in the Cabinet Office, and the Treasury is conducting an unprecedented government consultation with the voluntary sector as part of a study that will feed into next year's Comprehensive Spending Review. In September, a commissioner for the Compact - the agreement between government and the voluntary and community sector in England to improve their relationship - will set up shop in Birmingham. Backed by a staff of 20, the commissioner will promote good practice in dealings between charities and the state.

The measures are designed to address a host of long-standing difficulties that have impeded charities from flourishing as service providers. Bugbears include short-term funding, which makes it difficult for organisations to plan for the future, contracts that place the burden of risk on them and - the queen of voluntary sector gripes - the failure of the statutory sector to pay the full cost of the services that they commission. Attempts to address the problems are hardly new: the Compact has been in place since 1998, while the principle of full cost recovery was endorsed in a cross-cutting review in 2002.

But pledges from the top to treat the voluntary sector better have not had much effect. Last year, the National Audit Office found that there had been little progress on making full cost recovery widespread and that more needed to be done to improve funding practice. Its conclusions fed into an inquiry by the Public Accounts Committee, whose report in March this year identified a lack of expertise, experience and understanding of the sector across government departments'. The lack of progress has become so widely documented and discussed that even Home Office minister Hazel Blears admitted to charity chiefs a year ago that politicians had been 'talking the rhetoric' about a greater role for the not-for-profit sector for as long as she could remember.

But, this time, the government seems to be saying, it really means it. Some of those at whom the message is aimed can't help but feel encouraged. 'It's almost been a light bulb moment for government,' says Stephen Bubb who, as Acevo's chief executive, has been in and out of meetings with those at the top over the past six months. But he points out that real results, particularly in longer-term contracting and expanding the role of the sector in service delivery, will need to follow soon if charities are to be convinced that the government means business. 'This is the bottom line - we know what the issues are,' he says.

And there is a long way to go. …

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