February 2007

The findings of the Charity Commission’s report on public service delivery Stand and deliver agree with the Directory of Social Change’s warnings about charities and public service delivery, says Ben Wittenberg.

What DSC has to say:

1. We’re pleased that the Charity Commission, in its role as regulator, has recognised that there were some key issues around the VCS delivery of public service delivery that required investigation. Directory of Social Change challenged the initial all-party agreement that transference of public service delivery to the voluntary sector would bring nothing but opportunity. This research backs up what we have been saying (and many, many others have been telling us) for some months now – public service delivery is not appropriate for the majority of VCO’s; delivery under contract is restrictive; the practicalities of engaging in public service delivery (i.e. securing full cost recovery) are hugely unfair; and that having the majority of work prescribed externally and delivered under contract does limit independence.
2. Depressingly, the figures on full cost recovery are not a surprise, but hopefully they will serve as clear evidence to the Compact Commissioner and others that are campaigning directly for proper implementation supporting the constant stream of anecdotal evidence.
3. The government’s assumption that there is a possible ‘sector’ response to the delivery of public services is challenged here, with the research suggesting some real limits to the potential expansion of VCS delivery of public services.
4. That said there is an underlying assumption in this paper (and in government/the sector generally) that charities want to deliver public services, under contract, to their local authority etc. We would challenge that assumption – would the majority of VCO’s rather have a public service delivery contract if more flexible and longer term grant funding were available? DSC research published in our March 2006 newsletter showed that 68% of respondents said public service delivery is not charitable.
5. This is yet more evidence that the independence of VCO’s is placed at risk by restrictive and poorly delivered funding arrangements, but more than that, that a larger threat to the independence of the VCS is emerging, albeit as an unintentional consequence of the government’s public service delivery/VCS agenda.

What DSC wants to happen

1. The recommendations in the report point to a well documented and oft lamented gaping hole in the available information on the statutory financing of the VCS – government has a duty to address the issues of available research resource, complex and fragmented budget structures, and poor internal financial classification in order that timely and accurate data on who government is supporting and how – and how it has/is/will change as a result of policy shifts can be identified.
2. We strongly recommend that the paper be submitted as evidence to the Public Administration Committee on VCS Delivery of Public Services, and that the findings of the committee are fully, and publicly debated.
3. The forthcoming Third Sector Review to clearly acknowledge and address the implications of VCS delivery of public services on independence, lack of clarity around funding arrangements, lack of clarity about what constitutes public service delivery, the impact on public perception of charity, and support (not necessarily financial) for the majority of VCO’s that are not currently, or planning to, deliver public services.
4. Specific research into the impact of VCS delivery of public services on the public perception of the VCS.

Ben Wittenberg

Director of Policy & Research, Directory of Social Change