VCSE review points the way to better commissioning

April 2, 2015 at 12:28

The Joint review of investment in VCSEs in the health and care sector (VCSE Review) last month published its interim report, which you can read online.

The interim report is well worth a read, and highlights many of the problems that charities have been raising with public bodies and Ministers for several years. However, here are three key things that I have taken away from this report:

1.        It’s time to really open up commissioning to the sector

Something that is often forgotten in the discussion about public services is that charities are not only service delivery organisations. Charities carry out a range of functions and one of their most important is helping communities to communicate the problems they are facing, to represent them and to help to craft solutions. That doesn’t necessarily mean that charities have to deliver services, and some charities do not want to do so – and they shouldn’t be forced to do so in order to generate income. This particularly true for local infrastructure which, as the report rightly highlights, has a crucial role to play in improving service design.

Sadly, a lot of public bodies ignore this role. The Centre for Social Justice’s report into engaging charities to tackle poverty found that 67% of charities were not consulted on the design of services by commissioners. This is worrying because charities are often in the best position to provide accurate information about the needs of service users and the challenges that communities face. The ‘closed doors’ approach to commissioning or tokenistic engagement of charities is well past its sell-by-date.

Over the past thirty years or so years, we have seen public bodies accept that they do not need to monopolise the delivery of services in order to carry out their functions. Now they need to accept that they do not need to monopolise the design of services, in order to achieve their objectives. In fact, this monopoly is likely to a barrier to their effectiveness.

The new EU Regulations have outlined a method, the Innovation Partnerships procedure, which will enable local authorities to negotiate with the sector to design new solutions and encourage charities to deliver them.  We need to encourage public bodies to use this new flexibility and to open up the commissioning process to more meaningful involvement with the sector.

This will mean paying for charities to participate, perhaps even creating ‘prizes’ for local charities to put forward ideas of how to improve services locally, as well as increasing the length of design periods so that charities can fully engage. But the benefits of better designed services will far outweigh the short term costs.

2.      Commissioners cannot ignore the capacity crunch in the voluntary sector

Something that I have heard a lot from charities is the crunch they are experiencing in their capacity to engage with commissioners and the contracting process. The rising demand for services along with a squeeze in funding means that many people that used to have the time to engage with commissioners as well as bid for grants or contracts aren’t able to do so. Commissioners are also asking charities to do more with their funding, which means that staff are having to ‘double-up’ roles or stretch themselves further in to meet objectives.

Coupled with this, as budgets have been under pressure in the public sector commissioners have favoured shorter term contracts or grants which have exacerbated the problem.

At an individual level, it is rational for every public body to act in this way. But collectively, it is putting the sector under such pressure that it threatens to undermine its ability to engage in public service delivery. I have regularly spoken with commissioners that have noticed that when they go to engage with the sector, charities are less forthcoming due to lack of capacity.

The Review is useful, because it opens the possibility that in health and care at least, there can be a cross-cutting effort by public bodies to ensure that funding is made available for charities to engage in commissioning, share learning and have the headspace to create business plans to attract new funding to keep successful projects going.

3.      We need community budgets to generate social value

One gap in this report was a lack of consideration of community budgets. Pilots have been taking place across the country for some years and it is only by reforming the public service delivery landscape that we will see the proper implementation of the Social Value Act and recognition of the added value of the sector more generally.

Ultimately, as this report demonstrates, people cannot be put into neat boxes like ‘Health’, ‘Transport’, ‘Care’ or ‘Education’. There is a growing understanding that only ‘place based’ budgets, which knock down these silos, will be able to commission and capture the value of holistic approaches to service delivery.

Charities need to be advocates for this approach, what could be called Localism 2.0, because it is the best opportunity for the sector to get the kind of public sector commissioning that we have been calling out for.

Rather than working within a framework which is clearly not fit for purpose in the 21st Century, charities need to be positive advocates for reform. Not only will it lead to better long term decision making, and make long term funding easier, but it will also increases the chances of charities winning contracts and delivering high quality public services.