Doubts remain over government’s proposals for service delivery role

For many people, the attraction of working in the voluntary sector
is being able to do the job free from the bureaucratic burdens that
blight the lives of those who opt for a statutory sector

While a role at a voluntary or community organisation has its
downsides – poor pay, scarce resources and funding worries – most
believe the independence it provides outweighs these

Despite a call from National Council for Voluntary Organisations
chief executive Stuart Etherington in a speech at the London
Metropolitan University last week for the sector to “abandon belief
in the mythical golden age when charities and the state had no
relationship at all”, some are predicting that the sector may be
gambling its independence by entering into a deal with government
to deliver public services.

Although the sector has provided services since the 19th century,
particularly ones to alleviate ill-health and poverty, previously
it has worked largely on its own terms. Now it is being asked to
provide services on a larger scale than ever before and in
accordance with strict government targets.

The initial reaction to the government’s ambitions for the
voluntary sector, announced a couple of years ago, was

Having been underfunded and undervalued by successive
administrations, it was inevitable that the sector would ask why it
suddenly found itself in favour, hailed as the saviour of public

Many concluded that the government’s new-found admiration was born
of a desire to do things on the cheap. Ministers, naturally, had a
different explanation, which was that because of its flexibility
the voluntary sector could do something that many councils had
spectacularly failed to do: reach society’s most marginalised

Attempts have been made to dispel the notion that the vision for
the voluntary sector is money-led, and £218m has been
allocated to implement the Treasury’s cross-cutting review on
The Role of the Voluntary and Community Sector in Service
, published in September 2002, which sets out plans
for its new role.

To a sector starved of cash for so many years, the money appeared
to be a positive sign that the government was willing to finance
its ambitious agenda.

Next month the active community unit, which promotes the voluntary
sector within government, will publish its strategy on how to
develop the sector’s infrastructure and capacity, using £93m
of the cash.

The publication of the strategy is eagerly anticipated, especially
among those who still harbour reservations about how they will be
equipped for their future role.

Researcher Luke Fitzherbert, who works for charity support
organisation the Directory of Social Change, describes the money as
“froth on the top” and says that although it may sounds significant
it is insufficient.

He believes that the fundamental question about independence, which
has been somewhat brushed aside by the focus on implementing the
review, remains unresolved.

“When a charity becomes reliant on a dominant funder, it is putting
its independence at risk. If all your money comes from one
particular social services department, for example, if they say
‘jump’ you have to say ‘how high?’,” he argues.

Even the NCVO approaches the issue with some trepidation.

Last week, Etherington tempered his criticisms of those who argue
there should be no relationship between the sector and government
with warnings that “a close relationship with government is
certainly not without risks”. He urged organisations to “exercise
extreme caution, make maximum use of the compact and go into
relationships with government with their eyes open”.

But the local compacts, mutually binding agreements between the
voluntary sector and local authority, offer little protection. They
have no legal basis and, five years after their supposed arrival,
only 120 of 380 local authority areas have one.

With the relationship between the local authority and the voluntary
sector governed by such a weak mechanism, questions have to be
asked about how effective it can really be in protecting the
interests of voluntary organisations.

Its three main weaknesses – lack of awareness, poor implementation
and limited scope – are acknowledged in the review, alongside plans
to strengthen it. But Fitzherbert is emphatic that it will not
happen because “the welfare of the voluntary sector will never be a
major priority for statutory providers”.

Aside from the battle that many individual organisations may face
in preserving their independence, a broader issue is at work. The
government has assured the sector it will not have to sacrifice its
independence or be forced into delivering public services – but
there are signs that it may be left with little choice.

David Tyler, director of umbrella body Community Matters, fears
that the government has narrowed its focus in terms of the
voluntary sector, choosing to concentrate on social care
organisations. Dangers inherent in such an approach are that those
with no service delivery purpose, such as campaigning charities,
will struggle for funding.

Early victims of the trend away from campaigning organisations
towards those delivering services include the Low Pay Unit, which
was forced to close in February after 29 years. Its campaigning
work, which helped lead to the introduction of a national minimum
wage in 1999, improved the lives of millions. When its closure was
announced, director Richard Towers said that, if it had been
running a project, the unit’s future would have been secured.

More examples like this could see the celebrated diversity of the
sector destroyed and replaced by a sector of uniform organisations
funded largely by the government to deliver its services and

Inevitably, organisations combining service delivery and
campaigning may feel less able to oppose the government or risk
losing money. Fitzherbert believes that organisations should take
on contracts only where the work would not otherwise be done, but
worries that some may be tempted “to go whoring after the money”.
The price for those that do will be high: a responsibility to meet
a range of government-set performance indicators.

Neil McInroy, director of the Centre for Local Economic Strategies,
says: “It is worrying that the sector’s critical voice may
disappear and that the accurate, finely honed services they
currently supply will be forgotten because they are trying to chase
bigger targets.”

Head of the Association of Chief Executives of Voluntary Sector
Organisations Stephen Bubb says that the sector “has nothing to
fear” from the introduction of performance indicators. But in the
next breath, he adds that it is the flexibility of the sector, made
possible by its freedom from bureaucracy, that gives the sector its

Councils have become increasingly frustrated by the onslaught of
performance indicators and inspections in recent years. While it
could not reasonably be expected that voluntary organisations would
take public money without being accountable for how it is spent,
there is a potential danger that implementation of the
cross-cutting review’s proposals could see them become as ensnared
by inspection regimes as councils.

The review says: “In contracting with the VCS [voluntary and
community sector] to deliver services, government must ensure that
regulation is proportionate and the independence of the sector is
recognised. The greater the regulation, the greater the risk that
the best features of the sector are smothered.”

Lord Filkin, the minister responsible for the voluntary sector,
says: “It is not about ‘taking government money’. All grants and
contracts with the voluntary care sector and, indeed, any other
provider are fairly let, and they are expected to deliver quality
services according to agreed targets. This is about maintaining
standards in public services delivery and about value for money.
The question of independence of the sector has no relation to this
at all.”

But there is a growing body of research that insists that community
organisations are being co-opted by the government, which could in
turn reduce their ability to tackle social exclusion. A report by
think-tank Demos, on more than 40 community-based projects,
concluded that voluntary groups were being used as “instruments of
government policy”. Another study by the Economic and Social
Research Council, released last month, said that although voluntary
organisations were enjoying a greater say in policy-making, they
risked losing their “autonomy and critical edge”.

There are also questions around whether the sector has the skills
and necessary relationships with councils to make the plans work.

Improving the relationship between councils and charities, which at
the moment is often characterised by mutual suspicion of the
other’s motives, will be no small task. One of the biggest
complaints by the sector is that councils do not take their work
seriously and cut their funding with little notice. For their part,
councils may feel reluctant to give contracts to the voluntary
sector, especially as if the arrangements fail it will be the
councils that could find themselves penalised in the comprehensive
performance assessment inspections.

Without incentives to give contracts to medium-sized voluntary
groups with links to the grassroots, and the knowledge that they
will not suffer if mistakes are made, there is a danger that
councils will opt for safe choices, such as national charities with
which they have established relationships.

Arguably, such organisations have no greater connection to what is
happening at the grassroots than do local authorities. Filkin says:
“Nobody can compel medium-sized community groups that are not
interested in delivering services to do so. However, the government
recognises through the resources attached to the recent
cross-cutting review that the capacity of the sector has to be
developed and boosted in a number of ways to enable it to increase
its role in public service delivery.”

Filkin says: “Councils who are committed to meeting the needs of
socially excluded citizens will ensure that contract specifications
reflect their needs, while their contracting process will ensure
that contracts are awarded to those providers best able to meet
their needs.”

But with their experience of bidding for contracts and their
greater human and financial resources, large charities may seem a
safer bet. As McInroy points out: “Councils are wary of devolving
services because of issues of accountability. They know that if
something goes wrong, the buck stops with them.”

At present, there is a huge shortage of skills in the voluntary
sector, particularly in the groups that the government is
targeting. Fitzherbert estimates that there are 200,000 full-time
employees in the sector, but that the lion’s share of the work is
done by the 1.8m full-time volunteers. He argues that there is no
reason why they should be expected to become competent service

One way for the government to help is by providing more training.
Bubb says that the sector is notoriously bad at developing its
staff. But even this will not stem the flow of workers out of the
sector in search of better pay. It is unlikely that a worker in the
voluntary sector will be content to earn significantly less than
their council-based counterpart.

A report released earlier this month by voluntary sector think-tank
nfpSynergy predicted a recruitment crisis in the sector because of
its history of low pay. It says that societal changes – such as the
ageing population, decreasing birth rates and an increase in
student debt – will mean that many people, especially graduates,
will not be able to afford poorly paid jobs.

Filkin says it is outside the remit of the government to set pay
scales for the VCS. He adds that the Compact Code of Good Practice
on Funding says organisations submitting funding applications are
responsible for costing their working realistically, including
future salary increases.

In three years’ time, the cross-cutting review’s 42 recommendations
will have been implemented and then it will be known how
successfully the money has been used. But Fitzherbert believes
history proves that involving the voluntary sector in service
delivery does not work.

“Thirty years ago [US] President Johnson tried something similar. A
lot of charities took the money and began delivering services. They
lost their flexibility and advocacy role, but it didn’t matter
because in their place sprang up a whole new breed of small
voluntary organisations.” 

– The Treasury review is at:

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