The foundational economy, commissioning and the voluntary sector

Sarah Lloyd-Jones argues the voluntary sector has many strengths to offer foundational economies

This is the fourth in a series of essays co-ordinated by the IWA Economy Policy group on the foundational economy and its value to Wales. 


An article in Civil Society Media in April 2018 commented on the UK Government’s Transforming Rehabilitation programme, a £900m scheme for how offenders are managed in England and Wales introduced in 2015. For lower risk offenders the programme is delivered by 21 community rehabilitation companies (CRCs) and aims, amongst other things, to help offenders ‘turn their lives around’. The umbrella body Clink has identified that around half of the charities delivering aspects of this programme for the CRCs are subsidising the contracts they get, often using money from their own reserves.  They also report that charities are setting up social enterprises such as cafes to provide training and employment opportunities for clients that is not being funded in any other way. Anne Fox, CEO of Clink, is quoted as saying ‘The Transforming Rehabilitation system is reliant on organisations taking unpaid work’.


This issue of how voluntary organisations are working with public services has been a concern for Talwrn. Talwrn is an unconstituted group of voluntary sector leaders that meet regularly to share experiences and to focus on building capacity in the sector in Wales. The issue of commissioning and the damage it is doing has featured in recent discussions with members describing how, often for over a decade, they have been expected to deliver the same contract for the same amount of money. In the meantime, staff salaries have increased, statutory pension payments have been introduced, utility costs have risen. There is an increasing expectation that they will ‘find’ money from elsewhere to cover the deficit and they often do – with the result that essential family, child and community support is being propped up by a fragile, time limited mix of grant funding, with voluntary sector leaders spending a significant proportion of their time chasing grants to subsidise community services. Social prescribing models, for example, spend money on referring people to community activities, but nothing on enabling those activities to exist, or on funding workers with some expertise in supporting people with the, sometimes complex, problems that took them to health or social care services in the first place.


At the same time voluntary sector organisations are seeing their relationship with public bodies becoming more and more transactional and less of a partnership. Contract work has been shifted to competitive tendering processes, even when what organisations are delivering has been lauded as a model of best practice and the work has won awards and, in some cases, no-one else is likely to tender – so the approach is not based on using competition to drive up standards.


A commercial approach would say that they should stop the work, refuse to tender. But although it could be argued that many national charities have become, to all intents and purposes, businesses, locally owned and run voluntary organisations are not (and should not be seen as) businesses. They offer different strengths and vulnerabilities. At their best they are part of the community, their staff, volunteers and management structures are local, and they are embedded into a locality, seeing a second or third generation come through their services. They cannot just walk away and that is very good for the community. If we want sustainable, resilient communities these are just the type of organisations we want working in them because their commitment to the community is long-term, deep rooted and goes well beyond a specific contract.


The public sector is increasingly focused on meeting critical need and statutory requirements. If the sector is genuine in its wish to engage people, work to support their strengths and focus on preventative work (and public policy says it is) it is not going to be able to do this by itself. The public sector needs to work in partnership, going beyond the commissioner/deliverer relationship, and to do that well they have to recognise, and learn from, the strengths that voluntary sector partners can bring.


Investing in community organisations to build the capacity to deliver local services makes sense in enhancing a foundational economy. Local services delivered by community based organisations provides employment and can develop the local skill base, so enhancing the impact of public spending. It also offers greater potential for people to shape the services they are receiving (co-production) when they have long term relationships with the people providing those services (and their remit does not change with each new funding round), allowing for greater effectiveness.


Current procurement procedures, however, get in the way of collaborative partnerships with the voluntary sector because they do not recognise the strengths of the sector. Procurement processes advantage size over being local; they do not allow for long term impact, prioritising instead time limited delivery; and they are focused on silo working, often making it impossible to identify whole community, whole family or whole person impacts. In short, they exclude most of the strengths that the voluntary sector brings to building sustainable change and developing the foundational economy, and most of the ways of working that recent policy is built on.


It does not have to be this way, but there does seem to be a lack of understanding within public services on what they are required to do. In England,  the National Audit Office’s Successful Commissioning Toolkit says that often there are no hard and fast rules on whether public services should use grants or go through procurement. It advises that in making decisions they should consider the state of the current, and desired future, market and capacity building and enforceability. The NAO provide a case study example where a public service can use grants to help develop the capacity of the third sector to deliver a service it requires.


The Welsh Audit Office report Local Authority Funding of Third Sector Services is critical of local authorities’ commissioning processes:

Local authorities are not clear on which option to use – closed or open procurement – when procuring third sector services and the decline in grant support is seen by many third sector organisations as adversely impacting them. Local authority decisions to persist with annual funding awards and the reduction in authorities operating full cost recovery for third sector projects that are funded continues to present significant challenges for many third sector bodies’. (page 8)  


The report recommends that Welsh Government provides commissioning and coordinating guidance and support, clarifying its expectations of local authorities. The Wales Audit Office has also criticised public bodies’ procurement arrangements, saying that the last ‘procurement fitness’ exercise showed ‘a lack of overall maturity across the bodies assessed and the extent of follow-up action reported by individual public bodies varied’.


There is a strong argument for including criteria around the sustainable impacts that community and voluntary organisations can offer when looking at the delivery of services. These are impacts that come through advantages of scale, relationships, reciprocity, sustainability, and social networks – all core to thinking about the foundational economy.


Scale: community and some voluntary organisations are place based – they work in the small scale and they work with people in their context, two great strengths. Commissioning on a large scale is easier for managing contracts but it is almost impossible for regional or national bodies to ‘grow into’ a community. Local organisations can build a holistic picture and they can spot patterns and respond flexibly, for example Sylfaen in Caernarfon identified that a growing number of young people were being deregistered from school and educated at home in the communities they worked in. These are young people with a variety of needs that the school was struggling to meet. The concern was about what, if any, education they were receiving. With support from a charitable trust, Sylfaen are now working with families and their children to keep them in school. Their methodology uses local knowledge to develop a model that could work nationally.


Relationships: because of scale community and voluntary organisations can develop long-term relationships with people. They can model how it works when power is shared – an essential prerequisite of a sustainable relationship – so that people can make contact when they want to and seek the help they want. These are absolutely key to empowerment.  Pre-defining what help people can access – whilst it may be essential for commissioning structures – gets in the way of person centred work and ensures power stays firmly in the hand of the service deliverer which is contrary to the principal of the Social Services and Wellbeing (Wales) Act 2014.


Reciprocity: there is a genuine opportunity to work with (rather than for or at) people in communities because they can contribute back. Asset based work focuses on what people can do and what they have to offer as well as the support they need. In Brecon, for example, the Faith in Families Centre relies on local people to run a food bank, a lunch club and a gardening club. These people volunteer their time, support each other and contribute to their community. In Glyncoch the community organises a Christmas Fair and summer fetes, supported by community workers, and through working together experiences are shared, such as a conversation about getting children to go to school, with everyone sharing ideas of how they approach it.    


Sustainability: community organisations see generations grow up – Caia Park Partnership in Wrexham, for example, has been there for over 20 years and its long term impact was described in a presentation a woman gave about how she had first gone there as a young mum when she was in an abusive relationship; how they had supported her to move out of that relationship and then to cope as a single parent; had introduced her to adult learning; supported her as she progressed; saw her through university with encouragement, providing a shoulder to cry on in crises; and now she was working for them. Sometimes sustainability is about being able to depend on someone or something. Public services, for good reason, will talk about avoiding ‘dependency’ – their model is to deal with the crisis and move people on, but that is not what happens in communities (or it shouldn’t be). Support needs cannot be defined by contracts and knowing that those people, that centre, is still there when the next crisis occurs is empowering of itself.


Social networks: relationships in the community are forged through people having fun together, getting to know each other, building trust and spending time in the company of others. That means fun days, discos, youth groups, community events, social activities – these form the essential infrastructure which can allow more targeted support to happen. Community organisations can help connect people, whilst giving access to someone (usually a community worker) who they can go to when they need help. Well connected and outward looking community workers can offer a level of help, access to opportunities (like the adult learning in Caia Park) and the support to enable that access; they may also know how to access critical support (such as social services or health professionals) when needed. Then you have a joined up approach.


Individual pieces of commissioned work can enhance and support this model of work in communities. They can also really benefit from the context in which they are delivered. The problem is that because procurement and commissioning structures don’t recognise these strengths, they are actively, if unintentionally, undermining them, at a time when they are needed more than ever. Wales is going to have to move from a contractual culture, where the voluntary sector is seen, along with private business, as an additional mechanism for delivering public policy, to a much more cooperative approach where public, private and voluntary organisations are focused on what works for communities and families, rather than their service. And that is not going to be easy.   


A model where the charity and voluntary sector is subsidising public services is clearly unsustainable (reserves will quickly run out) and there is a real danger that Wales is missing a golden opportunity to restructure the way that the voluntary and public sectors engage with each other and with communities. The Welsh Government’s Well-Being of Future Generations and the Social Services and Wellbeing Acts signalled a new way of working that draws from the ethos of the voluntary sector and we need to harness the vision that Act provides to develop a new cross sectoral relationship.


Photo by Roman Kraft on Unsplash


All articles published on Click on Wales are subject to IWA’s disclaimer.

Sarah Lloyd-Jones is Director of the People and Work Unit

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