Focus: Finance and Governance - Outlook - Beneficiaries will become customers

Paul Palmer, professor of voluntary sector management at the Centre for Charity Effectiveness in the Cass Business School

An old injury has caused a friend some problems recently and he needed to have a minor operation.

It was a pleasant surprise when his GP advised that the surgery required was now undertaken in the practice and he could be fitted in during the following week.

However, two days before it was due to happen, the operation was cancelled because the nurse required to assist the doctor was not available.

A second appointment for two weeks later was made and he duly arrived.

Unfortunately, the receptionist had made the wrong appointment and the doctor, after apologising profusely, has now had to prescribe new medication and set yet another date.

Following his complaint, my friend reviewed with the practice manager what had gone wrong in his case. Apparently the practice had been given extra resources to undertake the activity. But little had been invested in the back office systems or in contingency planning, and the decision to take on the extra activities had been decided on with limited discussion about the implications for the practice.

My friend then had an interview with a senior member of the team who, apparently, was being challenged about the failings of the practice for the first time in his career. He was apparently unaware that he was there to serve and was not doing my friend a favour. This indicates to me that there was a governance failure in the practice.

As charities embrace more and more public service activity, are we going to experience the same kind of shocks as this practice? The deference of patients to doctors that used to exist in the NHS is evaporating rapidly.

Instead, patients are customers, expecting a professional service that they have paid for through higher taxation.

Charities have traditionally had beneficiaries, not customers. As they take on more personal social services and have the carrot of contracts with the NHS dangled in front of them, they need to ask if they have taken a strategic appraisal of what this will involve.

There are other questions that they need to ask themselves. Have they invested in the back office systems and properly trained the staff? In their full-cost recovery, have they ensured that they have captured not only current costs but also the additional investment needed to take the activity on? Lastly, are there checks and balances in the trustee board and the senior management team to ensure that the glamour of the visit to No 10 has not dazzled them to management reality?

KEY POINTS

- With charities taking on more public service provision, they need to prepare themselves for the changes this will entail

- They will need to invest in back office systems

- They will also have to ensure recovery of full costs, including any extra investment.

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