John Tizard: Treat Labour's insourcing proposal as an opportunity

This is a chance to shape policy into practical legislation and guidance - the third sector must make a strong case for doing so

John Tizard
John Tizard

It is understandable that some charity and voluntary and community sector leaders, having seen the headlines on the Labour Party’s new insourcing proposals but not read the policy document, are worried that their organisations might lose the opportunity to deliver public services.

This does not have to be the case: Labour’s call for the "democratisation of local public services" and policy for "21st-century insourcing" should be seen as an opportunity not a threat. The charity and voluntary, community and social enterprise sectors will not like every sentence in the policy, but can now seek to refine and shape the policy into a practical legislation and guidance.

The reality is that the current situation is not favourable to charities and the VCSE sectors. Despite many ministerial speeches and exaltations to involve the charitable sector in public service delivery, the record has not matched the rhetoric.

For many years, the default has generally been to outsource in ways that favour major corporates. This needs to change. There has also been a belief that outsourcing, and more particularly competitive tendering, lead to reduced costs and improved quality.

However, it is commonly the case that significant savings are likely to be achieved only at the expense of service quality or the terms and conditions of staff, and diminished accountability, with charities subsidising the public sector. With local authorities stripped of funding in recent years (more than 40 per cent in many cases) and faced with increasing demand for services, they have seen the charitable and VCSE sectors as low-cost service providers.

Almost without exception, when I talk to trustees, staff and volunteers at small voluntary and community sector organisations and to those involved in local  infrastructure bodies, there is one very clear message: they are disappointed and frustrated in equal measure with the public sector – especially the local government – approach to commissioning and procurement. Too frequently there is no distinction between contracting with a multinational corporate and partnering with a local community group.

Public sector commissioning is too often interpreted as little more than a means to procure services, rather than (as it should be) a means of identifying needs and outcomes to be pursued, and ideally talking with voluntary and community sector organisations about what is needed and what they might be able to offer.

Consequently, the expertise and the representative voice for communities and service users that the voluntary and community sector can offer is lost or deliberately excluded.

Labour’s policy is clear. Local authorities should outsource only in very limited circumstances when there is a compelling public interest in doing so.
The policy recognises that when services are best delivered by specialist VCSE groups this should be the strategic choice for a local authority. There is an explicit commitment to protect existing, good-quality community provision.

Social care has been exempted from the policy announcement and employment support services should be entirely unaffected by the legislation because of the way the framework applies.

The policy allows, and should be interpreted as, encouraging alternative forms of social provision, including relational partnerships with the local voluntary and community sector, strategic use of cooperatives (service user and/or staff-led), local social enterprises and socially driven smaller businesses. Charities and the VCSE are social organisations, and as service providers they are at their best when they complement public sector services.

It is important to consider the insourcing policy alongside Labour’s policies on social value procurement and its civil society strategy.

If I were drafting a response to Labour’s policy for the charity and VCSE sectors, I would argue for a new relationship between local government and the sector, based on the latter accepting that it should:

  • Move on from competitive tendering and contracting and adopt relational partnering when working with the voluntary and community sector 
  • Respect the right of charities and local groups to speak out for their beneficiaries and communities, including challenging public sector policy and underpinning ideologies; and acknowledge that advocacy, influencing and campaigning are fundamental voluntary and community sector roles and duties – this is very much part of the democratisation of public services
  • Involve the voluntary and community sector in all strategic commissioning, policy development and budget decisions so they can benefit from specialist and representative organisations’ understanding of needs and the best means of addressing them, including what role the sector might be able to play and on what terms
  • Acknowledge that the voluntary and community sector can complement publicly managed public services, but should never be expected or forced to be a surrogate for or to subsidise properly funded, high-quality, publicly run services
  • Respect the local voluntary and community sectors as place shapers and core to local community wealth building.

There are many examples of these points happening across the country. Let’s build on them. Labour, local government and the charity and VCSE sector leaders can reach out to each other to advance this agenda, and in doing so identify and secure changes and clarification to the policy to strengthen its practical application.

John Tizard (@johntizard) is an independent strategic adviser and commentator

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