NEWS IN FOCUS: Treasury review heralds new dawn


Big changes are in store as the Government gives the voluntary sector a larger role in public services. But success will be far from easy, says Stovin Hayter

The voluntary sector is about to begin the biggest changes in its relationship with government since the creation of the welfare state. That is if the Government succeeds in the reforms proposed in the Treasury's "Cross Cutting Review

published last week (see News, p4).

Paul Boateng called it a "historic opportunity

and a "roadmap and a call to renewal", which are the sort of words you would expect from the government minister responsible for the review. However, he was also remarkably candid about what is not working at the moment, and about the difficulty of changing these things.

"The current funding relationship is not working,

he said, citing things like the failure to fund the full cost of services, the unfair burden of risk that charities are expected to bear, and a "debilitating short-termism

that diverts attention and resources from delivery to bidding for contracts.

He promised to change all this, and the Treasury is to draw up new guidance to central and local funders "in language that everyone can understand".

Guidance is one thing, getting people to use it is completely another, however. Key to getting government departments and other funding agencies to change the way they work will be the 1998 Compact, which sets out the principles for a good working relationship between the Government and voluntary organisations.

The Compact, which already enshrines such principles as full-cost funding, is almost universally praised as a good thing by the voluntary sector, and condemned for not having been implemented.

"Implementation has not been up to scratch across central and local government and the time has come to own up to that,

said Boateng.

A senior official in all government departments will have the task of championing it and making sure it becomes part of day-to-day working practice.

Resources allocated to departments for 2003-06 are conditional on full implementation of the Compact.

The Active Community Unit, based in the Home Office, has the lead role - and £93 million of extra money over the next three years - to ensure that all the recommendations, including the full adoption of the Compact, are implemented across government.

However, it is not so much with central as with local government that the real challenge lies, and voluntary-sector representatives who attended the launch of the report left Boateng, Home Secretary David Blunkett and voluntary-sector minister Lord Filkin under no illusions about the difficulties they face here.

Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations, welcomed the report but added: "Implementation at local level will be down to individual authorities and I am not sure there is quite the same commitment there as there is in government."

The ministers all mentioned that the report had the full support of the Local Government Association. But as anyone who has worked with local authorities knows, this may not to be enough.

Bryan Dutton, chief executive of the Leonard Cheshire Foundation, which provides services for disabled people, said: "There are some parts of the country where they won't even let you in the door. They see no need even to have a conversation.

Since more than 65 per cent of statutory funding for the voluntary sector comes from local councils and health authorities, it is crucial that attitudes like this are changed, he said.

The Treasury report recommends that the Active Community Unit and John Prescott's Office of the Deputy Prime Minister work with local councils to increase the number of local compacts.

The Local Government Association, the Improvement and Development Agency and the Audit Commission will be roped in to find carrots and sticks - especially financial ones - to "incentivise

local authorities to implement such things as full-cost funding.

Local authorities will have to include voluntary-and community-sector representatives on their Best Value Review Teams. A special training programme will be developed for local authority staff who work with the sector.

Helen Edwards, director of the Active Community Unit, also promised that the unit would put in place a mediation service to deal with instances where the Compact is breached.

Not all the onus for making things work is on the Government, however.

Several of the ministers at the launch of the review called on sector leaders to prepare for big changes if they are to rise to the occasion.

"There is a major challenge for the non-statutory sector in the way that it is accountable, not just in its relationship with government but also with the people it serves,

said Home Secretary David Blunkett. "There also needs to be a great deal more coherence about the way the sector add-resses difficult issues."


Critical to the Government achieving its ambitions will be ensuring that the voluntary sector actually is capable and geared up to deliver what is being asked of it.

The issue of "capacity

is therefore one of the dominant themes of the Treasury's report, and it is here that the £125 million futurebuilders fund is to be targeted.

This is a three-year, "one-off strategic investment fund

specifically to modernise the sector and help it to develop its capacity to deliver public services.

Areas such as information technology, leadership and management skills, and the infrastructure provided by umbrella organisations should all fall within its remit.

Stuart Etherington, chief executive of the National Council for Voluntary Organisations, said: "The futurebuilders fund is significant because it recognises the need for the sector to gear up.

He also welcomed the Government's intention to decide in collaboration with the sector how to use and allocate the money.

A structure for how this is to take place is still being drawn up, but Paul Boateng, chief secretary to the Treasury, said at last week's launch: "People often assume that there is unlimited capacity in the sector, but things are much more fragile than they appear.

"Many organisations are already working at full stretch on initiatives such as Sure Start and Home Start.

"The £125 million is about making sure that the sector is fit for purpose.

There is a range of needs that will have to be addressed, and some pretty fundamental restructuring, if it is to fulfil its potential.We are looking to the sector to come forward with proposals for how the fund is to be used. It belongs to the sector."

Setting out the aims of the fund, the report says: "It will harness the vision, specialist knowledge and expertise of service providers to transform their capability, push out the boundaries and improve service outcomes.

High-quality schemes that exemplify good practice, encourage partnership working and replicate success will be candidates for funding.

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