Third sector is 'answer' to public service reform

The voluntary sector should be given its own version of the Private Finance Initiative as a way of enabling charities to carry out more public services, chief executives' body Acevo will claim tomorrow.

Launching a new book, Replacing the State? Acevo chief executive Stephen Bubb will argue that the voluntary sector is "part of the answer" to public service reform, but is held back by erratic funding.

"The voluntary sector spends too much time and money renegotiating short-term contracts with the state," he will say. "A PFI equivalent needs to be found so it can compete on the same terms as the private sector. We want long-term, 25-year contracts, not short-term year-on-year renegotiating."

The risky nature of public service delivery was illustrated by the case of Leonard Cheshire, which invested £1.5m of public donations in a state-of-the-art brain injury unit, only to be forced to close it because not enough patients were referred from NHS trusts.

Acevo wants the capital cost for new public-voluntary sector projects to be shared, and contracts subjected to performance monitoring and payment by results.

One contributor to Replacing the State? is the author and chief executive of the Work Foundation, Will Hutton. He argues that the sector's social entrepreneurship, local accountability, autonomy from professional control and ability to multi-task makes it ideal for public service delivery.

But Brendan Martin, chief executive of not-for-profit consultancy Public World, which examines the social dimensions of public service reform, was more sceptical: "Third sector organisations play a vital role in public service delivery, but just because they see an opportunity in reforms such as foundation hospitals, it doesn't mean the trade unions are wrong to see a privatisation threat."

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