Public Services

Baroness Barker Excerpts

Wednesday 12th December 2012 Lords Chamber

[Baroness Barker]

My Lords, I, too, thank the noble Lord, Lord Boateng, for introducing this debate. I declare an interest; I have a consultancy called Third Sector Business.

Three years after the financial crisis in the City, the shock waves are making their way out to local government and to charities. The noble Lord mentioned the survey results that came out this week from the Charities Aid Foundation. They should have come as no surprise. The survey showed that there are approximately 10,000 charities that are very vulnerable because they derive a large percentage of their income from delivering services through contracts with local authorities. Probably some of the charities have lost sight of the purpose for which they were set up. Some of them may deserve to move over and make way for more innovative and interesting social enterprises that are very tech-savvy and cost-effective; but some of them for years have been subsidising local authority service provision, and some of them are very important to the communities that they serve and to which they bring additional benefits. Therefore, some of the organisations deserve help to survive.

The Government recognised that in April this year when the Cabinet Office launched the £10 million Investment and Contract Readiness Fund, run by Social Investment Business. That is a three-year programme, but it is urgent that learning from the programme should be got out quickly to charities that clearly need to develop new business models and the sort of skills that the noble Baroness, Lady Stedman-Scott, talked about, such as measuring their impact, knowing their cost base and, above all, being able to demonstrate that they are the best organisations to serve the people who need public services.

In 2007-08, the Public Administration Committee published Public Services and the Third Sector: Rhetoric to Reality, in which it asked: “Does size matter?”. It is a hugely important question. In future, public services that will be delivered by the third sector will primarily be those where it can be demonstrated that money is being saved elsewhere in the public expenditure budget. The problem with that is that often the people who deliver the services have real difficulty demonstrating the savings and the value to other parts of the public service system. Under the previous Government, Total Place budgeting began to address that issue. Under this Government, community budgeting is going to continue—but it has a long way to go before it will be possible for one public service commissioner to say, hand on heart, that giving money to a particular voluntary organisation has definitely saved money.

It is particularly important for models of preventive services—in other words, services that apply across whole communities that are at risk rather than to individuals. Will the Government put greater effort into developing the community budgeting skills of local authorities and of the voluntary sector? Community budgeting will only work, as the noble Baroness, Lady Stedman-Scott, said, if we have a commissioning process which is sufficiently flexible to deal with the major problems which we have. There is a question about how we configure large and small voluntary organisations in future to deliver public services on the scale which we know is going to be necessary. We know that in social care, in order to relieve the pressure on NHS budgets, the voluntary sector is going to have to deliver a lot of high-quality services. In conclusion, this is going to be a very turbulent but quite exciting time if the Government can assist the voluntary sector with two or three specific targeted things which I have mentioned. I hope the Minister will say that they can.