Public service delivery
The third sector has a strong role to play in the development,
design and delivery of public services, through its culture of
innovation, responsiveness and flexibility and through its ability
to work closely with service users. NAVCA is committed to
strengthening the third sector role in transforming and, where
appropriate, delivering public services.
We believe local authorities must develop good practice in
commissioning and procurement by being clear about the
circumstances in which grants, service level agreements or
contracts are most appropriate.
Regulatory monitoring
Local voluntary and community organisations provide joined-up
services to particular client groups and it would make sense if the
various regulatory regimes under which they operate were equally
well joined up. NAVCA believes there is considerable scope for
streamlining regulatory regimes and monitoring procedures whilst
maintaining effective and proper lines of accountability. The
information that public agencies require needs to be proportionate
to the size of contracts and organisations. The emphasis should be
on the quality of experience for service users.
The sector's roles in public service reform
The third sector has always played a variety of important roles
in relation to public service reform. Third sector organisations
can, in particular, provide a voice for the most disadvantaged
citizens and communities, and work to ensure that unmet needs are
recognised and addressed. The capacity of third sector
organisations to provide strong, citizen-focused advocacy is
crucial, irrespective of whether services are delivered by the
public, private or third sector. The following third sector roles
are therefore central to the success of the Government's public
service reform agenda:
• Acting as campaigners and catalysts for public service reform,
using channels ranging from parliamentary lobbying through to the
Community Call for Action, and with a particular emphasis on
marginalised and excluded individuals.
• Advising commissioners on strategies and priorities in
commissioning, at local, regional and national level.
• Facilitating innovation and continuous improvement across the
public services by developing, pioneering and promoting new forms
of service delivery.
• Representing, and delivering high quality services to, both
communities of place and communities of interest.
In supporting these roles, we believe the following principles
should take priority in guiding the implementation of the
Government's agenda:
• A recognition at local level of the legitimacy and value of
policy development and campaigning work undertaken by local third
sector organisations that demonstrate good governance and genuine
accountability.
• Encouraging local authorities to actively promote the development
of a strong local third sector, with a view to enhancing the
capacity of citizens and communities to participate in local
governance and public service reform.
• Concerted efforts to create opportunities for the involvement of
all relevant third sector organisations in discussions on local
priorities in place-shaping and service commissioning.
• The promotion of flexible mechanisms such as strategic grants to
enable representative third sector organisations to exercise
accountability downwards to communities and citizens.
Third sector delivery of public services
Many third sector organisations exist to deliver public
services, and have a strong track record in user-focused provision.
The particular strengths of the best third sector organisations
include:
• a strong focus on the needs of service users
• the knowledge and expertise to meet complex personal needs and
tackle difficult social issues
• an ability to be flexible and offer joined-up service
delivery
• the capacity to build users' trust and
• the experience and independence to innovate.
Collateral benefits to the community may also result from third
sector organisations' complementary work in involving service users
and building community ownership, increasing the skills and
experience of volunteers, and developing trust and social capital
both within and across communities.
Through the third sector's involvement, the Government aims to
re-shape and transform public services, therefore commissioning
processes must focus closely on citizens' needs. The following core
principles should guide the implementation of the Government's
agenda:
• The development and application of a model strategic
commissioning and procurement framework, determining the most
appropriate strategies and techniques, which all public bodies
should apply as a minimum standard.
• A concerted effort to reduce the present gulf between central
guidance and local practice, and to measure the success of
initiatives in so doing.
• A clear division between purchasing and provision functions,
ensuring that public agencies must compete for delivery contracts
on a level playing field with independent providers.
• The universal application of the four principles of better
funding advocated in the Gershon Efficiency Review: full cost
recovery, longer-term contracts, fair sharing of risk, and the
elimination of unnecessary bureaucracy.
• The exploration of flexible mechanisms, such as strategic
alliances, joint ventures, and grants, to enable third sector
service providers to respond to the changing needs of communities
and citizens.
National and local service delivery
Since many national organisations deliver services at local
level, they often enter into competition with local service
providers. National providers may offer greater infrastructure and
capacity than their local counterparts, and many have a hard-earned
and well-deserved reputation for providing excellent services that
focus on the needs of the individual. Locally based organisations
may have particular knowledge, networks, and expertise that give
them unique strengths in building community ownership and improving
local services. Local ownership helps to develop social capital,
characterised by the trust and confidence that arises from
organisations with strong roots in local communities. It is
essential that commissioning processes reflect the value of social
capital.
Commissioning arrangements should encourage collaboration and
promote a healthy local sector. Examples of good practice
demonstrate clearly how collaboration between national and local
organisations can work. In Leicester, the Children's Fund contract
was awarded to a national charity on condition that it worked with
small local providers, including a range of black and minority
ethnic groups. They delivered a complete package of specialist
services, drawing on the skills and local knowledge of local groups
and developing their capacity for the future. In this way it is
possible for commissioning to support rather than undermine civil
renewal, social cohesion and civic engagement.
Long-term investment is needed in the vital preventative work that
small groups do amongst the most disadvantaged communities. This
sort of local community action is essential to sustaining local
social, economic and environmental well-being.
Commissioners and their infrastructure bodies, particularly the
Regional Centres of Excellence in Procurement, should support and
encourage collaboration between public service providers with
complementary skills.
The retention of profits and surpluses by third sector
organisations arising from service delivery
NAVCA believes that it is perfectly reasonable for a local
third sector organisation to earn a surplus as a result of
delivering a public service.
A third sector organisation can set the price of
a service to make:
- A full recovery of the cost of providing
it.
- A surplus to reinvest in the
organisation.
- A calculated loss (thereby subsidising the
service).
The full cost of a service includes both its direct costs
and also the indirect costs (sometimes called overhead,
administrative or 'core' costs) associated with it. Core costs
include the share of management costs (such as senior staff time
and board meetings), research and development costs (including
training) and other support costs (including premises and utility
costs) that can be fairly allocated to the service.
Third sector organisations should know the cost of any service they
deliver or plan to deliver.
By knowing and understanding their full costs,
trustees can make more informed decisions about whether to
undertake particular services or accept offers of
funding.