Third Sector Article- 19 November 2008
Between May and October this year, Richard Gutch, an Associate at Prospectus, the third sector recruitment agency, interviewed 100 third sector chief executives. The organisations covered health, social care, disability, children and youth, as well as funding and local infrastructure. They were mainly the larger nationals, but local infrastructure organisations (LIOs), gave an important local perspective. They ranged in size from Barnardo’s (£215m pa) to Voluntary Sector Manchester (£200k pa). Although the interviewees cannot be said to be representative of the sector as a whole, they provide an important snapshot of sector leaders’ experiences.
The interviews focussed on chief executives’ assessment of the biggest challenges and opportunities they and their organisations are facing. The biggest challenge was funding, whilst their strategies for responding to the changing political, economic and social environment were their biggest opportunity. Most of the interviews were conducted before the financial crisis hit the headlines, but interviewees were already anticipating hard times to come, as well as preparing for the possibility of a change of Government. One issue, commissioning, dominated throughout - both as a challenge and as an opportunity. Next week’s edition reports on this in detail.
The Top Ten Issues
- Great policy, poor delivery
Although the financial environment is growing more challenging daily, the policy environment for the sector has never been stronger. In health, the focus on patient involvement, self management and talking therapies are all examples of this. The 10 year strategies for children and for young people are further examples. Locally, the National Performance Indicators for the promotion of volunteering and a thriving third sector tell the same story. But policy implementation, particularly through commissioning, is a major source of concern. When the chief executives of the top charities use words like ‘appalling’, ‘dreadful’ and ‘a complete disaster’, clearly all is not well.
- New needs
New needs are continually arising. The RNID is having to place increased emphasis on the hearing health and prevention agenda as the ‘noise’ of modern life increases the number of people with hearing difficulties. The numbers of children with profound and multiple physical and learning disabilities is increasing, as survival rates increase, highlighting the need for more transitional services for young adults. The needs of carers are increasing, as older people live longer. Chief executives are reflecting these new needs in their plans, sometimes adjusting current priorities to accommodate them.
- Personalisation and individual budgets
Paul Farmer, chief executive of Mind, described the move towards personalisation and individual budgets, as the ‘elephant in the room’. On the one hand, it holds out the promise of truly independent living for disabled and older people, whilst ,on the other, it means the relative security of block contracts could be replaced by the vagaries of market demand. In the words of Victor Adebowale, chief executive of Turning Point, they are moving from being a ‘wholesaler for public sector agencies to being a retailer for individual members of the public’. As well as requiring investment in marketing and a more person-centred approach, some important cultural shifts will be required. As Anne Roberts, chief executive of Crossroads National Association, commented, for many providers used to operating a service that is ‘free’ at the point of delivery, the whole concept of charging may feel alien.
- Fundraising strategies
Most chief executives are trying to achieve a balance between contracts, voluntary and other earned income, to avoid the dangers of having all their eggs in one basket and to provide some unrestricted income for campaigning and development work. ‘21st century charities need to have an R& D budget, just like a pharmaceutical company ’, said Clare Tickell, chief executive, Action for Children, ‘so they can test new approaches to meeting needs.’ For some this will come through voluntary income; for others through earning income through publications and consultancies. A number of CVS’ are trying to ensure future sustainability through generating income from third sector centres, providing space for offices, training and conferences.
- Funders’ strategies
The biggest challenge facing the foundations, apart from growing concern about the financial position, was how to make the most of their cherished freedom and independence. They want their funding to be distinctive from government through filling gaps, adding value and exploring new areas rather than topping up or replacing government funds, but they are also looking for ways to increase impact through influencing policy. This could be through foundations telling policymakers what they have learned from the projects they fund, or through building the capacity of the organisations they fund to get their voice heard.
- National vs local
One of the consequences of increased commissioning is a growing tension between national and local organisations. LIOs talk of ‘predatory’ nationals with experienced bid teams and the ability to use voluntary income to undercut local providers. They are concerned that many of the sector’s perceived strengths are being lost. Nationals talk of the need to ensure high quality services for users, regardless of who provides them. The reality is often far more complicated. Nationals often develop their work through local management committees and are increasingly trying to work in partnership, whilst locals do not always deliver the user involvement and social capital they aspire to. Commissioners can help resolve these tensions through highlighting the importance of local connections in their service specifications.
- Member and user involvement
Member organisations increasingly use cooptions to achieve a balance between representation and the right skills mix. Sometimes, this is mediated though a Nominations Committee. The value of involving users directly is increasingly being recognised. Representation on the board, with appropriate support and training, is one way of getting users’ voices heard. Involvement through interview panels and advisory groups are other mechanisms. But chief executives stressed there is no point in developing these approaches unless users’ views are actually listened to and acted upon. Tokenism is worse than doing nothing.
- Local involvement
The sector’s involvement in local planning has grown significantly since the introduction of Local Strategic Partnerships. In most areas, LIOs play a leading role in helping organise this involvement, as well as being active members of the LSP Board themselves. In York, Colin Stroud, director of the CVS, chairs one of the LSP Boards and has chaired the LAA Delivery Board, whilst in Croydon, Nero Ughwujabo, director of the BME Forum, has chaired the chief officers’ group for the past year. Whilst it is very welcome to be sitting at the top table at last, these roles are very time-consuming and stretch the capacity of some LIOs to the limit.
9. Management challenges
Developing strategies to respond to new circumstances is seen as the biggest area of opportunity, but presents particular dilemmas. ‘Deciding when to collaborate and when to compete’ was highlighted as an issue by Simon Blake, chief executive of Brook, the young people’s sexual health charity. Mergers are now beginning to take place on a much larger scale, as the recent births of Rainer Crime Concern, Livability and CLIC Sargent all testify. National organisations like Terrence Higgins Trust have merged with over 25 specialist or local organisations in recent years. ‘Growing at the right pace’ and ‘within our capabilities’ were two common themes. Achieving the right balance between service delivery and campaigning is a constant challenge.
10. Responding to the recession
‘Less money’, but more need was the prevailing view of what the recession would mean for the sector, but there was also a feeling that it could bring opportunities. Tony Hawkhead, chief executive of Groundwork Trust UK, saw opportunities through Keynesian employment infrastructure projects, as well as environmental projects addressing fuel poverty and carbon emissions. Public sector agencies may contract out more services to reduce costs (although some may bring them in house for the same reason). Whatever happens, all were agreed that some belt-tightening and driving down of costs, and avoiding over-exposure to risk, were going to be essential to ensure survival in the hard times ahead.
Richard Gutch is an Associate at Prospectus, the third sector recruitment agency
Words 1351
4 November 2008
