NCVO public services news round-up: March 2015

Our monthly round-up focusses on the most interesting stories related to the voluntary sector and public services from the last month. If you have any thoughts, questions or challenges then please leave a comment below or tweet us @NCVO @NJ_Davies

The budget

Last week saw George Osborne deliver the final budget of this parliament and NCVO has combed through the details so you don’t have to:

• Michael Birtwistle has summarised the five things that charities need to know
• Karl Wilding has set out the five things that he wishes the Chancellor had said
• Chloe Stables has captured the reaction from across the sector.

Revolution in Manchester

The government has agreed to devolve £6bn of health and social care spending to statutory bodies in Greater Manchester. The intention is that the 10 local authorities (and ultimately the recently announced elected mayor) will control how budgets are allocated. This radical plan could significantly improve the integration of public services. The potential benefits for service users (and the charities that support them), whose needs don’t always fit neatly within government funding silos, are immense.

The plans won’t go live until April 2016 and there are major hurdles to overcome but this could have a major impact on the shape of public service delivery in Manchester and beyond. Indeed, this is likely to fire the starter pistol for other city regions that would like greater control over spending in their areas.

So far, Serco, so what

Serco has written off £1.3bn, partly due to losing money on public service contracts. Their chief executive stated that “Of the five large contracts on which we’re losing most of the money in this writedown, four of them are with the UK government”. The phenomenon of struggling to make government contracts pay will be familiar to many in the voluntary sector but the fact that a behemoth such as Serco is also having difficulties raises some interesting questions. To put this loss in perspective, £1.3bn is equivalent to 12% of the voluntary sector’s entire statutory contract income. Serco may be able to unveil a £555m rights issue but what are charities meant to do if they sustain massive losses?

We are also seeing a movement towards payment-by-results and a smaller number of large contracts across public service markets. This has been driven by two assumptions, both of which are challenged by this development:

• Firstly, that there are a sufficient number of organisations which are willing and able to taken on significant financial risk (even if they do plan to pass it down to voluntary sector sub-contractors!). But if Serco start saying no to such contracts and the handful of other similar organisations follow suit, who will be left?
• Secondly, that the best way to make public services more efficient is through economies of scale. But if a company the size of Serco can’t turn a profit then who can? I would suggest that ‘economies of flow (PDF, 2.75MB’ provide a more promising, long-term solution.

Troubled Families, troubled statistics?

The Troubled Families programme is one of the most interesting government initiatives around. In many ways it has a distinctly voluntary sector flavour, aiming to support those with complex and multiple needs through holistic, person-centred support. This is not entirely surprising given that is largely based on the Family Intervention Project model developed by Action for Children in Dundee in the ‘90s.

However, though we’re comfortable with the approach, the payment-by-results model and language used to promote the programme sit less comfortably with voluntary sector sensibilities. Never mind the fact that the figures used to determine the number of ‘troubled families’ were produced six years ago and compiled for different purposes…

Is it working?

This month the government pronounced that the programme had successfully ‘turned around’ 105,000 families, saving £1.2bn. Unfortunately, this announcement was, to be generous, a little premature, as the figures are based on some questionable self-reporting by local authorities. The programme may be a great success but we’ll have to wait until the independent evaluation is complete to find out.

Hurrah for grants!

It can often feel like the voluntary sector is fighting a noble but lonely battle for the preservation of statutory grants. Grants accounted for 50% of government funding in 2000/01 but had fallen to just 20% by 2011/12.

It is to celebrate when the value of grants is recognised by our public sector partners. NHS England has published a brilliant new guide setting out the benefits of grants and suggests practical steps that health commissioners can take. If you’re struggling to convince a CCG then show them this.

Experience of employment support organisations

Our colleagues at ERSA are conducting a survey to gather information about the health and confidence of the employment support sector, as well as to gain feedback on key policy questions. The survey closes on 27 March. This is also the closing date for nominations for the ERSA awards.