Memorandum by Shaw Trust (PSR 17)
Shaw Trust is a registered charity with a mission
to enable disabled and disadvantaged people to find and keep work.
Since Shaw Trust was established in 1982 it
has provided public services on behalf of government departments
as well as developing new and innovative approaches to the provision
of work related services, often with support direct from major
companies and also charitable trusts.
Today Shaw Trust is the largest not-for-profit
provider of Workstep, under contract to the Employment Service.
This contract provides over £10 million per annum to Shaw
Trust to support over 2000 severely disabled people in employment.
Shaw Trust is also a significant provider of
Job Broking services within the New Deal for Disabled People.
We have been awarded contracts from the Employment service, with
a total value of £11 million. The job-broking service is
due to run for 2.5 years and during this time we expect to find
employment for 4,000 people on Incapacity Benefit.
Alongside these contracts with central government
departments, Shaw Trust also has a range of contracts with Local
Authorities up and down the country. These are primarily with
Social Service departments as they contract out part of their
provision in support of disabled and disadvantaged people within
the local community. The total value of these contracts currently
is in the region of £4 million each year.
Our comments at this stage are given in response
to question 18 within your "Issues and Questions" paper
(18) If there are to be rules regulating
private sector involvement in public services, should they apply
also to, for example, the voluntary sector? Should there be less
stringent regulation where profit is not involved?
Shaw Trust believes that the rules governing
the regulation of public service involvement should be applied
with equal stringency to both private and voluntary sector. There
should be no less accountability simply because an organisation
operates on a not-for-profit basis. However, the issue is perhaps
less about whether the voluntary sector should be more or less
regulated than the private sector and more about how such regulation
should be structured.
It is our experience that, when public services
contract out a service to a third party, this is often done hand
in hand with the establishment of complex systems to count and
measure, in great detail, each element of the activity. In some
contracts this amounts to the government department implementing
a 100 per cent check on all information relating to clients who
are participating in the programme in question. This appears to
conflict with the second of the Prime Ministers declared three
pillars of reform; to give power to "the frontline professionals
and set them free to innovate and develop the services needed."
We would contend that, rather than developing
laborious systems to measure inputs to a programme, contracts
should be designed so that there are clear objectives, targets
and quality measures in place against which the contractor must
prove achievement. We would then expect the audit process to concentrate
on programme outcomes rather than programme inputs.
This is an issue that appears to confront private
and voluntary sector alike. We believe that it has a particularly
detrimental affect on the voluntary sector because such organisations
are often poorly resourced to manage such a level of administration.
If we accept that regulations should be equally
stringent for private and voluntary sector alike, then there is
one significant area where action is needed to ensure a level
playing field for the voluntary sector. This could be simply resolved
by ensuring that all areas of government operated within the spirit
as well as the letter of the Compact1
in terms of contracts as well as grants.
There is a major issue for the voluntary sector,
when competing for contracts, about being driven out of the contracting
process by application of a system which is heavily dependent
on payment against outcomes. We are supportive of the principle
of outcome related funding but the impact on the cash flow of
a voluntary organisation can be severe. We would suggest a payment
structure whereby, for voluntary sector contractors, payment is
made on assumption that outcomes will be achieved and redeemed
against future payments when this does not occur. If the spirit
of the Compact was applied, this problem could be easily circumvented.
We are currently experiencing reluctance within some government
departments to extend the compact's application to contracts as
well as grants and would welcome the PASCs views on this in relation
to the reform of public services as a whole.
We recognise that the PASC is focussing its
attention, at this stage, on the concept of a Public Service Ethos
and the involvement of the Private sector. We believe that there
would be merit in the Committee extending this brief to include
the Voluntary Sector.
As you know, the role of the Voluntary Sector
in the delivery of Public Services is currently being examined
as part of the 2002 Spending Review and Shaw Trust is playing
an active part in this process. We would hope that the PASC would
use the findings of this review as a contribution to the wider
debate on the reform of public services rather than as an end
in itself. We believe that the debate about the role of the voluntary
sector in the delivery of Public Services should be conducted
in a forum that is wider than the terms of the 2002 Spending Review.
Shaw Trust would be pleased to participate further
in this inquiry, should the PASC decide to widen its view to include
the involvement of the voluntary sector in the delivery of public
3 Compact on Relations between Government and the Voluntary
and Community Sector in England, Home Office 1998. Back
Compact-Funding: a code of good practice, Home Office. Back