Big Society or Big Business? Is there a future for the voluntary sector?

When a consortium of public-sector and voluntary organisations in the North East bid to host and help run a range of local services from libraries to Jobcentre Plus, it looked the perfect model of what Prime Minister David Cameron came to call The Big Society. Hours of volunteer time and a fair amount of cash were spent by a range of entrepreneurial bodies, including Doncaster College for the Deaf, in drafting the bid.

The effort and expense seemed worth it when the local authority went for the deal that would really bring about joined-up local public services. But then the local elections saw a change in political colours in the May 2010 local elections– and the whole enterprise was ditched. So it is hardly surprising to find a very sour and cynical attitude locally to the whole notion of Big Society.

One leading participant in the bid said at a recent seminar on the future of public services: ‘The things we spent time and money on fell through. By the time the handover was going to take place, the agreement collapsed.’ And so much for the promises of Big Society, he said. ‘Many networks that link schools, colleges and the voluntary sector are being wound up and volunteers are being thrown out. You can’t expect them to climb back on board with new organisations later on. This needs to be addressed.’

There was general agreement at the national seminar series run by the Learning and Skills Improvement Service in June and July 2011 that somehow such initiatives had to be ‘beyond party politics‘ and that stability was an essential success ingredient – stability and a fair degree of financial security.

Policy Consortium inquiries around the country reveal, however, that this is anything but the case – and that Doncaster is by no means an isolated event. If anything, since the arrival of the Coalition Government, the decline in voluntary participation has accelerated. Small voluntary organisations within the ethnic communities of the West Midlands are particularly hard hit. And nationally, there is real and growing concern, not least from Skills – Third Sector, the sector skills council charged with setting skills standards for the charities and voluntary organisations Cameron confidently expects to take up the slack following the cuts.

The Policy Consortium inquiries also echo the findings of the anti-cuts campaign, False Economy, whose latest report this week suggests that more than 2,000 charities are being forced to close, sack staff or shut down as local authorities implement central government spending cuts. The study, based on 265 Freedom of Information responses, shows that at least £110m will disappear from charities.

In its recent response to the Modernising Commissioning Green Paper on new ways of awarding public service contracts, Skills – Third Sector pointed out a number of pitfalls. The government may be trying to expand the third sector, it said, but at the same time it was also looking for massive financial savings and ways of streamlining administration. Hence the minimum contract levels currently at £500,000 for economies of scale and a smaller number of transactions, pinned to payment by results rather than up-front payments, in order to get better value for money.

When it comes to contracts for adult learning, this has excluded vast numbers of third sector organisations before they even reached the bidding stage. Most of such organisations are small, specialist, or work in a specific locality, often defined by their specific charitable remit. They are commonly not capable of taking on large contracts alone and they do not have the assets to carry them through the contract until end-loaded payment is due.

A Department for Business, Innovation and Skills (BIS) spokesman said: ‘These are big budgets we are talking about, with high risk of bankruptcy and these smaller charities are vulnerable. They will be able to play their part in Big Society as sub-contracting organisations.’

If this was supposed to reassure the charities, it has failed. Labour Force Survey figures quoted by Skills – Third Sector show that employment in the voluntary sector shrank by 2% in the last quarter of 2010 – a trend that continued into 2011. Stephen Jeffery, Chief Executive of the London Learning Consortium, a community interest company with over 160 member organisations, has predicted there will be many more redundancies as smaller organisations become financially unsustainable.

His predictions were to prove correct by the end of June 2011 Hundreds of voluntary groups that have closed or curtailed much of their work include Crossover 619, which gave support to long-term unemployed in the Birmingham area with over 25% unemployment and high black and minority ethnic (BME) population. The BREAD Youth Project, working with some of the most vulnerable and disadvantaged young people in Bristol, saw a 71% cut in funds, with drastic implications for the young people. And St Helens People’s Choice, a self-advocacy group for over 100 people with learning disabilities faced closure because their only paid member of staff was facing redundancy while Skills – Third Sector was monitoring the state of employment in the voluntary sector.

Two key factors are behind the decline in organisations related to further and adult learning. First, despite the rhetoric, the Coalition Government’s focus on big business to run Big Society – at the expense of smaller local organisations – is proving a blunt and exclusive instrument with which to cut costs and red tape. Meanwhile, draconian cuts to local authority funds are being passed on to voluntary groups, with the handy ability to place any blame squarely on the local level’s ‘powers’ to prioritise, by the national level. Second, voluntary sector redundancies are being caused by serious delays in the tendering processes as colleges and other providers insist the whole funding future is too uncertain.

UNISON, the public sector union, reports that colleges are delaying the bidding process or holding back on exchanging contracts until as late as possible, probably October or November, citing funding changes as the prime reason. Some of the problems result from community organisations being franchise rather being funded directly. Community learning is particularly hard hit by the sub-contracting process. Typically these teams deliver or support NVQs in Childcare, Care, Teaching Assistants, Functional Skills, Sign Language, ICT and Employability and are primarily funded via a commissioning route through local colleges.

A union officer said: ‘The result for learners and staff is at best uncertainty but in several cases already the community learning provider has advised the learners, the staff and the community centres that learning programmes will not be running in 2011/12.This leaves learners unable to access courses, staff made redundant and community centres losing one of their prime users.’ This is adding to the wholesale closures and, as witnessed in Doncaster, a sense of cynicism about the notion of Big Society is becoming deep-rooted.

Leading voluntary organisations including Skills – Third Sector and the National Association for Voluntary and Community Action have appealed to the government to rethink the approach to funding, recognise the full value of what third sector organisations do and reward them appropriately. They make the point that this is particularly important in learning and skills where voluntary groups often work holistically with hard-to-reach groups and get them on track to social and economic inclusion.

Such organisations say ministers are listening. But whether they will act is debatable. Also, if or when they do, will there still be the breadth of organised voluntary expertise around to make Big Society a success?