opportunities and challenges for the third sector - year 1/3

8/4/2019 Opportunities and Challenges for the Third Sector - Year 1/3

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VoluntaryI

ssues

The Opportunities and Challenges of the

Changing Public Services Landscape for

the Third Sector in Scotland:

A Longitudinal Study

Year One Report: Baseline Findings


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THE OPPORTUNITIES AND CHALLENGES OF THECHANGING PUBLIC SERVICES LANDSCAPE FOR

THE THIRD SECTOR IN SCOTLAND: ALONGITUDINAL STUDY

Year One Report: Baseline Findings

Professor Stephen P Osborne and Elric HonoreCentre for Public Services Research,

University of Edinburgh Business School

&

Sue Bond and Dr Matthew DuttonEmployment Research Institute,Edinburgh Napier University Business School

Scottish Government Social Research


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The views expressed in this report are those of the researcher and

do not necessarily represent those of the Scottish Government or

Scottish Ministers.

Crown Copyright 2011

Limited extracts from the text may be produced provided the source

is acknowledged. For more extensive reproduction, please contact the

Queens Printers of Scotland, Admail, ADM 4058,

Edinburgh EH1 1NG. Email: [email protected]

This report is available on the Scottish Government Social Research websiteonly www.scotland.gov.uk/socialresearch.


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Table of Contents

EXECUTIVE SUMMARY 61. INTRODUCTION 14

Structure of the Report 142. BACKGROUND AND CONTEXT 163 METHODOLOGY 21

Selection of case study and group work organisations 21In-depth case studies 21Three focus groups 22Analysis 22

4 THE CONTRIBUTION OF THE THIRD SECTOR TO PUBLIC SERVICEDELIVERY 23

The Diversity of the Sector 23Approaches to Service Provision 24Other Features of the Third Sector 26Summary 27

5 CHANGES TO THE POLICY ENVIRONMENT 28The 2007 Concordat 29Challenges working across many different local areas 30Lack of a clear and cohesive policy steer and an accountability gap 30Increased Localism 31Community Planning Partnerships 32

Perceptions of CPPs 32Other ways of influencing policy 34

Policy Priorities 34Single Outcome Agreements 36Summary 37

6 CHANGES TO THE FUNDING ENVIRONMENT 39Funding Cuts 39

Funding Cuts 40The Implications of Actual Funding Cuts 40The Implications of Potential Future Funding Cuts 41

Tendering 42Short-Term Contracts 42Feedback and Dialogue with Funders 43Quality versus Cost 45Other issues in the tendering process 46

Summary 48


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7 THIRD SECTOR RESPONSES AND CHALLENGES TO CHANGINGENIRONMENTS 49

Adapting Services 49Core Funding and Internal Capacity 51Diversifying the Funding Base 52

Alternative funding streams 52Fundraising 52Social Enterprise 53

Maintaining Competitiveness 55Competitors 56Summary 58

8 PERFORMANCE AND OUTCOME MEASURES 60Variability in Measurement and Scrutiny by Local Authorities 60Focus on Hard Outcomes and Added Value 61SROI and Other Measures 64Summary 66

9 PARTNERSHIPS 67The extent of partnership working among TSOs 67Success Factors 68

Shared Goals/Ethos and Clearly Defined Aims 68Complementarity 69Equality 70Trust and Reciprocity 71Commitment 71

Challenges in Partnership Working 72Investing in Partnership 72Formal versus Informal Partnership Working 73Partnership versus Competition 73

The Importance of Partnerships in Facing Future Challenges 75Summary 76

10 PLACE AND RURAL ISSUES 78Summary 80

11 CONCLUSIONS 81APPENDIX A: AIMS AND OBJECTIVES OF THE RESEARCH 84APPENDIX B: PARTICIPANTS IN THE CASE STUDIES 85APPENDIX C: ORGANISATIONAL PROFILES 86APPENDIX D: FLEXIBLE INTERVIEW SCHEDULE FOR CASE STUDIES (2010) 88APPENDIX E: AGENDA FOR FOCUS GROUPS 94GLOSSARY 96


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ACKNOWLEDGMENTS

The research team would like to thank all the organisations and respondentswho gave generously of their time in order to participate and make this researchproject possible. Also thanks to: Professor Ronald McQuaid at the Employment

Research Institute, Edinburgh Napier University for his contributions to thereport; Dr Colin Lindsay (previously of the Employment Research Institute) wholed the first year of the project; Alec Richards at the Employment ResearchInstitute for proof reading the report; Dr Kay Barclay at the Scottish Governmentand members of the Research Advisory Group for their support and guidance.


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EXECUTIVE SUMMARY

Introduction

The Scottish Government has acknowledged that the third sector has a key role toplay in delivering public services that are high quality, continually improving, efficientand responsive to local peoples needs. This work will inform future partnership-working with the third sector.

This research report outlines the findings from the first year of a three yearlongitudinal study examining the opportunities and challenges facing third sectororganisations (TSOs) in Scotland in the delivery of public services. The first year ofthe research aimed to establish a baseline by which subsequent years of researchcould be compared. As part of that, specific objectives for the first year of research

are summarised below:

identify the role and distinctive added value of TSOs delivering publicservices;

identify features of effective partnership-working between the public sectorand TSOs;

assess the impact of Scottish Government and local government policy andbudget priorities on TSOs changing practice and management;

track the impact of the economic downturn and budget limitations on TSOsroles in public service delivery;

describe how TSOs contribute to progress on the Scottish Governmentsnational priorities and national outcomes;

describe how TSOs contribute to progress on Single Outcome Agreementsand the work of Community Planning Partnerships;

enable TSOs to articulate views on the appropriateness of funders oversight,evaluation and management procedures.

Methodology

Year One (baseline) methodology involved qualitative research within 20 voluntarysector organisations based in Scotland. The methodology involved two key

components: (1) In-depth case studies with eight TSOs and; (2) three focus groupsinvolving a total of twelve additional TSOs.

In-depth case studies were carried out within eight third sector organisationsbetween December 2009 and May 2010. Case studies involved collectingappropriate documentary evidence including annual reports, policy statements andother organisational information.

In-depth face-to-face interviews were carried out with staff at different levels of theorganisation. These included: chief executives; other senior officers/managers;research/policy officers; business/planning managers; operational and line

managers; and front line staff delivering services. The selection of staff for interviewwas decided in consultation with the main contact from the organisation (usually the


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chief executive or another member of the senior management team) and actual staffinterviewed varied depending on the size of the organisation and availability ofappropriate functions.

Twelve organisations were divided into three focus groups of four participants. Each

focus group pulled together organisations with strong interests in particular areas.These included: (a) equalities; (b) social care and health care, and (c)employability/economic development/regeneration1.

One representative from each organisation (usually the Chief Executive or a memberof the senior management team) attended one of the focus groups carried outbetween April and June 2010 using a common discussion framework.

The Contribution of the Third Sector to Public Service Delivery

The third sector in Scotland is diverse covering many different types of services andclients, as well as being different in size, function, capacity and geographical spread.There were important differences between larger and smaller organisations in theircapacity to compete for funding in a challenging economic climate.

TSOs made a particular contribution to service provision through their specialistknowledge and expertise working with vulnerable, disadvantaged and hard-to-reachclients and providing specific services. This meant that they had the ability to fillunique niches in service provision.

A distinctive feature of many services provided by TSOs was their person-centred

holistic approach tailoring services to particular client needs. This is contrasted withsome approaches taken by statutory services.

TSOs had a specific ethos of providing quality values-based services focusing onimproving the experience for clients. This was sometimes in antithesis to a cost-driven funding environment. TSOs were also often rooted in local communities.

TSOs were characterised as operating in a more flexible, responsive way comparedwith the public sector because they were leaner, had flatter management structuresand were less bound by regulations.

Some felt that the third sector was more innovative and creative, although tenderingpresented challenges to maintaining these features.

Changes to the Policy Environment

Whilst the principle of the 2007 Concordat (more local control over planning andservices) was sometimes supported, the impact on TSOs in practice had been moreproblematic. For instance, some key issues identified included:

1Note that in practice it was not possible to apply these categorisations rigidly and there was some

overlap in the activities of organisations.


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(a) Practically, negotiating with numerous individual local authorities and CPPs couldbe difficult in terms of time and resources for those TSOs delivering local servicesacross multiple geographical areas,

(b) Some felt that devolving greater decision-making to local authorities had resulted

in policy that was unclear and lacked cohesion and resulted in an accountability gapwhere it was not clear whether Scottish Government, local authorities or CPPs haveresponsibility for policy, and

(c) Increased localism and the focus on local needs may have resulted in adecreased ability to see the bigger picture of policy and provision across Scotland,including limited sharing of good practice across areas.

New third sector interfaces in each Community Planning area across Scotland arebeing developed and will become the key mechanism by which the third sectorinteracts with the government. However, at the time this initial research was carried

out, the way in which third sector organisations interfaced with planning was in atransitional phase, with CPPs being perceived as the key way in which the thirdsector were involved in community decision-making. From the point of view of manyof the TSOs participating in this research there was some doubt over theeffectiveness of CPPs in terms of being able to represent the whole of the thirdsector and the limited extent of TSOs influence on policy, leading some to de-prioritise their involvement in CPPs. However, some TSOs felt they were able toinfluence policy more effectively through other means such as through partnershipswith the private sector and other forums. This is an important issue that will need tobe tracked through as this longitudinal study progresses.

In terms of specific policy priorities respondents felt that: there were variationsbetween local authorities; there had been a shift towards a more employability-focused agenda and finally; priorities were perceived to be focused on certainspecified groups of clients at the expense of others.

Single Outcome Agreements (SOAs) likewise were perceived to be subject tovariations between local authorities and CPPs. Some found SOAs to not be specificenough in order for them to inform organisational policy.

Changes to the Funding Environment

Many TSOs reported that over recent years (in the last decade but particularly in thelast 3 or 4 years) some funding had not kept pace with inflation although the samelevel of service continued to be provided with the effect of real term cuts. Theimpact of these cuts included employing lower skilled staff on lower wages andwithdrawal of delivery of some services.

Many TSOs feared future spending cuts of up to 20%. While some perceived this tobe an opportunity to reduce dependency on public sector funding, many wereconcerned about the potential implications of such substantial cuts across the sector.These included vulnerable client groups becoming more marginalised and the loss of

some third sector organisations and with them skills, knowledge and servicecapacity.


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the sector was not able to compete on an equal basis for contacts because of a lackof parity of esteem with other providers.

Performance and Outcome Measures

There was considerable variation in approaches, and therefore perceptions ofproportionality, to monitoring and evaluation of services by TSOs across localauthorities.

There was a perception among TSOs that some local authority funders in particularwere focused on measuring hard outcomes which did not capture the full range ofadded value of TSOs.

Much of the work carried out by TSOs was often with clients who were hard-to-reachand/or who had complex issues, focused on prevention and had wider social impactsthat were less easily measured.

The focus on hard outcomes could lead to: contradictory incentives; the mostvulnerable clients losing out because they were less likely to achieve quick andmeasureable hard outcomes, and: it did not easily recognise the work done bymultiple agencies. It was felt by some that some funders did not understand thecomplexity of the work done by TSOs.

At the same time, the focus on hard outcomes had resulted in radical changeswithin TSOs, including improvements in monitoring systems, staff training andgreater efficiencies in the service delivery approach.

Most organisations were keen to evidence the full extent of the work they undertookin order to show the value they added. While use of SROI was still fairly limited,many organisations were using other means of measuring soft outcomes, includingexisting measurement tools as well as devising their own tools and carrying outadditional research.

Partnerships

Most participants had experience of successful partnership working. However, theextent of partnership within the sector and with other sectors may have the potential

to increase in the future.

A number of factors were identified that contributed to successful partnershipworking for service delivery. These included:

Shared Goals/Ethos and Clearly Defined Aims having a shared vision andethos and having clearly defined and identified shared aims

Complementarity The extent that organisations complement each other interms of expertise, specialisms and organisational cultures

Equality Where organisations are roughly equal in terms of power, resourcesand terms and conditions of staff


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Trust and Reciprocity Trust and sharing of resources between organisations

Commitment The commitment of individuals at different levels withinorganisations to the partnership.

Partnership working presented a number of challenges for some organisations.These included:

The ability of organisations to invest time and resources into partnerships

Some respondents felt that informal partnerships were at least as important, ifnot more so, than formal ones and questioned the effectiveness of someformalised partnerships

There was a perception that the tendering process, whilst purporting toencourage partnership, actually increased competition between organisationsto the detriment of partnership working. There was some concern that thistendency would intensify in a tight funding environment.

Developing partnership working to a greater extent was perceived to be important inorder to meet the financial challenges ahead. In particular there was a perceptionthat more extensive participation in joined up working could also be beneficial forclients.

Place and Rural Issues

There were additional costs associated with providing services in rural areas. Thiswas because of the dispersed geography and additional travel required as well aslimited access to public transport. In addition, it was difficult to achieve economies ofscale for (usually) relative small local services. Funding cuts had already resulted inone organisation providing a reduced service in a rural area.

Due to the withdrawal of major public funding some families near poverty hadbecome solely reliant on some TSOs. This created additional pressures, particularlyfor the smaller TSOs.

The benefits of developing direct personal relationships between staff in TSOs andthe local communities they serve was highlighted.

Conclusions

The third sector in Scotland plays a key role in delivering public services that arehigh quality, continually improving, efficient and responsive to local peoples needs.The sector has a number opportunities afforded by the policy context, such as theEnterprising Third Sector Action Plan and competitive tendering. However, it alsofaces a series of challenges relating to devolved funding, being involved in the policyprocess, managing in a competitive environment, and increasingly, budget

constraints imposed on public services.


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This research, which forms the first phase of a three year longitudinal study, hasexplored a wide range of opportunities and challenges based on case studies andfocus groups with 20 TSOs in Scotland.

The research found that the third sector has a unique and distinctive contribution to

make to service delivery. TSOs tend to work with vulnerable, disadvantaged andhard-to-reach groups, engaging in preventative work and filling gaps in statutoryservices. Their focus is on the client and the provision of quality services and theyare characterised as operating in a more flexible, responsive way than the publicsector because they are leaner and possibly less bound by regulations. The sectoris also very diverse covering many different types of services and clients as well asbeing different in size, function and geographical spread.

The policy environment had created a number of challenges and opportunities forTSOs in Scotland. The key issues affecting them included:

The Concordat and localism agenda and involvement in local decision makingthrough the CPP

Funding challenges and concerns about the impact of budgetary restrictions

Shift towards competitive tendering and resulting challenges.

The new third sector interfaces are in development and should help to address someof these challenges.

Many TSOs had responded positively to the challenges faced by the changing policyand funding environments by:

Adapting their services in order to comply with changing policy priorities

Diversifying (or planning to diversify) their funding base by seeking alternativefunding streams

Fundraising

Developing social enterprise

Restructuring organisations and reducing cost base to maintaincompetitiveness.

In terms of their experiences of performance and outcome measures, there was

considerable variation in approaches to monitoring and evaluation of services byTSOs across local authorities and TSOs felt that funders were often too focused onmeasuring hard outcomes which did not capture the full range of added value ofTSOs.

Most participants had experience of successful partnership working and the researchidentified the factors that helped to support better partnership working such asshared ethos and clearly defined goals, complementarity and equality betweenorganisations, trust and reciprocity and commitment at different levels.

Partnership working to a greater extent was perceived to be important in order tomeet the financial challenges ahead. In particular more extensive participation injoined up working could also be beneficial for clients.


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1.6 Chapter 5 examines the impact on TSOs of the Changes to the PolicyEnvironment. These include the impact of the 2007 Concordat, CommunityPlanning Partners, Policy Priorities and Single Outcome Agreements.

1.7 Changes to the Funding Environment (Chapter 6) looks at the impact of actualand potential funding cuts, as well as perceptions and experiences ofTendering on TSOs.

1.8 Chapter 7 explores Third Sector Responses and Challenges to ChangingEnvironments. This chapter examines: the way TSOs have adapted servicesin response to changing policy priorities; issues around maintaining corefunding and internal capacity; how TSOs are diversifying their funding bases;the ways TSOs have sought to maintain competitiveness and; the challengesfaced by competitors.

1.9 Chapter 8 examines issues around Performance and Outcome Measures usedby funders and TSOs in order to measure service outcomes and performance.This includes an exploration of the variability in measurement and scrutiny bylocal authorities, the current focus on hard outcomes and the impact onmeasuring added value by TSOs and the use of SROI and other measuresamong TSOs.

1.10 Partnerships (Chapter 9) examines TSOs involvement in partnership workingand includes the extent of partnership working among TSOs, an exploration ofthe factors associated with successful partnership working, some of thechallenges presented by partnership working and the importance ofpartnerships for the third sector in facing future challenges.

1.11 Chapter 10 looks at place and rural issues and in particular at some of thechallenges and issues facing delivery of services in rural areas by TSOs.

1.12 Finally, a Conclusion is provided in Chapter 10.

1.13 All quotes use generic pseudonyms which are intended to provide someorganisational and respondent role context without identifying either individualsor organisation. However, please note that the generic pseudonyms cannot

encapsulate the varied roles of TSOs, especially since many organisations fallinto numerous categories, but they are provided for convenience. Appendix Aand B provide more details about each organisation. Where quotes have beentaken from a focus group discussion this is indicated in brackets after the quote(e.g. Employability FG where FG indicates focus group).

1.14 Interview schedules used in the fieldwork are appended (Appendix C and D).


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2. BACKGROUND AND CONTEXT

2.1 This section examines the policy background and context within which TSOs inScotland currently operate.

2.2 The Scottish Government is committed to promoting public services that are ofhigh quality, continually improving, efficient and responsive to local peoplesneeds and has acknowledged that TSOs have emerged as key providers ofsuch high quality public services2.

2.3 The Government in Scotland has increasingly focused on the third sector inrecent years with the then Deputy Minister for Community stating in 1999 thatthe third sector has enormous potential to help us to achieve our shared goalsof promoting community developing and active citizenship

3. More recently,

the Scottish Government has acknowledged that the third sector will continueto be important in supporting the on-going public service reform agenda,particularly in focusing services on the user, and so promoting greaterefficiency and delivering Best Value.

2.4 Recent and continuing changes to how Scottish public services are plannedand delivered have included a number of initiatives which are likely to have animpact on TSOs delivery of public services. These include: the 2007Concordat between the Scottish Government; Single Outcome Agreementsand Community Planning Partnerships; the Crerar Review; Best Value andBest Value2; The Enterprising Third Sector Action Plan (2008-2011); the

development of public-social partnerships; and the over-arching context of theimpact of the recent economic downturn and budget constraints.

2.5 The 2007 Concordat4

reduced ring fencing and devolved control of somebudgets to local authorities (LAs) and Community Planning Partnerships(CPPs), thereby transferring the contract holder/funder from the ScottishGovernment to individual local authorities. This fundamentally changed therelationship between national and local government in Scotland. This aimed topromote progress towards the alignment of funding and activities within localauthorities and other areas of the public sector with the Scottish Governmentspriorities and national outcomes. Four key tenets were included in the

Concordat:

Collaborative working and joint accountability the relationship betweencentral and local government to be based on mutual respect and

2Scottish Government (2008) Enterprising Third Sector Action Plan 2008-11.

http://www.scotland.gov.uk/Topics/People/15300/Actionplan3

Scottish Parliament, 1999, col. 767 quoted in Dacombe, R. And S. Bach (2009) The Evidence Basefor Third Sector Policy in Scotland: A Review of Selected Recent Literature, Edinburgh: ScottishGovernment Social Research.4

Scottish Government (2007) Concordat between the Scottish Government and local government.http://www.scotland.gov.uk/publications/2007/11/13092240/Concordat


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partnership and enable local authorities to respond more effectively tolocal needs by reduced micro-management

Finance and funding enabling financial decisions to be taken locally,reduced ring-fencing and being able to redeploy efficiency savings

Reduced bureaucracy reduction in the number of funding streams andmonitoring and reporting to central government and a more focused andproportionate inspection regimes

Single Outcome Agreements to align local policy with overallgovernment targets, taking account of local priorities.

5

2.6 Community Planning in Scotland is defined as a process "by which the publicservices provided in the area of the local authority are provided and theplanning of that provision takes place".

6Local authorities have a duty to

initiate, maintain and facilitate this process A number of public sectororganisations are statutory partners in Community Planning. These include thelocal authority, health board, fire, police, enterprise agency and transportpartnership. In addition to the statutory partners, all Community PlanningPartnerships (CPPs) involve third sector partners alongside some other public,voluntary, community and private sector partners.

2.7 From 2009-2010, Single Outcome Agreements (SOAs) were to be agreed withCommunity Planning Partnerships rather than local authorities. Increasingly,Community Planning Partnership are engaging with TSOs and otherstakeholders in decision-making and funding agreements at local level.

2.8 The Concordat partners joint commitment to responding to the Crerar review7indicates a commitment to reduce bureaucracy. This will lead toimprovements in performance management and self-assessment across thepublic sector thereby enabling a more focused and proportionate inspectionregime

8

2.9 Best Value is a non-statutory duty on public service organisations in order tobalance quality and cost considerations in improving the performance of publicservice organisations

9. It aims to secure continuous improvement in

performance taking into account economy, efficiency, effectiveness, equality

opportunities and sustainable development. Best Value Audits 2 (BV2) iscurrently being developed and tested in order to supersede Best Value. TheBV2 approach will seek to promote more proportionate scrutiny, encourageself-evaluation, and prioritise community engagement and partnership-working.

5Scottish Government (2009) Invitation to Tender Document: The Opportunities and Challenges of

the Changing Public Services Landscape for the Third Sector in Scotland: A Longitudinal Study,Edinburgh: Scottish Government Research.6

Local Government in Scotland Act 2003.http://www.legislation.gov.uk/asp/2003/1/contents7Scottish Government (2008) Cabinet Secretarys Statement on Scrutiny Improvement: Supported

Briefing. http://www.scotland.gov.uk/topics/Government/PublicServiceReform/Independent

ReviewofReg.CabSecBrief8Scottish Government (2007) Concordat between the Scottish Government and local government.

9http://www.scotland.gov.uk/Topics/Government/PublicServiceReform/14838


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2.10 The Enterprising Third Sector Action Plan aims to support enterprisingbehaviour in the third sector so that it may play a full role in the development,design and delivery of policy and services (including the opening up of publicsector markets to TSOs). As a result, a third sector funding package of over

90 million was made available over three years from 2008. This included theScottish Investment Fund (30M) and the Enterprise Fund (12M) to provideinvestment funding for the sector as well as other funding to support the ActionPlan10. The Third sector Action plan helped to open markets to third sector andgave support to TSOs to develop their capability and sustainability. It alsosupported the training of staff in third sector organisations in the tenderingprocess and through the Suppliers Development programme and the guide toTendering for Public Sector Contracts

11.

2.11 The key actions of the Enterprising Third Sector Action Plan (business support,opening third sector markets and funding and investment for third sector) will

be continued in the next phase of engagement and support, which is to bedelivered via overarching outcomes focussed contracts.

2.12 The public-social partnership model involves the public sector and the thirdsector working together to design and deliver public services with the aim ofimproving outcomes for local communities. The government is also keen thatthe model will see the private and public sectors make greater use of thirdsector expertise and services

12. The model is currently being piloted with 10

Public-Social Partnerships (PSPs) for a period of 2 years from 200913.

2.13 The Social Return on Investment model (SROI) is a means of understandinghow TSOs (and other stakeholders) deliver social and environmental benefits.It aims to help TSOs demonstrate their impact more clearly as well as assistingfunders and commissioners to make more informed investment or purchasingdecisions.14 SROI identifies and describes the social value being createdthrough an organisations activities (and the investment needed to deliverthem). Uniquely, it seeks to place a financial value on this social value. Using aset of financial accounting principles and standard calculations, SROI analysesproduce, as part of a wider report, an index of social return. An index of 2:1shows that for every 1 invested, 2 worth of social value is returned.15

10Scottish Government (2008) Enterprising Third Sector Action Plan 2008-11

http://www.scotland.gov.uk/Topics/People/15300/Actionplan11

Scottish Government (2008) Enterprising Third Sector Action Plan 2008-11 page 8, also see JointStatement on the relationship at local level between Government and the third sector, September2009, Scottish Government, Solace Scotland, COSLA and SCVO.http://www.scotland.gov.uk/Topics/People/15300/JointThirdSectorStatement point 28.12

Scottish Government News Release (12/06/09) Public Social Partnerships Welcomed at:http://www.scotland.gov.uk/News/Releases/2009/11/2312183013

The Public-Social Partnership Project website at http://www.pspscotland.co.uk/node/1714

Scottish Government website (accessed October 2010) at

http://www.scotland.gov.uk/Topics/People/15300/SROI15Scottish Government (2009) SROI Report Investing the Impact, Edinburgh: Scottish Government at

http://www.scotland.gov.uk/Topics/People/15300/SROI/SROIReport


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2.14 The Third Sector Task Group was created in 2008 for a fixed term with aspecific remit to improve coordination of third sector organisations in Scotland,local authorities in Scotland and the Scottish Government. With representationon the Task Group drawn from the third sector, local government and ScottishGovernment, the group worked across four main areas:

Partnership examining how government and TSOs could work togethereffectively to deliver services within the context of Single OutcomeAgreements, Compacts and Community Planning Partnerships.

Funding relationships developing more effective and sustainable fundingfor the third sector

Building Capacity increasing opportunities for TSOs to develop theirskills and knowledge through collaboration and support

Monitoring change evidencing the contribution of the third sector toSingle Outcome Agreements, Community Planning and to measure theturnover of the social economy

16.

2.15 The main output from the Task Group was the Joint Statement on theRelationship at Local Level between Government and the Third Sector

17. This

statement is signed by the Scottish Government, COSLA, SOLACE (Scotland)and SCVO and aims to contribute to establishing a successful relationshipbetween the Scottish Government, Local Government and the third sector.The statement outlines recommendations on working relationships in relation tofunding, shared services and Best Value, application processes for grantfunding, strategic commissioning and procurement, re-tendering, EuropeanProcurement Law, monitoring, reporting and evaluation and partnership.

2.16 The recent economic downturn and current and future budget constraints arelikely to have a significant impact on the third sector in Scotland. Indicationsfrom SCVO 18 suggest that the economic downturn has caused increaseddemand for frontline services provided by the voluntary sector in Scotland atthe same time creating financial difficulties. Sources of public and privatesector income, as well as donations and access to finance are increasinglyunder pressure. This was acknowledged by the Scottish Government whichset up a Roundtable Meeting on Resilience in the Third Sector held on 14 April2009 in order to discuss some of the issues.

19The 2.2M Third Sector

Resilience Fund aimed to support the third sector through the recession and

mitigate the impact of recession on front line services.20

2.17 It is not yet clear what the overall financial and wider impact will be on thesector, although organisations are likely to face both challenges and

16http://microsites.scvo.org.uk/taskgroup/Home/ViewInformationItem.aspx?i=912;

17Joint Statement on the relationship at Local level between Government and the Third Sector,

September 2009, Scottish Government, Solace Scotland, COSLA, SCVO.http://www.scotland.gov.uk/Topics/People/15300/JointThirdSectorStatement18

SCVO (2009) The Voluntary Sector in Scotland and the Economic Downturn: A review ofpublications. http://www.scvo.org.uk/19

Scottish Government website (accessed 2010)

http://www.scotland.gov.uk/Topics/People/15300/Resilience20Scottish Government (2010) News Release 2.2M for Scotlands third sector.

http://www.scotland.gov.uk/News/Releases/2010/02/15105819


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opportunities in the future. For instance, in 2009, the Accounts Commission forScotland indicated the priority need for local authorities to achieve costefficiencies through shared services and to view the establishment of effectivepartnership working though local Single Outcome Agreements and CommunityPlanning Partnerships21. This may create new opportunities through increased

partnership working, but is likely to create challenges for some organisations.There is speculation that the third sector could become more differentiated withorganisations competing for grants, contracts, staff and donors.

22There may

also be downward pressures on pay levels of staff within the sector.Indications also suggest that it may be getting more difficult for socialenterprise activity with SCVO reporting that self-generated income had fallenfrom 50% to 45% during the recession (between 2007 and 2009)

23.

21SCVO (2009) The Voluntary Sector in Scotland and the Economic Downturn: A review of

publications. http://www.scvo.org.uk22

Harrow, J. (2009) Thistles, roses, thorns: some reflections on the third sector/government relations

and policy expectations in economic downturn, ESRC/SCVO Public Policy Seminar Series Recessionand the Third sector, 13 February 2009, Edinburgh. http://www.scvo.org.uk23

SCVO (2010) Scottish Voluntary sector statistics. http://www.scvo.org.uk


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3 METHODOLOGY

3.1 Year One (baseline) methodology involved qualitative research within 20voluntary sector organisations based in Scotland. The methodology involvedtwo key components: (1) In-depth case studies with eight TSOs and; (2) threefocus groups involving a total of twelve additional TSOs.

Selection of case study and group work organisations

3.2 Following discussions with the Scottish Government and Project AdvisoryGroup, a framework was developed for the selection of research participants.This was designed to ensure the establishment of a purposive sample oforganisations working in different: policy areas (with a mix of social care,

healthcare, and employability/economic development/regeneration providers);geographies (based in different locations across Scotland); scales (with a mixof larger and smaller organisations included); and to include some socialenterprises. The selection of focus groups was based on similar lines withindividual focus groups bringing together organisations with strong agendas inthe following areas: (a) equalities; (b) social care and health care, and (c)employability/economic development/regeneration.

3.3 Potential participants were identified through a database of 685 possibleorganisations provided through the Scottish Council for Voluntary Organisations(SCVO). The final selection of possible organisations was selected in order toachieve the balance required by the framework (above). All organisations werethen contacted and invited to take part in the research for a period of threeyears as either: (1) a case study carried out once a year; or (2) to participate ina focus group carried out twice a year. Most first choice organisations werehappy to participate, with the few who declined being replaced by other suitableorganisations. In this way, the participation of all Year One (baseline)organisations was obtained.

In-depth case studies

3.4 In-depth case studies were carried out within eight third sector organisationsbetween December 2009 and May 2010. Two initial organisations were invitedto take part in piloting the research tools. These took place between December2009 and January 2010. Feedback from the pilots informed the refinement ofthe research tools and methods used in subsequent case studies.

3.5 Case studies involved collecting appropriate documentary evidence includingannual reports, policy statements and other organisational information.

3.6 In-depth face-to-face interviews were carried out with staff at different levels ofthe organisation. These included: chief executives; other senior

officers/managers; research/policy officers; business/planning managers;operational and line managers; and front line staff delivering services. The


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selection of staff for interview was decided in consultation with the main contactfrom the organisation (usually the chief executive or another member of thesenior management team) and actual staff interviewed varied depending on thesize of the organisation and availability of appropriate functions. A list ofinterviews carried out with each organisation can be found in Appendix A. A

copy of the main interview schedule is attached in Appendix C.

Three focus groups

3.7 Twelve organisations were divided into three focus groups of four participants.Each focus group pulled together organisations with strong interests inparticular areas. These included: (a) equalities; (b) social care and health care,and (c) employability/economic development/regeneration

24.

3.8.1 One representative from each organisation (usually the Chief Executive or amember of the senior management team) attended one of the focus groups

carried out between April and June 2010 using a common discussionframework. A copy of the Agenda for Focus Groups is provided in Appendix D.

Anonymity

3.9 In order to protect the anonymity of individual respondents who took part in theresearch, quotes have been labelled with generic job titles (e.g. SeniorManager, Manager, Officer). A brief description of the type of organisation isalso provided after each quote. Additional background information on theparticipating organisations is provided in Appendix C. This is intended to givecontext to the overall report and individual quotes without revealing the identityof participating organisations. All organisations were happy to be identified astaking part in the research (although not necessarily to have particular opinionscredited to them). All participating organisations were asked to approve theapproach to anonymisation that has been used. A full list of participatingorganisations is available on the project website athttp//www.thirdsectorproject.org.

Analysis

3.10 Thematic cross-case analysis of the year one (baseline) data was carried out.

This forms the baseline by which subsequent waves of data will be compared inorder to track changes.

24Note that these categorisations were not applied rigidly and there was some overlap in the activities

of organisations.


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4 THE CONTRIBUTION OF THE THIRD SECTOR TO PUBLICSERVICE DELIVERY

4.1 The third sector as a whole makes an important contribution to the delivery ofpublic services in Scotland across a number of sectors. With around 45,000organisations employing 137,000 staff, the sectors annual income in Scotlandwas estimated to be 4.36 billion in 2008-09

25. The Enterprising Third Sector

Action Plan identifies an important role for the third sector in sustainableeconomic growth in Scotland through its contribution to solidarity, cohesion andsustainability (Ministerial Forward). In particular, the Plan and the JointStatement recognise the sectors work with the most vulnerable groups:

Third sector organisations provide services to some of the most vulnerable

people in Scotland and as such have an important role in delivering betteroutcomes for our communities. 26

4.2 Of the 20 organisations who participated in the research, most werepredominantly funded by the public sector27 (see Appendix B) with just twoclassifying themselves as social enterprises (where a substantial portion oftheir funding is self-generated). This contrasts with the general picture inScotland where across the whole sector in 2008-09 self-generated funding wasthe largest component of total income (45%), with public sector funding (43%)being the next biggest component.28 This reflects the interest of this researchwhich is focused on particular sectors (e.g. health, social care and learning)which are heavily involved in public service delivery and thus in receipt ofpublic sector funding.

4.3 Participants in the research were asked for their views on what was distinctiveabout the third sector and what added value they thought their organisationand the third sector generally brought to public service delivery. Theirresponses fell into three general areas which are covered below: the diversityof the sector; distinctive approaches to service provision and other distinctivefeatures, such as how TSOs operated.

The Diversity of the Sector

4.4 The third sector in Scotland is diverse covering many different types of servicesand clients, as well as being different in size, function, capacity and geographicspread. The TSOs that participated in the research included a wide range oforganisations of different sizes, both local and national who worked across anumber of sectors including health and social care, employability services,

25SCVO (2010) Scottish Voluntary sector statistics. http://www.scvo.org.uk


September 2009, Scottish Government, Solace Scotland, COSLA, SCVO. Point 2.

http://www.scotland.gov.uk/Topics/People/15300/JointThirdSectorStatement27Based on information available on organisations websites and annual reports.

28SCVO (2010) Scottish Voluntary sector statistics. http://www.scvo.org.uk


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learning providers and supporting a wide range of clients. A list of organisationprofiles is provided at Appendix C.

4.5 The diversity across the sector was acknowledged by many of the researchparticipants. Some felt that other stakeholders (including the Scottish

Government) sometimes did not recognise this diversity:

The important thing for government to recognise is that the third sector must bestratified. It is too big, too complex, too diverse, to categorise it only as the thirdsector.

Senior Manager, Local Employability Provider

4.6 Some participants felt that there were big differences between large andsmaller voluntary organisations in the way that they operated, with very bigTSOs operating like private sector companies. They also felt that smallerorganisations were more vulnerable in the current economic climate,

particularly when competing with larger organisations. However, one nationalorganisation took the view that it was their responsibility as a large organisationto help safeguard smaller organisations through partnership working (also see9.20).

4.7 Key differences between large and small organisations included that largeorganisations had developed more intensive and professionalised structures topursue funding, improved organisational efficiency and customer relations toan extent that was difficult for smaller TSOs. However, the scale of largeorganisations also had an impact on their ability to work in smaller local areas:

The big charities...have obviously much more the capacity for fundraising, PRand large scale campaigns. They are able to play the heart strings withindividual donors UK-wide, but they do not fit as well at the middle level, say ata village or community level, like so many places are in the Highlands. This iswhere smaller voluntary groups can build an identity with their client group.

Senior Manager, Health and Social Care

4.8 Therefore there were disadvantages and advantages associated with large andsmaller TSOs. Particular differences in experience based on size oforganisation are highlighted throughout the report where these arose.

Approaches to Service Provision

4.9 Many participants in the research mentioned that the particular contribution ofTSOs to service provision was their specialist focus and expertise working withparticular client groups and/or issues. In many cases, this meant working withvulnerable, disadvantaged and hard-to-reach groups of people, in some casesengaging in more preventative-focused work. Some felt that their particularspecialist focus had the potential to fill gaps in the provision of statutory servicebecause they dealt with clients that were often not dealt with by other services.Some felt this was particularly true of smaller organisations who were able to

fill a unique niche:


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They have a very very focused approach, they work with a very small numberof people, theres only a couple of staff but they fill a niche that no one elsecould as effectively for the people they work with.

Senior Manager, National Health and Social Care Provider

4.10 An important role for some social care TSOs working with a broad range ofvulnerable clients (from young to older individuals with specific care needs, towhole families in complex situations) was to work within communities to avoidthe institutionalisation of clients rather than attempting to integrate them into amainstream service provision.

4.11 In dealing with particular, often vulnerable groups, some respondents statedthat a key feature of the services provided by their organisation was providing aperson-centred holistic approach to clients, which tailored the service to aparticular clients needs. In this example the respondent discussed providinglearning tailored to the individual and providing support which other learning

providers do not, such as pre-learning (e.g. getting clients ready to take up acourse).

The other thing that is distinctive as well is I think if you asked 500 learners orso what the service looked like they would all say something different becauseeach person does get a tailored service.

Senior Manager, Regional Learning Provider

4.12 However, although this approach made sense to several TSO practitioners,one respondent felt that it caused several clashes with the approach tocasework employed by statutory service providers.

For over 10 years weve had real problems in working on caseloads and doingpanel reviews of clients due to work practice. By default we would follow whatthe client wants to do in their lives, while a social worker would rather advise aspecific course of action.

Senior Manager, Local Health and Social Care Provider

4.13 Several respondents also mentioned a particular ethos that existed within theirown organisations. This was the provision of quality values-based servicesfocused on improving the experience of the client, sometimes in antithesis to a

cost-driven funding environment. Also see Cost vs. Quality 6.27-6.31.

Ive always thought of the sector as quality of life is what we are about.Anybody in the local authority or NHS can provide a service. We are the onesthat provide the service that makes the difference to the quality of life.


4.14 As part of this, some respondents felt that their organisations links with localcommunities were a distinctive feature of their approach, in particular contrastto the public sector:

We are out there, we are reaching communities areas, communities targetgroups. (that) public sector services frequently cant reach or cant work with


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in the same way. We are opening a gateway to them through partnershipwork.

Senior Manager, Equalities FG

4.15 Links with local communities could also be facilitated by employing local people

to deliver services, as a number of organisations did. This was also the caseeven within national organisations where services provided in specific localareas employed local people.

4.16 However, some organisations were examining their approaches to serviceprovision in the light of the new, more challenging, economic landscape andconsidering whether they should continue to provide some services:

Funding changes mean that we have to make choices. Do we continue toprovide certain public services? Is this a market we want to be in? Over the past year or so we have made decisions to move out of providing services

because of the funding. We are at a phase just now where we are doing afurther review of services.


4.17 This raises questions about the extent to which the distinctive approach toservice provision among TSOs can be sustained in the face of severe publicspending cuts.

Other Features of the Third Sector

4.18 A number of respondents felt that the third sector and/or their particular

organisation operated in a different way compared with the public sector; inparticular, that the third sector was much more flexible and able to respondquickly to changes, with flatter management structures and less bound byregulations than the public sector. This resulted in it being leaner and morecost-effective:

[We are] much more flexible, much more responsive. You know there are costsavings, I can build capacity, I can take away capacity, that's another importantthing to say for people losing jobs actually, but I can do that much, much morequickly than the local authority can do. That's part of the flexibility and things.

Senior Manager, Employability FG

4.19 The third sector was also perceived by some to be naturally more innovativeand creative:

The people who work in the voluntary sector like that chief responsibility to trysomething out that's a bit different and maybe a wee bit more challenging.

Senior Manager, Equalities FG

4.20 However, there was also a concern among some respondents that thetendering process reduced innovation and that the sector was already very

lean and there was a limit to how far it could be squeezed.


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Summary

4.21 The third sector in Scotland is diverse covering many different types of servicesand clients, as well as being different in size, function, capacity andgeographical spread. There were important differences between larger and

smaller organisations in their capacity to compete for funding in a challengingeconomic climate.

4.22 TSOs made a particular contribution to service provision through theirspecialist knowledge and expertise working with vulnerable, disadvantagedand hard-to-reach clients and providing specific services. This meant that theyhad the ability to fill unique niches in service provision.

4.23 A distinctive feature of many services provided by TSOs was their person-centred holistic approach tailoring services to particular client needs. This iscontrasted with some approaches taken by statutory services.

4.24 TSOs had a specific ethos of providing quality values-based servicesfocusing on improving the experience for clients. This was sometimes inantithesis to a cost-driven funding environment. TSOs were also often rootedin local communities.

4.25 TSOs were characterised as operating in a more flexible, responsive waycompared with the public sector because they were leaner, had flattermanagement structures and were less bound by regulations.

4.26 Some felt that the third sector was more innovative and creative, althoughtendering presented challenges to maintaining these features.


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5 CHANGES TO THE POLICY ENVIRONMENT

5.1 This chapter examines the key changes that have taken place in the policyenvironment in Scotland in recent years and the impact and issues thesepolicies have raised for TSOs.

5.2 The 2007 Concordat between Scottish Government and local authoritiestransferred greater control towards local authorities and fundamentallychanged the relationship between national and local government in Scotland.The first section of this chapter examines some key issues for TSOs emergingfrom this including working across different local areas, clarity of policy, andincreased localism. Community Planning Partnerships are the mainmechanism through which local community planning is devolved and is a key

element in recent government policy.

5.3 Since March 2008 there has been a major programme of change in third sectorinfrastructure with the announcement that, from April 2011 the ScottishGovernment would no longer fund networks of Councils of Voluntary Service(CVs), volunteer centres, local social economy partnerships and socialenterprise networks in their current form. This has led to the development ofnew third sector interfaces in each community planning area across Scotland,which typically involve the above networks. As is discussed in 5.20 below, thepre-existing infrastructure bodies received cautious, but positive, support fromthe third sector in Scotland. At this stage of this study, it is obviously notpossible to predict either how effective any new interfaces will be or how theywill be perceived by the sector. However, this is clearly an important issue tobe followed through on in future iterations of this study.

5.4 The main goal of the new infrastructure is to align the third sector with theCommunity Planning Partnerships (CPPs) and the Single OutcomeAgreements. By March 2011 each local authority area will have a third sectorinterface. They will vary in legal form but will all fulfil four functions:

Support to voluntary organisations operating in the area, both local andthose national organisations that deliver services at the local level

Support and promotion of volunteering

Support and development of social enterprise

Connection between the Community Planning Partnership and the thirdsector.

5.5 In the second section we examine TSO perceptions of CPPs - and other waysin which they attempt to influence the policy agenda. Finally, we review theimpact of changes in specific policy areas on TSOs and examine experiencesand perceptions of Single Outcome Agreements.


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The 2007 Concordat

5.6 Most of the third sector representatives had found the effects of the Concordatbetween Scottish Government and local government a particular challenge.The Concordat reduced ring fencing and pushed control of some budgets to

local authorities and Community Planning Partnerships29

thereby transferringthe contract holder/funder from the Scottish Government to individual localauthorities.

5.7 A number of respondents acknowledged that the Concordat had resulted inopportunities for local planning and services to be tailored to local need. Forinstance, one third sector representative perceived the Concordatarrangements to be beneficial in terms of giving local authorities the discretionto prioritise. Another pointed out that while there may be some confusion at thelocal authority level in adapting to this change, it nevertheless has given asense of shared purpose across the public and third sector in the delivery of

services, particularly in the Highlands area:

The Concordat and the NPF has made a massive difference. A colleagueworking as a civil servant described this perfectly as there being moreinvolvement and intelligence in the conversations going on at local authoritylevel. This is not a political comment; its simply that people can now see whatdirection we are working towards for the whole of Scotland.


5.8 Also, it was felt that the approach to work promoted by the Concordat andSOAs, while being somewhat unclear, promotes a working culture in whichproviders are given the space to work out how best to meet the targets:

[Skills Development Scotland] got all the providers together over two days, andthen outlined what they wanted to achieve through it....When we met a yearlater, we all knew it was successful and making a big difference in theHighlands, and more importantly, we knew what part we had played in this.


5.9 While some favoured the principal of the Concordat there were mixedresponses to its impact in practice. Particular issues mentioned included: (i)

problems working across many different local areas; (ii) Lack of a cohesivepolicy steer and an accountability gap, and (iii) issues around increasedlocalism.

29For instance the Working for Families Fund (WFF), to assist disadvantaged parents improve their

employability, was rolled up into the Fairer Scotland Fund. WFF had covered 20 local authorities, but

while most areas continued to resource the local WFF project after the Fund was no longer ring

fenced, others local areas did not (e.g. Glasgow).


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Challenges working across many different local areas

5.10 The Concordat arrangements are reported to have created some practicalchallenges for national TSOs working in multiple areas in terms of now needingto negotiate with individual local authorities and Community Planning

Partnerships separately. This represented a particular challenge for small,resource-limited TSOs. This latter groups perhaps deliver services over alimited number of areas, but even larger organisations perceived problems interms of the time and resources available:

The Scottish Government devolving the funding to local authorities means thatfor a national organisation with 17 staff and 3 people in fund-raising roles youthen have to talk to 32 different local authorities...and look at 32 SOA and workhow you are going to work. That is a challenge, instead of talking morecentrally to fewer people.

National Officer, Regional Learning Provider CS 6 Scotland

Lack of a clear and cohesive policy steer and an accountability gap

5.11 The Concordat introduced a new relationship between Scottish Governmentand Local Government which is based on mutual respect and partnershipwhere both Scottish and Local Government are politically accountable andfinancially responsible to the public30. However, some participants felt that thisopened up the possibility of a lack of clear and cohesive policy steer and anaccountability gap, where it was not clear whether local or central governmenthad responsibility on some issues.

5.12 Prior to the Concordat, some respondents felt that the ring-fencing of fundsallowed TSOs to quickly establish where government funding priorities lay.They felt that central government had provided a clear direction as to howmoney ought to be spent and what areas they considered important. Fundingpriorities would then feed through into each of the 32 local authorities allowingTSOs to have a reasonably clear understanding of where funding would bedirected. Post-Concordat, and decision making has been devolved to each ofthe 32 local authorities making it difficult to navigate policy priorities.

The Concordat has made it much more difficult to use central policy to get an

indication of the direction of central funding. [In the past] central governmentgave direction very explicitly to local authorities about the intent of that policyand around spending in relation to that. Post Concordat there is muchless central control on funding priorities and much more local control.


5.13 This also potentially resulted in what some referred to as an accountabilitygap where it was not clear who was actually responsible for devolved fundingthrough SOAs and CPPs:


September 2009, Scottish Government, Solace Scotland, COSLA, SCVO.


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Now if you go to the Scottish Government and say youre concerned about[expenditure on a particular issue], they will say that is devolved... to the localauthorities, they devolve it to the CPPs. It does create something, occasionally,of an accountability gap because if you then go to the CPPs theyll say: TheScottish Government doesnt fund us enough, so you get this ping pong of

who is actually responsible.Senior Manager, National Health and Social Care Provider

5.14 One respondent suggested that although there were democratic arguments infavour of the Concordat devolving decision making down to a local level, it wasalso felt that this had made it very difficult for TSOs to use political policy toinform their decision making now that the role of the Scottish Government inlocal spending decisions was significantly reduced.

I would prefer to see political direction if not attached to funding at leastespoused more clearly...[In the past] separate funding streams were for very

specific bits of work, whether it was violence against women or childrensservices and they had really strong messages about those being the importantissues. Tying it to funding is one way, but tying it to the more aspirational stuffin terms of the five strategic targets, 15 national outcomes, 49 local indicators,it does seem to be a mish mash.


Increased Localism.

5.15 The increased localism agenda, where responsibility for allocating funding isdevolved to the local level in order to meet local priorities, had resulted in what

some perceived as the transfer of responsibility from Scottish Government tothe local level, with Scottish Government taking a hands off approach and notexerting enough control over local policy.

5.16 Increased localism was viewed as resulting in CPPs and LAs only beingconcerned with meeting the needs of their local areas and not focused onwider national issues. Therefore, they were less able to see the bigger pictureacross Scotland in terms of policy and provision:

One of the frustrations of the localism agenda is it really does cause hugeproblems for seeing a bigger picture... I think thats a real difficulty, not just forthe national organisations and some of those have already shut down, but forthe local areas, because they are limiting what could be delivered locally, byonly looking locally.


5.17 These moves towards localisation were framed as having disempoweredpolitical leadershipin the view of one respondent. Some felt that there was nolonger the national political drive to push the rolling out of strategies throughoutScotland. National government was felt to have weakened its input into theshaping of public service delivery.


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5.18 This perceived lack of a sense of the bigger picture also meant that areas werenot learning from each others experience and sharing good practice. Somefelt it could also result in losing out on economies of scale.

So now you can have the most effective programme going in one area and

you cannot roll it out. So you cant get the economies of scale. You cant getthe benefits that would accrue to people from the lessons learned in a pilot.

Senior Manager, Employability FG

5.19 A respondent in one national organisation also felt that the emphasis onlocalism had led some CPPs to overlook national providers, even though theseservices were still being provided by local people.

Community Planning Partnerships

5.20 New third sector interfaces in each Community Planning area across Scotlandare being developed and will become the key mechanism by which the thirdsector interfaces with the government. However, at the time the research wascarried out, the way in which third sector organisations interfaced with planningwas in a transitional phase, with CPPs being perceived as the key way in whichthe third sector were involved in community decision-making. Therefore thissection examines TSO involvement in CPPs before looking at other ways inwhich TSOs influenced policy and decision-making. Clearly, the role of the newinterfaces will become an important element of this study in future years.

5.21 A key potential mechanism for supporting this role is the work that third sector

intermediary bodies (traditionally, such as Councils for Voluntary Service) canundertake. As previous research 31 has indicated these bodies can playimportant roles, including developing the capacity of third sector organisationsto engage with government, providing a conduit for contact between the sectorand government and acting as an advocate and focus for third sectorengagement with government at all levels. Equally this prior research alsoindicated that there is a potential for conflict between third sector organisationsand these intermediary bodies if these latter bodies are perceived ascompetitors for resources and influence, rather than supportive mechanisms.In general, the third sector organisations in this study reflected both theseviews. The general, positive, tone best conveyed as cautious support. The role

of these intermediary bodies is also being renegotiated in Scotland asinterfaces between the sector and government. Whilst there was little directevidence upon third sector views on this change, this is an important theme thatwill need to be followed through in future iterations of this study.

Perceptions of CPPs

5.22 There were varying degrees of involvement in CPPs among the third sectororganisations interviewed. Some were involved with just their local CPPs,

31Osborne, S. (1999) Promoting Local Voluntary and Community Action. The Role of Local

Development Agencies, Joseph Rowntree Foundation, York.


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some were involved with some CPPs within the areas they operated but not inother areas, while some (mainly smaller organisations) were not involved at all.

5.23 There were difficulties for individual TSOs in participating in CPPs, particularlysmaller organisations, because of limited time and resources available to them.

This was compounded by the difficulties of engaging with multiple CPPs acrossareas and CPP sub-committees within the same areas. Some felt that thestructure of CPPs in some areas also created difficulties for the involvement ofthe third sector because of the existence of specific sub-groups:

Theres only 4 out of the 12 neighbourhood partnerships that have voluntarysector sub groups... you know I don't feel engaged by the main partnershipand...only 6 out of the 12 have employability sub groups so....theres a hugeamount of work to be done....at grass roots level in terms of setting up the newstructure.


5.24 Some respondents felt that the structures of CPPs could not effectivelyrepresent the whole of the third sector in the community planning process,especially given the diversity in the sector, thereby limiting the sectorsinfluence on policy via this route:

I think there is actually no real consultation about what can be provided. Sowhat happens is that there is probably one local representative representing allthe voluntary sector who come from very very different disciplines and tellingthe community planning department what the voluntary sector want...

Manager, Regional Learning Provider

5.25 There was also a perception that while CPPs attempted good practice inengagement across sectors, they do not explicitly recognise the potentiallyconflicting agendas across participants, nor offer a clear method for resolvingthese:

There is supposed to be a range of organisations represented [on CPPs], butin reality there will only be a few. It is an attempt at user-involvement [whichis] progressive and representative. But this is difficult in practice and there are

clashes, as the representative can only truly represent their stake.Senior Manager, Local Health and Social Care Provider

5.26 On the whole, most respondents felt that their organisations had limitedinfluence on policy. Of the few who felt it had been effective these wereconfined to some areas and did not extend across others:

I think our involvementvaries across the country because we work in 24 of 32local authority areas. I cant give you one definitive answer but the area wherewe are very active... I think we have a very good local voice There are otherareas, where not just us but the voluntary sector generally have maybe

struggled a bit to get round the table.Senior Manager, National Health and Social Care Provider


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5.27 CPPs therefore did not appear to be perceived as an effective way for TSOs toinfluence wider policy. Some organisations even felt that their ability toinfluence policy had diminished with the onset of the community planningprocess. The experience of some in CPPs had led this organisation to de-

prioritise their involvement:

I think its been a confusing experience, yes I think we felt quite excited by itand then I don't know that it has delivered the kind of representation andinfluence that wed hoped it would have in the early days. So we haveprobably de-prioritised our involvement in it to be honest.


The new third sector interfaces are intended as a solution to these perceivedproblems of the current system of involvement. An important element of futureyears of this study will therefore to be track the effectiveness of these new

structures against this baseline, as well as any new challenges that they maycreate.

Other ways of influencing policy

5.28 Some organisations had found more effective ways to influence policy thanthrough the community planning process. These included through partnershipswith the private sector and other forums. For instance, one organisation wasinvolved in various employability forums and felt they had a bigger voice withinthat because its all...like minded organisations.

5.29 The above perceptions of CPPs by TSOs suggests that there is indeed a needfor new interface structures currently being developed in order to moreeffectively represent the third sector in policy making. At this stage of thisstudy it was not possible to predict either how effective any new interfaces willbe or how they will be perceived by the sector, but this is something that will befollowed through in future iterations of the study.

Policy Priorities

5.30 Respondents were asked about changes to the policy priorities of localauthority funders in recent years. Firstly, respondents perceived there to bevariations between local authorities in policy priorities. Secondly, they felt there

had been a shift towards a more employability-focused agenda and finally,priorities were perceived to be focused on specific client groups.

5.31 In terms of variations between local authorities, a number of respondents feltthat certain types of policy area were prioritised over others in some localauthorities but not others:

Authorities are taking different approaches...I know for example in [LA X] allsupport services were seen together in terms of learning disability, physicaldisability. Whereas [LA Y] for example is taking an approach that's less abouttraditional services and more about looking at ways to support peer support

and preventative work.Manager, National Health and Social Care Provider


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5.32 Many respondents felt there had been a shift in more recent years towards amore employability- and outcome-focused agenda. TSOs had responded byadapting the focus of their work to fit with these policy priorities also seeAdapting Services 7.2-7.8. Amongst most of the social care organisations

interviewed, this meant a change of focus from health-based approaches suchas providing day-care and occupational therapy to focusing on employability:

Over the years [name of TSO] was a glorified day centre. Whats happened inthe intervening years is the realisation that employment is actually good for youand that people despite sometimes having severe conditions can progressfurther in their recovery in employability than previously was thought. So on theback of that, the employability agenda within the health and social care domainhas grown in importance.

Manager, Local Employability Provider

5.33 One respondent felt that there was too much emphasis on fitting in with thenational agenda of employability when this was not necessarily appropriate totheir clients. For instance, personal development rather than improvingemployment outcomes was often the main goal of their clients:

[Theres an] obsession with employability as being an outcome and as beingthe only desirable one at the end of the day [Our] ethos is empowerment,and personal development is often the goal of many of our learners, andvolunteers. I feel that we have to keep manoeuvring around that, particularlyfor funding streams so that it fits with the employability agendas.

Officer, Regional Learning Provider

5.34 Policy priorities were perceived to be targeted to specific groups of people forexample the under 25s, the over 50s, parents with addictions and BMEcommunities, but this left others who did not fit into these categories unable toaccess support:

We couldnt get that very broad funding, but what we did get was a variety ofdifferent funders... With [the] Working for Families Fund we did work withasylum seekers and refugees. Now we cant do that work unless the asylumseeker is under 25 and a parent. Somebody who doesnt fit into these boxes,

we cant work with them...So if you are not a parent with an addiction, we cantwork with you.Service Manager, Local Learning Provider

5.35 Some felt that this would have a negative impact on community cohesion,since some groups were being excluded from access to service provision in thecommunity:

A major issue here is, what if you dont fit in to a particular silo?... It is divisive ifyou are trying to provide cohesion and harmony with the community.

Manager, Local Learning Provider


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5.36 Another respondent felt that certain groups who were vulnerable but not facingimmediate crisis would not be helped because they were not prioritised:

Funding streams are not available for this cohort [those who face moderatedisadvantage]. That is the group that we have targeted that we want to assist...

and whilst the people that are closest to the jobs market will be catered for andwill be outcomes driven, (so) if we take somebody in, if we work with them andthey get a job then we get paid. If they dont get a job then we dont get paid.That will be the reality of the marketplace.


5.37 For some social care organisations, the commitment at National Level topursue the person-centred approach (e.g. Getting It Right For Every ChildandSame as You? 32 ), was also described as positively influencing the policyenvironment for TSOs, as it legitimised their approach to delivery of socialservices. Since the Concordat, these policies have become much more present

at Local Government level, urging the service delivery system to change:

Single Outcome Agreements

5.38 As part of the devolution of decision making to local authorities, SingleOutcomes Agreements (SOAs) were established between central governmentand each of the 32 local authorities. Since 2009-10 the SOAs have beenagreed between each Community Planning Partnership (CPP) and the ScottishGovernment (CPPs are made up of local authorities and UK and Scottishgovernment bodies, for example the police, Skills Development Scotland, NHSand Job Centre Plus). The third sector is represented on each CPP through the

third sector interface. CPPs agree their strategic priorities for their local areaand express those priorities as outcomes to be delivered by the partners, eitherindividually or jointly. The outcomes explicitly contribute to the relevant ScottishGovernment priorities as set out in the National Outcomes as well as localpriorities. Hence local authorities and CPPs are required to work towards thefulfilment of relevant outcomes.

5.39 Some respondents in organisations were positive about the introduction ofSOAs (at least in the beginning), for instance, in terms of local organisationsworking to the same framework, providing focus for an organisation to worktowards and giving a competitive edge against other service providers.

5.40 However, as we have already seen in relation to policy priorities (many ofwhich will be filtered through SOAs) there were variations within local areasbetween SOA priorities.

32Getting it Right for Every Child - is a Scottish Government programme that aims to improve

outcomes for all children and young people. http://www.scotland.gov.uk/Topics/People/Young-People/childrensservices/girfec; The same as you? A review of services for people with learningdisabilities - Scottish Government (2000) Learning Disability Services Reviewhttp://www.scotland.gov.uk/ldsr/docs/tsay-00.asp


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You have in theory local outcome agreements which are based on nationalpriorities and you also have each of those organisations at a local level to workto a common crib sheet as it were. The reality is that they all work differently.they interpret the national and local agreements quite differently; there are

different terms, different ways of doing things, different personalities. If you aretrying to develop pan-Glasgow services then you are really going to strugglenow.

Manager, Local Learning Provider

5.41 At the time of their introduction in 2007, one organisation sought to ensure thattargets set out under the SOAs underpinned organisational thinking. However,SOAs were viewed as being too vague to provide clear guidance to directorganisational decision making, so in spite of initial enthusiasm for meetingtargets set out under the SOAs, it was felt that they did not contain sufficientdetail to enable service delivery and care plans to reflect their aims.

When that came out (SOAs) there was a real focus on the 15 Outcomes. Butonce it got down to planning, service delivery, care plans, outcomes forindividuals, its difficult to make the connections. One of the problems is thatdisability wasnt seen as a separate strand of any of the OutcomesI think ittook the sector a while to realise that we are contributing to the overall healthand wellbeing of the country.


Summary

5.42 Whilst the principle of the 2007 Concordat (more local control over planningand services) was sometimes supported, with new opportunities for localservices to be tailored to local needs, there were also practicalchallenges.Some key issues identified included:

(a) Practically, negotiating separately with individual local authorities and CPPscould be difficult in terms of time and resources for national TSOs workingacross multiple geographical areas,(b) Some felt that devolving greater decision-making to local authorities hadresulted in policy that was unclear and lacked cohesion and resulted in an

accountability gap where it was not clear whether Scottish Government, localauthorities or CPPs have responsibility for policy, and(c) Increased localism and the focus on local needs may have resulted in adecreased ability to see the bigger picture of policy and provision acrossScotland, including limited sharing of good practice across areas.

5.43 New third sector interfaces in each Community Planning area acrossScotland are being developed and will become the key mechanism by whichthe third sector interfaces with the government. However, at the time theresearch was carried out, the way in which third sector organisations interfacedwith planning was in a transitional phase, with CPPs being perceived as thekey way in which the third sector were involved in community decision-making.


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From the point of view of the TSOs participating in this research there wassome doubt over the effectiveness of CPPs in terms of being able to representthe whole of the third sector and the limited extent of TSOs influence on policy,leading some to de-prioritise their involvement in CPPs. However, some TSOsfelt they were able to influence policy more effectively through other means

such as through partnerships with the private sector and other forums. Equallythis involvement was not a priority for all TSOs.

5.44 In terms of specific policy priorities respondents felt that: there were variationsbetween local authorities; there had been a shift towards a more employability-focused agenda and finally; priorities were perceived to be focused on certainspecified groups of clients at the expense of others.

5.45 Single Outcome Agreements (SOAs) likewise were perceived to be subject tovariations between local authorities and CPPs. Some found SOAs to not bespecific enough in order for them to inform organisational policy.


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6 CHANGES TO THE FUNDING ENVIRONMENT

6.1 A significant theme to emerge from interviews with TSOs was the ongoing andanticipated changes to the funding environment. Almost all TSOs anticipatedchanges to funding as a result of cuts in public expenditure being discussed atthe time by all the main political parties. Interviews took place prior to the May2010 UK general election, so there was some uncertainty as to the shape ofthe political landscape after the election. However it was widely expected thatwhichever political party won the election, there would follow significant cuts inpublic spending so as to reduce the size of the public deficit. There was awidely held view that there would be cuts of up to 20% in the level of fundingreceived by TSOs over the coming years.

6.2 This chapter begins by examining the funding cuts (both actual andanticipated) that have been experienced by organisations taking part in theresearch, including the impact of these on organisations, staff, clients and thesector as a whole.

6.3 In spite of the anticipated cuts in public spending, there was a widespreadrealisation that the previous decade had seen an unprecedented level ofgrowth for TSOs as the process of tendering and contracting had created newbusiness opportunities in the context of public spending. However, competitivetendering also created a number of issues for TSOs. These centred aroundshort-term contracts, feedback and dialogue with funders, the tens

opportunities and challenges for the third sector - year 1/3

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