Room for all in public service delivery

Writing in Progress Online Tom argues that there is a place for all sectors in public service delivery but that local coordination is at risk from cuts in council spending. Neither social enterprise nor the private sector is a panacea but both have a role to play.


Nobody is seriously contemplating a future for public services which does not involve the third sector in an ever more prominent role. The ability of charities to deliver local, personal and cost effective services is understood but their capacity to grow to scale remains in question in many cases.

The funding of such services remains problematic as the stream of spending cuts shows no signs of abating; yet the Opposition cannot credibly guarantee that such cuts would be restored in the medium term following a future Labour victory.

But plans for future models of service provision have to be made and made urgently: those responsible for providing, or hoping to provide, local and community services need a stable and predictable future in order to plan ahead. Three considerations should underpin any such plans from any source.

First, local government must play a central role, not necessarily as the major provider but as the major commissioner and guarantor of services. This role should be underpinned by certain basic principles:

  • That accountability, transparency and responsibility for services should be as local as possible
  • That there should be equity of provision, with the greatest public resources going to those in greatest need, and geographical equity with local government having the authority to ensure reasonable access to services
  • That service quality standards should be sought, monitored and rigorously applied.

Secondly, whilst social enterprise (not for profit business with a social agenda) will and should play a greater role in service delivery, it is not a panacea; being a social enterprise (or a mutual) does not guarantee investment or success. But social enterprise is being held back by investment rules designed for large scale capital and it needs to be liberated.

Finally, in an increasingly diverse field of service delivery we ignore opportunities of working with the private sector at our peril. The potential for the corporate citizen, whether multinational or SME, to contribute constructively to communities is immense. Enlightened companies already demonstrate that:

  • They can play a major role in helping charities, social enterprises and mutuals generate capacity, and improve their business planning and ability to win contracts, whilst expanding the companies’ own HR provision
  • In mission-driven partnerships with charities and others they can deliver small scale programmes of social change whilst enhancing employee engagement, reputation and market position (Wates, the construction company, is a good example of this)
  • Through a modest source of investment, such as microfinance or bonds such as Allia offers, they can protect their assets whilst releasing finance for social change at the same time. This is in the private sector’s interest if it leads to a more prosperous, healthy, engaged and content community and market place.

We must not expect too much from charities and social enterprise in the short term; players should not be expected to run before they can walk. Much change has happened under the surface and much more is still to come; our job is to make sure that future change is the right change. Not all existing collaborative schemes (as the Work Programme shows) have got it right.

In Gujarat, Saath is a social enterprise which successfully delivers dozens of different services to hundreds of thousands of people through the medium of partnerships with government, local government, social and private enterprise and charities. If they can do it there, we can do it here.

Labour must engage with this new reality and leave no stone unturned in building alliances and partnerships with all of those who have an interest in a more just society.