Friday 3 July 2009

Embracing Cuts?

Of course it is clear that whoever sits in No: 10 there will be significant cuts in public expenditure. As citizens we should be prepared to take part in the coming debate. More taxes or cuts? Or both? And if cuts where should they fall?

Spending cuts will affect our sector. Grants will be axed or shaved. Programmes cut back or abolished. Contracts not renewed or prices slashed. The danger is our default position will be to fall back on the "no cuts" mentality of the 80s. Argue that the cuts should be elsewhere but our sector must be ring-fenced.

This approach is both intellectually bankrupt and doomed to failure. We need to engage in the discussion about what should be cut and where. We will need to justify our spending too.

In Canada, when the new Liberal Party won the election they had a root and branch of spending, asking do we need to spend this money, what value does it bring and does. The State have to deliver it. I would expect a similar approach from any new Conservative regime.

So let's start to prepare our case now. The recession should have pushed us to consider our own cuts, opportunities for new contracts, mergers and alliances.

So now let's look at the way the public sector provides services and argue how we can do them better and more cost effectively. Why perhaps we should even say "we can do it cheaper".

I realise this rubs against received wisdom '"no to services on the cheap" will be the cry. But actually I believe in many areas our services are both better and cheaper. Look at end of life services. We know that it is cheaper to provide care at home than in an expensive hospital bed. Marie Curie can make a plausible case that this is both more cost effective and its what people want. Yet our system ensures many have to die in hospital when a funding reform could gear up Marie Curie and others to provide that care. And I am not suggesting we abandon FCR. Indeed its clear even with proper funding we can be better.

We know that many of the long term condition charities could provide better care and promotion than the health system where money goes disproportionately into acute care.

We know vast sum are wasted on prisons and care for ex offenders is starved.

So let's argue for sensible cuts where that could lead to better services and reinvestment in TS solutions. Let's campaign for more service provision by our sector. And importantly let's get our case together on our value added and our impact. This will carry more weight than a thousand placards or anti cuts campaigns.

I'd be interested in a debate on this. Whatever your view we have to prepare for leaner times.


Unknown said...

Fully agree with you that the real 'bite' is going to come later, maybe 2011, just when we think we've weathered the worst. Not just in the public sector, but our 'Trust machine' that is the mainstay of organisations like this is going to be stretched and tentative even if interest rates start to rise again.

Also agree that the answer is to market the Third Sector as the amphibious vehicle that can ferry some of our publicly delivered services to dry land, but how can we turn the compound fear of the unknown into a determination to be that professional, cost effective deliverer that you describe? With an already nervous public and a pull towards greater control over expenditure who can undertake the Third Sector repackaging that is still needed to establish our services as the best answer to efficiency rather than the easiest figure to cut on the balance sheet?
Not surprisingly I don't have the answer to my own questions, but there are some powerful financial arguments that are not being made loudly enough, particularly in relation to the prevention agenda. And maybe rather than talking about 'value added' which suggests a kind of optional extra, we should talk about the 'investment value' of the staff and resources that we hold within the sector.

Cliff Prior said...

Good and timely topic to raise. Here are two thoughts. As a sector we have been obsessed with public service contracting and with money in general for a good couple of decades. Is it now time to focus more on direct to public offers like retail social enterprise as well as public giving, and on non financial resources particularly people power.

Our work supporting early stage social entrepreneurs to get started and get to scale shows that public sector contracting can be the slowest and most limiting route. Its a braver move to go to the public but one that can liberate our most exciting ideas. And it also works in some public service areas - the future of social care and perhaps health and education too is personal budgets and individual customers.

People are plentiful in a recession when money is scarce. Volunteering agencies have been reporting increased interest and the same is true for UnLtd Connect, our pro bono support service to social entrepreneurs. The social sector has always been resourced by both money and people, but the balance shifted over recent years. Time to rebalance? and time for our sector leadership bodies to help that rebalance?

Mark Jackson said...

You raise a critical issue. Please be under no illusion that it is not just the Conservatives that will carry out a root and branch review of all public spending. Currently we have a government in paralysis tinkering with a lit match when behind their back is a raging inferno of public debt that has to be resolved by genuine statesmanship instead of petty party politics.
Very recently Lord Darzi (not a professional poltician) warned NHS senior management of a forthcoming "financial tsunami" from April 2011. The best that can be expected is flatlining of the NHS budget for 5 years. With inbuilt inflation linked pay rises and other costs, that effectively means 5 years of a reducing NHS budget. Charities have, at the best, 18 months in which to change their fundraising profile and become far less reliant upon state funding. Additionally, we should be more agressive when it comes to commissioning. You give End of Life Care as an example. The reality is that the NHS only commissions 30% of EOLC; the remainder is commissioned by Third Sector organisations such as hospices. Therefore we should not behave as minority partners grateful for the crumps that come from the NHS's table, but the majority shareholder and dictate more to PCTs what we - and our charitable donors - actually seek in terms of efficient and cost effective services.
We will need to invest in marketing and fundraising staff in order to generate funds to replace those taken away by public sector cuts. In doing this, I would make a plea that we must not become agressive competitors with each other. Far better to behave like adults (unlike the politicians) and see how we can cooperate by working in consortiums, reduce duplication and think at all times of our patients/clients first and organisational status second.