Councils asked to 'think big' on saving cash but share out service provision

Eric Pickles, the new government's minister for communities and local government, recently said that he has three "very clear" priorities: localism, localism, and ... localism. "We'll weave that into everything we do, from parks to finance to policy," said the minister. "We are going to shake up the balance of power in this country. We are going to change the nature of the constitution. Be in no doubt about our commitment to localism. I know I look like an unlikely revolutionary, but the revolution starts here." That is pretty clear. But are there tensions between the government's commitment to devolving power out of Whitehall and other aspects of its policies, particularly its efficiency programme, where the emphasis seems to be on large-scale procurement and economies of scale? "This is a huge dilemma for people in local authorities," says Helen Hughes, national adviser on the voluntary and community sector at local government improvement agency the IDeA. "On the one hand, they are being encouraged to buy big, through big procurement exercises, but then we have different government departments telling them to be local and social. So there is a big issue about leadership, because all this means that public managers have to consider taking risks at a time when that really is not easy." Many commentators have pointed out that the UK's government system is one of the most centralised in the EU, so it has further to go than other countries to achieve greater localism. "We live in a society where power is concentrated," says Phillip Blond, who runs the thinktank ResPublica. Blond has been a huge influence on the present prime minister's idea about a "big society" approach, with people taking more responsibility for their own care and communities. He says it is now time for more radical change. "We've been pumping money into a dysfunctional system." For Blond, the time is right to include more social enterprises in delivering public services and harnessing their local capabilities. But doing so will require big changes. "This is an opportunity to move away from restrictive commissioning models," he argues. Instead, he wants to see voluntary organisations and social enterprises forming partnerships with one another and with private sector companies to bid for more work. Charities as commissioners One organisation to aid this process is 3SC, set up last year by 10 funders, all themselves social enterprises, to support third-sector organisations bidding for large contracts. "We discovered the third sector has an immense ability to deliver to a high standard, given this kind of opportunity," says Dee Taylor, communications manager at 3SC. 3SC is structured as a prime contractor that bids to manage contracts on a national or regional basis and then deliver them through a network of member organisations. 3SC writes the bids and manages the contracts; a network of third-sector organisations delivers them as subcontractors within a supply chain. "The speed at which we have grown has shown that we offer a new model to commissioners, enabling smaller charities to be part of the new commissioning environment," says Taylor. Initiatives such as 3SC have been set up as a response to fears that smaller, voluntary organisations, with excellent local knowledge, are being excluded from big government contracts. "The current employment and training marketplace is dominated by large, private sector organisations such as Serco, A4E and Priory Healthcare, and we have recently seen international providers from Australia, the US, Holland and Germany entering the market in the UK," says Samantha Dowling, policy manager at The Social Investment Business. "These new entrants to the market have replaced, in many cases, the provision previously delivered by small, locally based community providers in the third sector. "But it is charities, community groups and social enterprises, not the private sector, that has expertise in working with people who suffer from disadvantage, long-term unemployment, marginalisation, disability, homelessness, and so on," she says, "and many of these crucial issues are, or are about to be, handled at a local level." This on-the ground knowledge, plus the passion and commitment that social entrepreneurs and community groups have in spades, makes the third sector a force for change in an economic downturn that has put many people beyond the reach of mainstream state support, she says. However, Sonia Sodha, head of the public finance programme at thinktank Demos, is less optimistic about how this might work. For one thing, she points out, encouraging the third sector to deliver services may require upfront investment, as do preventive programmes. No matter how much they save in the long-term, such programmes are at risk in today's cost-cutting climate. The reality of what we face, she says, is not so much participatory budgeting at a local level as "participatory cutting". Return to the home page for more on public services