When progressive ideas are used to conceal market agendas

This piece from the UK Social Work and Action Network describes vividly how supposedly progressive reforms and ideas like social inclusion, social innovation and user centred services are deployed to conceal market based agendas and how, as a result, they end up destroying effective human and community services.

The piece also demonstrates that the use of market based approaches damages the most vulnerable and the most disadvantaged and undermines the capacity of human and communty services, thereby creating  the conditions for even more marketisation and privatization.

Sadly this situation also applies here in Western Australia.

I work for the NHS within Community Mental Health Services as part of a team whose remit was to enable service users to access educational and employment opportunities. We ran what I considered a unique and progressive service. We worked in a building not far from the city centre. We had an ICT suite where service users could gain qualifications and with our support create or update their CVs.
 

Within the centre we had a café where service users could gain work experience to gain relevant qualifications with currency in the catering industry. It was also a place where service users could come along for a hot meal, a coffee and a chat.

Our reception was also staffed by service users gaining work experience and relevant qualifications. We delivered in house courses in Building Confidence and Self Esteem. The team alongside ex service users also developed and delivered workshops to service users based on the Recovery Model.
 

We worked closely with local education providers delivering courses such as: Rights and Responsibilities at Work, Working in Retail, Working in an Office, Working in Customer Services and Working in the Public Sector. We also worked closely with Welfare Rights who regularly delivered workshops and advice sessions on benefits, debt and housing issues. We also had thriving Art and Drama projects which rebuilt the confidence of people who had endured a variety of mental health difficulties.

The whole project was person-centred, the idea being that it was a sort of stepping stone which gave them renewed self confidence and skills to move on with our advice, guidance and support into mainstream opportunities to enhance their life chances.

The whole project was person-centred, the idea being that it was a sort of stepping stone which gave them renewed self confidence and skills to move on with our advice, guidance and support into mainstream opportunities to enhance their life chances.

Then came the reorganization. The reorganization was pushed through using ideas and progressive language originally developed through the previous New Labour government’s Social Inclusion Unit. Day Centres we were told were bad, they simply institutionalized people with mental health difficulties. The whole new focus was to create services without buildings.

During my time working in Mental Health Services I have seen some pretty awful places. Day Centres which offered patronizing services that oozed with boredom with no real progression for service users. Our project was not like this.

The NHS Trust I work for was at the time of our reorganization looking at squeezed budgets and the cost incurred in leasing buildings. They do have a building programme for new inpatients units, but as yet not one brick has been laid and in some instances planning permission is not yet approved, yet they closed the only inpatient ward in the City.

Our project has changed beyond recognition. Some staff will be taking pay cuts in the reorganization which has had a massive impact on morale. We are now expected to record all service user contacts and outcomes from each appointment on 3 separate and different I.T. systems. But more importantly we can no longer deliver the range of opportunities to service users. Everything has to be accessed in the wider community. The café and service user reception has gone. We cannot make appointments to see service users in the building when we are offering advice, guidance and support. We now have to go out in twos to the service users home to ascertain from the service user what we can do for them to promote their social inclusion. The outcomes of the first contact with the service user are discussed at a team meeting and then a member of the team (an education worker, employment worker, volunteer coordinator, arts worker, sports worker) is allocated to the service user, depending on what kind of ambitions they have.

This is followed by a telephone call to the service user and arrangements are made to meet them somewhere in the community. The advice from the trainers from the Social Inclusion Unit was that a café may be a suitable venue for the first appointment. Yes a public place when the service user may be disclosing personal and often quite distressing information.

As a team we are now finding that many opportunities in the community for our service users: colleges, arts projects, leisure centres, etc are few and far between because of the current round of cuts .The local council has made cuts to the passport to leisure scheme which helped people on benefits access leisure centres etc. The local colleges have changed the criteria for fee wavering for people on benefits meaning that many of our service users are unable to access educational opportunities. As the cuts start to bite deeper there will be fewer and fewer opportunities for our services users in the wider community.

To make staff morale worse our building may be given to different teams within the Trust. We have recently heard that we may be supplied with laptops and work from our cars, dropping into Trust buildings to use docking stations to send data to the I.T. systems. We will probably end up as lone workers apart from one afternoon per week when we attend a caseload allocation meeting. It seems to me that our service has now been slimmed down to such an extent it is ripe and ready for privatization.

Welcome to modern, progressive mental health day services in 21st Century Britain.

Abbott led opposition to adopt UK style Big Society policies

 Writing in the Sydney Morning Herald Lenore Taylor traces the influence of the UK Conservative Government's Big Society agenda on the Coalition Opposition's social policy agenda for the next election.

Coalition frontbenchers have been instructed to slice away federal bureaucratic oversight of aged care, childcare, employment and family services in a bid to devolve government power and deliver budget savings through public service cuts.

The Coalition, which needs to find more than $30 billion in spending cuts, will pledge cuts to the bureaucracy, but says it will not hit frontline services. The policy is in line with the controversial ''Big Society'' philosophy of British thinker Phillip Blond, who was in Canberra this week for meetings with Coalition leader Tony Abbott and most of his frontbench.

Coalition families spokesman Kevin Andrews told The Saturday Age he had developed the model for stripping unnecessary federal oversight of federally funded services delivered by community and private organisations.

But Big Society rhetoric provides cover for severe austerity measures and a fundamental transformation of the delivery of publicly funded human and community services. 
 
In the UK Big Society rhetoric was used to justify sweeping cuts to public services, to community services and even to the community and voluntary organisations it was supposed to nurture.
 
It has also produced the largest ever privatisation of human and community services in UK history with large swathes of the human and community services industry now under the control of private corporations.

Despite promises by the UK Government that local devolution would primarily benefit small community based not- for- profit, it has been large corporations who have been the real winners.

Taylor notes, correctly, that:

But in Britain, the outsourcing program that was supposed to benefit little community groups ended up giving enormous contracts to large corporations, such as Serco, which runs Australia's detention centres, and in some parts of Britain now runs all the government-funded schools.

The implications of the Big Society agenda for Australia are well documented in a recent report by the Centre for Policy Development titled Big Society: How the UK Government is Dismantling the State and what it means for Australia. 

The Report shows among other things that the reality of Big Society Agenda is vastly different to its rhetoric. The impacts of the Big Society programs in the UK have included:

• An £81 billion cut in public spending over four years including an average 19 per cent budget cut to government agencies, 60 per cent cut to the budget for new public housing and £7 billion cut to the welfare budget.
• The UK’s public service is expected to shrink by up to 710,000 public servants over six years.
• Corporations and the largest charities have dominated the commissioning process: 35 of 40 Work Programme (employment agency) contracts were awarded to corporations.
• Cameron’s budgets have dealt a £5 billion funding cut to the UK’s community sector and funding cuts of £110 million to 2,000 UK charities
• The number of people employed in the UK’s community sector fell by 70,000.
• Local government budgets were cut by more than a quarter in 2010-11 resulting in staff cuts of 10-20 per cent and widespread cuts to programs.
• During 2010-11, public sector employment fell by 4.3 per cent. Private sector employment increased by 1.5 per cent.

Under outcomes based contracting small agencies are the big loser

More evidence that outcomes based contracting approaches such as payments by results and prime/lead contractor models are bad for small not- for- profit human and community services organizations.

In the UK outcomes based contracting models lead to the issuing of larger contracts which primarily benefit large corporate prime contractors.

Outcomes based contracting has the effect of forcing smaller agencies out of public procurement processes.

This report is from the UK online publication Third Sector

Heather Wilkinson, chief executive of Striding Out, which provides career support and training, told Third Sector her organisation had been affected by changes to the way government departments commissioned contracts for the Work Programme, the Skills Funding Agency and the National Citizen Service. 

"The challenge is that these departments are now only looking to work with large corporate prime contractors with a view to only issuing bigger contract values, and they are paid-by-results models."

Striding Out had been in talks with a prime contractor about NCS services, she said, but "due to its profit margins, the money it offered us for delivering our element of work was unviable".

"The money is there and the contract opportunities are there, but the problem is that we cannot get to them," she said.

"I don’t feel there have been fewer opportunities, but our ability to bid competitively and fairly has been reduced."

James Allen, head of public services and partnerships at the National Council of Voluntary Organisations, said the introduction of payment-by-results contracts, such as those offered to charities under the Work Programme, had proved particularly problematic.

"Payment-by-results is a significant barrier to organisations bidding for contracts in the first place," he said.

"The problem is moving from a model of upfront payments and grants straight to payment-by-results without the transition being skilfully managed. Organisations are already under pressure and margins are tight. They won’t bid because they cannot take the risk."

Why should the not-for-profit sector and the vulnerable pay to increase the profits of the private sector?

Richard Denniss of The Australia Institute poses a very good question in this piece in the Canberra Times- why should the not- for- profit sector have to pay for Government to reduce  red tape to increase business profits when the private sector pays nothing?

The ACT Chief Minister Andrew Barr recently announced plans to increase the efficiency of the ACT government and reduce the cost of ''red tape'' for business by creating a Red Tape Reduction Panel to identify, remove and improve outdated, unworkable and illogical business regulations''.

But to pay for this the ACT Government is imposing a $1.4 million tax on the not- for- profit community sector to fund these initiatives. However, the private and business sector who will primarily benefit from the reduction in red tape will pay nothing.

So as Dennis points out, the not-for-profit sector will have to pay for the privilege of less red tape while the taxpayer foots the bill for delivering the same benefits to the for-profit business sector.

"While these initiatives make sense, especially the commitment to remove illogical regulations, it is hard to see why the community sector should be asked to incur the costs of meeting some of these commitments. The government has argued that because the highly efficient community sector would benefit from a reduction in government red tape they should be the ones to pay for it. This argument is as novel as it is confused.

The more money the community sector can raise, and the more volunteers they can mobilise, the more services they will provide to the most vulnerable members of society. There is no profit margin; there is no incentive to do anything other than to support the community. On the other hand, the less money they receive from government, the fewer services they can provide.

It therefore follows that it is not the community sector that has ''lost'' $1.4 million dollars, it is the community. If the government believed that the level of support provided to disadvantaged children and families caring for those with disabilities was adequate, then it might make sense to reduce funding for community services. But if the government believes that the disadvantaged in our community have all the support they deserve it is not clear where or when it came to that conclusion.

It is great that the government is trying to reduce the amount of red tape it produces. Governments should always be on the lookout for opportunities to streamline their processes. But it is not clear why the government has adopted such a different approach to reducing red tape for private business and reducing red tape for the community sector.

As pointed out by the Greens leader, Meredith Hunter, while the community sector is being charged $1.4 million to fund the streamlining of the ACT, the government is footing the bill for the cost of reducing the cost of red tape incurred by the for-profit sector.

Economic rationalists are usually big on user pays, but, in the case of this new tax it is not the users that will pay, but the most vulnerable in our community. While it makes little sense for a government to charge any sector of the economy for increasing the efficiency of government, it makes no sense to ask the not-for-profit sector to pay for the privilege while the taxpayer foots the bill for delivering the same benefits to the for-profit sector. Australia is one of the lowest taxed countries in the developed world and, while Canberra has the highest average income in the country, it has the lowest average tax rate.

If our elected representatives wanted to spend more on community services they could. If our elected representatives wanted to return the benefits of reducing their own red tape to the community sector they could.

Unfortunately for those in the greatest need, the ACT government has gone in a different direction"

The dangers of outcomes based contracting models

As the Barnett Government and the funded not- for- profit sector in Western Australia move to adopt outcomes based contracting models for the delivery of human and community services, the evidence from the UK demonstrates the danger to the sector of such models.

The use of outcomes based contracting models- such as prime or lead contractor models and payment by results models- within the UK Government Work Programme is having devastating impacts for small agencies and disadvantaged service users.

The UK experience is that outcomes based contracting and procurement- in its many forms- results in Governments, or the agents of government, moving public money into bigger contracts and bigger services, which increasingly are awarded to large private and multinational corporations  such as SERCO G4S, A4E, Virgin, Ingeus (There Rein's company) and Capita to name but a few.

The majority of contracts are won by large for profit corporations who claimed that they would sub-contract smaller local not- for- profit providers to deliver tailored specialist services, however this has not happened.

Many of the smaller not- for- profits were used as "bid candy" to enable the corporate providers to tender for and win the contracts and were promised work as sub-contractors. Such work (and income) has not eventuated and even when it has major delays in being paid have severely affected the income and cash flow of small agencies.

The result is that more and more smaller agencies are having to shut down due to cash flow problems and loss of income. And the closure of small agencies with specialist knowledge and expertise and strong local links directly impacts on the most vulnerable and disadvantaged clients.

The Third Sector, an online  publication for the sector reports that:

Eco-Actif Services, a community interest company based in Sutton, south London, and Red Kite Learning, an education and learning charity in Southwark, south London, both closed in July and blamed the government’s move to large-scale payment-by-results contracts.

Lin Gillians, chief executive of the LVSC, said: "Over the past two years, longer, larger contracts for employment programmes have been almost exclusively awarded to large private sector providers.

"The intention was that specialist voluntary and community sector providers would deliver tailored support as subcontractors – however, as time goes on we are seeing this specialist provision disappear.

"This raises enormous concerns about the quality of support available to the thousands of Londoners facing serious or multiple barriers to work."

The homelessness agencies the Single Homeless Project and St Mungo’s have also withdrawn from the Work Programme in recent months, citing problems with the way it is run.

Gillians said: "The government urgently needs to review the impact of this commissioning model on disadvantaged job seekers and special employment providers before more damage is done.

"This isn't about blaming the Work Programme or prime contractors – it's about providing appropriate support to give everyone a fair chance to work."

Brendan Tarring, who founded RKL 25 years ago, said: "The Department for Work and Pensions needs to reassess its one-size-fits-all mentality and acknowledge that individually tailored employment support for vulnerable jobseekers is best delivered by innovative mid-sized charitable organisations."

Service delivery, social enterprise and the transformation of the not- for- profit sector

In this piece from the UK online publication Third Sector Lucy Sweetman asks some important questions about the future of third sector not -for- profit organisations.

Writing about the UK experience, Sweetman suggests that the increasing focus on service delivery and winning contracts to deliver services on behalf of Government, coupled with the uncritical adoption of the rhetoric of social enterprise and business has fundamentally transformed the sector's ethos and purpose.

And Sweetman argues that it is the most disadvantaged and vulnerable, the very people  the sector exists to serve, who are worse off because of these transformations.

The situation she describes in the UK is unfolding here in Western Australia.

Sweetman writes:

I’ve been worried for a long time that the sector’s charities have been drifting too far from their campaigning and fundraising roots and into service delivery. What started out in the sector as an interesting stroll down a path towards the creation of diverse public service partners has opened up into a gigantic free-for-all.

Predictably, the sector is now populated with social enterprises, social businesses, community interest companies and others, all willing to be in receipt of the state’s dollar to deliver our public services. And they are all competing with the charities that paved the way through the Compact.Public service delivery is now a vast and open market.

Ask Serco.

But when the large children and young people’s charities prefer to call themselves ‘social businesses’ in order to compete in this overcrowded marketplace, we move inexorably into territory where charitable purpose becomes meaningless and even undesirable.

For vulnerable and disadvantaged young people this is not good news. As we have seen with the Work Programme, the need to meet targets in order to justify or even receive funding for a service, leads to the people with the most complex needs being ignored. They are those who cannot be ‘resolved’ or moved on quickly and inexpensively.

So if charities stop thinking like charities entirely, who will be there for the most  disadvantaged,  those most in need of the long-term, expensive solutions? And who will take the time to set up and fund the types of projects that have less tangible outcomes, like those devoted to raising young people’s self-esteem or engaging them in the arts?

A crises parly caused by decades of market driven reform

photo courtesy of ABC News and Micaela Rehle, file photo Reuters)

The crises in the aged care sector is indicative of what lies ahead for the human and communty service sector more broadly.

It is the culmination of 2 decades of market driven reform in which the provision of care and the delivery of human services is marketized, privatized and corporatized.

The report below is from ABC News:

The aged care sector in WA says nursing homes are sacking staff and cutting services in a bid to stay viable, following an overhaul of Commonwealth funding.

Providers predict they will receive up to $24,000 less for each elderly person in their care, under the new funding arrangements.

The head of Aged and Community Services WA, Stephen Kobelke, will attend crisis talks with dozens of stakeholders today.

He says the cuts have put pressure on an industry already struggling to cope.

"Is it sustainable to remain in residential aged care?

"They're the things they'll start to look at; WA providers are deeply concerned about their ability to operate, or in fact their desire to do so.

"They want to look after older people but they've got to have the tools."

Mr Kobelke warns companies have no choice but to cut services and staff.

"Rural providers have already needed to start some sort of downsizing," he said.

Mr Kobelke says the industry is already doing it tough thanks to WA's workforce shortages, building costs and isolation.

More evidence on the failure of the privatization and outsourcing of human and community services

Excellent piece by Bill Mitchell ( Billy Blog) on the two decade long failure by Federal Labor and Conservative Governments of the privatisation and outsourcing of human and community services in the employment support field (what is  now known as the Jobs Services Australia Network).

A 2002 report by the federal Productivity Commission described the Job Network as a ‘managed’ or ‘quasi’ market for the provision of subsidised employment services, which aims to mimic the activities of competitive markets by allowing scope for competition, flexibility in service delivery, rewards based on outcomes and some degree of choice for the unemployed.

First, the Job Network comprises multiple independent agencies, each having a share of a common system of public service provision. Second, the agencies will be a mix of profit and not-for-profit organisations; and third, job seekers do not purchase services but have services purchased on their behalf by government.

Under the Job Network, the government was a purchaser and regulator of employment services, not a direct provider. The role of government was to award contracts through a competitive tender process, regulate providers, determine standards, and to collect and disseminate performance information.

However, this perverse “quasi market” soon revealed it was not immune from market failure.
There was policy schizophrenia in expecting an outcome-based funding model for employment services to deliver ‘better and more sustainable employment outcomes’ in the absence of concomitant policies to alleviate the macroeconomic constraint and create real employment opportunities.
In a highly demand-constrained labour market, characterised by persistent unemployment and marked regional disparities, it was always unclear how the supply-side focus of the Job Network could be effective.established a new industry – with private parasites pursuing a profit motive by meeting perverse performance targets specified in their contracts. These agencies were meant to support the unemployed but quickly assumed a police-type role imposing fines and disciplining the unemployed.

The system failed to achieve any of its stated purposes which were, of-course, not the real roles that the government was interested in pursuing anyway...........................................................................................

Subsequent evaluations of the effectiveness of the Job Network showed it failed to provide sustained employment prospects for the vast majority of the case load.

One of the features of the system that was most repugnant was known as “breaching”. The Government of the day (in 2002-03) reacted to the early criticisms of its failed program by reinforcing what it called the Active Participation Model – aimed at reducing the outlays that were rising as unemployment continued to increase in the face of the on-going failure to stimulate aggregate demand.

The reality is that the new compliance regime that the Australian Government introduced did not address the substantive cause of the mass unemployment – the failure of the economy to provide enough jobs.

It established a new industry – with private parasites pursuing a profit motive by meeting perverse performance targets specified in their contracts. These agencies were meant to support the unemployed but quickly assumed a police-type role imposing fines and disciplining the unemployed.

The system failed to achieve any of its stated purposes which were, of-course, not the real roles that the government was interested in pursuing anyway.

Fighting the business and corporate takeover of the not-for-profit sector

I have been warning against the corporate and business takeover of the not- for- profit human and communty services for years.

The takeover takes many forms, but is intensifiying as Governments outsource more and more public services and public functions to large corporate providers.

In his book Small Change: Why Business Won't save the World Michael Edwards also warns against the corporate and business takeover of the not-for-profit sector.

A review of Edwards's book has appeared on this blog here.

So I was interested to read this piece by Simone Joyeaux on Edwards's book on the US journal Non- Profit Quarterly. Joyeaux writes:

In sum, philanthrocapitalism claims that the “traditional ways of solving social problems do not work, so business thinking and market forces should be added to the mix.” Or, in other words, “business thinking and market methods will save the world.” (And make a lot of money for a limited number of people, too!) Now that’s where I get stuck, and so does Edwards: the excessive admiration for business thinking and market methods. Let’s see…would that be General Motors’ almost-bankruptcy and the 2010 BP oil spill? I guess all those philanthropic responses to natural disasters, civil rights, poverty, education, the arts—from NGOs and millions of people—don’t count for much? Weren’t sufficiently efficient? Didn’t produce meaningful and long-lasting results?

It’s human to want quick solutions and facile answers. But nonetheless, it reflects a dangerous naïveté and an insulting lack of awareness and understanding about what is required to make change. For example, this philanthrocapitalist approach hopes to fix the problems caused by capitalism. Honestly, I’m not trusting that. This approach fixes problems but doesn’t change the underlying systems like racism or sexism. I want more than Band-Aids; I want real change. Moreover, philanthrocapitalists represent only a small portion of our society, but hold a disproportionate amount of control. That doesn’t work for me. I believe everyone should and must have access.

Philanthropy—and the value of the nonprofit sector—is about social transformation. Edwards justifiably asks, “Can these new approaches transform societies, or do they simply treat the symptoms of social problems in more efficient ways?” I know my answer. What’s yours?

Sure, philanthrocapitalism can make a difference. It can find cures for various diseases and produce jobs. But that doesn’t fix the systemic issues that confront our society—things like greed and inequality, fear and prejudice, privilege and disadvantage. Edwards notes, “Few areas of business expertise translate well into the very complex social and political problems where solutions have to be fought for and negotiated—not produced, packaged, and sold. And, so far at least, there aren’t many philanthrocapitalists who are prepared to invest in the challenges of long-term institution building, the deepening of democracy, or the development of a different form of economy in which inequality is systematically attacked.”

Economic growth doesn’t fix racism, sexism, homophobia, and the fundamental inequities of our world. Economic growth doesn’t fix poverty, either; just look at the growing disparity in income over the last few decades. As Edwards says, “no great social cause was mobilized through the market in the twentieth century.” And I don’t believe that the market will ever mobilize any great social transformation.

But that’s okay. That’s okay as long philanthrocapitalists quit promoting their excessive value and societies stop looking for quick fixes. Business thinking is different than nonprofit sector thinking. Capitalism—even philanthrocapitalism—focuses on the financial bottom line first. The bottom line in the nonprofit sector is different. The bottom line is mission, not money. The bottom line is the common good, not the marketplace’s good. The result is social transformation, not reinforcement of the status quo. Certainly, nonprofits need to follow some good business practices to stay healthy, but the bottom line is fundamentally different.