Drawn into the spider’s web

A new report from the National Coalition for Independent Action explains how the contracting out of local authority services has drawn charities and community groups into a relationship that now threatens to strangle them. Penny Cole reports.

Across the country the services people rely on to make harsh lives in deprived areas more bearable are being smashed to smithereens. Thousands of community organisations that people have formed on their own initiative are facing closure.

All the facts now prove that the less well off you are, the more the Coalition’s cuts will hurt you and your family. Eight of the 13 youth clubs in Tottenham were closed in 2010/11, as a result of a 75% cut in spending by Haringey Council.

Research from the National Council for Voluntary Organisations shows that charitable organisations face cuts of up to £3bn imposed by local authorities. And this does not include cuts to national programmes directly funded by government departments.

How did independent charities and community organisations, many of them founded by campaigning heroes and heroines to fill gaps left by the state or to right wrongs imposed by the state, become so vulnerable to cuts imposed by the state? How did they lose their independence?

Instead of delivering a range of services themselves, councils have increasingly “commissioned” them from outside agencies. The bulk of social housing, social care, support for elderly people or those who need support to live independent lives, is now delivered either by private or not-for-profit organisations.

The fact that charities must compete for contracts against profit-driven companies who do not actually give a hang about their “service users” has made this an even more poisonous process.

In the past, charities looked to councils or central government departments for grants, which recognised the value of their work but, outside of financial probity checks, left them alone to get on with it. Grants were supplemented by fund raising with appeals to charitable trusts, companies and individuals.

Commissioning has now entirely replaced grants, and councils and government departments now design and tender contracts with the focus on pushing down costs. Contracts do not deliver the best services –  they deliver the cheapest. And the fact that charities have been drawn into this cuts-driven environment means the high standards and ethical agendas they set out with are eroded by the need to constantly provide the same service for less money.

Contracts are frequently re-tendered, sometimes every year, causing instability and misery for the charity’s staff and those who rely on them. Too often, it is those staff who bear the brunt, seeing colleagues made redundant and expected to redivide their work between those who remain.

The charity sector used to be the most radical and innovative. For example, it was here that the idea of locking people with learning disabilities away in asylums for life was first challenged. Charities showed there was no reason why people could not live in the community, usually in small group houses. It is mainstream now, but at the time it caused an uproar.

But as the National Coalition for Independent Action (NCIA) report says, “brand new or innovative work is too high risk for a market-based system and too hard to cost and evaluate”. Commissioning is “people getting what the government says they should get, not the service they need”.

Often councils cynically rely on charities to tender low to win contracts, and then subsidise the service with fund raising to deliver services that meet their own higher standards. In effect, charities are fundraising to subsidise the state.

Increasingly, charities are paid by results, such as the number of unemployed people put into jobs, and this discourages “holistic or preventative services which have less clear or immediate outcomes”. Long term thinking and planning are impossible because contracts are short with no guarantee of renewal and government priorities and funding systems are always changing.

And when services formerly delivered by government departments or councils are put out for tender, the private sector often succeeds by cutting wages, conditions and pensions of staff. Since they are now competing against these private companies, charities are also paying low wages and exploiting employees’ dedication and concern to keep levels of service up whilst pay goes down. Councils are assuming wage levels for contracted out workers that they know their own unionised workforce would never tolerate.

And if you do not hear charities shouting about this, it’s because they know only too well that if you complain about the level of funding, councils will punish you when it is time for contracts you are running for to be re-tendered.

The Coalition’s Localism Bill is simply a means of getting councils off the hook when they cut even deeper. It assumes that if a council closes a service, the local community can take it over and run it “better”, but without any proposal of where the funding will come from.

As the NCIA report says, it is only large corporate charities and the private sector that will be able to take over threatened services. LSSI, an American firm which manages 13 public libraries across the US, has set itself a target to manage libraries in eight British local authorities by the end of the year and to capture 15% of the market within five years, according to reports.

As the NCIA explains, the Big Society is about a big market of fragmented and unaccountable services; big government; big cuts; big bigotry as the idea of “undeserving” makes it into decision-making, and big inequalities.
It is clear that supine local authorities, under whatever political party’s control, are not going to oppose the cuts; in fact they are carrying them out enthusiastically in many areas.

The devastation facing the voluntary sector and in particular smaller, local community groups, is the best argument you could have to form People’s Assemblies in every area. Representing the whole community, they can forge their independence from the state. They can ensure that everyone gets the protection and support they need as assemblies set about replacing the current entirely undemocratic local and national state structures.

22 August 2011

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