TSRC Research Digest:
Have the rules changed?
Public sevices and the third sector 


TSRC research spans the transition from New Labour to Coalition government and consequently provides valuable evidence about some of the key changes that have occurred, as well as revealing continuities in government policy and practice towards the sector.

The commissioning process is one area in which our findings suggest that there has been considerable continuity. Recent research by James Rees, Robin Miller and Heather Buckingham looked at the commissioning of mental health services in Birmingham and the West Midlands, exploring the experiences of a wide variety of third sector organisations, as well as the perspectives of commissioners. They found that a full commissioning cycle was rarely in operation: in reality the process tends to be rather messier than policy documents would suggest. In common with previous research findings, personal relationships, networks and pre-existing trust relations all appeared to be significant in the way that both TSOs and commissioners negotiated the process of winning or allocating contracts. However, the extent of instability and uncertainty in the public sector due to health reforms and redundancies associated with budget cuts did seem to be changing the nature of the ‘game’. This was making it more difficult for TSOs to develop relationships with the relevant commissioners, but also meant that those charged with commissioning services did not necessarily have specialist knowledge of those areas. Some TSOs were pre-empting this by developing solutions to the problems that they knew commissioners would need to address and offering these proactively: not all had such good connections with public sector decision-makers, however.

Commissioning in mental health services contrasts strongly with the Work Programme, another example of third sector service delivery that TSRC research has explored. There are of course commonalities – cost efficiency and measurable outcomes are highly prioritised – but the Work Programme operates on a very different model involving prime contractors, and much greater involvement of private (for profit) sector providers. Research showed that sub-optimal behaviours, such as creaming off the most employment-ready clients and ‘parking’ more challenging cases, were embedded within the Work Programme: many providers saw these as rational responses to the Payment by Results system. There were found to be powerful isomorphic pressures operating on third sector organisations to deliver similar interventions to those offered by the private sector, and the level of resources available to help job seekers was and continues to be extremely constrained. As such, the message to policy makers is that ‘reduced funding levels and increasingly commercial and competitive environment, designed to increase innovation and efficiency, may be undermining the success of the programme even on its own terms’.

In work soon to be published in Social Policy and Administration, Isabel Shutes and TSRC researcher Rebecca Taylor argue that the design and implementation of the Work Programme has increased conditionality not only for participants in welfare-to-work programmes, but also for the organisations that provide them. Their work shows how obliging contracted providers to achieve employment outcomes as a condition of funding can impact negatively on the provision of services to unemployed people, and particularly to those in disadvantaged groups.

These findings are particularly important, given political interest in applying the prime contractor and Payment by Results models in other service provision contexts, such as criminal justice. TSRC’s early research showed that an emphasis on competitive policy may damage inter-sectoral partnerships in the criminal justice system, which could have serious implications for the strategic and significant role that third sector organisations play within it. There is a risk that many third sector organisations will be squeezed out if markets are organised in such a way that only providers with very high turnovers and the ability and willingness to take on high risks – or exclude the most vulnerable clients – are able to compete.

An interesting question is what these findings might bring to current debates about co-production as a means of meeting welfare needs. TSRC research on partnership working both between sectors and within the third sector highlighted the complexity of working in partnership, the importance of trust, and the lack of evidence about the outcomes of such partnerships. Importantly, this work called into question the merit of encouraging third sector organisations to scale up their activities in order to take on a greater role in public service delivery, noting that there are limits to the economies of scale that can be achieved in transactional and personal services where individual relationships are more important than systems in delivering outcomes for users. Co-production represents something perhaps more ambitious still than partnership working, but many of the challenges faced will be similar. For instance, in seeking to integrate the use of labour and resources from the informal sector (family and friends), market, state and third sectors in the pursuit of a certain wellbeing goal, tensions and questions will need to be addressed about the different ways in which these ‘assets’ are valued and distributed in different contexts, both geographically and culturally. Third sector studies therefore have much to offer ongoing debates about wellbeing and public service delivery, but, if the Work Programme is to be taken as an example, a clear message needs to be that without addressing resource constraints, finding sustainable strategies for meeting social needs will be extremely difficult.