Third Sector Interface network model and Voluntary Action Scotland: evaluation

2. The Third Sector Interface network model - structures and resources

Introduction

While the intention behind the development of the TSI network was to create some clarity and uniformity of Third Sector support across the country, in practice the TSIs are very different in structure, in scale and in the range of services that they deliver.

In this chapter we describe how the TSI model has evolved since it was first conceived and how it is being implemented across the 32 Local Authority areas in Scotland. We also explore the factors that have influenced the differences in the delivery models at the local level. In Chapter 4 we explore how effectively the TSIs deliver the four core functions and the common outcomes agreed with Scottish Government.

An integrated model

Throughout our consultation we explored with the various stakeholder groups the pros and cons of having a single interface locally compared with the historic structures that had been in place prior to the introduction of the TSI network model. The vast majority of people we consulted were of the view that moving to a single interface was an improvement on what had been in place previously.

In particular, consultees identified the key benefits of a single interface as being:

• simplification of the Third Sector support landscape - reducing the number of organisations providing support, establishing a single point of contact and creating the potential to act more strategically;
• creation of a greater pool of expertise leading to better services/better outcomes;
• improvements in collating evidence and intelligence from the Third Sector and feeding this in to policy and practice;
• improved planning and delivery of services resulting in a more co-ordinated approach to support, ensuring that the needs of the sector locally can be better met. TSIs are more able to take a strategic role, focusing on the needs of the sector rather than on issues affecting individual organisations/part of sector;
• improved relationships between local organisations where historically there had been tensions;
• improved representation of the Third Sector and ability to influence;
• improved connections between local partners ( e.g. Community Planning Partners) and local Third Sector organisations;
• creation of a clearer understanding of the scope and purpose of the Third Sector for national organisations which has, in turn, enabled stronger relationships to be built with them.

Figure 2.1 shows that over four-fifths (82%) of respondents to our survey of TSIs indicated that the TSI model has improved delivery of the four core functions at the local level to some or a great extent. Only 3% indicated that it had not improved delivery at all.

Figure 2.1: Overall, to what extent has your integrated TSI model improved delivery of the four core functions at the local level?

However, we also heard that the integrated TSI model was working better in some areas than others and there was widespread concern that under-performing TSIs were tarnishing the reputation of the stronger TSIs. Some people noted concern that this could lead to the model itself being called into question, highlighting that in fact concerns relate to management or governance of individual TSI rather than the model itself.

We consider these management concerns later in this report.

Structure of the Third Sector Interface network model

While the aim of establishing a network of TSIs was to create a single structure for the support and representation of the Third Sector in each Local Authority area, in practice they vary considerably in form and function - in part as a result of historical legacies and in part due to the diversity of areas that they serve, for example, Highland TSI covers an area of nearly 12,000 square miles; and Inverclyde TSI covers an area of approximately 60 square miles.

It was left to local areas to develop their own response to the establishment of the TSI, and each TSI evolved in many areas from the organisations and structures that already existed in the Local Authority area. This has resulted in a mix of single entities and partnership bodies, the latter generally incorporating the Council for Voluntary Services ( CVS) and Volunteer Centre and, where one existed, the relevant social enterprise support organisation or network. There are currently 22 TSIs operating as single entities and 10 operating through partnerships.

In one area the TSI is part of a larger organisation that delivers other services.

In a few areas, there was already an integrated body delivering both CVS and Volunteer Centre functions. For these organisations, the transition to a TSI required little change to existing structures.

Does a single or partnership structure work more effectively?

During the course of our research, we considered the relative merits of the single and partnership structures and specifically examined whether a single entity is preferable to that of a partnership.

There is a clear view among those TSIs in the network who have already gone through the (sometimes complex) process of a merger, that the unified structure has benefits. Specifically, they told us that operating as a single entity improved planning and delivery of integrated services; led to cost efficiencies; and created a "single point of contact" for the sector and partners. Most concluded that it had resulted in a more efficient and strategic organisation, and created more clarity for local Third Sector organisations and Community Planning Partners ( CPP). This was confirmed by other research participants:

"The unified structure is a significant improvement" and exhibited "new found confidence, leadership and direction" (Community Planning Partnership Manager)

Some TSIs also reported that operating through a single structure has resulted in cost efficiencies at the local level, resulting in:

• improved value for money through efficiencies in management;
• rationalisation of back-office costs and other physical resources;
• some TSIs also identified efficiencies in board time.

Views on the effectiveness of partnership structures are more varied. Some TSI consultees (from partnership TSIs) identified a number of specific benefits of a partnership structure including:

• a more equal level of prominence being given to each function - this was particularly the case among Volunteer Centre partners who thought that the function could be lost without a champion;
• more opportunities for cross-referral between services and closer working between partner organisations compared with the situation before the TSI was created;
• sharing the burden of representation and attendance at meetings.

In addition, there is evidence from the depth studies of partnership TSIs delivering clear outcomes for the Third Sector and local communities:

"We are confident that the TSI feeds the views of the Sector into the Community Planning Partnership" (Third Sector organisation)

"There has been a change in the relationship - there is a respect for the Third Sector now - we feel that they listen to us" (Third Sector organisation)

"They [the TSI] engage effectively with the community - they can engage with people and communities in a way that we can't do, they are responsive to the community" (Council Leader)

However, we also identified a number of challenges in some TSIs working within a partnership structure. Some Third Sector organisations who participated in our research, operating as partnership TSIs, told us that they found the structures confusing, not always knowing who the TSI is, or where to go to when they needed support:

"I'm not sure what support we get from the TSI, and what support is from the individual partner organisations" (a local Third Sector organisation)

Some Community Planning Partnership partners and indeed some TSI partners confirmed this position:

"We make the best of the status quo ( i.e. the partnership structure) but it doesn't feel like one entity. A single organisation or a co-located model is desirable. It would be painful to merge, but it would lead to more coherence" (Board member of a partner organisations within a partnership TSI)

"There is a real issue of identity. People don't understand the TSI structure in our area" (A partnership TSI Staff Member)

"The partnership model struggles at times" (a TSI Staff Member)

"The challenge for a partnership such as ours is to appreciate that historical dedicated roles are no longer valid, and that all partners have to appreciate they are now part of an integrated arrangement that requires flexibility and crossover between functions" ( TSI Chief Executive Officer)

TSI Partnerships tend to operate with some form of partnership agreement so that there is something on paper at least that binds the organisations together, but in practice these are only meaningful if the spirit of partnership exists and is adhered to, and each partner feels equally valued and resourced. This appears to not always be the case, for example where the legacy of funding allocations meant social enterprise had to be funded by other partners or the CVS has assumed the role as lead in Community Planning Partnership relations because of historical ties.

We also saw instances of partners producing their own element of the TSI work plan independent of one another, bringing into question the notion of an integrated approach.

Over time, there has been a gradual movement towards the development of single organisational structures, but there continue to exist some structural barriers to amalgamation (including pension liabilities, ownership of assets).

Resources

Funding core functions

As previously stated the TSIs are funded by the Scottish Government to deliver the four core functions. On average the Scottish Government grant is in the region of £200,000 - £250,000. To give some sense of scale of a TSI which relied solely on Scottish Government funding, this level of funding would typically cover four to five members of staff (based on an average mid-range salary of £25,000) and overheads. This might equate to around 1-1.5 members of staff delivering each of the four functions in an area with around 7-800 community and voluntary sector organisations.

While we know that in practice very few TSIs operate only with Scottish Government core funding, it is important to understand the scale of resource that the TSIs receive through their Scottish Government core grant and the implication in terms of the capacity to deliver the core functions.
Many but not all of the TSIs receive additional funding from their Local Authority to support the delivery of core services. Examples include:

• funding from Local Authorities or Community Planning Partnerships and other local agencies to build the capacity of the Third Sector; and,
• funding from Health and Social Care Partnerships to support volunteer development for marginalised communities and capacity-building and micro-enterprise development.

There are also instances of funding being levered in from Voluntary Action Fund and the Rank Foundation and other charitable funders to deliver services that contribute to delivery of the core functions prescribed by Scottish Government.

The additional funding enables TSIs to expand the number of staff and increase the scale and reach of services to the sector.

Some TSIs receive funding to deliver services which are additional to their core services, but support the delivery of core outcomes. For example, funding from Health and Social Care to support Third Sector organisations to engage in the Health and Social Care agenda.

In practice this means that there is huge variation in the scale of 'core services' delivered by TSIs. Evidence from the survey showed that one TSI had three full time staff members delivering core TSI functions to another with 18 full time staff delivering core TSI functions. This is in part due to variation in Scottish Government core grant, but more significantly due to the variation in the levels of other funding being levered in by TSIs to deliver activities which contribute to core outcomes.

Futhermore, external stakeholders reported that there was some confusion about the different levels and scope of services in each area which contributed to false expectations about the level of services that can or should be delivered in all. TSIs reported that the false expectations can also affect their ability to attract funding from sources who do not know or make assumptions about what TSIs are already funded to do:

'We have identified additional funding support in the past but have had applications declined by funders on the basis that TSIs are funded to do this work' ( TSI Chief Executive Officer)

Other sources of income

Most TSIs are in receipt of other sources of funding and deliver a range of different services and functions. In some cases, local and national funders have invested in TSIs to develop and pilot new services and new approaches to addressing needs in communities and to deliver demonstrator projects.
Examples include:

• Funding to deliver projects that engage with disadvantaged groups/support volunteering.
• Community Connector projects which are engaging with disengaged people and supporting them to engage in local services.

Some TSIs are involved in the direct delivery of projects and services such as befriending services, care and repair services, community transport services etc.. These are funded by a variety of charitable funders and sometimes also supported by (or contracted by) Local Authorities:

• These activities are not always new - they can also be a legacy of pre- TSI structures and service delivery models.
• Some TSIs have become involved in direct service delivery because they have been asked to intervene to develop a new service or 'save' a failing local project, frequently where there is no other local organisation in a position to do so (with the ultimate aim of 'floating off' the project once it is sufficiently robust again).
• There are also examples of TSIs developing social enterprises to deliver local services.

As a result, in some areas, TSIs are involved directly in the delivery of servcies to communities. While the delivery of these services is important in addressing the need of communities at the local level (and in some cases generate income for the TSI which support the delivery of core service), the role of the TSI in service delivery is contentious as it places the TSI in direct competition with the local Third Sector. Some TSIs have taken a policy decision not to deliver projects and services in order to avoid this conflict.

Most TSIs also generate their own additional income. For example, some own property and generate income through rental of office accommodation to the sector, and some generate income through the delivery of services to the Third Sector - for example, bespoke training, Independent Examination of Accounts, back office services (payroll and HR) and consultancy services.

Some TSIs act as hosts to other projects (often partnership projects) and generate management fees for hosting these projects. In some cases, the TSI is involved in the management of projects (which might be linked directly to their core function), and in other cases the TSI might only offer premises and provide the 'employer' function for these projects.

There are also TSIs to whom funding has been devolved by partners for allocation and onward distribution, representing a significant progression in Third Sector engagement and control of financial resourcing for the sector. In these instances the TSI will usually secure a management fee for the additional work involved.

Implications of the funding model

Many TSIs have been proactive and entrepreneurial in the development of additional projects and services which respond to local needs. For some, the delivery of projects and services generate income, which helps to fund core services.

While some TSIs are focussed predominantly on the delivery of the four core functions, many deliver a diverse range of projects and services of which the 'four functions' are a relatively small part of the organisational offer. Some are operating effectively like a local development agency - identifying need and opportunities, connecting the sector to those opportunities, but also developing local projects, services and social enterprises which meet local needs, creating volunteer opportunities and creating local jobs.

As a result, TSIs look very different: some are micro-organisations employing a few members of staff which are primarily focused around the TSI 'core functions,' where others are large multi-function organisations with large numbers of staff. This is often deceptive - for example, where a TSI is perceived as having 'lots of staff' but in fact the staff are often dedicated to other functions/services (project funding). It also results in confusion as to what TSI services are.

We examined funding information made available to us from the 11 selected areas (2015-16) which gives a sense of the variation and diversity of funding across TSIs, and the scale of service delivery as a result of each individual TSI's financial standing.

The Scottish Government contribution to total income of the TSI ranged from 10% to 93%of total income.

Across the selected areas, the proportion of funding for core services leveraged by TSIs from sources other than the Scottish Government ranged from 3% to 67%.

Those TSIs which lever in significant amounts of additional funding to support core functions can extend the scale and reach of their services to the Third Sector. Those TSIs which have not been in a position to lever additional funds for these functions have a lower capacity to deliver core services.

Demonstrating value for money

In an environment where organisations have to be accountable and demonstrate value for money, it has been difficult for the TSIs to demonstrate the 'added value' that they deliver. Although the TSIs deliver against a set of common outcomes (in the Common Services Framework) there is no effective mechanism to measure progress toward outcomes.

It is well known that it is challenging for intermediary organisations to measure impact (as their activities deliver outcomes for other organisations) but the challenge for TSIs is exacerbated by a measurement system which is still too focused on activities instead of outcomes.

During this evaluation, we were given sight of the work currently being undertaken by the Services, Quality and Impact Group ( SQIG) - a standing group of Voluntary Action Scotland - on developing a framework that sets out an outcome approach to the work of the TSI network. Whilst this is still a work in progress, we understand that it is working towards developing a set of short, medium and long-term outcomes for the network, and will then define core activities required to deliver these. We reviewed the draft document, and it is clearly moving in the right direction. However, whilst some of the proposed outcomes are clearly focused on the longer term impact that the network will have, some of the shorter term outcomes (being described as the TSI Core Outcomes) at this stage still appear to be quite focused on the current four functions, and on activities rather than real outcomes achieved as a result of delivering the 4 core functions.

Later in the report we consider the need for a shift towards delivery of local outcomes.

Chapter Conclusions

There are a number of significant findings related to structures and resources which have implications for any future TSI model which we outline below:

• The move to integration of functions is generally considered to be an improvement.
• Local discretion has led to TSIs operating through a mix of single organisations and partnership structures.
• There is a consensus that a single organisation is a more efficient and effective vehicle for the planning and delivery of integrated services, but there are examples of partnership TSIs which deliver effectively. However, there are some significant barriers to mergers in some areas including pension liabilities, ownership of assets and historical structures.
• Where partnerships work well, they are characterised by positive relationships between partners, clearly defined roles, and the capacity for a common vision.
• All four core functions are delivered in each area but variation in the level of resources available to deliver core functions, and the differences that exist in approach mean that the original aspiration of the 'common services' has not been fulfilled.
• Scottish Government funding for TSIs is based on an historical allocation. The level of funding allows TSIs to deliver each of the four functions, but on a very limited scale.
• Many of the TSIs lever in funding from the Local Authority/Community Planning Partnership (and others to a lesser extent) for delivery of services which support the core functions. These TSIs can extend their reach and scope of services.
• Where Local Authorities/Community Planning Partnerships have invested in TSIs, this usually reflects strategic commitment to the Third Sector and trust in the TSI as a strategic partner and delivery organisation.