The Opportunities and Challenges of the Changing Public Services Landscape for the Third sector in Scotland: A Longitudinal Study (2009 - 2013): Year 4 and Final Report

5 Conclusions

Chapter 5 considers the four year study itself, the main conclusions, and other issues concerning the future of service providing third sector organisations.

5.1 This four year study has provided a large amount of useful new information, analysis and insight for contemporary and future policy and analytical purposes. It should help inform Scottish and UK Government and local authority policy and practice in the future, as well as that of third sector organisations.

5.2 The study not only provided a cumulatively more valuable store of information but is also likely to have had some influence on the participant third sector organisations and Government views. The process of carrying out the research and meetings resulted in the organisations reflecting on their strategies and actions and learning from the other participants. For the Scottish Government, the process allowed fast or sometimes near contemporaneous feedback on the effects of current conditions, policies and initiatives.

5.3 The archive of the anonymised transcripts stored of all the interviews and focus groups will provide a valuable store for future analysts and researchers. Hence there will be a strong legacy of the project in terms of future research and policy development related to a period of major change for third sector organisations.

Changes in the Policy Environment

5.4 While the principle of localism is often supported, the impact on third sector organisations in practice had been more problematic e.g. organisations having to negotiate with numerous local authorities and 'disconnected' policies.

5.5 The move to greater personalisation of services is seen as a positive step. However, third sector organisations perceive that most Scottish local authorities have yet to fully implement the Self-directed support (SDS) agenda and there are concerns that some local authorities are using it as a cost-cutting exercise.

5.6 Awareness of the recommendations of the Christie Commission was more widespread among third sector organisations by Year 4. While most supported the recommendations and cited that it was an approach that many third sector organisations were taking already, there was concern that there was no additional funding to help third sector organisations implement the recommendations of the Commission.

5.7 The majority of participants engaged with the Work Programme have found that it has presented challenges rather than opportunities e.g. few referrals of clients to them and subsequent loss of funding.

5.8 Most participants stated that they had not prepared for the Scottish independence referendum.

Changes in the Funding Environment

5.9 A persistent theme across each of the four years has been the problem of securing core funding and maintaining internal capacity. The reduction in the availability of funding for core costs has had an impact on the capacity of third sector organisations to retain head office staff, pay for staff training etc..

5.10 In order to facilitate the greater involvement of third sector organisations in service design, the Public Social Partnerships (PSP) model has been developed in recent years. However, experience of them remained limited across the participating organisations.

5.11 A theme emerging from interviews with third sector organisations in Year 4 was the use of re-tendering by local authorities, for services already being provided by third sector organisations. Re-tendering was understood by third sector organisations to often be a cost saving exercise on the part of local authorities.

5.12 The issue of funders and commissioner not meeting their own schedules for announcing the outcomes of applications was becoming an issue in Year 4.

5.13 The problems of cash flow for third sector organisations were also not always recognised.

5.14 Despite the challenges faced by standstill funding or funding cuts, many third sector organisations also felt that some new opportunities for funding were emerging. However, there was concern that new initiatives were being promoted at the expense of existing more efficient and effective projects.

Performance and Outcome Measures

5.15 In Year 4, previous trends in measuring outcomes continued e.g. a focus on outcomes rather than outputs and increased compliance and scrutiny. Some organisations had experienced some changes in the systems used by funders and commissioners to measure outcomes, or had made alterations to their own internal systems.

5.16 The theme of inconsistency in funders' and commissioners' requirements regarding reporting performance and outcomes (relevant also in Year 1-3) continued. Some organisations had tried to directly engage with funders and commissioners to develop universal monitoring or had improved their own internal systems in order to address these challenges.

5.17 The theme of inconsistencies in funders and commissioner tendering information requirements continued, with additional resources having to be spend on providing similar information in different ways.

Partnerships and External Relationships

5.18 While third sector organisations recognise the importance of partnership working, in times of economic pressure organisations may tend to defend their own interests. Specific funding streams and the Public Social Partnership model were cited by third sector organisations as providing the momentum for developing partnerships.

5.19 There is considerable variation in the relationships between third sector organisations and local authorities in different areas. Participants perceived that third sector involvement in local authority decision-making processes was usually tokenistic. By Year 4 nearly all of the participants had heard of the third sector interfaces, but engagement with them was low. There was concern about the ability of intermediary bodies to represent the third sector as a whole.

5.20 The turnover of Scottish Government officials moving posts caused difficulties of knowledge, consistency and duplication for third sector organisations.

5.21 Partnerships and relationships with private sector organisations are increasingly important e.g. because of its leading role in the delivery of the Work Programme; and the importance of corporate social responsibility for private sector organisations.

Governance and Leadership

5.22 Across most of the organisations participating in this research there has been change to senior management teams, Boards of Trustees and governance structures in the period 2010-2013. In Year 4, the composition of Board members appears to have stabilised in many of the third sector organisations, although this was not the case in all organisations. The composition of Boards is changing, in general their role appears to have become more professional and more closely integrated into the overall strategic direction of the organisation.

5.23 Maintaining staff morale in a time of economic uncertainty and dealing with the pressure on organisational budgets are some of the key challenges faced by managers.

5.24 The Self-directed support agenda means that leadership structures are likely to change, to establish a clear link between the service users and the senior management team.

Changing Organisational Structures and Working Conditions

5.25 The internal structure of third sector organisations participating in this research has changed significantly over the period 2009 to 2013 e.g. the structure of senior management teams; the function of Boards of Trustees; the terms and conditions for staff; the mission and purpose of organisations.

5.26 Cost savings were being made through front-line staff wage freezes. This has meant a real terms decrease in take home pay for many third sector staff. Cost savings were also being made through redundancies and reduced working hours for other staff.

5.27 Under personalisation, services will have to be more flexible and responsive to the needs of the customer.

5.28 In addition to those raised in the previous sections, a number of other issues are highlighted by this study. First, there is a need for in-depth knowledge of the development of the third sector, especially, but not exclusively, in times of turbulent change.

5.29 Senior managers from third sector organisations commented that involvement in Community Planning Partnerships and Third Sector Interfaces did not appear to give significant voice to participating third sector organisations. There was a perception that CPPs and interfaces could give more serious consideration to the views and functions of the third sector as part of planning and delivering better public services. A change to the culture of CPPs and interfaces was required to ensure that the contribution of third sector organisations to the delivery of public services was integrated throughout the planning process. Attitudes across public bodies needs to be re-assessed to ensure that the contribution by third sector organisations to public services are discussed and, where appropriate, acted upon.

5.30 The need for support for core organisational capacity (in terms of expertise, training, support etc.) is increasingly difficult to obtain, with one future result perhaps being a greater homogeneity of solutions and lack of innovation in the sector.

5.31 The funding models being used will have profound impacts upon the structure of the third sector as a whole, and different types of third sector organisation (e.g. smaller third sector organisations). It is important that the overall impacts of funding changes be considered rather than just the impact of a single programme or set of projects. The incentives created in the funding processes may have a perverse effect over time. Consideration should be given to having as much consistency across practical bidding documents and processes as possible, to reduce the overall costs to bidders (which should lead to lower public sector costs).

5.32 There is a need for effective forums so that Community Planning Partnerships can learn from each other in terms of their relationships with, and effects on, the third sector. There may also be third sector organisations elsewhere that can fill the local gaps perceived by CPPs. It would be useful to have a systematic evaluation of Single Outcome Agreements across Scotland to identify common gaps, services etc. and the role of third sector organisations in helping fill these. In this context, the recent (2013) report by Audit Scotland on improving the role of community planning in Scotland is welcomed^[11].

5.33 The changes currently underway are changing working conditions, values, professionalisation and required skills across third sector service providers. It is important that experiences and good practices are shared in how to deal with these.

5.34 Finally, recognition needs to be given to the excellent work of the third sector in delivering public services and a clearer understanding articulated of their unique contribution to service delivery across Scotland.