The Opportunities and Challenges of the Changing Public Services Landscape for the Third Sector in Scotland: A Longitudinal Study Year Three Report (2009-2012)

CHAPTER 2: POLICY BACKGROUND - THE THIRD SECTOR IN SCOTLAND

2.1 This chapter outlines the key changes to the policy and funding environment over the three years of the research (2009-12) that were relevant to TSOs in Scotland. There were significant changes in the political and policy environment that occurred at both UK and Scotland levels, as a result of shifts in the balance of power in Scottish and UK governments following general elections in the UK in 2010 and in Scotland in 2011. The various impacts of these changes on TSOs are discussed in chapter 3.

Table 1A outlines the political context and Table 1B the policy context at UK and Scottish levels across the three years of the research.

Table 1A: The Political Context at UK and Scottish Levels 2010-1012

Table 1B: The Policy Content at UK and Scottish Levels 2010-1012

The UK context

2.2 The election of the UK Conservative and Liberal Democrat Coalition Government in May 2010 (after 13 years of a Labour Government) was a significant change which led to a range of new policies; in particular the Work Programme introduced in 2010 which replaced existing employability funding streams and the Welfare Reform Bill (February 2011). The impact of these policy changes on the third sector is discussed in Chapter 2.

2.3 As the economy entered a period of recession or, at best, very low growth, the UK Government introduced a policy of deficit reduction which resulted in spending cuts within the public sector and a reduction of the Scottish Budget in 2011-12 of £1.3 billion compared with the previous year. This translated into spending reductions of over 11 per cent in real terms between 2010-11 and 2014-15^[1]. These cuts are expected to impact on the third sector in Scotland in the forthcoming period.

2.4 Broadly, UK government policy was more relevant to TSOs focusing on employability (as a non-devolved issue), although some employability funding was made available through local authorities. For TSOs specialising in health and social care, policy at the Scottish Government level was generally more pertinent. However, there was often overlap in the activities of TSOs, and policy at different levels affected most TSOs to some extent.

Key policy developments in Scotland

2.5 In Scotland the SNP shifted from being a minority led government (between 2007 and 2011) to a majority government following the elections in 2011. Over the period of the research, Scottish policy developments of particular relevance to the third sector included:

• The Scottish Government's commitment to promoting high quality public services and the importance of the third sector in on-going public service reform
• The 2007 Concordat between the Scottish Government and local government which reduced ring-fencing and devolved control of some budgets to local authorities (LAs) and Community Planning Partnerships (CPPs). This fundamentally changed the relationship between national and local government in Scotland. This aimed to promote the alignment of funding and activities within local authorities and other areas of the public sector with the Scottish Government's priorities and national outcomes. Key tenets of the Concordat were:
  • Collaborative working and joint accountability - the relationship between central and local government to be based on mutual respect and partnership to enable local authorities to respond more effectively to local needs by reduced micro-management.
  • Reduced bureaucracy - reduction in the number of funding streams and monitoring and reporting to central government and a more focused and proportionate inspection scheme.
  • Single Outcome Agreements (SOAs) - to be established between central government and each of the 32 local authorities with the aim of aligning policy with overall government targets, taking account of local priorities. From 2009-10 Single Outcome Agreements (SOAs) were to be agreed with Community Planning Partnerships rather than local authorities.
• A major programme of change in third sector infrastructure with the announcement in March 2008 that as of April 2011 the Scottish Government would no longer fund networks of Councils of Voluntary Service (CVSs), volunteer centres, local social economy partnerships and social enterprise networks in their current form. This led to the development of new third sector 'interfaces' in each community planning area in Scotland which typically involved the networks listed above. The interface is the means by which the third sector is represented on the CPP.
• The Enterprising Third Sector Action Plan (2008-2011) which aimed to support enterprising behaviour in the third sector, including the Scottish Investment Fund (£30M) and the Enterprise Fund (£12M).
• The public-social partnership (PSPs) model involving the public sector and the third sector working in partnership to design and deliver public services which was piloted from 2009.
• The Social Return on Investment model (SROI) as a means of measuring how TSOs deliver social and environmental benefits.
• The Third Sector Task Group created in 2008 for a fixed term with a specific remit to improve coordination of third sector organisations in Scotland, local authorities and the Scottish Government. The main output from the Task Group was the 'Joint Statement' on the Relationship at Local Level between Government and Third Sector signed by Scottish Government, COSLA, Local Government and the third sector and offering recommendations on working relationships in relation to funding, shared services, Best Value, application processes for grant funding, strategic commissioning and procurement, re-tendering, European Procurement Law, monitoring, reporting and evaluation and partnership.
• The economic downturn and the current and future budget constraints and their potential impact on the third sector in Scotland.

2.6 A consultation on self-directed support (commonly referred to as personalisation) in Scotland in February 2010 was followed by the Social Care (Self-directed Support) (Scotland) Bill in February 2012^[2], which is currently going through the Scottish Parliament. The Bill provides service users with a high level of involvement in the way in which their care is arranged. The Bill states that 'A person must have as much involvement as the person wishes in relation to - (a) the assessment of the person's needs for support or services, and (b) the provision of support or services for the person'.

2.7 The SNP minority-led Government set up the Commission on the Future Delivery of Public Services (Chaired by Dr Campbell Christie) in November 2010 in order to 'examine how Scotland's public services can be delivered in the future to secure improved outcomes for communities across the country', despite the challenging financial environment. The Commission reported in June 2011^[3] and identified the following key priorities:

• Recognising that effective services must be designed with and for people and communities, not delivered 'top down' for administrative convenience
• Maximising scarce resources by utilising all available resources from the public, private and third sectors, individuals, groups and communities
• Working closely with individuals and communities to understand their needs, maximise talents and resources, support self reliance, and build resilience
• Concentrating the efforts of all services on delivering integrated services that deliver results
• Prioritising preventative measures to reduce demand and lessen inequalities
• Identifying and targeting the underlying causes of inter-generational deprivation and low aspiration
• Tightening oversight and accountability of public services, introducing consistent data-gathering and performance comparators, to improve services
• Driving continuing reform across all public services based on outcomes, improved performance and cost reduction
• Implementing better long-term strategic planning, including greater transparency around major budget decisions like universal entitlements^[4]

2.8 As part of the Public Services Reform agenda, John Swinney announced in the September 2011 Spending Review that £500M would be made available over three years to invest in preventative approached across three areas: supporting adult social care; early years and tackling re-offending^[5]. These are known as the Change Funds.

2.9 Appendix G presents a timeline of key policy events which may impact on TSOs in Scotland. These are set against the fieldwork timetable to highlight the timeframe within which these might have an impact. However, there is likely to be a time lag in many instances between policy announcements and impacts filtering through to TSOs, and it is overly simplistic to assume that there is always a direct causal relationship between a policy event and change in the third sector (the attribution problem). The timeline is therefore intended to set out a broader political context within which the study took place.