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 4: KEY CROSS CUTTING THEMES

4.1 This section examines some of the key cross cutting themes that emerged over the three years. These include issues around governance and leadership, such as the challenges for senior managers and the role of Board of Directors or Trustees. This section also looks at performance and outcomes measures including: measuring 'soft' and 'hard' outcomes; the performance and outcomes evidence that TSOs provide to funders, and; their involvement in the development and adaptation of measures to demonstrate impacts. The emerging trends in partnership working are examined, including the role of third sector intermediaries, partnerships with local and Scottish government and involvement in service design. Finally, place and rural issues are explored.

Governance and leadership

4.2 Fieldwork in years two and three specifically set out to identify key emerging leadership issues faced by the changing policy and funding environments in a way that was not done in year one.

4.3 The challenges facing the third sector are also challenges for leadership in managing organisational responses. We have already explored some of the key challenges for leadership in responding to the challenging environments in the previous chapter. This section explores the more general challenges faced by senior managers and Boards of Directors/Trustees in TSOs.

Challenges for senior management

4.4 In year two, respondents identified a number of challenges for leadership. These included the pace of change which made it difficult to be pro-active when a lot of time was taken reacting to changing agendas and circumstances. This presented challenges in terms of giving strong, consistent leadership and direction to staff in the organisation. Yet at the same time, it also became more important to maintain staff morale as well as supporting staff to embrace the changes that were happening. For senior managers, managing insecurity and low morale among staff (generated by uncertainties over funding and/or organisational change) could present challenges that had not been there in previous times.

4.5 In year three, senior managers had faced and continued to face a range of challenges. As well as adapting to new policies such as personalisation, one of the key challenges for many senior managers continued to be keeping staff motivated and positive at a time of considerable uncertainty and anxiety. As previously seen, in relation to the impact on staff, communication could be crucially important. In addition, managers also needed to be positive at a time when they themselves faced considerable challenges:

"Oh I come in smiling, saying 'How you doing?' The minute you're not doing that, that will be spotted… I wouldn't come into the front desk in a morning and say to the receptionist 'Oh god the funding's bad', you just wouldn't do that…that would get through the [office] within seconds and you…you don't want a crisis of confidence in your leadership but it is good to sit with the treasurer and go 'I haven't a clue if we're going to get this'".
(Senior Manager, Local Learning Provider, year three)

4.6 In years two and three, the environment also presented challenges to leadership skills for some, particularly in smaller TSOs. It was not possible in smaller organisations to have specialist support roles, for instance, in marketing, information technology, human resource management and operations management, yet these were becoming increasingly important. It often fell upon the CE to embrace this wide range of roles, particularly because of increasingly limited staff resources, yet it could be difficult for any one individual to be an expert in all areas. This was particularly noted in relation to the growing need for business skills and human resource issues.

4.7 Senior managers within an organisation that had recruited a new chief executive noted that the skills required of a TSO chief executive in 2012 differed from that which was required a decade ago. Knowledge of organisational change, fundraising and campaigning skills were now required of a TSO chief executive:

"Someone who knew about change within an organisation, change suggesting closure of services and the opening of new ones, dealing with the media, PR, influencing and campaigning work, fundraising. If you had rolled the clock back 5 or 6 years they would have looked for something completely different. It would have been purely about growth, back in the heady days of 2000's it was all about how do we become the biggest charitable provider in Scotland by turnover".
(Senior Manager, Health and Social Care Provider, year three)

4.8 Between years two and three, one organisation had been forced to substantially reduce staffing levels because of loss of funding. This was an emotional challenge for some of the senior managers who were tasked with informing staff members about redundancies:

"So we've done as much as we could in that sense, but it's still pretty emotional to lose a significant number of staff. So for the leadership, it's been a case of how do you keep staff focused and positive during a period like that because supporting the staff to think that anybody in the leadership team has lost faith that we can get out of the situation we're in".
(Senior Manager (1), National Employability Provider, year three)

4.9 Senior managers, and in particular, CEOs carried a considerable responsibility for organisations, and this could also have an impact on their own well-being and work-life balance:

"…there's always a temptation to always discount the impact it has on you as a manager and think about the impact it has on your staff. I was just conscious that 3 weeks ago I was at my lowest level of energy ever, just because I realised I that I'd been carrying everything and it didn't take much to knock you over the top".
(Senior Manager (1), Equalities Focus Group, year three)

Boards of directors/trustees

4.10 In year two, several changes to the role of directors and trustees were noted. Respondents felt that individuals on the Board of Directors/Trustees were increasingly required to apply their professional skills and experiences to strengthening the activities of the organisation. These changes were driven by a challenging external environment, where competition for funding was increasing and there was pressure on the costs of service delivery.

4.11 Several large organisations had conducted skills audits of their Boards to ensure that the skills of Board members were aligned with the strategic direction of the organisation. In cases where Boards were found to lack specific skills or experience then new Board members were recruited with relevant skills. Board members were required to possess a range of skills and experience, including understanding of the client group, knowledge of policy and law and business skills so that they "have a good spread of knowledge and experience and then they can advise us and help us to make sure that we are doing sensible things' (Senior Manager, National Health and Social Care Provider, year two)". Increasingly, in year three, organisations wanted Board members to have broader experience and networks beyond those related to the client group and their work. They were keen to include members with private sector and policy and government backgrounds. For instance, some of the new members on Boards included people with backgrounds in IT, financial, law, construction, human resources and government among others.

4.12 In most cases, Boards were perceived to be very important in providing strategic direction for organisations. However, in some cases, it was the senior manager who ultimately had responsibility and the Board provided more of a 'sounding board' rather than a strategic role. There was concern, in one case, that the Board might become too dependent on the Chief Executive:

"I think the culture of the company has been that the Chief Executive thinks and does rather than just implements - [the Board] rely heavily on the senior staff group to have the understanding about the context and politics and everything like that and the Board are happy to go along with whatever I present…the worry for me is that if things are not written down and documented and I go, then they have to start again with somebody else who might take the organisation in a completely different direction…so it's about getting consistency and planning for the future that they don't seem to take too seriously".
(Senior Manager (3), Employability Focus Group, year three)

4.13 The relationship between senior managers and the Board was also crucial in many cases and a close partnership between them was important. Boards could be valuable for motivating and providing support to senior managers through challenging times.

Performance and outcome measures

4.14 This sub-section examines issues for TSOs around performance and outcome measurement. This includes: experiences of funders measuring 'soft' outcomes; organisational strategies of providing additional evidence to funders; and some of the additional measures that TSOs have either used or developed in order to better demonstrate impacts.

Measuring 'soft' outcomes

4.15 In year one many TSOs felt funders had focused on measuring 'hard' outcomes at the expense of 'soft' outcomes^[27]. Since many TSOs worked with vulnerable or hard-to-reach clients who were some distance from being 'job-ready', the way in which many of the organisations added value was through 'soft' outcomes, such as increases in confidence and moving them along the route towards possible employment.

4.16 By year two, a number of TSOs felt that funders had become more focused on measuring outcomes within the previous year. By this they meant what had happened to a client (e.g. getting into a job) during their time with the programme rather than outputs (such as a client undertaking a development training programme). This generally continued into year three.

4.17 In particular, it was in measuring the 'soft' outcomes that some TSOs often noted the change, with funders wanting to identify the impact that TSOs had on clients:

"I think a lot of funders now are much more sophisticated and much more interested in knowing the difference that you make".
(Senior Manager, Local Learning Provider, year two)

4.18 This perceived trend was often welcomed because it enabled TSOs to demonstrate the value of the services they provided. One respondent thought that this trend was linked to the move towards personalisation, where there was more emphasis on what the service users would like to achieve. This translated into more emphasis on measuring the extent to which service users achieved their goals.

4.19 In year three, however, some felt a more 'bureaucratic' approach was being taken by some agencies, in particularly by the Care Inspectorate and European Social Fund. One interviewee characterised this as an 'audit' approach, essentially a rigid tick box approach as opposed to a 'support approach' that "understands what outcomes are being achieved and what impacts are being achieved' (Senior Manager (2), National Employability Provider, year three).

Providing additional evidence to funders

4.20 Some organisations provided additional evidence to funders on the impact of the service on the client over and above what was formally required. They believed that this helped to show funders what they do, the impact they were having and, ultimately, the value they added. This was perceived to be very important in gaining renewed funding, although it required additional investment:

"We've got evidence of the impact of what we do, but you can't underestimate the time just going out and doing all of that".
(Senior Manager, Local Learning Provider, year two)

4.21 TSOs who provided this evidence believed that funders welcomed this additional information because it showed the added value they were getting from the TSO.

Using additional measures to demonstrate impacts

4.22 As the year one report noted, much of the work carried out by TSOs was often with clients who were hard-to-reach and/or who had complex issues, focused on prevention and had wider social impacts which were harder to measure. Some TSOs were continuing to look at innovative ways to demonstrate their impact both to clients and to funders. Some had, or were considering, using existing tools (e.g. Rickter scale), while others were involved in the development of new tools. A small number of TSOs had carried out research or evaluations in the past and also found these useful in obtaining further funding. However, these required resources and one TSO had looked into this route but found this kind of research evidence to be prohibitively expensive.

4.23 As the year one report noted, funders required TSOs to report performance and outcomes in different formats and using different measures, leading to multiple measurement devices being employed. However, by year three a couple of organisations had introduced some standardisation across their TSOs. In one case, a TSO working in the social care and health field had developed an internal measurement tool which was used across services for care planning and to measure how far clients were achieving the outcomes they wanted. This evidence and outcome-based tool also aimed to demonstrate some of the softer outcomes that can be hard to quantify. Another organisation had developed its own 'Outcomes Framework' encompassing qualitative and qualitative measures to be used across different services. This aimed to benchmark nine 'spheres of life' of a client, who would be followed up at 6 monthly intervals. It aimed to standardise measurement throughout the organisation and provide evidence that can also be used in bids in the future, as well as going some way to meeting the varied requirements of funders. The Framework was just beginning to be rolled out at the time of the fieldwork in year three.

4.24 In year two, another organisation had sought to develop a common performance management framework across multiple contracts in the organisation and key performance indicators of the projects. They employed a performance and finance team to monitor all projects on a regular basis and created a red, amber and green way of flagging up issues on any particular contracts in key performance areas so they could then intervene early and deal with them.

4.25 One TSO faced challenges in measuring and demonstrating the progress of clients with low levels of literacy and numeracy. Questionnaires in these cases were inappropriate, so they adapted existing software (Comic Life) in order to create an accessible tool. The software programme was used to create a picture book comic with captions, so project workers could work with clients to take photographs and add appropriate captions so that the client could tell a story of their experience and progress. This was perceived as creating something that was more involving and meaningful to the client.

4.26 Some organisations felt that external evaluations had more credibility than internally produced evaluations. To this end, in year three, one organisation was working closely in partnership with a university in order to produce an evaluation of the impact of their work. In return for training given to staff, the organisation would collect additional data that could be used by the university.

4.27 A further organisation had developed a Social Accounts approach, starting in 2008. Social Accounting provided comprehensive independent qualitative and quantitative evidence:

"The accounts should show and demonstrate what you're getting in addition to just a financial input, you're getting a social and economic input resulting in a big impact and that can be quantified".
(Senior Manager (2), National Employability Provider, year three)

4.28 However, this process was reported to be very time-consuming and had to be done in sections of the business rather than across the whole business at one time. It represented a significant resource at a time when resources were strained, although, in theory, it offered great potential.

4.29 Several health and social care TSOs reported changes to the way in which they measured organisational performance. These had been brought about by the move to personalisation and the need to adjust performance measures to better understand how individual needs were being met. Mechanisms for collecting and analysing customer feedback were being introduced. The Balanced Scorecard, a strategic performance management tool, had been introduced by one TSO in addition to a range of additional quality assurance tools. A key change with regard to measures of organisational performance in year three had been a shift to measuring customer attitudes with a reduced focus on internal performance indicators.

Partnership working

4.30 Partnership working is a key tenet of Scottish Government Policy in the delivery of public services^[28]. The aim is to deliver efficiencies and 'innovative synergies in the way the services are designed and delivered'^[29]. The year one report outlined the importance of partnership working for many TSOs before examining some of the factors that helped make partnerships successful as well as some of the challenges they faced. There was also a belief at that time that partnership working was likely to become increasingly important in the future in order to meet the challenges of the changing policy and funding environment, particularly in order to manage reduced funding.

4.31 This sub-section follows up this issue and looks at the trends in partnership working noted by TSOs since year one of the research. We also explore the relationships and views of third sector intermediary bodies such as 'Third Sector Interfaces', Scottish Council for Voluntary Organisations and other partnership bodies. TSOs relationships with local and central government in Scotland are examined, before finally looking at the ways in which TSOs are involved in service design, including Public Social Partnerships.

Trends in partnership working

4.32 A number of participants in year one felt that partnerships would become increasingly important in the future in order to continue to deliver services in a tight financial climate. By years two and three, this view had gained even greater currency. This was partially related to changes in funding structures, for instance the Work Programme, as well as a desire to align more closely with 'natural allies' (i.e. those working in a similar field, or with the same/similar client groups or utilising similar approaches). Accessing funding as well as more 'joined up' working were key drivers towards partnerships.

4.33 In year two, the partners of some TSOs had been hard hit by the current environment and had to substantially reduce services or close down altogether. Although this was not reported as being particularly common in year two, it did have the potential to have a significant impact on surviving partners. For instance, some TSOs had already noted higher numbers of referrals because of partners closing down. Another had noted that there were fewer services to refer clients onto for the same reason. Another organisation had reduced service provision because partners could no longer provide resources.

4.34 In year two, some expressed concern about the potential future impact of partners closing down on their ability to deliver services. However, these concerns were generally not borne out in year three. In the main, existing TSOs had, if anything, benefited from picking up additional work left by organisations closing down.

4.35 Across the three years, participants expressed the view that the "sense of being in competition" with other similarly focused TSOs had been increasing. For instance, funding cuts and increased tendering were perceived as increasing competition between potential partners at a time when there was an expectation of more working together. Organisations tended to defend their own interests under pressure and could be less inclined to share.

"We're open to a partnership and we have opened discussions with more than one other organisation, [but] we still find the response tends to be protective".
(Senior Manager (4), Employability Focus Group, year three)

4.36 Other challenges to partnerships also remained. In year three, for instance, some interviewees perceived that funders were often keen on partnership working, but felt they there was less understanding generally about the complexities and legal issues involved:

"Funders…have been more keen on partnerships. We've done a couple of attempts in funding bids to bring other partners and we've been approached by other organisations to go into partnership but they're very surface level and there isn't a lot of understanding about the real working of partnership and even an understanding of what you need to have in place legally about liabilities for partnership working...all of those kind of serious structural things around partnership working we haven't addressed but there is beginning to be more I think".
(Senior Manager (3), Employability Focus Group, year three)

4.37 There was also some concern expressed about the risks of going into partnership with larger organisations. Smaller organisations felt they may be more vulnerable to the 'whim' of a larger partner or even to being absorbed or taken over.

Third sector infrastructure: intermediary bodies

4.38 Intermediary bodies (sometimes called umbrella bodies or local development agencies) are those TSOs that exist to support the work of other TSOs. They can be generic ones that cover all functions (such as CVSs), ones that serve a particular group of TSOs (such as Play Associations) or ones that support a particular function (such as Volunteer Bureaux). They can also exist at the local community, regional or national level (such as SCVO). Previous research has indicated that they are an essential element of a thriving third sector, but are not without their own challenges, either as organisations or for the sector.^[30]

(a) Local infrastructure: 'Third Sector Interfaces'

4.39 From April 2011, new local intermediaries for the third sector were established in Scotland - the 'Third Sector Interfaces'. Each local area had a newly established interface with clear links to Community Planning Partnerships (CPPs) and Single Outcome Agreements. The purpose of the interfaces was to provide a single point of access to support and advice for the third sector within the local area and also to provide strong coherent and cohesive representation for the third sector in the Community Planning Partnership.

4.40 In year one, CPPs were perceived by TSOs as the key way in which the third sector were involved in community decision-making, experiences, and issues related to which are outlined in the year one report. In years two and three, TSOs were asked specifically about their knowledge of third sector interfaces.

4.41 Given that the interfaces only came on stream properly in April 2011 it is therefore perhaps not surprising that many respondents had not heard about these forums in year two.

4.42 By year three, a number of interviewees had been involved with their local third sector interfaces. The interfaces themselves took variable forms across Scotland, with some only getting off the ground as recently as December 2011, with many "still finding their feet". Not surprisingly, experiences by TSOs of the interfaces at local level were mixed. Some reported good positive relationships and were optimistic about opportunities to have a say and access funding, while others felt they had made or would make little difference, for instance, that they were "the emperor's new clothes" and didn't address the issue of interfacing with national organisations. Some felt that the guidelines about how interfaces should work in partnership had been too vague and that there had been a lack of clarity.

(b) National infrastructure: relationships with Scottish Council for Voluntary Organisations

4.43 The Scottish Council for Voluntary Organisations (SCVO) is a membership organisation promoting the interests of the third sector in Scotland. It offers a range of services to members including: lobbying and campaigning on behalf of the sector; networking and development opportunities; information and advice; and payroll services (among others). SCVO's membership is estimated to encompass more than two thirds of the sector.

4.44 In year two, most of the TSOs in this study were involved with SCVO, to varying levels. Many felt that the SCVO (and indeed the local infrastructure bodies) provided a useful forum for representing the interests of the third sector and for supporting its work. However, others were concerned about the ability of SCVO to represent the sector as a whole, particularly the views of smaller organisations (and indeed this is a tension that SCVO itself recognised), and some TSOs also expressed a concern that there could be a conflict of interest for SCVO as a service provider. This is a tension that the previous research, above, also recognised - recommending that such service provision, where appropriate, was kept at 'arm's length' from the representative and advocacy functions of both local and national intermediary bodies.

Partnerships with local and Scottish Government

4.45 Generally, there were considerable variations in the relationships between TSOs and local authorities in different areas. A number reported good communication over the years. In year three, one organisation reported that local authorities they were working with had been made aware that they were working at full capacity and the LAs had become more realistic about what could be provided as a result.

4.46 However, there had been and remained a number of challenges. In year two, respondents noted that several local authorities had or were undergoing major structural changes and this presented challenges to maintaining relationships in terms of loss of known contacts. On-going into year three, a number of local authorities had made staff redundancies, with some long-term, experienced staff taking early retirement. This meant that new relationships had to be formed and some commented that staff in LAs were now less experienced and understanding. This was also noted in relation to the Scottish Government:

"...certainly my experience of the Scottish Government has been lack of continuity at the kind of middle to senior level. Lots of new people coming in who don't know their portfolio, don't know the background, don't understand and you're getting a lot of junior people".
(Senior Manager (1), Equalities Focus Group, year three)

"When the voluntary redundancies were being offered across LAs, it was the people with the 20/30 years' experience who took the packages and they said that there would be such a loss of knowledge and experience and that's exactly what's happened".
(Senior Manager (2), Equalities Focus Group, year three)

4.47 Some TSOs had close contact with specific individuals or departments within the Scottish Government and felt that they were able to have direct input at that level. Some were regularly invited to take part in specialist committees run by the Scottish Government.

4.48 In the longer term, the personalisation agenda is likely to change the relationship between local authorities and TSOs. In the past, by awarding large block grants for which TSOs would compete to win, local authorities became powerful players in the care marketplace. Local authorities stipulated how care should be delivered, as a senior manager described:

"Historically we deliver a service in particular ways because the local authority is the purchaser and a local authority decides what it is they are willing to purchase on behalf of someone".
(Senior Manager, National Health and Social Care Provider, year three)

4.49 With the introduction of personalisation, local authorities are likely to increasingly see their role as purchaser of services decline as service users gain control over their care budgets. Although local authorities may continue to have an oversight role ensuring that the needs of individuals are being met, they are likely to take a lesser role with regard to decisions on who should provide those services.

Involvement in service design

4.50 There is increasing recognition of the benefits of involving third sector organisations in the design of public services in order to incorporate their knowledge and expertise to help ensure that services are designed to meet user needs. The system of competitive tendering usually involves a funder specifying the service that it would like to contract and asking for tenders from organisations to deliver this. In this system, there is a limit to the extent to which TSOs can input into the design of services. In order to facilitate the greater involvement of TSOs in service design, the Public Social Partnerships (PSP) model has been developed in recent years. Some TSOs also noted some potential trends which may result in increased involvement in service design, although increased tendering for contracts limited opportunities.

(a) Public Social Partnerships

4.51 The Public Social Partnership model involves the public sector and the third sector working together to design and deliver public services with the aim of improving outcomes for local communities. The government is also keen that the model will 'see the private and public sectors make greater use of third sector expertise and services'^[31]. The model was piloted with 10 PSPs for a period of two years from 2009^[32], the outcomes of which informed Scottish Government guidance^[33].

4.52 One of the focus groups' participants in the research had been involved with a pilot PSP. However, with this exception, organisations experience of PSPs remained limited until year three.

(b) Trends

4.53 In years two and three, potential cuts to services had, for some, actually created greater opportunity for negotiating the shape of services at local level. Some local authorities had contacted TSOs and were talking to them directly about how services could be re-designed within budget requirements, allowing a significant input from the TSOs.

4.54 In year three, one organisation had seen a move towards co-production models:

"They are definitely about co-production and using the resources of communities and engaging with communities effectively in the design and delivery of new services. And I can clearly see in policy that that's a movement that is now being supported by funding and that's another one we have tapped into in the last year".
(Senior Manager (3), Employability Focus Group, year three)

4.55 Some local partnership forums offered opportunities to help shape services in local areas, such as provider forums and community planning, through sharing good practice and responding to local need.

4.56 However, the tendering process remained an obstacle to greater involvement in service design. Some felt that this process itself was not flexible enough in order to facilitate creativity in service design, and some felt commissioners had a limited understanding of services:

"An absolute lack of understanding of the service because we've had a situation where we had been in discussion with them about a service that is something special that we deliver and they want it, and then they drop this tender thing…and you look at it and you think it would not be in any way possible to deliver and they've described the service quite well in the tender document but it would be absolutely no way possible to deliver it on the costs they have attached to it".
(Senior Manager (1), Employability Focus Group, year three)

"They have designed the service and those of us that are at the chalk face might design a different service that might work better, but that opportunity doesn't seem to exist anymore".
(Senior Manager (1), Employability Focus Group, year three)

4.57 The move towards personalisation has potential for a significant shift in the balance of power between TSOs, local authorities and service users. This is likely to have implications for a TSO's ability to be involved in the design of services, although how is as yet unknown.

Place and rural issues

4.58 In year one, the research sought to identify how place and rural issues impacted on third sector provision of services. A number of organisations were selected for participation in the research because they operated in rural or semi-urban areas. These consisted of local projects usually operating from an urban or semi-urban base but covering a large rural area as well as national organisations that operated some projects within rural communities.

4.59 Some TSOs stated that there were additional costs associated with providing services in rural areas. This was because of the dispersed geography and additional travel required, as well as limited access to public transport. In addition, it was difficult to achieve economies of scale for (usually) relatively small local services. For instance, one national social care and health organisation provided some services within rural areas and outlined the difficulties around transport for workers and service users:

"I mean the obvious ones are around transport and that's in terms of workers having to cover a considerable area but also in terms of supporting service users to become more independent in terms of how they manage things. Transport's a difficulty for anybody in a rural area if you're managing on public transport".
(Manager, National Health and Social Care Provider)

4.60 It was also reported that economies of scale were not available to small rural services in the same way as larger services in urban areas:

"In terms of the area that I manage, operationally there are a lot of challenges. Typically although we're a big organisation individual services are quite small so there's no economies of scale within those because obviously you don't subsidise across areas - services have to stand within their own budgets. In a lot of areas over time that means...if there haven't been costs of living increases and things like that service budgets have got tighter and tighter".
(Manager, National Health and Social Care Provider)

4.61 These factors presented challenges for organisations maintaining and operating services in rural areas. Funding cuts had resulted in a reduced service being provided in one remote rural area because of the high additional costs associated with providing the service in full.

"When the council wanted us to make some cuts...we said we can't do low level support in out-lying areas because it costs us far too much to get there...I do worry for service users in some areas".
(Senior Manager, National Health and Social Care Provider)

4.62 Respondents felt it was important for funders to recognise the "practicalities and costs" associated with providing services in rural areas compared to operating services in urban areas. For one respondent having staff based in the local community providing services helped to manage some of the rural difficulties associated with transport:

"But in terms of a recovery focused model we've been encouraging people to find their own ways to manage those things but then you run into the whole transport issues that people have got in rural areas...if you want to look at the winter we've just had for example staff getting stuck, people being able to make it out to service users. I feel that as a service that's still locally based with local staff we were still able to manage that quite well. For some agencies that won some contracts and maybe their staff are coming from further out that can be really problematic when you get that kind of weather".
(Manager, National Health and Social Care Provider)

4.63 In one of the focus groups, place was felt to be very important for service delivery as providers cannot operate the blanket roll out of strategies as they need to be tailored to the individual needs of communities. Across Scotland the cultural, social and physical landscape varies. There may be nostalgic assumptions that rural communities will support individuals but the service providers find that very often this is lacking. Moreover, in rural areas, unlike cities, because of lack of funding there might not be a strong network of TSOs to support all people's needs and as a result individuals might become even more isolated.

4.64 One TSO adapted to the geographic spread of the Highlands by having 'Job Coaches' who operate as remote staff. Most are full members of their local community, job-sharing their position as Job Coach for the TSOs with another occupation, most often self-employment. This allows the TSO to have a direct relationship with the local communities, and also saving on infrastructure and office usage.

Conclusions

4.65 Senior management and Boards within TSOs faced a number of challenges presented by the changing policy and financial environments. A recent survey concluded that: "The sector is in the middle of a major re-shaping and…this is really testing the morale, ambition, energy and competence of trustees and senior managers".^[34]

4.66 The pace of change created a need for strong, consistent leadership and the provision of direction to staff. Additionally, there were challenges in maintaining staff morale and supporting staff through the changes which demanded skills in managing change as well as leadership. Managers in smaller organisations often had to embrace a wider range of roles since increasingly important specialist support roles were not available to them, e.g. marketing, information technology, human resource management, operations management. Senior managers carried considerable responsibility for organisations that could sometimes have an impact on their own wellbeing.

4.67 Board of Directors and/or Trustees of TSOs could potentially offer valuable skills, knowledge and experience to support CEOs/Directors in their role. A number of organisations noted a welcomed increase in involvement of their Boards in order to support organisations in meeting the recent challenges. A good spread of knowledge and experience among Board members was valued, and having some members from the private sector could provide valuable business experience.

4.68 A number of TSOs felt that funders had become more focused on measuring outcomes over the three years, and in particular 'soft' outcomes. As TSOs felt this was an area where they could particularly add value, this was generally welcomed. In order to demonstrate the value they added to the client experience, some organisations also provided additional evidence to funders on the impact their service had on clients over and above what was formally required.

4.69 A number of organisations had explored innovative ways to demonstrate client progress to clients and funders. This included measuring 'soft' outcomes, particularly in relation to clients whose literacy and numeracy were limited. Some had made significant steps towards adapting and/or developing tools that would both demonstrate progress to the client as well as the added value of the service to funders. While there was still no standardised way of measuring outcomes, some TSOs were making important steps towards developing tools flexible enough to be applicable across a number of different projects and funders.

4.70 TSOs were aware of the importance of partnership working as a means of meeting the challenges created by the policy and funding changes. Accessing funding was a key driver for partnerships and many were keen to be involved in more 'joined up' working. However, the 'sense of being in competition' with other similarly focused TSOs increased over the three years because funding cuts and increased tendering created a more competitive environment.

4.71 Since April 2011, each local area in Scotland had its own third sector interface to provide a single point of access to support and advice for the third sector within the local area. By year three, some interviewees had been involved with these interfaces, although experiences of them were mixed. Many interfaces were still relatively recent and were 'still finding their feet'.

4.72 Many TSOs had good relationships with local authorities, and a number reported improved communication and dialogue with more opportunities to discuss how services could be organised in light of the cuts. However, others found difficulties accessing local authority staff, particularly where the local authority had undergone major departmental restructuring and/or staff redundancies. In the longer term, the personalisation agenda is likely to change the relationship between local authorities and TSOs with local authorities seeing a decline in their role as a purchaser of services.

4.73 The system of competitive tendering usually involved a funder specifying the service required with limited scope for contractors to input into service design. Public Social Partnerships offered the potential for greater involvement of the third sector in the design of public services, although TSOs experience of these was limited. Potential cuts had, in some cases, actually created more opportunities for some TSOs to negotiate the shape of services at local level. Local partnership forums such as community planning and provider forums also offered opportunities to help shape local services. However, tendering remained an obstacle to greater involvement.

4.74 There were additional costs associated with providing services in rural areas. This was because of the dispersed geography and additional travel required as well as limited access to public transport. In addition, it was difficult to achieve economies of scale for (usually) relative small local services. In year one, funding cuts had resulted in one organisation providing a reduced service in a rural area.