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 6: CONCLUSIONS

6.1 Over the three years of the research there had been significant political and policy changes that had important consequences for TSOs in Scotland. Alongside the general financial climate of low or negative economic growth and public sector spending cuts, these represented huge challenges, as well as potential opportunities, for many organisations.

6.2 TSOs who focused on employability-related activities tended to be more subject to changes of policy at UK level, although some funding did come through LAs. Policy determined at Scottish Government level was generally more relevant to TSOs who specialised in health and social care. However, since activities of TSOs often overlapped, most were affected by policy at all levels.

6.3 There was a significant time lag between the making of policy and putting it into practice at the level of the third sector. As we have seen, the impacts of a number of policies were only just starting to be felt at third sector level in year three, despite having been enshrined in policy for several years. The full impacts of the Work Programme and Personalisation, for instance, were still unknown and unlikely to be clear until sometime into the future. This was probably because of a number of reasons, including, among others: (1) policy is generally filtered through a number of agencies, such as local authorities and community planning, before reaching the third sector; (2) there was a lack of clarity about how some policies should be put into practice, meaning that the details of policy, and their implications, were having to be worked out on the ground.

6.4 While some TSOs had made reductions in some services because of cuts, most had avoided this through costs savings elsewhere or using accumulated underspends from previous years. They were also keen to minimise the impact on clients where possible. It was staff within TSOs who had felt the impacts most acutely with redundancies, reduced hours, changes to terms and conditions, no salary uplifts and increased workloads creating an atmosphere of anxiety and uncertainty. However, good communication during a time of organisational change could help maintain positive staff relations and morale.

6.5 TSOs were undergoing a major re-shaping. Many had or were making significant efforts to respond positively and pro-actively to the challenges presented by the changing funding and policy environment. Many had taken the opportunity to look at their priorities and how they wanted to move forward (some had done this earlier). The majority had looked at a variety of strategies to cut costs and remain competitive, as well as diversifying the funding base (and social enterprise in particular).

6.6 It is important to recognise that there was no reductive response to the current economic climate, no 'one size fits all'. For some TSOs, mergers were an appropriate response, for others they were not. It is also important to recognise that innovation is only one response to the current situation. For others a more cautious 'sticking to the knitting' may be more appropriate. Proactive responses, like mergers and innovation, offer creative ways to respond to these straitened times. However they can also consume resources unnecessarily, at a time of resource scarcity. What is required therefore is a contingent response by TSOs that matches the response to the needs of their organisation, members and/or users.

6.7 Senior management and Boards within TSOs faced a number of challenges presented by the changing policy and financial environments. On the whole, however, they had risen to meet these challenges suggesting that many TSOs were taking a dynamic approach to change.

6.8 A number of TSOs were also rising to the challenge of measuring 'soft' outcomes, particularly in relation to clients with complex needs and/or whose literacy and numeracy were limited. Some had made significant steps towards adapting and/or developing tools which would both demonstrate client progress to the client as well as show 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.

6.9 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. The experience of partnership working with local authorities varied, with some reporting better communication and dialogue, while others reported lower levels of contact.

6.10 There were indications that opportunities for involvement in service design by the third sector may be increasing, with potential cuts actually creating 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.