Are the Conservatives really out to reverse Labour’s ‘marketisation’ of the third sector — it looks that way

In June of last year the Conservatives launched Stronger Society: Voluntary Action in the 21st Century, their Green Paper on the voluntary sector, voluntary action and social enterprise. Like many, I suspect, I have been remiss in not reading this until now. If you haven’t yet read it, it’s essential reading. It’s fascinating to watch a party in the process of pulling the carpet from under New Labour’s feet on an area of policy that previously has been seen as core business for Labour and pretty much an irrelevance to the Conservatives. I think this what Clinton’s strategists called ‘triangulation’.

The real interest lies in the nuances of interpretation in the Green Paper. On VCS involvement in public service delivery, the Conservatives are marking out distinctive territory. Public service delivery represents both the greatest opportunity for the voluntary sector – and the greatest threat to its independence, the Green Paper says. Contracts for under-valued public service delivery must not and should not be the only expression of the relationship between the state and the sector. There must be a place for both grants and contracts, with contracts being used only where they are most appropriate. Contract funding, the Green Paper says, can never be a substitute for grant funding because grant funding has a double worth — it is “a mark of humility on the part of politicians that others may be better placed to use public resources” and “a proof of political trust in the institutions of civil society”. This is extraordinary stuff.

The “doctrine” of Full Cost Recovery is also criticised. Why would voluntary organisations want to deliver public services if the best they can hope for is to cover costs? Commercial companies expect to make a reasonable return on investment and so should voluntary organisations and social enterprises – and the Tories will revise the Compact to reflect this.

On social enterprise specifically, there are some areas of confusion or lack of clarity (as as the Social Enterprise Coalition has noted in its response). There is a tendency throughout to identify social enterprise as “a part” of the voluntary sector, and little if any recognition of social enterprises’ specific characteristics as businesses (or their business support needs). We can probably expect this kind of thing to be ironed-out as the consultation progresses.

The real interest lies in some of the Conservatives’ underlying thinking about social enterprise. Social enterprise is seen as important because it can harness the kind of growth potential of the commercial sector while also delivering on a social mission – and it is growth that the Conservatives are interested in. They believe that voluntary organisations’ and social enterprises’ public service delivery should be additional to their existing independent activites, not a substitute. And additional services presupposes an increase in third sector capacity. It is here that the Tories see social enterprises coming into their own, their growth fuelled by earnings from service delivery.

Not only does social enterprise get its own chapter — so too do co-operatives! And it makes remarkable reading. I never thought I’d see the Tories arguing for mutualisation as a means of delivering what neither state nor market alone can: democratic control, social responsibility, and social innovation.

This is based on only one reading — the standard caveat when you want to reserve the right to change your mind – but extraordinarily it looks as if Conservative plans for the sector are to a large extent concerned with reversing its ‘marketisation’ and realising its ‘civil society’ potential. Who would have thought it.

  1. Charles Rapson Reply

    We live in the strangest times. The left wing of politics feels more like the right and the right moves left. What are we to do? Vote Lib Dem just to see how much confusion that creates.

    Thank you for this. Very interesting reading.

  2. Alun Severn Reply

    Glad you found it so, Charles — cheers.

  3. Graham Beaumont Reply

    Thanks for the analysis, as you suspected it’s one that passed me by!
    What we may be seeing is the death or the “3rd sector” as a lazy catch-all for a very disparate grouping of organisations with some form of social mission.
    What concerns me is the reference in all parties thinking to the voluntary sector as a “virtually free” resource for mopping up services the public sector no longer provides. Increasingly I see in, for example, the DoH innovation fund, references to “working with volunteers” as an innovative way of delivering to those defined as hard to reach. Worries about FCR may soon seem trifling!

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