PROVISION

Published: 24/11/2005 Volume 115 No. 5983 Page 14 15

Plurality of provision does not only offer opportunities to the private sector - voluntary and community organisations want to compete for business on an equal footing.

But can they? Daniel Martin reports

Much of the anger that greeted the government's July announcement that primary care trusts should divest provision was driven by political fears of NHS privatisation.

As usual, left out of the black and white public-private debate was what is becoming known as the 'third sector' of voluntary and community organisations.

The Department of Health wants to see more primary care services run by charities and other not-for-profit organisations, and last week a DoHsponsored task force met for the first time to consider what needs to change.

Many in the voluntary sector complain of barriers which stop them being able to compete effectively with the private sector for the provision of services. They say primary care trusts too often do not take them seriously.

But is it only the NHS that has to change? Some say PCTs are right to be wary: many voluntary sector organisations are not up to the job of providing services efficiently and to the highest standard. Perhaps there are things that charities themselves have to do.

Charities say they have a lot to offer the NHS. Not only do some large organisations provide vital services on which the NHS relies, such as Macmillan nurses and Terrence Higgins Trust sexual health advisers; they also say there is a lot they can offer in the future on a variety of scales.

Futurebuilders funds charities to help them raise their game and bid for public sector contracts.

Chief executive Richard Gutch says charities can offer the type of user-focused services the NHS can never hope to provide. In the era of choice, it will be an important card up the voluntary sector's sleeve.

'The voluntary sector are better at looking at what the users of the service really need, ' he says. 'Often they provide a service across health, education and social services. They are focused on users and not worried about departmental boundaries.

They can bring a particular understanding because service users are often involved in the running of the organisation.' On long-term conditions in particular, the voluntary sector has come up with inventive selfmanagement programmes.

Just as importantly, they can reach the parts that the NHS cannot.

'They often have a strong community basis. A black and minority ethnic-led organisation can often reach people more effectively than a statutory provider.' But at this summer's NHS Confederation conference, DoH commercial director Ken Anderson admitted that, as things stood, the private sector would run away with contracts in the new marketplace: 'I would say that the private sector is good at targeting who they are after, ' he told delegates. 'Sometimes the voluntary sector misses a trick.' So why are not PCTs commissioning more services from the voluntary and community sector? Mr Gutch is sitting on the government's third sector task force, which hopes to find an answer. Part of it, he says, is the stereotypical cardigan-wearing image that PCTs have of charities.

'They talk of the voluntary sector as if they are just groups of volunteers trying their best, instead of recognising that voluntary organisations have very professional staff working for them, ' he says.

'Their mindset is that the voluntary sector is marginal. They get given grants if there is some money left over in the budget. If they are going to play a bigger role they have got to be seen as more mainstream.' What charities want are longerterm contracts that give them the stability to invest in new staff and service expansion. Short-term, piecemeal contracts do not allow charities to plan ahead and give them the confidence to innovate.

And this leads to a vicious circle, because PCTs are then less likely to award them contracts against private companies, which have the extra money to invest.

They are fed up with not being trusted as much as the independent sector. Their contracts place too much risk in their court and they are micromanaged every step of the way by commissioners worried they are not up to the job.

At the other end of the scale they are tired of being overlooked - if a PCT is having a cash flow problem, the private companies will get paid first because they can shout the loudest, while the voluntary organisations are last in line.

What they want is a level playing field, where charities can compete fairly against private providers, and where voluntary organisations are paid not just for the services they provide but also for back-office functions. It is the long fight for 'fullcost recovery'.

'There is a history of a grant culture which does not respect the full cost of the service, ' says Mr Gutch. That is quite a barrier for organisations trying to get on a more business-like footing. PCTs need to work with voluntary sector organisations the same as they would the private sector, and give us longer contracts and full-cost recovery.' Traditional charities are not the only organisations that will benefit from greater plurality of provision.

The government is pushing new models of social businesses: non-profit making organisations which provide public services but are not necessarily from a charity background. While charities promote a particular cause, social businesses' primary aim is to provide public services (see box).

Birmingham University's Health Services Management Centre director Professor Edward Peck says the social business model will be significant in the future. These companies describe themselves as market-driven but value-led, with business models geared to achieving a social purpose, not shareholder value. Instead of living off grants, collecting tins and endowments, they make their money by contracting in the market.

Many NHS staff would find working for such an organisation much more acceptable than being employed by a private company - and some might even prefer it to the NHS.

'Many community health staff would find it more attractive than working for an NHS bureaucracy under the constant threat of centrally driven organisational change, ' says Professor Peck. 'They could become more ambitious and autonomous. Entrepreneurialism could really take off.' Social Enterprise Coalition chief executive Jonathan Bland says entire community health services could be transferred to the social business sector or 'a group of public sector workers such as nurses and therapists could set up their own social enterprises'.

'That is an area That is hardly been looked at. There are great barriers because there is a lack of awareness of different business models that already operate in other sectors and could operate in health and social care.' The government needs to take a lead. There is of course the everpresent pensions issue - at the moment, workers transferred from the NHS will not be eligible for an NHS pension. 'This has to be sorted or it will be a non-starter, ' he says.

But other things have to change, too. 'The government says they want a more mixed market, but the default position is that contracts will naturally go to the private sector, ' says Mr Bland. 'There need to be more concrete interventions to create opportunities for social enterprises.' He says PCTs must make sure that not all contracts are so big that only large private concerns can bid.

NHS Confederation policy manager Jo Webber accepts there are changes that PCTs could make.

'We need to look at longer-term commitments and cutting back on some of the bureaucracy, making it easier for them to apply for provision without having to fill in 50 forms for a few thousand pounds of business. Some smaller organisations haven't got the infrastructure to put in loads and loads of bids because they do not have a whole army of people to do the paperwork.

'I am not saying that we should reduce the probity of these arrangements, but some of the amounts of paperwork they go through are disproportionate.' But change is not all one way.

Charities need to raise their game, some accept.

Futurebuilders is helping staff in many voluntary organisations improve their commissioning skills, giving charities money to hire consultants and looking at providing training to groups of organisations.

'Because many voluntary organisations are so used to going cap in hand for a bit of a grant they are not as good at negotiating with purchasers as the private sector, ' Mr Gutch explains.

'The voluntary sector has got to be more grown up in the way it does business. They've got to stop accepting inappropriate and inadequate contracts - and That is a difficult thing for a value-drive organisation to do.' Turning Point chief executive Lord Adebowale agrees. 'You hear a lot of people saying that we do not have anything to do and that It is up to the government to provide us with a level playing field. I do not think That is true. It is naive.' He gets frustrated that the leadership of the voluntary sector is sometimes 'unclear' about what it wants. 'There are 150 special interest groups in health and social care and they all want to sit at the table with ministers.' He is calling for is a trade body to represent voluntary and community sector organisations with an interest in health. The public sector has the NHS Confederation, the private sector has the Independent Healthcare Forum - but there is nothing for the third sector.

Existing representative bodies such as the National Council for Voluntary Organisations and the Association of Chief Executives of Voluntary Organisations have not put forward plans for a trade body, but Lord Adebowale wants to push them in that direction.

'A trade body will help us take a part in decisions at the highest level and influence the message. We need a body to negotiate apposition on behalf of the sector. Without this body, our case is weakened.' PCTs, he says, are worried about clinical governance and he wants to see charities subject to the same regulation as the public sector: Healthcare Commission inspections.

And Lord Adebowale reveals that there is a large body of opinion in the third sector opposed to the whole idea of provision, saying it could compromise their independence.

'There is a kind of red herring that says if we get too close to government we will lose our independence. But in the House of Lords I see how the private sector do not hesitate to lobby the government. It is one of the basic tenets of democracy which says the source of your income should not dictate what you say.' .

SWEET TALK: TAILORED SERVICES

The Kath Locke centre in inner-city Manchester is pioneer in being among the first NHS primary care facility not run by the public sector. The Big Life Company competed with four NHS trusts to run the centre in 1996. It provides a range of services for the local primary care trust, mental health and social care trust and local authority.

Chief executive Fay Selvan says the centre is a model for how social businesses can provide effective primary care solutions.

'Historically, the NHS has provided the same services to everyone, ' she explains. 'We provide services for particular people. Our niche is to develop solutions where the NHS is not currently working.' The centre's Sugar group provides tailored services for older members of the Asian and Afro-Caribbean communities, who are at greater risk of diabetes.

It came about after an old woman came into the centre to complain about poor services.

'In the traditional NHS she would have been given a complaints form. But our centre manager sat down with her and came up with a plan for a support group.

It is a good example of what the NHS can't offer and we can.' The centre also provides tailored services for black and minority ethnic people with disabilities, dental services, and a breast screening van which the centre has found a home for after staff refused to visit the area following a series of shootings.

'There is a real lack of understanding from PCTs about what we do, ' she says. 'They do not see us as part of the NHS but as something different.

But we are delivering services on behalf of the NHS so we should not be seen as something different.'