Outside the marginals

a commentary on the politics that followed the UK 2010 & 2015 elections

Privatising Welfare

Part of the present Government’s philosophy is that Government should be small. If something does not need to be done; it should not be done. If it does need to be done; it does not necessarily need to be done by the Government.

Hence “Big Society” – the idea that volunteers or the voluntary sector can take over from government – particularly in the areas of health care, social care and education.

The problem is – what happens if a voluntary provider of these services fails?

The founder of Kids Company has said it will have to “abandon a lot of children” as she confirmed its closure.
BBC News website 5 August 2015 : Kids Company boss warns children ‘abandoned’ by closure

Will they be abandoned – or will Social Services in London, Bristol and Liverpool be able to take up the slack?

This is not like when a privatised rail franchisee fails – when it is relatively easy to ensure that the trains continue to run, that staff are paid, etc. A charity is a far “softer” organisation, a council social services department cannot just step in and “run” the organisation and manage a complex mix of employees and volunteers – who probably have very strong emotional feelings about the failed management team. (Transferring passengers from one rail franchise to another is also far simpler than transferring vulnerable people from being beneficiaries of a charity to council “service users”.)

For the government to use charities to run either essential services or those just on the edge of “discretionary” is problematic. The charity becomes compromised and has to serve two masters.

The original “masters” are those who contributed – either funds or time; the new “masters” are those who audit “service delivery” and control payment for “performance of service contracts”.

Charities are often run by big characters with high levels of emotional commitment; council services are often run by bean-counters and supervised by council officers and councillors very concerned about accountability, public liability and value for money.

Any charity that depends on government (local or national) for a large proportion of its funding (either through grants or service contract payments) is as vulnerable as a private company that is reliant on a single customer. The charity’s response will be a diversion of effort into demonstrating achievement of “performance measures” and – particularly if led by a charismatic founder – a charm offensive.

If politicians are susceptible to being mesmerised by such offensives – because being surrounded by charismatic, ethnic or exotic characters (or celebrities) who are associated with a valuable service that makes them look good, the vulnerability is increased. If a charity is being supported on a bubble of sentiment, the extreme danger is that the bubble will burst and the result has to be bad.

That does not look like a good business model – or a good means of providing essential services.

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2 thoughts on “Privatising Welfare

  1. More detail about the Kids Company situation:
    What went wrong at Kids Company? (BBC News Website 6 August 2015)

  2. Pingback: Who is Kidding who? | Outside the marginals

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