The coalition government and its Labour predecessor can agree on one thing – they want more civil society organisations delivering public services. Where they differ, is on how that can be achieved.
Labour's strategy was based on a 2002 Treasury review which identified a lack of skills in charities as the major barrier to their delivery of more public services. In response, Labour began building up the skills of the sector. The main programme they used, ChangeUp, was set up in 2004 with funding of £231m to give frontline charities access to the skills and expertise that would enable them to compete in the public service contracting marketplace.
This was effectively saying the commissioning process is fine, it's the charities that need to change.
The coalition government takes the opposite view – that it's the commissioning process rather than the charities that needs changing. You can't give preferential treatment to charities, but by changing the design of services to be closer to communities you will improve them and also create a system that will mean more charities winning bids. So when they came in to power last year the ChangeUp delivery quango, CapacityBuilders, was scrapped, other capacity funding money was slashed, and the government is now in the process of looking at changing the way the public sector commissions. They have backed a private members bill by Chris White MP which requires public bodies to look at social value when commissioning services and put out a green paper on civil society commissioning which will feed into a broader white paper later this year.
So, while Labour did look at commissioning to a limited extent and the coalition is looking at some targeted capacity building, particularly around social finance, the difference in emphasis is clear.
Although the coalition's approach is far cheaper, at least in terms of not having to pay for capacity building, which is more effective? The results of pumping in the extra capacity building money by Labour are far from certain. A National Audit Office investigation into CapacityBuilders found it couldn't demonstrate value for money and it has been dogged by accusations of wastefulness and inefficiency.
The first real test of the coalition's new strategy was the Department for Work and Pension's (DWP) work programme tender to reduce unemployment. The results were revealed this month when the successful prime- and sub-contractors were announced. The DWP stated that they expected 30% of sub-contracted services to be with civil society organisations, with a Merlin Standard developed to ensure that charities were being treated fairly. In the end it turned out to be only 19.4%, despite it being stated in the tender that it would be "a key factor in the tender assessment process".
The problem is the reliance solely on either capacity building charities or amending commissioning processes, when both are needed. Commissioning processes need to change to ensure they are related more closely to communities and are based on value for money rather than what's cheapest. But many civil society organisations still need help to ensure they are in a position to bid. They are motivated by their passion to make things better, not to win public service contracts. Giving them the skills to enable them to compete is vital to ensure the potential benefits they can bring to public service delivery is realised.
So while the coalition government is undoubtedly putting a lot of effort into reforming commissioning processes, they shouldn't forget the role of capacity building. Labour's attempts at it weren't great, but they shouldn't mistake a failure of a programme as a failure of an approach.
Oliver Reichardt is head of the public services and partnerships team at the National Council for Voluntary Organisations
Blog: ncvo-vol.org.uk/Reichardt
Twitter: twitter.com/OliverReichardt
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