Closing the commissioning gap: Supporting community and social enterprise through participatory budgeting

Guest blogger Jez Hall, from PB Partners, discusses the potential role of participatory budgeting in future community service provision. 

Whatever the recent election brings in terms of devolved powers and responsibilities to Scotland, the underlying situation facing public authorities will remain the same. Long term trends in the public sector will continue to require new approaches. 

Community planning partnerships (CPPs) have to respond to both new priorities and existing demands. But the financial pressures will doubtless remain very challenging.  Whether we like it or not, money is tight and the expectations placed on that money is growing.

 To help respond to these challenges the mantra of public service reform was laid out by the Christie Commission way back in 2011. Its message holds true today and will stay relevant for many years.

The Commission stated “the key objectives of that reform programme must be to ensure that:

• public services are built around people and communities, their needs, aspirations, capacities and skills, and work to build up their autonomy and resilience;
• public service organisations work together effectively to achieve outcomes – specifically, by delivering integrated services;
• public service organisations prioritise prevention, reduce inequalities and promote equality; and
• all public services constantly seek to improve performance and reduce costs, and are open, transparent and accountable.”

Under the first principle listed above, the Commission went on to state: “The Scottish Government should explore the potential of the proposed Community Empowerment and Renewal Bill to promote a significant improvement in the quality of community participation in the design and delivery of public services. That is happening. It’s now known as the (soon to be enacted) Community Empowerment Bill (Scotland) .

Which is also why in recent months the Scottish Government and a wide range of CPPs have been exploring the potential of Participatory Budgeting, described on the Communities Channel website as ‘a way for local people to have a direct say in how, and where, public funds can be used to address local requirements’.

The link to the Christie Commission’s first point is fairly obvious. But what is less clear is how Participatory Budgeting (PB) might support the other aspects of the Christie Commission recommendations. Namely around a more open and responsive commissioning culture, that prioritises prevention, leads towards service integration and a more outcome focussed delivery model. Not easy things to achieve.

As the Commission states under what it called ‘Producer Dominance’... Government remains the dominant architect and provider of public services. This often results in ‘top-down’, producer and institution-focussed approaches where the interests of organisations and professional groups come before those of the public. Contributions from other sources are under developed. Individuals, communities, businesses, voluntary organisations, social enterprises and charities all have resources and capacities that could be utilised more fully.”

Yet the possibility of local residents being more involved in commissioning raises a tantalising idea. Everyone knows we want to commission services better. Buzz words like asset based approaches and co-production abound. Could PB be a way to clearly link participation by residents to investment in building community capacity AND stimulate a vibrant ‘not for profit’ sector AND a style of commissioning that supports locally based social enterprise.

This theme connects to a paper of some years ago by the New Economics Foundation. “Plugging the Leaks”, identified how public spending drains away through commissioning services from profit driven private firms, by purchasing employment based outside the area, or if using a poor commissioning model. It persuasively argued that if public money can be made to re-circulate within the local economy we can build a useful multiplier effect. Every pound of public money could generate extra resources again and again and again, creating jobs and stimulating the local economy. Bottom up regeneration of this kind is more sustainable because it leaves a legacy.

The challenge of Producer Dominance is it limits the search for innovative ways to enable public money to be accessed by locally based organisations. Local organisations are also often reluctant to risk getting involved in commissioning because they lack information about how to, are too small, and traditional commissioning processes don’t fit their needs. The social enterprise sector is ill prepared for the hurdles put in place by our public procurement rules, which favours the private sector on price or established public sector providers on scale over what are sometimes seen as ‘softer’ social outcomes.

As Social Enterprise Scotland states under its campaign for procurement reform: By changing existing public spending practices and shifting the onus onto locally focussed businesses with wider social and environmental aims, longer term financial gains can be achieved.” Yet public sector commissioning is still normally structured so money doesn’t reach where its most valuable – there is effectively a commissioning gap.

It could get worse in the coming tight fiscal years. CPPs will be squeezed into making short term savings instead of investing in creating sustainable communities. Local initiative strangled for the lack of a few crumbs whilst millions are spent topping up private sector profit margins or outdated services. It’s not only formalised social enterprises but individuals, support groups and small associations that will suffer.

One answer is more collaboration. Encouraging smaller organisations to build partnerships to access big contracts. But forced collaboration can lead to mission creep and create extra risks. Charity trustees and social enterprise leaders are rightly worried they are being asked to do the government’s work and losing autonomy in the process. The shrinking of core grants for the community and voluntary sector, coupled with public spending cuts has already caused a lot of damage, placing extra burdens on charities, not for profits and the smaller community enterprises. There is a well recognised funding gap opening up, with perversely the voluntary and community sector, and hard pressed citizens, effectively subsidising the public sector rather than the other way round.

Carers for example are filling gaps in local health and wellbeing funding, and by doing so save the NHS and therefore taxpayers too. Yet individual carers remain in extreme need. As Carers Scotland recently identified: “It is clear, that despite saving the Scottish economy some £10 billion each year and despite carers’ invaluable contribution to enabling older and disabled people to live independently and safely in their own homes and communities, much more needs to be done."

So how does participatory budgeting connect to this gloomy picture? PB is about local solutions. Through examining many PB inspired community grants processes I have seen small organisations access public funding that might otherwise be unavailable to them. When a community comes together in a well designed PB process they decide who could best deliver services or needs extra support, and they naturally want to back local solutions the prevent problems down the line. PB is good at building local capacity, and directing much needed resources into social and community enterprise.

In just one PB event the community can target thousands of pounds locally into filling just this commissioning gap. As PB grows so the opportunity grows for spending money ‘in’ communities rather than ‘on’ them. Community based nurseries, welfare advice, personal support services, youth clubs, exercise groups, environmental improvement schemes all do well when the community decides. If hundreds of such events were occurring that would mean millions of pounds.

For example there was Newcastle’s Carers UDecide. With carers being put in charge of a budget to create the services they valued, to better do their essential work. Or in Tower Hamlets, where their £5m PB process provided an option to buy ‘customised’ services, either from the third sector or from the council. Close to home and more recently the Richmond Fellowship Scotland ran its Outcomes are Fun PB project. That sought to put the opinions of its service users ahead of professionals.

Or in Edinburgh, where a range of statutory and voluntary sector partners worked together to deliver Canny wi’ Cash, a PB process for Older People that funded a wide range of local providers. Commenting on the process one of the Older people who participated said “Our voices are being heard at last”. Reportedly Sir Peter Housden (Permanent Secretary to Scottish Government) name-checked Canny wi Cash as a good example of co-production at the recent 4th National Co-Production Conference in Glasgow’s Royal Concert Hall.

Hundreds of PB projects have already spent millions of pounds across the UK. We know the format works... the challenge is scaling up and sustaining them.

Localising funding decisions is good for all. Good commissioning is all about connecting local knowledge with technical expertise and political will... to unlock public investment. Creating in its wake new opportunities for co-production. Procuring the right services, at the right scale, without it being siphoned off by the private sector makes sense. Tapping into skills and resources within the community is another sensible strategy. Seeking bottom up solutions rather than top down interventions saves money down the line. And when citizens start to get involved in decision making locally they gain the skills and confidence to engage with big commissioning processes too.

To quote once more from the Christie Commission “the philosophy and attitudes underpinning the design and delivery of public services have changed little since the birth of the welfare state. Services are provided to individuals rather than designed for and with them. Models of provision fail to empower and enable people and communities sufficiently to achieve positive outcomes in their own lives. Services often impair individual incentives and foster dependencies that create demand. A culture of professional dominance in public bodies has made them unresponsive to changing needs and risk-averse about innovation. Procurement is often taken forward on a scale that discriminates against smaller providers and person-centred approaches.”

PB could be a true “win, win, win” scenario. Local decision making through PB can’t be much worse than an appalling story, across the UK, of public money wasted on big private IT programmes that failed to deliver, of PFI deals that exported profits off shore beyond the reach of the taxman, or shoddy services created from balance sheet driven outsourcing. If we re-read to the core recommendations of the Christie commission listed above, PB has an ability to support all of them... from accountability to prevention to transparency, from integration to capacity building. We should see PB as much more than a small grant pot. It’s a fundamental change in culture.

Yet many innovative PB initiatives, some described above, were first trialled in England in the closing days of the last but one New Labour administration. They stopped abruptly following the coalition government and its focus on austerity. Too often, without real political buy-in to devolving power, without professional support and leadership, and a well designed evidence base able to capture soft outcomes... we simply return to old ways of doing things. Which, as the Christie Commission has already identified, will not save us.

Happily the current picture in Scotland is somewhat brighter than in England, where the debate is still too focussed on how to cut public expenditure quickly. PB is definitely on the Scottish Government agenda, and if we can learn from the experiences that have already occurred (or about to happen) then I believe we can close the commissioning gap.

One day we will be able to say with confidence... trust the carers, trust citizens, they really do know best.

Jez Hall can be contacted through www.pbpartners.org.uk


Views expressed by guest bloggers may not reflect the views of What Works Scotland