On the 28th July 2010 the Institute for Government, NESTA and the Design Council hosted a seminar on the future of welfare in light of the Big Society agenda.
On the panel were Emma Stewart (Founder, Women like Us), Adam Sharples (Director General for Employment, Department for Work and Pensions), Karamjit Singh CBE (Social Fund Commissioner), David Clarke (National Audit Office) and Emma Jones (Office for Civil Society).
The case for the Big Society
State welfare provision will be streamlined through a “Work Programme which will move towards a single scheme that will offer targeted, personalised help for those [unemployed] who need it most, sooner rather than later.” A key part of this Work Programme will see more private and third sector provision to tackle worklessness, both in supporting people back into work and in creating sustainable jobs for the future. Rewards will be given to providers who manage to achieve these two outcomes.
Civil society will have to take on a significant role in supporting individuals looking for work, and peer to peer relationships and social networks will become increasingly important. Social enterprises will be crucial, at a grass roots level to support the supply of workers to the labour market, and at a market level, working with employers to shape labour demand.
However, the panel were aware that hard to reach individuals were the least likely to be able to rely on support from civil society, and that the communities they are part of often lack a self-help ethos. These individuals are often the furthest from the labour market and present the biggest risk to providers contracted to signpost and enable the journey from worklessness to work.
How do existing examples support the government vision?
There was a very strong case put forward that elements of the Big Society already exist in welfare support, and are stimulated by innovative, self sufficient grass roots providers. The panel also recognised that creativity can be unlocked through paying providers by results.
Women Like Us, a social enterprise that focuses on recruitment, bringing women and employers together with flexible work, provides an example of the social enterprise model. The organisation is concerned with the employment needs of working mothers, whilst also seeking to shape the markets that these women are moving into. Employers are therefore able to pull the market, retaining skills and part-time workers, rather than the state welfare model of pushing workers into the marketplace.
Social enterprises are employed through a prime contractor, and have to be commercially aware in order to manage this relationship. It was acknowledged that prime contractors have sophisticated business analysis departments that social enterprises often lack, however social enterprises have the grass roots skill sets that the prime contractors need. Therefore, social enterprises have to be aware of the value they add and work confidently and collaboratively to dynamically scale projects and win large contracts.
The existing work of community groups and peer to peer relationships in providing a ‘stepping stone’ to the labour market through voluntary work was also discussed. These groups will have an increasingly significant role to play in the Big Society.
What are the obstacles to the Big Society in welfare?
The state is big for a reason
In welfare provision this growth has been driven by a need for consistency and a minimum standard of provision, to shift welfare payments to be a public entitlement rather than an act of charity, and to capture economies of scale. The Big Society needs to answer how it will meet, or counter demands for consistency, thus overcoming the challenge presented by postcode diversity. Hybrid models, such as the Big Society, mean that the state will have to overcome the inherent tension between discretionary and universal services and commissioning.
The size of the state has resulted in a lack of a self-help ethos amongst some citizens, and this has led to a tension between entitlement to welfare, which is seen as more positive than a Victorian supplicant model, and personal responsibility.
The vulnerable and hard to reach
The most vulnerable and poorest people often interact with a number of public services, such as the criminal justice system and mental health services. A cross-departmental approach will be needed to reach these people, and this will have to be economic as well as social – as they often have high personal debt and lack access to credit.
Provider risk and reward
With the payment by results model it remains unclear which organisation captures savings, the department, the prime contractor or the grass roots service provider. Also, if an asymmetry of information or financial capability exists then small providers may carry the majority of the risk without enjoying sufficient reward. The profit motive that drives prime contractors can result in a lack of financial transparency and undermine the trust of social innovators.
Delivery models
The prime contractor model provides a problem for social enterprises, which need to be aware of how prime contractors understand and analyse their business in order to deliver against this. Government appears confident that the third sector has the skills to deliver the Big Society, however the panel were worried that the third sector may lack the capacity. Also, given the current financial situation all suppliers and providers need to answer the question of how to innovate with less money. The worry that intermediary and third sector providers could lose funding in the current financial climate was raised.
Problems with commissioning
Some markets appear closed or restricted, due to the presumption of a preferred supplier and contracts are often too large for smaller innovative businesses.
A skills gap exists whereby commissioners may lack the tools to re-imagine services so that are able to overcome silos in government provision. They may also need support in the commissioning of genuine insights and aggregating relevant information.
Commissioning for outcomes can lead to unintended consequences. In case studies on social clauses in commissioning the benefits were sometimes unclear, and show this should be viewed as a long term aspiration.
Accountability
Lots of organisations provide welfare type services, however they are not all funded through the Department for Work and Pensions, this creates a very complicated provider landscape. The National Audit Office recognises that accountability has a very powerful in impact on behaviour.
Shared Learning
Pilots are seen as too slow to feed back analysis and lessons learnt – decisions are often taken for the whole system before the pilot findings are really understood. The panel asked whether the state has a broker role to play in capturing and facilitating learning.
How can these obstacles be overcome?
Government will be an enabler and catalyst
Through providing social finance, on an outcomes focused and payment by results basis the government hopes to unlock the innovation of both the private and third sector. The Big Society can provide a ‘Big Chance’ for suppliers and providers that had previously been frustrated by top down state run provision.
Local choice
To overcome postcode diversification citizens will need to be empowered to make genuine local ‘choices’ and not regard themselves as subject to postcode lotteries.
Social return on investment
If civil society is to respond to the Big Society challenge then more sophisticated tools will be needed to measure successful outcomes. The SRI provides a model for this. Government may have to look for new platforms, and truly value the role played by social networks and peer-to-peer relationships in navigating the journey from welfare to work.
New platforms
Civil society and social networks will have to be utilised more effectively, developing new platforms for peer to peer engagement and support.
Public service reform
Simplicity and transparency will be needed to open up markets; this will be a change for a public service that is focused on intensive delivery.