<html><head /> <body> <META http-equiv="Content-Type" content="text/html; charset=UTF-16"><title>Government and the Third Sector</title><meta name="keywords" content="uk,active,britain,center,centre,centre-left,charity,community,deal,geoff,economy,government,innovation,kingdom,mulgan,new,organisation,organization,partnership,philanthropy,policy,policymaking,politics,relationship,sector,social,Society,third,united,volunteering,way,voluntary,"><table style="font-family:Verdana; font-size:larger; " align="center" border="0" width="50%"><tbody><tr> <td style="background-color:silver; border-color:white; border-left-style:none; border-style:none; " width="730"><span style="font-family:Verdana; font-size:larger; ">Government and the Third Sector</span></td> </tr> <tr> </tr> </tbody></table><br><table style="font-family:Verdana; font-size:medium; " align="center" bgcolor="white" border="0" width="50%"><tbody><tr> <td height="131" width="669"><span style="font-family:Verdana; font-size:x-small;"><strong>Editors Introduction</strong></span><span style="font-family:Verdana; "> </span><span style="font-family:Verdana; font-size:x-small; "><IMG SRC="auth_mulgan.jpg" WIDTH="85" HEIGHT="119" ALT="Geoff Mulgan" VSPACE="0" HSPACE="0" BORDER="0" ALIGN="right">Geoff Mulgan (right), founder of Demos, a London-based research institute, and currently the director of the Performance and Innovation Unit at the Cabinet Office, addresses the relationship between government and the voluntary sector. Steering a course between communitarian ideals and the practicalities of government, Mulgan reflects on the history and future of the relationship between government and the third sector.</span><br> <br><span style="font-size:x-small;"><strong>Patrons of the voluntary sector</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">Let me begin by emphasising the strong links between the centre-left in Britain and the voluntary sector. Voluntary action, methodism, trade unions (which remain the largest voluntary organisations in the UK and indeed in many countries), mutuals and co-operatives are all part of the British centre-left. These organisations have made the British left and centre-left historically very different from the left in those countries where the dominant strains have been revolutionary and statist, and where many believe that it is only through government that politics can manifest itself.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Britain has also been relatively insulated from the influence of the Marxist intellectual left, which has tended to be dismissive of voluntary organisation. The centre of gravity of the British centre-left has been founded--more than in other countries--in values of mutual responsibility and self-help, values which derive probably more from Christian traditions than any other.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Yet, despite this history, there has been an uneasy relationship between Labour governments and the voluntary sector. The voluntary sector, for many reasons, had been squeezed out of some of its roles under Labour governments. There were even times when philanthropy and charity became dirty words. By the 1930s, the voluntary sector had become almost a byword for inefficiency, uneven provision and a patronising relationship between provider and beneficiary. The voluntary sector was seen to be coloured by class in ways which led a whole generation to believe that the answers to most social problems lay in publicly run services and large organised professions. Welfare, they believed, had to be a right, and not dependent on generosity.</span><br><br><span style="font-size:x-small;"><strong>Adam Smith's invisible hand</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">Fifty to 60 years later the mood is different. There has been a strong reaction against the excesses of Soviet planning; against too much faith in the wisdom of the professions associated with the state; and against the extremes of hyper-market individualism and neoliberalism. Worldwide the left has had to come to terms with the value of the invisible hand of the market--Adam Smith's argument from 200 years ago that the invisible hand of the market, backed up by laws, is better able than any other mechanism to harness millions of different motivations into a common interest.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">But the argument does not end there. For just as Smith's invisible hand is an indispensable part of any modern society, so too is what I call the "other invisible hand"--a parallel set of legal, fiscal and cultural frameworks which harness millions of people's desires to connect, care and contribute to the common good. This is the heart of the Third Way argument around the voluntary sector. For it points to the need for governments to discover new ways to harness the motivations which are not captured by formal politics or the formal market.</span><br><br><span style="font-size:x-small;"><strong>Principles of third sector organisation</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">The single most important intellectual current which has fed into Third Way debates on both sides of the Atlantic has been communitarian thought. For Tony Blair the re-creation of community is the central goal of politics at the turn of the century. In the UK, communitarian ideas can be traced back to Owen, Morris and John Macmurray. In the US, its most important exponent has been Amitai Etzioni. But perhaps more important are the thousands of community activists and community organisations, which through their practice have demonstrated new principles of organisation. Some of those principles are worth spelling out before I move on to policy practicalities.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">First, a good society is founded on a balance between the interests of business, government and the voluntary sector. Second, institutions of the third sector are insulated from the immediate pressures of the market and electoral democracy and are, therefore, not only able to identify and anticipate needs, but also to act as guardians of much longer-term value. Third, institutions of the third sector can play a crucial role in fostering habits of responsibility and cultures of co-operation, self-control and self-expression.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">These principles do not imply that all charity and voluntary activity is positive; it can be inefficient, uninnovative, unresponsive to users and unequal in its relationships. Nor does it follow that the relationship between government and the voluntary sector is likely to be unproblematic, or that their interests are identical. The two partners have different views, different relationships of accountability, and, in practice, tend to have different, or at least distinctive, values. The important question to address is this: What are the terms on which there can be partnerships and relationships of mutual benefit?</span><br><br><span style="font-size:x-small;"><strong>Government's relationship with the voluntary sector</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">In practice, there are several areas in which the government is attempting to create a different kind of relationship with the voluntary sector.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">The first is in the area of policymaking. Over the last two years there has been an extraordinary opening-up of the policymaking process, not only to the voluntary sector but also to business, academia and others. Government has come to realise that it cannot form good policy alone. There are approximately 6,000 members of the general public now sitting on government task forces and policy action teams, hundreds of whom are from the voluntary sector, addressing issues like social exclusion, long-term care or the implementation of jobs programmes. The voluntary sector is now part of the policymaking process to such an extent that I quite often hear complaints from people who say it is almost as bad being listened to as it was not being listened to at all. On balance, however, this is a very healthy opening-up of the policymaking process, which has identified new issues, best practice models and potential areas where government can change. I think this more porous method of policymaking is here to stay.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">The terms of the relationship between government and the voluntary sector are changing. In the past, the relationship was often unequal--even oppressive--encouraging voluntary organisation into harmful contractual relationships. Government only paid lip service to ideas of consultation, community participation and partnership. The Compact is trying to put that relationship on a different basis with a commitment to fair funding frameworks and an understanding that recipients of government funding are, and should be, independent and must be able to criticise government if they want to. Alongside that are a series of attempts to streamline and rationalise funding mechanisms so that voluntary organisations are not held hostage to bureaucratic red tape and duplicate arrangements. Some of the attempts are already beginning to bear fruit across government in practical ways, ranging from funding to the management of volunteers (for example, the Department of Social Security now takes volunteering into consideration in the way it manages benefits).</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Government is attempting to forge a more genuine partnership model between the third sector and the public sector which goes beyond contracting. In the case of the New Deal, for example, the voluntary sector is now involved in framing policy through the Task Force and through hundreds of local partnerships which are charged with delivering the New Deal and acting as a contractor for providing gateway services and placements. Another example is the Sure Start programme for children under 3, where voluntary organisations played a leading role in framing the overall policy analysis and are now playing the leading role in hundreds of partnerships that will put Sure Start into practice across the country. In these and other ways the government is attempting to create a new relationship which brings the voluntary sector and government into a more equal partnership.</span><br><br><span style="font-size:x-small;"><strong>The social economy</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">Government is increasing its support for the social economy with a broader policy goal of integrating economic and social policy wherever possible. It has been a great historic mistake to see the two as separate. However, in co-operation with the Department of Trade and Industry, the Treasury and others, Government is in the process of defining its role with respect to credit unions, micro-finance funds, social banks, local exchange trading systems time-dollar schemes, community development trusts and so on. Government is also seeking to integrate social economy ideas into the remit of regional development agencies and the new small business service.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Government has a new focus on social capital, recognising that in the past government programmes have often damaged social capital by sending in experts but ignoring community organisations and by spending money primarily on bricks and mortar rather than recognising the importance of building local capacity. I hope the new focus is already obvious in the delivery of current programmes--such as the single regeneration budget programmes and the New Deal for community programmes--in ways that give real scope for small community organisations to become involved and to take a leading role in defining community regeneration. Sometimes government's impatience with getting things done tends to favour larger statutory organisations at the expense of local community organisations who are better suited for the job.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">However, we are attempting to ensure that those responsible for delivery keep a clear focus on the long-term importance of capacity. Government is also recognising the need for local community organisation to take a leading role in defining the ways in which funding is provided, and the need to create new funding mechanisms to ensure that small grants are made available at the grassroots level. Finally, government is attempting to ensure that small community-based regeneration projects can link up horizontally to share experiences and best practice models.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Work is under way to modernise charitable giving and how money is given to voluntary sector organisations. In many ways it is still difficult to give money efficiently. Data suggest significant declines in charitable giving, which is why this government has pioneered programmes such as Millennium Gift Aid--recently promoted by Eddie Izzard on the television; new ways of supporting payroll giving; and a much simpler structure of incentives</span><br><br><span style="font-size:x-small;"><strong>Volunteering</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">Perhaps the most important aspect of government's relationship with the voluntary sector is how government can work with the voluntary sector to modernise and improve the giving of time (or volunteering). Millions of people in this country are already active as volunteers in a range of organisations from the Territorial Army to Residents' Associations, serving as counsellors, school governors and so on. However, the evidence we have suggests that those numbers may be in decline: barely five per cent of young people are active as volunteers and only one in 10 adults gives time each month. The decline may be due in part to such pressures as longer work hours and family commitments. The identity of volunteering may also have come to seem a bit middle class and middle-aged.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">The government has been working with the voluntary and business sector over the last year to develop a more coherent strategy to reverse the declining trend in volunteering, to change the identity of volunteering, and to develop new programmes such as the Millennium Volunteers Programme. Part of developing a more coherent strategy includes building volunteering into core policy programmes, such as Youth Justice, school improvements and health. All the evidence we have from social science shows how vital it is to tap into the voluntary giving of time as a complement to the professional delivery of services.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Another way government can help improve trends in volunteering is to strengthen the infrastructure which supports volunteering. At the moment, it is easier to buy insurance or a foreign holiday than it is to find out how to get involved in your own community. Despite some very good efforts, it is still the case that in terms of technology, quality of printed material and quality of offices around the country the apparatus for volunteering remains backward.</span><br><br><span style="font-size:x-small;"><strong>In conclusion</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">This represents a telegraphic summary of government's attempt to come to terms with supporting a sector which is hugely varied and difficult to define. Government has been very conscious of the importance of the voluntary sector, being careful to support it without being overbearing and to be strategic without forcing strategy onto what should be an independent sector.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">We in government could benefit greatly from more academic input from institutions like the Centre for Civil Society to help guide our understanding of the voluntary sector and its links with government and business. We still do not know enough about the dynamics of giving money and time, nor about the dynamics of community organisations. In addition, we need to know more about how government can both create and destroy social capital.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">The Third Way is not a doctrine, a blueprint or a fixed ideology but, rather, a work in progress. A French intellectual commented a few months ago that the problem with the Third Way is that although it works in practice he could not see how it would work in theory. This comment is in part valid because the Third Way is an evolving framework, within which a lot of testing, learning and change have to take place. That is very much the spirit with which government is engaging with the voluntary sector. Government sees the voluntary sector as a partner in process which will take many years, and which will ultimately be judged by what it achieves and, above all, by what it contributes to the bigger task in which we are all engaged: healing the very deep scars of social exclusion, unemployment and weakened communities in the tissue of our society.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">You will find in government a ready audience. At the moment, we are creating a new unit--the Active Community Unit--whose head has just been appointed. The Active Community Unit will, for the first time, have a remit across government departments to foster partnership with the voluntary sector. There is also ministerial commitment, not just in the Home Office from Paul Boateng and Jack Straw but also from Lord Falconer in the Cabinet Office, who has a specific responsibility for volunteering. I think you will also see a desire by government to experiment and to achieve not only a change in policy, law and fiscal regime but, more importantly, a change in culture. In three, five or 10 years' time, we would like to see the third sector more fully woven into everyday life so it becomes as natural for people to have a paying job as to be involved in volunteering within their community, and natural for every agency and department to continually ask itself how it can better involve the voluntary sector as a partner in delivering its goals.</span><br><br><span style="font-family:Verdana; font-size:x-small; font-style:italic; ">This article first appeared in the Centre for Civil Society publication Third Way-Third Sector: Proceedings of a Policy Symposium Organised by the LSE Centre for Civil Society. Copyright The London School of Economics and Political Science.</span></td> </tr> </tbody></table> </body></html>