Wednesday, October 31, 2012

UK not for profit leader warns against adopting private sector models

Deborah Allcock Tyler who is the CEO of the UK based Directory of Social Change is a regular vsitor to Australia and always has important and insightful things to say about the Not-for profit sector

Last time she was in Australia she slammed the idea that Not for profits should be more business like arguing that it is offensive how much is written about how NFPs need to be run better and behave more like the business world.
Debra Allcock Tyler addresses the 2010 Think Innovation Summi

Allcock Tyler argues that the constant comparison between practices in the business and Not for Profit sectors is ironic, as it was the failure of corporate governance and banks that plunged the world into a recession.

Allcock Tyler has recently visited Australia again as a guest of the Victorian Department of Communities to speak about the experience of the big society and its impact in the UK, social finance and the role of the voluntary sector in social change.

One of her messages (one that I and many others have been arguing for years) needs to be stated over and over-  private-sector models are not the solution to deeply entrenched, long-term social problems and complex human and community needs.

Allcock Tyler is a strong critic of competitive tendering and contractual approaches arguing that the move to competitive tendering for government contracts creates a view of NFPs as just another delivery vehicle for social services. It creates a system where NFPs are forced to behave more ruthlessly like businesses, in a competitive manner.

 Allcock Tyler argues that competitive tendering creates a psychological shift about who the client is – with a contract the client is whoever is paying, instead of the grant system, where a NFP determines a solution to a problem and takes it to government for funding. It also this means the big organisations get bigger, and the medium and small organisations are left behind.

Allcock Tyler has warned the Australian not- for- profit sector of the dangers of adopting untested and in many cases failed market- based policies, including social finance, social enterprise and payment by results, which are increasingly popular here in Australia among Governments and which are fiercely promoted by academic think tanks like the Centre for Social Impact and the growing number of corporate funded  and business oriented NFP advocacy groups.

Allcock Tyler writes here:
It was a great trip, even though I came away worried that the Australians are following the UK's lead in government engagement with the voluntary sector - which, let's face it, is not going well. I did point out that they really shouldn't follow our example because we're buggering it up badly (they're Aussies - they like a spade to be called a spade, and an expletive to emphasise the point always goes down well).

You won't be surprised to hear that I was particularly scathing about social impact bonds and payment by results. One rather important sort of chap then asked me how I explained the success of the "Peterborough experiment". I was flummoxed. I'd never heard of it and said that if it was that successful people would have been shouting about it loudly.

Amazingly, on my first day back in the UK I was listening to Today when said 'experiment' was referred to by Chris Grayling, the Secretary of State for Justice. The absolute shocker was his statement that the payment-by-results model used in the social impact bond being pioneered at Peterborough prison was hugely successful - although he hadn't yet had the report with the evidence to back up that assertion. It seems the government is so confident this market-based, capital-intensive model is right that it doesn't need the evidence to prove it.

What really riled me was the bare-faced hypocrisy of this. We in the sector are constantly exhorted to provide evidence of need and success in order to get funding - but the government is allowed to get away with rolling out a controversial, highly contested model of funding the sector without providing evidence. How hypocritical is that? Well, it won't work. Private-sector models are not the solution to deeply entrenched, long-term social problems.

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