Annual Sector Report 2007

Annual Sector Report 2007 A report reflecting voluntary and community sector perspectives on the Compact Presented at the Compact Annual Review Meeting 13th December 2007

Stefan Simanowitz

Contents 1.

Executive summary / recommendations

2.

Purpose and methodology

3.

Introduction

4.

Compact awareness and implementation 4.1 Mind the gap 4.2 A level of scepticism 4.3 Impact of the Compact 4.4 Lack of reporting of non-compliance

5.

Relationships with government 5.1 An improving relationship 5.2 A coded description for conflict 5.3 An unequal partnership 5.4 The funding relationship 5.5 Local Compacts 5.6 Independence

6. 6.1 6.2

Barriers to use of the Compact Under-resourcing Is the Compact lacking teeth?

7.

Recommendations

8.

Conclusions

Annexes Annex 1. Compact Advocacy Programme Annual Report Annex 2. Focus Group Findings Report Annex 3. Report on Focus Group Verification Workshop

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1. Executive summary This report attempts to synthesize a number of pieces of research exploring voluntary sector organisations’ views on the impact of the Compact. It is based on findings of: • an independent focus group exercise commissioned by Compact Voice • a focus group verification workshop report • an annual report by Compact Advocacy Programme • regular meetings of Compact Voice and continued dialogue with the sector throughout the year • a rapid evidence assessment of relevant Compact literature (2002 -2007) Key findings and recommendations: •

Implementation – need to tackle the gap between rhetoric and practice; the voluntary and community sector being provided with the tools and training and support to challenge breaches of the Compact. Government need support in ensuring the Compact is embedded in all aspects of work with the sector. Specifically; o Clarity on how the Compact can be applied to EU funding; o Further Compact promotion and implementation across nondepartmental public bodies; o Improved guidance for legal departments about how to write Compact-compliant contracts for the voluntary sector; o Compact-compliant guidance for central government programmes which are implemented locally, including issues such as full cost recovery; o Improved guidance and support for local authorities on their implementation of key Compact commitments which have a major effect on the local voluntary sector such as 3-months’ notice when ending funding; o Improved consultation processes which make clear what decisions have already been taken and what questions are being asked as well as providing accurate feedback and ensuring responses are taken into account in final decisions; o Further resources for sharing of best practice and learning across central and local government regarding the Compact and relationships with the voluntary sector.

•

Awareness raising – Significant promotional work in both sectors to tackle the persistent lack of awareness of the Compact. Promote the Compact and provide education and training for partners of both sides of the relationship. Comprehensive, targeted, promotional campaigns that would increase appreciation and understanding of the Compact

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and what is and what it can do to make things better for both parties in the relationship. •

Local Compact resourcing – need for proper funding to ensure Local Compact implementation. An exploration of how this would work in practice is needed.

•

Research – a programme of research; a body of work breaking down what works in order to share good practice; research with local authorities to understand where the Compact fits within a local political environment that will be dominated by the LAA.

•

Joining-up - policy should be checked against the Compact to ensure that it complies with the National or Local Compact and makes meaningful reference to it. A stronger link is needed between local and national public bodies to ensure they work together to uphold Compact commitments.

•

Positive relationships – the Compact needs to be regarded as a mechanism for maintaining and enhancing relationships. Positive ways of working should be embedded on both sides of the relationship. Needs to be a clear understanding that this is an agreement of mutual benefit, as much in government’s interest as the sector.

Key questions for discussion 1) Is there enough in the action plan about raising awareness? Are we doing enough to support people on the frontline of this relationship for example, legal teams, commissioners, voluntary sector trustees, contract managers in the sector, policy officers in local public bodies and departments, procurement officers? 2) How is the local and national government relationship working? What do we all need to do to improve this? 3) How could we facilitate there being more funding for Local Compacts? 2. Purpose and methodology This year, Compact Voice are presenting an Annual Sector Report to the Compact Review meeting. This differs from the Annual Sector Survey that has been presented in previous years and offers a range of sector views and experience. The report examines sector research done over the last five years as well as drawing on primary research undertaken by National Compact Voice, Local Compact Voice and the Compact Advocacy Programme. Compact Voice’s direct consultation with the sector took the form of a series of focus groups across the UK. It is important to recognise that the voluntary and community sector is diverse and not a homogenous sector. Whilst this report talks about “the sector” it

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attempts to reflect the range of sector perspectives and abjures a prescriptive “one-size fits all” approach. 3. Introduction As the national Compact on Relations between Government and the Voluntary and Community Sector in England enters its tenth year, this report attempts to highlight Compact issues and challenges from the perspective of the sector. Whilst there is an increasing amount of research being done on the voluntary and community sector, little direct research has been done on the voluntary and community sector’s experience of the Compact. Whilst there have been many positive changes to the relationship over the past decade problems persist and new issues arise as the policy landscape changes. Whilst the Compact has retained both its symbolic and practical importance and remains central to improving the relationship between the partners, there is clearly still a distance to travel. A gap remains between the universally endorsed principles of the Compact and their practical application on the ground. Evidence from the sector suggests awareness of the Compact on both sides of the relationship is low, Compact compliance is patchy and effective Compact implementation at local and national level is yet to be fully realised. Despite the fact that the Compact is overwhelming endorsed by the sector there is a reluctance among voluntary organisations to make explicit use of it in tackling problems. Although the service offered by the Compact Advocacy Programme is increasingly seen as an effective means of enforcing Compact compliance, no Compact breach has so far been referred to the Compact mediation service or the Ombudsman. Whilst some of the Compact’s initial momentum might have been lost, and some of the optimism with which it was greeted might have faded, the Compact’s potency remains intact. As William Plowden says “what is at issue here is an attempt to change the culture of government/voluntary sector relationships. This is bound to take time. In the next few years, the circular relationship…must become positive, not negative.”1 4 Compact awareness and implementation Lack of awareness of the Compact on both sides of the relationship, combined with the wilful disregard for its requirements, is a key barrier to effective Compact implementation. Whilst issues of Compact awareness, compliance and implementation are deeply intertwined and not always easy to unpick, but it is important to attempt to do so. 4.1 Mind the gap

1

Nonprofit and Voluntary Sector Quarterly; 32; 415, 2003 William Plowden

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The focus group exercise revealed an almost unanimous endorsement of the Compact as a “good idea in principle” but found, in practice, lack of awareness and poor implementation have opened a potentially damaging “credibility gap”. The findings of the report were discussed in a verification workshop in which participants echoed their support for the Compact as a concept and described the gap variously as one “between where we are and where we believe we should be", between “rhetoric and practice” and between “fantasy and reality”. This concept of a gap or disconnect in implementation and expectation is also reflected in previous research into the Compact. Indeed, what is striking about the themes that emerge from the focus group is how closely they mirror the issues and concerns that have been repeatedly expressed in reports and studies over the past five years. As far back as 2002, the Treasury cross-cutting review revealed a “remarkable consensus of opinion that the Compact is ‘a good thing’". The review found that the concept of the Compact was “universally supported” and that there was “little support for radical changes to the Compact, its abolition or the view that its provisions should have a new statutory basis.” The review however also found consensus around the main problems with the Compact, namely “lack of awareness and ineffective implementation.” 2 The challenge of implementation was picked up as the key issue in David Carrington’s 2002 report. Whilst much of the framework of the Compact was in place, he argued that its implementation at all levels, was patchy and implementation had to be achieved in order to “close the gap between Compact enthusiasts and sceptics” and to prevent a loss of momentum to allow the Compact to become “yesterdays initiative”.3 An unpublished NCVO study in 2004 exploring national organisations’ views on the impact of the Compact, asked the question “Has the Compact Gone Cold?” It found a general view that the Compact had been successful in establishing principles and recognition of the role and contribution of the voluntary and community sector, but that its success in influencing actual practice was limited. It found that this was in part due to lack of awareness among the sector of what the Compact was supposed to achieve and how the Compact could be practically applied to enable organisations deal with specific problems.4 4.2 A level of scepticism There is clearly some scepticism within the voluntary and community sector as to the Compact’s usefulness. The experience described by a focus participant of “hollow laughs” and “blank stares” when trying to raise issues of The role of the voluntary and community sector in service delivery: A cross cutting review, HM Treasury, 2002 3 The Compact – The challenge of implementation, Carrington 2002 4 Has the Compact gone cold? Summary of research findings. Jean Barclay Compact Working Group. unpublished, 2004 2

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Compact compliance with government combined with the lack of accountability for breaches of the Compact has led to frustration. An Audit Commission study in 2007 found that some commissioners and smaller voluntary organisations had never heard of their local Compact.5 The focus group report found that even where the local authorities know about the Compact, they often chose to ignore it. It also suggests that the failure of local authorities to comply with the Compact is not necessarily about malice but lack of understanding or external pressures with local authorities, faced with numerous competing targets. Within the voluntary and community sector the government’s 2003/4 State of the Sector Panel, suggests that 70 percent of the 3,600 members were aware of the Compact (up 5 percent from the preceding year). This figure drops to under 50 percent among smaller organisations (less that £10K)6. Since 89 percent of the sector has an income of less than £100,000 small organisations experience of the Compact is of particular relevance.7 A 2007 online questionnaire for Third Sector magazine found that only 22 percent of respondents thought the Compact has had or will have a positive impact on their charity 28 percent of respondents thought that Local Compacts have had or will have a positive impact on their charity.8 4.3 Lack of reporting of non-compliance The fact that Compact compliance is not monitored and there are no obvious of enforcement measures or remedies when a breach occurs goes some way to explain the lack of reporting of Compact non-compliance revealed in the focus group report. However, the reluctance among voluntary and community sector groups to challenge a local authority over breaches of the Compact also results from a fear of jeopardising future funding. This fear described in the focus group report as a “wall of silence”. One focus group participant said that even where the independence of the sector is talked about and acknowledged, the fear remains that bringing up the Compact might sour relationships. This raises issues about independence and the way in which public service contracting can compromise sector independence which are explored later in the report. 5 Relationships with the government 5.1 An improving relationship Between 2001 and 2006, Compact Voice, formerly the Compact Working Group, recorded a steady improvement in the relationship between the Hearts and Minds: Commissioning from the Voluntary Sector, Audit Commission, 2007 6 OTS State of the Sector Panel – 2002/3, 2003/4 www.cabinetoffice.gov.uk 7 The UK Voluntary Sector Almanac 2007, NCVO 8 The state of the sector, nfpSynergy, 2007 5

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voluntary and community sector and the government. A 2004 study found that many of the organisations noted that in lots of ways they had good relationships with government, particularly at national level. Significantly, none of the organisations attributed this to the Compact.9 A 2007 Directory of Social Change survey which found that only 18 percent of respondents felt the relationship between government and the sector is getting better. Nearly half of respondents felt it was getting worse. It was not clear whether those who felt the relationship was improving, felt that this had anything to do with the Compact has played. A significant number of people who left comments felt either that the Compact was a total failure or that statutory bodies routinely ignored it in their dealings with the sector, and that it ‘needed more teeth’ to be effective.10 The 2007 Third Sector Review finds that “there is strong support for the Compact within the sector and a desire for better partnership working with all levels of Government, but more is needed to make sure that its principles are consistently adhered to by the public bodies to which it applies.” 5.2 A coded description for conflict For many, the Compact has come to be seen by both partners as a tool for the sector to use to challenge government. Rather than regarding it as a positive means of partnership working and mutual cooperation the Compact is increasingly seen in negative or adversarial terms. The government often see it as “just another thing they have to comply with” and the sector see it as “a weapon last resort”. The focus group exercise suggests there is an apparent division within the sector between those who feel the Compact should be more about partnership and the relationship, and those who feel it should concentrate more on compliance and enforcement. It is not helpful to see the debate as one framed in terms of "government bad voluntary and community sector good". Both sides have the responsibility to make the Compact work and a “them and us” approach is counter-productive. The public sector can become wary in its relationship with the voluntary sector where organisations they engage with point out the failures of the statutory sector whilst not admitting their own faults and there is a need for the sector to recognise their part in a failure to implement the Compact and codes. 5.3 An unequal partnership The relationship between the voluntary and community sector and the government is inevitably one of power imbalance, as one side has all the funding and decision making power. It was suggested that this has implications for the Compact’s credibility as a ‘mutually beneficial agreement between partners’. Has the Compact gone cold? Summary of research findings. Jean Barclay Compact Working Group. unpublished, 2004 10 Is the relationship between the government and the sector getting better, getting worse, or still the same?, Directory of Social Change, 2007 9

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However a power imbalance does not have to be problematic as a partnership is not necessarily a relationship of equals. The challenge for the Compact is not about creating equal partners but about treating partners equally. 5.4 The funding relationship Nowhere is the conflict between the voluntary sector and the government more acute than around issues of funding. The focus group exercise suggested that the Compact had not significantly improved the funding situation for voluntary and community groups and that other drivers, such as price, targets and treasury guidance, were more relevant in determining the funding relationships. This is supported by a 2007 Barings Commission study that finds only 7 percent of respondents felt they could make better use of the Compact in negotiating with government funders.11 However, another 2007 survey found there was recognition of the Compact as a useful tool for encouraging a move to three year funding. 12 Conflicts around funding can have a detrimental effect on the confidence and trust built through other aspects of partnership working. Indeed, a 2004 survey found that the spirit of cooperation and trust between partners “was often lost when it came to funding relationships, with the relationship reverting to one of grant maker and supplicant. Civil servants in charge of commissioning or procurement tended to be less aware of the Compact’s codes of good practice.” 13 There is widespread concern within the sector as to how the changing nature of commissioning and contracting might negatively affect the nature of the relationship between statutory funders and local voluntary and community organisations. There is also a desire for the Compact to take a more prominent role in helping manage these tensions. Whilst large organisations appeared to be able to adapt to the changing funding environment and very small organisations with only voluntary incomes are not particularly affected, it is the small and medium sized organisation appear to face increasing difficulties.. A 2007 National Audit Office survey found evidence in to suggest a “disconnect between central government commitments to more effective partnerships with charities, and the reality of their local funding relationships. Central government had not managed to embed commitments such as full cost recovery and longer term funding in local authorities”.14 5.5 Local Compacts Sources of strength, Baring Foundation , 2007 False economy? The costs of contracting and workforce insecurity in the voluntary sector, Unison, 2006 13 Has the Compact gone cold? Summary of research findings. Jean Barclay Compact Working Group. unpublished, 2004 14 Public Funding of Large National Charities, National Audit Office, 2007 11

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The national vision on the Compact has not been replicated on a local level. Local Compacts are often not merely under-resourced but, in many cases, completely un-resourced.It was suggested in the focus group workshop that central government has devolved its Compact leadership role to local authorities. This is done in the name of respecting the autonomy of local authorities, but in reality means that the Compact is not properly implemented locally. Local authorities are not under any compulsion to deliver and can therefore abscond from their responsibilities, or think that part-funding a Compact post is sufficient to fulfil their responsibilities. Local Compacts not being resourced is the major reason why they have little chance of succeeding and that what impact they have falls far short of their potential value to all partners. The publication of Local Compacts covering virtually every area of England fulfils the commitment in the Compact for it to be adopted and adapted locally. With most of the sector working at local level and with local public bodies being their key relationship with the state, the success of the whole Compact depends in large part on whether Local Compacts are working to make a difference to outcomes. The sector has not been slow coming forward in the last year in putting up Compact Champions to help make their Local Compact work but their support and training depend on resources which are often not made available. Very few areas have Compact officers working in the sector and even some of these posts have been lost in the last year. There is a correlation between areas with high performing Compacts and those that resource them. The longer Local Compacts are on the shelf for lack of resourcing the harder it has proved to bring them into operation, not least because the confidence and support secured in the development stage tends to evaporate, and the job of explaining the Compact has to be done again. The negative impact is most severe on small, BME and faith groups and public body staff at operational level who are largely excluded from access to and use of their Local Compact, along with partnerships which should be using their Local Compact as a governance tool. For most of the country, the idea of securing wins from their Compact or engaging in a Compact way of working together with public bodies is unrealistic because capacity is too overstretched to allow time to be given to taking forward their Local Compact. Local sectors want but have yet to hear a national message on Local Compact resourcing, discussion around this is long overdue and Local Strategic Partnerships should consider the need for it and keep the issue under regular review. 5.6 Independence Compact Voice’s report on local sector independence showed that the sector is experiencing a range of independence problems and suggests that the misunderstanding independence is part of a bigger problem of local public

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bodies not understanding the sector.15 This was echoed in the focus group exercise. “The commissioning relationship creates a paradox: the third sector is viewed by government as an important partner, but organisations feel unable to influence government when they believe change will result in poorer services to the people they support. Threats to independence are being felt across the sector.” Sources of strength The Charity Commission found in a 2007 survey found that only 26 percent of charities that deliver public services agreed completely that they are free to make decisions without pressure to conform to the wishes of funders, as against 48 percent of all charities. Stand and deliver 2007 A 2006 IVAR found that there were significant tensions and contradictions between public services delivery and the civil renewal role of community organisations, and that the move from grants to competitive tendering and contracts was threatening the independence and mission of many multipurpose community organisations. However this spirit was often lost when it came to funding relationships, with the relationship reverting to one of grant maker and supplicant. Civil servants in charge of commissioning or procurement tended to be less aware of the Compact’s codes of good practice. In addition, working relationships were perceived to be less good at the level of local authorities. 6. Barriers to Compact use 6.1 Under-resourcing Participants felt that under resourced implementation of the Compact had little chance of succeeding. Whilst Local Compacts have been published throughout the country, they have not been sufficiently resourced and very few Compact workers have been employed. 6.2 Is the Compact "lacking teeth"? A recurring refrain from the voluntary and community sector is that the Compact is “lacking teeth”. The lack of government accountability for Compact non-compliance and the lack of enforcement measures to tackle breaches are regularly cited as a weakness of the Compact. Those calling for the “legal powers” however, are often doing so as a result of frustration in and do not recognise that the Compact already has some force under public law. As the work of the Compact Advocacy Programme and NAVCA/Public Law projects demonstrate, the sector can be empowered through use of the Compact and public law principles. The Compact can create a legitimate Stronger independence, Stronger relationships, Better outcomes , Compact Voice, 2007 15

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expectation among public bodies to adhere to the procedure that has been agreed. If, for example, a public body has agreed under the Compact to consult for 12 weeks with the voluntary sector over particular issues, and they fail to do so, this may render any decision then taken by the body unlawful. A legitimate expectation would be more likely to exist if a public body had specifically signed up to the Compact, but even a commitment from central government might be sufficient to create such a legitimate expectation. The Compact and codes have been endorsed by central government as documents that should be adopted by all central government bodies, they have the weight of guidance. If a public body fails to take guidance into account when making a decision their decision might be rendered unlawful. Whilst the has yet to be a test case which establishes the precise legal status of Compact commitments, it is likely that there will be one soon. Indeed, two recent cases have already hinted at the likely result of any such case. In the High Court, Judge David Mackie QC stated that the Compact was “more than a wish list” it was “a commitment of intent”. He went on to say that local authorities should consider the Compact when making decisions and treat Compact requirements as yardsticks for deciding what was reasonable.16 In the other case, Judge Oliver-Jones QC asserted in a draft reserve judgement, that terms in the Compact had a real prospect of being viewed as an implied contractual terms. Although the Funding Code itself “is not, and cannot be, a contractual document…it is more than merely arguable that the substance of the Code is capable of being incorporated into the particular contract by necessary implication.”17 Despite having some legal force, it is important not to lose sight of the fact that the Compact is a value-driven document that invokes a mutual process of developing, maintaining and enhancing relationships. Ideally it should not be about penalising or punishing but about managing ambiguities and learning how to work together in a better way. Recommendations •

Implementation – need to tackle the gap between rhetoric and practice; the voluntary and community sector being provided with the tools and training and support to challenge breaches of the Compact. Government need support in ensuring the Compact is embedded in all aspects of work with the sector. Specifically; o Clarity on how the Compact can be applied to EU funding; o Further Compact promotion and implementation across nondepartmental public bodies; o Improved guidance for legal departments about how to write Compact-compliant contracts for the voluntary sector;

16

Berry v Cumbria County Council [2007]

17

LSC v Kids in Communication Ltd [2007] 12

o Compact-compliant guidance for central government programmes which are implemented locally, including issues such as full cost recovery; o Improved guidance and support for local authorities on their implementation of key Compact commitments which have a major effect on the local voluntary sector such as 3-months’ notice when ending funding; o Improved consultation processes which make clear what decisions have already been taken and what questions are being asked as well as providing accurate feedback and ensuring responses are taken into account in final decisions; o Further resources for sharing of best practice and learning across central and local government regarding the Compact and relationships with the voluntary sector. •

Awareness raising – Significant promotional work in both sectors to tackle the persistent lack of awareness of the Compact. Promote the Compact and provide education and training for partners of both sides of the relationship. Comprehensive, targeted, promotional campaigns that would increase appreciation and understanding of the Compact and what is and what it can do to make things better for both parties in the relationship.

•

Local Compact resourcing – need for proper funding to ensure Local Compact implementation. An exploration of how this would work in practice is needed.

•

Research – a programme of research; a body of work breaking down what works in order to share good practice; research with local authorities to understand where the Compact fits within a local political environment that will be dominated by the LAA.

•

Joining-up - policy should be checked against the Compact to ensure that it complies with the National or Local Compact and makes meaningful reference to it. Much stronger link between local and national public bodies to ensure they work together to uphold Compact commitments.

•

Positive relationships – the Compact needs to be regarded as a mechanism for maintaining and enhancing relationships. Positive ways of working should be embedded on both sides of the relationship. Needs to be clear understanding this is an agreement of mutual benefit, as much in government’s interest as the sector.

Conclusion

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Overall there has been development and improvement in the relationship between government and the sector. The profile and investment in the Compact over the last year has been significant and wholly welcome. The sector now has its own Minister and a new Commission for the Compact taking strides to improve the relationship. The sector feedback does highlight however the ongoing gap between the relationship outlined in the Compact and the reality of the every day experience. The key point much of our findings is that voluntary organisations are not specifically interested in the Compact and making it work – but they are interested in making their relationships with government work. The main message Compact Voice draws from this research is that its time to get the Compact, as it is, implemented. The main solution to this is getting key people in both sectors aware of and using the Compact.

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Annex 1 Compact Advocacy Programme November 2006 - 2007 The Compact Advocacy Programme has in the past year actively supported and campaigned on behalf of voluntary and community organisations in cases where the Compact has been breached. There are two strands to the programme, local and national, which relate to the type of public bodies involved in the cases. As well as giving advice and support to individual organisations about the Compact and how they can use it in their work, the programme also takes on cases and actively works to reach solutions that are Compact-compliant and satisfactory to both parties. In the past year the programme has handled 80 cases involving more than £3 million. Several of the cases have been on behalf of more than one organisation and the results achieved will therefore have wide ranging effects. This year the programme has seen an increase in new local cases. The national cases tend to go on over longer periods but the issues raised are very similar in both strands. All information in this report is taken from the programme’s own work. The data should not be seen as statistically significant. It is representative of the cases handled by the programme rather than necessarily representative of the whole sector’s experience. Overall caseload 80 cases and 37 enquiries over Nov 06-Nov 07 62% of cases are with local statutory bodies 38% are with national statutory bodies 89% had a Funding and Procurement code breach∗ 34% had a Consultation code breach 11% had a BME code breach 9% had breaches of the Compact (overarching document) 4% had a Community groups code breach Headline findings • There has been an ongoing increase in cases with a funding breach over the past three years of the programme’s work and now almost all cases involve a funding issue of some kind. In the earlier years of the programme, there were more cases which were based only on consultation code breaches or issues for BME or community groups. • The number of breaches of the consultation code had dropped slightly but then rose again this year. The cases this year suggest concerns about the lack of open and meaningful consultation processes. This means consultations which make clear what decisions have already been taken 

Many cases have breaches of more than one code and are therefore counted in each relevant category.

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and what questions are being asked as well as providing accurate feedback and ensuring responses are taken into account in final decisions. In previous years there had been more focus on the 12 week minimum time period. This issue seems to be especially prevalent at a local level. (There were consultation breaches in 48% of local cases versus 12% of national cases.) Percentage of cases breaching each code

2004 2005 2006

Volunteering

BME

Community Groups

Funding and Procurement

Consultation and Policy Appraisal

2007 The Compact

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

For detailed statistics on previous years of the programme, please see Appendix A.

• Over the past year, the percentage split between local and national cases has reversed. The local programme was only launched in 2005 but it has grown rapidly during this time. This trend appears to be continuing and may reflect the devolution agenda where organisations have more relationships with local statutory bodies as well as the changes with local authorities’ shift away from grants and towards commissioning. Percentage of local and national cases 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Local National

2004

2005

2006

2007

Year

• The number of cases handled by the programme overall has increased significantly, up from only 26 in 2005-6 to 80 in 2006-7. • National programme: In national cases, a key theme is complicated contract arrangements involving several different public bodies on different levels, that leave both the funding body and the voluntary organisation

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unsure of if the Compact applies. Another key theme is overburdensome and disproportionate monitoring arrangements, often blamed on EU regulation but sometimes added at a UK level. • Local programme: In local cases, key themes are the lack of awareness of the Compact and guidance from central government which does not promote Compact-compliant working. There are also concerns about the independence of the voluntary sector manifested in the sector’s fear of challenging its statutory funders as well as non-Compact compliant contracts and application forms which interfere with organisations’ internal management. Recommendations • Significant promotional work in both sectors to tackle the persistent lack of awareness of the Compact; • Focus on implementation of the Compact across government including: o Clarity on how the Compact can be applied to EU funding; o Further Compact promotion and implementation across nondepartmental public bodies; o Improved guidance for legal departments about how to write Compact-compliant contracts for the voluntary sector; o Compact-compliant guidance for central government programmes which are implemented locally, including issues such as full cost recovery; o Improved guidance and support for local authorities on their implementation of key Compact commitments which have a major effect on the local voluntary sector, such as 3-months’ notice when ending funding; o Improved consultation processes which make clear what decisions have already been taken and what questions are being asked as well as providing accurate feedback and ensuring responses are taken into account in final decisions; o Further resources for sharing of best practice and learning across central and local government regarding the Compact and relationships with the voluntary sector.

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Local Advocacy Programme Cases 50 different local cases and 22 local enquiries handled over Nov 06-Nov 07 46 cases had a Funding and Procurement code breach (92%) 24 had a Consultation code breach (48%) 5 had a breach of the overarching Compact clause on independence (10%) 5 had a BME code breach (10%) Targets 39 cases with local authorities (78%) 9 cases with PCTs (18%) 2 cases with prisons/probation services (4%) 1 case with a Government Office (2%) Breaches Top breaches in order are: 1) Ending funding without 3-months’ notice or without giving reasons why 2) Not consulting the sector on issues likely to affect it 3) Not being sensitive to the effect on organisations of changes to their funding 4) Lack of open and meaningful consultation, making clear what decisions have been made and what can still be influenced 5) Not involving the sector in programme design 6) Lack of full-cost recovery 7) Not trying to discuss and resolve performance issues before ending funding 8) Proportionate monitoring requirements 9) Appropriate balance and handling of risk Local Funding Code Breaches 2006-7 Number of cases

Section

0

5

10

15

20

25

30

35

40

Overarching principles Partners hips principles Programme des ign Promote widely, enough time to respond Clear and access ible forms Ask for relevant info on applications Full-cos t recovery Timely notification on applications Sensitive to changes Managing ris k Focus on outcomes Advance payment Longer-term funding Payment on time Proportionate monitoring Joined-up monitoring, only necess ary info 3-months' notice, give reas ons Performance management

Cases only

Cases and enquiries

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Themes in the Local Advocacy Programme The main reason local cases appear to occur is a lack of awareness of the Compact, its benefits for both sides and how to implement it. In the context of the financial and other pressures on local authorities and PCTs, this lack of awareness has serious consequences for voluntary organisations and the people they serve. It seems commissioners and other officers could often be better trained to understand the sector and the Compact and how it can help them in their work. The most comment breach locally is of funding being cut without proper notice and reasons given. This has included examples of some very poor practice – a council officer announcing on local radio that the local CVS would not get further funding and a small BME group being told in June that their PCT funding had been ended in April. It also often links with a consultation breach where a consultation or impact assessment should have been done before major funding cuts were made. There is also a smaller pattern with central government programmes which involve local agencies in funding the voluntary sector but do not promote Compact compliance in their guidance. As noted by the Commission for the Compact in their recent report on government funding, central government programmes could improve guidance on issues such as full cost recovery to increase clarity for those administering these programmes. This could bring significant gains in Compact-compliance at a local level. Finally, the independence of the voluntary sector is also a real concern across the local cases. This issue manifests itself in different ways which are explored more fully in Compact Voice’s report on this topic in July 2007. However, a key issue seen by the Advocacy Programme is a pervasive fear, whether real or inferred, that challenging a local statutory partner will result in funding being ended. There have also been various instances of public bodies trying to assert control over the internal workings of voluntary organisations. While government and its agencies must ensure that public money is spent appropriately, there may be tensions where this creates a risk averse culture, often with input from legal teams, which leads to voluntary groups being pushed to sign onerous and intrusive contracts which are not Compactcompliant or to give information on application forms which is beyond that required of public or private bodies. Although independence is currently a key issue in 10% of the local cases, it is a persistent theme in enquiries and the fear of challenging is prevalent across most cases.

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National Advocacy Programme 30 different national cases and 15 enquiries handled over Nov 06-Nov 07 25 had a Funding and Procurement code breach (83%) 3 had Consultation code breaches (12%) 4 had a BME code breach (13%) 4 cases have been concerning EU funds (13%) 9 cases have been going on for more than a year (36%) Targets 16 cases with Government departments, widely spread between them • 4 cases are with the Home Office • 4 cases are with the Department for Education and Skills, now the Department for Children, Schools and Families 11 cases with non-departmental government bodies • 3 cases are with the Big Lottery Fund • 3 cases are with the Learning and Skills Council 1 case with a Regional Development Agency 1 case with a Government Office Breaches Top breaches in order are: 1) Not giving timely notifications on applications 2) Not paying in advance 3) Not awarding full cost recovery 4) On shared fourth place were the following breaches: Not giving enough time to respond, lack of clear and accessible forms and information, not managing risk well, and lack of longer term funding

National Funding Breaches Performance management 3-months' notice, give reasons Joined-up monitoring, only necessary Proportionate monitoring Effective monitoring Payment on time Longer-term funding Advance payment Focus on outcomes Managing risk Sensitive to changes Timely notification on applications Full-cost recovery Ask for relevant info on applications Clear and accessible forms Promote widely, enough time to respond Programme design Sustained and long term capability Partnerships principles Overarching principles 0 Cases only

2

4

6

8

10

12

14

16

18

Cases and enquiries

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Themes in the National Advocacy Programme A third of all national cases are on behalf of more than one organisation, adding complexity and, usually, length to the case, but also making the effects more far reaching. One case has been going since early 2006 and has involved over 20 different organisations, covering numerous breaches and complaints. The most common breaches are of the funding code. 83% of all cases include one or more funding breaches. The most common complaints are around timing; either around late payments or application timelines. Timelines are frequently short, which puts small organisations at a disadvantage and which hinders partnership working and consortia building. Government timelines, connected to the spending reviews, Treasury announcements etc are sometimes putting departments in difficult situations where there is simply not enough time to be Compact compliant. In these situations better communication would be welcomed, rather than simply passing on the tight deadlines and short timescales to the voluntary organisations. Government departments, regional bodies and NDGB are often passing on overburdensome and disproportionate reporting and monitoring requirements from the EU to voluntary organisations, and refusing to take a more flexible approach, blaming EU regulation. There is still a lot of confusion around what requirements are imposed at what stage and where to challenge them. One case has shown significant regional differences in how monitoring and reporting requirements are imposed, despite the funding coming from the same pot. There is also evidence of where organisations have experienced Compact breaches but assume that the Compact does not apply to EU funds. It is therefore a priority to get further clarity and progress around the issues of EU funding. An overarching theme in most cases is poor communication. There are often significant delays before letters and phone calls are answered and a lack of easily accessible information regarding new policies, funding programmes etc. There has been a shift away from complaints of short consultation to complaints about the meaningfulness of consultation. Non-departmental government bodies are appearing to be less aware of the Compact than Government departments and some targeted by the programme believe the Compact does not apply to them.

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APPENDIX A Statistics from the Compact Advocacy Programme (2004-7) 2007 89% breaches of Funding & Procurement code 34% breaches of Consultation & Policy Appraisal code 11% breaches of Black & Minority-Ethnic Organisations code 4% breaches of Community Groups code 9% breaches of the Compact (overarching document) 62% Local cases 38% National cases 80 cases overall 2006 77% breaches of Funding & Procurement code 30% breaches of Consultation & Policy Appraisal code 8% breaches of Black & Minority-Ethnic Organisations code 4% breaches of Community Groups code 4% breaches of Volunteering code 4% breaches of the Compact (overarching document) 68% National cases 32% Local cases 26 cases overall 2005 58% breaches of Funding & Procurement code 42% breaches of Consultation & Policy Appraisal code 9% breaches of Community Groups code 3% breaches of Black & Minority-Ethnic Organisations code 3% breaches of Volunteering code 13% breaches of the Compact (overarching document) 64% of cases were breaches of the National Compact with 86% involving Government departments and 14% NDPBs. Of the 36% of cases involving Local Compacts, 92% involved local authorities whilst 8% concerned Government Offices. 23 cases overall 2004 59% breaches of Funding & Procurement code 41% breaches of Consultation & Policy Appraisal code 6% breaches of Black & Minority-Ethnic Organisations code 20% breaches of the Compact (overarching document) 86% concerning Government departments and 14% concerning NDPBs (at this time there was only a National Compact Advocacy Programme) 15 cases overall

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“The Compact is like gym membership. There's no point having one unless you use it” an indication of the range of the experiences and opinions from people within voluntary and community organisations which have significant income from government agencies

a report from 6 focus for Compact Voice presented at a public meeting in London, 08 November 2007

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List of contents: Executive summary 1.)

Introduction

2.)

Purpose

3.)

Methodology

4.)

Findings • • •

Endorsement Credibility gap Looking ahead

5.)

Discussion and conclusions

6.)

Recommendations for the design and framing of future research

Acknowledgement As the facilitator I am indebted to all the practitioners who took part in the focus groups. I would like to thank them for making the time in their busy professional lives to contribute to the study, for drawing on their expert knowledge and relevant experience and for approaching the discussion with such openness and frankness. I have learned a great deal from them and hope I have been able to communicate that understanding to a wider audience by means of this report.

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Executive summary “The Compact is like gym membership. There's no point having one unless you use it”. Like gym membership it was signed up to with the best intentions and with great expectations. Nine years on since its launch this study confirms that the document has certainly retained its tremendous “symbolic” and much of its “practical importance”. The most striking finding of the focus groups was the almost universal endorsement of the Compact as a “good idea in principle” and that “it’s better to have it than not have it”. The Compact appeared to have lost nothing of its symbolic strength as participants felt that it would “be an amazingly powerful political statement” to walk away from the commitment expressed in it. Some participants of the focus groups also stated that they can “make the Compact work for [them]” and provided examples of the Compact’s practical importance, such as its role in the development of good practice. However, the great expectations of some, like with gym membership, do not seem to have been met and while differences to the “Relationships between Government and the Voluntary and Community Sector” have been made they were experienced as both positive and negative. The participants described experiences in which the expectations associated with the Compact have opened a potentially very damaging credibility gap. Participants were clear that the ‘endorsement by government’ has not led to wide spread compliance with the undertakings of the Compact by local authorities and other government funded bodies and they indicated that significant parts of the Voluntary and Community Sector might be disengaged from, or disappointed with, the ‘consultation process’.k The participants also anticipate that their expectations of and experiences with the Compact are likely to be affected by the changing environment where there might, for example, be a shift away from ‘what can the government do for the voluntary sector’ to ‘what can the voluntary sector do for the government’, a shift also “towards commissioning, markets and contracts”. This may in turn affect both the Compacts practical and symbolic importance. Six focus groups could not provide a comprehensive range of the experiences of the voluntary and community sector but they have provided some insights. Yet, this study clearly indicated that we cannot continue to treat as one sector what is not a single entity but needs to be defined much more effectively. Even given the restrictions of its methodology the evidence of this project is that in terms of Compact use it was dealing mostly with organisations with significant government income and or infrastructure organisations and that other organisations might either not know or not want to know or have neither time nor money to engage. This would need to be investigated by further studies, however, as absence of evidence is, as we know, not evidence of absence.

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1.)

Introduction This report is prepared for Compact Voice and will be presented to a public meeting 08 November 2007. Compact Voice will be presenting an Annual Sector Report to the Compact Annual Meeting in December. The Annual Sector Report will aim to give an overview of the relationship between the sector and the government as framed by the Compact highlighting gaps in knowledge and priorities for the future. One part of the Annual Sector Report will be the findings of six focus groups organised to collect the experiences of representatives from diverse voluntary and community sector organisations contained in this report. This report is solely prepared to become part of the Annual Sector Report and therefore does not contain a background section on the Compact at this stage and was not edited for publication.

2.)

Purpose The main purpose of the focus groups was to obtain from representatives of diverse voluntary sector organizations: •

their experiences of Compact use

•

their views on how their independence has been affected by Compact

•

their views on how their funding has been affected by Compact.

•

a check-list of the issues that may need to be addressed to make Compact usage better.

This was to provide an indication of the range of the sector’s experience and opinion with regard to the Compact and to provide contextual information for the overall report. Furthermore it should provide a checklist of issues for the design and framing of future research.

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3.)

Methodology For this project Compact Voice engaged an independent researcher to facilitate six focus groups and present their findings impartially. Compact Voice administered the invitations to the focus groups. An initial “call to all voluntary organisations” went out “snowballing” through networks and infrastructure organisations and was also placed on a number of Websites such as the Commission for the Compact's website www.thecompact.org.uk. Everyone who is “involved in a community or voluntary organisation” was invited. Compact Voice reported that about half the eventual participants responded to this call and that the remaining participants agreed to attend after having been directly contacted trying to ensure as wide a range of organisations with differing objectives. 6 meetings in three locations (London, Birmingham, Manchester) were held and 46 respondents took part. Given the methodology of asking participants to attend meetings in working hours it is perhaps unsurprising that almost all participants were professionals in the voluntary and community sector with only one volunteer attending. However, this does not fully explain the low take up of the original invitation. Approximately 35% of the respondents’ organisations had income of over £ 1 million, a further 45% income of over £100.000, less than 5% had income of under £100.000 with the remaining 15% not known. Once the largest organisation was excluded because its income distorted the figures significantly it was established that the participants’ organisations from which figures had been made available had an average of approximately £ 500.000 income from “financial relations with government”. We must set the above against the sectors overall figures of roughly 1% with income over £1 million, approximately 10% with income over £100,000, and 89% with income of less than £ 100.000. This does also not include the unregistered or uncharted voluntary and community sector. It is obvious that the participants of the workshops do not reflect the composition of the sector as a whole. (http://www.ncvovol.org.uk/uploadedFiles/NCVO/Research/AlmanacSummary2006.pdf) Just under 70% of participants’ organisations are in receipt of government money and less than 5% said they don’t receive any with the remaining 25% unknown. Participants described 14 categories of objectives for their organisations: Black and Minority Ethnic Groups, Children and Young

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People, Community, Disability, Education and Training, Environment, Families, Health, Homelessness, Infrastructure, International, Older People, Refugees and Displace People, Sport. Approximately 20% of participants described their knowledge of the Compact as advanced, 30% as intermediate, 30% as very little, 10% as non existent with the remaining 10 percent not known. The workshops therefore can sensibly claim to have captured a good indication of the range of experiences and opinions with regard to the Compact from mostly professionals within voluntary and community organisations which have significant income from government agencies. From this still extremely diverse section of the Voluntary and Community Sector, participants came representing a remarkably wide range of backgrounds, yet this could still not cover the full range and one notable absence, for example, were representatives from faith groups.

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4.)

Findings While almost universally backing the idea of a Compact the participants identified a number of problems with it and pointed to some of the possible ways forward. The findings of the focus groups will therefore be divided in three distinct sections: endorsement, credibility gap, looking ahead.

4.1)

Endorsement There was an overwhelming endorsement of the Compact as a good idea. 45 out of 46 participants felt that the Compact was a good idea although this was often qualified as “yes, in principle” or “theoretically”. There was also a very strong feeling that it was better to have the Compact than not to have it. The prospect of not having the Compact raised serious concerns: “the act of taking it away would actually be an amazingly powerful political statement” and “however ineffective, it’s important that it’s there” Five types of examples of positive experiences with the Compact were given: places where participants felt the Compact was having a positive impact on the “Relations between the Government and the Voluntary and Community Sector”, places where the Compact has made partial positive contributions, examples of using the Compact as a last resort, places where developing the local Compact in itself was seen as helpful and positive and places where participants saw the Compact as a driver behind the scenes. Some participants enthusiastically reported from places where they felt the Compact was having a positive impact on working relationships: “We knew what was wrong and what kind of things we wanted to put in place, and that partnership agreement was about how can we improve services to service users, not about how can I in the voluntary sector get more money … or save my project from closing if it’s not operating effectively. Or from the local authority’s point of view it’s not how can we bully the voluntary sector … it was a real hands on heart, how do we work together to improve services for the service users and that’s the starting point, which is common ground for all of us. … and we make the Compact work for us in that respect. So it’s not target driven it’s relationship driven.” “in terms of making sure that transitional funding was there… they made some really tough decisions, but it’s taken two years for them to get to the position where they actually can commission stuff; they’ve done it properly, it’s all above board,

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they’ve gone through a process that’s been well thought out and well structured, and involved the voluntary sector in planning… so they’ve been very good, a very good example of where it’s worked very well, and how it’s involved everybody, and it’s done all…it’s ticked all the boxes.” Other participants told of partial successes: “I presume that the Compact has got some influence …that [the] level of openness in that consultation is better now than it has been previously.” “I think the BME Compact code has enabled a voice to be created in certain areas… where BME groups have been able to sit alongside the usual suspects and make their voice heard“ “and full cost recovery would not be on the agenda if it hadn’t been for the Compact.” Some participants retold experiences where they successfully challenged actions of government agencies using either the Compact in their argument or Compact advocacy services on their behalf. “we were occupying a building that we had secured … to convert …into premises for our organisation with disabled access etc for our users and our staff, and it was on a 10 year lease and normally leases are supposed to be renewable; however, … our lease [became] non renewable, therefore we had to remove ourselves from the building, and at that point it was a case of, end of your lease, bye bye. However, by bringing in … the Compact…not in its entirety but in fact that the principles, the concept that we had invested this amount of money, time, effort on the organisation and that … our services were valued enough… for the local PCT and for the local health authority and the local council to be able to help us back trying to get alternative accommodation premises, … the Compact came into play, not in its word but in principle, that they would then do something to help us as a voluntary sector organisation to be able to retain our services and to be able to carry on doing our work.” “…there were numerous changes throughout the delivery of the contract, way after the contract had been signed, you know, changes to evidence standards and what we were expected to collect in terms of evidence, so I’m talking about 12 months into a two year contract, so we just got to the point where … it was unsustainable; so we called in the services of the Compact advocacy team, and they supported us…”

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In some areas the process of negotiating the local Compact was seen as helpful even if it didn’t actually achieve change. “the process of developing the Compact was very, very positive for a lot of organisations” “When people were developing the Compact they said it was great, we were having these discussions, we’re negotiating these things. Then we produced it and it stopped being so good and it just started gathering dust. But actually people felt they made progress during the discussion.” One participant explained how he knew that a particular local authority was better to work with but not why and that only recently he discovered that it might be the Compact which is driving this. “it’s something that is driving [the local authority]… they really do support and want to work with community sector, third sector organisations.”… “but I’ve never known [the Compact] was there until I went on the website this morning”. It became clear that the participants who were all from the Voluntary and Community Sector did not feel that their counterparts in government were universally in favour of the Compact. “government departments … just consider it a thorn in their side” and “just wish it would go away”

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4.2)

Credibility gap Important themes which consistently emerged were those of the ignorance of or of the ignoring of the Compact, the lack of reporting of compliance and non compliance and issues arising from the authority of the Compact. The most prevalent experience of participants appeared to be of instances when those who according to the “undertakings by government” in the Compact were supposed to apply key principles such “simplicity and proportionality” and “consistency and coordination” did not do so. Most but not all instances appeared to involve funding. “they are playing cat and mouse with the funding” “They had the money, we made the successes, we proved, we made the outcomes and it was all independently evaluated etc. it comes to saying, right okay it’s achieved what it should do, it’s saved, now you need to invest. They didn’t want to know.” “if … conflicting with the powers that be, you can tear your Compact up” It was felt the Compact was either not known or being ignored. “there’s been … stunned silence in the room about what is this Compact” “every single PCT is signed up to the Compact and we’re saying we support it and yet the people on the ground that I deal with at a commissioning level haven’t heard of it” Voluntary and Community Sector Organisations felt that they cannot afford to change this situation: “you’re running late on a delivery of a project, you’ve been offered … a price very late; there is an imperative to get things moving very quickly, the last thing you can afford to do is spend the time educating local authority officers about the Compact” The Compact also appeared to be not well known in the Voluntary and Community Sector which has an undertaking of promoting “effective relationships with Government”. Where it was known, participants reported that they had sometimes heard rather negative references to it.

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“in most cases, they [50 small community organisations] were pretty unaware of the existence of the Compact” “you’ve got a code that’s dedicated to BME groups, yet those … don’t know about the Compact” “I’ve heard the phrase, it’s not worth the paper it’s written on, used, if I’m honest” During the first meeting there was a call for “breaking the silence about lack of compliance”. This became particularly pertinent as several participants in later meetings reported instances, including receiving ill concealed threats, when Voluntary and Community Sector organisations would not wish to confront local authorities for fear of the consequences. “to make the Compact case we needed one of them to put their heads above the parapet and take on a public case. No one wanted to do that because it would jeopardise the whole future funding relationship” “…you do not bite the hand that feeds you…” “and they don’t fund anybody that criticises them. That’s been said. I was there when it was said.” On the other hand participants were also disappointed that there did not appear to be an effective way of reporting and rewarding compliance and they expressed their sympathy for hard stretched local authorities. “I did have some sympathy with local authorities, because it seemed to me … central Government were saying to them, well we want you to go and have this very mature relationship with the voluntary sector over here, but we’re not going to treat you like that… we’re still going to have a very tight grasp on your finances, we’re still going to dictate targets to you” “we don’t know whether the Compact has caused these outcomes, all these changes” “I can’t see what the carrot is at the moment for those who are sort of sandwiched in the middle having to do the contracts and the negotiations, not having enough time”

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A strong theme emerged relating to how the Compact receives its authority. This applied both to the endorsement by Government and “the voluntary and community sector itself through its consultation process”. Participants often felt that the government’s endorsement was insufficient “if Government’s going to make fantastic policy at the high level and they’re just expected to somehow … fall down through the system and replicate it’s fantastic vision, that just isn’t reality.” and that the “consultation process” might be flawed. “The Compact, ha, you’ll get hollow laughs and blank stares. Because the fact is that they [voluntary sector organisation] feel it’s not made any difference, they’re not being listened to; they’re being heard but not listened to.” “there are key players which can also be called the usual suspects who are operating at this strategic level because they have the capacity and the resources to operate at this strategic level … and they are working very effectively at that level, sometimes creating great glossy PDFs and downloads and whole new organisations, but there are smaller organisations who don’t have the resources to be able to operate strategically, who are not accessing all this kind of glossy information and not attending launches …, who have no idea about what it really means at that kind of level, because it’s all operating up here” Participants also reported disappointment at instances where the implementation has got stuck or led to little: “the … Compact Group has not met for the last 18 months to two years. It does not have a Compact Officer”! “Okay maybe the local authority has a Compact somewhere hidden in the cupboard but it’s not using it, nobody knows that it’s there” It should be noted that participants did not seem to have a shared understanding of the Compact and that there are at least two prominent concepts, the “Compact as a guide to partnership working” “the Compact is a value driven document” “It is about everybody trying to work together and find solutions locally” and the “Compact as a rulebook” “If you know that nobody will control you than why have a driving licence”

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4.3)

Looking ahead In this section a number of issues are listed which participants raised. They each have their subheadings a)

Participants felt that under resourced implementation of the Compact had little chance of succeeding. “This is a much bigger job than they realised” They looked specifically at resource for training, marketing/information and office backfill: “there’s a huge [need in] training and awareness, because it doesn’t matter which sector you’re actually talking about or talk to … there’s gaps.” “the chap said to me, where on earth do we go for training on the Compact? “ “it’s very, very difficult to disseminate this information to the real people at the end who are trying … the potential beneficiaries” “It’s either writing a funding bid or dealing with a client or going to one of these meetings, and quite frankly when there’s a lack of trust … you’ve got to really think, do I keep my staff in a job and write a bid or do I go to one of those meetings, which is really not going to bring out anything because it’s not going to protect the organisation and the clients we serve, and that has been one of the problems, there’s a lack of like funding and support”. “So there’s a constant struggle as well between voluntary sector having a bigger engagement with their local strategic partners and at the end of the day, you know having the time and expertise to get on with their day job as well.”

b)

The changes to the environment appeared more powerful drivers than the Compact. In particular participants were concerned about commissioning and markets. “I’m very concerned about how the changing nature of commissioning and contracting over the next few months, plus this business about local area agreements and the lack of opportunity to influence those, direct opportunity, is going to change the nature of the relationship and the trust etc, between statutory funders and local and voluntary organisations, and I’d like to input into any kind of discussion and review on how the Compact can ease that, that process, but I’m not familiar with how it currently does”

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It was felt that the biggest drivers are: “price”, “targets”, “treasury guidance” There is a move “towards commissioning. markets and contracts” “the Compact is not helping to manage this” c)

Participants raised concerns about the use of local Compacts “I think one of the biggest challenges is where Compact is being defined differently, in other different geographical areas, … it shouldn’t look like a service level agreement between a local authority, and I think that’s causing a big problem in that it’s giving a lot of people a different understanding of what Compact can actually do.” “actually the inconsistency between the Compacts that are drawn up in different areas does create problems, particularly for those agencies that are working across with different local agencies, so how can more consistency be achieved then?” “it’s virtually impossible to get any form … of pattern between all [local authorities]”

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5.)

Discussion and conclusions The strong endorsement of the idea of the Compact by the participants of these workshops has to be qualified as it comes mostly from groups with a significant income from government. We do not know from these focus groups what the numerically much larger section of the Voluntary and Community Sector with much less income thinks about the Compact or what their experiences are. The 4 questions this series of focus groups set out to answer were: Participants’ experiences of Compact use While the experiences have clearly been very mixed from enthusiastically positive to despondently negative the overall impression is one that “it’s not quite baking yet” and “the train is moving slowly out of the station”. After nine years the impact of the Compact seems limited. The fact that most participants, even the enthusiastic ones, recognised the symptoms of the credibility gap must give cause for concern. This not withstanding, where the Compact is working overtly or behind the scenes its presence has been positively experienced and in any case “however ineffective, it’s important that it’s there” . Participants’ views on how their independence has been affected by the Compact When asked about this participants often appeared to veer back towards funding issues straight away. While this was never actually articulated during the groups the fact that organisations seem to shy away from challenging local authorities for fear of losing funding or simply upsetting their relationship with the funders is of course directly relevant. If a wall of silence were to be confirmed this would need to be seen as a very important indication that the Compact is not delivering on one of its core shared principles “Voluntary and community organisations are entitled to campaign within the law in order to advance their aims”. Other than that there was probably a feeling that it was up to the organisations to protect their independence rather than for the Compact to protect it. Participants’ views on how their funding has been affected by the Compact. The discussions of the Compact were mostly in regard of funding and it appears that the impact of the Compact was mostly felt there. Overall it seemed that participants did not associate the Compact with a significant improvement in their funding situation. In fact other drivers appeared much more relevant. In this situation very large organisations appeared to be able to adapt in the market environment while the very

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small organisations with only voluntary incomes don’t seem particularly affected. “the ones that are funded entirely by bring and buys, raffles etc, that have been going for 50 years, run by mother, daughter, etc, will continue, because nothing rocks their boat, they just carry on … the absolute bedrock for local communities” However, the small and medium sized organisation appear to face increasing difficulty despite the Compact “It’s the ones in the middle that have had one or two contracts, that have had grants, for no apparent reason for 20 years, who suddenly won’t have grants anymore, who haven’t got the infrastructural ability to go for a contract.” A check-list of the issues that may need to be addressed to make Compact usage better. The participants’ replies to this might be summed up in two categories: ‘clarification of expectations’ and ‘availability of resources’. With regard to clarification, participants needed to know if “endorsement by government” would actually mean a mandatory requirement of all levels of government to subscribe and act on “the undertakings by government”. They needed to know whether the Compact was “getting teeth” or not. They could then engage with the Compact with the appropriate expectations. There is a great challenge as well to all parts of the Voluntary and Community Sector to clarify its structure and the means of participation in the “consultation process”. This clarification is needed as otherwise the Compact would not be working even where it is implemented because it treats as one what isn’t a single entity. With regard to the availability of resources participants were quite clear that an undertaking like taking a policy right from the top through all levels of government right to the delivering individuals would take greater resources than were currently provided. They appeared also clear that not all parts of the Voluntary and Community Sector could be expected to engage as they “are not funded to take part in consultations”.

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Conclusions The participants of these focus groups describe a situation where the Compact stands at a critical junction. After nine years at least a part of the Voluntary and Community Sector has had a chance to experience its effects on their work, their independence and their funding. While they clearly feel it is needed they found it wanting in a number of crucial areas. They felt that the Compact is currently being undermined by a credibility gap. The gap is between the undertakings stated in the Compact and their daily experiences. If the gap was left unaddressed it would inevitably widen and eventually lead to disengagement as each new negative experience is destroying trust. Just like walking away from the Compact this would probably be seen as a strong political statement by the government. Even if the existence of the Compact helps to challenge what is perceived as bad practice it is “not really a success” if you have to fight for it. The participants of the focus groups, all from the voluntary and community sector, are aware and seemed accepting of the fact that there is not an equal relationship of partners in the Compact “there’s a total imbalance of power between one side and the other side.” yet they seem to be prepared to put their trust into the agreement and to make a “leap of faith”. If what can be expected of the Compact can be clarified and resources provided for its implementation people will not turn their backs on it: Because to some “the gap between where we are and where we believe we should be is so big for us that we have felt it necessary to look at other tools, which actually have more an impact.” will not see it as shorthand for conflict “rightly or wrongly, is that Compact has become kind of a shortcut, coded description for conflict” and trust can be built. Real progress appears to have been made and many people have put their hearts and minds into the implementation of the Compact. The partners to the Compact now need to ensure that the efforts that are being made are not leading to the kind of disappointment still being experienced.

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6.)

Recommendations for the design and framing of future research a.)

Clarify, in future research, which part of the Voluntary and Community Sector and which organisational forms within that part are being investigated, as it is extremely unlikely that any project will be able to reflect on “the sector” as a whole.

b.)

Undertake research which is designed to capture an indication of the range of the experiences and opinions with regard to the Compact in some parts of the sector not captured by this report, for example, small voluntary and community organisations, both registered and not registered as charities, with income of less than £10.000 and no income from government agencies. Given the concerns about the consultation process such research should not be undertaken using infrastructure organisations. Such research should be designed in a way that does enable the participation of volunteers and therefore not require participants to expend time during working hours and also not require them to travel significant distances.

c.)

Urgently investigate the existence of a wall of silence regarding the reporting or challenging of unfair practices.

d.)

Provide a publicly accessible evidence base of where the Compact is seen to work or not to work using for example the suggestion of a participant that “a big UK voluntary [organisation] can map the UK with hot spots of really good commissioning and appalling commissioning”.

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Annex 3 Report of the Focus Group Verification Workshop Executive Summary On 8th November, a workshop was held in London at which the findings of the Compact Voice’s focus group exercise were presented and discussed among sector representatives, practitioners and academics. The aim of the verification workshop was to get feedback on the findings of the focus group exercise. The workshop explored whether the findings resonated with participants and whether they reflect the range of the sector’s experiences and perspectives. It also provided an opportunity for participants to voice concerns on issues which they felt had been omitted and to challenge anything in the report which they felt was inaccurate or misleading. As with the focus groups, there was no unanimity or universal experience among the workshop participants, but crucially there was a feeling that the findings of the focus group report broadly reflected their own experience. In the course of the workshop, participants were split into three fall-out groups. Each fallout group was asked to highlight priorities for improving the effectiveness of the Compact. •

Implementation – need to tackle the gap between rhetoric and practice;

•

Awareness raising – need to promote the Compact and provide education and training for partners of both sides of the relationship;

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Local Compact resourcing – need for proper funding to ensure Local Compact implementation

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Research – a number of research priorities were identified, principally the need for research into the experience of smaller community organisations; the need for mapping research to assess levels of knowledge about the Compact; and the need to undertake some research with local authorities to understand where the Compact fits within a local political environment that will be dominated by the LAA.

•

Joining-up / Proofing - policy should be Compact proofed to ensure that it complies with the National or Local Compact and makes meaningful reference to it so that the Compact and Local Compacts are functionally linked with new initiatives and programmes

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Positive relationship – the Compact needs to be regarded as a mechanism for maintaining and enhancing relationships. Positive ways of working between partners should be embedded on both sides of the relationship.

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•

Compact as good business – Compact compliance should be celebrated as being in the best interest and to the benefit of both partners to comply.

1. Methodology The workshop involved 34 participants. These representatives included people who had participated in the original focus group exercise (8), sector practitioners (13), academics (3), members of the Compact Commission (5), and members of Compact Voice (6). Invitations to the workshop were sent to all those who had participated in the focus groups along with a copy of the report soliciting their comments on its content. An open invitation to the workshop was posted on sector websites and included in sector newsletters and updates. Individual invitations to the workshop were widely disseminated by Compact Voice. At the verification workshop, participants were given a copy of the focus group report. The findings were then presented by the focus group facilitator, Jurgen Grotz. After the presentation, the group was divided into three fall-out groups for more in depth discussions about the findings. Each fall-out group was asked to present three key issues in a final plenary discussion (see key findings above). These, and other issues, were discussed in the wider group and are reflected in this document. The comments of focus group participants who were unable to attend the workshop are also taken into account in this report. It is recognised that those most likely to attend the focus group workshop, and the focus groups themselves, will be people who have a certain level of knowledge of and interest in the Compact. They are also likely to attach the greater importance to the Compact. This will inevitably affect the range of views expressed. The purpose of the focus group exercise was to hear the voice of the voluntary and community sector and therefore only addresses one side of a partnerships perceptions. It is beyond the remit of Compact Voice to undertake research into the public sector but Compact Voice would welcome such complimentary research. 2. Main themes 2.1 Endorsement The participants echoed the findings of the report in endorsing the Compact as crucial to improving relations between the government and the voluntary and community sector. All the participants felt that the Compact was a good thing and all three fall-out groups cited examples where the Compact has made positive contributions to this relationship. There was recognition of the fact that the Compact acts as a driver behind the scenes and may be 42

responsible for many positive changes to the relationship which are not necessarily attributed to the Compact. Research needs to be done to understand why the Compact works well in some areas and not so well in others. The findings need to be disseminated. Examples of where the Compact is working well are often down to good individual relationships between people working for voluntary/community organisations and commissioners/local government officers. Participants pointed out that the Compact is in essence about personal relationships as well as relationships between the sectors. 2.2 Credibility Gap The ‘gap’ described in the report, was something that resonated among the participants. One participant described the gap as being “between where we are and where we believe we should be", another described it as “a gap between rhetoric and practice” whilst another, described it in more negative terms as a gap between “fantasy and reality”. However it is described, the gap identified here is that of the failure of proper implementation of the Compact which in turn has impacted on its perceived credibility. The reasons for this gap are identified in the focus group report as: 1) ignorance of the Compact; 2) the ignoring of the Compact; 3) the lack of reporting of compliance; 4) lack of reporting of non-compliance. A fifth issue, identified in the report involving “issues arising from the authority of the Compact”, was not widely discussed in the workshop. 2.3 'Ignorance of the Compact' and 'ignoring the Compact' Lack of awareness of the Compact on both sides of the relationship, combined with the wilful disregard for its requirements, was seen as the key barrier to effective Compact implementation. Indeed, the workshop discussion demonstrated how issues of Compact awareness, compliance and implementation are deeply intertwined and not always easy to unpick. The failure of local public bodies to comply with the Compact was not always seen as being about malice but lack of understanding or external pressures. Local authorities, faced with numerous competing targets, sometimes chose not to regard the Compact compliance as a priority. One participant described her experience in which local authorities were either ignorant of the Compact or deliberately chose not to comply with it. Many in the voluntary and community sector are unaware of the Compact and how it can be used. One participant described her experience of having worked for a small mental health organisation in which no one knew about the Compact. She felt that, whilst the Compact may be known in larger voluntary and community organisations, this knowledge is not filtering down. There is clearly some scepticism within the voluntary and community sector

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as to the Compact’s usefulness. The experience of “hollow laughs” and “blank stares” when trying to raise issues of Compact compliance with government officials resonated within the workshop. The lack of government accountability for breaches of the Compact is reflected in the fact Compact compliance is not monitored. This lack of monitoring also means that that there is no effective way of reporting and rewarding Compact compliance. 2.4 Lack of reporting of non-compliance The reluctance among voluntary and community sector groups to challenge a local pubic body over breaches of the Compact for fear of jeopardising future funding is described in the focus group report as a “wall of silence”. This was recognised by workshop participants who pointed out that even where the independence of the sector is talked about and acknowledged, the fear remains that bringing up the Compact might sour relationships. Reluctance to challenge Compact breaches out of fear of affecting funding raises issues about independence and the way in which public service contracting can compromise sector independence. 2.5 A coded description for conflict? Many participants recognised the fact that, for many, the Compact has come to be seen by both partners as a tool for the sector to use to challenge government. Rather than regarding it as a positive means of partnership working and mutual cooperation the Compact is increasingly seen in negative or adversarial terms. The government often see it as “just another thing they have to comply with” and the sector see it as “a weapon last resort”. There was a division among the workshop participants, echoing that of the focus group participants, between those who felt the Compact should be more about partnership and the relationship, and those who felt it should concentrate more on compliance and enforcement. Whilst the need for compliance was recognised, there was a general feeling within the workshop that the Compact should be “more about carrot and less about stick”. A number of participants warned against allowing the debate to become framed in terms of "government bad - voluntary and community sector good". Both sides have the responsibility to make the Compact work and a “them and us” approach is counter-productive. The public sector can become wary in its relationship with the voluntary sector where organisations they engage with point out the failures of the statutory sector whilst not admitting their own faults. The voluntary and community sector needs to acknowledge and recognise their part in a failure to implement the Compact and codes. Where statutory partners fail to deliver the voluntary sector should be wary of allowing disillusion or disengagement to take hold. Some participants questioned the Government’s commitment to the Compact and it was suggested that there is a deeper policy contradiction within the

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government’s attitude. On one hand it was suggested that the government want a good relationship with the sector but if that relationship becomes to close it might act as a constraint on the market. Other participants challenged this view, arguing that not only was there no contradiction between Compact principles and an effective business model, but that the Compact makes “good business sense” for both partners. 2.6 Is the Compact "lacking teeth"? An issued raised in the focus groups and discussed in the workshop was the lack of government accountability for Compact non-compliance and the lack of enforcement measures to tackle breaches. The issue of the legal status of the Compact was discussed in the fall-out groups and there was a division between those that felt that it should be made legally binding and those who felt that this would not necessarily strengthen the Compact. This division of opinion mirrors that in the focus groups between those who saw the Compact as a rulebook and those who saw it more as a guide to partnership working. It was pointed out that in public law the Compact creates a legitimate expectation among public bodies to adhere to the procedure that has been agreed. If, for example, a public body has agreed under the Compact to consult for 12 weeks with the voluntary sector over particular issues, and they fail to do so, this may render any decision then taken by the body unlawful. A legitimate expectation would be more likely to exist if a public body had specifically signed up to the Compact, but even a commitment from central government might be sufficient to create such a legitimate expectation. It was also argued that as the Compact and codes have been endorsed by central government as documents that should be followed by all central government bodies, they have the weight of guidance. If a public body fails to take guidance into account when making a decision their decision might be rendered unlawful. A test case requires an organisation to "put their head above the parapet" but it is clear that most organisations are afraid to do so in case it should jeopardise their future funding relationship. The level of compliance that the Compact requires by law might well be resolved through the decisions in the courts. However, one participant suggested an interim solution whereby a clause could be included in every contract and funding/grant agreement signed between local authorities and the sector guaranteeing Compact compliance. This could be combined with the introduction of some form of inspectorate.

2.7 Joining up / Compact proofing There was a feeling in the workshop that the Compact needs to be properly applied in a joined-up way. Draft policy papers or documents should be

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Compact proofed to ensure that they comply with the National or Local Compact and make meaningful reference to it. A need was also expressed to assess the Compact’s role in terms of voluntary and community sector participation on Local Strategic Partnerships and Local Area Agreements. Currently the Department for Communities and Local Government is seen to be driving forward the LSP/LAA agenda while the Office of the Third Sector is driving forward the Compact, but the two do not seem to very well joined-up by government. As more of the sector’s funding will come through LSP/LAA’s in future, this issue is likely to become increasingly importance. The old LAA system required a Statement of Community Involvement. This was a good place to mention the links with the Local Compact and endorse the application of Compact principles. Even though in the interests of localism the Statement is no longer mandatory, it was felt that the government should encourage local partners to consider retaining and developing such a statement. 2.8 Local Compacts The national vision on the Compact has not been replicated on a local level. Local Compacts are often not merely under-resourced but, in many cases, completely un-resourced. Under-resourced implementation of the Compact was seen as having little chance of success. One participant identified a gap between fantasy and reality within government policy-making. Good policy made at a high level does not trickle down through the system and get replicated at local level. It was suggested that central government has devolved its Compact leadership role to local authorities. This is done in the name of respecting the autonomy of local authorities, but in reality means that the Compact is not properly implemented locally. Local authorities are not under any compulsion to deliver and can therefore abscond from their responsibilities, or think that part-funding a Compact post is sufficient to fulfil their responsibilities. Whilst Local Compacts have been published throughout the country, they have not been sufficiently resourced and very few Compact workers have been employed. One participant highlighted the tension between central and local government where the role of local government can involve wearing a number of different hats; commissioner, partnership facilitator, leader and provider. Whilst the Compact can be a mechanism to diffuse some of these conflicts, the fact that a tension exists needs to be acknowledged and taken into account when constructing policy. 2.9 Small groups The fact that only 5 percent of focus group participants came from

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organisations with an income of under £100,000 whilst 89 percent of the sector has an income of less than £100,000 raised questions about small organisations experience of the Compact. If awareness of the Compact is low among professionals, who are likely to have come across the Compact it in their work, the lack of awareness in the sector as a whole is likely to be much greater. If this is the case it will impact on the level of endorsement for the Compact reflected in the focus group. As one participant put it “if you haven’t heard of the Compact, who knows whether you would think it was a good idea or not.” The failure of the focus group exercise to reflect the views of many smaller groups highlights a wider problem that very little research is being done into the needs of smaller organisations. These smaller groups are not necessarily “hard to reach” if the effort is made to reach them, but such research needs financial and methodological commitment. One participant called for outreach model to be applied in research in the same way is applied in service delivery. The call for more research was not universally echoed with one participant arguing that it is safe to assume that the situation for smaller organisations is even worse than that for larger organisations. Rather than conducting more research, she argued the need for action. Much of the discussion in the focus groups and the workshop centred on issues of commissioning, procurement, funding and contract issues. These are usually most relevant to the larger, professionalised voluntary and community organisations delivering services under contract. The views of organisations active at a local or community level are likely to be very different. These should be recognised as distinct from the larger, professionally staffed agencies which are most visible. 2.10 BME engagement As with the focus group exercise, much of the workshop discussion focused on funding and procurement. Whilst this is unsurprising, participants pointed out that there are four other Compact Codes. The need to engage with the BME sector was expressed as something that was not clearly enough outlined in the report. Despite the BME Code, BME groups continue to find it difficult to engage in meaningful consultation, engagement and policy-making. 2.11 An unequal relationship Much discussion centred on the fact that the relationship between the voluntary and community sector and the government is inevitably one of power imbalance, as one side has all the funding. It was suggested that this has implications for the Compact’s credibility as a ‘mutually beneficial agreement between partners’. One participant compared the Compact to a football match between a premiership side and a local pub team, where the premiership side shows up when and where they wants to, get to ignore any decisions by the referee which go against them, and any goals scored by the opposition can be ruled

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out. “In this sort of situation” he asks “why should the pub team keep showing up to play?” However, another participant pointed out that a power imbalance does not have to be a problem as a partnership is not necessarily a relationship of equals. The challenge of the Compact is not to create equal partners but to treat partners equally. 3 Recommendations 3.1 Awareness raising Lack of awareness or ignorance of the Compact on both sides of the relationship was regarded as a key barrier to effective implementation. Recommendations included: •

a comprehensive, targeted, promotional campaign that would increase appreciation and understanding of the Compact and what is and what it can do to make things better for both parties in the relationship.

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the voluntary and community sector being provided with the tools and training and support to challenge breaches of the Compact

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Need for partners to engage with the Compact rather than just when they have a problem.

3.2 Implementation 3.3 Compliance •

need for accountability if Compact is not used effectively.

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Acknowledging a systemic failure rather than blaming “a few bad commissioners”. It is a corporate failing – policy framework needs to be challenged

3.4 Research •

research into the experience of smaller community organisations (i.e. with an annual income of under £100,000)

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need for mapping research to assess levels of knowledge about the Compact at all levels, identify knowledge gaps and inform the future research agenda

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need to collate case studies that look at which relationships are working and why and which relationships are not working.

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•

need for in depth local studies to establish what works

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need to undertake some research with local authorities to understand where the Compact fits within a local political environment that will be dominated by the LAA.

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need for more effective dissemination and communication of existing Compact research. The current evidence base is very fragmented and as, a result, research often duplicated.

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Good practice examples provided to enable bad practice to be challenged

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