The Privatisation of Poverty

It’s a brave person who declares the death of the voluntary sector but just look at what’s been happening.

Over the past few months I’ve been looking at the use of complexity approaches to social issues in urban settings. One clear message I am hearing is that traditional ways of tackling problems, such as local government interventions, simply aren’t making much difference.

One reason for this is that grant funding for community organisations is becoming a thing of the past. Local government sources of money and support have dried up with senior local figures now declaring that they don’t do that anymore. This shameful disavowal of responsibility means that local community organisations are either relying on volunteers or closing.

At the same time bigger organisations have secured large contracts that shut out smaller and more local organisations.If questioned, these bigger organisations often complain that they are having to compete with large private sector organisations and say that they are better than the private sector alternative.

This means that voluntary sector organisations that employ staff are having their funding squeezed or removed. The funders, sorry contractors, will pay according to the cheapest reasonable offer. The good old notions of best value and the contributions of social value are ignored in the fight to secure the biggest bang for the buck.

This also means the end of the voluntary sector group part-grant funded, part-volunteer run. These groups face a stark choice either to fold and be left with nothing or to opt for one of the private sector options such as the Community Interest Company or CIC (“kick”). CICs are in essence just like any other company but with certain breaks in recognition of their community contribution. ‘What community contribution?’ you may ask. Aren’t these people paid? Well yes they are. So what’s the difference between a CIC and a limited company? Nothing that directly benefits local communities, so far as I can see.

The march towards the removal of grant funded organisations continues and is nearing completion. People who could have volunteered for voluntary sector groups are now volunteering for private sector companies.

Since the Coalition government of 2010 grant funded organisations have faced two choices. The first is to go out of business either by ceasing activity or operating ‘below the radar’. The second is to somehow form themselves into private sector organisations such as CICs. This second choice, you will appreciate, is rather like telling a fish to ‘get on your bike’. Not surprisingly, very few local groups have managed this or at least managed this and retained their local specialisms.

Alongside the elimination of effective local community groups has been the economic rationalisation of larger groups. The most ‘successful’ of these groups have managed to secure enough funding to ‘save’ certain activities while diversifying and expanding their own business.

If we accept the value of local activity and the contribution of local people coming together for the betterment of society then we will find the resources not only to keep this going but to increase it over and over again. Don’t forget that it was David Cameron who praised the virtues of localism and his government that legislated to create legal powers for communities.

Before we get too misty eyed about Dave remember that he’s responsible for the very problem under discussion: The removal of local groups who help the poorest people in our communities by providing them with opportunities to improve their lives while treating them with decency and respect. That’s what this government is busy taking away.

So where can the money be found to carry out the necessary social activities that hold our communities together? Well the European Social Fund still provides a lot of funding for locally-run activities in places where they are needed. I’m not saying it’s perfect but it is an awful lot better than nothing. It’s interesting to see that no one on either side of the referendum debate, Remain or Leave, seems very keen to point this out. Nevertheless the European Union has a lot of money that could be used for investment in just the sort of local organisations that are desperately needed. Think about that when you put your cross in the box.


Putting the local into Local Enterprise Partnerships

Local Enterprise Partnerships (LEPs) are groups led by businesses to steer economic growth in their areas. In the North East there are two: Tees Valley Unlimited and the North East Local Enterprise Partnership (NELEP). Their role is to promote business and investment by challenging negative perceptions of their area, and by driving transformational change as local communities take greater responsibility for their development.

Last year, the Heseltine report, ‘No Stone Unturned’, supported LEPs and recommended that they be given a range of powers and budgets to drive their work. Earlier this year the North East Independent Economic Review Report for NELEP led by Lord Adonis endorsed the Heseltine review and outlined an even greater role for NELEP and other LEPs.

But how local are LEPs? Heseltine had no place for neighbourhood planning or community budgets and neither Heseltine not Adonis refer to local organisations as contributors to growth. So it seems that LEPs and localism are talking about different things.
The European Funding cycle 2013 to 2020 is currently under review. At least 20% of the European Social Fund (ESF) will be dedicated to social inclusion. The plan is for this to be routed through LEPs who will decide on the delivery. However, the question is whether LEPs have a good enough understanding of social inclusion to do this properly. And if they don’t then there should be opportunities for local groups to get together, possibly as VCS consortia and bid to do this work for the LEPs.

Certainly, the VCS has the fine grain of local knowledge necessary to allocate this funding effectively. And equally certainly the need for this work is there in our region. The question is whether the local VCS has the allies to influence their LEP and to shape the debate in their favour. And the first task is to make LEPs listen.