Today’s Financial Times quotes research from the National Council for Voluntary Organisations which found that 36% of charities are operating hand-to-mouth without any cash reserves.
The FT suggests that this raises “profound doubts about whether [these charities] can survive the imminent cull of Whitehall budgets and help deliver David Cameron’s “big society”.
The article notes the current squeeze on contracts and grants. It also observes that some funders are wary of supporting charities with significant reserves and that funding sometimes only covers costs. Of course, some trustees may also bear some responsibility for failing to address the issue of reserves and setting a reserves policy for maintaining financial viability.
Showing posts with label third sector. Show all posts
Showing posts with label third sector. Show all posts
Friday, August 06, 2010
Tuesday, July 13, 2010
The Big Tax rise for the Big Society
I try not to spout off on this blog. But I am concerned about the impact of the VAT rise on charities. (Colleges too will be hit.) The Charity Tax Group estimates the impact to be £143m.
As well as a campaign by the third sector to protect charities, there is an online petition in support of a proposed amendment to the Finance Bill. I urge you to sign it.
As well as a campaign by the third sector to protect charities, there is an online petition in support of a proposed amendment to the Finance Bill. I urge you to sign it.
Thursday, June 17, 2010
Revised Charity Commission guidance on finance, risk and black swans
Last week the Charity Commission published four updated sets of financial guidance for charities. The documents cover risk management; financial difficulties and insolvency; reserves and internal financial controls.
The Commission says that the guidance has been revised to reflect new developments and the challenging economic climate that charities now face.
The updates include guidance on controls over internet banking and safeguards against fraud and financial crime (Internal Financial Controls) and a checklist of key questions for trustees to establish their charity’s financial position (Financial Difficulties and Insolvency).
Interestingly the Commission is warning charities to beware black swans – i.e. the high-impact, hard-to-predict and rare events spotted in Nassim Nicholas Taleb’s book.
The Commission notes (Charities and Risk Management):
If an organisation is vulnerable to a risk that potentially might have an extremely high impact on its operations, it should be considered and evaluated regardless of how remote the likelihood of its happening appears to be. Charities need to find a balance and they will need to weigh the nature of the risk and its impact alongside its likelihood of occurrence. With limited resources, the risks and the benefits or rewards from the activity concerned will need to be considered. It is important to bear in mind that on rare occasions improbable events do occur with devastating effect, at other times probable events do not happen.
Of course, the trickiest aspect of black swans is knowing what they are. High-impact and low-probability risks are often off the radar. Nevertheless rigorous risk management helps: the organisation with contingency plans for staff absence arising from pandemic flu will be more resilient when coping with absences due to volcanic ash grounding Europe.
The Commission says that the guidance has been revised to reflect new developments and the challenging economic climate that charities now face.
The updates include guidance on controls over internet banking and safeguards against fraud and financial crime (Internal Financial Controls) and a checklist of key questions for trustees to establish their charity’s financial position (Financial Difficulties and Insolvency).
Interestingly the Commission is warning charities to beware black swans – i.e. the high-impact, hard-to-predict and rare events spotted in Nassim Nicholas Taleb’s book.
The Commission notes (Charities and Risk Management):
If an organisation is vulnerable to a risk that potentially might have an extremely high impact on its operations, it should be considered and evaluated regardless of how remote the likelihood of its happening appears to be. Charities need to find a balance and they will need to weigh the nature of the risk and its impact alongside its likelihood of occurrence. With limited resources, the risks and the benefits or rewards from the activity concerned will need to be considered. It is important to bear in mind that on rare occasions improbable events do occur with devastating effect, at other times probable events do not happen.
Of course, the trickiest aspect of black swans is knowing what they are. High-impact and low-probability risks are often off the radar. Nevertheless rigorous risk management helps: the organisation with contingency plans for staff absence arising from pandemic flu will be more resilient when coping with absences due to volcanic ash grounding Europe.
Wednesday, November 11, 2009
Code unknown: the third sector code of governance
In a couple of weeks the consultation ends on the revised third sector code of governance. When it was launched in 2005 the original code, Good Governance: a Code for the Voluntary and Community Sector (pdf available), was a real step forward for the voluntary and charitable sector. As there was more talk and even action on the third sector running public services, it was vital that the sector raised its game.
It was disappointing to read on the Third Sector website that more than a quarter of the respondents to the code consultation had not heard of the original code. There is still some way to go…
It was disappointing to read on the Third Sector website that more than a quarter of the respondents to the code consultation had not heard of the original code. There is still some way to go…
Saturday, September 12, 2009
10:10 vision: making a carbon commitment
Last week I was pleased to see that public and third sector organisations making the 10:10 pledge i.e. committing to cut carbon emissions by 10% in 2010. There are ten universities as well as dozens of schools.
While some carbon-reducing measures will have cashflow and budget implications which may preclude speedy implementation at the current time, other measures may save money as well as the planet.
I am actively seeking to reduce my business mileage which is significant albeit driving a low carbon car. Making the 10:10 is consistent with that. I will sign up although I am no sure whether I do that personally or as Deed Consulting.
While some carbon-reducing measures will have cashflow and budget implications which may preclude speedy implementation at the current time, other measures may save money as well as the planet.
I am actively seeking to reduce my business mileage which is significant albeit driving a low carbon car. Making the 10:10 is consistent with that. I will sign up although I am no sure whether I do that personally or as Deed Consulting.
Wednesday, July 08, 2009
Ethics – not expenses?
It now seems that the expenses furore has died down. Its effects will be legion. One effect will doubtless be in the audit plans that internal auditors propose and audit committees consider.
Thousands of internal audit days will be devoted to checking the processes for expenses as internal auditors and audit committees will have been unsettled by the Westminster expenses scandals. If anyone needed a reminder of the seriousness of reputational risks, they have had it. (It’s worth noting that the ripples of the expenses row have reached both the BBC and charities.)
Will those internal audit days be well-spent? Definitely, sometimes.
Where expenses policies are poorly worded, inadequately applied and widely disrespected, some lessons may be learned and culprits may be caught. However, I do wonder if elsewhere the internal audit resource might be better deployed looking more widely at the ethical environment of organisations.
How often do internal auditors look at:
1) How a culture of ethical responsibility is fostered across the organisation?
2) How well codes of ethics are agreed, communicated and bought-in to?
3) How responsibility for ethical matters, legal compliance and reputational risk is allocated?
4) How effectively are social, environmental and ethical risks integrated into risk management?
5) How does the board set itself ethical standards (along the lines of the IoD’s Standard for Directors)?
The answer is not very often and maybe not very well. There is a risk that these kind of reviews degenerate into empty tick-boxing.
I am aware that some housing associations have renamed their audit committees as audit and ethics committees. It will be interesting to see if that means more than a nod in the right direction.
Certainly audit committees do need to look at the wider ethical scene rather go searching for duck houses.
Friday, May 15, 2009
Charities harnessing the power of the internet?
The research consultancy nfpSynergy have issued the results of its Virtual Power survey on The power of the internet for charities. (The report can be downloaded if you register.) the report has some interesting figures although I hope some analysis is to follow as 345 pages is a lot to go through.
Some figures do stand out. It was perhaps surprising to read that 48% of charities are now using social networking sites. (I do wonder how many public sector organisations do likewise.) Less surprising is that only 28% bother to blog.
Strangely the latest survey shows fewer organisations look at the possibility of SMS and mobile telephony as a communication tool. Similarly fewer are using these tools. I do wonder if the mix of respondents may have changed in the recent surveys.
Only a quarter of respondents agree with the statement: “My charity is making the most of the internet".
Only 23% of charities agree with the statement: "Our trustees are involved with our internet strategy". (That may be due to a lack of such a strategy!) Meanwhile 32% of the respondents agree either strongly or slightly that "Our internet strategy is ratified and approved at Board level". That sounds like a rubber stamp being applied – uninvolved approval!
I’d recommend charities (and others) have a look at the survey. The questions – even more than the answers - should get you thinking.
Some figures do stand out. It was perhaps surprising to read that 48% of charities are now using social networking sites. (I do wonder how many public sector organisations do likewise.) Less surprising is that only 28% bother to blog.
Strangely the latest survey shows fewer organisations look at the possibility of SMS and mobile telephony as a communication tool. Similarly fewer are using these tools. I do wonder if the mix of respondents may have changed in the recent surveys.
Only a quarter of respondents agree with the statement: “My charity is making the most of the internet".
Only 23% of charities agree with the statement: "Our trustees are involved with our internet strategy". (That may be due to a lack of such a strategy!) Meanwhile 32% of the respondents agree either strongly or slightly that "Our internet strategy is ratified and approved at Board level". That sounds like a rubber stamp being applied – uninvolved approval!
I’d recommend charities (and others) have a look at the survey. The questions – even more than the answers - should get you thinking.
Friday, February 13, 2009
Learning from the credit crunch: a series of unfortunate incidents (and examples of bad governance)
There’s lots of food for thought around risk, governance and regulation in the revelations from the former chief risk manager at HBOS, Paul Moore.
For people looking for some analysis about the lessons for governance arising from the credit crunch, I would particularly recommend a couple of documents.
There was an interesting article about Flaws at the top in the December issue of the Institute of Directors’ magazine The Director. The article quotes one observer as noting:
Corporate governance itself hasn't failed—the banks have failed corporate governance by not complying with it.
There certainly appears to have been a lack of challenge (and maybe understanding) of the risks that some of the banks were running.
A fuller survey of governance, regulation and the credit crunch was published by the Association of Chartered Certified Accountants (ACCA) in November. While a lot of the analysis was of an accounting technical nature and sometimes banking-specific, Corporate Governance and the Credit Crunch (pdf available) made points of wider relevance to boards in all sectors.
The ACCA made the general observation:
Many of the causal factors seem to be inextricably linked to a failure in corporate governance. Regulatory boxes may have been ticked but fundamental principles of good governance were breached. There should be more emphasis in the performance of corporate governance than with its regulatory compliance.
My personal view is there can be a sense that governance can become ritualistic as an unforeseen effect of rigid and poor regulation.
On the issue of risk management, the report noted:
Risk should have been more fully taken into account when making decisions about strategy or operations. Risk management tools have not always been fit for purpose.... More use should have been made of scenario planning as a risk tool. The risk management function needs to earn, and be accorded, higher status.
I would concur although it is worth remembering that the best sensitivity analysis and scenario modelling would not have necessarily factored in some of the arguably unforeseeable events that have come to pass.
The report links matters of risk to the ever-present fact of life whether we are talking about multi-national banks or community groups: the information imbalance between executives and non-executives. It usefully re-states the obvious:
There is a temptation for managers to make sure that information prepared for non-executive directors does not raise too many difficult questions. A partial explanation for boards not understanding their organisations’ risks is that information is sanitised by the time it reaches them.
It may not be much of a silver lining but hopefully board members will learn some lessons from what lay behind the current financial crisis.
For people looking for some analysis about the lessons for governance arising from the credit crunch, I would particularly recommend a couple of documents.
There was an interesting article about Flaws at the top in the December issue of the Institute of Directors’ magazine The Director. The article quotes one observer as noting:
Corporate governance itself hasn't failed—the banks have failed corporate governance by not complying with it.
There certainly appears to have been a lack of challenge (and maybe understanding) of the risks that some of the banks were running.
A fuller survey of governance, regulation and the credit crunch was published by the Association of Chartered Certified Accountants (ACCA) in November. While a lot of the analysis was of an accounting technical nature and sometimes banking-specific, Corporate Governance and the Credit Crunch (pdf available) made points of wider relevance to boards in all sectors.
The ACCA made the general observation:
Many of the causal factors seem to be inextricably linked to a failure in corporate governance. Regulatory boxes may have been ticked but fundamental principles of good governance were breached. There should be more emphasis in the performance of corporate governance than with its regulatory compliance.
My personal view is there can be a sense that governance can become ritualistic as an unforeseen effect of rigid and poor regulation.
On the issue of risk management, the report noted:
Risk should have been more fully taken into account when making decisions about strategy or operations. Risk management tools have not always been fit for purpose.... More use should have been made of scenario planning as a risk tool. The risk management function needs to earn, and be accorded, higher status.
I would concur although it is worth remembering that the best sensitivity analysis and scenario modelling would not have necessarily factored in some of the arguably unforeseeable events that have come to pass.
The report links matters of risk to the ever-present fact of life whether we are talking about multi-national banks or community groups: the information imbalance between executives and non-executives. It usefully re-states the obvious:
There is a temptation for managers to make sure that information prepared for non-executive directors does not raise too many difficult questions. A partial explanation for boards not understanding their organisations’ risks is that information is sanitised by the time it reaches them.
It may not be much of a silver lining but hopefully board members will learn some lessons from what lay behind the current financial crisis.
Saturday, December 13, 2008
How to survive the credit crunch
While the newspapers are full of advice on cutting household bills and more generally responding to the recession. There have been fewer handy hints for managers delivering public services. However, Public Finance recently carried a useful article by Roger Latham on How to survive the credit crunch. Here are some extracts:
1) prepare for the long haul.
2) watch out for the secondary effects … Existing contractual arrangements around the Private Finance Initiative are already showing signs of pressure. In the long term, the implications on the pension fund will show up in increased employer contributions. Will these still stand, or would there be further changes?
3) efficiency is more than a priority, it’s a necessity.
4) look out for displacement of policy objectives. Existing policy priorities at central and local level are going to change and with them the existing funding arrangements…
5) place shaping on hold? Some of the proposals currently being considered by planners and proposed by developers are going to come to a grinding halt. The value of assets and the cost of borrowing might suspend some long treasured plans. The community facilities promised through Section 106 agreements and the like might not come to fruition…
6) a collapsing capital programme? Valuable parts of your capital programme might be underpinned by capital receipts based on assumptions of land and property values that are now unachievable…
7) check the pattern and flexibility of service demand … You need to think now where your budget flexibility lies.
8) tax base losses.
9) propping up the local economy … Establish immediately what you will and won’t do in discussion with the business community to avoid raising unrealistic expectations.
10) don’t forget the people. The morale of your organisation might take a real hammering…
While some of these are issues specific to local government, other parts of the public and third sectors will often have similar issues – or be affected by how local government responds to the credit crunch and recession.
It’s definitely a good time for revisiting risk registers.
1) prepare for the long haul.
2) watch out for the secondary effects … Existing contractual arrangements around the Private Finance Initiative are already showing signs of pressure. In the long term, the implications on the pension fund will show up in increased employer contributions. Will these still stand, or would there be further changes?
3) efficiency is more than a priority, it’s a necessity.
4) look out for displacement of policy objectives. Existing policy priorities at central and local level are going to change and with them the existing funding arrangements…
5) place shaping on hold? Some of the proposals currently being considered by planners and proposed by developers are going to come to a grinding halt. The value of assets and the cost of borrowing might suspend some long treasured plans. The community facilities promised through Section 106 agreements and the like might not come to fruition…
6) a collapsing capital programme? Valuable parts of your capital programme might be underpinned by capital receipts based on assumptions of land and property values that are now unachievable…
7) check the pattern and flexibility of service demand … You need to think now where your budget flexibility lies.
8) tax base losses.
9) propping up the local economy … Establish immediately what you will and won’t do in discussion with the business community to avoid raising unrealistic expectations.
10) don’t forget the people. The morale of your organisation might take a real hammering…
While some of these are issues specific to local government, other parts of the public and third sectors will often have similar issues – or be affected by how local government responds to the credit crunch and recession.
It’s definitely a good time for revisiting risk registers.
Thursday, November 27, 2008
The third sector – the new rulers?
Yesterday I attended the National Council for Voluntary Organisation’s 10th Hinton Lecture. This year’s lecturer was the Guardian columnist Simon Jenkins. The central argument made was that a vibrant, self-governing democracy needs strong local government.
In order to avoid (almost) everyone in the room agreeing with him, Simon Jenkins threw in a grenade when he suggested that the organisations of the Third Sector were “the new rulers of Britain”. I think this was a little distracting. However, when he said that the “new localism” seemed to be all about “consulting stakeholders” he had a point. How many people know what local strategic partnerships are? What they do? Do they contribute to accountability and transparency?
In order to avoid (almost) everyone in the room agreeing with him, Simon Jenkins threw in a grenade when he suggested that the organisations of the Third Sector were “the new rulers of Britain”. I think this was a little distracting. However, when he said that the “new localism” seemed to be all about “consulting stakeholders” he had a point. How many people know what local strategic partnerships are? What they do? Do they contribute to accountability and transparency?
Friday, August 15, 2008
Tough times and the third sector
The impact of the current economic downturn on the third sector has been in the news. This week Oxfam announced plans for job loses and cost savings. While charities face falling income and rising costs – the people who need them most, need them even more. Earlier in the summer an NCVO study found that the third sector was expecting “tough times”.
The think tank nfpSynergy has published an interesting mini-report on what happens to charities in a recession. They believe that this is a 10-month delay between an economic downturn and its subsequent effect on charities income although the falling disposable income is almost immediate.
I think the nfpSynergy research is useful but we need to be wary. Looking at the last two and a half decades tells us only so much as we have not had a recession for over a decade – and we might still escape one now. The combination of inflationary pressures and credit crunch is both toxic and unusual.
nfpSynergy link the economic downturn to risk management. I wonder how many charities and other third sector organisations included an economic downtown in their risk reviews and prepared contingency plans?
The think tank nfpSynergy has published an interesting mini-report on what happens to charities in a recession. They believe that this is a 10-month delay between an economic downturn and its subsequent effect on charities income although the falling disposable income is almost immediate.
I think the nfpSynergy research is useful but we need to be wary. Looking at the last two and a half decades tells us only so much as we have not had a recession for over a decade – and we might still escape one now. The combination of inflationary pressures and credit crunch is both toxic and unusual.
nfpSynergy link the economic downturn to risk management. I wonder how many charities and other third sector organisations included an economic downtown in their risk reviews and prepared contingency plans?
Going green in HE, FE and elsewhere in the public and third sectors: revolving funds and useful advice
It was good to read last week that the Higher Education Funding Council is launching with Salix Finance a £30m Revolving Green Fund to support the introduction of carbon-saving projects. Earlier in the year the Learning and Skills Council launched similar funding (and I believe that there will be more finance in the future.)
Even when funding bodies are not providing financial support, the public and third sectors can do something. I have come across a useful source of information on Canny Buying. This site is aimed at organisations in Scotland but sustainability has relevance south of the border too.
Even when funding bodies are not providing financial support, the public and third sectors can do something. I have come across a useful source of information on Canny Buying. This site is aimed at organisations in Scotland but sustainability has relevance south of the border too.
Friday, August 01, 2008
More on pay, incentives and motivation: donating unpaid overtime in the for-profit and not-for-profit sectors
There is an interesting article in the Spring issue of Research in Public Policy from Bristol University’s Centre for Market and Public Organisation.
The article summarises some CMPO research In search of the public service ethos. While people talk of a public service ethos, do they actually demonstrate it in behaviour through donating labour in the form of unpaid overtime. It crunched raw data that showed 46% of employees in education, health and social care in the non-profit sector do some unpaid overtime compared with 29% of their counterparts in the for-profit sector.
After adjusting for demographic variables and for the possibility that unpaid overtime may be motivated by the prospect of promotion or bonuses, it concluded that people working in welfare services in the non-profit sector are 12% more likely to do unpaid overtime than those in the for-profit sector.
The authors point out that:
[The] estimate of the premium suggests that an additional 120 million hours are donated in the public sector compared with similar people working in similar jobs in the private sector. This is equivalent to an extra 60,000 people.
But before we get to the unlikely scenario of advocates of keeping the NHS (and other public services) public using the argument that the private sector is bad because it fails to extract unpaid labour from its employees, its worth noting that the researchers did not find that people changed behaviour when they moved between the for-profit and non-profit sectors.
Where does that leave us? Perhaps the research strengthens the case for a mixed economy in public services. The existence of non-profits and for-profits may allow better matching of people to the sector and the motivational structure that works for them. Of course, non-profits cover a range of models and the research did not explore the interesting question of how public sector or third sector employees may work differently.
The article summarises some CMPO research In search of the public service ethos. While people talk of a public service ethos, do they actually demonstrate it in behaviour through donating labour in the form of unpaid overtime. It crunched raw data that showed 46% of employees in education, health and social care in the non-profit sector do some unpaid overtime compared with 29% of their counterparts in the for-profit sector.
After adjusting for demographic variables and for the possibility that unpaid overtime may be motivated by the prospect of promotion or bonuses, it concluded that people working in welfare services in the non-profit sector are 12% more likely to do unpaid overtime than those in the for-profit sector.
The authors point out that:
[The] estimate of the premium suggests that an additional 120 million hours are donated in the public sector compared with similar people working in similar jobs in the private sector. This is equivalent to an extra 60,000 people.
But before we get to the unlikely scenario of advocates of keeping the NHS (and other public services) public using the argument that the private sector is bad because it fails to extract unpaid labour from its employees, its worth noting that the researchers did not find that people changed behaviour when they moved between the for-profit and non-profit sectors.
Where does that leave us? Perhaps the research strengthens the case for a mixed economy in public services. The existence of non-profits and for-profits may allow better matching of people to the sector and the motivational structure that works for them. Of course, non-profits cover a range of models and the research did not explore the interesting question of how public sector or third sector employees may work differently.
Thursday, July 24, 2008
Mission (statement) impossible?
When bored, one way of passing time can be to compare and contrast mission statements in social housing. Here are a random selection from some local housing associations:
1) Working with residents to excel at creating and sustaining communities where people want to live.
2) We will provide our future and present customers with well maintained and affordable homes, in safe and attractive neighbourhoods.
3) Our vision is to build successful communities. Our communities will be famous for good quality homes, excellent services and a cleaner, greener environment. People will feel safe and have pride in their homes and neighbourhoods.
Some adopt a slightly different tack:
We are a social business providing:
- Support and services to individuals and communities through good business practice;
- Quality accommodation in an economically viable manner.
It’s not easy to have a distinctive mission statement that works. Yet such statements do convey something of the organisation’s brand – its value and culture.
As an accountant by profession, I’m not going to give lessons on inspiring mission statements. However, I would recommend a perusal of the 2008 Getting Attention Nonprofit Tagline Awards. The blog might be from the other side of the Atlantic but it has some useful advice on effective taglines (specific, positive, brief, clear, accessible) that are relevant to mission statements too.
1) Working with residents to excel at creating and sustaining communities where people want to live.
2) We will provide our future and present customers with well maintained and affordable homes, in safe and attractive neighbourhoods.
3) Our vision is to build successful communities. Our communities will be famous for good quality homes, excellent services and a cleaner, greener environment. People will feel safe and have pride in their homes and neighbourhoods.
Some adopt a slightly different tack:
We are a social business providing:
- Support and services to individuals and communities through good business practice;
- Quality accommodation in an economically viable manner.
It’s not easy to have a distinctive mission statement that works. Yet such statements do convey something of the organisation’s brand – its value and culture.
As an accountant by profession, I’m not going to give lessons on inspiring mission statements. However, I would recommend a perusal of the 2008 Getting Attention Nonprofit Tagline Awards. The blog might be from the other side of the Atlantic but it has some useful advice on effective taglines (specific, positive, brief, clear, accessible) that are relevant to mission statements too.
Sunday, July 06, 2008
Time to go: Bill Gates, Founders’ syndrome and good governance
As Bill Gates logs off from the hands-on management of Microsoft, perhaps his example will be followed by others, including one or two pioneers in the third sector, handing over to others. He is moving on, although not far, to the non-executive role of chair.
The founders’ syndrome is a recognised sickness in the third sector. There are few things sadder than a good (or even great) organisation going wrong (or even bad) due to an often-inspirational founder losing their way. Charismatic personalities who can provide the energy, direction and leadership that start-ups need in any sector are often not those best suited to letting go when they should.
Treating founders’ syndrome is inherently difficult. Founders are unlikely to self-medicate and hand over to new leaders. The need for an effective board is obviously essential – yet, dominant personalities are unlikely to have developed such a counter-weight. While I believe strongly in the autonomy of the third sector, funders and regulators should be require the good governance that enables organisations to deal with their own problems.
The founders’ syndrome is a recognised sickness in the third sector. There are few things sadder than a good (or even great) organisation going wrong (or even bad) due to an often-inspirational founder losing their way. Charismatic personalities who can provide the energy, direction and leadership that start-ups need in any sector are often not those best suited to letting go when they should.
Treating founders’ syndrome is inherently difficult. Founders are unlikely to self-medicate and hand over to new leaders. The need for an effective board is obviously essential – yet, dominant personalities are unlikely to have developed such a counter-weight. While I believe strongly in the autonomy of the third sector, funders and regulators should be require the good governance that enables organisations to deal with their own problems.
Saturday, June 28, 2008
Some thoughts on 200 blog entries: the FE sector, social housing and the third sector
As I’ve posted 200 entries on this blog, I thought it was time cast a look over my shoulder.
Back in late 2006 when I was setting up I thought that a blog might be interesting as an opportunity to share ideas and information as well as occasionally pontificate. Everyone seemed to have a blog. Many blogs were interesting – either informative or a little weird such as the President of the Islamic Republic of Iran. Perhaps not everyone had a blog – there seemed to be a lack of blogs on housing and further education – two sectors where I have done a far bit of work over the years.
Since 2006 we’ve acquired a new prime minister – and a fair few commentators speculate that we may have another one before long whether before or after the next general election. Public sector reform is still on the agenda. The language has shifted a bit – away from competition and choice towards contestability and personalisation. Some of the agenda has been adopted by the Conservatives - and taken further as in the case of Michael Gove’s proposals on schools choice. Even the Liberal Democrats are advocating empowering the user of public services. One major change that we have seen in the policy environment is a significant tightening of public finances although the implications of the Comprehensive Spending Review were well-heralded and analysed by the experts at the Institute for Fiscal Studies.
In social housing we’ve seen a review or two leading to end of the Housing Corporation as we know it – with a de-merger seeing English Partnerships absorbing investment (aka funding of new affordable housing) and a Tenant Services Authority (briefly known as Oftenant) taking over regulation. The TSA might even have a sector-wide remit including all social housing if the government listens. The nature of regulation is a bit of an unknown. Housing inspection will live on at the Audit Commission for the moment anyway – with new short, sharp, shock notice inspections coming in after some years of talk. We’ll probably see some new council houses at long last – although not many. Indeed there is a bit of uncertainty over all house-building after the credit crunch – who worried about sub-prime in 2006? (Arguably not enough people.)
In further education we’ve seen the announcement of the death of the Learning and Skills Council. Its role will be parcelled out – perhaps neatly, perhaps not - among a Young People Learning Agency, Skills Funding Agency, a National Apprenticeships Agency and dozens of local authorities and “sub-regional clusters”. We’ll see how joined-up that is. As a result of the changes we’ll probably see LSC staffers finding new homes – hopefully not too many will compete against me as freelance consultants. Another key development will be sixth form colleges “rejoining the local government family” – a good or bad thing depending where you are. (I won't quote Tolstoy or Larkin.)
Of course, the third sector – particularly social enterprises – are even sexier now than 20 months ago. Politicians are falling over themselves to woo charities and other third sector organisations. The other week it was the Conservatives offering the sector treats including the Office for the Third Sector which NCVO welcomed. Yesterday it was the government promising the third sector a role in service delivery. As always, reality may be less rosy – as seen in the disappointment when the Department for Work and Pensions gave the lions share to the private sector in a major commissioning exercise. Still we have seen actions as well as words – funds for third sector organisations, ambassadors for social enterprise, training for commissioners, new and flexible forms of legal entity for social enterprises.
I am sure that I have missed a few developments. Its seems a lot has been happening even if much of it is skated over in the mainstream media.
I wonder what I’ll be writing about after another 200 blog entries.
Back in late 2006 when I was setting up I thought that a blog might be interesting as an opportunity to share ideas and information as well as occasionally pontificate. Everyone seemed to have a blog. Many blogs were interesting – either informative or a little weird such as the President of the Islamic Republic of Iran. Perhaps not everyone had a blog – there seemed to be a lack of blogs on housing and further education – two sectors where I have done a far bit of work over the years.
Since 2006 we’ve acquired a new prime minister – and a fair few commentators speculate that we may have another one before long whether before or after the next general election. Public sector reform is still on the agenda. The language has shifted a bit – away from competition and choice towards contestability and personalisation. Some of the agenda has been adopted by the Conservatives - and taken further as in the case of Michael Gove’s proposals on schools choice. Even the Liberal Democrats are advocating empowering the user of public services. One major change that we have seen in the policy environment is a significant tightening of public finances although the implications of the Comprehensive Spending Review were well-heralded and analysed by the experts at the Institute for Fiscal Studies.
In social housing we’ve seen a review or two leading to end of the Housing Corporation as we know it – with a de-merger seeing English Partnerships absorbing investment (aka funding of new affordable housing) and a Tenant Services Authority (briefly known as Oftenant) taking over regulation. The TSA might even have a sector-wide remit including all social housing if the government listens. The nature of regulation is a bit of an unknown. Housing inspection will live on at the Audit Commission for the moment anyway – with new short, sharp, shock notice inspections coming in after some years of talk. We’ll probably see some new council houses at long last – although not many. Indeed there is a bit of uncertainty over all house-building after the credit crunch – who worried about sub-prime in 2006? (Arguably not enough people.)
In further education we’ve seen the announcement of the death of the Learning and Skills Council. Its role will be parcelled out – perhaps neatly, perhaps not - among a Young People Learning Agency, Skills Funding Agency, a National Apprenticeships Agency and dozens of local authorities and “sub-regional clusters”. We’ll see how joined-up that is. As a result of the changes we’ll probably see LSC staffers finding new homes – hopefully not too many will compete against me as freelance consultants. Another key development will be sixth form colleges “rejoining the local government family” – a good or bad thing depending where you are. (I won't quote Tolstoy or Larkin.)
Of course, the third sector – particularly social enterprises – are even sexier now than 20 months ago. Politicians are falling over themselves to woo charities and other third sector organisations. The other week it was the Conservatives offering the sector treats including the Office for the Third Sector which NCVO welcomed. Yesterday it was the government promising the third sector a role in service delivery. As always, reality may be less rosy – as seen in the disappointment when the Department for Work and Pensions gave the lions share to the private sector in a major commissioning exercise. Still we have seen actions as well as words – funds for third sector organisations, ambassadors for social enterprise, training for commissioners, new and flexible forms of legal entity for social enterprises.
I am sure that I have missed a few developments. Its seems a lot has been happening even if much of it is skated over in the mainstream media.
I wonder what I’ll be writing about after another 200 blog entries.
Monday, June 16, 2008
Equality and diversity: the Third Sector struggling to match words with actions
The community investment foundation Olmec has just published A Guide to Equality and Diversity in the Third Sector (pdf available). The guide provides a useful set of signposts to more information.
The guide came out of the findings of an Olmec survey of 159 third sector organisations (pdf available). The study found that the third sector had its heart in the right place with 97% of organisations having an equality and diversity policy but problems in putting it into practice.
The study found more work needed to be done in two main areas:
Firstly in ensuring that the commitment to equalities is demonstrated at the
highest level of an organisation. Secondly that this commitment is transmitted across all policy and strategy areas as well as in individual work plans, performance targets, measurements and reporting requirements. In particular organisations current monitoring systems do not lend themselves to reporting on outcomes and the difference their work has had on those who it is set up to serve. Equalities monitoring was largely directed by funders requirements rather than because it was part of an internal drive to achieve better equalities outcomes or part of externally accredited quality standards.
The guide came out of the findings of an Olmec survey of 159 third sector organisations (pdf available). The study found that the third sector had its heart in the right place with 97% of organisations having an equality and diversity policy but problems in putting it into practice.
The study found more work needed to be done in two main areas:
Firstly in ensuring that the commitment to equalities is demonstrated at the
highest level of an organisation. Secondly that this commitment is transmitted across all policy and strategy areas as well as in individual work plans, performance targets, measurements and reporting requirements. In particular organisations current monitoring systems do not lend themselves to reporting on outcomes and the difference their work has had on those who it is set up to serve. Equalities monitoring was largely directed by funders requirements rather than because it was part of an internal drive to achieve better equalities outcomes or part of externally accredited quality standards.
Wednesday, June 11, 2008
A social enterprise stocktake
Now – with the sale of ECT Recycling – is a good time to take stock on social enterprise. There is a timely review in this month’s Director magazine.
If anyone thought the situation was simple, the article will disabuse them of that notion. It warns of charitable and corporate entities being re-sprayed as social enterprises – “carpet-bagging”. It also suggests a distinction between the Body Shop as a social business and the Big Issue as a social enterprise. (I'm not sure about that one: it sounds like the government when it suggests that the "business" in the Department for Business, Enterprise and Regulatory Reform is something different from the "enterprise".) The article also points to the challenges – such as “scalability” with capacity issues in expanding to be in a position to deliver big contracts.
I have recently worked with one social enterprise that was thinking about seeking growth through mixing commercial and public funding. That poses a whole set of new challenges – not least for governance and accountability.
I suspect this bandwagon will keep rolling.
If anyone thought the situation was simple, the article will disabuse them of that notion. It warns of charitable and corporate entities being re-sprayed as social enterprises – “carpet-bagging”. It also suggests a distinction between the Body Shop as a social business and the Big Issue as a social enterprise. (I'm not sure about that one: it sounds like the government when it suggests that the "business" in the Department for Business, Enterprise and Regulatory Reform is something different from the "enterprise".) The article also points to the challenges – such as “scalability” with capacity issues in expanding to be in a position to deliver big contracts.
I have recently worked with one social enterprise that was thinking about seeking growth through mixing commercial and public funding. That poses a whole set of new challenges – not least for governance and accountability.
I suspect this bandwagon will keep rolling.
Tuesday, June 10, 2008
Social enterprises, muck and brass
I was surprised to read that the social enterprise ECT Recycling (linked to leading social business Ealing Community Transport) has been bought for £3.4m by private sector company May Gurney.
ECT Recycling is a community interest company required to return only 35 per cent of its profits to shareholders with the rest reinvested in operations.
The CIC regulator has said it will be monitoring developments. It will be important that this deal does not go sour – otherwise there will more cries of “privatisation” when new providers are involved in delivering public services.
ECT Recycling is a community interest company required to return only 35 per cent of its profits to shareholders with the rest reinvested in operations.
The CIC regulator has said it will be monitoring developments. It will be important that this deal does not go sour – otherwise there will more cries of “privatisation” when new providers are involved in delivering public services.
Sunday, April 27, 2008
The third sector and terrorism
The Institute of Chartered Accountants’ seminar on charities on Thursday included a thought-provoking session on charities, terrorism and fraud.
I must confess a degree of doubt over whether the WRVS would be targeted by Osama Bin Laden. Moreover, I think that the banks’ money-laundering regulations get in the way of civil society much more than criminals and terrorists who would merrily steal identities to circumvent the bureaucracy. Nevertheless, terrorism should be borne in mind when addressing fraud and other criminal threats as good risk management.
The Charity Commission’s operational guidance on Charities and Terrorism is useful and relevant in the public and third sectors beyond charities.
I must confess a degree of doubt over whether the WRVS would be targeted by Osama Bin Laden. Moreover, I think that the banks’ money-laundering regulations get in the way of civil society much more than criminals and terrorists who would merrily steal identities to circumvent the bureaucracy. Nevertheless, terrorism should be borne in mind when addressing fraud and other criminal threats as good risk management.
The Charity Commission’s operational guidance on Charities and Terrorism is useful and relevant in the public and third sectors beyond charities.
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