Graham Manville
For many years the Third Sector was the Cinderella of the economy with the private sector and public sector basking in the spotlight and attracting the top talent. During the past 15 years, however, there has been a drive for the Third Sector to play a larger role in public service delivery. This has not diminished since the global financial crisis (GFC) and the UK government has turned to it in order to plug the gap to be left by the forthcoming public sector cuts framed around the Big Society rhetoric.
The Big Society concept is viewed as either a call to arms for a more civic-minded society; a kind of Kennedy inspired “ask not what your country can do for you but what you can do for your country”. Alternatively it is perceived to be a daring attempt by neo-liberals to use the austerity measures of the GFC to slash public services and roll back the state. The aspect of the Big Society agenda which does not get much media coverage is the desire for a rebalancing of public services which includes the expansion of private sector providers. We are now witnessing large private sector players such as Capita and Serco develop a significant presence in public service delivery. In addition the sector is seeing an influx of Social Enterprises which reinvest their profits back into the community. Rather than it being simply black or white, perhaps the truth lies somewhere in the middle of these two paradigms.
What is inescapable is that the Third Sector is changing and it will need to monitor its organisational performance more effectively and align it to its business strategy. In 1989 the “godfather” of modern management Philip Drucker claimed that non-profits no longer see business as a dirty word. Unfortunately in many parts of the Third Sector this is not the case and many are fearful of the move towards a more commercialised sector. With austerity cuts yet to be fully implemented, there is a lot of pain coming down the track and many Third Sector organisations will need to raise their game in order to remain sustainable.
In the commercial jungle of the private sector, the mantra is survival of the fittest and we are witnessing first hand household names on the high street fall into administration and/or disappear altogether. The Third Sector arguably has a bigger challenge than the private sector as they need to manage the tension between being business-like without compromising their ethical stance. In the Third Sector the larger organisations such as Barnardos, Amnesty International and Oxfam have the critical mass and expertise to weather the storms facing the sector. The smaller organisations will need to improve their performance or risk falling by the wayside. It is envisaged that a significant amount of smaller Third Sector organisations will either have to merge or form consortia in order to compete for contracts.
Existing commissioned contracts awarded by local authorities may be subjected to more intense competitive tendering and contracts may be regained with a commitment to improve on the previous service level agreements. If that was not enough the pervasive nature of 90 day break clauses are being inserted into renewed contracts. So like it or not non-profits will need to have their organisations on a more commercial footing if they are to remain sustainable and continue to provide excellent public services for their service users.
A new edited book on Third Sector Performance has just been published by Gower which has contributions from thought leaders across the world from within academia and practice.
Graham Manville is co-editor of the book and is a Senior Teaching Fellow at the University of Southampton. His PhD focuses on Third Sector Performance Management within UK Housing Associations.
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