Legislating for the Big Society? The Case of the Public Services (Social Enterprise and Social Value) Bill Simon Teasdale Third Sector Research Centre (TSRC) Park House University of Birmingham Birmingham B15 2TT Tel: 0121 414 2578 Email:
[email protected] Pete Alcock Third Sector Research Centre Park House University of Birmingham Birmingham B15 2TT
[email protected] Graham Smith Third Sector Research Centre (TSRC) / Centre for Citizenship, Globalization and Governance (C2G2) School of Social Sciences University of Southampton Southampton SO17 1BJ
[email protected]
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Introduction “There is a paradox at the heart of the ‘Big Society’ message namely that it can be identified as desirable by legislators, but it cannot be legislated for. For if we legislate for the Big Society then it is no longer society which expands but the state” (Lord Bates, 2010) The Conservative Party approached the 2010 United Kingdom (UK) general election with the ‘Big Society’ as a central element to their manifesto and campaign message. One aspect of this idea was an enhanced role for voluntary and community organisations and social enterprises (VCSEs) in the delivery of publicly funded services. Since coming to power as prime minister of the coalition government, David Cameron has continually re‐emphasised the Big Society message as being central to government policy. However this has to some extent been overshadowed, or even contradicted by the decision to make drastic cuts to public spending. The call for an enhanced role for VCSEs is often one element of a market liberal discourse prevalent within the Conservative Party. Here, the state is perceived to ‘crowd out’ voluntary action: substantial cuts to the size and reach of the state will thus lead to an increase in VCSE activity. However, this is not necessarily the intellectual basis of the Big Society; for instance, influential ‘Red Tory’ think tank close to the heart of the Conservative Party have vociferously argued that building the Big Society may require active state support and intervention, including funding (Blond, 2009; Singh, 2009). Perhaps nowhere is the tension in current Conservative governing philosophy more apparent than in the field of public service delivery. For while faced with a fiscal ‘crisis’, Conservatives have promised to drastically reduce public spending and seek to give an enhanced role to VSCEs in service delivery. From a Big Society perspective any rebalancing of the welfare mix goes beyond simply commissioning services from the lowest cost provider, instead seeking to give advantage to VCSEs in recognition of the social value it is claimed they create. However, as Lord Bates highlights above, herein lies a paradox. Achieving this aspect of the Big Society requires formal legislation, to which many in the Conservative Party are traditionally hostile. A recently published private members Bill, The Public Services (Social Enterprise and Social Value) Bill provides a window through which we can explore how this contradiction in 2
Conservative philosophy is played out in the era of the Big Society. The Bill seeks to provide VCSEs the ability to ‘compete on a level playing field’ in the delivery of public services by ensuring that public bodies commissioning services include provisions relating to social value1. It has been presented by its sponsor as (light touch) legislation to develop the Big Society through allowing VCSEs to secure reliable sources of income, and as a means to introducing the concepts of social and environmental value to all public sector contracts. It has been widely supported by VCSE representative bodies – this is not just a Parliamentary issue. What is more, the government is supporting the Bill (Cabinet Office, 2010), making it highly likely that it will come into legislation in some form. The progress of this Bill therefore affords an opportunity for an exploration of possible contradictions in political principle made explicit in political practice that lie at the heart of the Big Society discourse and across competing political governing philosophies in the Conservative Party. We draw on the Hansard record of the parliamentary debate on The Public Services (Social Enterprise and Social Value) Bill to provide a detailed insight as to how legislation might be used to take forward aspects of the Big Society. Our analysis of this debate reveals some of the contradictory discourses within the parliamentary Conservative Party around three key issues: 1.
Should VCSEs be given a fiscal advantage to deliver public services?
2.
How should social value be conceptualised?
3.
What should be the role of legislation in creating the Big Society?
We argue that these are symbolic of wider unresolved tensions within the Conservative Party, which are played out within the Big Society agenda. Predictably how these questions are answered in Parliament is, at the extreme positions, dependent upon members’ moral and ideological compasses. But at the centre of the Conservative Party there is no obvious compromise. The support of the government for the principles of the Bill would suggest that the Big Society is in the ascendancy. However closer scrutiny of the position expressed by the Cabinet Office on behalf of the government reveals that the compromise position is likely to favour Market Liberals within the Conservative party. A mixed economy of welfare 1
http://www.navca.org.uk/localvs/infobank/ilpunews/pubilcservicesBill.htm
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The Big Society has become the leitmotif of policy change for the new UK Coalition Government. Despite concerns in some quarters that it is not understood by many, or that it is little more than a cover for public expenditure cuts (Barnard, 2010; NEF, 2010), it has become the basis of a major Cabinet Office paper outlining the new government’s commitments to ‘Building the Big Society’ (Cabinet Office, 2010). The Big Society appears to mean different things to different protagonists, joining the long line of ‘essentially contested concepts’ (Gallie 1956; Connolly 1974) in political discourse. While we can readily debate the nature of the principles underpinning the idea, it is only by focusing on political practice that we begin to understand the ways in which (if at all) the Big Society is reframing the nature of contemporary politics. One such feature is the enhanced role which the Big Society discourse envisages for voluntary and community organisations and social enterprises (VCSEs) in the delivery of public services – an issue that is of particular interest of course to public policy and administration. One of the Cabinet Office’s key priorities is: ‘making it easier for VCSEs to work with the state’; and already a series of moves have been made to achieve this. Taskforces have been established to advise on reducing ‘red tape’ and support the creation of new mutuals, in particular where these have been created from within current public service agencies. The Compact, governing relations between the state and VCSEs, has been renewed and simplified. Following a Green Paper consultation on commissioning (Cabinet Office, 2010), a (delayed) White Paper on public service reform is now promised for July 2011 to address in particular the need to open up public services to private and VCSE providers. Underlying this promotion of an enhanced role for VCSEs in the delivery of public welfare services is an implicit (and at times explicit) assertion that such diverse forms of service provision have been ‘crowded out’ of the welfare state since the development of the major national public services in the latter part of the twentieth century; and that what is needed now is a major policy shift to re‐instate them. This is not a new concern, and it is one which has been voiced for some time by right leaning commentators such as the Institute for Economic Affairs (See Green, 1993). The suggestion is that before the development of state welfare provision, the voluntary sector was actively (and effectively?) providing a wide range of welfare services, for instance through voluntary hospitals, friendly societies and charities like Barnardo’s. But that once comprehensive public services, such as 4
the NHS, the National Insurance scheme and local social services, were introduced these independent providers disappeared. In the case of voluntary hospitals and friendly societies this is certainly true; but many others (including Barnardo’s) remained within the welfare state, and indeed flourished in providing services which public agencies did not, or could not, cover (see Lewis, 1995). What is more new organisations continued to grow delivering new services to some extent dependent upon or engaged with public services, for instance Citizens Advice Bureaux (CABx) and tenants’ associations. Analysis of Charity Commission records in England and Wales, demonstrates despite the introduction of the welfare state, organised voluntary action continued to grow throughout the late twentieth and early twenty‐first centuries (Backus 2011) And as Lewis (1999, see also Harris, 2010) argues the history of relations between voluntary sector and the state is not one of competition, or still less take‐over; but rather one of shifting boundaries and terms of engagement, for instance from ‘complementary’ service provision in the early part of the last century, when public services were less extensive, to ‘supplementary’ service provision, when distinctive organisations such as CABx and hospices could operate alongside ‘comprehensive’ state provision. To put this in more general terms, as in other advanced industrial nations, welfare provision in the UK is in practice a ‘mixed economy’ of service providers, with public, private and third sector providers operating alongside, and sometimes in partnership with, each other (see Powell, 2007). However, the mix in this economy has been constantly changing over time. In particular since the mid 1980s there has been an increasing focus on the extent to which non‐statutory providers, in both the private and third sector, could take over the delivery of public services from the public agencies who had been delivering these (Lewis, 1999; Billis and Glennerster, 1998). Under the recent Labour administrations these trends continued and indeed were further encouraged, in particular through a range of measures for generic support for third sector agencies to equip themselves better to take on public service delivery. It was argued by third sector representative bodies such as the Association of Chief Executives of Voluntary Organisations (ACEVO) that VCSEs were better placed to deliver public services as they were more responsive to local need, have a high level of public trust, are better able to develop innovative services, and by engaging citizens in the services they receive (ACEVO, 2003). In essence VCSEs create added (social) value when compared to the state as the 5
deliverer of public services. Despite their being little or no evidence to support these claims (Macmillan, 2010) they have been reiterated in official government publications (Cabinet Office, 2009), and recur in the debate over the Public Services Bill which forms the centrepiece of this paper. One consequence of a policy environment favourable to the third sector was a big growth in the proportion of income derived from public expenditure, up from £8bn to £12.8bn between 2000 and 2008 for charities in England and Wales, and largely the result of an increase in the number of contracts for delivery of public services (Clark et al, 2010, p.43 ‐47). Labour also encouraged private providers to bid for and deliver public services, and was planning to extend further all forms of non‐statutory provision, for instance, with major changes planned in the employment services programmes provided by DWP. Significant changes in the mixed economy of welfare were therefore taking place before the election of the Coalition government in 2010; and indeed commitments to promote further the role of VCSEs in public service provision were a feature of the manifestos of all the major parties in the election campaign. That the Conservatives’ Big Society should foreground an enhanced role for VCSEs in public service delivery is therefore not new, and certainly not radical. A new contradictory discourse? There are aspects of the new Big Society discourse, in particular its policy emphasis on enhancing the role for VCSE delivery of welfare services, that are potentially contradictory. At the very general level this is because leading proponents of the Big Society, and in particular the Prime Minister himself, have sought to contrast the Big Society with what they refer to as the Big State. This is associated, it is alleged, with the previous Labour administration, and is characterised as the (undesirable) growth of large, monopolistic and unresponsive public service agencies. Given the new pressure on public expenditure, these large public service providers are no longer affordable in their current form, it is argued; but, more pertinently perhaps, they are in any event not desirable because private and (in particular) third sector providers could deliver these services more efficiently and more responsively. This critique of monopoly state welfare is not new either of course, and was a key driver for the shift towards the contracting with private and third sector providers in the 6
1980s and 1990s. But the Big Society discourse gives it a renewed edge, in particular through a return to the argument that state monopolies are ‘crowding out’ private enterprise and (especially) voluntary and community action. Under the previous Labour administration a policy emphasis was that the role of VCSEs in delivering public services should be enhanced, in part because of the additional social value they create. One element of this was the re‐labelling of voluntary organisations delivering public services as social enterprises (Carmel and Harlock, 2008). Much of the policy and practitioner literature portrays social enterprises as efficient and profitable businesses which create social value, either directly through their trading activity, or through investing surpluses for social benefit (Cabinet Office, 2009). It is unsurprising that an organisational form which apparently combines free market efficiency with the social purpose inherent in the Big Society vision has found favour with today’s Conservative Party eager to do ‘more for less’ in order to deal with the ‘debt crisis’ (Cameron, 2009). However the label social enterprise incorporates a wide range of organisational forms. At one extreme can be found mainstream businesses engaged in the provision of social welfare services, for example Lockheed Martin. At the other extreme some commentators argue that social enterprises must be non‐surplus distributing and pursue an explicit social (c.f. charitable) purpose (see Teasdale, 2011). This conceptual confusion is in part a consequence of there being no consensus as to what constitutes social value or purpose. For some commentators, ‘social’ refers to a collective or shared purpose. For other commentators, ‘social’ refers to a more residualised notion approximating to charitable purpose (See Amin, 2005 for an overview of the changing nature of the social under New Labour.) The particular focus on the ‘untapped potential’ of VCSE provision to create additional social value (however defined) has been taken up by some of the leading non‐ government protagonists of the Big Society, such as Respublica. They have developed the argument further to criticise also large scale private provision of welfare. Blond (2009) talks of the dangers of a ‘public monopoly passing to private oligopoly’; and Singh (2009) argues that the ‘added value’ of VCSEs is ignored under current systems for commissioning public services which perceive value primarily in financial terms. So whereas under New Labour much of the debate was over whether the state or VCSEs should be preferred deliverer of 7
public services, under the coalition government it would seem that the battleground now consists of VCSEs and the private sector. More generally then, what the Big Society is seeking to promote is a much greater role for the third sector, or VCSEs, in the delivery of public services, commissioned by state agencies to replace in‐house provision. And what is needed to secure this is not just a reduction in the size of the state – although this is of course desired for both economic and political reasons – but also a levelling of the playing field so that VCSEs can compete effectively with alternative private and public providers. Indeed according to commentators such as Singh (2009) the playing field does not just need levelling, but it needs to be tilted towards those VCSEs who can deliver the community and voluntary commitment to welfare services which it is suggested that state agencies and large commercial companies cannot. Here, however, a paradox is opened up. Government wants to promote the development of independent providers of welfare services, arising out of communities, voluntary action and social enterprise, at the same time reducing the role of the state and removing red tape and legislative interference. This appeals to the notion of a small state and an enhanced role for civil society; but this appeal also generally includes hostility to regulation, legislation and government interference. There is a potential contradiction here between the desire for a Big Society (and a small state) and the need to level (or tilt) the playing field in order to achieve it. We might not want the state to play much of a role in the Big Society, but we may need the state in order to achieve this. How might this contradiction play out in practice? The Public Services (Social Enterprise and Social Value) Bill
The private members Bill was presented to Parliament on 30 June 2010. The Bill was
debated at a second reading on 19 November 2010, and with the support of the Cabinet Office the Bill was then referred for scrutiny in committee. It is the proceedings of the debate over the second reading which forms the basis of this analysis;2 and it was a debate in which Conservative MPs dominated discussion – and disagreement. The Bill was formally described as: 2
There is no debate associated with the First Reading of a Private Member’s Bill.
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“A BILL TO Require the Secretary of State and local authorities to publish strategies in connection with promoting social enterprise; to enable communities to participate in the formulation and implementation of those strategies; to require that public sector contracts include provisions relating to social outcomes and social value; and for connected purposes” (House of Commons, 2010) The aim, according to the Bill’s sponsor, Chris White was to help bring about the Big Society through legislation by “trying to help one set of providers at the expense of others”. However, in achieving this, the Bill ran the risk of contradicting the principles of free market competition in the awarding of contracts. It exposed, therefore, a contradiction within modern conservative thought between (and arguably within) what we might call the Big Society and the Market Liberal discourses; and these contradictions were played out in the ensuing parliamentary debate on the Bill conducted by the Conservative MPs serving on the committee. Areas of dispute centred upon whether mainstream businesses or VCSEs should be favoured in the delivery of public services; what is meant by social value, and which organisational types create such value; and whether it is acceptable for the central state to take to compel local commissioners to offer preferential treatment to VCSEs. And the positions taken on these areas of dispute exposed the rather different ideological and policy frameworks underpinning the Big Society and Market Liberal approaches to public service reform – with supporters of market liberalism favouring a traditional laissez‐faire approach and Big Society protagonists arguing for legislation to tilt the playing field in favour of VCSEs. These fissures within Conservative Party politics are not readily reconcilable, however, and they posed problems for the Government’s approach towards legislation which in principle they were committed to supporting. As we shall see the attempt in the committee deliberations to arrive at a consensus, or rather a compromise, in practice lead to one approach being favoured over the other. Should VCSEs be given a fiscal advantage to deliver public services? There is general consensus among Conservative MPs that the role of the state in the direct delivery of public services should be reduced as part of a reform of public services aimed at re‐balancing of the mixed economy of welfare. But there is considerable disagreement as to which organisations should fill the gap. From a Big Society perspective there is a clear 9
preference for VCSE delivering publicly funded services, not only because of the additional social value they create, but also because they might reinvest surpluses from delivering these contracts to: “...innovate and expand their activities, using their funding to further build their capacity and strengthen their community base” (Chris White) However, this extended logic of this Big Society perspective is questioned by Market Liberals, who, whilst recognising that supporting VCSEs to deliver public services may be a laudable aim, also argue that these organisations may in practice be unsustainable and cost the taxpayer money by virtue of their inefficiency: “We must not get into a frame of mind in which we think that anything that calls itself a social enterprise is, by definition, a good thing. Such bodies have to be run along business lines...people in Verwood…have set up a community enterprise called the Verwood Hub, which is a community centre. Unfortunately, it is becoming clear that they have not been applying business principles to the running of that centre, so they are having to go back to the local authority and say, "Please give us some more money." The local authority is making it clear that it can go only so far in doing that, because there is a limit to how much it can be expected to use local taxpayers' money to make up for the deficiencies in the business plan of what might otherwise be described as a laudable community enterprise” (Christopher Chope). It also reflects a wider scepticism in some of the public and academic debate about social enterprises and entrepreneurial activity within voluntary and community organisations, which questions whether social enterprise is always as robust as traditional profit‐oriented business (Young, 2011). In particular government support for social enterprises, such as that developed by the Labour Government, can be seen as evidence of the lack of robustness of these organisations as businesses – and this could be extended to include preferred investment under initiatives like the planned Big Society Bank. Social enterprises may not be such robust businesses because they are concerned not only with profit, but also with social value; and this links into a related disagreement within Conservatism revealed in the debates on the Bill. Social value and the Big Society?
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The central premise behind the Bill is the assumption that VCSEs should deliver public services as they create (additional) social value. From a Big Society perspective the rebalancing of the mixed economy of welfare should not be confined to providing market alternatives to the public sector, but should also include the creation of wider social value. Critical to this argument though is the question: “How do we measure social value? What do we mean by it? A great deal of academic research is being done on it and there is no settled view” (Hazel Blears, Lab) Neither the Bill or its sponsor, nor any of the MPs debating its passage specify clearly what is meant by social value. Instead they offer examples of actions or organisations that create social value. Nevertheless, in practice rather different approaches to conceptualising social value are taken by Market Liberal and Big Society elements of Conservative Partythinking. Big Society proponents such as Chris White see social value in terms of reciprocal links and a cohesive society. Thus social value is created when we “bind our neighbourhoods together” (Chris White). An implication is that VCSEs delivering public services create additional social value when set against public and private sector deliverers, for example, through the employment and training of long‐term unemployed people, engagement with local communities, and engendering public trust (Chris White). From this perspective, government should provide a fiscal advantage to VCSEs as their explicit aim is to create social value: “I do not suggest for a second that no private for‐profit businesses have a social objective – a lot of for‐profit companies do take that responsibility seriously ‐ but I see the Bill as a way of encouraging organisations whose main purpose is to deliver services that could be delivered by the state for the community” (Sam Gyimah) But social value is not exclusively claimed by promoters of the Big Society. From a Market Liberal perspective: “all enterprise is necessarily social because it seeks to create value for other people” (Steve Baker). This creation of social value by mainstream businesses might even extend beyond the creation of employment opportunities and wealth: “For example, one of the most successful companies in this country, Tesco, puts a lot of money back into the community every year by enabling people to get vouchers that are then used to buy IT equipment, and other equipment, for schools” (Christopher Chope).
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If social value is not exclusively associated with particular organisational forms, then it is not clear how such value can be promoted by tilting policy in favour of such organisations – or even why this would be a desirably policy goal. Once again fissures open up here in policy prescription.
And there it is not simply a tension between ‘free market’ and ‘VCSE’ prescriptions
when it comes to social value. Some MPs appear to straddle both camps, arguing that social value can equate to financial value that is retained within communities. Richard Fuller, for example, wishes to extend the term ‘social enterprise’ to include locally‐owned businesses: “I, for one, believe that a local business making a local profit that is retained in its local community is of enormous social value to its local community. At the moment, as I was saying earlier, some of that profit is being exported. The very fact of passing the Bill would assist social enterprise, but would also help local businesses that do so much in their local community. That is why I welcome it so much” (Richard Fuller). That said, the general consensus amongst Market Liberal Conservative MPs was that: “If the awarding of public contracts can make a difference to flourishing businesses, large or small, that should count as social or public value” (Fiona Bruce) So although there is widespread consensus that the role of the state in the direct delivery of public services should be reduced, there remains dispute as to whether VCSEs or mainstream businesses should fill the gap created. Proponents of both VCSEs and private businesses are able to point to the creation of social value (albeit differently understood) as a by‐product of favouring one organisational type; and measures to increase social value through the awarding of public sector contracts are apparently universally welcomed. Localism or Central Control? The Bill opens up further tensions when it comes to the extent of central control in setting commissioning frameworks. While Market Liberals will generally oppose any central government legislation that favours one form of organisation over another, the position for Big Society proponents is more confused. The Big Society discourse favours localism; but at the same time a more systematic extension of the role of VCSEs may well require state action.
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“We have all strongly agreed on much of what has been said today, but the key question is: what is the role of the coercive power of the state in building that better society? For me, there is a fundamental disagreement about that role today, as there has always been” (Steve Baker) The Bill itself is an explicit attempt to legislate for one element of a Big Society: an enhanced role for VCSEs in the delivery of public services. “This Bill is my attempt to do such a thing [build the Big Society]. In order to realise a stronger society and to build on those bonds within communities, we need to empower and champion civil society. We need to create the conditions for civil society to flourish. We need to create the opportunity for voluntary organisations, social enterprise, charities and socially responsible businesses to thrive. That will not happen by itself” (Chris White) Thus building the big society is to be achieved through enshrining recognition of VCSEs contribution to social value in legislation. Predictably perhaps, such a pro‐legislation approach was strongly supported by Big Society MPs favouring a greater role for VCSEs in the deliverance of public services. However there was strong resistance to legislation from Market Liberal MPs: “...To achieve that [more small businesses delivering public services], we do not need legislation; all that is required is positive will on the part of the Government…” (Christopher Chope) Of particular concern was the Bill’s apparently contrasting aims to the coalition government’s localism agenda. At a time when the Coalition Government is promoting devolution of decision‐making to local levels, some Conservative MPs highlighted the paradoxical aims of a Bill compelling commissioners to consider social value when procuring public services: “…will he [Nick Hurd] explain why it [the Bill] is mandatory on local authorities? I thought that the Government believed in localism and would trust local authorities to make these judgments themselves without Government interference” (Christopher Chope) Consensus or compromise?
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The Bill was passed to committee stage following support from the Cabinet Office on behalf of the government: “...we support the Bill's objectives. We think it is consistent with the Big Society agenda and our public service reform aims, and with our intention to make it easier for charities, voluntary sector organisations and social enterprises to deliver public services” (Nick Hurd) Is this evidence of a consensus? Whilst it might suggest that the government has favoured that faction of the party proposing VCSEs as preferred providers of public services, closer analysis of the debate reveals it is actually an attempt at a compromise position, which aims to appease both wings of the party. However, when the details of this compromise are examined, we find that they respond primarily to those favouring a Market Liberal approach to the commissioning of public services. Rather than explicitly favour a particular organisational type, the Bill as it progresses through parliament aims mainly to open up the delivery of public services to a broader range of organisations: “I was talking about why we think the Bill is consistent with our ambitions and aspirations for public service reform. One of our aims is to encourage greater diversity of supply and provision…” (Nick Hurd) The original draft of the Bill contained a stricter definition of social enterprise than the loose definition favoured by the last Labour administration. This would have excluded any organisation which paid out more than half of distributed profits to external shareholders ‐ as opposed to using them to achieve social purposes. In this case, Government support for the Bill became conditional on the clauses containing this definition being omitted. As a result it simply becomes associated with the opening up of public services to any organisation which creates social value, however defined. This is at odds with the original intention of the Bill’s sponsor, Chris White, who wanted the legislation to tilt the playing field in favour of VSCEs. The Bill contains no definition of what is meant by social value, and therefore no link to any particular organisational form. And since, as we have seen, it can be argued that all organisations create (some form of) social value, the Bill merely imposes a duty upon commissioners to consider wider social value:
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“Commissioners retain the discretion to determine how social, environmental and economic value is taken into account. The Bill does not stipulate the methodology that should be adopted by commissioners, and it is right not to do so. Local autonomy is maintained” (Nick Hurd) A decision as to what is meant by social value, and whether it is proportionate to take social value into account is in the end, to be left to local commissioners. What is revealed here is a paradox in the Government position on legislating for a Big Society. Rather than compelling local commissioners to behave in a certain way, legislation will: “...simply propose(s) a duty to consider, where relevant and proportionate. It does not compromise autonomy or add additional burdens. It is about trying to turn best practice into standard practice and to deliver the best possible value to taxpayers, and it is on that basis that we are prepared to support the Bill” (Nick Hurd) The government does plan to offer guidance to local commissioners as to how best achieve their aims, through a national programme for commissioning offering training in ‘measuring wider social, environmental and economic value’ (Nick Hurd). But this will stop far short of any central control, or even direction, towards the use of preferred providers. “The procurement officers will not be compelled to do something from the top down, but will have the same choices before them as they have always had. Rather, they will be asked to look imaginatively at those choices. We are talking about benevolent libertarianism and a nudge forward...” (Nadheem Zahawi) Whilst the initial proponents of The Bill may have sought to legislate for a Big Society, the outcome of the parliamentary debate was a Government led compromise which appeased almost all those favouring a Market Liberal approach to public service delivery. Conclusion The debate over the second reading of The Public Services (Social Enterprise and Social Value) Bill provides interesting insights into current tensions within the governing philosophy of the Conservative Party when it comes to the question of commissioning public services. Significant fault lines are exposed. While both Market Liberal and Big Society proponents wish to see the role of the state in the delivery of public services reduced, there 15
are distinct differences as to how this strategy should progress. For Market Liberals there are two dynamics at play. First, the size of the state is criticised: the state should withdraw from many of the activities it is currently engaged in. Second, there is no specific preference for which organisations pick up this activity – the market should be free to all; the most efficient (typically large private sector companies) will win out. The picture is more complicated for proponents of the Big Society. While they share much of the critique of the over‐weaning state, there is a preference for service delivery by VCSEs because of the social value their activities generate. Unlike for Market Liberals, the extent of public services is not necessarily reduced; rather the mode of delivery. But this opens up a second fault line: it implies active state intervention (central government legislation) to support such organisations at the same time as the Big Society promotes localism – local control of decisions about commissioning and the like. The government’s response indicates a reticence to legislate: but no legislation ends up appeasing the Market Liberals and large‐ scale private providers, as evidenced by the recent allocation of prime contractors for the Department of Work and Pensions’ new Work Programme. In a sense, the debate over the Bill (and broader debates around the Big Society) is exposing well‐established tensions within Conservative philosophy given that the Party is home to (amongst others) Market Liberals and those with more traditional commitments to stable community, self‐help and local distinctiveness. Whereas the Conservative Party under Thatcher saw a ‘free market‐strong state’ compromise within the party influenced by the ideas of the New Right (Gamble 1988), the debate over the Public Services Bill provides evidence that the Party is engaged in a new battle of ideas. Evidence from the debate – and the broader response to the current fiscal crisis – suggests that in practical policy terms it is likely to be the Market Liberals who win the day.
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