Not-for-profits and the NHS

Andrew Harrop

As expected, Andy Burnham’s Ten Year Plan for Health and Care today confirmed that under Labour NHS institutions will be the ‘preferred provider’. The party is clear that if it wins power, the Lansley experiment is over and independent services will only play a supporting role.

But the pledge that followed in the document was more of a surprise – and a welcome one. Labour announced that it would introduce a clear demarcation in commissioning between non-profit and commercial providers ‘by giving the voluntary sector organisations the benefit of longer and more stable arrangements’.

This move will be greeted with great pleasure by charities, mutuals and social enterprises, who have worried that they might be shut out from partnerships with the NHS, in Labour’s haste to unwind ‘any qualified provider’.

This is one of a number of announcements in today’s paper to reflect ideas in the recent Fabian report Going Public, which argued that the values, character and accountability of service providers matter far more than whether they are formally public bodies.

On non-profits and public services the report said:

In considering the role of independent providers government and public bodies should think separately about the place of non-profit partners (in all their diversity). Non-state organisations with strong public character (including charities, housing associations, universities, employee mutuals and co-operatives) are often likely to be more suitable providers than private companies. Outsourcing specifications should be designed to give them a strong chance, using the social value approach. On a national level, government could consider when and how to restrict service provision only to state and non-profit providers, as happens today with schools, social housing and adoption. Alternatively, public and non-profit providers with strong public character might be treated as ‘preferred providers’, for example in the delivery of major NHS services, with commercial providers only being used where it could be shown that public interest institutions were unable to deliver.

Achieving this ‘pluralism with public character’ means resolving how to lawfully create commissioning arrangements where organisations with public character either have priority or exclusive access. It would also mean developing an operational test to assess the extent to which non-profit bodies display aspects of public character like a commitment to equality, collaboration and shared ownership (not distributing profits is not a sufficient criterion on its own, as demonstrated in the case of some free schools). And finally public bodies need to identify how to give responsibilities to non-profit providers in a way that protects assets and avoids the risk of future privatisation, an approach pioneered by the co-operative councils movement and highlighted in guidance on mutuals and co-operatives developed by the TUC and Co-operatives UK.

Co-operative councils have also shown how public bodies can abandon traditional commissioning relationships based on private sector procurement. Public bodies should consider when to see non-profit organisations as embedded public interest institutions, which can be treated as partners in identifying needs, developing new solutions, sharing assets, collaborating in joined-up service delivery, and helping to empower and support communities to meet their own needs. This approach informed the recent ‘declaration of interdependence’ on children’s services signed by 23 charities, the TUC, Unite and Unison.

So far the Labour party has hardly begun to think through how to develop a new partnership with the non-profit sector. A period of dialogue is now needed, to enable non-profit providers to help contribute to the next government’s new agenda for public services.

Going Public, by Andrew Harrop with Robert Tinker is available to download here.

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