Debate Opinion Why declare interdependence? Children England and the TUC have published Declaration of Interdependence. Here Children England’s Chief Executive, Kathy Evans, explains why we developed this document and what we want to achieve. In a few brief weeks during May 2014, flying under the radar of the local and European elections, a mounting wave of protest was building at the prospect of regulatory reforms that could have seen councils’ child protection teams outsourced to private companies. Only a fortnight after the consultation closed, the Department for Education announced it would ban profit-making companies from such arrangements. In the span of only a few weeks nearly 75,000 formal responses and petitionary messages were submitted to Michael Gove from a huge breadth of organisations, professionals and members of the public. Whatever else they felt about potential reforms to child protection, 97% united in saying that a line had to be drawn in the sand at the unpalatable prospect of a profit motive in the protection of children. Days later, the Financial Times, in a landmark editorial, called for politicians of all colours to rethink their ‘promiscuous’ enthusiasm for outsourcing public services. In some areas of public service, like probation and court translators, the onset of outsourcing can be clearly dated as a relatively recent development. In the children, young people and families’ service sector, however, a ‘mixed economy’ of public, voluntary and private organisations has been familiar for over a century. Never in our national history has there been a time when the state ran all children’s homes, all schools or all nurseries. Many children’s services, including of course child protection social work itself, were first conducted and funded by charities. In children’s services the boundaries between public and voluntary endeavour have always been quite comfortably fluid. Exactly the same kind of family services provided by a local charity in one community might be run by the local authority in another, without there being any major ‘ideological’ disagreement over who should provide. Over the last 30 years or so, however, we have increasingly seen the diverse mix of agencies involved in supporting and caring for children re-described and managed as a ‘competitive marketplace’. Competitive tendering for highly specified and increasingly complex short term contracts has become the ubiquitous preference of the public service procurement industry, while discretionary grants to invest in smaller community groups have gone wildly, and inexplicably, out of fashion. Some former public sector practitioners have faced not just one but many TUPE transfers to new employers over the last 10 years, just to keep doing the same job in the same community. These ‘marketising’ trends were already well established in children’s services long before the credit crunch and the subsequent austerity policies of the Coalition government. In 2012 Children England published Perfect Storms, a report which highlighted through case studies and innovative modelling how the shared financial pressures, human resource strains and increasing demands for help across statutory and voluntary sectors, were combining to create ever-deepening unsustainable problems for children’s services. We found most charities having to spend ever more of their own resources on competing to get even less income to meet greater demand. One case study epitomised this, with a 19% reduction in income in one year matched precisely by a 19% increase in cases, and a significant ‘internal’ diversion of reduced staffing capacity to more tendering expertise, just to keep bringing in their dwindling income. Significant wage cuts and staff losses in the voluntary sector, even deeper than the public sector pay freezes and redundancies, were being introduced along with waiting lists and service rationing. As single contracts being issued for tender got larger, more and more small charities were being forced out of the ‘marketplace’ for public funding, or forced into uncomfortable and sometimes unserviceable subcontracts with ‘primary’ contractors. Overall, the picture we gathered was one of essential support services for children collectively spending disproportionate and too-often wasted amounts of money, time and effort on competing with each other to do the same thing, while levels of unmet need were increasing. Even worse, such competition was increasingly being weighted to award contracts simply to the cheapest bidder rather than who could deliver the best quality service. With only one or two years' worth of contracts on offer before re-tendering, even the best service provider would struggle to make a demonstrable impact on real outcomes for children before being asked to compete – and to reduce cost – yet again. These ‘ever decreasing circles’ of the contracting merry-go-round seemed primarily to serve an interest in seeing competitive market mechanisms flourish, rather than any real interest in making increasingly scarce money get as quickly and efficiently as possible to where it was most needed and could have most impact. If we could put fluorescent markers on every taxpayer and charity pound being spent purely on the processes of market competition then we might all be able to see more clearly the sheer scale of resources being drawn away from the ‘front line’ of children’s services. There is surprisingly scant research evidence or data on the true amounts being spent nationally on the ‘transfer and transaction’ costs of the competitive marketplace, although Children England hopes to work more on researching this in the near future. In just one local area we studied for Perfect Storms, however, and in one contracting exercise alone, we know that the costs of the competitive process across the council and just 5 of the bidders was at least £1million. That’s before a single solitary penny was spent on delivering the resulting contracted services. We found, after publishing Perfect Storms, that the picture we had formed was one that resonated across voluntary and public sector groups. We began working with the TUC, Unite and Unison, along with a wide range of voluntary sector bodies and service providers, to think about how we might try to ‘change the weather’ in our Perfect Storms. The result is our ‘Declaration of Interdependence’ – a document that aims to reunite public sector services, charities and voluntary groups in our shared vision and commitment to children, young people and families. In it we identify price-driven competition and procurement as eroding the capacity and morale of our collective services and workforces, causing damage to services today, and risking even greater damage tomorrow. We begin a re-framing of relationships between public and voluntary sector by reasserting the unique and important values of public service and civic leadership. We call for reforms to current commissioning and contracting trends at a time when the Cabinet Office is promising to consult on procurement reforms. We believe that our reforms could unlock a far more creative and collaborative pooling of charity and state resources for children than competitive contracting could ever allow. We aim to generate agreement across employers and funders to stem the incessant downwards pressure on the salaries, capacity and skills of our workforce, to end the ‘false economy’ of people being forced into casual working and zero-hours contracts, or paid so poorly that their families require benefits to sustain themselves, and their own children feature in our shameful child poverty rates. We call for longer term public spending and investment plans, and a spirit of social partnership, to build a reliable infrastructure for children, families and communities in the long term, not the short term shopping exercises that simply discard unsuccessful bidders and lose all the social capital and expertise that they have to contribute. Are we idealists? Are we being ideological? Some may think we are. We have no fear of revealing the passionate beliefs and values that drive our work, nor our sense of urgency in the need to change direction. But the real driver underpinning this Declaration of Interdependence is simple maths. With no realistic prospect of the financial pressures on local authorities and charities changing significantly in the near future, whatever may happen at the next General Election, spending this kind of money, time and energy on competing with each other feels increasingly wasteful. Even if there are still a number of competitors for many contracts issued today, the prospects of there being anywhere near as many remaining ‘in business’ and willing to compete over the medium term are slim. Just imagine if, instead of issuing an invitation to tender for an increasingly small and finite amount of public money, and then paying a procurement firm to run an expensive competition for winning it, that total amount of public funds were put on an open community table, and a wide range of charities and voluntary groups added to it with their voluntary income and charitable grants. Imagine all organisations offered creative use of their buildings and premises, the skills and passions of their personnel, their supporters and volunteers. Imagine we then added the goodwill and philanthropy of local people and businesses, and together we aimed to solve the conundrum of how to make all of those resources and efforts really work together, led by the imaginations and mind-bending creativity of children and young people themselves. We believe that would be a far greater asset base from which to think seriously and entrepreneurially about making every penny and every person count. Some may say I’m a dreamer….but with the range of enthusiastic supporters of the Declaration so far, I know I’m not the only one. Will you join us in trying to change the weather? If your organisation would like to become a signatory to the Declaration please contact Chloë Darlington. You can also help us to change the weather by becoming a supporter or member of Children England.