Tom Levitt has written an erudite and timely book on the changing relationships and boundaries between the business, public and third sectors.
It should be read by those responsible for a wide range of public policies from “big society” to personalisation of public services and localism – and it should also be read by those involved in their implementation.
Some of the major barriers to effective cross-sector collaboration are a result of a lack of mutual respect and a general misunderstanding of the accountabilities, governance, values and objectives of other sectors, and different cultures. Levitt gets behind these high-level statements to identify their origins and more importantly, he draws on practical examples of where and how these barriers have been overcome.
The business, public and third sectors have always co-existed and there has been a history of mutual support. Corporate social responsibility has gained greater significance, though it is by no means embedded across the business sector and still too often regarded as a nice-to-do activity or an extension of the marketing department. It has to be core and directors need to be held to account for this as much as for financial profitability. This – as well as good employment practice and exemplar governance – should be at the heart of the current drive for responsible capitalism.
People employed in the private sector may volunteer and their employers may provide pro-bono and/or financial support to charities. The public sector has supported the third sector through grant aid, tax advantages, pro-bono support and increasingly through contracts for public service delivery. Many third sector organisations have become reliant on the public sector for all or a significant proportion of their funding, which can challenge their independence and values. That said, it should always be remembered that the vast proportion of charities receive no public sector financial support.
Under the guise of the often derided “big society”, government has committed to a greater role for charities, social enterprises and other social sector organisations in public service delivery, building communities and facilitating volunteering. Although the term big society may be associated with the coalition and the prime minister in particular, all the major political parties are committed to enhancing the role and opportunities for this sector. They must realise, however, that this requires an active and supportive role for the state too.
Every local authority and most NHS trusts commission and procure services from the third or social sector. However, not every government policy and action supports these objectives. For example, the recent confusion over tax concessions for high-earning donors was clumsy, too demanding and overly bureaucratic procurement practice.
There are also good examples of genuine partnership between business and third sectors in public service delivery, such as Serco partnering Turning Point in the delivery of criminal justice services, highlighted by Levitt. Equally, there are many instances of how this has been less successful, including some Work Programme examples. Such collaboration can only work when partners respect each other, build on each other’s strengths, focus on outcomes and ensure that both benefit. We need to have a much better understanding of what does or does not work and why, when the business and third sectors combine to deliver public outcomes. Levitt provides some insights that help answer this.
Third sector organisations also provide a voice for individuals and communities. They often campaign for social justice and to change public policy. This is one way in which they are different from many businesses. And even when they deliver services, they seek to add social value (though this has to be defined and measurable) and innovate; simply following instructions from a public sector commissioner may be inappropriate.
Levitt traces the history of relations between the sectors and in particular the evolution of the third sector. In doing this, he comes right up to date with analysis of the current government’s programme to spin social enterprises and co-ops out of the public sector, the growing interest in social investment as well as that of contemporary corporate social responsibility and the role of philanthropy in a modern society.
Individual chapters address a wide range of issues from regulation to partnerships in international development. Levitt is able to draw on his personal experience – as a public sector employee, member of parliament, trustee and consultant – to ensure that his analysis is supported and enriched by case studies and real world experience. Tom’s passion for and understanding of civil society, public services and collaborative working comes across throughout.
One significant criticism of the book is how it underestimates the task ahead if we are to realise necessary behavioural and attitudinal shifts across the sectors especially, but not exclusively, in the private and public sectors. There are many examples of excellence but even more of sub-optimal behaviour – too much seeking to hold onto control and short-term profit maximisation. And in the third sector, sometimes too much of a complacent, if not arrogant “we are best simply because we are the third sector” approach. All these behaviours have to change but it won’t be easy. It will require a collaborative approach to people development, talent strategies and recruitment.
As the book identifies, there are many questions to ask and answer about the apparent blurring of the sectors. When does a social enterprise differ from a company with a social purpose? What happens to a charity that does not make a surplus and fails to act in a businesslike way? What are the special characteristics of a public sector trading company that make it different from a private sector business? The key questions are when we should collaborate and how we can maximise our objectives. These should be regularly asked in every sector. Partners for Good provides some of the answers but more importantly stimulates thinking about these and much broader questions across every sector.
The future of our economy, society and environment will depend on the third, public and business sectors making their own contributions and increasingly, seeking to collaborate. This must not be about blurring the differences and accountabilities between sectors, but rather finding the most effective way to secure public value. The third sector, and in particular charities, rightly wish to protect their independence and pursue their missions. The private sector aims to maximise shareholder value in ways that are socially responsible. And the public sector wishes to secure outcomes for citizens and communities in the most efficient and effective way. There may be conflicts as well as potential synergies and these should be recognised.
There has to be respect and understanding between the sectors; more movement of people between the sectors over the course of their careers; and shared purpose. No one sector has a monopoly of wisdom or expertise or values. No sector should seek to dictate to another – I only wish that public sector commissioners and procurers really grasped this. And, of course, each of the sectors is itself not homogeneous. Diversity within and between the sectors can be powerful and open up opportunities for the greater public good.
If these opportunities are to be realised, Levitt’s book should be at the top of the reading list for every decision maker in every sector.