Threatened union kicks third sector in shins over myth

THERE is myth and there is reality. One of the secrets of a happy life is not to confuse the two. It is a lesson that one trade union should have learnt before it committed itself to kicking social enterprises in the shin.
The particular myth to which I refer is that the running of welfare-to-work programmes will be handed over by the Government to charities and social enterprises to run. As with many myths, it is difficult to establish where it originated.
An assumption that this is being lined up led the largest civil service union ? Public and Commercial Services (PCS) ? to commission a report with the overt objectives of assaulting the third sector and undermining any role it may have in running public services.
The third sector is the term used by the European Union and now by the UK Government to describe the not-for-distributed profit sector, including charities, voluntary and community groups, co-operatives, other mutuals and social enterprises.
But while there has been much coverage in the press about the role of the third sector in taking over the old labour exchanges, this is not justified by the contents of the Welfare Reform Bill presented last month to Parliament, nor in the Green Paper that outlined the reform proposals.
"Future Pathways to Work provision will be delivered primarily by the private and voluntary sector with payment by results," says the Green Paper. In other words, the third sector is intended to take a role, but there is no assumption that it will be the leading role.
The model for the privatisation of welfare-to-work is Australia. Its welfare system was analysed in a paper published by the Department for Work and Pensions, ?the use of contestability and flexibility in the delivery of welfare services in Australia and the Netherlands&#039, available on the DWP website.
Model
This makes clear that the model used in Australia is dominated by private sector players, though with two charities ? Mission Australia and the Salvation Army ? playing significant roles.
According to the PCS report, the private sector has 50 per cent of Australia&#039s publicly-funded job brokerage market, with the Salvation Army having ten per cent of contracts ? no figures are provided for the rest of the third sector. But in its anger at media reports that the third sector will run future UK welfare-to-work programmes, the PCS has lashed out at social enterprises.
In doing so its report ?Third Sector Provision of Employment-Related Services&#039, by Steve Davies of Cardiff University, published on the PCS website, muddies the waters even further. PCS conflates social enterprises ? businesses trading with a social purpose, which reinvest profits for social objectives ? with businesses that claim to trade with a social conscience. These ?social conscience&#039 businesses offer no guarantees against converting their profits into shareholder dividends.
"The definition of the third sector has been stretched to breaking point to include private, profit oriented companies," argues the report, without justifying the assertion with evidence that anyone, other than the PCS and its researcher, is confused.
Ironically, PCS accuses the Government of misleading its own supporters by claiming associations between today&#039s social enterprises and traditional co-operatives.
"Ministers appeal to Labour&#039s historic association with the Co-operative Movement," the PCS submits.
Services
It is not surprising that unions ? and Unison has a similar, negative, perspective to PCS ? are unhappy at social enterprises taking over public services. Unions&#039 responsibilities are to their members, whose job security and, possibly, employment terms may be damaged by an enforced transfer to another employer, whether in the private or third sectors.
But from a political perspective, I believe that the Government is right. I have never thought that socialism (or Clause Four) was about the state providing services.
At their best, social enterprises and other third sector bodies can provide more personalised and responsive services.
I say this as a person who used to administer state benefits and knows just how unresponsive those services could be and how rudely they were sometimes provided by state employees.
My problem with the Government&#039s welfare reforms is that they precisely do not do what people think it says on the tin. The proposals in reality are for the privatisation of the service, with the likely beneficiaries being employment agencies such as Reed.
I was excited by reports of the third sector taking on the running of welfare-to-work services. I fantasised about networks of third sector organisations getting together, providing advice, support and training.
Skills
Might intermediate labour market projects and social firms ? which in different ways provide skills, training and an introduction to working life for people marginalised from the labour market ? take centre stage, I wondered. Alas, it seems, no.
An intelligent and well-researched consideration of the potential role of third sector organisations in the reform of the welfare state would be welcome. This might consider in a practical way the strengths and weaknesses of the sector and its potential for creating strong networks of providers that concentrate on different parts of the service chain for recipients of state benefits.
It might take evidence not only from Australia and the Netherlands, but also from Italy and the United States. According to The Economist, the third sector is playing a leading and central role in the welfare-to-work programme in the United States ? the significance of the US third sector is often overlooked in Europe.
Instead we have incomplete research published both by the Government and its union critics, with each side reaching its conclusion and then scratching around for justification. So much for evidence-based policy-making.