Serco and the sector – more of an opportunity than a threat

Many are concerned about the role of the private sector in delivering non profit services, but Tom Levitt questions whether they should be.

Out in the charity world a debate is raging which echoes one in the public sector: is there a legitimate role for the private sector in the delivery of key services? Can those motivated by profit be trusted to prioritise the needs of those for whose benefit a service is provided?

At issue is the National Citizens’ Service (NCS), a Coalition initiative to support and nurture 16- and 17-year old community leaders of the future, built up as comparable existing schemes were axed. 60 charities are already involved in NCS and last year’s 8,500 participants will grow to 30,000 this year. To meet its target of 90,000 by 2014 the Government is recruiting partners to run 19 regional NCS schemes in England. A favourite to win in eight regions is a consortium, NCS Network, involving V, the National Youth Agency, Catch-22, UK Youth and… Serco.

Some local authorities believe that they had a raw deal when Serco addressed their ‘failing’ services. Serco is one of a handful of companies whose process-driven business (they sell ‘how’ rather than ‘what’) tends to feed an image of ambulance-chasing ubiquitous grabbers of public money. And they are highly successful, with an annual global revenue of over £4 billion.

Many of Serco’s 600 relevant business units are populated by former local authority employees who see the company as their way to deliver good services in a better paid and more innovative way than the public sector allows. It is a company that lists partnerships with the third sector as one of its goals; and which is building and running a new prison alongside charity partners Catch-22 and Turning Point. (Although controversial when forged in 2009, most now believe that this alliance will improve prison outcomes). Serco is also regularly near the top of Business In The Community’s ethical business league.

Battle lines are being drawn: Serco could receive over £100 million of public money for NCS and some don’t like it, though Volunteering England suggests that investment through a stable and competent facilitator like Serco is crucial to resurrecting volunteering infrastructure.

The noises coming from NCVO, the sector’s largest umbrella body, fall short of a ringing endorsement. NAVCA is also sceptical, raising the prospect of private sector cherry picking and third sector floor sweeping. Sir Stephen Bubb, leader of charity chief executives’ body ACEVO is more realistic, arguing that the nature of the contract will determine its success – as long as they remain partners and do not adopt the prime contractor model of the Work Programme which has failed to engage other sectors as equal in stature to those seeking profit.

The fact is this: the third sector does not have the experience or capacity to deliver a national or even a regional programme on this scale. Logistics is what Serco does best. In general terms, private companies have skills, experience, capacity and other qualities from which both the third and public sectors could – should – benefit.

In the best case scenario companies are corporate citizens who help those who serve to deliver the best possible benefits, as Serco proposes here; in the worst case the outsourcing express is leaving the station. The voluntary sector not only needs to be on board but needs to be near the private sector driver’s cab if they are to influence where it is going.

Tom Levitt is a writer and consultant on third sector issues.

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