It's hard to be fluffy and efficient

The government has to decide whether it outsources for ruthless efficiency or its fluffy "big societ

Ben Phillips writes for Left Foot Forward:

One of the big ideas behind the government’s welfare reforms is that local charities would be better at getting the unemployed into work than government.

It just so happened that there would be a middleman – often a big contractor like A4e that. . . carries £200 million of public sector contracts.

Once the contractor takes on the case, they then find a subcontractor – the small local organisation – who will actually help secure employment for the jobseeker.

Except that specialist trade magazine Third Sector have reported the majority of welfare-to-work subcontractors in one survey have had precisely no client referrals.

This seems to be a pattern in initiatives aimed at harnessing the power of the "big society". It's fundamentally a mismatch between two competing – and contradictory – aims of outsourcing. Normally, the state outsources because it thinks the private sector can do a better job; if there's an element of publicity in it, its that governments sometimes like to be seen to be reducing the burden of the public sector.

Under the Conservatives, a second aim has been grafted on to that: make the government look fluffy. The rhetoric of the big society isn't just about removing the government, but also about putting power back in the hands of the people. Unfortunately, transferring control of, in this instance, the welfare-to-work schemes from a government to a massive outsourcing firm doesn't achieve that goal particularly well.

Hence this strange split-level structure. The government can't afford to deal with charities directly (literally can't afford – the administrative overheads for dealing with the hundreds of local operations would be prohibitive), so it contracts out the role to middlemen.

Unfortunately, it appears from Third Sector's report that the middlemen aren't particularly interested in boosting the big society agenda.

David Cameron launches Big Society Capital in April. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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