I concur. The drive that we have seen in the third sector towards a contract approach has involved almost a supermarket-type master-servant relationship. There is a huge imbalance in power between local authorities and the charities concerned, which are often quite small. That feels wrong, but there has been a strong emphasis on that approach, which has been pushed hard.
The other thing that happens, which I think that many people will be quite shocked about, is that local authorities demand complete transparency of accounts. That would not happen with a supermarket and a supplier—the supplier would be able to keep their margins to themselves—but local authorities demand to know whether third sector organisations are making any kind of surplus, which is often clawed back. That does not lead to long-term sustainability or a partnership approach. David McNeill is absolutely right: there needs to be a shift away from the master-servant relationship to one in which there is parity of esteem.
I was very encouraged by public social partnerships, which are an extremely useful addition to the landscape. They involve a different approach to the development of services. They have their weaknesses, which we highlighted in our submission, but they represent an extremely useful change in the lens for looking at the relationship between the local authority and the charity. PSPs involve asking, “How can we do this together and play to our strengths?”, instead of one party having a big stick and trying to hit the other one as hard as it can in order to get the lowest price.
The master-servant relationship is a race to the bottom, because it is just about driving down cost. That is the fundamental discussion; it is not about service or the quality of what is delivered. The third sector prides itself on having the ability to provide quality and a depth of relationship to beneficiaries. When the focus is exclusively on money, that promotes completely the wrong values in the sector.
Although money is important, it is not everything, and there are definitely different ways of doing it.