This article is originally published in Scottish Left Review www.slrp.co.uk

Gary Fraser examines the politics of the voluntary sector and highlights the costs of normalising a corporate-style, neo-Liberal welfare state

The voluntary sector has been defined as comprising “independent, self-governing bodies that do not distribute profits but are run for the benefit of others and the community” (Poole, 2007). Voluntary sector organisations are run by a mixture of paid staff and volunteers and draw on a range of resources to keep them economically viable; these include individual and corporate donations, state grants, contract finance, tax relief due to their charitable status and lottery funding (Poole, 2007).

The recent strike by workers at the homeless charity Shelter has highlighted issues concerning exploitation in the voluntary sector. According to Shelter management, the charity needs to be more competitive in the public services delivery market. Furthermore, it is not the first time that Shelter management have attacked wages and conditions in order to win contracts to provide public services. The attitude of Shelter management has surprised many; in some statements they have sounded more like corporate-style bullies than managers of a charity.

Ken Loach, whose 1960s film Cathy Come Home played a part in establishing Shelter as a campaigning organisation, likened the charity to a QUANGO working for the state, rather than a critical independent organisation. The public services delivery market involves organisations like Shelter competing to provide services to local authorities, primary care trusts and government agencies. The markets that have been created in the public sector are uneven: at the top end of the market, commercial firms have profited from the marketisation of public services, particularly in relation to the Private Finance Initiative (PFI). However at the other end of the market, relatively few opportunities exist to make a substantial profit which obviously means that private firms do not tender for contracts. Consequently, a vacuum has been created in the delivery of public services that has been occupied by the voluntary sector.

It is in this context that the voluntary sector has been called upon by government as a means of providing low cost public services. What is taking place is a neo-liberal restructuring of the voluntary sector that is related to the political project of ‘rolling back the state’. Neo-Liberalism is not necessarily anti-welfare. In Britain during the previous two decades, both Conservative and Labour governments have attempted to restructure the British welfare state in order to make it compatible to neo-liberal ideology. New Labour has referred to this process as ‘public sector reform’ or ‘modernisation’. Forming the core of these ideas is a commitment to establish a neo-liberal welfare state.

Social welfare in one form or another has always existed. What is called the voluntary sector today is historically routed in self-help movements, charity and philanthropy. In Britain, workers co-operatives, mutuals, friendly societies, social welfare clubs, credit unions and the co-operative movement are all examples of assistance and relief provided to those excluded from, or by the market. The voluntary sector was sidelined as the major provider of welfare after the Second World War and by the 1950s, the welfare state was firmly established in British society.

This era in British politics has been referred to as the ‘social democratic consensus’, or ‘post-war settlement’. The ‘post-war settlement’ lasted for the best part of 30 years. There is not the space here to discuss why it collapsed, although it is important to note that the destabilisation of capitalist economies in the mid-1970s, precipitated by a collapse in oil prices, did much to undermine the Keynesian economic programme. In addition, the election of the Conservative Party in 1979 brought about a new era in British politics: the age of neo-liberalism, sometimes referred to in Britain as ‘Thatcherism’ had begun.

The Tories restructured the provision of social welfare in Britain. Neo-liberals argued that the state had an unfair monopoly over the provision of welfare services and called for a more pluralistic approach to service delivery; a political transformation was taking place whereby the state relinquished much of its direct welfare provision to the private and non-profit sectors, which it would in turn work to enable, finance and regulate (Poole, 2007). As a consequence of neo-liberal reforms, the welfare state was opened up to internal markets, a process referred to as marketisation. The reforms meant that the state was becoming a purchaser rather than a provider of services.

The election of a Labour government in 1997 did little to reverse the declining role of the social state. New Labour fully embraced a mixed economy of welfare encouraging various stakeholders and partners to become involved in service delivery. New Labour has pushed reforms to much deeper levels than Thatcher or Major. Under a Labour government, frontline services have been contracted out to the cheapest provider. Moreover, as a consequence of PFI, the private sector now owns assets that were once the property of the public sector, e.g. schools, hospitals and community centres. What New Labour has not privatised they have been keen to transfer over to the voluntary sector.

In 1991 there were around 98,000 registered charities in the UK with an expenditure of around £11.2 billion; by 2001 the number of registered charities had risen to 153,000, with a collective expenditure of over £20 billion (Poole, 2007). In Scotland, the social economy in which the voluntary sector operates has an income which exceeds £2 billion, around 4 per cent of Scotland’s GDP. Furthermore, the sector employs 100,000 staff and 700,000 volunteers. The rise of the voluntary sector runs parallel to the decline in services that were once provided by the state. The former Prime Minister Tony Blair described the voluntary sector as providing high quality, but lower cost products and services. Moreover, he added that he wanted the sector to strive for a public service ethos with strong business acumen.

The voluntary sector is the preferred option of neo-liberal policymakers because of its role in delivering public services cheaper than the state, which is largely due to the voluntary sector having lower labour costs. The sector has come under intense pressure from government to become more business-like in its agenda. The new business culture has been encouraged by a policy context that is driven by central government which involves competitive tendering and contracting. A market discipline is being established in the provision of public services with providers competing with one another for welfare contracts.

Becoming more efficient in governance is a stated aim for the voluntary sector. In practice, this has required embracing the ethos of New Public Management (NPM). NPM involves consolidating neo-liberal values within the everyday culture of voluntary organisations. The main features of NPM include an emphasis on auditing, measurement, calculation and quantification (Mooney and Law, 2007). Auditing has given rise to a culture of distortion and spin in the delivery of public services creating a plethora of middle managers obsessed with the PR management of public services.

The outcome of continuous audits is a focus on organisational not social goals; organisations produce paper trails of achievement and successes that bear little relationship to real events taking place on the ground (Hughes, et al, 2002). Mooney and Law note, that whilst auditing has stimulated “organisational games”, designed to meet the auditors own indicators for grading, it is less clear that they contribute directly to improving public services. The PR management of public services has resulted in seemingly endless consultations with various stakeholders and partners.

The management of public services and voluntary sector organisations like commercial businesses has resulted in a decrease in morale amongst the workforce. Everyday working life in the voluntary and public sector has become more routine, standardised and subject to continuous regulation and monitoring. Furthermore, increased employee surveillance by management has been achieved as a consequence of performance indicators, staff reviews, Quality Assurance documentation and rigorous inspection regimes (Mooney and Law, 2007). The result of all these reforms has been a ‘proletarianisation’ of professional workers who once had a degree of autonomy in their work (Cumbers and Whittam, 2007).

Many workers, who regard themselves as professionals, are now subject to labour market conditions that require flexibility, which has helped create a culture whereby short-term contracts have become normalised. Furthermore, NPM has encouraged a routinisation of the work process that is contributing to a ‘spectre of uselessness’, now gripping professional workers as it did manual workers before them (Mooney and Law, 2007). Workers who were once inspired to choose a caring vocation have now found themselves caught in the multifarious webs of government bureaucracy, audits, marketing and target setting.

This article has highlighted the neo-liberal discourses that inform the contemporary policy context which surrounds the voluntary sector. A broader change is taking place in politics: it is the end of an era in many ways, creating new challenges and opportunities for the left. In the United Sates, the presidency of George W. Bush – responsible for so much bloodshed – will come to an end next year. In Britain, Tony Blair has gone and Gordon Brown is increasingly looking like a lame-duck Prime Minister. Moreover, the era of New Labour is coming to an end: in Scotland, the SNP have broken Labour’s hegemony over the Scottish working class. In a British wide context, there is the real prospect of a Conservative government taking power.

In relation to the voluntary sector, the Tories want to extend the influence of charities in providing public services. David Cameron has a vision of charities becoming more competitive and being paid the market rate for delivering public services. In a recent interview with the Guardian he stated: “…the state can’t run British society properly...the state takes responsibility away from people, families and communities, and a lack of social responsibility is the fundamental cause of the social breakdown we see all around us”. Cameron then calls for more non-state collective provision, adding that “family breakdown, anti-social behaviour, drug and alcohol abuse are best dealt with by the voluntary sector”.

It is clear then, that a Tory government would not mark a qualitative shift from the policies pursued by New Labour. It is important to note however, that the neo-liberal restructuring of the voluntary and public sector, whether it be implemented by Labour or the Tories, has not been uncontested. The neo-liberal agenda involving intensive managerialism and auditing runs right throughout the public sector: teachers, social workers, community workers, university academics, childcare workers, NHS staff and many more have all suffered from neo-liberal reforms. Consequently, there is widespread frustration and anger which has occasionally resulted in industrial action. Furthermore, the recent dispute by Shelter workers creates an opportunity to link the struggles of the voluntary sector to resistance taking place in the public sector.

However, it is not just enough to provide a critique of neo-liberal welfare; socialists and progressives also need to engage in a discussion about what an alternative welfare state might look like? In this discussion it would be a mistake to romanticise the past: it should not be forgotten that the ‘post war consensus’ involved a welfare state that was ‘top-down’, overly bureaucratic and patriarchal. New forms of welfare need to be participatory, enabling and inclusive. Moreover, there needs to be a return to the ethos of public service and a shift away from the language and practices of the market.

As for the voluntary sector, there should be in the short term, a minimum of four-years’ funding for all organisations providing social services. In the longer term, services that were once provided by the state need to be returned to local authority control. This would require a complete rethinking of the role of local government. The voluntary sector still has a part to play, not as entrepreneurial business endeavours providing public services on the cheap but as independent campaigning organisations providing political voices to some of the most marginalised groups in our society.