Press Release - Local Area Agreements and the Third Sector:
Public Service Delivery
22 June 2007
Local authorities should work more collaboratively with
voluntary and community organisations to help them improve the
delivery of public services, according to a report out today by the
National Audit Office.
The report looked at whether Local Area Agreements (LAAs) are
helping to promote better value for money in the way government
works with the third sector to deliver public services. It also
examined the impact LAAs have had on the role of third sector
organisations in the delivery of public services.
LAAs are a new form of contract between central and local
government and were designed to devolve greater power over public
services to local communities. The Department for Communities and
Local Government (DCLG) and the nine Government Offices for the
Regions (GOs) have worked to introduce LAAs over the past three
years and by April 2007 every local authority in England had one.
The amount of public expenditure covered by the agreements is
expected to reach around £5 billion in the next three years.
Government is keen for third sector organisations (TSOs) –
including charities, voluntary and community organisations and
social enterprises - to play a greater role in public life,
building ‘social capital’, promoting volunteering, representing the
community and delivering public services.
The NAO found that government has put in place a range of
initiatives to support TSOs and to encourage public bodies to work
with them. These particularly focus on changes to public
procurement and grant funding which will put TSOs on an equal
footing with other suppliers. The Office of the Third Sector (in
the Cabinet Office) has responsibility for leading this work and is
supported by the Treasury in its work with other government
departments.
It is still relatively early days for LAAs, but today’s report
shows that LAAs and work to increase the role of the third sector
in public services have been developed by different parts of
central government with few, weak links between the two. LAAs
include only limited references to the third sector and there are
as yet no visible changes in local patterns of service provision or
in local public bodies’ funding practices towards the third
sector.
Where changes have occurred, they are due to other initiatives
rather than to LAAs. The opportunities which the introduction of
LAAs offered, to help place TSOs on a ‘level playing-field’ with
other potential suppliers, have mostly been missed.
Much practical work remains to be done to translate the
principles of LAAs into practice. Policy in this area is developing
fast; the Local Government White Paper, published in October 2006,
proposes changes to the structure of LAAs which are likely to lead
to even more local decision-making. Changes to LAAs are to be
accompanied by moves to encourage local authorities to move away
from a "traditional service perspective" towards a commissioning
role.
Among the NAO’s recommendations are that the Department for
Communities and Local Government and the Government Offices should
encourage local bodies to consider third sector organisations as
potential partners in the delivery of public services, alongside
other private and public partners. They should also further develop
existing programmes to improve commissioning by local government.
The Office of the Third Sector and the Treasury should promote
awareness of guidance on the third sector and should find ways of
spreading good practices more widely.
Joe Cavanagh, Director of Business Development at the NAO,
said today:
“Both main political parties have highlighted the third
sector’s important role in building a civil society. It is
therefore disappointing that the new Local Area Agreements have not
embraced the potential of the third sector to help deliver public
services.
“More needs to be done by the departments involved and
by local authorities to understand the work of third sector
organisations, and how it can be used to obtain better value for
money in delivering services.”
Neil Cleeveley, Director of Information and Policy at
the National Association for Voluntary and Community Action
(NAVCA), said:
“NAVCA welcomes this report and is pleased that the
Government is starting to address the issues it raises. Many of our
members have been heavily involved in their Local Area Agreement,
giving a good deal of time and effort to make them a success, often
with very little recognition.
“NAVCA wants to see local area agreements work – the
local third sector has a key role helping to bring about the
improved public services they promise, especially in the most
disadvantaged communities. It is still relatively early days –
however NAVCA and its members will do all we can to help our
partners in the public sector make the most of the third sector’s
potential.”
Notes for Editors:
- Press notices and reports are available from the date of
publication on the National Audit Office (NAO) website, which is at
www.nao.org.uk. Hard copies can be obtained from The Stationery
Office on 0845 702 3474.
- The NAO employs some 850 staff and is totally independent of
government. NAO has had a specialist team examining government
policy on the third sector since 2005, when the Value for Money
report Working with the Third Sector was published. This report by
the Comptroller and Auditor General, Sir John Bourn, who is head of
the NAO, examined government’s progress against a series of
commitments to improve third sector funding
practices.
- Today’s report is the second of three reviews of the third
sector’s relationship with government, which NAO is publishing in
summer 2007. The first, published on 6 June, examined ‘full cost
recovery’ (the question of whether third sector organisations
receive the full costs of the services they provide to public
bodies). The third report will look at the public funding of large
national charities.
Press Notice 29/07
All enquiries to Donna Watson NAO Press Office: Tel: 020 7798
7038
Mobile: 07917 555 388