Next target: the voluntary sector

Next week Steve Maharey will launch another scheme in the Clark-Anderton ministry’s reshaping of government: a new arrangement with the voluntary sector.

Yawn. That sounds almost as boring as debating the constitution – earnest people saying earnest things to each other. What can a “compact” with the voluntary sector say to a pocketbook public?

At one level his initiative similar to Monday’s abolition of sirs and dames and pardons for soldiers murdered by British officers in the first world war. That is, it is iconic – a load of nice words.

Changing the way things are done takes time – years can elapse between the cabinet-room policy decision and a changed outcome at ground level. In the meantime icons provide a visual facade.

In the end, however, a government cannot live by icons alone, any more than a priesthood can. It will be judged by what it does.

For the Labour party the biggest question is how it reconfigures the welfare state so that it can deliver social democratic-style services and security within the budgeting constraints imposed by membership of a globalised economy.

One way Labour has identified is to ditch the notion that politicians and bureaucrats at the centre have all the answers.

This may sound odd, given Annette King’s and Trevor Mallard’s hellbent recentralisation of health and education, reabsorbing the Health Funding Authority into the Health Ministry and abolishing schools bulk funding. The previous regime contemplated a wider range of local health delivery mechanisms and schooling.

Those recentralisations are partly due to the influence of the health and education unions on Labour and the Alliance. But in social welfare services, the picture is different. There professionals have been demanding flexibility.

And Mr Maharey wants to respond. Moreover, he has been reading books – a disturbing habit in a politician, in which, thankfully, few of our lot indulge. The books have been telling him old-style top-down state-centred social democracy has had at best dubious success. This is partly because the state in the twentieth century crowded out “civil society” – that part of social interaction, out of reach of the state and the market, where citizens do things with, to and for each other.

Mr Maharey wants civil society blooming again. Down there in the ruck are people who know their communities – their opportunities and problems – and have ideas. He wants those ideas put to work, rebuilding social democracy at ground level. The state will support, with money and organisational advice, but not dictate. Local government will have a role, too.

Mr Maharey has in mind a three-layered scheme borrowed from Canada: a set of high-level principles (he will next week name the person to lead the consultation to develop this); broad-based agreements with individual sectors (ranging through health, foreign aid, social services and education) establishing codes of practice; and new arrangements with individual organisations.

He wants to replace the contracting system in vogue since the late 1980s, which he thinks has turned voluntary agencies into lackeys unimaginatively performing narrow tasks, with “relationships” that aim at more general outcomes and give voluntary agencies more operational latitude – in other words, a sort of bulk funding.

This has obvious implications for the Public Finance Act, which requires accountability for narrowly defined “outputs” and which therefore, he freely argues, will need changing to realise his scheme. His agreements will, besides covering compliance costs, funding arrangements, the law, policy implementation and consultation, also address seek new forms of accountability.

Mr Maharey calls his initiative a “sea change”. He contemplates failures as part of finding what works – and these will at times be politically embarrassing, especially if money goes awol or outcomes are worse, not better.

This “sea change” is not about to break over our heads next week. It will be almost imperceptibly tidal, spread over years. It might work. Or it might fall foul of a Prime Minister tough on budgeting and intolerant of failure. Between books and the ballot box there is a long march.