Component Three: Supply Chain Development, Remodelling the service wave impact of public realm funding

Or the perplexing complexity of transformational relationships

http://empathygap.uk/?feed=rss2 Introduction

As identified in Component Two, public realm ‘transformational’ activity, within the http://catholicmannight.com/uncategorized/the-advent-of-jesus-christ-2/ Linear Process, focuses on a commissioning and tendering process and the development of a supply chain of services.

This third component explores the complex and often perplexing issues generated by public realm service ‘transformation’, and how such transformational activity impacts on other sectors and service delivery is not as simple or straight forward as identified in Fig 1i

 

Fig 1i Linear process transformation of fund allocation

Within the ‘transformation’ process, great emphasis has been placed on creating an ‘open market’. The term ‘market’ is used to describe the development of an ecosystem that is efficient and engages external, non-public realm organisations in the provision of services through the tendering and commissioning process. This process, it is argued, provides better value for money, an efficient service within the public realm ethos, and is free at the point of delivery.

The methodology of the ‘transformation’ process, the data used to commission activity, the due diligence and fit for purpose assessments undertaken by public realm organisations has an impact on the development of an eco-system, and therefore the supply chain,  to deliver services. There is an additional, wider issue, as to how these methodologies are used by other external funding bodies to measure and assess commissioned or grant funded activities within their own programmes.

This ‘wave impact’ therefore has a wider and more significant impact on the eco system:

  • The way data is collected and used by funders, Public realm and other funding bodies.

  • The development and provision of services created through funding, commissioned or external processes attracting new organisations to seek such funding where they had not considered it before and generating mission drift within organisations who modify their purpose and activity to be eligible for funding.

  • Within all this melée there is the confusion of voluntary and community sector (VCS) and volunteering.

In some cases, not all, the ‘transformation’ agenda, driven by a reduction in public expenditure, augmenting a ‘more bang for your buck’ philosophy, drives communities and VCS organisations towards what was described as a  ‘Big Society’ ‘volunteering’/community responsibility/management process, through which communities and VCS organisations are encouraged/nudged/obliged (through fear of loss of resource or service) to maintain the system through unpaid volunteers replacing paid staff.

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Restricted data – Linear Process

Commissioning and tendering, and thereby any funding to organisations, determines how public realm services are developed and designed. Commissioning activity is based on data that is held and gathered by public realm organisations.

The data which is accumulated and analysed is seldom shared or published (in a format that can be analysed) and is primarily focused on perceived deficiencies, users or recipients of services, symptoms or conditions that require to be managed or resolved.  While data is gathered from ‘service providers’ which may be VCS or community organisations, the linear process has no procedure to gather additional data from such organisations, whether or not they have a funding relationship with them.

As stated previously public realm data can be defined as restricted data, internally gathered, collected from current service provision. It is data derived from measuring current activity outputs. Data that monitors delivery and services from identified [funded] groups to specific cohorts: elderly people, children, people with disabilities etc.

This data of their own provision is internally analysed within current public realm (quantifiable) measurement processes by public realm staff. Even though one department/section may commission, and another monitor, it is still within public realm linear processes.

Service provision data focuses on those who receive services, addressing identified problems, acknowledging how the system has corrected or supported an individual in improvement. This data focuses, as the provision does, on the adverse, deficient, conditions and, therefore, the need for intervention.  The collected data therefore, justifies the need for the system of intervention, presenting the outcomes and outputs in a digestible structure.

Some datasets may identify a wider cohort within an area or with identifiable needs. Service provision data only measures who in the cohort has received support or identified a requirement for support.

Other, general, data may identify general services that cohorts may require, and plan delivery based on a preventative programme.

Such data may be published in journals other media but not in an accessible format – as a PDF or a jpeg etc. Such data is generalised and cannot be easily analysed or compared with data from other community sources.

Data that drives these and other service provision remain within the restricted data principle, seldom shared in an accessible format and rarely utilising other community sourced data.

Public realm data focuses on resolving, or in some cases preventing issues. The data is augmented and underpinned by quantitative research and/or qualitative case studies and stories. Such studies remain within the boundaries of Linear Process and current service provision, and thus are developed within restricted parameters.

The data provides us with scenarios of the ‘familiar’, programmes that address ‘deficiencies’ or needs, behaviours or practices. It does not provide us with a wider perspective of the issues from other sources outside the linear process provision. The data and the case studies only provide us with a view of need, people who have ‘fallen into the water’ and need assistance or rescuing. It justifies a status quo existence for services that resolve problems, even if people continue to fall into the water.

“There comes a point where we need to stop just pulling people out of the river. We need to go upstream and find out why they’re falling in.”  Desmond Tutu

Restricted data therefore continues to reinforce deficiency model provision, plans for continually pulling people from the water, and restricts supply chain development to prevent them falling in.

Because of the nature of restricted ‘data gathering’, systems to prevent individuals from ‘falling into the water’ are not explored. Systems that may explore and utilise any inherent community skills or data are not funded as they generally, do not fit tender specifications.

Support programmes may be funded through other external sources but the data collected by these programmes may not be incorporated into public realm linear process analysis. These programmes may be dealing with people who ‘get by’, those who may have the same experiences/‘traumas’ as others but who don’t ‘fall into the water’.

Not sharing data and not utilising the immense amount of data held by non public realm organisations restricts the information available to those developing tendering specifications and commissioning services so the development of the ‘market’ is hindered even further.

The use of this data by external funders to justify their programmes only adds to the restrictions placed on innovation and community/asset initiated programmes. Justification for applications and, in some cases, relating the application to identifiable need, focuses applicants towards using the accessible elements of the restricted data.

 Supply Chain Development Wave Impact: Exploring the complex and perplexing…

The ‘transformation’ process outlined in Fig 1i visualises the perceived relationship change, related to funding, between public realm and VCSE organisations. The colour coding identifies the linear process (yellow) and the proposed transformation activity (blue).  As the transformational process has been developed within the public realm linear process the relationships that emerge are far more complex than this diagram, with significantly more impacts than outlined in Fig 6 (See Component Two for Figs 2-5)

This visualisation retains the blue of transformation but incorporates brown as the purpose of transformation. Tender specifications and commissioned activities is product development (Component Four).

The increased encouragement that VCS organisations should move away from grant funding to a mixture of external/blended finance, mixing loans, contracts, earned income or payment by results is starting to dominate the potential participation of VCSE organisations within public realm service delivery.

Fig 6 Supply chain modification – the perplexing complexity

In any of the transformational visualisations, fiscal management remains centrally controlled, within the linear process, at a national and local commissioning level. Delivery outputs continue to be derived from restricted, organisational/in situational gathered data.

While there have been major cuts to public realm funding in the past 5 years, expenditure is still significant, and the commissioning of statutorily-required services and subsequent support activities from public realm funding has an impact on VCS* or private** sector organisations or companies.

This ‘wave impact’ is manifested in a variety of forms

  • Administering the new process

  • Consulting ‘stakeholders’

  • Product development and innovation

  • External funding for community activity engagement

Administering the new process

The historical use of grants restricted access to such funding support. The increasing legislative requirement to ‘commission/tender’ services has acted like a wave, emitted from the public purse, attracting and developing a considerable number of organisations interested in developing and delivering services. The change to commissioning has had an impact on the structural, fiscal and governance formats of previous recipients as they modify their practices in order to be considered part of a ‘supply chain’ to statutory public realm ‘market’ activity.

Contracts and tenders were reduced in number and increased in financial magnitude to reduce public realm staff monitoring commitments. Large commissions entail an increased focus on fiscal and organisational capability for compliance and delivery of a contracts. A process that focuses on the size, form and structure of organisations who submit tenders, checking their governance, due diligence, cash flow, skill capability, etc. Funders only contract with regulated ‘incorporated bodies’ that fulfil due diligence tests within the commissioning process.

The message is often clear – smaller organisations need not apply.

The current process tends to develop/identify ‘supply partner/preferred supplier’ (fig6). These become lead organisations in the process as they are deemed able to successfully deliver services within commissioning and tendering requirements, having passed the relevant assessments.

As commissioning and tendering is an ‘open’ process, groups that are proficient in tender applications have a better chance of being awarded funding. While due diligence/contract compliance assessment would look at the governance and administrative and delivery process, it may not have been so thorough in exploring and examining the organisation’s staff skills and development of programmes. They may however partner with appropriate community organisations, with relevant experience, and access to target communities.

While this ‘transformational’ process has the potential to widen participation in delivery, community engagement through VCS organisations can be restricted through due diligence rules, and a public realm ‘deficiency’ view of their capability to deliver.  VCS organisations have been offered ‘capacity building’ programmes to ensure they have the capabilities to deliver public realm contracts. Policies and processes mirror public realm practices, necessitating VCS organisations to mirror public realm. This reduces the VCS to a ‘sub department’ of public realm rather than an asset or representative of the community it serves, of interest or of geography.

VCS or community focused innovation proposals may fail as they are not fully compliant with a tender specification. They may have been developed within and by specific communities to address specific issues but do not comply with fiscal and due diligence assessments that might be too strict or restrictive.

The creation of the ‘market’ has increased distortion to the creation of a supply chain/partnership.

The commissioning and assessment process has had the effect of increasing mission drift, entailing some VSC organisations to modify their mission and, in some cases their governance as they ‘chase funding’. They modify their activity to respond to the restricted data used to identify need, and may thus reduce the unique data they, as community organisations, produce and retain.

The transformational process is forcing a rigid business development model on VCS organisations, forcing them to function in a more entrepreneurial manner, ignoring the fact that many have functioned in a business manner within the voluntary and charitable sector for years. They are now expected to develop services, often within a public realm remit, and to generate several sources of ‘blended finance’ to become sustainable.

This process puts forward a straight forward fiscal and operational model to be developed by organisations. Transformation of the VCS process by the VCS itself provides business opportunities to develop models within the sector that do not necessarily focus on tendering and commissioning.

Organisations are offered ‘Capacity building’ implying a deficiency of skills within VCS organisations. It however fails to address two fundamental issues.

Firstly, that many organisations were created to address social and welfare issues, the purview of public realm activity, and may have little experience, or interest, outside this remit. Such activity is often charitable/not for profit and requires external funding as beneficiaries cannot fund the process. Developing a sustainable business model for such activities is difficult.

The second are structural issues. Smaller organisations often have greater access to those who need such support. Blended finance and multi-funded programmes require size and capacity to deliver, and such growth is not always possible. Engagement with such community groups is often lost within the operational process of tendering and commissioning.

Consulting ‘stakeholders’ – developing and utilising the partner supply chain

Communities and community organisations (VCS organisations), and other potential provider partners are engaged within tender specification development. Often couched as ‘co-design’, ‘co-production’ and partnership development, it is accommodated as part of tender specification development, but fiscal restrictions and tender compliance, through assessment by public realm bodies, remains the dominant process.

VCSE organisations engagement within this ‘transformation’ through co-design/production, tender application or social capital investment often requires them being required to engage in ‘capacity building’ programmes.

‘Capacity building’, delivered or commissioned by a public realm funding body, passes on engagement protocols, fiscal and process compliance through workshops and training, assuming that public realm or other grant funding organisations have superior skills, and knowledge of governance and management processes, to those possessed by trustees/board members and staff of VCSE organisations. This process, with little acknowledgement of any skills, knowledge, understanding or experience that VCSE organisations may have in developing, delivering or innovating projects, is a purely project compliance exercise.

The ability of community groups to create or co-create/produce ‘products’ that respond to identified need are limited to the ‘product’ complying with tender specifications and due diligence checks. Thus co-production can stifle innovation due to non-compliance with the tendering specification.

While the ‘transformed’ commissioning process has the facility to utilise other processes e.g. co-production and co-design, and to view the impact of funding on other agendas, community cohesion etc., the inability to view the community as ‘assets’ rather than a provider, incorporating potential support into service is a barrier to true co-production.

Product development and innovation

The administrative change from grant funded programmes to commissioning, as part of the public realm ‘market’ development, with its attached more rigorous compliance rules, has had a negative impact in the way public realm funding responds to VCS sector innovation. The commissioning-focused public realm funding has subsequently excluded some organisations that were previously grant funded.

While VCSE organisations are expected to ‘transform’ and become more business-like for the various funding streams, there remains a ‘delivery disconnect’ in organisations’ abilities to develop and implement business plans, generate innovative ‘products’ and services, and develop sustainable funding streams for activities that were traditionally public funded as they are not economically viable.

The innovation potential of VCS organisations and community groups can be stifled within the Linear Process Commissioning process. VCS or other organisations/companies may seek external funding to develop these innovative or appropriate responses to identified community needs.

VCS organisations and community groups respond to issues/needs that they, as groups or communities, may be aware of. This issue/need may not be highlighted in (restricted) public sector data collection, and, therefore, not included in any tendering specification.

VCS organisations are expected to develop the ‘blended finance’ model proposing and developing products for the ‘market’.

The ‘market’ within the ‘transformational process’ expects VCS organisations to develop activities within a ‘value proposition’ to describe the need, their solution and to quantify their ambition and capability.

While VCSE organisations can develop a ‘value proposition’, there is a potential disconnect to their charitable and community purpose as they ‘mission drift’ into areas that can be funded.

Community focused groups, established to address identified need, are forced into ‘mission drift’ if tender specifications or other funding processes cannot accommodate their needs and purpose.

Organisations develop wide and all-encompassing development plans that fulfil a range of funding streams, rather than develop specific proposal within their skill set or charitable/community purpose.

While groups can adapt their services for the new opportunities, they may not be able to adapt or modify their existing skill set, established and developed to meet their established needs, to fit the tender outline, commissioning brief or funding criteria.

Products are developed and focused on potential funding streams while innovation may be stifled as the innovative product cannot be funded, or needs to be ‘hidden’ within a product that can be. Development limits its true transformational impact.

Fig 7 Supply chain connect – still complex, still perplexing

External funding for community activity

A fundamental issue in the complexity of public realm and VCS relationship in the transformational process is the role that external (non public realm) funding plays in supporting VCS and community organisational services development and activity and delivery – purple in fig 7.

 ‘Restricted institutional data’ is increasingly influential in external grant funders’ methodology of planning and evaluation (identification of need, project impact evaluation, data collection and monitoring) and strategic aims.

The question “How does your project fit in with local national or regional strategies?” appears in a variety of funding applications, and the ‘proof of need’ question relies on reasoning justified with institutional data as well as local data. Which is given the greater weighting in assessing applications?

There is an increasingly close working relationship between funding organisations, public realm, large/national grant-giving trusts and charitable grant giving organisations whereby some public realm funding is administered by these bodies. The objectives of such funding are public realm and, while there may be elements of innovation/creativity and piloting of projects, the final assessment of success falls within the linear process.

While organisations can seek funding from other sources for activities, the strategic outcomes that influence public realm commissioning, and the data that influences such commissioning, are beginning to impact on external funding.

VCS organisations/charities/community groups have always sought funding from a variety of sources to deliver their objectives.

The increasing pressure to develop blended funding models places additional pressures on the administrative and support processes within VCS organisations that are not recognised within the transformational process being proposed.

VCS organisations can develop business plans and value propositions to deliver identified and proven need. The economic constraint on the sector can interfere with their ability to deliver such activities within a blended finance structure, which drives them back to safe grant / public realm funded programmes.

Three such issues are

  • The variance in timings related to funding programmes, funding rounds and periods. This has an impact on cash flow, project projections and expectation, product/service delivery projections. VCS organisations cannot borrow against prospective income to either develop or pilot activity. Developing one programme while running another, from another source of funding is not possible. Programmes do not get developed or weaker business plans are developed.

  • There is often a variance in terminology (outcomes, outputs, impact etc.) between funders. A one size value proposition / business proposal is not always possible as one funder may accept terminology while another may not acknowledge the use of some words to fulfil their requirements.

  • There are extensive capital investment restrictions within funding programmes that restrict VCSE organisations’ ability to invest in IT management systems. This has a negative impact on the digital and data development of the organisation, thus creating barriers to them operating more productively and contributing to wider data collection process.

Funders will only fund certain capital elements (IT) related to their programme. VCS organisations have problems in borrowing for capital investment, capitalising the expenditure and representing it within applications or programme development costs, as the private sector would do.

In some (many) cases innovative products/ services and activities are developed through external funding.

Once success in deliverability is proven, the innovating organisation can develop business plans, value propositions and explore blended funding or other external funding to maintain delivery.

While the products/services/activity were not within public realm commissioning framework, once it has been proven there is a danger of ‘innovation assimilation’ into commissioning specifications, against which a wide range of organisations can tender. The VCS organisation that developed this process/model/ service may not win the tender. The innovating organisations has very little power over such activity – it is difficult to copyright or claim intellectual property rights over innovative activity.

This innovation assimilation perpetuates and expands the endemic silo mentality, within public realm, linear process, structures, towards the VCS organisations and transformation within that sector.

While public realm funding has been reduced over the past eight years it still has a significant impact on the non-public realm social welfare eco system.

It forms and shapes the ‘market’ it has created and has the ability to modify its own requirement through ‘consultative’ practices, co-design and production,  that have the potential consequence of creating an environment of little motivation for VCS organisations to develop innovative models and share data to prove need as they may not reap the public realm benefit from their work.

 *The term VCSE is used as a generic term covering Community Groups, Registered Charities, Social Enterprises, CIC’s or any other form of group that are considered ‘not for profit’. They are organisations that do not pay a share dividend or profit to individuals, but recycle such profits/surpluses within the organisation or, in some cases, to other ‘not for profit’ organisations. 

**Private sector is considered as organisations that redistribute profit to shareholders, individual owners or individuals within an organisation in terms of bonus payments.