ANALYSIS: A statutory Compact is under review, 22 August 2008

The launch of a consultation on the uneasy relationship between the public and third sectors aims to beef up their current agreement. But will it take the plunge and recommend giving it legal teeth, asks Herpreet Kaur Grewal.

An informal consultation into the Compact, the accord between the third sector and the public sector to improve their relationship, was launched this month. It poses a number of questions about how the Compact could be more effective. These include: what sort of agreement it could become in the future; how its form and content could be enhanced; and how the independent body overseeing the Compact could change.

Sir Bert Massie, commissioner for the Compact, says the paper is “not a formal consultation document, but is intended to be used as a prompt for wider debate”. He says that when the three month-long debate ends, and “there is some consensus on a way forward, the Government will carry out a formal impact assessment of the proposals and undertake a full public consultation”.

According to Phil Hope, minister for the third sector, who asked Massie to carry out the review, “the Office of the Third Sector will at the same time lead the debate within government – this is crucial because the Compact is a two-sided agreement.”

Calls for central and local government to consult third sector organisations when they make decisions that affect them, as urged by the Compact, have grown in intensity in recent years. In 2004, six groups won a High Court ruling against Leicester City Council’s decision to cut their funding, on the grounds that they had not been adequately consulted on the decision (R&R, 8 October 2004, p14).

In March last year, the Home Office was criticised in research findings by the National Council for Voluntary Organisations for having the worst record of any government department in complying with the code. The Departments for Education and Skills and Communities and Local Government were not far behind. Unsurprisingly, one of the questions the discussion paper addresses is whether to make the Compact statutory. It even asks whether it should be a two-sided agreement, with legal obligations falling on the third sector as well as central and local government.

At present Massie does not think there is an appetite among both sectors to make the Compact a legal obligation, although that will depend on the outcome of the consultation. “At the moment, the case has not been made for it,” he says. “If the Compact is going to work, it has to help everyone.” He hopes that at the end of the debate, the Compact remains voluntary, “because it works better as a flexible agreement”.

Carole Howells, director of the Newcastle Community and Voluntary Service, says the case to enforce the Compact, at least locally, would depend on each area’s needs. “Statutory powers may be useful where the relationships are not good,” she says, but trying to enforce the Compact in an area where relationships are already good may undermine them and pose a threat to public agencies already working well with the third sector. But Howells believes there may be a case for making the national Compact statutory.

In Wales, the Welsh Assembly Government is required by statute to set out its proposals to promote voluntary organisations’ interests. The discussion paper says that introducing a similar requirement for England would need an Act of Parliament, which could place a duty on the Government to set out its proposals for the third sector. While this would not amount to a legal obligation, the Government would have to answer to Parliament on an annual basis regarding its relationship with the third sector.

Toby Blume, chief executive of third sector group the Urban Forum, says making the Compact statutory would not necessarily “change the way people do things”. He says a bigger “cultural change” is needed to “win hearts and minds”. Blume suggests that one of the ways this could happen would be to build a greater evidence base showing the contribution made to society by the third sector. He says there also needs to be more data on the achievements of the Compact.

Massie suggests that, rather than a statutory Compact, having a champion for it may be more useful. He says that the Commission for the Compact, which he heads, should have more independence and the power to investigate local disputes. Other tools exist for voluntary groups if they want to dispute a local agency’s decision – such as the judicial review process entered by the six groups in Leicester in taking the council to the High Court. And more recently the High Court ruled in favour of women’s refuge Southall Black Sisters in its funding wrangle with the London Borough of Ealing. Even so, SBS spokeswoman Pragna Patel argued that the costs for the case – running into hundreds of thousands of pounds of public money – could have been saved if the council had listened to the group in the first place.

Massie says that if a body like the Commission for the Compact could step in and mediate in such disputes, it could potentially save a great deal of time and money.

– Contribute to the debate by emailing debate@thecompact.org.uk. The discussion paper is open for responses until 10 November.