‘Marketisation’the shift from supply-led to demand-driven Rob Macmillan Third Sector Research Centre University of Birmingham The Impact of Infrastructure 2012 conference London, 25th April 2012
Welcome!In this workshop…•an overview of the ‘marketisation’ of infrastructure (Rob)•charting the experience in Norfolk (Brian)•small group discussions and feedback (you)Questions…•What are you doing or planning to do about the changes we’ll bediscussing?•What experience can you share?•What is needed to make it work?
Overview of marketisation…2.Context… the great unsettlement3.What is ‘marketisation’?4.Towards a demand-driven environment5.‘Building Capabilities for impact and legacy’6.Issues for: o Customers o Suppliers o Market makers
Context: the great unsettlementShake-out? - organisations and projects contracting or coming to an endShake-up? - being more enterprising - rationalisation/reconfiguration - demonstrating valueRoom – is there enough room for everyone?Decoupling the state and the VCS? - partial/gradual withdrawal of state support? - e.g. ‘strategic partners’ and ‘TLI’
What is ‘marketisation’?Five sector trends bundled together as marketisation:3. increased competition for public service contracts and funding4. growth in earned income and commercial trading5. changing expectations of funders and institutional donors, for more accountability and transparency6. emergence of social enterprise7. adoption of private sector management practicesVCOs are adopting management approaches and values of the private (for profit) sector as a means to respond to their changing environment, in particular to market based government policies, which are aimed at reforming the perceived inefficiencies in public service provision (Bruce and Chew 2011: 155)
Towards a demand-driven environmenthangeUp (2004-2011, R.I.P.) o Hubs, consortia and (block) grants to infrastructure organisationsBuilding Blocks” (Harker and Burkeman 2007) o Critical examination of second tier support in Londoneal Help for Communities – Modernisation Fund (2009-2010) o Bursary scheme viewed positively by recipientsffice for Civil Society - “Supporting a stronger civil society” (2010)ew developments: o Big Lottery Fund “Building Capabilities for Impact and Legacy” o Local experiments – local authorities and ‘TLI’
Changing business models in (local) infrastructure Not doing it and Not doing it, Doing it already don’t plan to but plan to Reducing operating costs Bidding consortia Building/premises Charging fees for consultancy Non-infrastructure contracts Local businesses More member-only benefits Selling to each other Trading companyPhilanthropists/individual donors Commissions 0% 20% 40% 60% 80% 100% Source: NAVCA – annual survey of Chief Officers, May 2011, by kind permission
Towards a demand-driven environment Office for Civil Society (2010) “Bursaries put the organisation in control, enabling it to access the advice that is right for its circumstances and choose from a range of providers” Big Lottery Fund (2011) “we need to be realistic about where we spend our limited resources to achieve the best effect…[in the future] approaches should engage with customers and help them find the advice and support services which best meet their needs”
BIG: ‘Building capabilities for impact and legacy’ • To guide a c.£20m complement to the £30m Transforming Local Infrastructure investment • Less money around - existing arrangements and structure unsustainable • Four demand-led proposals i. Assessment – grant – approved list of providers ii. Assessment – voucher – any qualified provider iii. Online information to help find a support provider iv. Bursaries to fund peer to peer support • Supported by the £6m Assist programme for a three-year national framework to support local infrastructure in the new environment
Issues for….customers• What support do we need/want? o what for? (e.g. fundraising, business planning, governance) o what kind? (e.g. more or less intensive support)• How much can or should we shop around? o how do we assess the quality of providers before we choose? o what is the role for trust and existing relationships? o how important is local knowledge? o what would be a reasonable price? o what can we afford?• Can we be confident that the support we receive is any good? o what difference did it make?
Issues for….suppliers • Who are the customers? o what do they need or want? o how do we ‘reach’ them? o do they understand what it is we can provide? o are they prepared to pay for our services? • What services can or should we provide? o what resources/expertise do we need to provide our services? o what are our costs? o how do we set and adjust prices for our services? o how do we undertake non-marketised activities? (e.g. voice, representation) • What is our relationship to other providers? o how much do we know about them? o how much do we signal to them what we offer and how? o are they competitors/potential partners?
Issues for….market makers (1)• Is there actually a market for capacity building and infrastructure support? o how much does it need to be promoted and fuelled?• What kind of emerging (extending) market is it? o a status market – i.e. one operating more around the status and regard of providers than the nature of the product or service• How should the market be constructed and managed? o a ‘free for all’ or a managed market (vouchers, approved lists)? o how is quality to be judged? o what information about providers is needed and how should it be circulated and used? (‘judgement devices’) o how are prices determined?
Issues for….market makers (2)• How will the supply side be reconfigured? o providers trying to find their footing and place in the market (in relation to each other) o opening up the geography and scale of infrastructure o generalists and specialists o voice, advocacy, representation o hollowing out (freelancing development support) o brokerage• How will we judge the emerging system? o on what basis might we evaluate the emerging market?
For discussion…In small groups:3. What are you doing or planning to do about the changes we’ve been discussing?4. What experience can you share with each other?5. What is needed to make it work? • for customers – i.e. front line VCOs • for suppliers – i.e. infrastructure organisations • for ‘market makers’ – i.e. funders, statutory bodies, etc------------------------- For research on ‘infrastructure’ and other topics, visit TSRC’s ‘Knowledge Portal’ at: www.tsrc.ac.uk