“On Wednesday of last week, VONNE, along with UNISON and the North East Child Poverty Commission, hosted an event looking at the opportunities and challenges that the concept of the Living Wage offered to voluntary sector organisations. VONNE deserve great credit for identifying this as an issue of concern for their members and it should be noted that umbrella bodies for public and private sector organisations in the region are not exactly clamouring to discuss this agenda publicly. It should also be noted that the three accredited Living Wage employers in the region are all voluntary sector organisations and no public sector bodies in the North East currently pay the national Living Wage.

The event was organised to see if there were barriers that might prevent voluntary organisations paying their staff a Living Wage of £7.45 per hour and the issue of commissioning arrangements with local authorities was a particular concern. It has been suggested that paying all staff at least the Living Wage would price these employers ‘out of the market’ for certain contracts with local authorities and other public sector bodies. The increasing influence of public sector funding therefore provides a dilemma for many of third sector organisations and it is to be hoped that the Social Value Act will help voluntary organisations articulate to public sector bodies the benefits of working with them.

Charities have a long history of campaigning for and advocating on behalf of some of the most vulnerable individuals in society (many of whom have suffered at the hands of the state), challenging political power, and of picking up the pieces or filling the gaps where the state (or, increasingly, the market) has failed. Few charities, if any, will have been set up to deliver public services, to ‘maintain the status quo’ or to support and sustain employment practices which do not offer people sufficient income to allow them to escape poverty. So, can voluntary sector organisations be effective campaigners against social issues such as poverty and its consequences (and advocates for those affected by poverty) whilst paying employees low wages, which we know are a major cause of poverty? Or, to look at it another way, does campaigning on behalf of animal cruelty charities give you the right to kick your cat behind closed doors?

The increasing business mentality – or ‘corporatisation’ – of some charities is illustrated by a desire to remain ‘competitive’ and ‘win’ contracts that effectively trumps a desire to, for example, ensure reasonable conditions of existence for employees or to deliver the best possible service for clients. We must ask ourselves if charities are in danger of being caught on the side of powerful institutions rather than the side of vulnerable and marginalised individuals and workers.

Jo Curry, the Chief Exec of VONNE, also highlighted the role that voluntary sector organisations play in employing ex-service users and those who might not be an attractive employee to employers in other sectors. Jo suggested that, in some cases, the choice might be between offering these individuals a job on low wages – as a starter position and then developing them and training them up so that they could progress in work – or no job at all. I’d argue that this frames the options too narrowly between the two evils of the ‘low-pay, no-pay’ cycle and that, dare I say it, a ‘third way’ exists. This would see charities rejecting an orthodox market approach which pays people as much (or as little) as the market deems they are worth and setting wage levels based on what people need to achieve an acceptable minimum standard of living, rather than what the ‘business’ can afford. A business model could be developed around this way of working which would ensure that charities did not perpetuate the very problems they were trying to tackle. Such a model could also explore pay ratios within the organisation as another example of a practical way of tackling inequality (this also offers the potential to implement the Living Wage at no overall cost to an employer).

Three voluntary sector employers in the region, Scotswood Natural Community Garden, Children North East and Aquila Way have already demonstrated that it is possible to not only talk the talk about a Living Wage and, by extension poverty and inequality, but also to walk the walk. I look forward to seeing more charities in the North East signing up to be Living Wage employers.

Stephen Crossley, North East Child Poverty Commission
s.j.crossley@durham.ac.uk

“Last month Aquila Way became an accredited Living Wage employer. We did this not because we are flush with spare cash or because of external pressure on us to do so, we did it simply because we believe it is the right thing to do.

It was with interest that I read IPPR’s ‘Beyond the Bottom Line’.  The question at the heart of their consideration of the Living Wage for the Voluntary Sector ‘will it create disadvantage in competing for contracts?’ is a question that we have had to consider. It is a question to which we have concluded that the role of an ethical employer is not to join the race to the bottom, but to protest against it.

Aquila Way is a voluntary sector provider of supported housing.  We frequently compete for contracts through the Local Authority and are witnessing the competition for these contracts becoming increasingly focused on cost, with cheap contract prices being achieved through low salaries for staff and skeletal staffing structures.  Aquila Way realised a while ago that we would never be the provider submitting the cheapest tender because we are not willing to pay the minimum wage, slash staff training budgets, or allow for the least amount of contact time with service users that we can get away with. We want to provide a quality service, we want to ensure that our staff have the right skills, expertise and training to do their job, and we believe that staff who do work that is frequently challenging and taxing, deserve a respectful wage.    Whilst we are confident that we provide good value to our commissioners, we will not join the race to the bottom, so instead we have decided to be proud, to shout loudly about doing things differently and wear our Living Wage credentials with pride.

28 years ago a group of local students set up Aquila Way.  They established, in an embryonic form, Aquila Way as an ethical charity, driven by beliefs and a clear ethos. As the Chief Executive three decades later, I take seriously this ethos, recognising that it gives us a mandate today to champion the worth of all people, to keep working for a fairer society, to stamp out injustice.  Living Wage Foundation claim that the Living Wage has lifted 45,000 people out of poverty during the 10 years it has operated, if we can be part of growing this figure, we want to be.

IPPR’s report is a welcome spotlight upon the potential of the Living Wage and an important call to large private companies and to government to adopt the living wage. I think it would be a mistake however for the Voluntary Sector to hide behind its lack of economic prowess as reason not to adopt the Living Wage unless incentivised financially to do so.  The role of the Voluntary Sector is to be a beacon for change. Not to be shaped by market trends without discretion, but to subvert those trends when they are not in the interests of the communities those charities serve.

Whilst I wholly support the call for financial incentives for SME’s who choose to adopt the Living Wage, I would encourage all employers to look at the statistics regarding the benefits of being a Living Wage Employer. An independent study of the business benefits of implementing a Living Wage policy has found that more than 80% of employers believe that the Living Wage had enhanced the quality of the work of their staff, while absenteeism had fallen by approximately 25%. 66% of employers reported a significant impact on recruitment and retention within their organisation and 70% of employers felt that the Living Wage had increased consumer awareness of their organisation’s commitment to be an ethical employer.

I want to be part of a voluntary sector that competes not only on cost but also on quality, integrity, on the health of their organisation and on the benefit they offer to every community they work in and commissioner they deliver services for. The real challenge for the sector is to work with commissioners to secure a joint agenda on these issues.”

Nancy Doyle, Aquila Way

www.aquilaway.org

The group also spent some time thinking about how the VCS and police could work better together in partnership. There was some real intellegence gathered that Vera Baird will be using over the forthcoming months but the strongest statement I heard was “The police need to really work in partnership with the VCS, not just ticking a box. The VCS do not just want money, they want support and really do want to work together. A culture shift is needed”.

If you were unable to attend the session but would like to feed in your views you can do so by completing the online survey before 31st January – www.surveymonkey.com/s/northumbria_pcc

Successful Candidates in the North East taking up office today are:

1. Northumbria – Vera Baird QC, Labour
2. Durham – Ronald Hogg, Labour
3. Cleveland – Barry Coppinger, Labour 

There has been a lot of coverage in the news about why the turn out would be low with some members of the public believing things would not change so did not see the point in voting however this week Cleveland’s PCC has already put their power into practice with the removal of Cleveland Police Authorities’ CEO. Read more on the  Gazette’s website.

I think this just goes to show how much things could change with the introduction of these positions so it is vital that the VCS engage with and influence the PCC’s – The Safer Future Communities Networks will be supporting the VCS to do just this.

This hourly rate is set independently and updated annually.  The Living Wage is a calculated according to the basic cost of living in the UK.  The UK Living Wage is calculated by the Centre for Research in Social Policy. The London Living Wage is calculated by the Greater London Authority.

The Living Wage enjoys cross party support, with public backing from the Prime Minister and the Leader of the Opposition.   Paying the Living Wage is said to be good for business, good for the individual and good for society. 

However employers choose to pay the Living Wage on a voluntary basis.  I’m proud to say that VONNE is a Living Wage employer, in that all staff are paid at least this.  But I wonder how many other voluntary organisations are able to pay a living wage?  The sector is being encouraged/expected to take on delivery of public services on an unprecedented scale.  This move from grants from public bodies, to contracts to deliver services has not come without drawbacks to organisations.  How many voluntary organisations are now struggling to keep staff on minimum wages, or have made redundancies, and now rely on volunteers to fill the gaps?

Newcastle City Council has recently launched itself as a Living Wage employer with all staff being paid at least that rate.  However they have no plans to impose such obligations on their contracted out work.  I was disappointed to hear this, but thought that perhaps the new Social Value Act could come into play here.

The Social Value Act which comes into force in January, will allow local and national government to consider the social good offered by bidders during procurement exercises in addition to monetary value.  The legislation, which was introduced through a private member’s bill from the Conservative MP Chris White, is intended to give charities a better chance of winning contracts.

But I was dismayed to read today that EU procurement rules mean the new legislation will only apply to central government and NHS contracts worth more than £113,057 and local authority contracts worth more than £173,934.  No level playing field for for charities hoping to win smaller contracts.

This news shouldn’t stop councils still putting into their tenders that they would be looking for bidders to pay a Living Wage.  And today’s news also cheered me, another report which says that making it a contract requirement to pay a living wage would not breach EU procurement rules.

I can’t pretend to understand all the nuances of EU procurement, but I would hope that the Living Wage is something that our sector aspires to, despite not having the best conditions to enable us to pay it.

What do you think? Would you like to pay your employees the Living Wage but are unable to due to cuts in your contract? Tell us in the comments below.

4 observations to contemplate as intelligent funders
1. The recent emphasis on social finance is depressingly irrelevant for all but a tiny minority of the sector. It isn’t because Staff, volunteers and trustees are lack creativity, are too ignorant or risk averse, that they are not business like or entrepreneurially savvy enough to take out a loan, it is because in the vast majority of cases they correctly identify that the issue that they face is lack of access to income and not lack of access to finance. The people that they serve cannot pay for the services that they receive, now or next year. There is likely to be no real cashable financial return on the investment.

2. I would argue that the emphasis on consortia building is also a red herring. The real test of whether any of the consortia building that has been invested in over the past 5 years has payed off, must be judged against the number and value of contracts that have been won collectively. In my experience in the North East of England, the financial value of contracts won is less than the amount that was spent on consortia building. Small organisations with little if any commercial acumen, regularly meeting to build a consortia when there is no deal on the table has been for many an enormous waste of time and energy. I would argue that there resources would be far better spent establishing meaningful relationships based on a niche offer to prime providers and large charities who may be persuaded to build them into their supply chains.

3. Thirdly – Sustainability. VCS organisations in my view are asked to collude in story telling when they are asked to provide sustainability plans, especially when applying for funding. An example of this is the Big Lottery, who this summer announced a £100m investment into tackling the issue of NEET young people. The principal that projects should be sustainable from the outset is a nonsense. I would charge Big and other funders to consider the sustainability of the programme or intervention themselves. If Big can’t negotiate mainstreaming with the financial muscle that they have, then why would they assume that we can do this locally with a minute fraction of the resources. The bottom line in many cases is stark – if you stop funding it the support will be lost and vulnerable people will suffer.

4. Finally, in the North East we are indebted to the Northern Rock Foundation, at it height it invested around £25m a year in the NE and Cumbria. It has never shied away from supporting away from supporting less attractive  causes, funded core costs, salaries, and established long term relationships with partners. One of the legacies will be to share with others what it is like to be a truly intelligent funder. As funders you should think carefully about the geographical spread of your investments. Do they reflect a diverse spread and do they take into account deprivation. How much of your funding is given to small locally based organisations that do not have a presence in the capital; that don’t have business development managers or bid writing specialists. I would urge you to go to Wigan, Cornwall, and Wallsend – visit projects, get a sense of the spirit of the place, and the real value of the work that is provided. Fund outside your comfort zones. In the North East there are some brilliant organisations doing tremendous work with vulnerable people. They just want to carry on with it.

Last night VONNE hosted an event to give the VCS an opportunity to ask Northumbria Police and Crime Commissioner Candidates any burning questions. All four candidates were represented (Vera Baird, Phil Butler, Peter Andras and Alistair Baxter). Candidates had a tough job answering the very well thought out questions but not as tough a job as Richard Moss, BBC Political Editor, had chairing it!

I hope the event helped groups make their decision about who to vote for on 15th November.

To give the sector an opportunity to discuss their thoughts with candidates and make an informed choice I am organising a number of events specifically for the VCS in Northumbria and Durham. To find out more or book a place visit VONNE’s website.

To find out about events for Cleveland contact Middlesbrough Voluntary Development Agency

This directory will be pushed with Police and Crime Commissioners, when they take up post on 22nd November. It is hoped that this directory will be used as a tool for commissioners and other statutory agencies looking for services within their police force area.

If your organisation was already on the NEON directory we will be contacting you over the next few weeks to update your details. If you organisation is not listed please take a few minutes to add it – SFCN Directory

As you may be aware I am developing a Safer Future Communities Network for Durham and Northumbria police force areas. As part of this I am working with the transition teams within the police authority.

We are trying to pull together a statement of impact of the VCS’s work around reducing reoffending, reducing crime, community safety and supporting victims. In order for this statement to be a success we need your support. Please send any evaluations, case studies or other relevant information to Chris Hartworth at Barefoot Research.

In Durham I have been working with them around a draft commissioning framework for when the PCC takes up office on 22nd November. I would really like to receive your thoughts are this.

In Northumbria I am working in Partnership with the police to hold a voluntary sector specific event to influence the police and crime plan. Come along on 17th September to have your say. Northumbria Police and Crime Panel are also looking to recruit their 2 independent members - anyone can apply but must do so by 28th August.

So that just leaves me with a little time to try and plough through my inbox before I go…