6.1 In Year Two the all-pervading message was that of change and uncertainty stemming from new policies and funding programmes coming out of the new UK Coalition government as well uncertainty about the outcome of the Scottish elections in May 2011. As one service manager noted, 'there is nothing surer than change'. This could create challenges for organisations, not least the rapid pace of change itself. Nevertheless, many were positive that the changes could create opportunities for improvements in the third sector.
6.2 Many TSOs were making significant efforts to respond positively and pro-actively to the challenges presented by the changing funding and policy environment. Many had taken the opportunity to look at their priorities and how they wanted to move forward. The majority had looked at a variety of strategies to cut costs and remain competitive, as well as diversifying the funding base (and social enterprise in particular). This presented challenges to leadership and governance, but senior management and Boards of TSOs were, on the whole, rising to meet these challenges. This suggests that many TSOs are taking a dynamic approach to change.
6.3 It is important to recognise that there is no reductive response to the current economic climate, no 'one size fits all'. For some TSOs, mergers are an appropriate response, for others they may not be. It is also important to recognise that innovation is only one response to the current situation. For others a more cautious 'sticking to the knitting' may be more appropriate. Proactive responses, like mergers and innovation, appear to offer creative ways to respond to these straitened times. However they can also consume resources at a time of resource scarcity. What the findings of this report suggest is required is a contingent response by TSOs that matches the response to the needs of their organisation, members and/or users.
6.4 A number of TSOs were also rising to the challenge of measuring 'soft' outcomes, particularly in relation to clients with complex needs and/or whose literacy and numeracy were limited. Some had made significant steps towards adapting and/or developing tools which would both demonstrate client progress to the client themselves as well as show the added value of the service to funders. While there was still no standardised way of measuring outcomes, some TSOs were making important steps towards developing tools flexible enough to be applicable across a number of different projects and funders.
6.5 TSOs were aware of the importance of partnership working as a means of meeting the challenges created by the policy and funding changes. Many were keen to be involved in more 'joined up' working and were taking advantage of increased partnership opportunities, but the impact of funding cuts on their existing partners presented a potential future threat. The intermediary bodies that appeared to be most successful in offering TSOs a platform to influence policy were specialist partnership forums (e.g. membership forums) and those with direct links with government. The experience of partnership working with local authorities varied, with some reporting better communication and dialogue while others reported lower levels of contact. There were indications that opportunities for involvement in service design by the third sector may be increasing, although it was too early to be certain if these would effectively materialise.
Email: Kay Barclay
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