Coming in from the cold? The impact of the contract culture on voluntary sector homelessness agencies in England

The voluntary and community sector (VCS) has experienced unprecedented growth over the past two decades, and has come to play a central role within the UK’s welfare state. This growth has been driven predominantly by a sustained influx of statutory funding as part of the modern ‘contract state’ and ‘quasi market’ approach to public service delivery. The growing dominance of statutory funding has lead a number of recent commentators (Dahrendorf cited in Brindle (2001); Centre for Social Justice, 2006; Seddon, 2007; Charity Commission, 2007) to argue that the VCS is being fundamentally changed through its closer relationship with government – that the independence, responsiveness and flexibility of organisations is under threat and that they are becoming para-statal or ‘QUAGOs1 - quasi-governmental organisations’ (Dahrendorf quoted in Brindle 2001). This paper examines the impact of the contract culture from the perspective of the VCS through the experiences of eight charities working in the field of ‘homelessness’ over the past ten years and in particular the responses of their chief executives to the changing political and economic environment. While contracting has undoubtedly blurred the boundaries between sectors, and played a part in the professionalisation and formalisation of charities, the study finds little evidence for the more negative processes of what Kramer (1995) refers to as ‘devoluntarisation’ or loss of independence. It concludes with a discussion about the relationship between the mission, culture and strategy of organisations to statutory funding and the management of the quasi-market itself.