Subsidiarity in England

Education, health care, and social services in a country that was already practicing subsidiarity in the 17th century. Integration between the public and private sectors on trial with the Blair government, arousing numerous doubts


The number of public services (both for-profit and not-for-profit) that are furnished by the private sector in Great Britain is astonishing: education, social work, employment, pensions, etc. In its history, the United Kingdom has always been characterized by a strongly centralized and "liberal" form of government. The State has never tried to intervene in those areas where society, often in the form of charities, was already working. The Charities Uses Act dates to 1601. A statute emitted by Elizabeth I and still applied in large part, it lists the numerous fields in which charities can operate: education and social work, but also transportation and infrastructures. Indeed, it was only with the Industrial Revolution and its consequences in society (the sudden birth of new needs and the appearance of early forms of trade unions) that the State began organizing its intervention. The fact is that today more than 180,000 charitable organizations and some private operators provide, under different forms of contract, a large part of public services.
Some examples follow.

The school system, which since September 1999 has undergone partial reform, can be divided into three phases: school for children up to 16 years of age, high school, and university.
The Local Education Authorities (LEAs) have the task of ensuring primary and secondary education. There are community schools (public), voluntary schools (private), and foundation schools (run by foundations). The principal differences regard who owns them and their responsibility toward their staff (teaching and non-teaching). For the first category, the local authority is both owner and manager of the schools; for the second, it is a private body; and the third has mixed forms, in which usually a trust owns the buildings. About 23,000 schools are financed by the State and of these about 14,000 are community schools, a little less than 1,000 are foundation schools, and the rest are different forms of voluntary schools. The LEAs are responsible for the financing of all the schools, albeit with varying procedures and controls; the principal difference being in the destination and use of the buildings. In the case of "bankruptcy" of a voluntary school, the law provides for a form of administration that subjects the school to strict control by the LEAs.
The high schools (for students from 16 to 18 years old, as well as for vocational instruction and for continuing adult education) represent a universe made up of different types of colleges (about 440 in England), private institutions (for the most part, privatized after 1992), and independent schools, all regulated, monitored, and financed, beginning in 1992-93, by the Further Education Funding Council (FEFC). Other monies are provided by tuition, local funds for technical schools, European Community funds, other national funds, and various fund-raising activities.
Finally, in Great Britain there are 135 universities and university colleges, attended by about 1.3 million students. The nature and administration of these institutions vary: public, private (not-for-profit and foundations), or mixed. Financing is provided by a mixture of government funds for about 55%, and the rest partly by tuition, private research grants, endowment investment, and various other sources.
Recently, partnerships have been instituted between public and private (PPP) to finance the renovation and development of schools regulated by the LEAs.

Health care and social services
The social and health services, as reformed under the Thatcher government, are prescribed in the National Health Service (NHS) and Community Care Act of 1990. The principal aim of this reform was to reduce spending by creating a market internal to the national health service that in the future could be offered to private suppliers. A second aim was to develop and transfer social and care services from local authorities to the tertiary sector, primarily on a contractual basis.
In reality, health care management has remained in public hands; private investment in health care and hospital management has been limited to sporadic cases focused mainly on upgrading and supplementation and on day clinics and doctors' offices.
Social care is a different story. Currently practically the majority of social and care services are managed privately, contracted out on the basis of territory, in particular by not-for-profit organizations, which were already operating in the areas of prevention and the care of the disadvantaged, and by cooperatives. In essence, all the home care and residences for the elderly and chronically ill are managed privately. Recently, private involvement is growing in the elaboration of local policy, although there do exist problems of coordination and authority with regard to the activities previously carried out by the same not-for-profit organizations.
Other sectors in which a public service is operated or managed by private bodies are: a large part of the transportation sector, almost all utilities (telephone, electricity, gas, etc.), employment agencies, arts administration, and pensions (which provides for a minimum guaranteed pension and strong incentives for private supplementary plans).
Integration between public and private is achieved in various ways, ranging from partnership to open competition. In recent years, the tertiary sector, which enjoys tax privileges as well as the traditional propensity toward donations on the part of the British people, has had to face new problems like a decreasing number of volunteers and a diminished income from donations and investments. To this are added problems of continuity in terms of the original mission of some charities that over time have become fully integrated into the market of personal care providers. This situation, along with the politics of the Third Way, has reopened a wide debate on the relationship between the State and the Third Sector, within the context of the reform of welfare that the Blair Labor government intends to enact.
Recently, there was a conference entitled "Third Way, Third Sector: A Policy Symposium," organized by the Centre for Voluntary Organization of the London School of Economics. Directed by Prof. Helmut Anheier, numerous academics, politicians, and business representatives compared views on the opportunities for collaboration according to the policies of the Third Way. Interesting ideas emerged, both for the situation in Britain and for their possible impact at the European level.

Blair's Third Way: Doubts and Criticisms

Prime Minister Tony Blair, in a recent speech, declared that in the development of his Third Way policies, the Third Sector will play a leading role. New Labor sees in this political design the real challenge to pure market policies. The role of the State can no longer be that of provider of services. This, however, requires a transformation in the public's concept aimed at individual rights, but also individual responsibilities. In this sense, the Third Sector will have to "help this change along."

What is the true impact of this political design on the Third Sector? First of all, there is a fear that it will be assigned more responsibility than it can handle, given its real capacity. And too, a coordination of this scope creates a form of neo-corporativism in which smaller associations (in particular at the most local level) will be at a disadvantage in terms of intervention and thus in terms of access to available funds.

The "Compact" between the government and the Third Sector is an early product of this new kind of relationship, a point of departure which has to be applied at the regional and local levels. The Compact is based on four principles:
  1. An independent sector having its own assigned task represents a good for all of society.
  2. The government and the independent sector have complementary roles in the furnishing of social services.
  3. There is value added in the partnership between public and private.
  4. The government and the independent sector follow different economic principles, but similar values and commitments.
This program, by now in the enactment phase, has been subjected to significant criticism, which has not been answered:
  • Who decides what is the appropriate role for the government and for the Third Sector? What does it mean that they have complementary roles?
  • What happens to a not-for-profit organization whose values do not coincide with the government's?
  • The Compact provides a "positive" definition of the sector, in which informal organizations do not seem to have been recognized.
  • The Third Way does not deal with the question of organizations with a confessional origin and gives a definition of the Third Sector that ignores the presence of churches or other types of community.
The politics of the Third Way, which has so fascinated other governments of continental Europe, has attempted to recognize the historical role of the Third Sector and at the same time has consigned it to a responsibility that cannot yet be defined. The fear of operators in this area is that the freedom in which the sector has grown up may be sacrificed as a function of this recognition.