Carmel 2008

© The Policy Press, 2008 • ISSN 0305 5736 155
Instituting the ‘third sector’ as a governable

terrain: partnership, procurement and
performance in the UK
Emma Carmel and Jenny Harlock
In this article we argue that governance of the ‘dispersed state’ is being extended into
the quasi-private realm of voluntary and community organisations and their activities.
Focusing on public service delivery, we distinguish the formal and operational dimensions
of governance, and argue that the goal of partnership carves out a newly governable
terrain – the third sector – which is to be organised through the operational governance
mechanisms of procurement and performance.The result is the attempted normalisation
of VCOs as market-responsive, generic service providers, disembedded from their social
and political contexts and denuded of ethical or moral content and purpose.
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Introduction
Delivered by Ingenta to: McMaster University
Across Europe and elsewhere there has been an increasing use of voluntary and
community sector organisations (VCOs)1 to deliver public or human services over
Copyright The Policy Press
the last decade (Ascoli and Ranci, 2002; Evers and Laville, 2004). Evidence from
the US and increasingly from Europe seems to show that the precise role that
VCOs play in public service delivery varies according to the existing arrangements
and social politics in individual countries, but also that some markedly similar
trends can be noted, with significance for both states and VCOs. The agenda
justifying these developments is that public service delivery, especially in welfare
services, is supposed to be assessed on the basis of ‘what works’, irrespective of the
sector, ownership or form of organisation delivering the service (Kramer, 2000).
Yet at the same time VCOs are being lauded as generators of competition and
contestability in public service provision, and especially as sources of public service
modernisation, and thus in delivering government agendas for welfare reform, in
the UK and elsewhere (Home Office, 2004a; Barnes, 2006; Cabinet Office, 2006a).
Across a range of countries in Europe, this approach has led to the emergence of
‘disorganised welfare mixes’, with a wide and highly variable range of organisations
being involved in public and welfare service delivery via a variety of arrangements,
at local, regional and national levels (Bode, 2006). More widely, the emergence of
fragmented and complex service provision has been observed to result in a blurring
of organisational boundaries between state and non-state actors (for a summary, see
Kramer, 2000: 4–6; also Evers, 1995). There has even been an international transfer
of policy instruments (Compacts) that can manage these increasingly dense and
complex relationships between VCOs and states. At the same time,VCOs can find
themselves under pressure to change their organisational forms and even goals in
response their involvement in public service delivery (Barnes, 2006).
Key words: governance • third sector • voluntary sector • partnership • public services
Final submission July 2007 • Acceptance August 2007
Policy & Politics vol 36 no 2 • 155–71 (2008)

156 Emma Carmel and Jenny Harlock
In this context, we examine recent developments in UK government policy in

relation to the role played by VCOs in the delivery of public services.We address the
way in which these policy developments attempt to institute a specific relationship
between VCOs and state authorities while promoting the use of VCOs in public
service delivery. We explain this relationship as an attempt to institute VCOs as a
single, ‘governable’ terrain, that of ‘the third sector’, through discourses, strategies,
and administrative and policy changes, broadly conceptualised as ‘governance’.
This governance strategy is designed to demarcate and impose an institutional
and normative order as a whole onto an otherwise privately organised and variably
regulated group of organisations.2 In the process of instituting this governable
terrain, we identify a clear instance of the ‘dispersed state’ (Clarke, 2004) developing
a range of strategies and techniques across new sites of action (Newman, 2001).Yet
VCOs comprise a myriad of contrasting organisations: this range and diversity of
organisational origins, purpose, structure and form presents problems for governing
VCOs as a ‘new site of action’, and our article is concerned with how the governance
strategy adopted to respond to these problems attempts to institute a particular,
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limited, set of relationships between VCOs and the state in public service delivery.
In particular, we identify since 2005 a key shift in the governance of VCOs in

service delivery. The use of VCOs to deliver public services – and the expectation
that this role should increase – has led to the development of a strategy to institute
a particular mode of governing VCOs as ‘the third sector’, and of VCOs providing
public services as ‘social enterprises’. We argue that the discursive construction of
VCOs as the third sector is embedded in a system of governance that tends to
institute them as technocratic and generic service providers. In doing so, it renders
their specific social origins, ethos and goals absent, as if these are politically and
socially irrelevant to their activities and role in relation to the state. We argue that
the partnership with VCOs, promoted since the late 1990s, has changed its meaning,
since procurement has been adopted as the key mode of organising service delivery.
Further, we argue that the governance of the third sector not only privileges market-
like behaviour and market-style organisational forms, but assumes their necessity.
This governance thus tends to normalise VCOs’ roles and actions as occurring on
and through an apparently depoliticised and desocialised, governable terrain. We
further argue that a central concomitant feature of the attempted institution of the
third sector as a governable terrain is the depoliticisation of the very act of governing
VCO activity and state–VCO relations.
The next section of the article outlines our perspective on governance, and
conceptualises the idea of a ‘governable terrain’. The subsequent sections address
how the policy goal of partnership represented a first attempt at instituting the
sector as deliverer of public services, positioned both as a special kind of service
provider, and increasingly as a generic service provider. We then go on to explain
the simultaneous emergence of third sector discourse with the promotion of
procurement, and the links with accompanying measures designed to enhance third
sector performance.3

Instituting the ‘third sector’ as a governable terrain 157
Instituting a governable terrain
We treat governance as ‘ensembles of practices and procedures that make some forms
of activity thinkable and practicable both to its practitioners and those upon who
it is practised’ (Gordon, 1991: 3). These ensembles involve an ‘attempt to regulate
and steer social subjects’ (Gordon, 1991: 3) or, rather, categories of social subject.
Policy discourses about specific social groups, organisations and relationships, as
well as policy instruments and administrative changes, interact to produce modes
of regulation which institute categories of social subject, and the relationships
between them. We adopt the idea that any mode of governance depends on the
interaction of two mutually constitutive but analytically distinct dimensions: the
formal, or substantive, dimension, which defines what is to be governed and by whom,
and the operational dimension, which defines how governing is to be done (Carmel
and Papadopoulos, 2003: 32–3). Each of these dimensions therefore involves both
discourse – establishing conditions of possibility for seeing and acting on the world
– and ‘technologies of government’ – procedures and processes that facilitate ways
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of governing (see Fenger, 2006). We explain how these two dimensions of UK

governance jointly institute VCOs as the social subject category of the third sector
with a specific relation to the state and the market, creating a governable terrain
via the mechanisms of procurement and performance.
By governable, we mean that categories of social subject are brought into the
orbit of regulation, management and coordination by state actors. According to
our conceptual reference point, then, instituting an area of social, political or
economic life as a governable terrain involves making the governance of this area
of life ‘thinkable and practicable’.We are therefore concerned with how recent UK
governance directed towards VCOs makes ‘thinkable’ and ‘practicable’ certain forms
of activity – by state and non-state actors.
So what would it mean to institute an area of social, economic or political activity
as governable (ie both thinkable and practicable)? In our view, making it thinkable
requires that it is discursively and institutionally constituted in four ways: as single,
recognisable, limited and knowable:
• Single: that which is to be governed must be conceptualised as comprising a

single group of institutions, actors or processes with enough commonality to be
able to demarcate them as a specific object of governing.Thus the terrain could
comprise a state, a locality, or a policy target group.
• Recognisable: the terrain must be recognisable as such to the actors and institutions
which form its subject categories and those with whom they interact.
• Exclusive: the terrain must be exclusive; it cannot include everyone, and we can
also expect attempts to exclude actors and institutions who are not recognised
as subject categories.
• Knowable: the complexity of subject categories instituted through the governance
of the terrain must be limited, facilitating data collection and analysis.
To make governing practicable, it is necessary to ensure that the sphere of life or

activity to be governed is not considered private; that it is available for governing. In
ordering the social world, the definition of what is a private matter for the market

or the domestic sphere, or a matter for experts, is crucial. This is because defining
an issue, problem or policy area as a matter for the market or for families or experts
indicates that it is not a political issue – it should not be contested on political
grounds.Thus defining a matter as outside politics, is a political activity itself (Fraser,
1989: 168–9). However, we make a qualification to Fraser’s argument, noting that
there are two aspects to defining what is political (not private): first, defining what
is publicly a matter for societal or collective concern; and, second, defining what is
politically available for political debate. It is the manner in which this is achieved
through both the formal and the operational dimensions of governance that we
focus on. In making governing practicable, it is essential for an issue or terrain to be
defined as a public matter or activity, but not necessarily a political one.
From the voluntary and community sector to the third

sector: governing through partnership
The process of rendering the governance of VCOs as both thinkable and practicable
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in the UK has until recently been directed through the formal dimension of
governance: partnership with the voluntary and community sector. In this section,
we explain how the discourse and practice of this partnership represented a specific
attempt to institute a governable terrain in public service delivery. We go on to
explain the significance of the post-2005 administrative and discursive changes to

the partnership form.
Partnership can be directly contrasted with the competitive contracting policy
that dominated UK–voluntary sector relations up to the late 1990s. From 1998,
the role of VCOs in UK public service delivery, and their relationship with the
state, were considered to be governed by the ‘Compact’ with government. This
Compact outlines positions of mutual respect, and recognition of the independence
of VCOs vis-à-vis the state (although it is without legal status). The UK version
was internationally unique in emphasising the Compact’s role in facilitating good
relations for public service delivery (White, 2006: 61); a reflection of its origins as a
response to the deterioration of VCO–state relations in the era of contracting-out
of public services under the Conservative governments 1979-97 (Kendall, 2000).
Indeed, the Compact had its origins in an independent review (Deakin Commission)
of VCO–state relations, whose findings were welcomed by VCOs, who had found
contracting-out profoundly constraining (eg Lewis, 1994; Deakin, 1996; Craig et al,
2002).The distinctiveness of the Compact(s) meant that Alcock and Scott (2002: 126)
could argue that ‘contracts have been replaced by Compacts’ as the overriding feature
of voluntary–statutory relations. As Kendall (2000: 544–6) has noted, the Compact,
treating the fragmented charities, local groups and voluntary organisations as ‘the
voluntary and community sector’ (VCS), first institutionalised the idea of a single,
unified social actor, with whom government and the public sector could deal.
The term ‘voluntary and community sector’ (VCS) makes the social and
organisational foundations and origins of the sector evident; indeed, these foundations
have often been highlighted as a defining and advantageous feature for public service
delivery. The VCS was characterised as being neither market nor state, and, as such,
offering distinctive value (Home Office, 1998).The key dimensions of this apparent
distinctiveness were and are that it is independent, not hidebound by bureaucracy like

the state, and therefore able to be innovative. It is close to users, and thus especially
able to respond to their needs, generating trust from ‘hard-to-reach’ social groups (eg
HM Treasury, 2002: 16; Home Office, 2004b: 6, 15–16; HM Treasury, 2005: 23–34;
Cabinet Office, 2006b: 9–10).The VCS comprises charities, voluntary organisations,
local community groups and social enterprises, which are constituted as partners
or potential partners with local or national government and public bodies. VCOs
therefore have a special status as potential partners, distinct from the private sector.
Key aspects of the institution of a single, recognisable and exclusive governable
terrain of the VCS were therefore already being discursively articulated from 1998.
The VCS could be treated as a single entity, and it even had identifiable interlocutors
in the form of the National Council for Voluntary Organisations (NCVO) and
other national bodies. The NCVO, along with many VCOs, not only recognised the
terminology of VCS, but had effectively created it (through its adoption after the
1978 Wolfenden report). Further, the distinctive features of the VCS in relation to
public services instituted an exclusive governable terrain: those included as subjects
to be ordered and managed through its governance are defined by these rules of
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distinctiveness.
Nonetheless, from early on, central to the institution of a governable VCS was
its apparently shared values with the Labour government (Labour Party, 1997: 1;
Home Office, 1998: 4; Hodgson, 2004: 141). This created ambiguity regarding its
distinctiveness and independence. The civic and economic benefits of VCOs were
frequently articulated in terms of the sector’s capacity to provide public services in
accordance with the government’s goals.The discourse of partnership thus appears
to unite voluntary organisations and public service agencies in the pursuit of
shared goals and ‘joint visions’ (HM Treasury, 2002: 3; also Home Office, 1998: 1).
Independence from the state, central to the justification of the special (ie exclusive)
character of this new terrain of governance, is paradoxically linked with the role of
VCOs in pursuing the shared (ie non-exclusive) goals of ‘social progress’ (Cabinet
Office, 2006a: 13). Indeed, this paradoxical relationship was already evident in the
Compact’s reference to ‘shared values’ (White, 2006: 51), but the provision of public
services is not simply a matter of implementing those policy goals shared by some
VCOs for the well-being of society. Instead, this mode of governance asserts and
even assumes that VCOs ‘have a crucial role to play in the reform of public services
and reinvigoration of civic life’ (HM Treasury, 2002: 3; Home Office, 2004a: 7);
through ‘continual improvement of services’,VCOs are integral to public services
reform (Cabinet Office, 2006a: 16). The political character of this positioning of
the subject category of VCOs is disguised by reference to VCOs’ traditional role
in welfare provision, normalising and naturalising their position in partnership
governance, and conflating the VCS and statutory sector as generic service providers
(HM Treasury, 2002: 5).
The discourse of partnership thus presents an ‘illusory unity’ (Newman, 2001)
of public and VCO services, disguising important disparities between them, while
simultaneously lauding VCOs’ distinctiveness and independence. Indeed, research
on partnerships with VCOs tells us that partnerships have failed precisely because
VCOs are not generic service providers; they are profoundly shaped by their
particular, and varied, social origins. There is strong evidence that the statutory
regulatory requirements and structures, andVCOs’ concern about accountability and

representativeness to their communities, mean that VCOs’ participation is limited

to the few and better resourced ‘mainstream organisations’ (Home Office, 2005c)
– and decision making is largely dominated by statutory partners (eg Taylor, 2001;
Craig et al, 2004; Harris et al, 2004).
Nonetheless, like any ‘sectorisation’, the social subject category of the VCS, with
whom this partnership was to be developed, rested on an unstable fiction of the
unity and similarity of purpose, organisation and structure of the multitude of
organisations that comprise it (see Kramer, 2000: 3–6); the instability of this fiction
continued to trouble government until 2005, and indeed beyond.The diversity and
fragmentation of the sector are consistently presented as a policy problem, which
various definitional exercises sought to resolve (eg HM Treasury, 2004; NAO, 2005;
Home Office, 2005a: 9–10). A 2005 discussion paper (HM Treasury, 2005) provided
a clearing ground for the articulation of a single, recognisable and exclusive terrain: it
was here that the third sector replaced the VCS as the nomenclature; that this ‘third
sector’ was itself explicitly defined; and that its constituent subject categories and
their roles were defined. A detailed mapping of the governable terrain of the third
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sector was provided, including, for the first time, mutually exclusive definitions of the
subject categories to be governed, their possible role in public service delivery, and
the terms under which they might be governed (ie charities,VCOs, cooperatives).
There was even an attempt to design how data will be collected on this third sector
and its constituent subject categories (HM Treasury, 2005: 63–70; also 2006a). The
polyvalent VSC was described, dissected and rearticulated as the apparently more
neutral and more inclusive third sector, which despite recognition of the problems
with VCS, was still preferred by VCOs and some public sector bodies (Home Office,
2005b).
The third sector comprises organisations that are ‘nongovernmental;“value-driven”
(concerned with purposes other than profit per se); principally reinvest surpluses
to further those purposes’ (HM Treasury, 2005: 17). This definition – a formalised
version of the ‘neither state nor market’ adage – makes some important discursive
achievements. First, despite its reference to value-driven, it renders these values
politically and socially neutral – it does not matter what these values are, how they
relate to the sociopolitical origins of an organisation, or even its purposes, as long as
these organisations are not profit oriented. Second, it is extended specifically in order
to include social enterprises, which, until that point, were institutionally dealt with
as businesses, and part of the market, rather than the third sector (see Home Office,
2005a: 11; OTS/Compact Voice, 2007: 5). This definition has cascaded through all
subsequent documents, which address VCOs in general, and the terminology ‘the
third sector’ is also universally applied (see Cabinet Office, 2006b, 2007; HM Treasury,
2006a, 2006b, 2006c).The Office for the Third Sector, based in the Cabinet Office,
was created in May 2006, with a designated minister. This brought together the
Social Enterprise Unit from the Department of Trade and Industry and the Active
Communities Unit from the Home Office. Subsequently, the interim report on
a 10-year strategy towards the third sector as well as an action plan on the third
sector in public service delivery were published (HM Treasury, 2006a). At the same
time, a new ‘Commission for the Compact’ was established in late 2006, to act as a
regulator-cum-advice centre for parties to local Compact agreements. It is in this
Commission that the assertion of independence and mutual respect of the public

and third sectors resides (HM Treasury, 2005; OTS/Compact Voice, 2007).Thus we
see that in instituting the third sector as a governable terrain, there is in the formal
dimension of governance both discourse (partnership with the third sector) and
technologies of government (changes in administrative authority, redefinitions of
the roles and relationships of departments and public bodies). Together these mark
the outline of the terrain, the social subject categories to be governed, and their
responsibilities (eg to coordinate and govern state actions in relation to VCOs and
‘third sector organisations’ more generally).
The promotion of partnership with the third sector in public services enables
VCOs to be discursively constituted as a natural participant in government policy as
generic ‘service delivery organisation[s]’ (Cabinet Office, 2007: 5). As such, the third
sector is also discursively constituted as part of a public domain, delivering public
services, for the public good (because it is value driven, but only in so far as these
values are shared with government), rendering its governance discursively practicable.
Thus far, then, the third sector is instituted as a governable terrain – although this
governance is apparently apolitical, naturalised simply as part of ‘what VCOs do’ and
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‘how public services are delivered’.The institution of the third sector as a governable
terrain has even been expressed as an attempt to engage VCOs in a political project:
that of increasing the role of the third sector in service provision to assist in public
services reform, and to create a competitive market of service delivery suppliers
(Cabinet Office, 2006a, 2006b: 39ff). How explicit this agenda has now become, and
how problematic this role is in relation to the ideals of VCOs as distinctive providers
in partnership with the state, is explained in the next section.
Governing through procurement: contracts and the

Compact
The 2002 review of the role of VCOs in public service delivery suggested that it
was important to ‘creat[e] a level playing field in competition for service delivery’
(HM Treasury, 2002: 25, 15–16; 2006d: 9). Public service delivery is to become a
fully fledged market, with providers subject to market-style discipline in offering
their services. It was in the 2002 review that the recommendation was first made
to introduce procurement contracts with VCOs, rather than grants, as the main
mechanism to coordinate and ensure service delivery.At the same timeVCOs would
get a commitment to three-year funding, and encouragement to charge for ‘full
costs’ (HM Treasury, 2002: 22; NAO, 2005; HM Treasury, 2006b, 2006d). Grant-
based funding from public bodies is to be confined to community organisations
promoting social cohesion and active citizenship (Home Office, 2004a: 7; Cabinet
Office, 2006b: 52–4; DCLG, 2006: 59).
For government, procurement introduces market-based competition, and thus
overcomes the problem of there being too few suppliers (HM Treasury, 2005: 22), and
in order to maintain the supply chain of services, it is also important to break down
barriers to entry on the ‘government market’ (Cabinet Office, 2006b: 5; HM Treasury,
2006d: 17). In addition, in order to ensure accountability to government over the
new three-year funding period, procurement is said to offer the best mechanism
for securing the government’s risk (ie contracts mean that cost management must
be borne by the service provider).

Procurement can also act as a disciplinary mechanism over the wide range of
relationships that exist under the term of ‘partnership’, and over the behaviour of
commissioning authorities (HM Treasury, 2006a: 25–6). Indeed, there is considerable
emphasis in the documents we reviewed on getting public authorities to behave in a
more market-oriented manner (NAO, 2005; Cabinet Office, 2006b: 57), including the
provision of guidance and exhortations on how to procure (eg HM Treasury, 2006b,
2006d), and the responsibility of local authorities and commissioning departments in
managing market development (HM Treasury, 2006d: 17).A proposed enhancement
of the Compact – Compact Plus – made clear the demands that partnership by
procurement places on commissioning authorities as well as VCOs (Home Office,
2005a: 12), and offers an insight into how the institution of the third sector as a
governable terrain also institutes ‘the sector’ in relation to other actors.4 While social
and environmental clauses can be included in the contracts (HM Treasury, 2006d:
23), the aim is clearly to organise the terrain of the third sector in a knowable and
manageable way, a mode of organisation where VCOs facilitate contestability and
competition on the government market to assist in efficient and cost-effective
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public services (Cabinet Office, 2006a; also HM Treasury, 2002: 15).The assumption
underpinning this way of working draws on a market model, which prescribes

competition between providers to drive down costs and improve efficiency and has
the ability to deliver better results to the users of services, or ‘customers’ (Clarke and
Newman, 1997); ‘better’ of course being defined by government.

Following the 2002 Treasury review of working with VCOs, there was also
increasing emphasis on securing medium-term funding for organisations that deliver
public services so that VCOs in particular are able to plan ahead with some financial
stability.Two policies have therefore been adopted – to make three-year funding of
state–third sector partnerships the norm (DCLG, 2006; HM Treasury, 2006a: 71), and
to encourage ‘third sector’ organisations to charge for their full costs (ie including
overheads) (eg HM Treasury, 2002; NAO, 2005: 2–4). Both these policies have the
potential to benefitVCOs by ensuring that when delivering public services they cover
all their costs, and that they are able to plan their services and policies. However, these
two changes, justified on the basis of improving government efficiency (NAO, 2005:
4), are promoted in conjunction with a move from grant-based to procurement-based
funding. In addition, in this case, the market is a monopsony, and many VCOs are
very unlikely to have resources to be actually bidding for contracts on an equitable
basis, but may be compelled to bid for service contracts in a context of scarce
resources, as well as having to introduce particular methods and modes of working,
which can interfere with VCOs’ purposes and their engagement with their wider
social basis (Taylor and Warburton, 2003: 335; Barnes, 2006: 98, 104).
For the central state, procurement means that the same process is adopted for
contracting-out service provision for all providers, irrespective of whether they
are private sector (known as ‘mainstream’) or third sector providers. This disguises
differences in ability, willingness or appropriateness of playing this field within the
third sector, but it is not just the general promotion of procurement that attempts to
contain the diversity of the third sector terrain. Not only does the definition of the
third sector specifically extend to include social enterprises, but social enterprise has
explicitly been adopted as a generic name for third sector organisations working in
partnerships. It is, it seems, no longer different VSOs, co-ops and charities that will

provide services in state–third sector partnerships. Rather, it is social enterprises,

which, simply by virtue of being contracted by the state in new procurement arrangements,
are constituted as quasi-businesses in the quasi-market:
trading with the public body: undertaking specific activities in return for
payment … makes the organisation a form of social enterprise … increasingly
it is likely that the nature of public service provision – providing specified
outputs in return for payment – will encourage the use of the term ‘social
enterprise’ for all third sector organisations contracted to deliver public services
by public bodies. (HM Treasury, 2005: 19; see also 2006a, passim)
The key issue is the idea of trading with the public sector as it is this which makes
the delivery of public services a matter of business, subject to market rules and
procurement, rather than grant funding (Home Office, 2005a: 10).5
Thus, social enterprises are no longer one among a series of categories of third
sector organisations, part of the defining limits of what was to be governed in
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partnership (see HM Treasury, 2005). Nor are they businesses with a social purpose,
dealt with as a special part of the private sector, as in the past (see Kerlin, 2006:
250). Rather, social enterprises are now discursively constituted as the generic
public service provider, the main object to be governed through third sector–state
relations, and, at the same time, all VCO public service providers are to be social
enterprises, behaving like business enterprises in a level playing field with the private
and public sectors.
This discourse, and the contractual tool of procurement that should institute it,
combine to form an important part of the operational dimension of governance
with two significant features. First, it involves the (attempted) institution of a market,
in which not only the third sector is to be governed, but also the other actors in
the market – notably commissioning authorities.Yet conceptualising and presenting
this governing as part of the promotion of an efficient market, providing value for
money, occludes its political aspect – that it is about central government attempting
to steer the behaviour of the social subject category ‘commissioning authority’, ie
executive agencies, non-departmental public bodies and especially local government.
Second, this part of instituting the third sector as a governable terrain, renders absent
not only the marked differences in the organisations that make up this sector, but
also the differences between these (in purpose, origin, form and structure) and
the private sector. This then makes the articulation of a level playing field and
competition between sectors and organisations part of a market rationality, made to
appear commonsensical as part of a specific agenda of public service modernisation.
The relationship betweenVCOs and the state appears apolitical, or at least politically
neutral, as it is governed through market rules – albeit the oxymoronical ‘government
market’ – in which the central state is the governing authority.
Building capacity, creating professionals: governing through

performance
If procurement and market creation form one part of the operational dimension
of third sector governance in public services, the second aspect is that of the

‘performance–evaluation nexus’ (Clarke, 2004). The way that the voluntary sector
is expected to deliver services is subjected to a discourse pervaded by terms such
as ‘transformation’, ‘reconfiguration’ and ‘revolution’, but this is not merely about
changing the way public services are delivered (ie through procurement and quasi-
market competition) – it involves changing how VCOs themselves are constituted
in delivering these services.
These new ways of working are generally framed in terms of building capacity, and
there are specific funding streams attached to capacity building for the third sector.
The emphasis in the policy and funding instruments regarding capacity building
in the third sector, particularly in relation to public service delivery, is embedded
in a new public management discourse, despite the range of possible meanings
and motivations for capacity building, based on empowerment and community
development (Harrow, 2001: 210ff). Building capacity in terms of increasing advocacy
and support services and campaigning work is marginalised and subordinated to
government objectives of increasing the capacity of voluntary organisations to
deliver public services. Poor performance is thus defined in terms of VCOs’ capacity
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to deliver public services – that is, to adhere to government’s objectives, including

how they do the business of service delivery (Cairns et al, 2005). It is not defined in
terms ofVCOs’ capacity for work with service users, advocacy or other functions.All
the specific policy tools promote business practices: IT resources and skills, human
resources management, meeting skills gaps, leadership, volunteer management (HM

Treasury, 2004: 55; 2005: 55; 2006c: 24–6). This construction of capacity building
assumes a technical and market-oriented accountability, which simply ignores the
conflicts such forms of performance accountability raise for VCOs given their need
for other forms of accountability, as well as the cost of compliance (Harrow, 2001:
215–17; Taylor and Warburton, 2003: 333; Barnes, 2006).VCOs are specifically not
rewarded – or given access to funding streams – for pursuing those virtues that made
them special service deliverers. Instead,VCOs are imagined as de facto businesses,
‘selling’ their services and driven by private sector ways of working, presenting a
productivist vision of their role. The emphasis is on selling services and responding
to the customer flexibly (Home Office, 2004a: 26, 28; HM Treasury, 2002: 5).
There are multiple ways in which performance can be measured, familiar from
new public management discourse: evaluation, setting targets, audits, performance
indicators and cost–benefit analysis (HM Treasury, 2002; Home Office, 2004a; NAO,
2005; HM Treasury, 2006b, 2006d). Being performance driven thus offers a different
set of logics and constraints for voluntary organisations’ work to being driven by
altruistic motivations. The discourse of performance normalises the reshaping of
VCO services around the imperatives of targets, efficiency and cost-effectiveness.
Efficiency orders the priorities on resources and action, expelling activities that do
not contribute to the primary goal, and legitimates withdrawal from previously
undertaken activities which become redefined as ‘unessential’ (see Clarke and
Newman, 1997). The discourse of performance thus sets rationing criteria; it
establishes priorities between different services and groups of users, and the use
of resources, but these appear as rational choices according to market-based logic,
rather than political choices, which might otherwise be contested, even by theVCOs
themselves (see eg Barnes, 2006). Evaluations, audits and performance indicators are
furthermore presented as rational and scientific, and therefore distinctly apolitical; they

appear to transcend the political agendas of different governments and thus present a
system of fairness and objectivity that seeks to invoke trust in these techniques. Dean
(1999: 168–9) argues that such ‘technologies of performance’ present themselves as
techniques to create trust in the activities of VCOs, specifically here facilitating the
legitimacy of their role as a public service provider, because they appeal to notions
of accountability and transparency, albeit rather different ones from those historically
articulated by VCOs themselves.
The capacity to deliver public services, to be quality oriented and responsive
to customers – ie an organisation’s performance – is frequently emphasised as being
dependent on a highly effective workforce (Home Office, 2004a: 27), and various
techniques for its development are suggested, both to promote good practice, and
to organise the delivery of capacity-building funds. This discourse of performance
thus produces a normative ‘model’ or ‘ideal type’, which all organisations, if they
are to be successful, must follow:
[T]o ensure that they have real impact these organisations have to concern
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themselves with strategic planning and budgeting, staff recruitment and

development, quality management, statutory reporting requirements, public

relations, membership systems, more formal management of relationships with
stakeholders. . . .(Home Office, 2004a: 19)
To achieve this adherence to specific standards of practice, developing expertise and

‘advanced thinking’ are required (Home Office, 2004a: 10):VCOs are advanced if they
carry out their role as public service providers in the way government and professionals
do.The proposed funding of hubs of expertise as gateways to good practice therefore
imagines a ‘path to professionalism’, or a ‘process of professionalisation’, which can
be realised by the VCOs, if they emulate government practice.This process can offer
appealing new subject positions for VCO members; volunteers and voluntary sector
staff are reconstructed as leaders, strategists, experts and professionals. Simultaneously,
the discourse of professionalism enables government to facilitate a programme of
coaching, shadowing and mentoringVCOs (Home Office, 2004a: 27) and providing
secondments, to assist them and demonstrate competencies and standards (Home
Office, 2004a: 9). Thus, intersected with the discourse of professionalism is the
discourse of paternalism, with government presented as the teacher and the example
setter, guiding, leading and nurturing the voluntary sector to fulfil its potential and
capacity – that is, its potential and capacity for being a public service provider (see
Labour Party, 1997: 2; Home Office, 1998: 3).
The emphasis on ‘training and skills development’ and ‘recruiting and retaining
the right people’ providing ‘appraisals and diagnoses of individual learning and
skills needs’ (Home Office, 2004a: 27) also enables government to individualise
performance. Thus, if these techniques are implemented, individual volunteers
and staff are made responsible for organisations’ overall performance, and every
individual is constructed as having a role in delivering the organisations’ objectives
– which in public service delivery, are those of the commissioning authority. The
discourse of human resource management and scientism thus makes it possible to
redefine the motivations and allegiances of volunteers and VCO staff (Clarke and

Newman, 1997); altruistic motivations and activities are displaced by commitments

to increasing capacity and performance.
Importantly, the discourse also constructs new subject positions for volunteers
and staff as (exclusively, and mutually exclusively) employees or managers, and
therefore reconstructs relationships between volunteers and staff as relationships
between employer and employee. Indeed, VCO members and workers as a
whole are repositioned through this discourse as a workforce, part of the labour
market, corresponding to their institution as the third sector, competing in the
market.Voluntary activity is thus presented as a means through which people can
primarily enhance their employability and gain skills and qualifications, generating
‘management, leadership, team working, planning, and ICT’ skills (Home Office,
2004a: 27).The voluntary sector is thus constructed as a resource to be utilised and
harnessed, making invisible the women who predominantly comprise this resource
to be used, particularly in the fields of health, education and social services (Lowndes,
2000: 534; Newman, 2005: 89–91), justifying claims that women volunteers bear the
cost of attempts to cushion cuts in public expenditure (Bagilhole, 1996).
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The second aspect of the operational dimension of governance – performance

– discursively closes off other possibilities of practice by presenting itself as the ‘only
right way’ of coordinating an organisation internally. Indeed, the documents suggest
‘benchmarking’ organisations against each other; a technique that seeks to produce
conformity with a model way of working.The logic of standards and good practice
assumes that organisations must converge around a consensus of standards. Thus,
the VCO’s ability to offer varied and wide-ranging services, and its innovation and
flexibility in both the services it provides and the way it provides them (so lauded
in principle) is subverted by the operational dependence on the discourse and
techniques of performance and professionalism.
Conclusion: instituting a governable third sector

In this article we identified the existence of an agenda that sought to increase
the role of the VCOs in public service provision, and drew attention to how this
political goal was rendered plausible and apolitical in two key ways. First, by the
goal of (notionally equitable) partnership, and, second, through the assumption of
shared, even universal, aims and values, which consequently neutralised differences
between VCOs, and between VCOs and the public sector. It highlighted how
partnership thus instituted VCOs as a constitutive part of modern governance, and
therefore as a governable terrain, unitary, or unifiable, as the third sector. We noted
that the reasoning for adopting performance management was structured specifically
around the notion of increasing capacity – that is,VCOs’ capacity to deliver public
services. Thus the discourse of performance established the market model and its
associated techniques of contracting and competition as the means to deliver public
services, prioritising financial calculation and forms of economic rationality. We
argued that the discourse of performance also implied the normalisation of VCOs’
professionalisation, and of forms of organisation that conform to business models,
such as employee-manager.
Our contention, then, is that the mode of governance outlined in this article,
involves making a set of organisations, activities and relationships previously not

considered an object of state governance –VCOs – into a governable terrain.Through

the formal dimension of partnership and the operational dimension of procurement
and performance, VCOs are to be drawn into and made subject to processes of
state governing. Simultaneously, these same discourses, policy instruments and
administrative changes occlude the extent to which this is a political development.
This is achieved in part through the idea of shared moral purpose and vision that
precludes engagement with political difference, which has been problematically
evident since the late 1990s. The more recent emphasis on market creation for
public service delivery, and the adoption of technocratic terminology and measures
(with funding attached) to alter the ways VCOs behave, to be more like the ‘social
enterprises’ they are assumed to be, creates a coherent approach to governing the
third sector in public service delivery, which is furthermore articulated as normal
and rational. Indeed, we pointed out that while the third sector is instituted as a
governable, and thus a public, realm, its accountability, procedures and activities as a
public service provider remain a matter for technocratic evaluation by state actors,
rather than a matter for political debate and contestation.
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This mode of governance positions the organisations that are supposed to

comprise the third sector in a peculiar sociopolitical ‘no man’s land’. It technocratises
organisations’ activities by apparently dissociating them from the social context
from which they have developed, in which they act, and to which they respond.
As a result, the social foundations of VCOs, and the organisational imperatives that
stem from these foundations, are disguised. The goal of partnership with the third
sector appears to express a politically neutral collaborative mode of governance but
in practice it enhances the ambiguity of third sector organisations’ position vis-à-vis
the state as ‘both a site and a form of organizing power’ (Clarke, 2004: 115).
What we have not done in this article is to analyse the variety of ways in
which VCOs have engaged with these discourses, nor how the widely varying
implementation of such governance strategies by local authorities affects the
governability of the voluntary sector in practice. Existing research on public sector
partnerships and performance management in the public sector, of course, suggests
that, in detail, such governance practices are likely to be negotiated, compromised
and often messy in application, and it is not at all certain that the nomenclature of
social enterprise will be recognised by those to whom it is now applied. It is also the
case that some VCOs adopt and use these government discourses in order to gain
resources for negotiation with their actual partner (the commissioning authorities).
What remains to be investigated is whether ambivalence ever translates into resistance
– among both commissioning authorities and VCOs – what form such resistance
takes and, above all, what the consequences of acceptance, ambivalence and resistance
are for the volunteers and the citizens for whom they do their volunteering.
Notes
1
We refer to ‘voluntary and community organisations’, as it is these, as public service
providers, that have been the explicit target of the policies and strategies under
investigation here.We refer to organisations rather than ‘sector’ in order to keep in mind
the variety of aims, legal and organisational forms, economic position, size etc that can
and have been included under the heading ‘voluntary and community sector’. When

appropriate, we also distinguish specific legal or organisational forms, such as ‘charities’

or ‘social enterprise’.
2
This should not imply that VCOs are not subject to any form of legal regulation;
charities, for example, are subject to regulation by the Charity Commission,VCOs that
also trade as companies are subject to company law etc. As such, all formally constituted
organisations are ‘governed’. However, our concern is with a new attempt to govern
VCOs as a whole, via the mechanisms we identify here.
3
This article presents a discourse analysis of all published government documents
representing general policy towards VCOs since 1998. The citations presented are
illustrative and not exhaustive. The analysis does not include policies, discussion
documents etc developed for particular policy areas, such as regeneration, health or
crime. This means that we necessarily exclude an analysis of partnerships organised
for community empowerment and civil renewal. The latter is an important strand of
government discourse, but we confine ourselves to the governance of VCOs in relation
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to public service delivery. It is, indeed, notable that the vast majority of statements of
strategy, policy, action plans, reviews and guidance produced for and about VCOs in
general, are articulated in terms of public service provision and the role of VCOs in
delivering reform in particular.
4
This Compact Plus was eventually rejected byVCOs for demanding high-performance
compliance and for privileging ‘mainstream organisations’ that could meet its demands
(Home Office, 2005b: 10-12, 28), and appears to have been dropped as a policy
proposal.
5
This issue of trading seems to have been of concern in relation to the 2006 Charities
Act, which introduced a new legal form for charities – the Charitable Incorporated
Organisation – to facilitate charities’ trading, by offering limited liability while remaining
under Charity Commission regulation, and therefore benefiting from charities’
advantageous tax position in relation to ‘trading’.As the details of this new legal form have
yet to be published, we cannot evaluate its significance, nor consider its likely uptake.
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Committee, London: Croom Helm.

Emma Carmel, sssekc@bath.ac.uk

Jenny Harlock, j.e.harlock@bath.ac.uk
Department of Social and Policy Sciences, University of Bath, UK

Carmel 2008

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© The Policy Press, 2008 • ISSN 0305 5736 155

Instituting the ‘third sector’ as a governable

Final submission July 2007 • Acceptance August 2007

Policy & Politics vol 36 no 2 • 155–71 (2008)

In this context, we examine recent developments in UK government policy in

In particular, we identify since 2005 a key shift in the governance of VCOs in

Policy & Politics vol 36 no 2 • 155–71 (2008)

Instituting a governable terrain

of governing (see Fenger, 2006). We explain how these two dimensions of UK

• Single: that which is to be governed must be conceptualised as comprising a

To make governing practicable, it is necessary to ensure that the sphere of life or

Policy & Politics vol 36 no 2 • 155–71 (2008)

From the voluntary and community sector to the third

explain the significance of the post-2005 administrative and discursive changes to

Policy & Politics vol 36 no 2 • 155–71 (2008)

Policy & Politics vol 36 no 2 • 155–71 (2008)

representativeness to their communities, mean that VCOs’ participation is limited

Policy & Politics vol 36 no 2 • 155–71 (2008)

Governing through procurement: contracts and the

Policy & Politics vol 36 no 2 • 155–71 (2008)

underpinning this way of working draws on a market model, which prescribes

Newman, 1997); ‘better’ of course being defined by government.

Policy & Politics vol 36 no 2 • 155–71 (2008)

provide services in state–third sector partnerships. Rather, it is social enterprises,

Building capacity, creating professionals: governing through

Policy & Politics vol 36 no 2 • 155–71 (2008)

to deliver public services – that is, to adhere to government’s objectives, including

resources management, meeting skills gaps, leadership, volunteer management (HM

Policy & Politics vol 36 no 2 • 155–71 (2008)

themselves with strategic planning and budgeting, staff recruitment and

development, quality management, statutory reporting requirements, public

To achieve this adherence to specific standards of practice, developing expertise and

Policy & Politics vol 36 no 2 • 155–71 (2008)

Newman, 1997); altruistic motivations and activities are displaced by commitments

The second aspect of the operational dimension of governance – performance

Conclusion: instituting a governable third sector

Policy & Politics vol 36 no 2 • 155–71 (2008)

considered an object of state governance –VCOs – into a governable terrain.Through

This mode of governance positions the organisations that are supposed to

Policy & Politics vol 36 no 2 • 155–71 (2008)

appropriate, we also distinguish specific legal or organisational forms, such as ‘charities’

Policy & Politics vol 36 no 2 • 155–71 (2008)

voluntary and community sectors’, in C. Glendinning, M. Powell and K. Rummery

Policy & Politics vol 36 no 2 • 155–71 (2008)

Policy, vol 24, no 2: 139–64.

Policy & Politics vol 36 no 2 • 155–71 (2008)

Newman, J. (2001) Modernising governance, London: Sage Publications.

Committee, London: Croom Helm.

Copyright The Policy Press

Emma Carmel, sssekc@bath.ac.uk

Policy & Politics vol 36 no 2 • 155–71 (2008)

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