Give charities the same help as small businesses to boost productivity in the UK, ministers urged

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For First Steps, a charity based in the English Midlands which offers advice to people with eating disorders, the decision to go paperless before the Covid-19 pandemic has resulted in a boost in productivity that anyone could what a small business would have envied.

Instead of an increase in profits, the dividend was paid out in the number of daily sessions that the organization’s advisers could perform, increasing from five to six.

“Before digitizing the process, we spent 10 to 20 minutes after each session filling out paper files, scanning them and then filing them,” said general manager Kevin Parkinson. “The introduction of technology has allowed us to process more cases and manage them better.”

With the charity sector now receiving nearly £15billion a year in government grants and employing over 900,000 people, there are growing calls for it to be included in ministers’ efforts to tackle the crisis in long-standing productivity in British companies.

Sir Charlie Mayfield, the former chairman of the John Lewis Partnership, tasked by former Prime Minister David Cameron with improving low productivity in small businesses, is among those calling for the ‘third sector’ to receive similar help.

Former John Lewis Partnership chairman Sir Charlie Mayfield says the so-called third sector should get the same help as small businesses to improve productivity © Neil Hall / Reuters

Chancellor Rishi Sunak has announced £520million in 2021 for the government’s Help to Grow scheme, which aims to provide discounted business advice to 130,000 small businesses, and Mayfield believes charities would benefit from the same kind of advice .

“The integration of the social sector into the broader productivity effort of the country must become a priority. Opening up Help to Grow for the charity sector would be a start, but that’s the model that has reach – we need Help to Grow, but tailored to the third sector,” he said.

Lord Gus O’Donnell, former cabinet secretary and chairman of Pro Bono Economics, a charity providing economic expertise to the sector, echoed this – calling for it to be presented in the next budget.

“It would be a great investment for taxpayers, and it’s very much in line with the leveling program because you’re helping the most needy in society, which is fundamental to addressing staffing shortages and our supply problem. workforce,” he added.

The charity sector, which has a total income of nearly £85billion a year, is three times less likely than the wider economy to invest in leadership development essential to improving productivity, according to a survey of 500 medium and large charities and social enterprises by Clare Social Leadership, a consultancy firm.

Mayfield, who chairs Be the Business, a charity that offers mentoring and productivity advice to SMEs, said he thinks the same principles could be applied to the so-called third sector.

“New technologies and new kits are essential, but mentoring and creating a space for reflection for leaders is the key to improving productivity, which is” the “biggest thing holding back our economy” , he added.

However, the commercial department said that Help to Grow was only aimed at SMEs that could benefit from intensive leadership training and indicated that it had no plans to expand the remit of the program.

“Social enterprises continue to receive government support, including £20m of blended finance, as announced in the leveling white paper,” he added.

Peter Osborne, COO of the Guide Dogs charity
The management techniques of the charity Guide Dogs have been improved thanks to a partnership with Toyota, says Peter Osborne, the charity’s director of operations © Guide Dogs

Compared to businesses, charities often find it harder to invest in improving productivity because most donations are tied to achieving a direct result, said Peter Osborne, chief operating officer of the Guide dogs charity that trains dogs for the blind.

Osborne, who holds an MBA focused on operations management, said the organization is always looking for more efficiency in its canine supply chain, which involves raising some 2,000 puppies a year, of which only the about half will reach the rank.

Current areas of focus include ways to standardize dog training, which can vary between five and 10 months per animal, as well as better processes to identify young dogs most likely to succeed before time and effort run out. money is invested in their training.

“If you can reach the assessment early on, you could incur huge costs considering that a trainer is taking four dogs through a training cycle for 20 to 30 weeks,” he explained.

In some areas corporate sponsors can also help. Guide Dogs has already streamlined the manufacturing of its harnesses using production line management techniques shared during a Partnership with Japanese automaker Toyota.

“Really taking under the hood of this cost analysis and supply chain management is where even an organization the scale of ours is always looking for additional assistance,” added Osborne.

For other charities, such as Enable Scotland, which provides social care and employment training for local communities, it is a more traditional improvement in management processes that can provide both better services and a best quality price report.

Theresa Shearer, group chief executive of Enable Scotland, who spent a decade in the human resources outsourcing industry before entering the charity sector, said the charity had cut administrative costs by 14 % to 10% since she took over in 2015.

Efficiencies had been driven by digitalisation, doubling the scale of the charity’s operations from £30million to £65million and a strategic decision not to take on government contracts which were draining the Enable reserves because they were priced at a point that required a subsidy.

Advice from a former Microsoft Scotland executive who works for Enable two days a month has helped create bespoke technology that has freed up caregivers more time for patients and improved working conditions and staff retention levels , she added.

“We are a purpose-driven charity, but by applying as much discipline as possible, with very strict rules, it means that most of our money will go to the front line,” she said.

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