1. ‘Marketisation’
the shift from supply-led to demand-driven
Rob Macmillan
Third Sector Research Centre
University of Birmingham
The Impact of Infrastructure 2012 conference
London, 25th April 2012

2. Welcome!
In this workshop…
•an overview of the ‘marketisation’ of infrastructure (Rob)
•charting the experience in Norfolk (Brian)
•small group discussions and feedback (you)
Questions…
•What are you doing or planning to do about the changes we’ll be
discussing?
•What experience can you share?
•What is needed to make it work?

3. Overview of marketisation…
2.Context… the great unsettlement
3.What is ‘marketisation’?
4.Towards a demand-driven environment
5.‘Building Capabilities for impact and legacy’
6.Issues for:
o Customers
o Suppliers
o Market makers

4. Context: the great unsettlement
Shake-out?
- organisations and projects contracting or coming to an end
Shake-up?
- being more enterprising
- rationalisation/reconfiguration
- demonstrating value
Room – is there enough room for everyone?
Decoupling the state and the VCS?
- partial/gradual withdrawal of state support?
- e.g. ‘strategic partners’ and ‘TLI’

5. What is ‘marketisation’?
Five sector trends bundled together as marketisation:
3. increased competition for public service contracts and funding
4. growth in earned income and commercial trading
5. changing expectations of funders and institutional donors, for more
accountability and transparency
6. emergence of social enterprise
7. adoption of private sector management practices
VCOs are adopting management approaches and values of the private (for
profit) sector as a means to respond to their changing environment,
in particular to market based government policies, which are aimed
at reforming the perceived inefficiencies in public service provision
(Bruce and Chew 2011: 155)

6. Towards a demand-driven environment

7. Towards a demand-driven environment
hangeUp (2004-2011, R.I.P.)
o Hubs, consortia and (block) grants to infrastructure organisations
Building Blocks” (Harker and Burkeman 2007)
o Critical examination of second tier support in London
eal Help for Communities – Modernisation Fund (2009-2010)
o Bursary scheme viewed positively by recipients
ffice for Civil Society - “Supporting a stronger civil society” (2010)
ew developments:
o Big Lottery Fund “Building Capabilities for Impact and Legacy”
o Local experiments – local authorities and ‘TLI’

8. Changing business models in (local) infrastructure
Not doing it and Not doing it,
Doing it already
don’t plan to but plan to
Reducing operating costs
Bidding consortia
Building/premises
Charging fees for consultancy
Non-infrastructure contracts
Local businesses
More member-only benefits
Selling to each other
Trading company
Philanthropists/individual donors
Commissions
0% 20% 40% 60% 80% 100%
Source: NAVCA – annual survey of Chief Officers, May 2011, by kind permission

9. Towards a demand-driven environment
Office for Civil Society (2010)
“Bursaries put the organisation in control, enabling it to access the
advice that is right for its circumstances and choose from a range of
providers”
Big Lottery Fund (2011)
“we need to be realistic about where we spend our limited resources
to achieve the best effect…[in the future] approaches should engage
with customers and help them find the advice and support services
which best meet their needs”

10. BIG: ‘Building capabilities for impact and legacy’
• To guide a c.£20m complement to the £30m Transforming
Local Infrastructure investment
• Less money around - existing arrangements and structure
unsustainable
• Four demand-led proposals
i. Assessment – grant – approved list of providers
ii. Assessment – voucher – any qualified provider
iii. Online information to help find a support provider
iv. Bursaries to fund peer to peer support
• Supported by the £6m Assist programme for a three-year
national framework to support local infrastructure in the new
environment

11. Issues for….customers
• What support do we need/want?
o what for? (e.g. fundraising, business planning, governance)
o what kind? (e.g. more or less intensive support)
• How much can or should we shop around?
o how do we assess the quality of providers before we choose?
o what is the role for trust and existing relationships?
o how important is local knowledge?
o what would be a reasonable price?
o what can we afford?
• Can we be confident that the support we receive is any good?
o what difference did it make?

12. Issues for….suppliers
• Who are the customers?
o what do they need or want?
o how do we ‘reach’ them?
o do they understand what it is we can provide?
o are they prepared to pay for our services?
• What services can or should we provide?
o what resources/expertise do we need to provide our services?
o what are our costs?
o how do we set and adjust prices for our services?
o how do we undertake non-marketised activities? (e.g. voice,
representation)
• What is our relationship to other providers?
o how much do we know about them?
o how much do we signal to them what we offer and how?
o are they competitors/potential partners?

13. Issues for….market makers (1)
• Is there actually a market for capacity building and
infrastructure support?
o how much does it need to be promoted and fuelled?
• What kind of emerging (extending) market is it?
o a status market – i.e. one operating more around the status and
regard of providers than the nature of the product or service
• How should the market be constructed and managed?
o a ‘free for all’ or a managed market (vouchers, approved lists)?
o how is quality to be judged?
o what information about providers is needed and how should it be
circulated and used? (‘judgement devices’)
o how are prices determined?

14. Issues for….market makers (2)
• How will the supply side be reconfigured?
o providers trying to find their footing and place in the market (in
relation to each other)
o opening up the geography and scale of infrastructure
o generalists and specialists
o voice, advocacy, representation
o hollowing out (freelancing development support)
o brokerage
• How will we judge the emerging system?
o on what basis might we evaluate the emerging market?

15. For discussion…
In small groups:
3. What are you doing or planning to do about the changes we’ve
been discussing?
4. What experience can you share with each other?
5. What is needed to make it work?
• for customers – i.e. front line VCOs
• for suppliers – i.e. infrastructure organisations
• for ‘market makers’ – i.e. funders, statutory bodies, etc
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