This commitment pulled the voluntary sector centre stage, mainstreaming their activity and engagement, or as Kendall (2009) termed it ‘hyperactive mainstreaming’ through a number of very proactive moves including the creation of new institutions, commissioning out services, partnership formations and a rise in political status. However, the role of the voluntary sector is underpinned by an economic discourse, which is potentially in a juxtaposition to the social justice discourse presented by the sector itself. As voluntary sector organisations increasingly engage in the delivery of policy, tensions arise between their responsibility to service users and participants versus the need to deliver services in an increasingly competitive and demanding market (Taylor-Gooby and Wallace, 2009).
During the 1980s and 1990s, much of the strategic interface between the state and the voluntary sector took place through the Voluntary Services Unit, located in the Home Office. The association with the Home Office presents this unit as having a remit of social control and policing. Labour rebranded this in 2001 as the Active Community Unit, and expanded its remit and budget significantly, allocating an additional £300 million three-year budget to support an infrastructure development support programme for the sector aimed at improving voluntary activity (Alcock, 2010). Shortly after, the creation of the Civil Renewal Unit focused on community action. The later merger of these two units, with a third unit, the Charities Unit, created the Active Communities Directorate. This expansion of both policy influence and budget remit sent a clear message to the voluntary sector in terms of both defining and mainstreaming voluntary sector activities. Similarly, in the Treasury in 2006, a new Charity and Third Sector Unit formed, and the Department of Trade and Industry (DTI) became the home to the newly formed Social Enterprise Unit (SEU). With the creation of the new institutions, also came the new legal structures. To incorporate organisations in the voluntary sector that traded as businesses, through reinvesting profits in the business and had clear social or environmental purposes, the term ‘social enterprise’ gained momentum. Partly to incorporate these as a legal form, community interest companies emerged. Community interest companies were introduced as a legal form under the Companies Act 2006. The formation of these new units and legal structures risked constructing a confusing landscape for policy creation and engagement of the voluntary sector. Thus in 2006 this was simplified and consolidated by the creation of the Office of the Third Sector (OTS), which was situated within the Cabinet Office, centralising the voluntary sector within the heart of government (Hilton, 2011) and securing this through the allocation of a Minister for the Third Sector. The creation of the OTS in 2006 confirmed and solidified Labour’s deliberate attempts to ‘expand the reach of policy intervention into areas not traditionally associated with the voluntary action in the country’ (Alcock, 2010: 159). Alcock (2010) argues that one of the most significant features of the OTS was the remit of the third sector, rather than the voluntary sector. The term ‘third sector’ expands our understanding of the sector to encompass a variety of organisations beyond that of the traditionally understood charitable and voluntary organisations, to include community interest companies, social enterprises, community mutuals and cooperatives.
Further cementing Labour’s commitment towards the third sector, the development of several ‘horizontal’ infrastructure and capacity building programmes, backed with significant investment emerged (Kendall, 2000a). The Deakin Commission Report had made numerous recommendations in light of the relationship between public agencies and the voluntary sector including the suggestion that there should be a governing concordat, a framework of guiding principles to oversee this relationship. This was realised when the Home Office published a national Compact in England (1998), providing a model for the development of the Compact in individual areas. Local Compacts reflected the relationships between separate public bodies, that is, the National Health Service, police, local authorities and the third sector. In a review of relevant policy and political literature, Kendall (2000a) argues that the notion of the Compact was ‘completely without precedent, representing an unparalleled step in the positioning of the third sector in public policy’ (Kendall, 2000a: 2). As such, this, combined with the institutional changes discussed, represented a ‘clear step change’ (Kendall, 2000a) for the relationship between the voluntary sector and the national government.
The Compact however was not a legal document; it was a proactive agreement, requiring all parties to willingly and actively participate. This led to several issues arising including different levels of participation by various agencies and third sector organisations due to capacity and ability. In tackling this, the government then set up the Compact Commission in 2007 to oversee the implementation and highlight good practice. As such, the Compact continued to gain momentum and became a key tool of engagement highlighting new government commitment to the engagement of the third sector, recognition of the need to work in partnership and integration of the voluntary sector into the political and economic discourse.
There was growing recognition of the need for infrastructure development within the voluntary sector to facilitate voluntary organisations to participate actively within the principles outlined within the Compact, including the ability to tender for contracts to deliver public services. This brought forth the debate of the marketization of the voluntary sector (Milbourne and Cushman, 2013). Further underpinning this, Labour committed to a number of investments to support the voluntary sector’s growth and development, including establishing the Futurebuilders fund, initially £125 million over three years (2005–2008), which expanded to a total of £215 million and extended over a further three years (2008–2011). This funding provided grants and loans to assist voluntary organisations participating in the commissioning process. The delivery of the Futurebuilders programme was outsourced to a new independent agency in 2008, the Adventure Capital Fund, which in turn established the Social Investment Business (SIB) (Alcock, 2010). The SIB became the main source of government investment for the infrastructure and development of the third sector through administering a range of programmes including the £100 million Social Enterprise Investment for social enterprises tendering to deliver health and social care services, the £70 million Communitybuilders fund to provide support for smaller voluntary sector organsiations. The SIB also hosted the £150 million ChangeUp funding programme to support infrastructure development organisations, such as national charities like NCVO and local Councils for Voluntary Services.
In 2006, the responsibility of ChangeUp was handed to a new government agency established by the OTS called Capacitybuilders, a name that reflected the ongoing commitment by the government to build up the capacity of individual organisations to deliver services as part of the wider market. The public investment for the voluntary sector outside of government investment also continued to grow throughout the Labour term. The introduction of the National Lottery programme in the early 1990s, distributed additional funding from the sale of national lottery tickets to charities through a number of Big Lottery programmes. With a much larger pool of resources to access funding from, the size of the voluntary sector expanded, as did the culture of contractualism