GOVERNMENT FUNDING, EMPLOYMENT CONDITIONS, AND WORK ORGANIZATION IN NON‐PROFIT COMMUNITY SERVICES: A COMPARATIVE STUDY
| Published date | 01 September 2014 |
| Date | 01 September 2014 |
| DOI | http://doi.org/10.1111/padm.12060 |
doi: 10.1111/padm.12060
GOVERNMENT FUNDING, EMPLOYMENT
CONDITIONS, AND WORK ORGANIZATION
IN NON-PROFIT COMMUNITY SERVICES: A
COMPARATIVE STUDY
IAN CUNNINGHAM, DONNA BAINES AND SARA CHARLESWORTH
The article provides a comparative exploration of New Public Management (NPM) funding models
on the non-profit sectors in the UK and Australia, and the implications for services, employment
conditions, and worker commitment. A degree of convergence exists around the principles of
NPM in the two case studies, creating employment regimes of low pay, casualization, and work
intensification. Enhanced vulnerability to pay cuts in the UK, and insecurity in Australia are
explained by national differences in exposure to recession, industrial relations institutions, and
competition, leading to diminishing worker commitment and raising important concerns for
policy-makers as benefits gained from outsourcing to non-profits are eroded.
INTRODUCTION
The impact of New Public Management (NPM) on employment conditions for those
employed in public service delivery has varied across nation states (Diefenbach 2009;
Bach and Bordogna 2011). NPM has also involved the outsourcing of public services to
non-profit organizations. In such circumstances, it is felt that the full effects of NPM and its
cost-cutting tendencies and concerns over working conditions will be most pronounced,
and subject to less variability. This is because the further workers are from the source of
the outsourcing process, the greater the likelihood that they will experience degradations
in their working conditions (Flecker et al. 2009). This is potentially problematic as non-
profit workers can become disenchanted when their employment conditions are reduced
(Cunningham 2008), or perhaps just as importantly when their commitment to making
a difference is frustrated by perceptions that NPM-inspired government funding models
fail to fully recognize and address the needs of clients (Thompson and Bunderson 2004).
Most work exploring the impact of NPM on non-profit workers is country specific
(Baines 2004a; Cunningham 2008), with few international comparative studies. This
article begins to meet this gap through drawing from a qualitative study of two non-profit
organizations in Australia and the UK. The article explores three questions:
1. How do NPM-influenced government regulations and funding mechanisms shape
relations with non-profit organizations providing public services?
2. What are the implications from these regulatory and funding pressures for terms and
conditions of employment, work organization, and service provision in non-profit
social service organizations?
3. What impact do these implications have on management–employee relations and
worker orientations?
Ian Cunningham is in the Department of Human Resource Management, University of Strathclyde, Glasgow, UK.
Donna Baines is in the Department of Labour Studies and Social Work, McMaster University, Hamilton, Ontario,
Canada. Sara Charlesworth is in the Centre for Work and Life, University of South Australia, Adelaide, Australia.
Public Administration Vol. 92, No. 3, 2014 (582–598)
©2014 John Wiley & Sons Ltd.
NON-PROFIT COMMUNITY SERVICES 583
Data indicate converging NPM pressures, but also other factors influencing pay,
working conditions, and services across the two organizations, and growing intolerance
among workers, suggesting instability and threats to service quality in NPM-inspired
systems of social service delivery. The article presents explanations for differences in the
impact on employment conditions related to variable vulnerability to wider economic
conditions and varying influences from industrial relations institutions. The next section
outlines the conceptual framework, drawing on insights from regulatory scholarship,
inter-organizational literature, labour process theory, and the influence of industrial
relations institutions. This is followed by an overview of the state–non-profit relationship
in Australia and the UK. The method and participating organizations are then outlined,
followed by an examination of the findings, and a discussion and conclusion.
CONTEXT
Outsourcing to the non-profit sector has been implemented with the application of NPM
(Evans and Shields 2002). Debates continue concerning the coherence of NPM, including
whether it is a novel or well-defined concept (Page 2005), a transitory phenomenon
on the road towards a ‘new public governance’ (Osborne 2006), or a movement of
distinct phases beginning with efficiency concerns and in more recent years turning
to those of quality (Hood and Dixon 2013); and whether there are distinct types that
are union-orientated or union-conditioned (Bordogna and Neri 2011). Nevertheless, this
study identifies specific characteristics of NPM – including removing differences between
private and other sectors, the use of market-orientated mechanisms and private sector
management techniques in delivering services, and the principles of efficiency, value for
money and greater service user choice (Bach and Bordogna 2011) –which persist and
have potentially significant implications for employment in outsourced services in the
voluntary sector.
Studies of NPM indicate a variable national impact (including in the area of employ-
ment) in public sector provided services explained by: differences in the timing of
implementation; mediation by legal, institutional, and cultural contexts; the political
persuasion of governments; employee resistance; and countries adopting only aspects of
its suite of practices (Bach and Bordogna 2011; Bartels 2013). This suggests a variable
impact across states from NPM on non-profits, rather than convergence. Indeed, the few
comparative studies indicate both similarity and differences in the lived experiences of
workers in non-profit organizations. There are differences between Canada, Australia,
and the UK with regard to work–life boundaries, with workers in the former two coun-
tries more likely to experience hours of unpaid overtime for employees (Baines 2004b).
Similarities are also apparent among the above countries with regard to the onset of ‘lean’
working environments and fragmented and insecure hours (Baines 2004a; Cunningham
2008; Baines et al. 2011). These studies capture worker experiences but their focus is not
wholly on the impact of NPM, so we are unable to accurately discern national differences
and causation in a systematic way.
To explore the impact of NPM on outsourced non-profit services, the article draws
insights from several sources. Recent regulatory scholarship (Arup et al. 2006; Braithwaite
et al. 2007) suggests that funding models employed in the sector can constrain and
undermine employee protections provided by industrial regulation (Charlesworth 2010).
The organization of work in non-profits is shaped not only by the rules and institutions
that deal with employment matters but also by government decisions about the funding
Public Administration Vol. 92, No. 3, 2014 (582–598)
©2014 John Wiley & Sons Ltd.
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