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Another national example is that of last year’s Make Poverty History operation, which involved the coming together of a huge coalition of groups, some of which have their priorities in far-distant countries and work according to their consciences on behalf of people around the world who are worse off than ourselves. Many groups have taken on that initiative and made it into a practical commitment. Two towns in my
constituency are on the verge of acquiring Fair Trade status. They have achieved that because over the past few years voluntary organisations have grown up and worked with local authorities, caterers and all sorts of other organisations to build a coalition of voluntary sector, private sector and public sector interests that are backing the Fair Trade cause. The initiative was created by the voluntary sector in a way that will produce long-term benefit for us all.
I was fascinated to read in today’s newspapers about the largest ever donation to charity. A 75-year-old American gentleman by the name of Warren Buffett has just given more than three quarters of his $44 billion fortune—about $35 billion—to the Bill Gates Foundation, which is, according to The Times,
“the world’s largest philanthropic organisation”
“funds the international fight against diseases such as malaria, Aids and tuberculosis.”
Mr. Buffett justified his actions thus:
“What can be more logical, in whatever you want done, than finding someone better equipped than you are to do it? That is how I feel about this decision about my money.”
Any donation of that nature sets an excellent example—it does not have to involve billions of dollars, which most of do not have.
Martin Horwood: I thank the hon. Gentleman for sharing with us the breadth of his expertise in the voluntary sector. He is right to draw attention to the principle that Warren Buffett has so generously espoused. Does he agree that it might even apply to much smaller charities, which are often registered by the Charity Commission but which might in some circumstances be better off as fundraisers for larger and better established charities, as they have fewer overheads and administrative burdens?
Tom Levitt: The hon. Gentleman makes a good point. I am sure that for some small charities that is the right way to go, although I would not include the Nepal Children’s Trust, which was delivering on a very specific aim. However, this debate is not about telling the voluntary sector what to do but about giving it its head and finding out what works. They may well coalesce, by a process of organic growth, into being fundraisers for larger bodies as the most practical way of achieving what they set out to do, but that is for them to discover for themselves.
There was a time when we could talk about the public sector, the private sector and the voluntary sector as three points of a triangle, but today they are three points on a circle, with every sort of organisation in between. In any ward in the constituency of any hon. Member here tonight, we will probably see a plethora of voluntary sector organisations. In one of my local wards, an active residents’ association elects representatives to the arm’s length management organisation that looks after their social housing. We would also find housing associations, the neighbourhood watch, various sports groups, older people’s groups, local history groups, and guides and scouts. Tomorrow, I will be pleased to welcome the
retiring commissioner of the Pennine guides as my guest at the older volunteer of the year awards, here in the House.
The University of the Third Age is a huge organisation in my constituency. We also have the furniture project. This weekend, I asked the people at that organisation whether it was still a charity—a voluntary organisation—or had become a social enterprise. It collects second-hand furniture and trains people to repair and build furniture and to recycle furnishing materials. It is an accredited training organisation and a not-for-profit company, and in just a few years it has earned the title of a social enterprise. We will find community transport and volunteer car schemes, branches of large organisations such as Amnesty International and Friends of the Earth, and groups such as the one that I spoke to this morning—the local domestic abuse reduction partnership. All those organisations are dedicated to the public benefit of improving the communities in which they work.
That is not to mention the trade unions, which represent public benefit in the workplace, and political parties. If those of us in political parties are not here in order to promote the public benefit, then what are we here for? Although it is not a matter for this debate, I hope that we will seriously consider the possibility of casting political parties in the same mould as voluntary sector organisations and charities as regards their treatment for tax purposes. That would be one way of stimulating a healthy democracy.
The issue that took up much of the time in the Lords, as it has today, is that of public benefit. I am pleased that the Bill tightens the definition of public benefit, not least by abolishing the presumption that certain organisations automatically qualify for charitable status because they are involved in education, for example. Nevertheless, it is important that we allow for the necessary flexibility and do not tie ourselves down by agreeing on a definition that tries to anticipate all future examples of where public benefit may or may not be demonstrated.
Many charitable organisations have commercial arms. An educational charity should not be banned from having a commercial arm attached to it, as long as the public benefit can be demonstrated by the charitable part of the organisation. I feel the same as some of my Back-Bench colleagues about the ethos of independent and fee-paying private education. I believe that the best way of ensuring that we have no need for it is to make the state sector so good that people will not want to pay. However, it is a fact of life that such schools and institutions exist. Some of them are special schools providing services that are not provided in the state sector. Those organisations should not have their credibility drawn into question when the public are paying those fees through sending children to use their facilities.
As I mentioned in an earlier intervention, we are now seeing a growing tendency of independent schools to make their facilities—their drama halls, sports equipment, field study facilities—and their time, in the sense of sixth-form preparation, pre-university courses and so forth, available to state sector schools that have not been fortunate enough to provide the same facilities. I believe that those are good partnerships.
Schools in the state sector do not receive any benefit from some teachers who were trained in that sector, so let us build a relationship with those teachers, even though they are working in the independent sector. If facilities benefit only some children, let us make them available to all children by developing partnerships with independent schools. I do not believe that a provision to deprive independent schools of only 4.5 per cent. of their total income will be for the wider public benefit when we can already see the tendency for more of their facilities being made available to more children— [Interruption.] I note that my hon. Friend the Member for Selby (Mr. Grogan) is itching to intervene.
Mr. Grogan: I thank my hon. Friend for giving way, but does he accept that an amendment to deal with unduly restrictive charges would not require the removal of charitable status from all public schools, but only that they justify such status? Any schools carrying out the magnificent things that my hon. Friend describes would clearly pass the test, but why should those refusing to share any facilities or to offer any bursaries necessarily be given charitable status?
Tom Levitt: I am confident that the latter sort of school that my hon. Friend describes would not be able to demonstrate any public benefit, so it would not be entitled to charitable status, but I hope that the Bill will encourage schools to go down the former route and make their facilities and bursaries available.
I should like to put a few questions to Ministers on the issue of fundraising and its regulation. It is claimed that the Bill will reduce the burden of legislation and bureaucracy on local authorities, but it seems to me that it does so partly by increasing the burden on the Charity Commission through the issuing and administration of public collection certificates, which have to be renewed every five years—a task currently carried out by local authorities. Of course it makes sense for a national organisation to have a national public collection certificate, once it has been granted, but the question remains whether the Charity Commission has the capacity to deal with it and, secondly, whether it is really removes all the burdens from local authorities. The question of when a street collection takes place would have to be administered by the local authority, as, presumably, would enforcement of the regulations pertaining to public collection certificates. Co-ordination remains the local authority role and the issuing of permits for street collections could be just as burdensome on local authorities as it is now.
I was initially concerned that the legislation did not establish the imperative need for those involved in door-to-door collections to carry appropriate identity cards, but I now believe that it does. It is very important to reassure people on the doorstep that the person they are talking to is who they say they are and working on behalf of the organisation for which they are collecting. Members do not need me to explain that any further.
The need for ID cards is established in clause 63, but who ensures that the people have the correct identity cards, adopting the correct style and containing the correct information? Who ensures that the identity is
somehow authenticated? I cannot believe that it is a job for the Charity Commission to ensure that every identity card is produced in the correct way, so I presume that it remains an inspection role for the local authority to carry out. In view of such concerns about door-to-door collections, safety and the possibilities for crime or abuse, it is important for us to seek some reassurances in Committee.
To conclude, every Member has his or her own knowledge of the value of the charitable and voluntary sector in their constituencies. They know that the sector can see what is wrong with service delivery and feed back on it. The sector is capable of some smashing examples of innovation and it can be less bureaucratic than the public sector, while certainly personalising services more effectively. In many ways, it can provide a better quality of service, if that is what is needed. We look to the sector to be a voice—not necessarily the only voice, but a voice—of public service users. We look to the sector to be a partner—not a junior partner, but an equal partner—in delivering those services and we see it as a viable and respected sector in its own right.
As a Government, we need to build real partnerships with the charitable and voluntary sector. We need to strengthen the compact and commit ourselves, for example, to longer-term funding streams and full-cost recovery in all dealings with the sector. The Bill provides the framework to liberate the sector, to elevate it and to empower it. It deserves our support and I am sure that it will receive it.
7.26 pm
Ms Celia Barlow (Hove) (Lab): A charity is an organisation that serves the public good and an institution that benefits people. Apart from the very necessary legal and regulatory questions, we should ask ourselves today how we can ensure that our charities can best function in the interest of those people. That is what I would like to speak about today.
Charities can serve many purposes, and one of this admirable Bill’s main accomplishments is that clause 2 gives a clear statutory definition of charitable causes, thereby updating the law. One purpose can be, as mentioned in subsection (2), providing relief to the elderly and saving lives. I would like to refer to one recent example from my Hove constituency of the closure of a care home that was owned by a charitable trust. It provides a telling example of a local charity not acting in the interests of its immediate beneficiaries and we will see how the problem could be rectified by the Bill and what questions still remain.
Before I come to that, however, I would like to say that I welcome the Bill, as many Members have today. It was a Labour Party manifesto commitment at the last general election to provide a new, modern framework for the voluntary sector in order to promote charities and give them better legal guidance. The present regulations for charities are indeed outdated. As my right hon. Friend the Member for Darlington (Mr. Milburn) pointed out, our courts still have to rely on the Charitable Uses Act 1601, passed under the first Queen Elizabeth, to determine what a charitable purpose is.
It is also a great step forward that we now get a clear definition that a charity has to work for the public benefit, rather than relying on the old circular reasoning that an organisation pursuing charitable purposes must be a charity. The new public benefit test will remind all charities that they need to demonstrate their usefulness to the public on a constant basis. However, as my hon. Friend the Member for Selby (Mr. Grogan) said recently, we need to decide on a rigorous definition of public interest.
In the light of recent experience in my constituency since the beginning of the year, I would like to highlight the reform of the Charity Commission’s powers. It is the first major shake-up since 1960, and I hope that it will take effect as soon as possible. Indeed, for some of my constituents, reform is already coming too late.
Mr. Deputy Speaker, you may have read in the papers about the case of Dresden house, a care home for elderly gentlewomen in Hove. For many years, Dresden house was a very happy place for pensioners in Hove, a place where many members of my local communities wanted peacefully to spend their final years. It has been run as a charitable trust since 1910 and was highly praised in official reports. It was therefore a great shock to all the residents when, in January, the trustees suddenly announced that the home was to close and all residents were to move out in three months. Citing economic unsustainability as the reason for closure, the announcement left only 12 weeks for the elderly gentlewomen to find suitable alternative accommodation.
Not only was the building destined to be closed but the many friendships built up over months and years by the residents in the community of Dresden house were about to be brought to an end. The trustees’ decision was perceived by many residents and their relatives to be unnecessary as Dresden house continued to provide a high standard of care, with new residents being admitted to the premises as late as December 2005.
Deeming the closure to be unnecessary, the residents’ group contacted the Charity Commission for guidance, trying to find some facts about the decision to close. The group was headed by Nick Steadman, nephew of Dresden house resident Alice Pink, a 93-year-old gentlewoman who had previously worked as a nurse. I was introduced to Alice in January and came to admire greatly her resolve and strength of purpose. She had moved into Dresden house only in August 2005 and was looking forward to many happy, relaxing years in beautiful surroundings.
The residents’ group and my office wrote many letters to the Charity Commission. I talked to both the commission and the trustees. However, the Charity Commission replied that, under its current rules, it was unable to help in the matter. Despite my intervention, the trustees were unwilling to provide their residents with a clear reason for closure other than general financial circumstances, which could not be independently verified because the trustees were unwilling to disclose their accounts before the end of the financial year and there were no regulations to ensure that they did so. The financial year would expire after the last resident was required to leave the home.
The residents’ group offered themselves as trustees to oversee Dresden house, should the current trustees no
longer wish to handle the responsibility of running such an institution. The trustees declined the offer. The Charity Commission had no powers to insist on its acceptance.
Despite widespread support and sympathy, the trustees’ decision to close could not be challenged under the existing definition of public benefit. At the beginning of March, the elderly residents of Dresden house had the trauma of moving to new premises. Alice Pink was the last resident to leave at the end of March. Failed by the institutions, she appeared to lose her energy and will to live after having to move elsewhere. Two months after leaving, she was found with a note by her bed, which read simply “I can’t go on.” She had taken an overdose of painkillers. One week later, she was dead. Another resident, 84-year-old Edna Henshall, died having suffered a stroke on the day she was due to move out. It is in their memory that I speak today. Dresden house now stands empty.
The residents’ group identified several points on which they felt that the system failed them. They felt let down by the Charity Commission’s inability to direct trustees to comply on consultation and disclosure of financial papers. The new powers for the Charity Commission in chapters 1 and 5 to direct and advise charities proactively are therefore much needed, and the commission must use them effectively. The residents’ representatives also complained about the Charity Commission’s difficulties in influencing the composition of the board of trustees. The Bill will give the commission more powers to intervene.
May I take the opportunity to throw my weight behind the request of the hon. Member for Rochford and Southend, East (James Duddridge), who is no longer in his place, to provide that people with learning disabilities can become trustees of charities of their choice?
Chapter 2 deals with the creation of a charity tribunal and also constitutes a clear improvement in the law. As things stand, if a care home is council run, residents can bring a case under the Human Right Act 1998 with a reasonable chance of success. In the case of Dresden house, users and their representatives have had no effective redress, since the commission essentially has the final say. In my local case, the people affected felt severely let down by the absence of a strong authority to handle appeals about Charity Commission decisions.
The new tribunal will give people the certainty that there is indeed an institution they can approach as a last resort. According to schedule 4, affected individuals will get a right of appeal. The relatives of the unfortunate former residents of Dresden house humbly request that the tribunal be given the ability to accept any disputed case for review, without exception.
Charities are man-made institutions for the benefit of the people. In the other place, there has been some debate about whether the commission should have reasonable regard to the well-founded interests of the beneficiaries of the charity. Material assets are, of course, important but we should focus on the people involved—our most senior citizens in the case that I have outlined. The issue was debated on several occasions in the House of Lords. My noble Friend the Home Office Minister Baroness Scotland assured the
Lords that, although the focus on people was not expressed in the text of the Bill, it was implied. On 28 June 2005, she said:
“There is no doubt that the commission should take into account the interests of those affected by its actions. Two of the principles of best regulatory practice on the face of the Bill are that regulatory action should be ‘accountable’ and ‘transparent’, and these will involve the commission having regard to the interests of stakeholders.”—[ Official Report, House of Lords, 28 June 2005; Vol. 673, c. 193.]
I am willing to believe that that is the case but I press my right hon. Friend the Minister and my hon. Friend the Parliamentary Secretary to assure me that the interests of stakeholders will play a more central role in the commission’s work. Will they ensure that, in its guidelines, there will be a clear undertaking to listen to the people who depend on charities?
I do not claim that further cases such as Dresden house can be easily avoided by the Bill. However, I am sure that the clear guidelines that it provides will make it easier for the people affected to make their voices heard. I hope that the Government will ensure that the Bill stipulates that the Charity Commission and the charity tribunal will be the champions of the people who rely on them. We owe that to the many vulnerable people who depend on charities. We owe it to the elderly gentlewomen, formerly of Dresden house. It is in their honour and spirit that I support the Bill.
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