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1.57 pm

Norman Baker (Lewes) (LD): The right hon. Member for Horsham (Mr. Maude) began by saying that this was his first Front-Bench outing for some time. Having taken a break from the Front Bench, I can tell him that it is also mine. Last time I introduced a debate it was on nuclear power. I am happy to say that, whatever the treacle or honey that characterises not the bi-partisanship, but the tri-partisanship or even multi-partisanship in the Chamber today, I am sure that it will be considerably more than it was on nuclear power on that occasion.

I generally welcome the direction of the Government’s policy on the third sector. I am prepared to be proved wrong by the passage of events, but they seem genuine in their wish to make the issue a priority and to move in the right direction. I particularly welcome the publication of “Third Sector Review: Final Report” in July 2007, which has a number of sensible suggestions. Of course, the proof of the pudding will be in how far the Government take matters forward and deliver. The right hon. Gentleman was right to be slightly sceptical about the consequences of the compact in 1998 and about how far that has taken us. However, I believe that the Government are committed, although time will tell.

I particularly welcome the move towards three-year funding. That is essential in giving stability to the voluntary sector. I shall say more about funding in a moment. I also welcome the small steps being taken on the ground, which we do not often hear about. I refer in particular to a small piece in Whitehall and Westminster World earlier this month, which said:

That is the sort of initiative that is quite useful and which leads to action on the ground that will improve matters for the population at large. More such initiatives will be welcome.

I do not need to dwell on the importance of the third sector. All shades of opinion in the House recognise the sterling work delivered by charities, social enterprise units and others in our constituencies and throughout the country. The world would be a poorer place without the people who work voluntarily to staff the charity shops mentioned by the hon. Member for City of Chester (Christine Russell) and to deliver innovative projects such as the Eden Project, to which
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the Minister referred and which I have visited. It is a splendid effort, and a much better testament to the millennium than the dome; it has lasted considerably longer. I hope we can take it as read that we all have a great deal of time for the third sector and recognise the good work being done on the ground.

An interesting aspect of this issue is the relationship between the third sector and the statutory bodies, be they councils or central Government. On 25 July, the Minister said that

I agree with him; that was exactly the right statement to make. There is a feeling, however, among some third sector organisations, that the Government want them to deliver public services. That might be because of a genuine wish to devolve in order to involve communities on the ground, and I understand that. I accept that that is a good motivation. Nevertheless, there is a danger, of which I am sure the Minister is aware, that if we go too far down that track, we will end up with uncertainty over delivery, either because the necessary funding is not in place or because accountability processes and democratic involvement are missing. That is not a criticism of the third sector. I am merely making the point that we need to put in place mechanisms to address those shortfalls, although not in a way that will make things more bureaucratic for small organisations seeking to respond to the challenges that are out there.

Many third sector organisations have no wish to participate in the delivery of public services. The National Council for Voluntary Organisations warned in 2001 that many voluntary groups had

Nor should they have, and the Government are not forcing them to participate. None the less, we must be cognisant of the fact that there is not a one-size-fits-all answer. Each organisation is different. Indeed, the diversity of the sector is one of its strengths.

Mrs. Moon: Is the hon. Gentleman aware of how proactive the Welsh Assembly Government have been in ensuring that many areas of work are devolved into the third sector? That has been very positive in helping the sector to grow and helping the services to become more flexible, creative and innovative. It is a positive example of how services can be delivered in a partnership between the public sector, the private sector and the third sector. Perhaps England could follow Wales’s example of working in partnership in this way.

Norman Baker: I do not disagree with the hon. Lady’s direction of travel, or with the fact that we can learn from Scotland and Wales. Devolution in the UK over the past 10 years has been successful in allowing diversity to provide different solutions that can subsequently be rolled out more widely. The option for the devolved Administrations to devise their own solutions is better, for example, than imposing the poll tax, which was a way of rolling out trial solutions in times gone by.

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If more public money is to be spent on our behalf by the third sector, on public or quasi-public services, it will be important to examine the accountability of the sector to ensure that the money is being well spent. There is a tension between the handing over of powers and moneys under a devolutionary arrangement to escape the heavy hand of local or central Government and ensuring that the money is well spent. Local government is subject to considerable controls, as it should be, to ensure that the money is properly spent. An audit process exists, as well as targets. There are too many targets at present, but the Government are now abolishing some of them. There is also the Standards Board for England, and a range of other processes to ensure that local government acts properly in carrying out its statutory functions.

Those standards are not applied to the third sector in the same way, and I am not suggesting that they should be. That would be too bureaucratic. We should, however, flag up the fact that the devolution of more services and money to the third sector could produce problems. They might be rare and sporadic, but I have no wish to see the third sector compromised, or to see confidence in the sector shaken. We need to examine the system of accountability that applies to such arrangements.

One method of accountability might involve a Select Committee on the third sector. I think that policy has been advanced by the Conservatives in the book by the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), and it has some merit. The Government’s view, as I understand it, is that the Public Administration Committee is the appropriate body to analyse how the third sector is delivering services. On balance, I think that that view is probably right because it is sensible to look at the delivery of those services as one cohesive unit rather than separating them off, which would result in the cross-referencing that we would have under a separate Committee. Nevertheless, the issue needs further consideration.

We also need to consider further the subject of funding. The three-year funding programme is undoubtedly the right way to go. At the last Cabinet Office oral questions, I raised the issues of the uncertainty of core funding, and of the bureaucratic form-filling necessary for so many organisations in order to qualify for grants. Some organisations do not succeed in getting the grants. A great deal of the form-filling for applications for money takes place within a limited time and many of the applications are unsuccessful. That represents a tremendous drain on the personnel resources of small organisations, so a move towards three-year funding is absolutely right.

Will the Minister comment on the question of core funding? There are undoubtedly problems relating to such funding, and in some ways they are getting worse. Local authorities in particular do not find the prospect of providing core funding attractive. It is the same with the lottery fund, which wants to fund particular, cutting-edge projects that will deliver something new or something related to a particular section of the community that is seen as disadvantaged. That is all very laudable, but the consequence is that the voluntary organisations in my constituency and elsewhere are able to get funding for innovative ideas but not for the two or three key personnel without whom the organisation could not function.

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Mr. Flello: Does the hon. Gentleman agree that this is not only a question of the core administration? Third sector organisations often have particular skills that need to be upgraded and honed continually. The training costs involved in improving and perfecting those skills are often not funded by the very organisations that require and use the skills.

Norman Baker: I agree with the hon. Gentleman.

We also increasingly need to consider the skills involved in filling in application forms. That might sound facetious, but it is an important point. People need training in how best to get through the system to secure the money that their organisations need.

The citizens advice bureau in my constituency is an illustration of the core funding problem. I recently received a letter from its chairman, Michael Bell, who said that the local authorities across East Sussex are threatening to replace the bureau’s core funding with the commissioning of particular services through competitive tendering in the marketplace, and that fixed costs would then have to be spread across specific projects. At present, there are fixed costs to cover core funding available from the various district councils in the county. That will be a retrogressive move, but such arrangements will become more and more common. I do not pretend that there is an easy answer to the problem, but I would like to hear the Minister’s views on the matter.

Another problem with the funding for third sector organisations is the diversity of its supply. In one sense, that is a strength, because the organisations are not dependent on one particular body; that would be a dangerous relationship. On the other hand, that diversity of funding results in a huge amount of work to secure pockets of money from here, there and everywhere. For example, according to the National Audit Office report published in August this year, Mencap received £155 million in the last year for which figures were available, and that money came from 532 different sources. That must have involved a huge number of attempts to get money. Some of these bodies must spend more on internal organisation than they would wish. They want to deal with their client base, and with the people whom they are trying to help, and too much of their time is spent on trying to secure funding.

Mrs. Moon: Does the hon. Gentleman agree that that is where organisations such as the Bridgend Association of Voluntary Organisations in my constituency play such a critical role? BAVO does a great deal of the central work, organising training courses across the voluntary sector and organising the database available to the whole voluntary sector within my constituency. It also organises the capacity training to fill in those application forms, so that individual small charities do not have to spend a great deal of time training and capacity building. It is done by a central organisation that brings all the voluntary sector organisations in to receive that training, experience and expertise.

Norman Baker: That sounds like a reasonable way forward. It is perhaps a good practice model that could be rolled out in other areas of the country. I hope that the Minister will help to make the third sector aware of
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good practice such as that and will encourage local authorities to provide the requisite training. There could well be a role for the Government to lead by good practice and making people aware of what is happening elsewhere in the country.

I wish to deal now with the campaigning element of third sector organisations, which was a matter of some disagreement across the Front Benches earlier. Although I thought that the speech of the right hon. Member for Horsham was very thoughtful—it included a number of interesting and sensible points—I have to say that he got hold of the wrong end of the stick when it came to the issue of campaigning. He seemed to raise a spectre that does not really exist and I failed to understand his concerns. As I understand it, there is already a regulator in the Charity Commission and there is already legislation in force. I am not aware that Ministers intend to introduce new legislation—they will perhaps tell me if they do—so the difficulties that the right hon. Gentleman mentioned do not apply.

Mr. Maude rose—

Norman Baker: I will give way in a few seconds. I am sure that the right hon. Gentleman is genuine in his approach, but I fail to see why he is so concerned. Let me provide him with one example before he intervenes. There is a problem now in that voluntary sector organisations and charities are concerned that they cannot go too far. They are worried about the consequences and about their ability to deliver their own mandate because they fear that the Charity Commission might come down on them like a tonne of bricks or that they will be ruled against by the Advertising Standards Authority or whoever. The Royal Society for the Prevention of Cruelty to Animals—I am vice-president and declare my interest—was advised that it was not open to it to campaign for the total abolition of experiments on animals. I believe that that is entirely wrong, irrespective of whether we agree with the policy. Surely the RSPCA, as an animal welfare organisation, should be able to campaign on that issue.

Mr. Maude: No one is arguing that charities should be unable to undertake any campaigning. The hon. Gentleman says that I am making more of this issue than is justified. The Minister, in response to my hon. Friend the Member for Chichester (Mr. Tyrie), said that he did not want a change that would enable charities to devote all their time to campaigning. There was some question about whether he accepted that it might be a dominant part of what they did. In fact, the review says:

a charitable purpose—

It is not therefore an issue that we are blowing up out of proportion and it is not completely consistent with what the Minister said.

Norman Baker: The Minister will have a further opportunity to deal with that particular point and that quote at the end. My understanding is that it is perfectly possible to be highly political—on an issue such as hunting, for example, which strongly divided the House—
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without being party political. That is a key difference for me, suggesting where voluntary organisations should go in this respect. In my view, they cross the line if they come out and say, “We believe in this policy, so you should vote for this political party”. That would be quite wrong, but saying, “We believe in this policy” is entirely appropriate. I do not see the problem there.

I want to raise another issue about campaigning, as it is a barrier that needs to be dealt with. I have already mentioned my RSPCA role and I should also mention that I am president of the Tibet Society. In that role, I have become aware that a great deal of unnecessary bureaucracy has been forced on it as a consequence of its concerns about the Charity Commission and what it is able to do without being rapped over the knuckles. The same applies to Greenpeace and other organisations. The Tibet Society has had to separate itself into two parts. There is the Tibet relief fund, which campaigns in a completely non-political way—in terms of the categories of the right hon. Member for Horsham—to provide sustenance and support for the Tibetan community in exile in India and elsewhere. Then there is the Tibet Society, which might be regarded as having a more political role in arguing about the Chinese occupation—an illegal occupation—of Tibet. Because of concerns about how that might be interpreted, a dual structure has been created within the society to ensure that no rules are broken. I have to say that all this is unnecessarily bureaucratic. It costs money and it gets in the way of spending the money that has been raised for the Tibetans. Resources are being spent artificially to meet what may be unfounded concerns about how the Charity Commission might respond to the society’s work. I very much hope that, as a consequence of the review, that sort of unnecessary distinction, which costs time and money to voluntary organisations, can be dispensed with. I would therefore go in the opposite direction to the right hon. Member for Horsham in that regard.

Let me briefly mention a small, technical point about how the Government are dealing with the third sector. Given that some 70 per cent. of moneys available to voluntary community organisations comes from the local level and that these organisations are not national statutory bodies, there is an argument for the Department for Communities and Local Government rather than the Cabinet Office to deal with the third sector. There may be a case for the Cabinet Office carrying out a one-off review of the third sector, but I am not personally convinced that the Cabinet Office is the correct location within the Government to carry out such a function. It would fit much better with the DCLG. There are problems with the Compact and with the delivery of good works on the ground. We know that the Compact is not being honoured by all local councils. It would be easier to deal with those problems if the function were situated in DCLG rather than the Cabinet Office. I will not lose any sleep if it stays where it is, but I wanted to argue the point in this debate.

The right hon. Member for Horsham raised the issue of the Commission for the Compact. I am not aware of the history either, but it seems unfortunate to lose Angela Simpson and then John Stoker. As has been put to me this week, it can be unfortunate to lose one leader, but losing two looks like something else! Perhaps the Minister will respond not on the diversion that I have just suggested, but on the Compact commission. Seriously,
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we need to know what happened and we want some assurance that any problems will be sorted out. We must have confidence in the future direction of that body. I would also be interested to know whether the Minister sees it as having a different function or moving in a different direction from how it has been viewed up to now.

Finally, I want to say a little more on the social enterprise side of the issue, which the Minister mentioned in his contribution. I agree with him that it is a very important aspect of the third sector. He mentioned the Eden Project. As he may know, the social enterprise coalition would like some clarification from the office of the third sector as to what it is doing to ensure that the distinctive business needs of social enterprises are represented in the Government’s enterprise strategy and framework. There seems to be some uncertainty about that, so it would be helpful if the Minister dealt with the point when he sums up.

For some time we have had a “green Ministers” Committee, an official Cabinet Committee, which has looked into the Government’s policies across government from an environmental point of view. I believe that it has been useful in identifying good practice and eliminating bad practice. It would be nice if the ethos of social enterprise organisations and businesses could be rolled out across government in order to achieve best practice in Government Departments. It could improve their dealings with Cafédirect, for example. I am not convinced that there is the same cross-government commitment to support that ethos and such social organisations as there now is to support good environmental practice. The Minister might address that point.

In general terms, however, the Government appear to be on the right track. As someone who criticises the Government not infrequently, I feel that it is important to say when they have got things right, and I think that they have, by and large, got them right so far in this regard. However, I am willing to be proved wrong in due course by the right hon. Member for Horsham.

2.20 pm

Charlotte Atkins (Staffordshire, Moorlands) (Lab): The Government’s partnership with the third sector is a success story, as we have backed up our policies with proper state funding to enable the voluntary sector to flourish. Total public funding has doubled from less than £5 billion in 1997 to more than £10 billion in 2005. Gift aid is now worth £750 million a year to charities, up from just £100 million in 1997—so much for the Opposition’s commitment to gift aid.

Greg Clark: The hon. Lady may wish to know that if the withdrawal of tax relief on covenants and the advance corporation tax are taken into account, the total tax receipts returned to charities are in fact now £100 million less in real terms than they were in 1996-97—so charities are £100 million down.

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