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That is a clear statement. I have certainly been involved in organisations that are, if not political in the party sense, certainly quasi-political, and have never registered as charities because they suspect that they would fall foul of such a regulation. A long time ago I was involved in the Welsh Language Society, and that has never registered, although it has the charitable-type aim of preserving and extending the use of the Welsh language.

It is clear that some charitable bodies have been wary of political activities and there is a danger that their priorities will be skewed by the funding regime under which they work. We are all aware of that danger and it needs to be constantly reviewed. The Prime Minister wrote in the report that the aim was to make “space and opportunity” for the third sector to flourish, and we can all sign up to that. No one would say that they did not want to make space and opportunity for the third sector to flourish.

My experience of third sector organisations—those involved with mental health, benefits, mental handicap and learning difficulties—is that they are often the most innovative in public sector social policy. They face
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problems with sustained funding—a point that I made in an earlier intervention. Before I was elected in 2001, I was an adviser to the Welsh Affairs Committee on its long drawn-out investigation of social exclusion. We talked to a large number of voluntary organisations during that investigation, all of which pointed out the problems of chronic short-termism in funding. They often spent February and March either writing notices to their staff or trying to scrabble around for odd bits of money. A three-year funding term would be welcome. Some small community organisations were talking about a five-year period, so that they could develop their services, and the professional roles of their paid-for staff—people could be sent away for training and come back to make a useful contribution, perhaps before moving on to other jobs.

I mention in passing two social enterprises in my constituency as good examples of the contribution that the third sector can make. Antur Waunfawr is a project working with people with learning difficulties. It was set up in the 1970s following a hospital scandal in Wales, which led eventually to the closing of large mental handicap hospitals, as they were called. Antur Waunfawr is a village project with both housing and employment on site, and is now developing other services. The important thing about it is that it is not set apart from the village, but an organic part of it. Local people feel quite happy to call into the garden centre and the café; its open day is attended by many hundreds of people.

The project arises from the community, which is certainly the view taken by its founding force, a man called Gwyn Davies, who tragically died last Friday. He certainly saw his role in Antur Waunfawr as being to root it in its own community. Other hon. Members have talked about projects in their communities, and I think the best such projects share the aspect that they are part of the communities from which they sprung. Antur Waunfawr has developed a recycling arm, which looks much more like an enterprise, or a small business. It recycles furniture and takes away waste paper, including confidential waste, and provides a service to all sorts of local businesses. It is not a not-for-profit organisation. It makes a profit, but that goes back into the business. It is quite hostile to the not-for-profit label, because it makes one.

The other organisation to which I would like to draw hon. Members’ attention is called Galeri. It set out to renovate shops in the town of Caernarfon in a manner consistent with its mediaeval, Victorian and Georgian architecture. When it ran out of shops, it built a multi-million pound arts centre on the quayside. It is a fantastic place and I encourage anyone coming to Caernarfon to drop in. It has a very good restaurant and bar; it has a performance space, theatre and all kinds of stuff. That shows how able Galeri was to mutate, change and morph from being a company doing up shops to one that undertook the huge enterprise of building an arts centre. Most people in Caernarfon think that it is owned by the Welsh Assembly Government or the council, but it is actually owned by that third sector organisation.

I shall close with some of my concerns, which are based on funding evaluation and the ability of organisations to network. Last year, an investigation took place into the third sector in my constituency by a
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group called Menter a Busnes. It concluded that third sector organisations find it difficult to know where sources of funding are—none of its conclusions were surprising—and an increasing number of them are looking to commercial activities to supplement their funding. They tend to run into trouble when they divert their personnel towards commercial activities, rather than the central purpose for which they were set up. None of that is surprising, but this evidence comes from ground level.

As far as evaluation is concerned, fewer than one third of the organisations surveyed had any mechanism for measuring and analysing their social and economic contribution. Only one in three organisations were actually measuring what they were doing. I was involved recently in something called a social audit, which is a new method of evaluation, for Antur Waunfawr. We found that £1 spent by the local voluntary organisation goes further environmentally, socially and economically, especially in rural areas such as mine.

The investigation by Menter a Busnes found that voluntary organisations have few avenues for sharing and learning from other organisations in the same field locally and nationally, and that they are less effective than the private sector at initiating commercial activity, marketing their efforts, recruiting personnel and assessing their effectiveness. Those are all learning points for the future. It was also found that voluntary organisations are not sufficiently familiar with methods of bringing their expertise to bear on public policy, and thus making a contribution to formulating and implementing that policy. A great deal more could be done in Wales and England on that.

Mr. Flello: The hon. Gentleman is making a thoughtful speech, although I am sure that the names of some of the organisations are giving the Official Report writers some difficulty. Do not his findings from the social audit report further emphasise that lack of core funding for small charitable organisations means that they are unable to do many of the things that he outlines?

Hywel Williams: The hon. Gentleman makes a good point. Antur Waunfawr happens to have grown to a sufficient size to engage in a social audit. It pulled in people like me—I gave a day of my time to it—because it was a thorough investigation, which took qualitative and quantitive evidence from local people involved in the organisation in a long drawn-out session. However, as the hon. Gentleman points out, not all organisations can do that.

I emphasise the third sector’s potential to contribute to local life and the local economy and its key role in helping formulate, develop and implement policy. I look to see the third sector grow in my area. The roots are deep and should be nurtured.

3.27 pm

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): I am delighted to have the opportunity to make a few comments in this afternoon’s important debate, not least because, by the end of our discussion, a total of five Labour and Co-operative Members will have either spoken or intervened. That is no accident
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because those of us who come from the co-operative as well as the Labour tradition have at the heart of our political philosophy the co-operative ideal of self-help and communities working together to address the needs of their society and area. It is therefore unsurprising that we have an interest in how to extend community self-help, which is behind the thinking in the review.

Like, I am sure, all hon. Members, I am fortunate in having a wide range of campaigning and non-governmental organisations—charities and non-charities—active in my constituency. The headquarters of large, campaigning NGOs, such as Friends of the Earth Scotland, are in my constituency. The headquarters of organisations that provide valuable support to charities and NGOs on the ground are also based in my area. They include Citizens Advice Scotland and the Scottish Council for Voluntary Organisations. I believe that all their staff are full time, but their work assists tens of thousands of volunteers who work in communities in Scotland. To echo a point that was made earlier, it is dangerous to pick out the number of full-time staff in organisations because that does not always take due account of the work of those organisations.

Hon. Members may have noticed that I am wearing in my lapel a poppy from the Poppyscotland appeal, which was launched yesterday in the Scotland Office in Dover house. I am fortunate to have the Poppyscotland headquarters and its poppy factory in my constituency.

That is just a snapshot of some of the headquarters and national organisations that are based in my constituency. I would not even dream of picking out too many local organisations, for fear, apart from anything else, of perhaps offending those that I did not mention. Like all of us, if I were to list the local organisations active in my constituency, we would be here well beyond the 6 o’clock deadline and probably well into tomorrow. I once tried to count how many people were involved in local activity in the third sector in my constituency. I estimated the figure to be certainly well over 10,000, and probably 20,000, with 1,000 to 1,500 organisations, illustrating how much the work of community organisations and the third sector is at the heart of community life and society in all our constituencies.

Community organisations provide a vital role, as all hon. Members know, not just in delivering community services and assisting in their provision, but in giving voice to communities defined by both geography and interest. In many cases, community organisations also help to re-establish some of the basic social bonds that have broken down or to build those bonds that have never been established in the first place. Such organisations play a vital role, and I am sure that we have all experienced that in our constituencies.

Many of the policy areas affecting the third sector in Scotland are devolved. I will not take up the House’s time by talking in detail about issues that do not fall within the responsibility of the Minister and the UK Government. There are, however, a number of important areas in which what the Government have done is of great benefit to third sector organisations in my constituency, just as I am sure it will be to organisations in the constituency of the hon. Member for Caernarfon (Hywel Williams) and hon. Members from other constituencies outside England.

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Mention has been made of gift aid. Unlike the right hon. Member for Horsham (Mr. Maude), I continue to believe that gift aid is a wonderful support for charities. Without that innovation, introduced by the Government, many charities would not be able to do the kind of work that they do. I pay tribute to what has already been achieved not only by gift aid, but in trying to respond to the concerns raised by charities about how gift aid schemes operate.

I was intrigued by the suggestion that the hon. Member for Broxbourne (Mr. Walker) made to make it even simpler for charities to make use of the gift aid regime. I saw the Minister nodding away enthusiastically when the suggestion was made. I am not sure how far his nodding was a commitment on behalf of the Government—perhaps he is not nodding now; I do not know—but the suggestion was certainly interesting. I suspect that it would probably be of particular benefit to small charities that have not started to make use of gift aid, perhaps because they feel that any bureaucracy is too much extra work to bear, so I hope that the Minister will take up that suggestion.

Mr. Andy Reed rose—

Mark Lazarowicz: I am happy to give way to a fellow Co-operative Member.

Mr. Reed: This is not a Co-operative matter specifically, but about gift aid and sports clubs. As my hon. Friend said, many organisations are so small that it is not really worth their while to take the scheme forward. One thing that is being promoted is the idea of extending gift aid and working on, for example, junior subscriptions. As he rightly said, tens of thousands of people give up their time to help voluntary sports clubs. One way to make a significant difference would perhaps be to extend any changes that we make to junior subscriptions, which would encourage more people to get involved and to participate, which would benefit them, and would remove some of the obstacles caused by the complexities of gift aid as it stands currently.

Mark Lazarowicz: I am grateful to my hon. Friend for that point. Perhaps I should declare an interest: I am about to fill in the renewals for the subscriptions of two of my children for the junior football groups in which they are involved. He makes a good point. For people who already spend so much time volunteering to support local organisations, any extra bureaucracy is something that they could do without. Anything that makes it simpler for them to attract finance to support their activities is important. My hon. Friend has made a valuable suggestion and I hope that the Minister will nod enthusiastically about it, either now or in his departmental meetings at a later stage.

We have been talking about co-operatives, and many of the Government’s measures on co-operatives apply to Scotland as well as to England and Wales. The support for credit unions has also been important. I am fortunate to have in my constituency the headquarters of the Capital credit union, one of the most innovative in the UK. Credit unions have been supported by the UK Government. I also mentioned Citizens Advice
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Scotland, which is funded by the Government to do work related to money advice and citizens advice. I believe that the Government are still the major funder of that organisation. We have also seen some welcome changes to the rules set out by the Department for Work and Pensions, which will make it easier for people to do voluntary work while still claiming benefits, to a certain extent. All these issues are relevant to my constituents, just as they are to those of Members of Parliament from England and Wales.

I want to suggest to the Minister a way of making it even easier to contribute voluntarily to community organisations in the third sector and thereby be a benefit to society. This suggestion, too, has UK-wide possibilities. We should encourage even more employers to facilitate arrangements for their employees to take time off to contribute voluntarily to local organisations. Many employers already do a wonderful job in that regard and there are many interesting schemes, of which I am sure the Minister is aware, to encourage such activity and make it possible.

Some employers, however, are not as good as they ought to be at encouraging and enabling their employees to take part in voluntary activity in their local society. There are particular problems for small businesses, which find it difficult to allow their employees to have time off in this way, but there must be ways of developing the ability of employers to encourage their employees to take part in voluntary activity. I think that the statutory right still exists for local councillors, justices of the peace, magistrates and some others to take time off to engage in public duties. I am not sure that I would want to apply a parallel arrangement for employees taking part in voluntary activity, partly because the exercising of that statutory right has been problematic, and partly because I would not want to add a complicated regulatory regime to the burdens already affecting employers. However, there must be some way to give greater rights to people who want to take part in voluntary life in the community, and to encourage and facilitate that activity when people face an unhelpful attitude on the part of their employer. I hope that the Minister will think about that suggestion.

I said earlier that it is essential that all sectors of government show respect for the work of the third sector and encourage its ability to provide for the needs of our communities. I mentioned the recent decisions of the Lib Dem-SNP council that now, thanks to the proportional representation system, runs the administration of Edinburgh city council. I must emphasise that I did not raise that matter in a partisan way. The hon. Member for Lewes (Norman Baker) knows that I am as non-partisan as he is. I would have made those points if the council were Labour, Tory, Unionist or anything else. I raised the matter because it provides an example of precisely what should not be happening. We know that after years of campaigning and arguing, we finally reached a situation in which the majority of local council funding for local organisations in my areas was being provided on a three-year rolling basis. Organisations had a degree of certainty with service level agreements that were designed to allow them to plan year by year. Then they suddenly found that their funds—what they had thought was their guaranteed three-year funding—were to be cut in the middle of the year. That will not encourage financial stability for local organisations.

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In opening today’s debate, my right hon. Friend the Minister for the Cabinet Office emphasised how important long-term stability of funding really is, particularly for third sector organisations. I would not expect my hon. Friend the Parliamentary Secretary to get too involved in the internal politics of my city council—though he is welcome to do so if he wishes—but I hope that in his summing up, he will emphasise how important it is for all levels of government to try to work towards a regime in which funding for voluntary organisations is much more secure and much more long-term.

We want to avoid anything that can be debilitating to the work of staff, volunteers, voluntary committees and so forth. They do not want to spend half their time every year running around trying to raise money to keep themselves going for next year. All too often, they have just completed one funding application only to be at it again in respect of the funding for next year. Security of funding is vital to community, non-governmental and voluntary organisations and charities. The more we can move towards such security, the more we will help those organisations to maximise the potential they can offer to their society and community.

3.42 pm

James Duddridge (Rochford and Southend, East) (Con): It is a pleasure to speak after such a veritable shopping list has been drawn up for the Minister to follow up. I would like to add a few more items to that shopping list, in my own modest way.

Charity is probably in MPs’ blood. If we run through our pockets, desks or handbags, we will probably find a raffle ticket or an invitation to something that we attended last week in our constituencies and neighbouring areas. I am also interested in charity from a legislative perspective, and I sat on the Public Bill Committee that considered the Charities Bill. However, this is not a debate about charities; it is about the third sector.

I am a little bit unsure about the usefulness of the “third sector” terminology. The hon. Member for West Bromwich, West (Mr. Bailey) talked about silos and the need to break them down, but pulling together a disparate group under the umbrella of the third sector is not particularly helpful. I assume that the third sector is so described on account of the other two sectors—public and private. The Government have passionately tried to merge those two in respect of financing and provision. Even in the pure charities sector, we hear about a lot of merging and about Government provision via charities. Even within the third sector, there are massive differences between a mutual, a co-op and a social enterprise.

In his introductory remarks, the Minister said that many people did not understand what social enterprise was. If they actually saw social enterprise, or if they knew that Divine chocolate was a social enterprise, or that getting involved in the community and doing things for themselves rather than relying on the state amounted to social enterprise, they would understand it a lot more. However, it is not always helpful when we use this terminology.

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