Examination of Witnesses (Questions 340
- 359)
TUESDAY 20 NOVEMBER 2007
RT HON
ED MILIBAND
MP AND PHIL
HOPE MP
Q340 Paul Rowen: It was said
to me before I came here by a large private sector educational
organisation that one of the consequences of these greater freedoms
that you are giving local authorities is that they are taking
more services in-house. What safeguards are you putting in place
to make the point you emphasised about small voluntary organisations
that have been around for a while that have to rely on ad hoc
funding and suddenly there is a change; we have seen that with
DWP with the Pathways to Work where a lot of local organisations
that were doing employment and training did not get a contract?
What safeguards are you putting in place to actually assist those
voluntary and third sector organisations to win those contracts?
Phil Hope: There are two or three
things I have mentioned already. One is that the Local Government
Performance Indicators include a thriving third sector as one
of those indicators, that they will be inspected against by the
Audit Commission in their Comprehensive Area Assessment; it will
judge not only is the third sector thriving but is the relationship
between the third sector and the council a strong one or, if it
is not, what is the direction of travel of the council to try
and increase the strength of that partnership and the role the
third sector plays. The commissioning process the local authority
undertakes should start not just in terms of "can we get
the cheapest" but from "what are the needs of the user".
The third sector has a role to play right through to looking at
different kinds of providers at a local level to the actual contracting
and tendering process that results in an organisation getting
that contract. I might add that local authorities will still be
giving grants to local organisations. I have not mentioned the
Capacitybuilders resource that has been there for a couple of
years now at a local level through the ChangeUp Programme asking
within each region what is the right local third sector infrastructure
to provide support to frontline organisations. It is about organisations
that need advice on funding, filling in applications, how to run
their organisations or how to employ staff, where do they go to
for that. The local infrastructure organisations of the third
sector establish CBs[9]
and those kinds of organisations at a local level, supported by
the local authority, but through the ChangeUp Programme we are
looking at how we can make those more effective and responsive
at a local level. Finally, we have also introduced a new grant
stream particularly for very small volunteer-led community groups
right at the frontline of communities. This is the Community Grants
Programme. That is £80 million over three years and the £50
million endowment funds we have created, endowment funds that
will be matched so that at a local level the endowment does not
get spent but creates a sustainable funding stream of relatively
small grants for these frontline organisations, because that is
often what they need, it is not huge amounts of money but relatively
small grants to maintain their work in local communities. That
flow-through funding from the Community Grants and the Endowment
Foundation money together provides a new source of income in the
region of £130 million over three years for very frontline
community groups.
Q341 Paul Rowen: I appreciate
what you said about Capacitybuilders, and I think that is important.
Representing, as I do, the home of the Co-op, what are you actually
doing to strengthen and support co-operative enterprises? I will
give you an example. The local credit union in my town went bust
a few weeks ago. It was previously held up as an example of a
successful credit union but there was not the infrastructure there
to provide, as it were, watching support and that is a great shame
for the people in Rochdale. What are you doing not just to foster
development but actually support and ensure organisations like
credit unions continue to grow?
Phil Hope: Co-operatives UK is
one of the Office of the Third Sector's strategic partners that
we fund specifically to carry out these functions to promote and
support co-operatives in the work that they do. I am sad to hear
about your credit union because I think credit unions in many
communities do provide an important financial lifeline for many
who cannot access normal loans and means of borrowing. I hope
you manage to get through that. At a local level, as well as what
I have described that we do nationally, very often we have Co-operative
Development Agencies that the local authorities might support
and as part of our Regional Economic Development Strategy we have
been funding Regional Development Agencies to provide advice and
support to social enterprises. Over and above the ordinary business
advice that ordinary enterprises get, co-ops, as one among many
social enterprises, can receive advice that is more tailored to
their character, their style of working. That is across each region
of the country having resource from the Office of the Third Sector
to build a more tailor-made service within that to make sure that
the needs of social enterprises, including co-ops, in terms of
start-up and growth and so on are met via the Regional Development
Agencies.
Q342 Kelvin Hopkins: In my
own mind it is fairly clear what ought to be, and are indeed,
statutory services which the state is obligated to provide and
a whole panoply of other services which are not so vital which
are provided very largely by the third sector. Indeed, as MPs
we all know the value of the third sector. In my case there is
the local law centre, the CAB,[10]
a whole range of services that do a wonderful job and we could
not live without them. Houses do not burn down because the CAB
is not there but they would do if the Fire Service was not there.
Would it not be more sensible for Government, instead of encouraging
the third sector to nibble at the edges of this statutory sector,
to extend its reach and provide more of the kinds of services
it currently provides which are so valuable?
Ed Miliband: You will be pleased
to hear that we are not proposing that the third sector gets involved
in running the Fire Service.
Q343 Kelvin Hopkins: I am
pleased about that.
Ed Miliband: That will be a point
of relief.
Q344 Mr Gordon Prentice: Why not?
Ed Miliband: The thing I would
say to you is—
Q345 Chairman: Gordon asks
a good point: why not?
Ed Miliband: Because there is
a whole set of issues around a national Fire Service where it
makes sense to have one uniform pattern of activity and centralised
structure to do with the Fire Service, and you could say the same
about national defence and other issues.
Phil Hope: Whilst that is the
case, of course, the Fire Service does do many good things with
young people, training young volunteers who want to learn about,
take part in and become young firefighters. They are not actually
fighting fire but it is all part of a voluntary youth organisation.
Q346 Chairman: They do many
things. It was unthinkable when prisons started being run by the
private sector. If the prisons can be run by the private sector
why can we not have a private Fire Service if they are efficient
and cost-effective?
Ed Miliband: You can get into
quite theoretical debates about this. I have not seen any third
sector organisations coming forward saying, "We want to run
the Fire Service".
Q347 Mr Prentice: Yet.
Ed Miliband: Gordon says "yet".
I think it is highly unlikely that in the sort of time with which
I am going to be concerned with these issues—I mean in a
long-term sense—that we will have the Fire Service being
run by the third sector.
Chairman: Kelvin is trying to find out
what the lines in the sand are.
Q348 Kelvin Hopkins: I am
very pleased with what you have just said, if I may say, but that
is just a personal political view. I do draw a distinction between
the third sector and the private sector. They are different. Certainly
the people who run, shall we say, Victim Support are very different
from the people who run McDonalds and I do think there is a serious
distinction there. In a sense, Phil started to touch on the idea
that the Fire Service, instead of just putting out fires, should
extend its role as an advisory body advising people on how to
live more safely and not have fires. That is the kind of safety
advisory role which traditionally has been done by the voluntary
sector, the third sector. Are you suggesting that rather than
having the voluntary sector and third sector moving into taking
over areas which were previously statutory that we should have
the statutory sector extending outwards and taking over things
which were previously done by volunteers?
Phil Hope: I was minister responsible
for fire safety four years ago and I instituted a programme there
to try and encourage more connections and relationships between
the voluntary youth services and the Fire Service. The reason
for that was that a lot of young men at the time were getting
into trouble. They were causing fires, getting the Fire Service
to turn up and then throwing bricks and things at the firefighters.
It was a serious, serious problem. We discovered that a lot of
these young blokes who were doing this, if you got hold of them
in the right sort of a way and put them into doing voluntary activities
with a firefighter being the person who was leading the voluntary
youth group that they would turn up and do things. The uniform
and fact it was a male role model who was strong and so on meant
they stopped behaving badly and started behaving quite well. In
fact, some of those villains, if I can call them that, then started
to become quite positive and started to play a part and turned
their lives around. I do not want to over-exaggerate it but it
did make a huge difference. In terms of fire safety, I can see
how the Fire Service in this small example, working with voluntary
youth organisations and others, could help to reduce crime and
antisocial behaviour in some of those areas. I would also say
the issue for me about this barrier and whether there is a limit
is that it has got to be about outcomes. In some of the communities
that we represent, and I am looking at the Labour Members here
in particular but for all of us, where we have got—
Q349 Paul Rowen: Just the
Labour Members!
Phil Hope: Where we have got people
who are living in the hardest, most challenging circumstances
with lives that can sometimes be chaotic and we are trying to
help them through that, the third sector organisations have proven
time and time again that they can make a difference to people's
lives. It is right that where a grant making process or a contracting
process can identify where the public sector can engage third
sector organisations to intervene successfully with people, to
be on their side, to be the advocate for those families or individuals,
then we should encourage them to do so. That is not to say that
we determine, "Here you can and here you cannot", it
is where we say to the third sector, "Where you are good
step forward and play your part in partnership with the public
sector".
Ed Miliband: I do not want to
consume the time of the Committee but I just want to add something
to this because I think you raised a fundamentally important point,
Kelvin. There is a lifecycle of third sector involvement in public
services and it is quite interesting how this lifecycle is changing.
Take childcare, for example. In the 1960s and 1970s the third
sector started campaigning for childcare, there was very little
childcare in Britain, and it started providing it on a voluntary
basis but they also campaigned for it to be more universal. In
the 1990s and beyond, it maybe started slightly earlier, there
has been significant government investment in childcare. The old
way of thinking about that would be the third sector has done
its bit, if you like, it has done the campaigning, it has done
a bit of voluntary stuff and now it can all be run by the state.
That is not the route we have chosen to go down because we think
there are various expertise and skills that third sector organisations
can bring to this. A lot of childcare is run by the public sector
but a lot of it is run outside of it. You make quite an important
point about the third sector's end-to-end role in this, which
is they are not just about being deliverers. This cannot be done
without the state because in the case of childcare it is the state
that is providing the resources to make the childcare provision
happen by and large. The state has an important role and the third
sector has an important role in different ways in the process
of building up services.
Q350 Kelvin Hopkins: I think
we are often on the same wavelength. Lord Victor Adebowale, when
he came before us a few weeks ago, said many thoughtful things
and I was very impressed by what he said. First of all, he said
that the amount of money being spent on the third sector by Government
is tiny by comparison with that being spent on the private sector,
on PFIs[11]
or whatever. It is very minor compared with the private sector.
However, he did draw attention to the history of the third sector
and pointed out that in the 19th century many of what we now have
as statutory services started as voluntary services, and the drift
has been from voluntary into statutory. I have a concern that
there seemed to be at some time, maybe not now but in recent years,
a tendency to want the drift to be the other way, to move away
from statutory provision or to trim some statutory provision and
push it into the third sector, which I think personally would
be regressive.
Ed Miliband: I draw a distinction
between the funding of the services and who provides the services.
I know in an earlier session you talked about the work by a local
organisation done with self-harming youngsters. That is an incredibly
important service and, in a way, I suppose 30 or 40 years ago
we would have thought that is not really a core service, but actually
it is an incredibly core service now as we know from all our communities.
Yes, to make those services adequate needs proper government resourcing
but why should third sector organisations in your constituency
or others who have particular skills and talents to provide those
services not be able to do so.
Phil Hope: Just for the record,
the amount that the third sector is receiving from public sector
sources has shifted from £5 billion-ish in 1997 to some £10
billion in 2005, so it is not strictly true to say that the third
sector has not benefited hugely from an injection of public sector
resources.
Q351 Kelvin Hopkins: The broad
thrust of my question is that there is a tremendous amount of
extra work that could be done by the third sector out there, for
our constituents and people in general. Is there not a case for
encouraging that extension? For example, not every area has a
law centre. Law centres do a fantastic job and without my local
law centre I would be in some difficulty. Pushing further in that
direction, getting more third sector provision in what they do
best rather than encouraging them to take on statutory provision
or what might be considered more in the statutory sector, would
that not be a much more positive way forward?
Phil Hope: I do not see it as
either/or. If we take innovation of the kind you are talking about,
for example, the third sector is still doing it. If we take recycling,
for example, in Tower Hamlets the recycling levels were hopelessly
low and the third sector came up with a different way of doing
it because of tower blocks and getting in and how to sort the
newspapers from the bottles and so on, and have massively improved
the recycling levels in an area like Tower Hamlets, or in Liverpool
with the Bulky Bob scheme, which has been a hugely successful
social enterprise. For me it is not necessarily either/or, Kelvin.
Q352 Kelvin Hopkins: If we
just take that example, that is a very good example but if you
go to Switzerland where there are very strict laws about what
you do and do not recycle, they have a fantastic level of recycling
but it is driven by very hard law. It is legally backed and people
are almost fearful of throwing things in the wrong bag. I am not
suggesting we should go that far but it is at least moving in
that direction. If you are serious about recycling, in the end
it will have to become more statutory and less voluntary. Can
I move to one final point on funding? One of the problems with
the third sector is that it derives a lot of its funding from
discretionary grants from local authorities. Local authorities
get into financial difficulty, under pressure from government
often, and then they start to cut or squeeze their grant funding
for voluntary organisations and they come to me and say, "Can
you not lobby the local autohrity to get more money?" I say,
"They are under the cosh from central government". If
we are serious about the third sector, should we not actually
be looking to make sure they get the funding that they need?
Phil Hope: I just want to answer
on this point about sticks and carrots in response to the issue
about recycling because I do think there might be sticks you can
introduce into the system to encourage people to behave in certain
ways, but I also think you need to enable and support people to
be able to change their behaviour. A lot of what the third sector
is about is often to do with changing the way that people behave
towards one another in terms of antisocial behaviour, whether
they recycle or not, their diet, their health, whether they re-offend.
Those sorts of things are very much where the third sector often
plays an important role which is, as it were, at the carrot end
rather than forcing people to do things through the legal means.
In terms of local authority grants, what is very important here
is the Compact. Some 99 % of local authorities have signed the
Compact, they are committed to apply it. The Compact spells out
the relationship between local authorities and third sector organisations,
including things like longer term funding. We want to see longer
term, three year funding become the norm rather than the exception.
It is the case that where a local authority has signed up to the
Compact, if a third sector organisation feels there has been a
breach of how that compact has been operated, and you mentioned
funding but it might have been about consultation or any number
of the other strands of the compacts at work, then there is redress,
and as a Member of Parliament if you are receiving these complaints
you might want to refer them to what is called Compact Advocacy,
an independent organisation based at NCVO[12]
that takes individual cases through and there are a variety of
ones that have been taken through in the past. We would expect
and hope that stick end of the way of ensuring local authorities
abide by their commitments would be unnecessary because they would
have a strong and positive relationship with their third sector
through Local Strategic Partnerships where they are involved in
consultation on their services and on spelling out timetables
and dates about funding changes and grant changes that may occur
from time to time. As I say, the new guidance that has gone out
for those LSPs[13]
and LAAs[14]
today will help to massively strengthen that case for third sector
organisations in local authorities.
Q353 Paul Flynn: You said
you do not want to have targets, which is wise I think with often
the experience of targets being measures of failure, but if you
are going to have an outcome that is going to be realistic and
credible, should you not be talking about a minor reform of the
service, a modest improvement instead of talking about a transformation?
Is this a credible objective?
Phil Hope: The transformation
is about the nature of services that individual users or families
might receive.
Q354 Paul Flynn: Do you think
that in 10 years' time the history books will talk about a transformation
in these services? Do you think you will achieve that or do you
think it will be a hostage to fortune?
Phil Hope: It may be a hostage
to fortune, Paul, but I guess my feeling is that if we really
do want to aspire to serve our communities to the very best then
we should aspire to service transformation.
Q355 Paul Flynn: I read your
speech to the ModernGov Conference and reading through it I thought
the ghost of Nicholas Ridley was stalking through the hall. You
talk about local authorities increasingly becoming commissioners
rather than just providers and that was precisely what Nicholas
Ridley said, that he wanted to see local authorities meeting once
a year to dish out the contracts and then disappearing and not
meeting for another year. Is this part of your ambition?
Phil Hope: No. I thought it was
ludicrous then when I was a councillor and I think it is ludicrous
now to imagine that once a year the local authority councillors
will sit around and hand out contracts. You have got to understand
this word "commissioning". This word "commissioning"
is far more profound than I think people are fully grasping, which
is why this training programme and guidance is so important. Commissioning
takes a local authority, or a commissioner in central Government,
through a process where it starts off with the needs of the user.
It asks what are the users' needs, what are the needs of the families
in our area, what are the problems we need to address and it then
asks what are the kinds of services that might address those needs
and do we have people who are good enough and qualified, ourselves
and others, to provide those needs. If not, should we invest in
building the provider base, whoever that might be. It then moves
to a process of contracting where people are invited to bid and
then there is a process of choosing and selecting.
Q356 Paul Flynn: You are talking
about 2,000 commissioners, and I promise you I am not an applicant
for this job but you appear to be giving me the training now.
Phil Hope: That does not mean
that you can sit down once a year, as Nicholas Ridley had in his
head, to say, "We will just hand out the contracts every
year". The relationship between the local authority and the
third sector must be a profoundly close and important one, not
least through that process I have just described which is light
years away from the concept that Nicholas Ridley might or might
not have been suggesting as the way to go forward.
Q357 Paul Flynn: Martin Narey
of Barnado's told us there is nothing in the voluntary sector
that the voluntary sector can do that the public sector or the
private cannot do just as well. Do you agree with that?
Phil Hope: His view is that the
third sector can deliver good services and I have been visiting
organisations around the country where that is the case. I would
not say, however, that every organisation in the third sector
is excellent and is better than every local authority or every
public sector provider.
Q358 Paul Flynn: Do you see
any inherent weaknesses in the third sector as opposed to the
public sector?
Phil Hope: Access to finance is
one area where we have been keen to see if we can improve services
and support for third sector organisations. I think that is one
of the weaknesses.
Q359 Paul Flynn: When we were
in America we found one particular area, and it applies here as
well, where they made a huge provision and the third sector was
everything: the area of the homeless. They had a huge number of
homeless and that problem virtually disappeared to vanishing point,
yet the bureaucracy remains the same. Is that not a weakness?
Is it not the same in this country where over the last 10 years
the number of homeless people and people sleeping rough on the
streets has gone down to about a third of what they were but the
charities involved in them have not decreased, in fact they are
bigger than they ever were, they are spending more money, they
are campaigning? Is it not true that one of the weaknesses of
the third sector compared to a local authority that has a whole
range of activities is that when they have a crisis in one area
they deal with that and plan to diminish the problem and see the
problem disappear, but in the third sector where you have a one
issue charity they have a vested interest in expanding the problem?
If the homeless disappear you invent hidden homeless and expand
it into other areas. There is a vested interest in the third sector
provider to increase the perception of the problem to campaign
to the public. Do you not see that as an inherent weakness? It
did not come out in this evangelistic praise of the third sector
in your speech to the ModernGov Conference.
Phil Hope: I am not sure I do
see it as an inherent weakness in the way you describe. I would
hope that good third sector organisations, if they are successful
at resolving a particular problem, would then make the choice,
"That is good, that is done, we do not need to visit any
more", or perhaps say, "Are there other ways, being
flexible, being responsive, being nimble, being able to tailor
our services in a way that perhaps public sector organisations
may not be so nimble and tailored in the way they go about things
to apply ourselves to new problems". In this case you have
described homelessness; it might well be that they have been successful
working in partnership with Government, and I am glad you see
the value and the benefit of the work we are doing to reduce homelessness
on the street, but there are other problems, and I know this as
a constituency MP and it must be true for you too, with people
who struggle to find places to live, get on to the housing ladder
and so on where third sector organisations might well play a very
useful function in supporting people in a new part of their housing
problem they want to solve. I would not see that as a problem.
9 Capacitybuilders Back
10
Citizens Advice Bureau Back
11
Private Finance Initiative Back
12
the National Council for Voluntary Organisations Back
13
Local Strategic Partnership Back
14
Local Area Agreement Back
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