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Westminster Hall

Thursday 11 March 2010

[Mr. Eric Illsley in the Chair]

Assistance to Communities

[Relevant documents: Thirteenth Report from the Select Committee on Communities and Local Government Session 2008-09, HC 649-1 and Government Response, Cm 7790.]

Motion made, and Question proposed, That the sitting be now adjourned.-(Angela E. Smith )

2.30 pm

The Minister of State, Cabinet Office (Angela E. Smith): I was delighted to secure this Adjournment debate on assisting communities and third sector organisations through the recession, and I am pleased to see that a number of hon. Members are in the Chamber to take part. The sector is hugely valued by the Government, and it includes local community groups, a whole range of third sector organisations and social enterprises. The support that such organisations have given in services and advice, together with support from the Government, has been invaluable, especially as we come through a period of international recession.

As the Minister responsible for the third sector, I am proud that in the past 10 years, there has been unprecedented funding for, and investment in, the sector. Since 1997, income from the Government has increased from £5 billion to £12 billion. The sector has also stepped up to the challenge of working with the Government in shaping, designing and helping to deliver public services. If we are to deliver high-quality services it is crucial that they are designed around the needs of the communities and the people they serve.

The third sector plays an essential role in a number of ways, and I will go through them in no particular order. First, the sector is a provider of a whole range of services, from debt advice to counselling. As a result, the sector has become expert in designing and delivering preventive services in the belief that prevention is better than cure. The work follows on from the principle that the service user and citizen should be the starting point for any solution.

We should also see the third sector as an advocate, because it connects people with their communities, and enhances participation and engagement on issues that affect or interest them. The sector makes an invaluable contribution to the British economy that is not often recognised. There are 62,000 social enterprises in the UK, which make an annual contribution of £24 billion to the UK economy and employ 800,000 people. That is a significant contribution and a good example of the way in which the sector is helping the economy to grow.

A recent survey undertaken by the Social Enterprise Coalition showed that social enterprises are performing strongly during the recession, with 56 per cent. experiencing an increase in turnover, and only 20 per cent. experiencing a decrease. That compares favourably with the position for small and medium-sized enterprises, of which 28 per cent. have experienced an increase in turnover, and 43 per cent. a decrease. For all those reasons, the sector
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is today regarded as intrinsic to British society. There are 870,000 civil society organisations in the UK, and that partnership, which has evolved over the years, is crucial in tackling the challenges that we face as we work through a period of economic downturn.

There is no doubt that the recession has had an impact on the third sector. It is difficult to quantify that impact, because the situation is complex. Because of the diversity of the sector, different organisations are affected in different ways. Some organisations have seen a rise in demand for services, particularly employment services or, as I mentioned, debt advice. Some charity shops on the high street report increased trade, as people trade down from higher-value items. Other organisations have reported far greater difficulties in obtaining donations, with increased competition for those donations, while some bodies report a decrease in demand, with cultural or leisure activities doing less well.

Additionally, the third sector faces financial pressures caused by rising costs as well as a potential fall in donations. I say "potential", because there is evidence that donations do not necessarily fall during a recession, although they slow down as people become more selective about the causes to which they donate. A Charity Commission survey in August last year showed that most charities were reporting no change in most income streams. In the recession of 1991 to 1993, two thirds of voluntary and charitable organisations reported an increase or no change in income, with only one third reporting a decrease.

A recent survey by the National Council for Voluntary Organisations reported that charity leaders are now more positive about the UK economy than they were when surveyed two years ago, and that 27 per cent. expected their organisation's financial situation to improve over the coming year. Only 8 per cent. planned to cut the number of paid staff in the next three months, while 7 per cent. planned to reduce the services that they offer.

There is much positive news, but we know that it remains tough in the third sector. There are regional variations in how hard the recession has hit communities, and the current level of additional investment is unlikely to be maintained. That has put pressure on staff in some organisations, who are working longer hours to try to ensure that they provide the best service possible. Concerns about funding obviously affect confidence in job security. The services, advice and help provided by the sector could not be achieved without the dedicated support of staff and volunteers, including trustees.

We should not see the recession as being only about challenges and difficult times with no light at the end of the tunnel. Over the years, third sector organisations have adapted to many policy changes and developments, and they have weathered previous recessions. Some organisations have emerged even stronger, and it seems that when faced with adversity, they can step up, innovate and continue to campaign for social change. When we in the Government have to make difficult decisions, the sector is crucial in lobbying, campaigning and making its voice heard. That can be difficult for the Government, but civil society is not something with which we are concerned only during the good times. We must be even more alert, and enable the sector to do what it does best during the tough times.

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The challenges for the sector in weathering the storm include ensuring that organisations demonstrate the social benefit of their services, and how that provides value for money. The social return on investment model, developed with the support of the Office of the Third Sector will be helpful in that respect. Demonstrating success is not easy, and using a model that shows the social impact and effectiveness of the work of the third sector in the community, and quantifying that impact, will be crucial. Recessions make us all think differently and force difficult and tough decisions. If we are to get something positive for the sector out of this situation, we will do so by examining organisational models and proving the sector's social and environmental impact.

It is time to get the partnerships right. Pressures on the funding environment for the third sector are creating a need for new ways of working. That could mean joining up with other third sector organisations to bid for contracts as part of a consortium, merging with like-minded organisations, or reinvigorating a partnership with a statutory funder or with the Government. For example, the refreshed Compact launched in December last year offers a platform from which successful partnerships can be built. Although it is early days, Total Place offers a unique opportunity for the sector to engage in local dialogue about effective local services. Only through collaborative, respectful and genuine partnerships can we achieve more with less.

Lembit Öpik (Montgomeryshire) (LD): I am grateful to the Minister who, in my judgment, is outstandingly effective and committed to the sector, as was the right hon. Member for Cardiff, South and Penarth (Alun Michael) when he performed a similar role.

Is the Minister aware of an organisation called RE:generate, which seeks to work to empower local communities in partnership with first sector organisations? If she is not aware of that organisation, and if time permits, would she be willing to meet with RE:generate, which has a clear focus that is much in line with the thrust and narrative that she and her Government seek to push forward?

Angela E. Smith: A number of organisations such as RE:generate do such work, which enables them to engage with the community. It brings people together, gives them a voice and helps that voice to be heard, which can make a difference to the community and whatever population the organisation serves. I would be pleased to hear more about that organisation, and I am grateful to the hon. Gentleman for raising that point.

I would like to say a few words about what the Government have done to help the sector. The Office of the Third Sector had a recession action plan, the Real Help for Communities programme, which was launched almost exactly a year ago and was a Government plan to help the sector through the recession. As part of that plan over 1,500 targeted recession-focused grants, loans and bursaries have been provided through the modernisation fund, the targeted support fund and the hardship fund. Another £500,000 has enabled three new schools for social entrepreneurs to be opened in Yorkshire, Hampshire and Devon, and it has allowed existing schools in the north-west and the east midlands to run additional
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programmes. The school provides action learning programmes to help social entrepreneurs tackle hardship and make positive changes to their communities. The students I have spoken to about their work are inspirational in seeking to make a difference for their communities-and, in one case, for the world at large. It was most impressive.

The £8 million volunteer brokerage scheme for the unemployed has provided 40,000 opportunities for people to learn new skills and give something back to communities through volunteering. Because the effect of the sector is varied, the action plan included a targeted package of support to sustain organisations through the economic downturn. It has enabled them to support their communities through a range of recession-focused services such as information and guidance on finding employment, support for health and well-being, and increased volunteering and employment opportunities.

I found it really encouraging to visit some of the recipients of the "Real help now" money and see for myself the difference that they have been able to make in their local communities. When I went to Brighton, I met the East Sussex credit union. Many people here today are members of credit unions.

Alun Michael (Cardiff, South and Penarth) (Lab/Co-op) indicated assent.

Angela E. Smith: I see my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael) nodding vigorously.

The credit unions support vulnerable people on low incomes who often find it difficult to access mainstream financial services, and many of whom are targeted by loan sharks. "Coronation Street" fans will know that the programme covered that problem. Loans can be offered at as much as 5,000 per cent. interest. Such people are in a bad cycle of debt and deprivation, but thanks to a bursary from the Modernisation Fund, the credit union is considering merging with another organisation so that it can respond better to the needs of local people; it will be better able to reach many of those being targeted by loan sharks.

I did not have to go far to visit the St. Martin-in-the-Fields Connection centre, where I saw the amazing range of work that it does for homeless people. It provides not only shelter and support, including food and showering, cleaning and changing facilities, but training and support for job seekers. More than 5,000 people benefit from its services every year, which makes it the busiest day centre not only in the capital but in the country. At the other end of the country, the volunteer centre in Blackpool has benefited from a grant from the targeted support fund. It has been working to help meet the increased demand for those who want to volunteer, finding good opportunities to add value to their skills.

That is why we launched the action plan. The money is an investment. However, it is invested not only in those organisations that receive it but in the community. It enables the organisations to continue doing what they do best, which is helping the most vulnerable in society through the economic downturn with Government support.

The work involves not only the Cabinet Office; other Departments are doing invaluable work. For instance, the Department for Culture, Media and Sport is investing £5 million up to 2011 in the "Recruit into Coaching"
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programme, which will recruit 10,000 new volunteer coaches from 70 of the most deprived areas in England, giving priority to 16 to 25-year-olds who are out of work or education. The aim is to offer a pathway to employment, and to increase confidence and skills. DCMS is also providing £3 million to transform empty high-street shops into cultural and community facilities as part of a programme to tackle the recession in the high street.

The Department for Children, Schools and Families is providing a recession package worth more than £3 million to enhance family services. That includes making extra funds available to Relate in the areas hardest hit by the recession, to the Parentline Plus helpline, and to Parent Know How, which provides support and debt counselling to families. Her Majesty's Revenue and Customs has launched a payments support service for small businesses and individuals who are unable to pay their taxes. So far, over 292,000 time-to-pay arrangements have been agreed, totalling more than £5 billion.

The Department for Business, Innovation and Skills has provided a £10 million funding boost to extend the opening hours of citizens advice bureaux this year, and a further £5 million next year so that more people can benefit from its free, independent and impartial advice. The extra funding will allow the bureau network to stay open for approximately 170,000 additional hours, which will benefit about 600,000 extra clients until the end of March 2010 and a further 300,000 next year.

Last year, I spoke at the Citizens Advice annual conference, which was celebrating 70 years of service. It was heartening to hear that volunteers are still the backbone of the service. The value of the work done by volunteers, including its trustees-we sometimes undervalue the role of trustees in such organisations-is estimated to be in excess of £86 million. Those are all good and positive examples of the real efforts that the Government are making to help communities and third sector organisations tackle the recession.

The Supporting People programme is the biggest source of Government revenue funding for the sector, with more than £13.6 billion invested since the programme began in 2003. The programme is grant-funding housing-related support services, largely delivered by the sector; it is administered by all 152 top-tier local authorities. The economic climate could lead to more vulnerable people facing redundancy and repossession, which will mean an increase in demand for existing services. Through Supporting People, the Government are investing in early intervention and preventive housing services. The recent report by the Select Committee on Communities and Local Government highlighted the fact that, against an investment of £1.6 billion, the programme is delivering a net financial benefit of £3.4 billion each year. Supporting People is helping about 1 million people at any given time. In 2007-08, 41,000 people avoided eviction and maintained accommodation; 21,000 people accessed training and education services; 47,000 people established contact with external services; and 8,000 people gained paid employment.

It is not just about numbers on a page. For every person mentioned, there is a real story. Supporting People has had an impact on people's lives, made a difference and improved things for their families and their communities. In times of financial hardship, we need to continue investing in such services. The removal
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of ring-fencing for the Supporting People budget means that local authorities can be more innovative and flexible, and can pool budgets to support even more people, with services tailored to meet individual need. As a result, services are not hide-bound or held in silos, and are thus not inflexible. I know that concerns were raised about ring-fencing Supporting People; removing that ring fence was based on sound principles and was endorsed by the Communities and Local Government Committee.

A lot of work is being done to ensure that the third sector is both resilient and is supported through difficult times, but we must also ensure that its future is secured so that it remains in a strong position to continue its contribution to the design and delivery of better public services. We are not yet out of the danger zone brought about by the impact of the recession; tough times will continue for some time to come. However, I believe that the third sector is in a good position to weather that storm, and can prove its value to the community-and to all levels of government. We will continue to work with the sector for the benefit of the community.

2.48 pm

Alun Michael (Cardiff, South and Penarth) (Lab/Co-op): It is a particular pleasure to serve under your chairmanship, Mr. Illsley. You and I shared a fairly chaotic room with another half dozen MPs when we first entered Parliament, although things have become more orderly as the years have passed. Those others included Rhodri Morgan, the former First Minister of the National Assembly for Wales.

It is a pleasure to speak in a debate initiated by my right hon. Friend the Minister. She comes from the voluntary sector, and she worked with me on voluntary sector matters in opposition. She has a good sense of the contribution that the sector makes, and also of its potential. I commend her on the efforts that she has made since taking over her current role to encourage greater participation and engagement by those in business and elsewhere in support of the third sector.

I am pleased that my hon. Friend the Member for High Peak (Tom Levitt) is sitting next to me, although he will not be with us in the House for much longer, given his decision to stand down after the election-at his young age, that is a total disgrace. It is appropriate to pay tribute to the leadership that he has provided as chair of the all-party group on the community and voluntary sector. His time as chair has been excellent, and the group has looked much more widely at the sector. I have a feeling that those who intend to continue as Members after the general election will hear from him in a variety of ways as he pursues other activities, although I am sure that those activities will not be far from the heart of the voluntary sector.

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