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11 Mar 2010 : Column 151WH—continued
There have been challenges along the way, however, regarding the capacity of the third sector to engage not only in delivering a service, but in the bidding process in response to a tender to provide a service. Full cost
recovery was an early issue, and it has perhaps still not been wholly addressed; nevertheless, we have come a long way. I remember that when my hon. Friend the Member for Slough (Fiona Mactaggart) was the Home Office Minister with responsibility for the third sector many years ago, she said something very memorable: third sector organisations have to learn to say no. They have to be able to recognise when they are being asked to do something impossible, and then say no and not take on the commission or deliver the service. Otherwise, the possibility of full cost recovery is jeopardised, advantage is unfairly taken of the good will of the third sector organisation and the volunteers concerned, and the organisation's mission is endangered. Protecting an organisation against mission creep, while maintaining its financial viability and core activities, is the responsibility of trustees-as my right hon. Friend the Minister mentioned-but all those elements are fundamental to the identity and sanctity of the third sector organisation. Commissioning must therefore never be an excuse for exploiting third sector organisations.
Although we acknowledge that the changes taking place have led to attempts to address each of those issues, we recognise that there have been other changes in service delivery. Local authorities, for example, have increasingly looked to private sector organisations to commission services. The Department for Work and Pensions looks for both private and third sector organisations to deliver support for long-term jobseekers on a payments-by-results basis. One trick that we seem to have been missing is that private sector organisations have as much reason as the local authority or central Government to seek cost-effectiveness, personalisation and the local appropriateness of services. There is absolutely no reason why private sector organisations that deliver services either on behalf of or in parallel with local authorities and central Government should not also look for third sector partners, to provide those nuances.
There will be problems, and my right hon. Friend the Member for Cardiff, South and Penarth touched on some of these aspects. Although there is little formal commissioning of services from the third sector by the private sector, there are huge opportunities for more of that to take place, to the mutual advantage of both partners. Particularly interesting is the way in which some private sector organisations engage with charities such as Pilotlight and even VSO, and provide opportunities for managers in business to get some life experience by working with third sector organisations. They see those organisations as a resource and pay on a commercial basis to get training, experience and enlightenment.
If, however, we are going to make the most out of the relationship between the private sector and the third sector, a number of problems need to be tackled. They include the same attitudinal problems that there were at the beginning of public sector commissioning: the possible mistrust and misunderstanding of what the other partner is about; the private sector perhaps having rather more demanding expectations regarding capacity than the public sector; and scepticism about whether so-called amateurs could ever deliver a professional service, which we know they of course can.
I see other opportunities for third sector organisations, given some of the changes that the Government have brought about in recent years. We have seen a bit of hesitation, but the way in which health services are
scrutinised has changed over the years. We have set up local involvement networks. LINks bring local authorities' scrutiny procedures and appropriate third sector bodies into the health service to scrutinise, advise and assist in the improvement of services. That would not have been possible a few years ago, but the local authority scrutiny process has matured over the years and is now capable of providing that service.
The third sector bodies that were involved in the community health councils-some of which were better than others, which is why changes had to be made-are now engaging in the LINks process. Why, therefore, can we not consider using that process in other public services that are not delivered directly by local government? An obvious example is policing. My right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) wrote a document for the Home Secretary-I was pleased to be involved in the research and writing-advocating the involvement of the third sector locally to scrutinise the policing of communities at a grass-roots level. I am much more interested in a LINk-type process of community engagement through voluntary sector organisations and community groups than I am in the development of a police authority scrutiny procedure. However, I welcome the fact that many chief constables now come before local authority scrutiny committees in a way that perhaps they never did before.
My right hon. Friend the Member for Cardiff, South and Penarth mentioned volunteering. I do not think that it is possible to talk about volunteering these days without talking about V, a brilliant organisation set up by the Government to foster and promote volunteering among young people. It currently works with about 500 volunteer and community partners throughout the country, opening up 900,000 opportunities for young people to volunteer. V has funded more than 1,300 projects since 2006, and through its support, more than 500 people have set up their own social action projects to meet needs that they have identified in their communities. Every month, young people looking for volunteering opportunities on the V website run 72,000 searches, and online applications to volunteer have increased 200 per cent. in the past year alone.
One thing that V does effectively is to bring in funding from other sources, including £42 million from the private sector. Match funding from more than 120 corporate partners in the past year alone has produced an extra £84 million for youth volunteering. In my constituency, 200 young people have been involved in the V Inspired project. Last week, I was delighted to attend with my right hon. Friend the Minister a celebration of youngsters in Derbyshire-well, it was actually country-wide-who had received V talent certificates for intensive volunteering. One constituent of mine, Rosie, spent 30 hours a week for 45 weeks working under the oversight of Connexions with the police, local authorities, the youth service and others to ensure that young people in her community were not left to drift but were provided with something to do.
I remember the Prime Minister saying that the voluntary sector provided a voice for the voiceless. Many national campaigns have their roots in the voluntary sector and the third sector generally. We should admire the tenacity, effectiveness and professionalism with which such groups
mount their campaigns. People are encouraged, perhaps more so than before, to campaign locally, whether by lobbying their council, signing online petitions or through other measures. It is important that campaigning remains a key activity for the sector.
That, of course, is the point at which we remember that political parties are third sector organisations in terms of how they are set up. We do not receive gift aid, but perhaps that time will come. Nevertheless, campaigning is central to the work of the sector. I urge the hon. Member for Ruislip-Northwood (Mr. Hurd) to come on board and say that campaigning is not only a legitimate but an essential activity for third sector organisations, and that we should never return to the situation in the early 1990s, when organisations such as Citizens Advice were told that if they did not stop lobbying for the law on various issues to be changed, they risked losing their grants from central Government.
In another example, which I have given before, Save the Children was delivering services in Iraq as part of the rebuilding work after the 2003 war. The charity was critical of the conduct of both the American and British Governments in their military activity there, and as a result, it lost its funding from the American Government. However, it continued to receive funding from the British Government on the grounds that it was doing what it was asked to do and fulfilling the terms of its contract. In general terms, we welcomed rather than criticised the fact that Save the Children had used its position to campaign.
Mr. Hurd: Will the hon. Gentleman give way?
Tom Levitt: Briefly, in the hope that the hon. Gentleman will say yes to my question.
Mr. Hurd: I am more than happy to place on record my profound belief in the value of the voluntary sector's advocacy role. I took a private Member's Bill through Parliament almost entirely because it had the support of a national network of organisations driven by exactly the same energy and vigour that the hon. Gentleman mentioned. I am a strong believer in the advocacy role of charities and the sector. We propose no change to the regulation in that context.
Tom Levitt: I am pleased to hear that. The hon. Gentleman will remember that the leader of his party, the right hon. Member for Witney (Mr. Cameron), said at one time, "If you want to know what a Conservative Government are going to do, look at what Conservative local authorities are doing." The hon. Gentleman will also be aware that when Conservatives took over the organisation of London Councils, one of the first things that they did was to decimate the programme of grants to the third sector. I hope that he can reassure me either that his leader was wrong to say that we should look to Conservative councils for leadership or that the Conservative councils were wrong to pull the rug from under many local voluntary organisations. Perhaps he will come back to that later if he does not have an answer now.
Mr. William Cash (Stone) (Con):
I am fascinated by the hon. Gentleman's excellent speech, but I ask him to consider this. The voluntary sector and all the tremendous organisations in that sphere are focused primarily on
concern and compassion, and on providing opportunities outside the country's power structure. What I hope to discuss if I catch your eye, Mr. Illsley, is the essential distinction conferred by trust and charitable status. The state and political parties are interested in power, but social care, voluntary contribution and compassion are provided outside the power structure. It is a difficult line to follow, but that is why a lot of problems arise about what is, or is not, political from the point of view of charity law.
Tom Levitt: I am grateful for that fascinating intervention. I will read it carefully in Hansard tomorrow. The hon. Gentleman seems to be suggesting that there is a compassionate charitable side and a state power side, and never the twain shall meet-one shall not influence the other. It is about influence. No one is suggesting that the third sector should run the country, but it has the right-and, indeed the obligation-to seek to influence how it is run. That is the heart of the issue.
I welcome what the hon. Member for Ruislip-Northwood said in another Committee on which we served together a few weeks ago, and which dealt with a statutory instrument on exempt charities. I have praised him once and will praise him again for taking the right line on that matter and for welcoming the Government's initiative under the Charities Act 2006 to move away from the concept of exempt charities, which undermines the status of charities.
Was the hon. Gentleman a little surprised to hear, therefore, that the hon. Member for Surrey Heath (Michael Gove) was trying to put the original clause 42 back in the Children, Schools and Families Bill? The exempt charity ruling was rightly removed from the Bill by the Secretary of State for Children, Schools and Families, because it was unnecessary to the achievement of the good things in the Bill. The only reason for putting it back would be to remove the public benefit test from independent schools. That test was refined in the 2006 Act and, as I recall, it had widespread support. I do not understand why the hon. Member for Surrey Heath wanted to put the exempt charities provision back in the Bill, as it went totally against the advice of the hon. Member for Ruislip-Northwood.
Mr. Cash: I had direct experience of this matter when a new school was created in my constituency when I first went there in the early 1980s. The assisted places scheme, as it was called in those days, enabled people who otherwise would not have been able to get into that school to do so, to its enormous benefit. It is now one of the best schools in the region. That matter is tied up with the exempt charity status. We must ensure that people can benefit from such opportunities.
Tom Levitt: I am not sure how the exempt charity status reflects on that matter. Labour has taken a different route, which is to make all our schools excellent so that people do not have to make the somewhat artificial choice of entering the narrow confines of the independent sector, rather than being in the big wide world of the state sector.
I will conclude in a moment, but first I want to mention a few topical issues. I welcome what the Minister said about music licensing and PPL in Question Time in the House yesterday. It is important that musicians
receive the payments for the performance of their music to which they are entitled by law. However, everybody, including musicians' representatives, must recognise it would be unfortunate if that had a financial impact on the smallest amateur-I do not use that word disparagingly-groups in the country, particularly at this time. For example, it should not affect people who like to have the radio on in the back of the charity shop. The Government are only playing the role of honest broker in this matter; it does not relate to tax or to any Government measure, but to a court ruling. I hope there can be an agreement between the sector and the music industry that will minimise the impact on those who are least able to pay. I understand that that might be only days away.
I welcome the news that the Department for Culture, Media and Sport is not rejigging the distribution of lottery funding and that it will continue to reflect both need and where the bids come from, rather than seek an artificial evenness. Equality of opportunity does not have to depend on equality of treatment. It is important that the most vulnerable areas are helped whenever possible. Lottery funding, particularly through Reaching Communities, has been incredibly valuable. Later today, I will be celebrating the impact of Reaching Communities on Gamesley in my constituency, which has received £250,000 over three years. We are keeping our fingers crossed that there might be more on the way. That funding has gone into the heart of that community, not to impose or change it, but to enable, empower and enrich it, and to help it celebrate the best of what is available.
I know that the Minister takes an interest in NHS charities, so I hope the assurances of the Department of Health are true that the storm in a teacup a few weeks ago over the future independence of NHS charities was just that-a storm in a teacup. I hope that NHS charities will remain financially independent, while being embedded in, and part of, the NHS. It is almost impossible to be treated in hospital and not come across a volunteer working in the NHS or a facility funded by a charity. That could include anything from the scanner through to the tea shop and florist.
Finally, I do not think there is anything the third sector cannot do. It is varied and versatile, and can adapt to changing circumstances, demands and relationships. I have every confidence that it has a bright future in all its forms, including social enterprises, co-ops and community groups. As chair of the Community Development Foundation, I would like to have said a lot more about communities. I think that there is momentum in the sector. The way in which it looks for relationships has enabled it to grow. Despite the funding relationship that we have discussed, it is probably more independent of Government than it has ever been in its attitudes and in its belief in where it can go. It has a very fine future.
I was hoping to continue speaking until my right hon. Friend the Member for Cardiff, South and Penarth returned to the Chamber, which was quite a challenge to set myself and I will not try to meet it. He mentioned football clubs being taken over by their supporters. I can think of only one major club to which that applies. I had the pleasure of going to see it on a hot night in Barcelona last summer. The Barcelona players have the word "UNICEF" emblazoned across their chests. They celebrate not a fat-cat company that puts money into
the club, but the third sector organisation to which they give £1 million a year. I look forward to the day when our football clubs wear similar badges with the same pride. That is the pride we all have in our third sector.
3.48 pm
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): I welcome the comments that hon. Members have made, and it is a pleasure to sit under your chairmanship, Mr. Illsley.
Like my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael) and the Minister, I am a Labour and Co-operative Member of Parliament. I have had a long association with and commitment to the co-operative and mutual sector. Although that informs my basic philosophical position, I will extend my comments to the wider remit of the community and voluntary sector.
The Minister's opening speech referred to the enormous growth in the third sector's impact on the economy. We could not have had such a debate 15 years ago because it could not have been couched in the same terms. We could not have spoken about the significant impact the third sector was having on the delivery of services, nor the contribution it was making to the country's economy. She gave figures showing an increase from £5 billion to £12 billion. In my Government office region of the west midlands, the contribution is assessed to be £3.3 billion and the sector has between 44,000 and 50,000 employees. Notwithstanding the huge social benefits that the sector brings to the area, there are also considerable economic benefits.
That is the case for a number of reasons, one of which is the public recoil from the privatisation excesses of the '80s and '90s, and the gradual realisation that the propriety form of companies delivering services, or the alternative of public sector organisations providing services, did not sensitively and specifically meet the whole range of needs within the wider community. Although there were models of mutuality and co-operation for people to exploit, they were often not well understood and under-utilised. There was no driving philosophy within the Government or the civil service to give the support necessary to enable those models to reach their full potential. I do not for one moment think that, more than 10 years after the Government came to power, we have reached that full potential, but huge strides have been made.
The Minister has outlined some of the initiatives that have taken place to help development. However, it is also important to note hon. Members' contributions through private Members' Bills. Many of those were introduced by Labour and Co-operative Members, but there were others, including at least one from a Conservative Member. Those people pioneered private Members' legislation that has helped the development of different corporate models that, in turn, have helped the third sector. I would particularly like to mention the community interest company and, of course, the asset lock, both of which have enhanced the legislative framework necessary to assist the development of third sector organisations.
I did some research into the economic impact of third sector organisations on my local authority. Although that impact is almost impossible to quantify, it is interesting
to note that, in my local authority of Sandwell, there are 478 third sector organisations, of which 312 are registered charities. In our representative roles as Members of Parliament, as we carry out our daily constituency tasks, I think we all see the incredible work that is carried out by not just volunteers but professionals within the sector to meet the needs of the local community.
At this time of economic problems and recession-the Minister referred to this-third sector organisations have a hugely strategic role to play. Two particular difficulties-it is the classic double whammy-for third sector organisations have resulted from the recession. The rise in unemployment and the associated problems that go with it put an additional strain on voluntary and charitable organisations within an area and, over and above that, many such organisations are dependent on contracts from public sector organisations, which are having to squeeze their expenditure to meet tougher spending regimes in order to reduce public spending and the so-called financial deficit. Third sector organisations are suffering in both ways, as a possible source of income is diminishing, but they have to meet increased demand on their services.
The Minister outlined the measures that the Government have taken, which clearly show that they recognise the difficulties faced by such organisations. Those measures are, of course, very welcome. This is not a special plea but, as the West Midlands Regional Committee's report highlighted, we have suffered disproportionately in my area of the west midlands, largely because of our historical dependence on the motor industry, which has been badly hit. We have also suffered because we have comparatively low skill levels. Unemployment has been higher in the west midlands than in other regions, and we have had all the associated problems that go with that. The west midlands is at the forefront of facing such pressures.
May I make a few comments about the Compact and the issues outlined by my right hon. Friend the Member for Cardiff, South and Penarth and my hon. Friend the Member for High Peak (Tom Levitt)? Many of those issues have been covered already. Obviously, there has to be a balance between value for money and the ability of small third sector organisations to provide a service. The Compact was considered to be a good way of raising awareness of the issues and providing the right sort of framework and culture that would benefit both sides of the equation. However, there is a feeling-and perhaps a fear-within the third sector that, under pressure, there might be a process of resiling from the sort of principles under which the Compact was devised.
Hon. Members have mentioned the difficulties that small third sector providers face when they try to meet the requirements of large contracts and there is a short time for tendering. However, there is also a fear, which is supported by evidence, that third sector providers are disadvantaged in the tendering process by an approach that puts cost ahead of value. Some of us who were in local government 20 years ago remember the difficulties that compulsory competitive tendering brought, when the only criterion for awarding a contract was cost. That relates to the old question of how to balance the cost and value of something. The most cost-effective contract often does not provide for the best value.
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