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11 Mar 2010 : Column 172WH—continued
Another theme that comes through in the report is the difficulty of spreading best practice. Some local authorities and commissioners are doing that well. The Compact works well in Merton, which I am sure the Minister and others have visited. There are local authorities that are very clear, nimble, flexible and agile in their dealing with EU procurement law, such as Hampshire and Westminster, which have been cited. We always talk
about spreading best practice-it is one of the clichés of the political narrative-but why is it so hard in practice? The report talks about using regional improvement and efficiency partnerships, but I am sceptical about that idea, because another regional layer would be introduced and that would add to the confusion. We already have the Local Government Association, the Improvement and Development Agency and lots of people trying to help but, collectively, they are not making an impact, so that needs some thought.
On the commissioning process and the difficulty of accessing public money, we need to revisit all the things that flow from that, such as reporting, monitoring and accountability. The example that sticks in my mind is of a gentleman who represented a community group in Dorset standing up at a conference, waving a document at me and saying, "I applied for a contract of just a few thousand pounds from my local authority, and I'm having to fill in a 28-page contract. This is bonkers." More dramatically, a social entrepreneur told me that he had received £500,000 from a private sector grant-making organisation on the basis of four agreed desired outcomes. One piece of paper framed that entire relationship. He then got £1 million, which is a lot of money, from a Government Department, but he told me that he wished that he had not, because of what happened next. That Department hired an agency as an intermediary to manage the relationship, and the agency came in and checked his diary, e-mails and phone logs to see what he was doing.
The message that I get, and I am sure the Minister has picked up on this as well, is that our message to the sector is wrong. On the one hand, we say that we love its creativity and powers of innovation but, on the other hand, what we put it through with the contracting and commissioning process sends the message, "We don't trust you." The focus in the House has to be on what we can do to reduce bureaucracy and the flurry of activity in the name of accountability, and how we can introduce more trust into the process of commissioning and procurement.
My last point in that context is about more effective checks and balances in the system. The Compact is clearly very useful, but it is undermined by the fact that it can be ignored with impunity. It is time to get serious about giving the commission a clearer role and recognised authority. Greater transparency, about which we feel strongly, is another important tool in the box. There should be transparency about public money and the terms and values of contracts and grants. That is why our commitment to publish details of all public expenditure over £25,000 will be an important catalyst for driving better processes. Transparency, as we know in the House to our cost, can be a powerful force for change.
Mr. Cash: Does my hon. Friend agree that ensuring that he gets the accountability-to use that expression-right in this context does not mean doing so to the extent that the object of the exercise is lost because people spend all their time bean counting and not carrying out the job in question and the supervision that goes with it?
Mr. Hurd:
My hon. Friend touches on a fundamental point: accountability to whom. At the moment, as we know, local authorities feel a tremendous sense of
accountability to Whitehall. With the devolution of power, the basis of accountability will shift to the communities that they serve. Transparency is an important tool in that process.
I would like to make a final point about money, which we have not really touched on. Above all else, the sector needs money, because demand for its services will always outstrip supply. As various hon. Members have mentioned, the recession has proved a particularly demanding environment for the sector when accessing money. I see the situation relatively simply, in that there are three main sources of money for the sector.
First, there is public sector money from the opportunity to deliver services. That amount has grown and will continue to grow, because the sector's share of the cake will grow, even if the cake shrinks. Secondly, there is philanthropy, which has struggled to make progress, and we have said that we need a concerted effort to deliver a step change in cultural attitudes to giving. The third pillar is embryonic and small, but it has fascinating potential. It is called social investment, and it is money from sources that are prepared to consider a blend of traditional financial return and social impact. That source is worth about £1 billion, but it could be worth a great deal more. We see an opportunity to connect the social entrepreneur with the strategic capital. At the moment, they are disconnected and speak different languages. For the market to grow, we need a strong intermediary that can make the connection and create the financial products that make sense for mainstream capital.
Mr. Cash: I am extremely interested in that suggestion. In a sense, it was what I was referring to. In the 19th century, people created the railways and other things out of nothing. They also created the companies that led to the building societies, the insurance companies and so on. That was driven by the very thing to which my hon. Friend is referring-social investment.
Mr. Hurd: Our instinct tells us that people are looking for the opportunity to invest significant capital for good, but that process needs help. That is why we have strongly supported the idea of the social investment bank for some time. There has been widespread consensus on that for three years, but we still do not have the bank. When will we get it? On my travels around the sector, I have heard two concerns: first, that the Government do not have a clear enough vision of the potential of the social investment bank or of what it will do; and, secondly, that the Government, in a last-minute dash to be seen to be doing something, might create something half-baked that does not capture the full potential of such an institution.
There is concern that the Government's commitment of up to £75 million of capital is inadequate compared with the capitalisation that the sector feels is right. I would like the Minister to put on record confirmation of the Government's intent. Will the Budget, as promised, make it clearer what model they are considering, and is the £75 million a stepping stone on a journey towards higher capitalisation? We and the sector think that the social investment bank would be an improvement, but there is frustration over how long it is taking to put into place an organisation that could play an important role in connecting social entrepreneurs with the strategic capital that they need.
5.10 pm
Angela E. Smith: With leave, Mr. Illsley, I should like to respond to some of the issues raised in the debate. I will happily come back to some of the points made by the hon. Member for Ruislip-Northwood (Mr. Hurd), but I will have to disappoint him because I cannot give him any Budget secrets today. He will have to wait a few days longer for the Budget.
I thank hon. Members for their contributions. The debate has been wide ranging and diverse, which reflects the nature of the sector. We need to look at the third sector as a whole and the report itself. I am sad that no members of the Select Committee were present to debate the report, because that would have been a very useful contribution.
What we have firmly placed on record today is how we as a Government, a Parliament and a society value the third sector-small voluntary community organisations, volunteers and large social enterprises and charities-for the contributions that it makes.
Let me turn to the comments of my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael). When I stopped working in the third sector, I went to work for my right hon. Friend. I could say that he taught me everything that I know, but I will not. The points that he made about mutuals and co-ops were timely. He will be aware that my right hon. Friend the Minister for the Cabinet Office and for the Olympics, and Paymaster General has been meeting a number of people and is driving this agenda forward.
Partly as a response to the banking crisis and some of the issues that have led us into an international recession, the public no longer has an appetite for "business as usual". When engaging with business-whether as consumers, investors or employees-they are attracted to and supportive of a business model that is not the same as it always has been. I was encouraged by the hon. Member for Stone (Mr. Cash) when he talked about the very genuine commitment there is to mutualism and the co-operative movement. In the early days, people who were involved in the co-op movement were regarded as slightly whacky, but now the ideas are becoming far more mainstream in political thinking. It may have taken us since 1844 and the Rochdale Pioneers-over 160 years ago-to get where we are today, but new thinking is always welcome. The ideas of the pioneers are as appropriate today as they were then.
My right hon. Friend the Member for Cardiff, South and Penarth mentioned StartHere, which shows the value of the third sector in bringing together the kind of issues and support that is needed to help some of our vulnerable groups. I would be happy to discuss that matter further with him.
The hon. Member for South-East Cornwall (Mr. Breed) talked about the value of volunteering. He asked questions about the Criminal Records Bureau and the vetting and barring system. I am not sure whether his example, in which someone goes to have a cup of tea with someone once a week, qualifies. The system is there to protect young people and the most vulnerable people. Society demands that the Government have a process in place to protect people. We need to strike the right balance between giving the protection that Government are able to offer and not creating a bureaucracy that deters people from volunteering. Some individuals may be put
off from volunteering by the vetting system, but the majority of people are not deterred. CRB checks have prevented more than 80,000 unsuitable people from taking on jobs or volunteering, which shows how important they are. It may reassure the hon. Gentleman if I tell him that checks for volunteers are free. The Singleton report, which the Government have accepted, strikes the balance between not being over-bureaucratic and not unnecessarily deterring people from volunteering.
My hon. Friend the Member for High Peak (Tom Levitt), like my right hon. Friend the Member for Cardiff, South and Penarth, called on his own knowledge and practical experience of the sector. He raised some policing issues. Let me tell him that the Home Office and the Association of Chief Police Officers have now launched a compact between them. Knowing his commitment to the Compact, I think that he will find that of particular interest. I have to say that I met Rosie, his V volunteer, at the V volunteer awards. I feel passionate about the V volunteer awards and talent awards. I saw young people who have been engaged in the volunteering process for a whole year. Many of them were working in the field of youth justice. Over the year, they gained confidence and an ability to engage. The process made them more ready for employment or higher education. Young people cannot acquire such skills easily; they have to make the effort themselves.
Various Members raised the issue of campaigning. I touched on the subject myself in my opening remarks, but I will need to read Hansard to ensure that I have correctly understood the comments made by the hon. Member for Stone (Mr. Cash). I welcome the comment made by the hon. Member for Ruislip-Northwood, who said that he believes in advocacy-it was a step on the right road-but advocacy and campaigning are not the same thing. We would all expect third sector organisations to be advocates for their cause, but how far they are able to campaign is an important issue. I hope that he does not get into too much trouble with the rest of the Conservative Front-Bench team after the comments that he has made today.
The hon. Member for Stone, if I understood him correctly, differentiated between service providers in organisations and those who are able to campaign. He spoke of local organisations in his constituency. Next week, I will chair a meeting in the Bulphan area of my constituency that will be attended by local residents whose homes have been flooded and by local pressure groups. Both groups will come together in the way in which he described the groups in his constituency.
It is right for organisations and charities to campaign-I am not talking about campaigning for or against a political party-because they are ideally placed to do so, even, as I said in my opening remarks, when it is uncomfortable for the Government. I use the example of the RSPCA purely because I met an RSPCA inspector this week during my work. RSPCA inspectors do a fantastic job in the areas of animal welfare, homing animals and responding to animals in distress. They are at the forefront of the organisation. They are hugely admired by society as a whole, but because of the work that they do, they become acutely aware of the problems that need to be addressed, and they are not alone in that. The Animal Welfare Act 2006 received the support of many Members across the House because the issues were brought to their attention by organisations such as
the RSPCA. There was no party political campaigning, because all parties supported the legislation, and the organisations were justified in their actions.
Mr. Cash: Will the Minister give way?
Angela E. Smith: Let me finish my point, and then I will happily give way. I am seeking to illustrate the fact that those who provide services become aware of certain things that need to be changed, and it could be argued that they have a duty to draw those issues to the attention of legislators and to campaign for change.
Mr. Cash: The phrase "political purposes", which is the test against which so much of this is defined, is itself extremely difficult to define and will remain so. However, I think that I am right in saying that the RSPCA has occasionally got itself into difficulties in relation to the manner in which it dispenses some of its funds. I am not criticising it, but saying that there have been difficulties. The National Trust, too, has had difficulties in relation to the use of its land. The fact is that political campaigning-without making an absolutely clear distinction with purely political campaigning-quite often overlaps with social campaigning. It is difficult to draw a line between the two. It is not for us to solve that problem in this debate, but I ask the Minister to go away and seek more detail and analysis. I think that she will find that the definition of "political purposes" is becoming more and more difficult to understand.
Angela E. Smith: It is difficult; the hon. Gentleman is right. How do we define social rather than political campaigning? Any campaign can be defined as political that seeks to make social change. However, I was trying to illustrate the fact that those who deliver services see what changes are required to deliver those services better, and it is right and proper that they should draw them to the attention of councillors or MPs who can effect change.
Alun Michael: Surely, it is not that difficult. If an organisation has clear charitable objects, any campaigning must be clearly within and consistent with those objects. To constrain that would be wrong. A prime example is the Alzheimer's Society or an organisation dealing with a particular disability. Such organisations provide services to people who cannot have a voice of their own. Surely, we must be protective of organisations that seek to represent the interests of those who are clearly within their charitable objects.
Angela E. Smith: That is absolutely right. It is cause for concern when organisations are prevented from campaigning on behalf of the people-or animals-whom they were set up to represent.
My right hon. Friend the Member for Cardiff, South and Penarth mentioned the Compact and the refreshed Compact, which ties into the comments made by my hon. Friend the Member for West Bromwich, West (Mr. Bailey). The hon. Member for Ruislip-Northwood mentioned my breach of the Compact. One important thing about the Compact is that it established a framework for the relationship between the Government and the sector. It is important that we embed that through the
Government. That does not mean that there will never be another breach of the Compact; it means that the Government must understand the value of the Compact not just to the organisation concerned, but to the Government.
My right hon. Friend and I worked on the issue before I was an MP, when he was a shadow Minister for the third sector. The whole point of the Compact was that it gave a different relationship between the Government and the sector, from which both benefited. The Government see the value of three-year contracts being the norm, for example. It would not be something that the Government were doing for the sector; it would be a partnership relationship and a different way of working.
I am keen for the refreshed Compact to be implemented and monitored, not in a censorious way that says "Your Department's very bad; it's broken the Compact on X number of occasions," but in a way that says, "This is a really good example of Compact working; this works well," and asks why it works well, why the Department thinks it works well and how other Departments can learn from it and use the Compact in a way that works well for them. I have shared the frustrations of the hon. Member for Ruislip-Northwood about spreading best practice on more than one occasion. It does not seem that difficult. If we can get it right sometimes, why can we not get it right most of the time? That is what I am trying to do with the Compact. It should be the normal, common-sense way of working, and all sides should benefit.
My hon. Friend the Member for West Bromwich, West mentioned financial pressures on local authorities that are making meeting the Compact more difficult locally. I met Regional Action West Midlands when I was in Birmingham last week. It is doing excellent work on procurement and working with local authorities. The case must be made to local authorities as well that they can benefit from the Compact. In a tighter spending round, when their finances are more constrained, a framework within which they could work with the sector would bring huge benefits to them as well as to the sector. Having seen RAWM's work on procurement and a new framework, I think that it is well placed to make that case to local authorities in the area.
The hon. Member for South-East Cornwall discussed funding. He is concerned about small local community groups that might find themselves in greater difficulty. I direct him to the Government grass-roots grant scheme, which is aimed particularly at smaller groups. Grants start at £250 and run up to £5,000. His point about decisions being made by funders closer to those receiving funding applies to the scheme, because community development foundations make the awards. As he will know, for many organisations, particularly those that rely on volunteers, that kind of money can make a huge difference. I appreciate that he might not have been aware of the scheme. Some organisations in his constituency might find it useful.
The hon. Gentleman did not take the wise advice of my hon. Friend the Member for High Peak; he referred to work done in his constituency. I think that what he said resonated with every Member here. We all have similar organisations in our constituency. He asked about Gift Aid. We made changes to Gift Aid when we came into government. As his shadow Treasury team will be aware, we are looking into Gift Aid and undertaking
research, particularly into the higher rate. Gift Aid is worth more than £900 million a year to charities. It is huge. We are proud of the support that we are giving to charities through Gift Aid.
The hon. Member for Ruislip-Northwood and my hon. Friend the Member for West Bromwich, West mentioned commissioning. We are providing training and support for commissioners and working with the Improvement and Development Agency. The issue relates to the social return on investment model, which we discussed earlier. To respond to the comments of the hon. Member for Ruislip-Northwood, we need to value the social impact of third sector organisations that undertake contracts on behalf of local authorities or health bodies. There are ways to do that, although the idea is still in its infancy. Some local authorities are working it into their contracts.
The key is often to have commissioners who understand the role of the third sector and the wider benefits that it brings in terms of the social return on a contract. That is not just about the narrow confines of what the organisation is being asked to deliver; it is about asking what extra can be gained for the area from the organisation undertaking the contract. That will become more and more important as time goes by, funding becomes harder and people want more for the same money. If a social return can be proved, that is even better. Capacity builders are providing advice and guidance on the issue, and a Cabinet Committee is specifically considering how we can remove barriers to third sector organisations.
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