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Williamson of Horton, L.
Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

6.21 pm

Clause 3, as amended, agreed to.

[Amendment No. 48A not moved.]

Lord Dholakia moved Amendment No. 49:

(a) contractual arrangements which the Secretary of State may make with probation trusts or with any other person for the provision of probation services and for the operation of approved premises; and(b) sub-contractual arrangements made with charities by probation trusts or by any other person with whom the Secretary of State has made contractual arrangements for the provision of probation services.

The noble Lord said: I declare an interest in that for nearly 25 years I have been associated with Nacro, the National Association for the Care and Resettlement of Offenders, which has considerable interest in the amendment. Equally, the Government’s emphasis on voluntary organisations effectively means that Nacro would very much benefit if the amendment were to be carried.

The new clause requires that at least 7 per cent of probation budgets should be used for services provided by charities, that contracts with charities should provide full cost recovery and that decisions to award contracts should take into account providers’ arrangements to ensure equality and diversity in their operations. On that point, I have no difficulty, given that I have received appropriate assurances from the Minister.

At Second Reading, there was unanimity across the House that voluntary organisations play a vital role in the rehabilitation of offenders. In particular, the sector has expertise in delivering high-quality services in accommodation, employment, education, monitoring, addictions, mental health, working with offenders’ families and community engagement. Those services are crucial to the reduction of reoffending. For example, the likelihood of reoffending by ex-prisoners who obtain and keep a job is cut by between a third and a half, depending on which research study you look at. Getting offenders into stable accommodation reduces their reoffending rate by at least a fifth. Ex-offenders with support from a family are reconvicted at a rate of between a half and a sixth of similar offenders without family support. One study showed that offenders who receive educational help reoffend at a third of the rate of similar offenders who do not receive such help. Involving offenders in drug rehabilitation reduces the volume of reoffending by about 70 per cent.

These effects are interrelated; for example, it is harder to get a job without basic skills and it is harder to get one if you are homeless. Offenders who are homeless and drifting are less likely to sustain the motivation to complete a drug rehabilitation programme and to change their offending behaviour. NOMS has developed targets to get more offenders into employment and sustainable accommodation, to improve offenders’ education, and to involve them in drug treatment programmes. If these targets are to be achieved, the involvement of voluntary and community organisations will be crucial.

Yet, the history of the past few years has shown that the Probation Service has often been reluctant to engage the voluntary sector in partnerships, except when it has been required to do so, either by legislation or by centrally driven targets. Until 2001, the Probation Service had an official target of devoting 7 per cent of its resources to partnerships with the voluntary sector. While it never quite achieved that percentage, the target pushed up the proportion of the service’s budget devoted to such partnerships to around 5 per cent. However, the 7 per cent target was removed in 2001. After that, the proportion of probation budgets spent on contracts with the voluntary and private sectors combined plummeted to less than 2.5 per cent. That cannot be a healthy sign for voluntary sector involvement in probation work and does not project a happy picture.

Faced with the threat of contestability, the Probation Service has, somewhat belatedly, begun to remedy this. It has adopted a target of devoting five per cent of its budget in 2006-07 and 10 per cent in 2007-08 to partnerships with the voluntary and private sectors. As a result, the proportion of probation budgets devoted to such partnerships has now increased to around 4 per cent. So we are seeing some progress, but not sufficient to meet the objective set by the Government.

However, there are two reasons why it would be preferable to put on the face of the Bill a requirement for a specified percentage of probation budgets to be provided by the voluntary sector. First, the Probation Service’s recently adopted 10 per cent target is not a statutory requirement. There is nothing legally to stop the service from reversing this policy, abandoning the target and reverting to the position where a derisory proportion of its budget was devoted to partnership with the voluntary sector.

Secondly, the service’s non-statutory 10 per cent target applies not only to contracts with charities but includes contracts with the private sector. It would be theoretically possible for the service to meet this target by devoting 10 per cent of its budget to contracts with Serco, GSL, Group 4 Securicor, Reliance, Calyx and other private providers and having no contracts with the voluntary sector at all. Many charities fear that private sector agencies will win contracts in preference to voluntary organisations, not because they are better at the work but because they have more resources. This means that they can put teams of people on to the intensive process of writing bids and can produce attractive bids at short notice, which charities cannot do, given their more limited resources.

By specifying a minimum level of contracts with the voluntary sector, the new clause would guard against the risk of the voluntary sector’s unique contribution being squeezed out through this process. Put simply, experience shows that the Probation Service is unlikely devote a significant percentage of its budget to voluntary sector partnerships unless it is required to do so—and the amendment would ensure that.

The new clause also requires that contracts with charities should reimburse them for the full cost of their services. One problem is that, all too often, statutory funders have been unwilling to reimburse charities for a realistic proportion of their overhead costs, such as financial administration, IT costs, human resources and staff training, which are necessary to provide services effectively. NOMS has recognised the need to remedy this in its policy statements. For example, the NOMS document Improving Prison and Probation Services: Public Value Partnerships included a commitment to:

Policy statements are all very well, but experience shows that they are not always translated into practice when procurement processes start. For several years now, successive versions of the Government’s compact on relationships between the Government and the voluntary sector have required contracts with the voluntary sector to provide full cost recovery and to guarantee funding for a minimum of three years. Yet the Charity Commission recently found that the majority of contracts between government departments and charities do not provide full cost recovery and last for only one year at a time. Unless a requirement for full cost recovery is written into the Bill, there can be no guarantee that the stated intentions of policy documents will become a reality.

Finally, the new clause requires that, in awarding contracts, the Secretary of State should take into account the arrangements which providers make to promote race equality. As I said, I am delighted that we have an assurance from the Minister on that matter.

The work done by voluntary organisations and, in particular, Nacro, in assisting in the resettlement of offenders over all these years comes to hardly anything when, over a period, insufficient funds are made available and grants are cut at the whim of the Government. We have seen example after example of notices being issued to hundreds of staff who have been unable to maintain a job or provide a service. It will be to the detriment of the Bill and the Government if we are not able to ensure that charities have adequate resources to create an effective partnership in probation work. I beg to move.

6.30 pm

Baroness Anelay of St Johns: Although I shall be brief, I hope that the noble Lord, Lord Dholakia, will not underestimate my admiration for him for bringing forward this amendment. It has performed a valuable exercise in drawing our attention to the importance of charities and the work that they do. He will know from our debate so far that all sides of the House stand in admiration of that work. But we all still have ringing in our ears the thoughts of the noble Lord, Lord Judd, on an earlier amendment. I shall certainly wish to revisit the speech that he made in withdrawing his amendment, in which he urged caution in relation to the future role of charities.

It is clear that there are concerns about the lack of a guaranteed funding stream, which is currently made available to charities. Sometimes they receive pump-priming, they just get going and then, without completing their task, they find that the pump-priming is removed, often for very good reasons. It is given to them in the first place only on the basis of their finding replacement funding to continue the work, so there is no sleight of hand in this; the Government make it clear from the beginning that that will be the case.

Concerns have also been expressed that, when charities work in partnership with the Home Office, they are not always paid the full amount of the money promised to them at the beginning. That is carefully reflected in subsection (3) of the amendment, so I think that the amendment has some advantages. My concern is one that I know the noble Lord, Lord Dholakia, will understand; that is, as soon as one tries to put a budgetary percentage into statute, suddenly it becomes the ceiling. Therefore, 7 per cent would become the maximum, although I know that that is not what the noble Lord wishes. I am sure that he would want some flexibility, with the voluntary sector getting more than 7 per cent if appropriate. I am sure that, at this stage, this is a probing amendment and it gives us an opportunity to debate the matter but, if the amendment were accepted, it might well constrain and not expand the role of the voluntary sector.

The amendment is a very useful way of taking us forward. We will have to address in more detail at later stages what impact contestability will have on charities and on the deliverability of services.

Lord Ramsbotham: I support everything that the noble Baroness, Lady Anelay, has just said. I am glad that the noble Lord, Lord Dholakia, has raised the issue of charities. Like the noble Baroness, I commend him for almost everything in the amendment, except that, again like the noble Baroness, I stick over the inclusion of the figure of 7 per cent. I do not like ceilings in these matters. Of course, charities will be part of the partnership and one would encourage that, but things may be changed in annual plans and there may be different opportunities in different places. I quoted the experience of the Youth Justice Board. You have to be certain that the providers will be there when you try to find them, and they may not be.

I am particularly glad that subsection (3) was mentioned. Although I am sure that the noble Baroness has seen it, I draw to her attention a report by the Charity Commission entitled Stand and Deliver, which was published in February 2007. It contains some very disturbing information from the charity sector about how few charities—only 12 per cent—are paid in full in government and public sector contracts. The commission goes on to speculate that this is bound to affect the willingness of charities to become involved in this sort of work in case they are not paid, because they simply cannot afford to go on in that way.

The Charity Commission also issues a caution. It says that charities must bear in mind that the mission which allows them to have charitable status must not be strayed from. If they enter into contracts with commissioners in the public sector, there is a danger that the requirements of the commissioners will affect that mission. If that happens, their charitable status will be at risk and the trustees will be liable.

Attention to all this has been carefully drawn together in a splendid report by Clinks, a hugely reputable and successful organisation which welds together voluntary sector support. Of course, the bigger charities are more able than the smaller ones to withstand this sort of commercial pressure, but it is the small, local charities all over the country that deliver a very large amount of the valuable work which I suspect probation supervisors, in particular, will need in supervising the low-level offenders for whom they will be responsible.

As I said, I am enormously glad that the amendment has been put forward but I have concerns about specifying a figure of 7 per cent.

Lord Northbourne: I am amazed by what I have heard. I do not fully understand what is meant by “contestability”. I should have thought that, if the service provided by the voluntary organisation was better, it would be in a position to negotiate a better deal. Furthermore, I am not entirely clear what “commissioning” means. I should have thought that it meant entering into a contract with the sub-contractor to do the job. It would be very careless of the charities if they did not ensure that the contract provided for the period of funding and the terms of withdrawal and so on.

Baroness Howe of Idlicote: Like many other noble Lords who have served on charities, I am afraid that it is all too easy to recognise the scenario of waiting to see whether your contract will be renewed, knowing that the money paid will not exactly match the full cost of what you are providing. So I have a great deal of sympathy in that regard.

I, too, share the concern expressed by the noble Baroness, Lady Anelay, and my noble friend Lord Ramsbotham about some aspects of what is proposed. I point out that the low percentage of contracts with charities, which was perfectly fair in the early part of this century, was certainly not a desirable aspect of the relationships that the Probation Service had with those charities. However, as the noble Lord, Lord Dholakia, said, the figure is going up. All the signs in the documents that we have seen are that the charities also wish to embrace the partnership approach.

There is a danger in setting specific targets. As has been acknowledged, many targets may not have been kept to when they were set in the past. It may be better not to push the matter to a vote at this stage but to take very careful note of what has been said.

Baroness Linklater of Butterstone: I totally support what my noble friend Lord Dholakia said about charities, although I noted the sensible cautionary tone in what the noble Baroness, Lady Anelay, and the noble Lord, Lord Ramsbotham, said about the risk of quoting a figure and it becoming a ceiling. But the principle, which I think is the key, is to ensure that there is a duty on the probation services to include a proportion of the voluntary sector organisations and charities, however that is worded in the Bill. Without that, there will be a risk of slippage. As we debated earlier, co-operation between agencies is also a very real duty. If it slips off the face of the Bill, it will slip off people’s consciousness and affect the way that things are organised. After all, legislation is important in enunciating certain principles. If they are stated clearly in the Bill, they will be followed.

Lord Hylton: In general, I welcome this amendment. I want to refer only to subsection (4). I question whether absolute equality in matters of religious belief is wise. If a voluntary organisation sets out to benefit only the members of a particular religious belief, why should it not do so by working exclusively with offenders from that religious background? It may be able to work very effectively within its own faith community, so why should it be forced to offer its services to everyone indiscriminately?

Lord Bassam of Brighton: I sense that this is the last of this afternoon’s debates on this Bill. I shall not detain the Committee too long, but important points have been made to which I need to respond. I thank the noble Lord, Lord Dholakia, for putting the amendment before us, because it provides us with a very welcome opportunity to debate the process by which contracts should be let under the new arrangements that the Bill envisages for delivering probation services.

I start with a slight tease. In the past, I have listened to Members on the Liberal Democrat Benches berating the Government for setting too many targets, yet here we have a Liberal Democrat amendment setting a target. That is a novel experience; culturally, it is rather hard to adjust to.

Lord Dholakia: I remind the Minister that I am using the Government’s target. If he looks at what they have done, he will see that that is what I am trying to achieve.

Lord Bassam of Brighton: I know that, and the noble Lord is right to point it out. However, I am slightly amused that he has tabled an amendment to follow the point through. We are making progress.

As with many of the amendments that we have discussed in Committee, there is much with which we agree. As my ministerial colleagues and I have made clear from the outset, we are absolutely committed to greater involvement by the voluntary and charitable sector in the delivery of probation services; that is the key motivation for this legislation. We believe that those organisations have much to offer in the fight against reoffending, and we have been hugely heartened by the support that many organisations have shown towards the proposals in the Bill; that support has been reflected in the content of the debates so far, not least on this amendment.

However, we differ from the noble Lord and the noble Baroness who contributed from the Liberal Democrat Benches on some points of principle and, in particular, on this. We do not believe that it is appropriate to set targets for the amount of work that should be delivered by any particular type of provider. We share some of the concerns that have been raised from the Cross Benches on that issue. We think that the guiding principle should be which provider is the best able to deliver the service in question. Our commitment is to a mixed-economy provision: what is best for the service and not from which sector they come.

As the noble Lord reminded the Committee, we have targets in place to encourage probation boards to make greater use of alternative providers in the delivery of services where that is more effective. We are doing that in response to the concern that the service is currently doing far too much in-house, as the noble Lord, Lord Dholakia, made clear in his comments. That is not a long-term solution, as my right honourable friend the Home Secretary made very clear in another place when he said:

It is hard to argue with that, and I am more convinced of that argument the more I have listened to the debate.

6.45 pm

I turn to other aspects of the amendment. Subsection (2) of the proposed new clause refers to the contractual arrangements that the Secretary of State may make with probation trusts or other providers and to the subcontractual arrangements that trusts and those other providers may make with charities. The contracts that are let by the Secretary of State will, of course, contain a substantial number of standard provisions. Work is currently under way to draw up model contracts in readiness for the establishment of the first trusts. But contracts are, by their very nature, the outcome of a process of negotiation between two parties in the light of circumstances at the time. For that reason, we argue that it would be entirely inappropriate to seek to impose elements of that contract by means of secondary legislation. The same goes for the subcontracts that trusts and other providers may make with charities, or indeed with providers in other sectors.

Subsection (3) has exercised a number of Members of the Committee this afternoon. It relates to arrangements with charities to make provision for full cost recovery. I understand those arguments. I, too, have been involved in charity organisations—I have worked in the voluntary sector—and I entirely understand why noble Lords have drawn attention to this. The Committee will be reassured to hear that we are fully committed to the principle of full cost recovery. Our intention is that that will be reflected in the tendering and contractual process, which means that the voluntary sector will be encouraged to submit bids that recover the full costs.

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