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I thank the Minister for his characteristically considerate response. I remain anxious that, if the whole Bill is about co-operation, it does not specify in precise language what the contracts and agreements with particular organisations are about. They are about co-operating with government, not only about co-operating with each other. Co-operating with government means that they are not only service deliverers. Of course we want the greatest possible cost-effectiveness, but co-operation is also about the development of policy and listening to organisations when contracts are being made and saying to them, “Now look, this is the objective. We are considering you as an organisation with which we would like to co-operate because of your hands-on experience and your policy experience, and because we value your input”. Simply using this cold language about a contract or an agreement to provide a service does not underline all that.

My noble friend Lady Scotland was passionately emphatic that she wanted to see agreement and partnership, but this is still a missed opportunity. However, I have noted what my noble friend Lord Bassam said, and I very often subscribe to the view that half a loaf is better than none. I heard what he said about guidelines. I hope that those guidelines will

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be drawn up in consultation with agencies and voluntary organisations that have experience. On the basis that he has given an undertaking that this concern will be reflected clearly in the guidelines, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Lord Tordoff): My Lords, I must inform the House that, in the second Division today, 79 noble Lords voted Content, not 77 as announced. Nevertheless, I suspect that the Not-Contents still have it.

Baroness Anelay of St Johns moved Amendments Nos. 6 and 7:

(a) make contractual or other arrangements with any other person for the making of the probation provision; or(b) make the probation provision himself.”

The noble Baroness said: My Lords, the amendments are consequential on Amendment No. 4. I beg to move.

On Question, amendments agreed to.

Lord Wallace of Saltaire moved Amendment No. 8:

(a) a copy of any model contract produced under subsection (1),(b) a copy of any model contract amended under subsection (3),(c) a notice of the withdrawal of any model contract.”

The noble Lord said: My Lords, we tabled Amendment No. 8 because representations had been made to us that a number of non-governmental organisations find overwhelming the vast and complex forms that accompany the bidding process, and that this is a barrier to the sort of mixed economy that we would like. The noble Baroness, Lady Turner, talked about two visions for the Bill. I think that there are two visions for the public service. One, which I have heard from a number of people on the new Labour Benches, is for an American-style process of contracting out, but without the great benefits to the United States of its very sharp decentralisation to

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states and local authorities. England is the most centralised country in the democratic world. That is partly why we want structural change; so that we can move away from that.

We have a different vision, which is based very much on the Nordic model of a mixed economy. I wish that we had more evidence-based studies of how well that model operates. It operates very locally and very effectively, and I note that 60 to 70 per cent of the population votes in local elections in Norway. There are no obstacles to structural change there, and no centralised governments having to impose on Conservative local authorities.

Nor do we share the concept of a monolithic third sector, co-ordinated by the director-general of the third sector and the Cabinet Office, which means that only very well funded large-scale non-governmental organisations can manage the complex bidding and negotiation process. We therefore wanted to emphasise that, if one has an effective mixed economy, we must treat the private sector—the for-profit sector—and the voluntary sector rather differently. Through the amendment, we want to tease from the Government how they will handle that.

I thank the noble Baroness, Lady Scotland, for her letter on this point. We received it just as the debate was starting, so we have not yet had the chance fully to absorb it. However, I note that, under the heading “Contracts”, it says:

It would therefore be appropriate at this stage for us not to press the amendment, but perhaps to return to it at Third Reading. However, we ask the Government to recognise very clearly that if we are to have the sort of mixed economy that we on these Benches want, retaining the autonomy and diversity of the not-for-profit sector—and, indeed, helping that sector to develop rather than moving towards the sort of private sector national provision which the noble Lords, Lord Warner and Lord Filkin, seem to prefer—we need to know rather more about the contracting process and how we will handle these different not-for-profit and for-profit providers. I beg to move.

Baroness Anelay of St Johns: My Lords, I have a good deal of sympathy for the amendment’s objective. I am grateful to the noble Lord, Lord Wallace, for indicating already that he does not intend to press it to a vote at this stage, and that there is time for reflection. He is right that this is an important issue. I tried to explore it in part in Committee on 5 June—at col. 1100 of the Official Report—when I spoke to my Amendment No. 82. I wanted the Government to put clearly on the record how they would expect contracts with charities to be drawn up, and to say whether the same type of contractual conditions would be applied to both private companies and not-for-profit organisations. In response, the Minister confirmed that the Government would be able to apply penalties to third sector organisations if they failed to meet their contractual obligations. He implied that contracts would be basically the same for both private companies and not-for-profit organisations. Noble

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Lords expressed their concerns that treating private companies and not-for-profit organisations the same could have significant disadvantages for the third sector, both in the bidding process and later in the delivery of services.

I returned to the issue on the last day in Committee, on 12 June, when we debated the commencement amendment of the noble Lord, Lord Ramsbotham. I asked why the Government had not yet put draft model contracts before the House and whether they would do so before Report. We heard nothing more until today, the first day on Report, when the Minister’s office delivered to us on these Benches and the House what appears to be a very full series of documents, in the region of 25 pages, on service specifications, drafts for consultation and service level agreements. I appreciate that there may be very useful and interesting information here, but it will not take anyone by surprise when I say that, whereas the noble Lord, Lord Wallace of Saltaire, says that he has not looked at “too much” of it, I have looked at virtually none of it because of the other amendments to which I have been speaking.

7 pm

It is important that we resolve the issue of how not-for-profit organisations are likely to be treated. The process of awarding contracts must be carried out in such a way that it does not put the third sector at a disadvantage and does follow the principles of best value in the commissioning and delivery of services. Both of those principles work for the public good and the good of the not-for-profit sector.

Lord Dholakia: My Lords, will the Minister give an undertaking that this matter will be brought back at Third Reading so that we may have an opportunity to reflect on the correspondence? As none of us have had the opportunity to grasp it completely, the discussion has been curtailed.

Lord Ramsbotham: My Lords, I am very interested and glad to hear the noble Baroness mention the briefing prepared for us by the Association of Chief Executives of Voluntary Organisations. It makes extremely clearly on behalf of the sector the point made by the noble Lord, Lord Wallace. Welcoming, as we all do, that the Bill has the potential to enable the professional third sector to play a much more significant role in delivering services to offenders—and hear, hear to that—ACEVO states:

One way of doing that is to:

We owe it to them to enable them to do their work on the Bill.

Lord Hylton: My Lords, I welcome the concept of having a model contract; that can be only helpful. I would, however, like to give some examples of the sorts of questions that will have to be dealt with. First, should NGOs—which are by definition non-profit making—be able to include what would

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otherwise be described as a profit margin to allow for the short length of contracts and to allow them to build up their own legitimate reserves and cope with the possible penalties they may incur as a result of having a contract?

Secondly, it will be important for private sector organisations to be able to build into their bid not only fair rates of pay for those who will be working for them but a quality service to the clients or customers of the service, while allowing that the private sector needs ultimately to make a profit. Thirdly, some quite difficult considerations may arise when probation services themselves are bidding. Will they, for example, be obliged not to put in a loss-making bid?

Those are examples of the kinds of practical problems that will inevitably occur. The Government may say that they will cover them in guidance, but another way of dealing with them is to have them as footnotes to a model contract.

Baroness Stern: My Lords, I have a couple of remarks on the important issues raised about contracting with the voluntary sector. I am particularly concerned about what it means for what I would call civil-society organisations. I am not talking about the big-business-like organisations that belong to ACEVO, write briefs to people in the House of Lords and know what they are about. I am talking about the small organisations that have a moral, ethical or religious reason for wanting to do something to make society better in their own way and for wanting to do something different—for example, people connected with churches who do circles of accountability with sex offenders. It is incredibly difficult work that only very dedicated people will do. There are organisations made up of people who used to be involved in abusing drugs who then want to help other young people to get off drugs.

In the world I used to inhabit—to which the noble Lord, Lord Judd, referred before leaving the Chamber—people like that got grants, because those who gave the grants were very grateful that those people were there to do what they did. No one else wanted that work or was able to do it. They were given grants and they accounted for them. A local person helped them with the business side to ensure that it was all done properly. It was a relationship where they were supported, encouraged, allowed to develop and given enormous gratitude. It seems that there is no place for people like that in the relationships and contracting which we have been discussing. Those people will never get to first base: they will not be able to fill in the form or satisfy the criteria. We will therefore lose them. A big concern about this market approach is that we will lose so many of the things that could make the lives of ex-offenders and of people in society so much better. I am very concerned about it and I hope the Minister will be able to respond.

Baroness Scotland of Asthal: My Lords, I say to the noble Baroness, Lady Stern, that we very much value that group of activists, individuals and collectives.

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Sustaining their commitment and giving them an opportunity to participate in a fair way is of great importance to us. Part of our work now is to understand better how we can make that activity more sustainable and easier for them and provide longer-term provision. The noble Baroness, the noble Lord, Lord Wallace, and other noble Lords will know as well as I do that sustainability was one of the difficulties facing the voluntary sector because of short-term contracts lasting just one year. I know that the noble Lord, Lord Hylton, was touching on the sustainability point in his comments about the need for footnotes to contracts.

I agree with the noble Lord, Lord Wallace of Saltaire, that it is important for us to come back to this. However, I should like to make a few remarks which I hope will be helpful. First, I apologise for not getting the agreements to the House more quickly. We did it as fast as we could. I could have waited until after today but I very much wanted noble Lords to have in their hands an example of the direction of travel. I thought that that might give some assurance that we were all thinking along the same lines.

As noble Lords will know, local probation boards have been operating since April 2006 in accordance with service level agreements—SLAs—which are agreed between the board and the regional commission acting on behalf of the Secretary of State. I wanted to send noble Lords the extracts so that they could have a taster of how they work. I shall look at further extracts to see whether I can send anything else in addition. I think that an example of the current service specification of offender management is helpful. As noble Lords know, the SLAs are not legally binding but represent an important step forward in the move to a fully commissioned environment.

As I am sure noble Lords are aware, we intend the first wave of probation trusts to go live in April 2008. At that point, those trusts will move from SLAs to legally binding contracts. The process of developing the contracts is now well under way and is taking the existing SLAs as the starting point. I emphasise that it is a starting point. As far as possible, we want contracts to focus on outcomes in order to free trusts and other providers to be more innovative in how they achieve results. We are gathering the specifications for each area of work, such as unpaid work, into separate contract schedules that will sit under a generic set of terms and conditions. Drafts of most of the required contract schedules have been developed but they are currently subject to legal scrutiny. I am not able to share them at this stage, but I hope that if they are ready at a subsequent point we might be able to do something about that. However, I will send noble Lords a list of schedules so that they can see what we have in mind. We are consulting probation chairs and chiefs throughout the process so that, when we reach a draft that is ready for consultation, we will be happy to make it available to the House and to noble Lords who have attended this debate.

I turn now to the specific contracts. I understand from the noble Lord that we can probably leave the specific elements of the amendment until the next occasion. First, however, I want to give one other

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piece of information which I hope will reassure the noble Lord, Lord Hylton, and the noble Baroness, Lady Stern, and give some comfort to the noble Lords, Lord Wallace and Lord Dholakia. We are constructing a demonstration project with Clinks. Here I should say that I hope the noble Baroness, Lady Stern, will agree that Clinks is a small, dynamic organisation which has demonstrated clearly what small groups of people with passion can do. Clinks will look specifically at how we can develop and sustain this part of the market—the small-scale voluntary sector which makes up 70 per cent of the market and has a real passion and commitment to this work. These local providers do not want to enter into consortia and do not form part of national providers. We want to capture that. Clinks has kindly indicated that it will help us with the demonstration project and we hope to get something of good quality out of it. I can assure the House that the whole process has been very consultative. We are pleased that various parts of the sector have come forward and generously and willingly helped us to recast and recraft the contracts in a way that makes better sense for them—and therefore better sense for us because we will then be able to help the people whom we care about in more meaningful ways.

Lord Wallace of Saltaire: My Lords, I thank the Minister for that reply and I thank all those who contributed to this helpful debate. I hope that we shall have time for some informal discussions on this issue before we return to the Bill at Third Reading. This debate has shown clearly the importance of thinking about local initiatives by local voluntary organisations. There are, among the subtexts of the debate, some who see England as a corporation in which strategic planners structurally change what has to be done from the centre and everything is done for profit. We all know that this is an area in which idealism and altruism are shown by dedicated individuals—often awkward sods doing things locally. However, they are the most innovative in finding ways of dealing with obstinate reoffenders, persistent and prolific offenders and others. That is what we wish to ensure is not lost as we move towards a mixed economy of this sort.

I wish that we had more information on how the Nordic states do this. I constantly regret the extent to which Ministers look at the American model of contestability and do not look at how well it is done in a number of European countries. They manage to maintain prison populations less than half the size of ours who are increasingly diverse in ethnic origin and so forth but without our levels of reoffending.

This has been a helpful debate and I thank the Minister for her generous response. I think the missive which I received was still warm from the copier when I opened the envelope. It was very much a last-minute affair and we need to reflect rather more on it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.15 pm

Baroness Anelay of St Johns moved Amendment No. 9:

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(a) its anticipated probation service needs;(b) from whom it proposes to commission services; and(c) the cost of those services.

On Question, amendment agreed to.

Lord Dholakia moved Amendment No. 10:

The noble Lord said: My Lords, the Minister is aware of my concern about the funding of voluntary organisations; this is not the first debate in which I have raised the matter. The amendment relates to the role of the voluntary sector in providing probation services. This issue was debated in Committee and I have taken into account the comments of noble Lords. The amendment I am proposing now has been redrafted for the purposes of Report stage.

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