Baroness Royall of Blaisdon: My Lords, I am grateful to my noble friend Lord Boeteng for enabling this debate. It is especially important when all services are under immense and increasing pressure, due to a combination of cuts and increased demand. As noble Lords have said, this is a crucial time for decisions about the future of public services. I have always strongly believed in partnerships between local and national government and the private and voluntary sectors. For too long and for too many people, the goal was to move away from public services, notwithstanding their

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quality. What might be called the G4 moment at the Olympics removed ideological blinkers, so that once again quality and value are to the forefront. Quality and value—not just for money—must be the key. The Public Services (Social Value) Act is a significant step forward and should ensure that the additional social, environmental and economic benefits that an organisation provides will be taken into consideration when a contract is being awarded.

There are superb voluntary services in our country, which are innovative catalysts and add value, on which millions of often the most vulnerable depend and without which society would crumble. They are often community based, with real knowledge of, and a stake in, the community that they serve. However, the systems are complex and commissioning needs improvement, as so many noble Lords have said. I ask the Minister what the Government are doing to ensure voluntary sector involvement in the commissioning process. While it is right that charities should be enabled to deliver public services, they should not have to fill in the gaping holes which are left up and down the country as councils withdraw from certain services because of budgetary pressure. Many councils do a brilliant job and, with vision and innovation, provide or commission new ways of delivering services. However most have now made all the cuts that are possible without severely impacting on the citizens they serve. It is the voluntary sector that has to pick up the pieces when their own income is being cut.

Too often charities have to shoulder burdens caused by a shrinking state. As Sir Stuart Etherington, the NCVO’s chief executive, has said:

“Often it is charities, that are best placed to provide this specialist support and we are urging the Government to make a number of changes that would enable charities to play a fuller role. We know from our own research that charities are working extremely hard to service even the hardest to help, often by having to dip into their own reserves”.

Many noble Lords, including my noble friend, mentioned the Compact Voice report, which found that up to 50% of local authorities are cutting grant funding to the voluntary sector disproportionately. I hope that the Minister will not say that it is not a matter for the Government but for local authorities to choose how to spend their money. That simply would not do. Devolution of responsibility must not be dereliction of duty. Partnership working is crucial and one of the things we are trying to do in the Forest of Dean is to provide a comprehensive and seamless system of social care with our local NHS community services and community hospitals, working with Crossroads Care and other charities which are delivering services but wish to do more. However, as noble Lords have said, it is difficult for small charities such as the ones with which I am involved, like Forest Sensory Services, to get involved. The system is so complex and is devised for bigger charities.

The noble Lord, Lord Adebowale, spoke of the social care sector. Many public services currently delivered by the voluntary sector relate to vulnerable, marginalised and disadvantaged groups. The work is often not valued and salaries have historically been lower than they should be. We live in difficult economic times, when organisations and individuals are hurting, but I

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trust that the Government will do all they can to promote the living wage. Apart from being the right thing to do, it is a means of cutting back the budget for working tax credits. I am proud that 19 Labour councils now pay the living wage and many also ensure that those with whom they have contracts also pay the living wage. A living wage brings dignity and we have to raise the esteem we have for those who work in caring and other community services. Of course, many people in the voluntary sector are volunteers and we could not exist without them. A recent WRVS study showed that older people who volunteer are less depressed, have a better quality of life and are happier.

I close by celebrating the fantastic contribution that the voluntary sector and volunteers make to our society. As we look at the future of public services there is so much more to be done and we must do it.

8.59 pm

Lord Wallace of Saltaire: My Lords, this has been an excellent debate and I look forward to many more on this theme. I thank the noble Lord, Lord Boateng, enormously for the way he introduced this debate. This is a cross-party and cross-government issue in which we are attempting to go through a major cultural change in the way in which the state, centrally and locally, delivers services in partnership with the voluntary sector, rather than simply as a contractor of it, as a number of noble Lords have said.

I am interested that no noble Lord has cited the new report from Social Enterprise UK, which contains some sharp language which I am sure that the noble Baroness, Lady Royall, would welcome, on the dangers of ending up, through outsourcing, with a private oligopoly of firms that are too big to fail and have a stranglehold on the outsourcing sector. The Government are aware of that, and a great deal of what we are now attempting to do is to make it easier for smaller enterprises and those which do not have the financial reserves and the skills to prepare complex contracts successfully to achieve a relationship with government. The Commissioning Academy is now getting under way, training central officials to simplify the contracting process between government and the voluntary sector, thus advertising small contracts available on government websites to make it easier to find out what is going on.

This is, of course, a long-term development and, in some ways, a revolutionary development. We are now admitting that we have a limited government and that we cannot provide for our society everything that is needed through the state itself.

At a meeting in Paris, I sat between one of my party colleagues in government and a senior French Minister. He was saying, “We share a similar set of problems. We in Britain are spending nearly 45% of our GDP on public services; but you are spending 55% of your GDP on public services”. I thought, “That is a very important gap”. Part of the problem that we all have—the previous Labour Government faced this—is that we have a public who resist paying higher taxes but want better services. That is a problem that is going to get worse in the next 10 to 20 years because our older population is growing. The possibilities of what one

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can provide in social care and healthcare are rising, so the pressures are intense. We have to find ways of providing a mix of state and voluntary services which can provide the quality that we need.

We hope that we are moving toward real partnership. Even there, I have to say that, as we are accounting for public money, and we are having to contract out public money, the question is how one achieves a balanced partnership where the state is paying and the Daily Mail is looking over the state’s shoulder to see whether it is spending the money properly. That is a relationship that we will have to learn about as we go on.

As we all know—I certainly remember from when I was a politician in Manchester—there is deep suspicion among large local authorities of the volunteer and the amateur. Only the full-time council employee could be trusted to do things. That is part of what we need to change. We also recognise that there is a deep problem in London. A lot of people in London—politicians, journalists and officials—do not really believe that people in Birmingham, Manchester or Leeds can be trusted to do things on their own. Manchester, Birmingham and Leeds are very large local authorities and, in their turn, do not trust some local enterprises which really understand what is happening in parts of Leeds or Bradford to begin to deliver the sort of public services which are needed.

As has been said by several participants in this debate, the voluntary sector is often best when it is small and local. The noble Lord, Lord Mawson, spoke about those teams of local players, and I think that he meant personal relationships. That is fine, but it does not fit the model of state provision of services. We have to find ways around that. The noble Lord, Lord Boateng, and others talked about giving instructions to local government. If we believe in pursuing the localism agenda, we have to encourage local government rather than sending the sort of mass packs of instructions that Governments have tended to do over the past 25 years or more. We have to encourage them to go in for community budgeting—double devolution, which the previous Government and this one have also talked about. We have to recognise that our city local authorities —Birmingham is larger than several European Union member states—have to be encouraged to push things down from the local authority level to the communities below them.

This is a set of challenges for the voluntary sector as well. As the noble Baroness, Lady Stedman-Scott, and others have said, a lot of social enterprises and charities do not have the skills needed to get into these large procurement exercises. The charities I have been involved in lacked accounting and legal skills. We have had to learn by packing the trustees and getting accountants and lawyers to provide their services pro bono. If you are going to be getting into contracting with the Government you need a certain level of contracting skills and that, again, is something which the Government are experimenting with as we try to simplify the contracting process.

Working relations with social entrepreneurs, as the noble Lord, Lord Mawson, knows well, are never going to be easy. The way in which states have to

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operate does not easily absorb the individualist—the entrepreneur—who wants to do things in an entirely different way. We have to live with that tension and we have to do our best to make it work. Although I recall with some amusement being told that various government departments have wanted to replicate in other cities in England what the noble Lord, Lord Mawson, has achieved in east London. They have worked on this but not quite found the right non-conformist Ministers to lead it. It is again part of the problem with the voluntary sector which requires determined individual leadership.

The Government are pursuing a partnership with the voluntary sector. We are learning as we go forward. We are experimenting, as the noble Baroness, Lady Barker, said, with new forms of financial assistance and support. We are very conscious, for example, that in one or two cases social enterprises have failed in bidding for government contracts because they could not demonstrate that they had the financial reserves to guarantee that they would be able to carry out the contract through a particularly difficult period.

We all hope that the Public Services (Social Value) Act, which is just about to come into operation, will help a great deal although estimating and calculating social value and standing up to the Public Accounts Committee asking you whether your department did deliver social value may not entirely be an easy thing to do. I am also engaged through the Cabinet Office in Civil Service reform. Getting officials out of their offices and changing the ways they think about the sort of services they are delivering again is part of this whole process. The voluntary sector, in turn, also has to adjust.

I was fascinated to hear the noble Baroness, Lady Barker, talk about a period of turbulence. In political science there is the phrase “creative destruction”. I fear that what she is suggesting is that some charities

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will fail to make the grade and others will come into greater prominence. However, when one looks at the figures of turnover in the number of charities registered with the Charities Commission one realises that this is a continuing process. Charities die; other charities come into effect.

The noble Lord, Lord Best, said something extremely interesting about housing associations. A couple of weeks ago a good friend of mine who has just retired from a big housing association was making almost exactly those points. Housing associations have the funds, the presence and the weight to be able to do a lot of things that smaller and more fragile bodies cannot. I think that is a model we all need to take on board. Housing associations can actually do broader things within the local communities of which they of course form a part.

We are learning as we go along. The Government and the voluntary sector know that this is a long journey. We will be publishing tomorrow a new document about making it easier for civil society organisations to do business with the state. I think it will address some of the issues that the noble Baroness, Lady Tyler, raised in her speech. This is of course part of a process whereby we hope to be building a better and easier relationship with the voluntary sector. It would be much easier if the economy were growing at 2% to 3% a year but, in the circumstances where the economy is not growing, we all hope that in two or three years’ time that will be the case. Our aim should be a plurality of social enterprises, charities and others working with local government and with agencies of national government to deliver the quality of services which we need in an increasingly difficult environment, with an older and more diverse society. That society will be coping with a very large range of different challenges.

House adjourned at 9.10 pm.