As part of its inquiry, the Committee held a roundtable event on 30 November 2016 in Cardiff with representatives of a range of small charities.
The following Members took part in the visit:
Baroness Gale, Lord Harries of Pentregarth, Baroness Pitkeathley and Lord Rooker.
They were accompanied by the following House of Lords staff: Matt Korris (Clerk) and Simon Keal (Policy Analyst)
The Committee met with:
The Chairman introduced the roundtable event, explaining to participants the purpose of the inquiry and the format for the session.
The participants were asked to discuss questions covering three themes: funding and accountability, volunteers and support, and governance and trustees.
There was discussion among the participants about the funding challenges many of them experienced. The Committee was told that the increasing role of charities in service delivery meant that they often found themselves in competition with each other, particularly when bidding for grants or contracts. Participants observed that the demand for the work of charities was going up, while money was going down—for example, some charity contracts did not cover the National Living Wage, core costs or pension costs.
Participants noted that short contracts for service delivery work made longer-term planning difficult for charities and that tendering for larger contracts limited the opportunity of charities to bid. They also said that public sector contracts were often accompanied by fixed delivery targets—in some cases with a duration of as little as 12 weeks—which were unrealistic for measuring meaningful outcomes when helping people in difficult circumstances.
The Committee heard that the requirements of commissioned work meant that charities were required to act in a more business-like manner. Participants said that some commissioners put pressure on charities to ‘toe the line’ in relation to advocacy and to avoid making controversial statements.
Attendees also discussed other sources of funding, such as corporate fundraising and the European Social Fund (ESF), and expressed concerns about the future of ESF funding after the UK left the European Union.
The Committee was told that the Welsh government had a compact with charities and that the relationship between government and charities was stronger in Wales than elsewhere as it was easier to get access to decision-makers. Participants said that the quality of consultation varied across local authorities, with some better at listening than others.
The Committee heard that volunteering was not cost-free, as volunteers had to be organised and co-ordinated. Participants said that in some cases, owing to funding restrictions, volunteers were being deployed where previously they would have used paid staff and in situations where beneficiaries would benefit from professional support. They noted that getting involved helped people gain work experience, but that charities needed to be careful about receiving ‘unwilling’ volunteers being sent to them by job centres.
Participants said that the Charity Commission was perceived to be overstretched and struggling to oversee, let alone support, charities. Some took the view that Wales would benefit from a separate Charity Commission as devolved services were seen to be more effective.
The Committee heard that participants had received support and training opportunities, as well as finance, from the Big Lottery Fund, Lloyds Bank Foundation and Cardiff Third Sector Council.
The Committee heard that charities found it difficult to recruit a diverse group of trustees. Participants said that there was scope for charities to be more proactive in recruiting trustees from a variety of backgrounds and with different skills. Concerns were expressed about the independence of charity boards in cases where the chief executive officer had effectively recruited most or all the trustees.
Participants said that there could be a complex relationship between trustees and staff members, especially in small charities. In some cases, staff could end up managing the board, raising questions of independence. It was suggested that negative coverage had ‘frightened’ some trustees, and that they had become risk averse, although others said that trustees could also intervene too frequently in day-to-day management.
Attendees suggested that one way to recruit new trustees might be to set a time limit for their service at the outset, so they knew they would not be expected to make an ongoing commitment. This would also reduce the likelihood of multiple trustees leaving simultaneously. Some participants suggested that paying some trustees might reduce charities’ dependence on retired people to fill the roles.
Following the discussion on the above themes, the Chairman invited attendees to divide into two groups to discuss their ideas for key recommendations that the Committee might make in relation to its inquiry.
The groups noted that:
The participants recommended that: