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The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)
I thank the hon. Member for Glasgow North West (John Robertson) for a thoughtful, wide-ranging speech, and I welcome the additional comments provided by the hon. Member for Paisley and Renfrewshire North (Jim Sheridan). I venture to guess that my hon. Friend the Member for Warwick and Leamington (Chris White) was going to mention his valuable work on introducing the Public Services (Social Value) Act 2012, which I congratulate him on as well.
I turn to the comments made and the issues raised by the hon. Member for Glasgow North West in the debate today. I agree that charities play an important role in our society, and I take this opportunity to extend my thanks to the charitable organisations in this country that work so hard, and to those who work in them. They will be glad to see us taking these issues seriously in the House, and I know that there is much more that we must do.
I start with a general point that the hon. Gentleman will be well aware of. Matters pertaining to donations to charities in Scotland are, of course, devolved matters. He is nodding, and he will know as well as I do that it is for the Scottish Government to comment on those matters. Perhaps they have a clear idea of what they wish to do in the long term in Scotland about such things, but he and I can take that into a different debate any time that he wishes.
I turn to the broad issue of current donations and the health of the sector, which was raised in the hon. Gentleman’s speech and in reports a short while ago. Much has been said about the health of the sector generally, and I add that the picture is very mixed. Clear trends are not easy to discern at this stage. The evidence of recent reports from the Charities Aid Foundation suggests that charitable donations are down, while other evidence, such as the Taking Part survey commissioned by the Department for Culture, Media and Sport, finds that there is a slight increase in the proportion of people giving to charity. Similarly, the overall effect on the health of the charitable sector is unclear.
There are, however, grounds for optimism. Some reports suggest that the total income of registered charities has grown from £52 billion in 2009 to almost £59 billion now and that there are 2,000 more registered charities now than in 2009. Those figures are to be welcomed and cast an interesting light on the debate that we are having here today. What appears clear is that no one can say for certain whether donations are decreasing and certainly not at what rate. There is some debate in the sector about whether a decrease is what charities are experiencing on the ground.
We will need to wait and see if there is a clear trend in donations, but regardless of what trends emerge, it is also true that life goes on. We need to acknowledge that it is a challenging environment for charities and, clearly, for the people they serve. We should all make every effort to help the sector to raise money efficiently and effectively to meet the challenges, and that is exactly what we are doing. If the hon. Gentleman will allow me, I will go on to deal with a couple of ways in which the Government are seeking to play their part.
The hon. Gentleman referred to face-to-face fundraising, often referred to as chugging. That is certainly seen regularly in Norwich. Indeed, only recently I was corresponding with a constituent on exactly that matter. It is an important and successful method of fundraising, which can bring millions of pounds into the charitable sector every year, but I welcome the announcement in November by the Public Fundraising Regulatory Association and the Local Government Association of an agreed template for voluntary site management agreements as a way for local authorities to control chugging in their areas. I think that more than 50 site agreements are in place, with more being negotiated.
Much more is being done by this Government to support the sector, including by supporting a culture of giving both money and time—an important area of debate—by opening up new sources of income and finance through social investment or delivering public services where organisations decide that that is right for them and by providing wider support for the sector, thereby making it easier to set up and run a charity or social enterprise. All those actions support the health of the sector, either through increasing access to income of various kinds or through reducing costs and burdens, so that that income goes further.
The debate has focused on charitable donations, and perhaps the biggest help that the Government give to the sector is gift aid, which the hon. Gentleman went through in some detail. He will know that it is a matter for the Treasury. Although I used to be that Minister, I would not dream of going on to such territory here today, but he did mention his pride in chairing the debates in Committee on the gift aid small donations scheme, and I was the Minister responsible for much of the work on that and was deeply proud to be so, because it is a very good avenue of further help—up to £100 million a year, we hope—for the sector. I shall say more on that in a second.
I want first to deal with the administration of gift aid and ways in which traditional gift aid can be made better for the sector. My right hon. Friend the Chancellor of the Exchequer announced in the autumn statement that an examination would be carried out to identify ways to improve the administration of gift aid to reflect new ways of giving money to charity and, in particular, digital giving, to which the hon. Gentleman referred.
John Robertson
I accept what the Minister is saying. I have no doubt that she is right and I think that gift aid is a good idea. The problem is that the small and medium-sized charities seem to be suffering the most, and they do not seem to have the access to gift aid that the larger charities have.
Miss Smith
I shall be very happy to answer that, but first I shall take the other intervention.
Richard Fuller
On a similar note to what has been said by the hon. Member for Glasgow North West (John Robertson), rather than looking to reform gift aid, would my hon. Friend the Minister consider scrapping gift aid entirely and putting in place a system whereby people can make direct deductions from their taxation? If we want to create a culture of giving, nothing is better than letting people write a cheque to a charity. That is one way in which smaller charities would benefit, rather than having to go through the more cumbersome process of gift aid.
Miss Smith
My hon. Friend makes a fascinating point, and I am always very interested to hear his ideas, some of which I have time to debate at length with him in this Chamber. I shall ensure that that idea goes where it can be well considered.
In answer to the point made by the hon. Member for Glasgow North West, the instigator of the debate, I think that the most important way to help smaller charities is to reduce the costs and burdens associated with what the state can provide to charities. That includes what we did in Budget 2011, which made it clear that we intend to make it easier for charities to claim gift aid by introducing a new IT system that will allow charities to claim gift aid online and through, as I mentioned, the gift aid small donations scheme, which will allow charities of all shapes and sizes—we hope that it will be of particular benefit to small local charities—to claim top-up payments equivalent to gift aid on small cash donations of up to £5,000 a year, without the need to have gift aid declarations from donors. That scheme should commence in April of this year, and as I mentioned, it is expected that it will increase the amounts received by charities by about £100 million a year. It is my sincere hope that it will be put to very good use by smaller charities as well as others.
Jim Sheridan
Can the Minister confirm whether the figure of £750 million is correct and, if it is correct, how small charities in particular access it?
Miss Smith
If the hon. Gentleman will forgive me, I shall have to write to him on the figures because I did not catch the one that he was referring to. I will ensure that he gets the correct Minister’s response to the figure given. He does give me the opportunity to answer a question that was posed earlier: what happens to unclaimed gift aid? I think that both he and the hon. Member for Glasgow North West mentioned a £750 million figure in that regard. If they will forgive me for making a particularly political point at this stage, it is important to note that there is no such thing as a Treasury coffer that just sits there. There is no such thing as the Chancellor wishing to stockpile. There is every such thing as public spending, and if money that is within the public finances is not spent on one thing, it is spent on another. That is a very important point to note. I could also note plenty of other things that past Governments failed to do with public spending, such as control it properly, but I think that what is most helpful in this debate is to come back to the reasons why gift aid may be unclaimed. I want to return to that because I think that it is the constructive area for us to debate. We need to ensure that everyone who has a reasonable business claiming gift aid can do so easily, without costs and burdens.
I want to go on to payroll giving. The Cabinet Office, the Treasury and Her Majesty’s Revenue and Customs will come together to produce a joint consultation document on payroll giving in due course. I hope that that reassures the hon. Member for Glasgow North West on some of his points. We are further supporting giving at the top end by ensuring that people who donate at least 10% of their estate to charity will be eligible for a reduction in their inheritance tax bill from 40% to 36%. That is an incentive to help giving as well.
The hon. Gentleman suggested a number of other ideas to increase giving, and I am grateful for them. We will look at many of them; we will constantly look at this issue. We are making £10 million available to the Innovation in Giving fund. Many of the schemes use technology to further their aims. That fund will be delivered by NESTA—the National Endowment for Science, Technology and the Arts. In England only, I should note, the fund will find and support the growth of the most promising ideas with potential to create a step change in giving. That is something that we can all welcome.
In addition, the Institute of Fundraising, which is one of Government’s strategic partners, provides training and guidance to small organisations on fundraising issues. We are also doing much to support the giving of time and wider community action, such as through the National Citizen Service, which gives young people the chance to do voluntary activities, meet new people and put something back into their communities. We are supporting Join In, to encourage people to volunteer and get involved in local sports clubs.
We are also supporting the sector to find other forms of income. We launched Big Society Capital with up to £600 million. That is the world’s first social investment institution. We have provided support with a wider package of social investment measures. In addition, the Cabinet Office recently published guidance entitled “Making it easier for civil society to work with the state”, which brings together the range of reforms across the Government and the wider public sector. That is aimed at making it easier to set up and run a charity. Part of that is that charities and social enterprises should be able to shape and deliver public services.
We are doing much to support charities to work better, including finding sources of income, through the £30 million Transforming Local Infrastructure fund, to help 74 local support organisations to improve their performance in supporting front-line organisations locally. We have looked at the bureaucracy that frustrates charities and adds to their costs and expenses. We are making good progress in implementing the recommendations on red tape that Lord Hodgson made in 2011 and are undertaking a red tape challenge for the civil society sector.
I should like to make one brief point on the international aspect, which the hon. Gentleman’s comments very interestingly turned to. I am sure that he would welcome, in both the coalition agreement early on and yesterday’s mid-term review, the reinforcement of this country’s aim to give 0.7% of our GDP to development aid. That is an important way to fulfil the aspiration that his speech articulated, and we should not forget it.
The Government recognise that charities face a challenging time in the current economic conditions. We will continue to work with the sector to help them.
Question put and agreed to.