Community and Voluntary Sector Funding

Tuesday 24th November 2015 Westminster Hall

[Mrs Madeleine Moon in the Chair]

14:30

[Naz Shah (Bradford West) (Lab)]

I beg to move,

That this House has considered funding for the community and voluntary sector.

It is a pleasure to serve under your chairmanship, Mrs Moon. I welcome the presence of the Minister, who will respond to this debate.

Given the value that the charity, community and voluntary sector adds to the communities we represent and the incredible services that it provides to our constituents, such as mine in Bradford West, it is fitting that we debate this important issue as the sector faces difficult and economically challenging times and increasing user need. We are on the verge of another round of Government spending cuts, and in many places the cuts have already done irreparable damage to the community and voluntary sector. There have been many changes over the past five years to grants, commissioning and procurement for small, medium and large charities. Many should have offered a lifeline to vital projects in our constituencies in the face of austerity, but the reality is that they could not.

The previous and current Governments committed to reforming the voluntary and charitable sector and helping it to be buoyant at a time when it was most needed. The big society project translated to commitments made in this House, but in reality little progress was made in communities that saw funding falling, grants drying up, short-term procurement opportunities, increasing costs and plateauing revenue streams. We have seen projects and charities that provide innovative services and important community projects close and others struggle to stay afloat. By and large, the charity sector has tried to adapt to the challenging economic environment, but we should create a culture in which it can thrive and serve, because there are intangible and immeasurable benefits to the services it provides. I believe that all parties recognise that fact, but are the Government giving it due consideration?

On procurement, a recent study by the National Council for Voluntary Organisations on the financial sustainability of the sector showed that since 2009 there has been a £2.3 billion reduction in Government contracts, and that the sector faces a £4.6 billion annual shortfall by 2018-19 in the funding it needs to maintain its current level of service. The simple fact is that the need for charitable services is increasing, as demonstrated by a report published by the Charity Finance Group in December 2014, which showed that more than 70% of charities expect demand to increase. We have to recognise that, if we are to maintain the same level of services, we must take action now to ensure the long-term sustainability of the community and voluntary sector.

[Dawn Butler (Brent Central) (Lab)]

I congratulate my hon. Friend on securing the debate. On the issue of sustainability and the need for charities, I want to mention two charities in my constituency. First, given that this will be the coldest and longest winter in 40 years, the services that Energy Solutions provides to the community are essential. Secondly, although World AIDS Day is coming up on 1 December, the Community Health Action Trust has had its funding cut, which means that it can no longer serve the community and test people rapidly for HIV, which is on the increase among heterosexuals.

[Mrs Madeleine Moon (in the Chair)]

Order. I ask that interventions are interventions, rather than mini-speeches.

[Naz Shah]

My hon. Friend the Member for Brent Central (Dawn Butler) makes a valid point. We are seeing that theme across the country.

The £2.3 billion reduction in Government funding is interesting. It will come through a number of streams, because the third sector has a symbiotic relationship with many Government-funded organisations, not least local councils, whose budgets have been decimated by austerity. However, the wider point is that the Government have been unable to build the third sector’s capacity to apply for more complicated contracts through increasingly complex and larger tendering processes.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate my hon. Friend on securing this timely debate. The Government talked about a big society, but they really meant a smaller society. My hon. Friend touched on an important point. A lot of local authorities procure services from the voluntary sector—particularly from citizens advice bureaux, and I am sure from a lot of other organisations. In a time of austerity, people badly need those services. They cannot get legal aid any more for a whole range of issues. Does my hon. Friend agree that that is an injustice perpetrated on society?

[Naz Shah]

I absolutely agree. I will come on to talk more about the big society—or the failure to have a big society—and what should be done.

The coalition Government and this Government concretely demonstrated their commitment to tendering provisions for the VCS sector when they embraced the Public Services (Social Value) Act 2012. They have attempted—I use the term loosely—to reform public sector procurement to benefit VCS and social enterprise groups through their open public services approach. However, the reality on the ground is quite different. According to the National Audit Office, income from the Government to deliver contracts decreased by £1 billion in 2012. Its report shows that the biggest private sector contractors’ market share increased, and in 2012 charities lost almost £886 million in contracts, while the largest providers’ income grew by £551 million. That is unacceptable.

Those are not new statistics, and the problems are not new. There has been a lack of solid progress since the 2012 Act was enacted. The Government backtracked and kicked their commitment to transparent tendering into the long grass. They tender contracts that are far too large for the majority of VCS organisations to bid for; they put unrealistic timescales on the bidding process, which works in the favour of the larger private companies; and the calculations of cost value per unit still fail to consider the social value added by VCS organisations. Those issues are magnified by the financial pressure that all VCS organisations are under. Many have adapted and risen to the challenge of maintaining a similar level of service by innovating and raising finance elsewhere. The Government have failed to give due consideration to how charities can build the capacity that will give them the necessary skills to bid for contracts.

There has been a massive shift away from grant funding, which was more discretionary, to contract-based services, which are far more rigid. Without flexibility and financial stability, VCS organisations are unable to innovate—not in their front-line service, but in their capacity to bid for large contracts against private companies. I am extremely interested to hear how the Government will address that capacity shortfall to ensure that those who are doing the best, most valuable work are capable of applying for such contracts.

I used to issue health action zone grants. As a former NHS commissioner, I have seen at first hand how the voluntary and charitable sector developed, and how the Government strangled the ability of smaller organisations to thrive and meet the demand in their communities. Until recently I chaired a large mental health organisation, which, as a large organisation, was in a privileged position. We were able to ensure that we could survive. That is an example of the inequalities that are created by the Government’s stance on voluntary sector funding.

A further issue that must be addressed today is the Government’s longer-term strategy to devolve discretionary business rate exemptions for the VCS sector and charities. As the Minister is aware, there is currently an 80% mandatory business rate relief for charities, and the other 20% relief is provided at the discretion of local councils. Councils are already suffering incredible pressure on their budgets and are struggling to offer the full rate relief that is important to large and small VCS organisations. That 20% can be the difference between keeping services going and their having to close altogether. The situation made difficult by the uncertainty about the future of the rate relief and the expected full devolution of council tax control to councils.

It is essential that we give small charities all possible support so that they can continue to provide services to our constituents. It is imperative that the Government issue a long-term strategy on rate relief. Ideally, they should help councils to offer full rate relief to all charities for the foreseeable future. Given that more of the financial burden has fallen on councils in areas of higher deprivation, such as my constituency, it is not fair that yet again the Government are not supporting the communities that have the most need.

Recently, I was invited to address an event in my constituency organised by the Blenheim Project, which helped local women and their children who were made homeless and vulnerable due to domestic violence. I heard moving testimony and stories from those who had received invaluable support from the project and who, as a result of that help, managed to live not as victims but as active and productive citizens. Breaking the cycle of homelessness is the most cost-effective approach in the long term and has benefits for communities and for the economy as a whole. I heard from one woman who stayed in the project as a young child with her mother after they finally had to leave home. She continued to enjoy security at the project even though it had been taken away from her at home. That young women went to university and is now working and contributing to society. She is just one example from thousands of similar stories about the importance of receiving that much-needed support.

However, the event was not held to celebrate the Blenheim Project moving forward or developing; it was to celebrate the project’s achievements upon its closure due to funding cuts. It was sad, because I know the value and appreciate the benefit that the project added to my constituency and community, reaching places and people that others could not. As someone whose life has been shaped immensely by the voluntary sector, both as a service user when facing difficulties in my own life and when I worked in it as an employee, I am devastated at the loss of the project’s beds. Let me be clear: one bed space literally means the difference between life and death for some women. Where I come from, one death is one too many.

The charity had 37 long years of hard work, supporting hundreds of women and providing exceptionally high-quality support to prevent women and children from becoming permanently homeless. It had proved itself successful, but could not find a sustainable financial platform despite offering a service that others could not, and for a modest sum when all its intangible benefits are considered. If it was not the definition of a public good that we in this House should protect at all costs, what is?

The pressures of the funding cuts brought about by the coalition Government’s austerity measures and increased by this Conservative Government cut to the heart of our communities. They disproportionately affect northern councils that have some of the poorest wards in the country. The funding cuts have propelled councils to rationalise and reconfigure services to meet demand and support vulnerable people, but the impact on service delivery continues to hit the most vulnerable indirectly, and initiatives such as the Blenheim Project are falling victim. The VCS is known to provide high-class services to people and communities who often get missed by mainstream services, but this Government believe that that does not carry a price tag, as we have seen from their so-called big society pronouncements in the past.

The changes in funding, which have required the development of new commissioning and VCS frameworks, have made it impossible for projects such as Blenheim to continue providing the quality support that they know women and children need. The new reality in funding and commissioning arrangements makes many successful small charities unsustainable. Small to medium-sized local charities face challenges due to the drive towards commissioning processes that seek to maximise outputs on the same resources. The tendency for bigger charities to drive down costs as loss leaders in the first instance makes the option of tendering for contracts unsustainable. Smaller charities do not have the resources to invest in future developments, never mind taking on projects as loss leaders as part of a wider strategy. In a statement, the Blenheim Project said:

“Due to pressures in funding Bradford Council can no longer support as many homeless people as before and have drastically reduced both the number of places they will fund and also the level of funding”,

which would no longer be adequate for the services that the project offered. In addition, the council took away the project’s ability

“to assess the needs and risks of the clients”

for itself.

Only a few hundred yards up the road from the Blenheim Project used to be another project, the Manningham Mills Community Association, which has also bitten the dust. Another community has been robbed of a vital resource due to funding cuts and belt tightening. For me, however, there is belt tightening and there is just strangling a community. What the Government are doing is a shameful indictment of how out of touch they are with the communities they are supposed to protect.

[Chris Davies (Brecon and Radnorshire) (Con)]

The hon. Lady is making a generalisation—it sounds as though the whole of the third sector had disappeared. I met the Powys Association of Voluntary Organisations, my local third sector governing body, just last week at its annual general meeting. Everyone would like more money, but such organisations are striving to succeed and still doing an extremely valuable job. I regret the fact that the hon. Lady is making it sound like the third sector has vanished.

[Naz Shah]

I thank the hon. Gentleman for that comment. Although I agree that the third sector is doing a valuable job and is working hard, if one considers the Tory Government’s proposed £300 million-plus cuts to the Big Lottery Fund, which I will refer to later, that will put my comments in context.

In communities such as my constituency of Bradford West, where more than 26% of children are already living in poverty, the average weekly wage is more than £110 less than the national average. In another ward in my constituency is a specialist project catering for black and minority ethnic women fleeing violence, which would have soon closed due to pressures facing the local council were it not for the intervention of the Big Lottery Fund, the input of which in my community is literally life-changing. Across my great city there are many other examples of the axe falling heavily, and all of them have a few things in common. They are smaller VCS organisations, providing vital services and lifelines to those most in need of support and plugging the gaps where statutory services are not delivering strongly.

The Government are making it harder to secure grants and funding at a time when demand is increasing and capacity is already stretched to maintain current service levels. The top-heavy austerity measures and the slashing of Bradford council’s budgets by almost half by 2020 have led to a short-termist view, wholly created by the Conservative Government. Whereas councils were previously able to take long-term views on VCS funding, the parameters of that work have now been narrowly defined. The money available has been restricted to reduce costs, there has been a drive for efficiency and to obtain ever-increasing best value, and a reduction in unit costs has led to the likes of the Blenheim Project being placed in vulnerable positions. The situation is set to get significantly worse and have an impact on other areas of the VCS and charitable economy.

The Government fail to realise that much of local government, the NHS and the third sector operate in a symbiotic relationship, helping to create a robust mechanism to meet needs across the board. Taking out the third sector or reducing its ability to operate under financial strain will have an impact on the drive to reduce admissions, promote self-care and increase community capacity for home care and the promotion of health. We are only storing up problems for the future. Saving money in that way is a false economy.

Along with the provision that we have lost due to charities such as the Blenheim Project closing, the Bradford district has lost expertise and the ability to reach out to places and groups that need help. The project closed its doors at the end of September 2015 after 37 years of supporting hundreds of vulnerable, homeless women and children. As a result, Bradford has lost jobs and 17 rooms for vulnerable people, and wider community involvement and community development has ended. A successful church community project has closed, leading to the loss of valuable expertise that knew its community exceptionally well. There are many other such cases across Bradford, and the picture is repeated in constituencies across the country. It is not unique to Bradford West.

My final point is about potential cuts to the Big Lottery Fund. We have been hearing reports of a 30% reduction, with the money being used to cover a hole in the finances of the Department for Culture, Media and Sport equating to between £300 million and £320 million a year. If true, that will be devastating to VCS organisations across the entire country. I will use the example of my constituency to illustrate just how damaging the loss of 30% of grant money would be to small organisations, in particular small charitable projects. Since 2014, the fund has commissioned 466 projects in my constituency to the tune of £4.9 million, almost 90% of which were for under £10,000. It is an amazing array of projects, targeting some of the most vulnerable and the most in need. From that alone, we can see how a reduction in grant awards would decimate the small community projects that can have transformational impacts on people’s lives as they often concentrate on specific, niche needs. The Anah Project in Bradford is only there because of the Big Lottery Fund. Furthermore, as I said, we have seen changes to the awarding of grants, a lack of capacity in the VCS to apply for more complex funding and the loss of funding from struggling local councils. In all, plainly, the big society appears to be even more hollow than first feared.

Unlike the Government in their approach to communities such as mine in the north, the Big Lottery Fund does not discriminate. It gives out funding to individual projects, based solely on the value they add and, most importantly, on need. We could face a betrayal not only of the great work that individuals and organisations do in the community with lottery funding, but of the members of the public who elected this Government. Many will feel that the Government are overstepping the mark if they backtrack on the principle of the additionality of lottery money, which has been reiterated time and time again by successive Governments. The money is there for the community, not for this Government or any Government to plug holes in their funding.

I want assurances from the Government that they are considering the long-term implications of their decisions and the pressure that they are putting on the VCS. More has to be done to tackle the inequality in procurement and the manner in which contracts are decided if we hope to be able to retain some of the most valuable and innovative community engagement work across all sectors in the foreseeable future. Charities and voluntary organisations need to be able to plan their funding and projects on a longer-term basis. The Government not only have a responsibility to help build capacity in the third sector through investment, but they also need to give assurances on the unknown costs by making critical decisions, such as on council tax relief for charities. Ultimately, the Chancellor must not use the Big Lottery Fund to act as tape to cover up poor financial planning in central Government. As John Major said, lottery money is from the people for the people.

[Mrs Madeleine Moon (in the Chair)]

Given the number of Members who have indicated their wish to speak in the debate, with the authority of the Chairman of Ways and Means I impose a time limit of six minutes on Back-Bench speeches.

14:51

[Michelle Donelan (Chippenham) (Con)]

Thank you, Mrs Moon.

I commend the hon. Member for Bradford West (Naz Shah) for the subject of the debate. I am extremely passionate about it because my constituency has some of the highest rates of volunteering in the country; more than 1,500 voluntary opportunities are being advertised there at the moment. Volunteering is deeply embedded in the fabric of the Wiltshire community. In fact, it is the very glue that binds it, filling the gaps left by the state. Voluntary organisations are essential for those two reasons and I welcome the Government’s support for the sector, although I encourage them to protect and support its work further.

Given a ballooning state, a huge deficit and an ageing population, the truth is that we will not be able to sustain the existing model and will be unable to continue providing all the levels of service that we have now. We will need to look to the voluntary sector for more and more, so it is imperative that we support and strengthen the industry today. In addition, as the hon. Lady said, charities save the state money in the long term.

For example, Wiltshire Mind, which is based in my constituency, receives no Government funding, but even the Avon and Wiltshire Mental Health Partnership NHS Trust acknowledges the charity’s vital work and how it reduces pressure on services. Alzheimers Support and the Alzheimer’s Society are prime examples of charities that achieve better outcomes than many state-run organisations, because they are specialised in their sector. Volunteer centres act as pivotal hubs, promoting and filling roles, and they often excel at rehabilitation of ex-offenders and back-to-work programmes.

As we all know, the recession has hit the voluntary sector hard; its total income has fallen in real terms every year since 2009-10. That is because of not only the reduction in Government spending, but the reduction in giving—an obvious symptom of recession. The National Council for Voluntary Organisations estimates that the rate of giving fell by around 10% during the recession, and it has still not recovered. Individuals are the voluntary sector’s single biggest source of income, hence the impact.

Funding is not the only issue, and that is the point that I want to labour. We also need to encourage volunteering, especially among the young and the elderly. In 2014-15 47% of adults in the country did some form of informal or formal volunteering. Informal volunteering is most prevalent among 26 to 34-year-olds and formal volunteering among the young—those of 25 and under. That means that a huge number of people in the retired sector with time and expertise who could get involved. Volunteering would also help some of them to ward off loneliness and other such attributes.

[Martin John Docherty (West Dunbartonshire) (SNP)]

I recognise some of what the hon. Lady is saying, but does she recognise that such volunteering activity requires investment? It does not come for nothing.

[Michelle Donelan]

Exactly. I am trying to make that point and will continue to, but I am also saying that we can throw money at things, but it is not only a case of money—we must also promote the voluntary sector to ensure that we have the volunteers for tomorrow.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

I completely agree with my hon. Friend. Carers’ organisations also recognise that the issue is not only about funding, but about the freely given caring provided day in, day out by carers to their families up and down the country.

[Michelle Donelan]

I agree. I am very much involved with the carers’ organisation in my constituency and I completely understand that point.

We need to go further to encourage and enable more people in long-term unemployment to go into volunteering schemes. We already do that, but we need to work more closely with volunteer centres to ensure that it happens more. There is a lot of concern about the loss of benefits to volunteers, so there is much work to do there.

We need to invest to encourage more young people to volunteer as well. Some fantastic work has already been done, such as that of the National Citizen Service. It is important today to focus not only on the negatives, but on the positives. Seventy-five thousand young people have changed their lives and got involved in their communities through the NCS. We should take note of the things that are working as well.

[Anna Turley (Redcar) (Lab/Co-op)]

I share the hon. Lady’s positive view of the NCS and its good work with young people. At the same time we are seeing huge cuts to youth services across local authorities and the NCS works with a fairly small number of young people compared with the great majority who can access mainstream services. Does she not think that the cuts to local authorities also impact on young people’s preventive services?

[Michelle Donelan]

The cuts to youth services are for a totally different debate, because they are not purely about volunteering. There is a vast variety of youth services depending on the different areas and models involved. There is also the question of replacement: in many areas, including mine, the council has worked closely with the community to offer a replacement service that is the most cost-effective and efficient for the people using it.

In addition, the Government are providing funding for campaigns such as the national Step Up To Serve #iwill campaign, which aims to make social action part of the lives of as many 10 to 20-year-olds as possible. More remains to be done, however, and I am quite shocked that there is still no formal encouragement in respect of the value of getting volunteering into schools, through things such as voluntary placements. We have always had a system of work placements, but there has never been a system of voluntary placements as a formal mechanism in the UK. I have approached my local volunteer centre about the issue, and we are trying to do something with willing schools in my constituency.

We need to change the ethos and encourage more businesses to allow voluntary days, which would build on the Government’s initiative on that. There have been other great investments, which we should not fail to mention, such as Big Society Capital, tax relief for social investment, social impact bonds and £70 million for social investment in the investment and contract readiness fund.

[Dawn Butler]

In addition, business rate relief for charities is worth £1.7 billion. Does the hon. Lady not think that they should be excluded from the Government’s plans for rate relief? Those plans will hinder charities’ ability to provide services to the community.

[Michelle Donelan]

That is one thing we could look at, but it is not the only thing, as I shall get on to in the rest of my speech.

More needs to be done and it is time we looked at gift aid in particular. On average, the charity sector loses almost £1 billion a year from people not opting into gift aid. Perhaps we should not only promote it more as a mechanism, so that people understand it, but look at the logistics of having an opt-out instead for the working population. That might be one solution.

When compared with the state, charities are often far better placed to deliver services and value for money, as well as being far more knowledgeable about those services. The charities also provide specialised local knowledge and learning for volunteers. Young people can gain skills and a preparation for life and employment, while older volunteers can impart their own knowledge and reduce the training burden carried by charities. Charities may also reduce demand on the NHS as people stay active and healthier during volunteering. There are thousands of voluntary organisations in Wiltshire that bring in money from inside and outside the county in addition to Government funding.

While central Government may be able to replicate the functions of a local charity in part, that is not sustainable. That also does not take into account the unseen costs of not funding those charities, such as the loss of expert knowledge and the unquantifiable but large wider social benefit that community charities provide. I welcome the Government’s recent initiatives, but I urge them to go further. The reality is that we will need to rely more and more on the voluntary sector in coming years, so it is imperative that we support and promote it today.

15:00

[Susan Elan Jones (Clwyd South) (Lab)]

It is a great privilege to serve under your chairmanship, Mrs Moon. I am not sure whether this requires a declaration, but I am co-chair of the all-party parliamentary group on civil society and volunteering, which is administered by the National Council for Voluntary Organisations. I put that on the record; I might have got into trouble if I had not.

Six minutes is not a lot of time to talk about this. As it was in 1601 that the Charitable Uses Act came to this House, we have been discussing charities and their development for the past 414 years. In England and Wales, we have got about 180,000 registered charities and there are probably as many again that are not registered. Charities have a combined income of £40.5 billion a year, similar to the figure for 2006. Of that, £13.3 billion is from Government sources, down £1.7 billion since 2010-11, and 83% is from contracts. Many of those points were made most eloquently by my hon. Friend the Member for Bradford West (Naz Shah), who spoke magnificently at the start of the debate.

Wherever we stand on the ideological spectrum, we all know that the public sector cuts will hit hard, so I will put in a plea for the charities’ old block grants. I know the history of contracts and the rest of it, but, as well as providing value in terms of simplicity for smaller charities, they also deal with capacity building. The core funding can and should be monitored. Indeed, when I was a manager of a small charity in London, I think I faced a lot more monitoring than Kids Company did for its multi-millions. That should be looked at, because it would enable those charities to develop and grow in funding and capacity.

It is right that controversies and indeed slightly dodgy fundraising practices are looked into, and it is right that we are considering those issues in the Charities (Protection and Social Investment) Bill. I, for one, will welcome the development of a fundraising preference service, but we know that charities need to raise money and always have needed to. We have seen that throughout our history, whether it was Dr Barnardo or those lesser known and less wealthy philanthropists such as those individuals and families who, in Victorian times, ensured that orphaned, destitute and illegitimate children became part of their family. They did not have the money or get the big plaques, but they were part of that bigger society.

To look to the new generation, I agree wholeheartedly with the hon. Member for Chippenham (Michelle Donelan) that we must look again at gift aid. I suspect that many of us make direct debits and the like and sign the little gift aid forms in the old-fashioned way. However, there is a new generation out there. Demos, in its “Introducing Generation Citizen” report in 2014, made the point that 13 to 19-year-olds have a real desire to help others through social action. Of course, many younger people do donations by text, so we need philanthropy for a modern age and a new generation of givers. Think, indeed, of Stephen Sutton and how crowdgiving led to more than £3 million for a charity in a year—that is a phenomenal legacy from a phenomenal life. Cancer Research UK’s no make-up selfies raised £2 million for charity and received more than 800,000 donations by text.

We know the history of gift aid and as a society we should be proud of how it has developed and increased, but surely it is time to look at making it automatic for text donation. The Government must look at that. We made the point in the Small Charitable Donations Act 2012—this is not for gift aid, but it is similar—that charities can automatically claim back on a gift from an unknown donor, so I hope that the Minister will look at that.

We are looking at our communities and discussing the charities and community organisations, which I think reflect the diverse aspects of Britain: the different societies; the wealthy philanthropists; the miners’ welfare organisations; the Churches and other faith groups; and a whole series of initiatives.

Let us not forget that the NHS did not start off as a national, state-sponsored health service; it actually began in small communities where people had ideas. When we talk about the divisions between voluntary sector and state and private sector, we forget that often a good idea is piloted in the voluntary sector and people think, “This is good. We will have a bit more of this and then we will do it locally or nationally.” At the heart of the debate, we need to look at funding and where clear problems are caused by the funding cuts, but we need to be innovative and pluralistic and celebrate that work. It is not that we want a big state; what we challenge the Government for is a much bigger society.

15:05

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Moon, and to contribute to the debate. I pay tribute to the hon. Member for Bradford West (Naz Shah)—that was something I would never have said in the previous Parliament, but I can happily say it now—for the thoughtful and welcome debate she has brought to Westminster Hall. This is something that we all care about, because in all of our constituencies we recognise voluntary organisations and charities, some of which are linked to national organisations such as Age UK, and there are also smaller groups that have recognised local need. For example, in my constituency the Debenham Project has come together to support people with dementia and their families. That project is now being used as a pioneer throughout the east of England to show just how communities that have recognised a need can come together and make a real difference for people with dementia.

Before I talk more broadly about the role of businesses in supporting volunteering and the charitable sector, which I do not think has happened to the extent we would like— and I will talk about the legal sector in particular—I want to pick up on some of the points raised in the debate that affect all of our constituencies. Much of the volunteering in Suffolk, and, I am sure, throughout the rest of the country, is freely given. I am sure that no one wants in any way to polarise the debate by saying that the voluntary sector should be a purely funded sector.

I am sure we all recognise the vital contribution in carers’ organisations, village hall committees, scout groups and other groups in the community when time is freely given to support others in need, be they young people needing support with educational causes or the most vulnerable. None of us would want to undermine that ethos in any way. It is important that everyone considers the opportunities in their community to support vital projects and, in particular, to look after the most vulnerable people.

One such example in my constituency is the hour community project in Framlingham for which everyone in the community has given up one hour of their time—whether one hour a week, one hour a month or even less than that—to take an older person who may be living in social isolation shopping, for example, or to provide support to special educational needs children or teachers in a school or to provide time to other people in the community with needs. We should value and cherish that.

That does not always require funding. Of course there is an argument for pump-priming some such projects, as outlined earlier, and providing seedcorn whether through local authorities, central Government or lottery funding to kick-start them, but we should never undermine the importance of encouraging people to volunteer in their communities and give up their time to help those in need and good community causes.

These times of economic austerity have, of course, had a clear impact on charities and voluntary organisations. There has been a reduction in central funding—of course that is the case—and there has been a 10% drop in charitable donations, according to figures from three or four years ago. However, voluntary organisations have opportunities they did not have before to find additional funding, and local commissioners now have greater opportunities to commission services from voluntary and charitable organisations, where appropriate. Has that happened, however, to the extent envisaged in the legislation? Perhaps it has not.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

I agree with the hon. Gentleman that local charities do very good work. In my constituency, however, small charities have consistently reported problems with public service commissioning, including that contracts are becoming so large that only the largest organisations can bid for them. Does the hon. Gentleman agree that the Government must take steps to level the playing field so that the charities he is speaking so passionately about, and that I believe so passionately in, can compete?

[Dr Poulter]

That is an issue, particularly where local authorities look at having block contracts for aspects of social care. That is a real problem, particularly for more—I do not necessarily think this is the correct description—bespoke charities, which provide specialist services. For example, a charity looking after younger people who have had a brain injury may not fall easily within a block contract. The Department for Communities and Local Government could certainly look at providing guidance and support to those who put these contracts out, to make sure that block contracts do not inadvertently get in the way of providing the right services to people with quite specialised needs. That can be a very real problem, which can result from block contracts, because they are inherently larger. The result can be that people with more specialised needs can fall through the gaps. Some of the charities and voluntary organisations providing very good specialist care do not get a look-in on block contracts, because they are not geared up to provide the service required, although they do provide an important service for certain groups in the community. The DCLG may well want to look into what guidance it can offer. Indeed, the Local Government Association also has a role in supporting local authorities to make the right decisions in this area.

The more general point I wanted to get on to relates to the role of big businesses in supporting volunteering. They have done a lot to support links with the armed forces. They have rightly been part of a big drive, with the Government, to support people in having time off to serve with the armed forces. There is also often a synergistic relationship with the voluntary sector, and local businesses can benefit and get good will from the community by allowing staff to have time off to contribute to charitable and other good causes. However, one area that needs attention is the legal sector—

[Mrs Madeleine Moon (in the Chair)]

Order. I call Gerald Jones.

15:13

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

May I say what a pleasure it is to serve under your chairmanship, Mrs Moon? I congratulate my hon. Friend the Member for Bradford West (Naz Shah) on securing such an important debate.

I spent many years working in the voluntary sector and as a volunteer. I wish to state that at the start, although it is not a declarable interest. I am deeply concerned about the situation facing the community and voluntary sector—a situation the Government have created. Volunteers and voluntary groups do a truly outstanding job in many of our communities, and they deserve all our support and that of the Government.

Demand for charitable services is increasing. Given the hardship the Government’s austerity agenda is creating, people in our communities will undoubtedly turn to charities and voluntary groups even more in the future for assistance.

In 2010, we heard much from the Prime Minister and the coalition Government about the big society and the role volunteers play in community life. Here we are just five years later, and the Government are pulling the rug out from under many of the charities, community groups and voluntary organisations that make such a valuable contribution to our country.

Recently, I spoke at the annual general meeting of the county voluntary council in my constituency. Voluntary Action Merthyr Tydfil does an outstanding job of supporting voluntary groups, as do many other county voluntary councils. The mood of many of the community groups I met was one of deep concern and worry. Historically, many voluntary organisations have received support—including, importantly, financial support—from local authorities and, in Wales, from the Welsh Government. Given the Tory Government’s austerity agenda, as well as the huge cuts to local authority budgets and, in Wales, to the Welsh Government budget, devolved and local government are finding it increasingly hard to deliver key services, putting at risk their ability to support voluntary and community groups.

Clearly, it is impractical for many charities and voluntary organisations to make a realistic charge for many of the services they provide, because that would, in many cases, put those services out of the reach of the people who need them most. Charities are well used to fundraising and to looking at all opportunities to bring in extra resources, but many will always need some support.

As my hon. Friend the Member for Bradford West said, the indication that the Treasury may look to cut the Big Lottery Fund share of national lottery funding from 40% to 25%—a cut of some £300 million—is hugely worrying, and such a cut would have a catastrophic effect on hundreds of voluntary organisations. The Big Lottery Fund is the biggest single funder of voluntary sector organisations, and given that charities are struggling financially, this is not the time for the Government to make matters worse.

Small grants of a few thousand pounds from the Big Lottery Fund are a lifeline to many community groups. Such funding is often the first step for fledgling community groups, such as senior citizens organisations and youth groups. I know of many instances where such grants have given volunteers and community groups a real boost, giving them an incentive to develop their work and to contemplate more ambitious projects, including attracting more volunteers.

[Tulip Siddiq]

Does my hon. Friend know that half of BLF awards go to organisations with a turnover of less than £25,000? The proposed move would be devastating for community spaces in my constituency, especially youth services, because of their small turnover.

[Gerald Jones]

I absolutely agree. As I said, that funding is an absolute lifeline for many small community groups that are on the road to developing more ambitious projects. It is unacceptable for the Government to contemplate such a cut to offset Government cuts in other areas. The Minister should confirm that the cut in lottery support will not be used as part of the Government’s deficit reduction plan.

In view of the Government’s apparent attack on the voluntary sector, I am bound to ask what they have against volunteers and voluntary groups. I urge them to acknowledge the role of the voluntary sector and the massive contribution the sector makes to society and to act accordingly. I therefore ask the Minister to advise us whether he will stand up for the sector and stand against this huge cut in the support to the Big Lottery Fund.

15:18

[Carolyn Harris (Swansea East) (Lab)]

May I, too, congratulate my hon. Friend the Member for Bradford West (Naz Shah)? May I also say what a great pleasure it is to serve under your chairmanship, Mrs Moon?

Charities play a vital role in society, and they make a significant economic contribution. The sector generates gross value added of £12 billion per year. The economic value of UK volunteering is estimated at nearly £24 billion. However, given that approximately half of all charities depend on central or local government funding, they expect to be hit particularly hard by any budget reductions over the next five years. Charities will be looking closely at the spending review for details of where funding may become even more challenging. It goes without saying that public service cuts will have a significant knock-on effect on charities.

We have heard a lot about the Big Lottery Fund. To shed some light on the issue, let me add that it is one of 12 distributors of the national lottery’s good causes funding. However, there is a strong indication that Her Majesty’s Treasury is planning to reduce the Big Lottery Fund’s share of national lottery funding from 40% to about 25%. That, arguably, would mean the redirection of funding towards the arts and sports because of DCMS spending reductions. The reduction in the Big Lottery Fund would be £300 million a year. We all recognise the value of the arts, sport and heritage, but support for those causes should not be at the expense of community groups.

The move would hit smaller groups hardest, because 90% of BLF grants are smaller than £10,000. It would particularly affect community projects such as village halls, playgrounds and youth clubs, as well as targeted interventions where there are social problems. Examples are isolated older people, domestic violence and vulnerable children—I could go on, but I think I have made my point. As BLF funds are usually committed years in advance, an immediate reduction in the national lottery’s contribution to it could cause it to close its books to new funding applications for several years.

In my constituency a total of 251 projects have been funded, with a total value of nearly £4 million. In the whole of Swansea 993 projects have received funding, with a total value of £20 million. One of those is an organisation called Hands Up For Down’s, a parent-run group for children with Down’s syndrome and their parents and carers. It is based in Swansea and has been running since May 2014. It simply offers a support network to the parents of children with Down’s syndrome, as well as an opportunity for the youngsters to get together to play freely and socialise. Sian is the mum of Iolo, who uses the project, and she said:

“We are facing many challenges but with the support of Hands up for Downs and the Big Lottery Fund we don’t feel we need to do it alone”.

I hope that the Government will think about all the Iolos and Sians in the country, who benefit from the Big Lottery Fund, when they wield their axe and do whatever they intend to do that will affect voluntary sector funding.

15:23

[Jo Stevens (Cardiff Central) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Mrs Moon. I congratulate my hon. Friend the Member for Bradford West (Naz Shah) on securing the debate. We have heard excellent and wide-ranging contributions this afternoon, and I very much welcome the debate. It is important that we discuss the issue, since funding for the community and voluntary sector is at a critical juncture. With the Chancellor’s spending review coming tomorrow, I am sure that everyone involved in the sector will wait with bated breath to see what further cuts he has lined up for local government budgets. The continuous budgetary pressure on local government makes it even harder for the voluntary sector to fund its important work. I have seen in my own constituency the tremendous impact that community organisations have and the growing funding challenge that they face because of cuts to Welsh Government budgets that have to be passed on to local authorities.

I spent some time a couple of weeks ago at Grassroots Cardiff, a small community organisation working with the most vulnerable young people in Cardiff Central. It provides advice, support, creative opportunities and training that help young people between the ages of 16 and 25. In a supportive environment, it promotes self-confidence and development to help vulnerable young people avoid homelessness and drug abuse. It also runs a fantastic weekly Asperger’s support group for young people—the only one that is available in Cardiff and the wider region. I have seen the remarkable work that the organisation does and the positive difference it has made to the lives of young people with Asperger’s.

Grassroots works very hard to function within its means, but owing to the cuts it is really struggling. It has lost local authority funding because of UK Government cuts and faces the prospect of being able to offer only a part-time service. That successful organisation, which has been serving the community in Cardiff Central for decades, is under threat. It is desperate for funds. If it asks for funds from local people, who are already stretched with low incomes and a lack of work opportunities, they will give what they can, but it is a struggle.

In the previous Parliament, under the coalition Government, there were tax cuts for the wealthiest in the country—a giveaway to the people who needed it the least. At the same time cuts were made to the local authority funding that supports and delivers voluntary and community sector provision in villages, towns and cities across the UK. The expectation was then, as it will be once again in tomorrow’s spending review, that ordinary working people will have to foot the bill.

Part of the Conservative party manifesto in 2010 and again 2015 was the creation of the big society. One pillar of that was opening up public services and enabling voluntary organisations, charities and social enterprises to compete to offer public services combined with community empowerment, giving local councils and neighbourhoods more power to take decisions and shape their own area. However, under the coalition Government outsourcing took place on an unprecedented scale, and that is continuing under the current Government. The aim was to create a fairer playing field in which charities, social enterprises and private companies could bid for services, but as we have heard in many speeches today, the harsh reality has been private companies’ share growing, while charities and voluntary organisations have lost out completely.

The other pillar of the big society was community empowerment. The idea of that, as I understand it, was for people to be able to select the community projects they wanted to launch. However, because of the swingeing cuts in public sector funding, people are now forced to choose which projects they want to save, rather than the ones they want to launch. I have seen that happen in my constituency. Several voluntary sector organisations, including Carers UK’s Cardiff branch, ABCD Cymru, which works with the disabled black and minority ethnic community, and Cardiff’s Disability Action group, have had to fold altogether, leaving people without the support they desperately needed.

[Tulip Siddiq]

My hon. Friend has been talking about the notion of the big society. In the more affluent bits of my constituency there is a lot of social capital and invisible capital. The big society has worked there, but does my hon. Friend agree that in the more deprived areas of our constituencies it will not work? We cannot expect people who are choosing between putting the heating on and eating, and whose tax credits are being cut, to volunteer as well and keep up the big society, while the Government crush the roots of local democracy and cut councils’ funding.

[Jo Stevens]

I agree entirely. It always seems that the people who can least afford to give are the ones who are looked to for giving.

Several colleagues have mentioned the Big Lottery Fund. Since 2010 it has supported 74 projects in my constituency, including a deaf youth summer theatre school, the Somali Integration Society legal and welfare advice pilot project, and the Adamsdown day centre’s “Young At Heart” project. The day centre provides an essential service for elderly people who would otherwise have little or no daily social interaction. Its lottery fund money made the difference this year between being able to stay open or closing its doors for good. Seventy-four projects in Cardiff Central have received more than £3.3 million in funding from the Big Lottery Fund. Not only is that funding worth discussing here; it is something that all of us need to protect. I am sure that all the hon. Members present share that view, and I hope the Government will take note of what has been said today and take action urgently to protect a fantastic, hard-working, critically important sector.

15:28

[Martin John Docherty (West Dunbartonshire) (SNP)]

It is a pleasure to serve under your chairship, Mrs Moon. I want to mention that I am vice-chair of the all-party group on civil society and volunteering, along with the hon. Member for Clwyd South (Susan Elan Jones), whom I am delighted to see here today. I congratulate the hon. Member for Bradford West (Naz Shah) on securing the debate, and I am delighted to speak for the Scottish National party, which, for the record, I want to congratulate on its resounding victory at the general election.

The subject of the debate is a critical issue for communities across these islands. As my constituency is in Scotland, I am keen for Members from other parts of the UK to hear briefly about differing approaches to supporting the community and volunteering sector. I believe that the approach in Scotland is based on common values, as the voluntary sector seeks to play its part in the civic life of the communities in which it was founded and that it engages with and serves. The relationship between local government and the voluntary sector in Scotland is also extremely important, given the sector’s role in Scotland’s community planning partnerships and in developing all 32 single outcome agreements. If hon. Members do not know what those are, I advise them to look at those interesting documents, which place the sector in a critical and fundamental role in Scotland’s public life.

The challenge we now face as we approach the comprehensive spending review, which has been put well by many Members, is a decision by the UK Government that will reduce the funding for the most local of organisations—critically, through funds such as the Awards for All programme and Investing in Ideas—through funding reductions to the Big Lottery Fund. That fund enables local volunteer-led organisations to deliver support to communities at the coalface of community cohesion.

In Scotland, the Big Lottery Fund awards more than 2,000 new grants every year to organisations ranging from grassroots volunteer-led community groups to major charities. Its work is funded through an average annual budget in Scotland of £70 million, and it has recently come to the end of a five-year strategy. The fund has existing financial commitments to more than 3,000 projects in Scotland. Last year, more than 116,000 people in Scotland took part in small grassroots projects funded by the fund. Nearly 2,500 jobs, mainly in registered charities and community organisations, are at least partly funded by grants from the Big Lottery Fund, almost 780 of which are full-time posts solely supported by those grants. As we approach the comprehensive spending review, our grave fear is of a possible reduction in that funding. I hope the Minister will take this opportunity to deny the possibility of a reduction of national lottery funding to the Big Lottery Fund from 50% of moneys raised to 25%.

Without doubt, the community and voluntary sector in Scotland and the rest of the UK makes a direct impact on the economy; in Scotland, that impact is worth nearly £2.5 billion. Our Government in Edinburgh are committed to working—I should add, with cross-party support—with sector groups to create a fairer and socially just Scotland. That is why they have created a new third sector forum this year, bringing together representatives to consider ideas about the sector’s future. The Scottish Government are determined to work with the sector to remove the barriers that prevent people from reaching their full potential—critically, with regard to volunteering. The voluntary sector is crucial to achieving social justice, and its organisations are closing the gap in employment and health inequalities and addressing the significant problems of poverty in my own constituency of West Dunbartonshire and across the country. I will mention just a few specifically: the Independent Resource Centre, which is celebrating its 25th anniversary; West Dunbartonshire CAB; the Vale of Leven autism group; and the Ben View centre.

Importantly, in February this year, the Scottish Government announced £1.1 million of investment for a new volunteering support fund, which will, we hope, train and recruit 3,000 volunteers from disadvantaged backgrounds to work at 110 projects across Scotland, seeking to ensure equal access to civic participation. That is on top of an increase in investment in the community and volunteering sector in Scotland, from 2001 to at least 2011, from £2.1 billion to £4.5 billion.

In Scotland, 1.3 million volunteers undertake roles in every community and in all sectors, bringing significant individual and community benefit, as volunteering does across the rest of the UK. Volunteers have a critical role in leading change and empowering our communities. We now have the opportunity, throughout the UK, for growth in volunteering through a renewal that connects with the passions, interests and motivations of individuals and brings about public value.

Volunteering provides enormous value to society in general and significant benefits to the wellbeing of those who participate. In Scotland alone, it is estimated that volunteers contribute £2.6 billion to the economy. More recent findings about the direct impact of volunteering on individual wellbeing indicate exceptional benefits. Any cut to the Big Lottery Fund in the comprehensive spending review will undermine the very source of our community and voluntary sector—the volunteers by whom so much is delivered for so little.

As is the case in the rest of the UK, the majority of these organisations in Scotland are run by volunteers, in service delivery roles as well as management roles, with volunteer committee members and, on occasion, charitable trustees. The sector has considerable experience and understanding of working with individuals and communities in developing solutions, and thus mobilising the skills and knowledge of communities. That co-production model for solutions is essential to successful prevention, and I am sure that hon. Members here today would like to see similar models in their own constituencies. While the UK Government are poised to cut funding, the Scottish Government are investing in the enterprise ready fund, which distributed nearly £6 million between 2013 and 2015 to help maintain, develop and grow the sector. I am sure other Members will also want to look at the model of the social entrepreneurs fund.

The Big Lottery Fund in Scotland currently supports more than 2,000 organisations. It uses the good causes funding it receives from national lottery ticket sales to provide £75 million of funding every year to projects that tackle a wide range of issues including poverty, loneliness and ill health. The jobs partly funded by the fund are also a critical issue. There has been speculation that cash will be taken from the lottery fund to mitigate cuts to arts and sports resulting from the departmental budget cuts to be announced in the comprehensive spending review. Similar tactics were used for the Olympics in 2012, with a massive £638 million “borrowed” by the Government, a sum that has yet to be paid back.

The national lottery is independent of the United Kingdom Government, and that Government should not be raiding the Big Lottery Fund to subsidise their departmental spending cuts. The UK Government’s austerity agenda is focused on cutting public services and social security, no matter the cost to people. It is clear that any cuts to the Big Lottery Fund will have the greatest impact on the most vulnerable in our society and will exacerbate the impact of other cuts across our communities.

15:35

[Anna Turley (Redcar) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mrs Moon, and my privilege to respond as shadow Minister for Civil Society. It is also a great pleasure to follow the hon. Member for West Dunbartonshire (Martin John Docherty) who set out clearly and powerfully the role of the community and voluntary sector in Scottish civil society and its impact on the Scottish economy. He also talked about the Big Lottery Fund, which I will discuss in some detail. I share his deeply held concerns.

I thank my hon. Friend the Member for Bradford West (Naz Shah) for calling this extremely important and timely debate. She set out eloquently and passionately the challenges faced by the community and voluntary sector. She also gave a heartfelt example of how crucial services such as the Blenheim Project in her constituency are to people in need, in particular at times of crisis.

Tomorrow, the Chancellor will set out his departmental spending priorities. It is his chance to set out his vision for the kind of society and economy he wants to build. The question for us today is whether that vision will be one that recognises and values the role that the community and voluntary sector can play in building a safe, healthy, decent and prosperous society. Many Members have set out fantastic examples of great work done by civil society organisations in their local areas, as well as the challenges such organisations face.

The hon. Member for Chippenham (Michelle Donelan) mentioned Mind. Many of us would want to pay tribute to the great work that Mind does, not least in my own constituency, where it has been dealing with some of the repercussions of the huge job losses we have faced. She made a really important point about the preventive role it plays in reducing pressure on our public services. That also made me think of the importance of investment to prevent costs further down the line in public services. She also mentioned gift aid. There is an important message for the Government on that: they should look again at whether they might loosen the eligibility criteria for the small donations scheme, which so far has generated only £21 million, not the £105 million expected. That might be something that they could explore further.

My hon. Friend the Member for Clwyd South (Susan Elan Jones), who is chair of the all-party group on civil society and volunteering, spoke eloquently about the importance of core funding. Any of us who have had experience of working with the voluntary and community sector will know how important that funding is to enable voluntary organisations to keep the lights on and keep functioning, when often grant money for specific projects is more readily available. She also talked about the importance of new technology. There are some really interesting issues there that we can look to take forward.

The hon. Member for Central Suffolk and North Ipswich (Dr Poulter) made some important points about businesses giving up time for people to volunteer. It is important always to look at the contribution that everyone can make, not just the professionals within the community and voluntary sector. We recognise the importance of diversity of funding and of capacity within the sector; to my mind, however, we must not lessen the importance of the role of partnership with public services and the support of local authorities and central Government, as they are often absolutely critical to funding projects that would not necessarily get private sector support.

My hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) talked eloquently about the impact of cuts on the devolved Administrations and on local government, and the effect that had on local communities in his area. My hon. Friend the Member for Swansea East (Carolyn Harris) paid tribute to Hands Up For Down’s, which sounds like a really excellent organisation doing great work. She also mentioned the impact of cuts to the Big Lottery Fund.

My hon. Friend the Member for Cardiff Central (Jo Stevens) talked eloquently about Open Public Services, which ranks alongside the big society as a flawed philosophy, set out by the Government five years ago. It has seen many contracts gobbled up by the private sector and larger charities, to the detriment of smaller charities, as my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq) also pointed out. I thank all my colleagues for their important contributions to the debate.

The worry for many of our hard-working community and voluntary sector volunteers and professionals, as well as those who rely on their vital services, is whether the Chancellor will tomorrow hasten his assault on the sector, which has already seen the big society agenda disappear like a mirage, wiped out by a wave of cuts over the past five years. Figures I have received from the NCVO show the sector is already receiving £1.7 billion less of its income from Government than it was in 2010-11, and the number of grants to the sector from Government has halved since 2002. The charity sector faces a shortfall of £4.6 billion by 2018-19 on current spending trajectories. Charities and community groups have been hit by a triple whammy of cuts to their grants and income; a reduction in local government support, with partnering public services facing their own drastic cuts, leading many of them to cut preventive services; and having to deal with a large rise in demand.

As my hon. Friend the Member for Bradford West mentioned, according to the Charity Finance Group, 70% of charities expect demand for their services to continue to rise in the next 12 months. In 2009, the figure was half that, with only 36% of charities thinking demand would rise. Charities know they are picking up the consequences of this Government’s economic and social policy failures. They are often catching the people who have fallen through the gaps and are too often failed by the state. Charity and community groups are fearful of tomorrow’s statement. They are asking whether tomorrow will see a spending review that puts the final nail in the big society coffin and shows that, like the Tories of the past, this is a Government who believe in neither the state nor society.

Nowhere is that threat more clearly exposed than in the expected cuts to the Big Lottery Fund, as many of my colleagues have rightly set out. The Big Lottery Fund has been a vital ingredient in helping many community organisations to deliver vital services in the local community and transform lives, particularly in our most deprived areas. The rigour that the Big Lottery Fund applies to its funding process ensures that charities can prove they work to change people’s lives—a rigour that has been sadly lacking from the Government’s own direct distribution of money to charities, as highlighted by the Kids Company saga.

If it is true that the Chancellor intends to take around £320 million from the Big Lottery Fund and redirect it to the Department for Culture, Media and Sport to spend on arts and sports, it is a shameful act of misappropriation. The Chancellor should not be raiding the people’s lottery to plug gaps in his departmental spending, to try to compensate for the total failure of his long-term economic plan. The British people donate these funds when they buy lottery tickets in good faith that the money will go to good causes—village halls, youth clubs, playgrounds, domestic violence support, care for older people and those with disabilities, and the many groups we have heard about this afternoon. Ninety per cent. of Big Lottery Fund grants are less than £10,000, and they are a lifeline to small local groups, as my hon. Friend the Member for Bradford West set out, so this act will hit the smallest charities doing the most important work in the most deprived areas.

As the former Conservative Prime Minister John Major recently said, lottery money was to be from the people, for the people. The guiding principle has always been that lottery money adds to, rather than replaces, public funding. Is the Minister going to allow that principle to be shredded to compensate for his Government’s failure to protect and support our public services? Is he aware that some 3,800 charities are still waiting for the repayment of £425 million that was taken from the Big Lottery Fund to help pay for the 2012 Olympics? Depriving vulnerable people and communities of support during this difficult time is outrageous and is contrary to the very nature of what players of the lottery expect will happen with their contributions. I urge the Minister to ask his right hon. Friend the Chancellor to think again.

In conclusion, I hope the Minister will give some reassurance to the community and voluntary sector ahead of tomorrow that the Government still value the contributions it makes to our society. In 2009, the Prime Minister, then Leader of the Opposition said he wanted to

“set free the voluntary sector and social enterprises to deal with the…problems that blight so many of our communities”.

Far from setting them free, this Government are starving them of funds and forcing many of them, as we have heard today, out of operation. I urge the Minister to fight for the future of a sector that is vital to the strength, health and dignity of our society.

15:44

[The Minister without Portfolio (Robert Halfon)]

It is an honour to serve under your chairmanship, Mrs Moon. I congratulate the hon. Member for Bradford West (Naz Shah) on securing the debate and on her election; there are not many Labour MPs I raise a glass for when they get elected. I know that in her maiden speech she spoke about social action in terms of food banks. Although, of course, I disagree with her on some points, she spoke thoughtfully and with passion, and I will try to answer some of her points.

The hon. Member for Clwyd South (Susan Elan Jones) said she was worried about mentioning that she chairs the all-party group on civil society and volunteering; I think that is a badge of pride. She made some thoughtful remarks about gift aid, which she will know was worth £1.2 billion to charities last year. The Government have launched Charities Online, an online system that makes it simpler and faster to claim gift aid. The innovation in giving fund has provided around £10 million to develop ideas that have the potential to create a step change in the giving of time and money, including, as she suggested, crowdfunding platforms and other innovative forms of technology.

The hon. Member for Bradford West spoke about procurement, an issue that has come up not only recently but over many years. I have spoken on the record in the past, when I was on the Back Benches, about the Tesco charities—in other words, the bigger charities that get the bigger slices of the pie. She will know that the private Member’s Bill of my hon. Friend the Member for Warwick and Leamington (Chris White), the Public Services (Social Value) Act 2012, supported by the Government and passed by Parliament, requires public service commissioners to consider social value whenever considering procurements in their area. The Cabinet Office has led the successful Commissioning Academy to instil best practice across the public sector, as well as delivering special commercial masterclasses to charities to support them to bid. There is also a local sustainability fund of £20 million that supports grassroots charities, to ensure they have a secure future.

The hon. Member for Bradford West is right that charities currently get business rates relief of up to 80% if a property is used for charitable purposes. Many local councils top up certain reliefs, offering 100% relief in order to give businesses and charities extra help, and business rates relief helps charities up and down the country. With the Government’s tax changes, employers, including charities, will have their national insurance bills cut by £1,000 from April next year.

The Big Lottery Fund has come up on a number of occasions. I have to confess that I have not seen inside the Chancellor’s lunchbox, but I urge hon. Members to wait 24 hours and hold their horses, so that we can see what happens. I cannot comment on funding, particularly because of the spending review, but I want to talk about three things—funding we have provided for civil society, what we have done to improve civil society, and our ongoing work.

It was a pleasure to hear from my hon. Friend the Member for Chippenham (Michelle Donelan). I cannot get away from her Facebook page, because it has one post after another of her community activism, looking after her local community and doing exactly the kinds of thing we have talked about today. I know that her work is acknowledged by her constituents. My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) talked about volunteering, which I hope to come on to later.

I am a passionate believer in big society and always have been. I have always believed that social capital is as important as economic capital, that social entrepreneurs are as important as economic entrepreneurs and that people power is as important as state power. That is what big society means to me, and that is what big society means to the Government.

[Jess Phillips (Birmingham, Yardley) (Lab)]

Does the Minister recognise that people capital and social capital, which he rightly points to, will not provide a rape crisis counselling service for children, no matter how much he wishes they might? The state once provided that. The Big Lottery Fund then went on to provide it, and the Chancellor is potentially about to take it away.

[Robert Halfon]

As I said, I suggest the hon. Lady holds her horses and waits to see what happens in 24 hours. I will talk about what we have already done to fund civil society and big society in a moment.

The Government recognise that individuals are looking beyond the state and want to help friends, family, their community and their local services. People are becoming far more community-minded and are asking not what their community can do for them, but what they can do for their community. Millions give their time, energy and expertise to help others, and they put service above self. I am wearing a Heart 4 Harlow badge, which is from a social action project created by faith communities in my constituency. They work together to do social action and to help our town. This social action—this people power—is the foundation of the bigger and stronger society that we all desire.

It is no surprise that the Charities Aid Foundation found that the UK is the most generous nation in Europe. That means that the public are giving twice, which it is important to note, both in their taxes and personal donations. With all the talk of funding, it is also worth noting that taxpayers are giving about £13 billion a year to charities up and down our country—remember, that is not Government money, but taxpayers’ money.

We should also note that five years ago, our country was broken. We had experienced the deepest recession in living memory and the deficit between public spending and the Government’s revenue was unsustainable. Unemployment had risen to record levels and household debt was higher than many of us would agree is sensible. The societal issues that stemmed from those circumstances meant that public services and civil society both faced an incredible challenge—one of increasing demand, but without the ability easily to invest increased resources to meet it.

[Anna Turley]

If the Minister is setting out the challenges and saying that there is a consequence for public services and the big society, we are now five years on and the crisis is even greater for the community and voluntary sector. Is that not a consequence of the last five years of economic policy as well?

[Robert Halfon]

As I said, the taxpayer is spending £13 billion a year, which is a sizeable chunk of money, on charities.

I turn to the Government’s achievement over the last years in pursuit of this vision. There is, for example, the community organisers programme, which is training more than 6,500 organisers to work in hundreds of cities, towns and villages. Community organisers are not about replacing existing jobs or services; they are about people power, giving social entrepreneurs, charity workers and volunteers the real tools to help themselves. One example is the work of community organiser, Tania Swanson, in Clacton in Essex. She works with the Rural Community Council of Essex to assist with projects on affordable housing, energy efficiency and community farming, as well as on many other community initiatives.

The big society has meant the establishment of the Centre for Social Action, too, which has seen an investment of around £70 million of real money from the Cabinet Office, commissioners, local authorities, philanthropists and other partners into 215 social action projects in England, working alongside and helping public services. Just as the Government have liberated business entrepreneurs from red tape and regulation, so the big society has worked to free charities, voluntary groups and social entrepreneurs from red tape. There has been £200 million of investment to help charities transform themselves to be more effective. We have seen the creation of the world’s first social investment bank, Big Society Capital. A prime example of that, and one I know about, is the £825,000 invested into the Essex social impact bond to help vulnerable young people avoid care or custody and stay at home with their families.

To me, perhaps one of the most exciting and forward-looking of the big society projects is the National Citizen Service, which was highlighted by my hon. Friend the Member for Chippenham. It gives young people a real chance in life and a real experience of community ethos, social action and important skills that they will have for life. Over 5 million hours of volunteering has been given by NCS participants to their local communities; that is a whole generation for whom social action has become the norm, not the exception. Ensuring that future generations are more socially minded is key to the work of the National Citizen Service. A lot of work has been done to help young people. In my constituency of Harlow, we have the Young Concern Trust, which does an enormous amount to support disadvantaged young people.

I said earlier that the big society was about social capital, social entrepreneurship and people power, and that that is the continued mission of the Government over the next five years.

[Dr Poulter]

Will the Minister give way?

[Robert Halfon]

I will not—I am very sorry, but I have to get on.

So what does this mean in practice? It means a continued investment in our charities, continued support for social action, and continued backing for giving and philanthropy. My hon. Friend the Member for Central Suffolk and North Ipswich talked about volunteering. We believe that the planned entitlement will help build stronger communities and a stronger economy by creating a more motivated and productive workforce. It has been shown that people who volunteer also have significantly higher levels of life satisfaction. Many businesses across the country already run great volunteering programmes that empower their staff and help build stronger communities. During this Parliament, the Government plan to make that an entitlement for those working in the public sector and large companies.

We are also working to make social investment an integral part of the investment landscape. Earlier this year, Access—the new £100 million social investment foundation—was launched. By helping organisations to become investment-ready, Access will be critical to our continued efforts to ensure social investment is working for more organisations and is accessible by more people. We, as a Government, can use social investment to deliver a more just society.

Alongside social investment, Government are rapidly extending the scope and reach of social impact bonds to tackle youth unemployment, mental health, homelessness and children in care. Through funding for initiatives such as the Centre for Social Impact Bonds and the Social Outcomes Fund, we can help to build a strong, resilient sector.

So what do we plan for this Parliament? What do we want to see over the next five years? We want to see increased levels of social action and volunteering, creating stronger, more resilient and empowered communities, and increased resources going into the civil society sector through more giving and philanthropy, as well as more social investment enabling investors who want to use their money to have a profound social impact. We want more businesses actively building social capital as well as economic capital—helping to build a more compassionate economy—and, of course, better and more responsive public services, ensuring that they work hand in hand with the expertise, humanity, and dignity of the big society of community and volunteers.

[Dr Poulter]

On volunteering, I wonder whether the Minister may be able to look at—and perhaps do some work with the Law Society on—pro bono work from solicitors. A lot of big law firms do not give their lawyers time off to perform pro bono work. The only way we can change that is not through dealing with firms, but by putting a requirement on lawyers through the Law Society which then, in turn, would put pressure on firms to act. Will he look at working with the Law Society to encourage more pro bono work?

[Robert Halfon]

My hon. Friend raises a very interesting point. I am lucky in my constituency, because I have a pro bono lawyer who very kindly helps us with difficult legal cases with my constituents. I am sure that the Minister for Civil Society will look at that issue.

I firmly believe that we are on the brink of something special in our country: where we continue to create millions of jobs and apprenticeships, where public services offer more choice and are focused on the security that everybody needs, but most importantly, where the big society flourishes like never before, so that even in difficult economic circumstances, with the strong backing of this Government, millions of social entrepreneurs, community-minded individuals, charity workers and others give all they can to make our country a better place to live.

15:58

Question put and agreed to.

Resolved,

That this House has considered funding for the community and voluntary sector.