The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
I begin with an apology on behalf of the Under-Secretary of State for Women and Equalities, my hon. Friend the Member for Gosport (Caroline Dinenage), who is unable to respond to this debate due to other business. However, I am here and happy to respond on her behalf. I thank the hon. Member for Glasgow South West (Chris Stephens) for securing this important debate. It is timely as it allows me the opportunity to confirm the budget agreed with the EHRC for the remainder of this spending review period, something which has been of interest to many hon. Members.
Before I move on to provide greater detail, I want to take a moment to remind ourselves of the wider context of Government fiscal controls. At the beginning of the last Parliament, as hon. Members will remember, the Government inherited the largest deficit in the post-war period. The EHRC’s position needs to be seen against that background and against the significant spending reductions that apply to central Government, including making over £20 billion of savings by 2019-20. I can confirm that the EHRC’s settlement for this spending review period amounts to a total budget of £20.4 million for 2016-17, £19.3 million for 2017-18, £18.3 million for 2018-19, and £17.4 million for 2019-20, equating to a 25% reduction across the spending review period since 2015-16. Obviously, and as the hon. Member for Glasgow South West made clear, reductions in the EHRC’s budget stretch across a longer timescale than just this spending review. With its settlement now confirmed, the EHRC will have had an approximate budget reduction of 68% between 2010-11 and 2019-20.
Joseph Johnson
If hon. Members give me some time, I will supply some context for the reduction, most of which we did not hear from the hon. Gentleman.
Owen Smith
I am grateful to the Minister for giving way. In the context of a current budget deficit of around £68 billion, is he seriously telling the House that cutting the EHRC’s budget by 68% down to £17 million is really necessary or relevant?
Joseph Johnson
The context that I am about to provide will help hon. Members understand in more detail why cuts of that magnitude were appropriate. If the hon. Member for Glasgow South West bears with me, I am sure that I will answer the question that he was about to ask.
First, when the EHRC was set up in 2007, it had an extraordinarily high budget to facilitate the merger of three previous bodies—the Equal Opportunities Commission, the Commission for Racial Equality, and the Disability Rights Commission—into a new body. The budget was simply not right for the organisation during its infancy. In 2007, the EHRC had a budget of £70 million, which was an astonishing £20 million more than the combined budgets of the three previous commissions. The EHRC never managed to spend more than £62 million in any year. Indeed it often struggled to spend its allocation, reporting significant and repeated underspends. In June 2010 for instance, the EHRC budget was reduced in-year from £62 million to £55 million. However, the EHRC’s actual expenditure in 2010-11 was £48 million, of which £16.3 million, or 35% of its budget, was spent on its corporate costs.
Secondly, those with longer memories will acknowledge that the organisation was poorly managed at the time and had poor spending controls, as a result of which its first three sets of accounts were all qualified. That inevitably called into question its financial controls and the amount of funding that it should be given.
Thirdly, Members should be aware that the EHRC’s budget reductions have simply reflected changes to its range of functions. A number of significant functions have been repealed, or are no longer funded, to help it concentrate on its core remit. Most notably, the EHRC has stopped its large grants programmes, which had been mismanaged and cost several million pounds. The EHRC also lost its helpline, which cost £2.5 million a year, and its conciliation role in service provision. Those functions ceased in 2012-13 and were costed at £10.1 million or 21% of the EHRC’s budget at the time.
Those changes were considered in the review of public bodies conducted by the Government in 2010, and it was decided that the EHRC should be “retained but substantially reformed”. In March 2011, the coalition Government accordingly set out plans to reform the EHRC in the consultation document “Building a Fairer Britain: Reform of the Equality and Human Rights Commission.”
The current Prime Minister, who at the time was Minister for Women and Equalities along with her Liberal Democrat coalition partner Lynne Featherstone, set out proposals
“to transform the Equality and Human Rights Commission into a valued and respected national institution.”
A comprehensive budget review was set up in 2012 to identify the minimum level of funding needed for the commission to discharge its statutory functions effectively, in accordance with the provisions of the Equality Act 2006. The review concluded that steady state funding of £17.1 million would be adequate for the commission to continue to fulfil its statutory functions.
Chris Stephens
The Minister seems to be suggesting that the £17.4 million budget for 2019-20 is only to support the commission’s core statutory functions, which I understand is the direction of travel. Will he confirm that, in previous years, the commission received up to £7.8 million of funding to support its wider functions?
Joseph Johnson
The EHRC is receiving money in excess, although modestly so, of the minimum amount regarded as necessary to support its statutory functions. The hon. Gentleman is correct.
Kate Green
I understand the Minister’s point about focusing the commission on its statutory and strategic functions, but how can he be confident that it has the resources to do that well when we know that many local authorities are failing to comply with the public sector equality duty and that the Government are the subject of a number of significant criticisms from UN bodies for failing to comply with our obligations under socioeconomic and other rights treaties?
Joseph Johnson
Work was undertaken in the last Parliament to assess the minimum level of adequate funding necessary to ensure that the commission is in a position to discharge its statutory functions. As I said earlier, the review concluded that steady state funding of £17.1 million would be adequate.
The hon. Member for Glasgow South West mentioned staffing reductions, which I recognise is also a concern of other hon. Members. As an independent body, it is for the EHRC to determine the level and structure of its staffing, which includes defining the appropriate grading and staff numbers. The commission has had to make difficult decisions in order to deliver value for money in its use of public funds while also ensuring that it is furnished with the right complement of skills and experience. Once the commission has concluded its restructuring under the target operating model, the total number of posts will be 179.
The hon. Member for Pontypridd (Owen Smith) asked about the impact of the EHRC’s restructuring on the Government’s goal of halving the disability employment gap. In terms of actual redundancies, the restructuring affects six disabled staff members. More widely, the EHRC retains good links with disabled groups, is continuing its work on disability issues and is working with disabled groups specifically to improve its enforcement work on disability discrimination cases.
The Government are also working generally to combat hate crime. Other hon. Members asked about the impact of the restructuring on the commission’s ability to deal with instances of hate crime. The Government are working generally with the police to provide a breakdown of data on religion-based hate crime to help them target resources and increase understanding. We recently published the hate crime action plan, in July 2016, and are now delivering locally based projects to tackle hate crime. We have announced additional funding for communities to increase reporting, with £2.4 million to protect places of worship and £900,000 to support community projects. We are engaging with groups to ensure we understand the public’s experience of hate crime and make it easier for victims to come forward.
Let me turn specifically to points made by the hon. Member for Birmingham, Erdington (Jack Dromey). Although the EHRC needs to have due regard to fostering good relations, it is not a criminal enforcement agency, as he knows, and it has no role in prosecuting offenders or ensuring compliance with the law in this area. Therefore there will be no impact on the Government’s ability to tackle hate crime.
Chris Stephens
The Minister is saying that the commission does not have duties in terms of dealing with criminal behaviour, but he has yet to comment on how staff were treated. They were dismissed with one day’s notice and told to clear their desks. Does he believe that that is appropriate?
Joseph Johnson
I will take another intervention on the same point and then I will deal with one from the hon. Member for Pontypridd.
Alan Brown
I thank the Minister for giving way. I just want to add to what my hon. Friend said. The Minister seemed to be alluding to a strategic review of what the commission needs to do to carry out its core work, so how does sacking people by email and sending them home comply with the strategic review? There is no way that can be a skills-based assessment.
Joseph Johnson
Turning to the points about restructuring, hon. Members will know that the EHRC has followed a multi-staged process, to mitigate the impact of job losses on all staff, including consideration of those with protected characteristics. The commission is confident that the processes undertaken to date have been fair, evidence-based and transparent. Trade unions have been extensively consulted to offer every alternative to compulsory redundancy, where possible. Despite that, they have called five strikes in recent months.
Happily, the EHRC is no longer the focus for the tabloids’ wrath. Its accounts have not been qualified for five years. It has provided respected policy interventions on stop and search; the treatment of religion in the workplace; and pregnancy and maternity discrimination. It has intervened successfully to help enforce the Equality Act and human rights at the European Court of Human Rights.
Joseph Johnson
I will give way, but this has to be quick as we are running out of time.
Owen Smith
I am grateful to the Minister, who is being very generous in taking interventions and is trying to answer our questions. However, in so doing he is making our case for us, because he has just admitted that six of the people who are being sacked are disabled, which will clearly add to the disability employment gap. In conceding that we are seeing a rising tide of hate crime, despite the fact that we have this commission, he is surely making the point that the £17 million it currently has to support its work is inadequate.
Joseph Johnson
The hon. Gentleman needs to look at the EHRC’s restructuring in the context of its ability to carry out its broader work to support people with disabilities and to ensure that their rights are not affected by their disabilities in terms of their ability to access opportunities in the workplace.
As the National Audit Office notes, the EHRC
“has responded to its budget reductions in a number of ways”,
and it is increasingly working in partnership with other organisations and being more selective in the legal cases it takes on, taking on cases with the potential for the most impact and thereby enhancing its overall effectiveness. We are working with the EHRC to increase its effectiveness further. We share the view that members of the Women and Equalities Committee expressed in January: the EHRC should play to its unique strengths and powers, as provided in its legislative framework, by making more selective legal interventions and leaving the research to other bodies that can already fulfil that function.
Chris Stephens
The Minister is being very generous in giving way. He must appreciate the anger felt by Opposition Members about how staff were treated—they were effectively sacked by email. Will he confirm that the commission will be given some human resources and personnel advice and expertise by Government Departments? Is he going to intervene regarding the concerns we have about those staff who have been sacked?
Joseph Johnson
We are satisfied that the EHRC has conducted its restructuring in an appropriate manner. It has consulted all the relevant partner bodies, as required.
I understand that the EHRC chair, David Isaac, shares the objective of the commission sticking to its legislative framework—
Joseph Johnson
I was just in the process of delivering my concluding sentence. My right hon. Friend the Minister for Women and Equalities and my hon. Friend the Under-Secretary of State for Women and Equalities look forward to working constructively with the chair, David Isaac, and his board in the years to come, to the overall benefit of equalities and human rights in this country.
Question put and agreed to.