Queen’s Speech

Baroness Scott of Needham Market Excerpts

Tuesday 24th May 2016 Lords Chamber

[Baroness Scott of Needham Market (LD)]

Like my noble friend Lady Barker, I will speak on the relationship between the Government and the charity sector. It is worth starting with the reflection that charities contribute around £12.2 billion to the UK economy and that on top of the millions of people who volunteer on a regular basis around 827,000 people are actually employed in the sector, which is about 3% of the total workforce of the UK. The relationship between the Government and the charity sector is an important one that the Government should take care to get right. All too often we see a lack of understanding in Westminster and Whitehall about the way the sector works, and a tendency to impose change rather than work with it.

The gracious Speech contained reference to a new statutory framework to be set up to deliver the National Citizen Service. I urge the Government to work very closely with the sector on this, because it will not be easy to get it right. Charities cannot just absorb large quantities of volunteers—they need professional staff to train and manage them. In fact, many charities do not lend themselves to the way the NCS will operate. We want volunteering to be a positive experience. That means that we need to take care to match the individual and the organisation. Local volunteers’ centres can be brilliant at doing this, but they have been closing fast due to funding cuts. The whole point of the big society is that it works best when it is small.

Lately, we have seen from government a strategy of announcement, furore and then withdrawal: the PIP changes announced and dropped, outcry at the anti-advocacy clause, and now sending elements of housing benefit reform back to review. Members have marched through the Lobbies, Conservative MPs go on the airwaves to defend the indefensible, and then the Government change their mind. I am not going to lose sleep over the difficulties that that causes for the Conservative Party, but what troubles me is what it says about the Government’s attitude to the voluntary sector.

Coming back to the anti-advocacy clause, Answers to Written Questions from my noble friend Lady Barker show that the Government could offer no evidence of the use of government grants to fund lobbying activities. I know that it is radical, and perhaps I am naive to expect evidence-based policy, but really—no evidence? Do not get me wrong: charities should be scrutinised and appropriately regulated, but the Government should not give the impression that problems exist where they do not. The damage to the sector in the long term will harm all of us.

The governance of charities is in the spotlight more than it has ever been. That is only right. Regardless of whether charities’ income comes from taxpayers through the award of contracts, or from the philanthropy of individuals currently giving around £19 billion a year, they have a right to expect good standards of governance. The NCVO has done a good job in responding to issues such as inappropriate fund raising, while the collapse of Kids Company demonstrates that no matter how good the cause, or how charismatic the leader, not only do trustees have to take their responsibilities seriously but public bodies need to do more to assure themselves that the standards of governance of those to whom they award contracts is in good order.

Traditionally, charities funded their work through donations and grants. That is still the perception. However, over the last decade that has transformed. Charities earn more of their income—55 pence out of every pound in income now comes from providing services or from trading. There are around 163,000 charities in the UK, with a total income approaching £44 billion. Around £15 billion of that comes from working with government. This was increasing between 2000 and 2010, driven by the voluntary sector delivering more contracts. However, as public spending has reduced, charities are now receiving less.

The last time I spoke about this issue in your Lordships’ House two years ago I expressed my concerns about public commissioning and procurement practices. They tend to be focused more on the way the private sector works and do not tend to favour small local enterprises of any kind. I ask the Minister to ask the Commissioning Academy to take more heed of this. The doctrine of economies of scale is driving out innovation and local flexibility. It increases risk and deters new entrants from the market.

The UK boasts a strong and vibrant civil society. Charities are at the heart of that. This core is incredibly diverse, with an army of volunteers and staff providing help and support to individuals and communities nationally and overseas. If the Government truly want to deliver the aspiration of improving life chances outlined in the gracious Speech, they will not do so without the charity sector.