National Citizen Service Bill [HL]

Baroness Scott of Needham Market Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Tuesday 22nd November 2016 Grand Committee

[Baroness Barker (LD)]

My Lords, I have a number of amendments in this group, whose purport is somewhat different from that set out by the noble Baroness, Lady Finn.

When this legislation is passed, the National Citizen Service will no longer be a start-up; it will be a sizeable body with a very sizeable budget. Therefore, it is not unreasonable to expect that its reporting requirements will be different from those which it currently has as a very small community interest company. As such, and not a charity, the NCS has a lower level of financial reporting requirement than many of the organisations with which it has to do business and from which it has to commission its services.

I make no apology for the number of the amendments in this group which deal with accountability. I appreciate that we are talking about a royal charter body but the voluntary sector has had one of the worst years on record and has suffered a great deal in terms of its reputation and public support, precisely because it has not been living up to the higher standards of reporting which it should demonstrate—way above the public sector.

These amendments stem, to a large extent, from the acknowledgment of the noble Lord, Lord Maude, on Second Reading, that the NCS was deliberately set up to sit apart from the rest of the voluntary sector while being almost entirely dependent on it for the delivery of its outcomes. The NCS is, and will be in the future, a central commissioner of services from the voluntary sector, and as other resources diminish that will become increasingly important as a larger percentage of the money available for volunteering will be tied to this scheme. The greater freedom of action a body has, the higher standard of accountability it should aspire to. That is why the level of detail we require about any charity’s accounts is much higher than for anywhere in the private sector. The lack of competition to the NCS makes it wise to require a greater degree of transparency and detail in its reporting than we might have otherwise. Recent examples like Kids Company and Work Programme show that the lack of a requirement for proper accountability can be extremely damaging. It is with that in mind that we have proposed a number of amendments.

Given its purpose and set apart though it is, this organisation cannot deliver co-ordination with other voluntary organisations unless it has good relationships with them. It therefore does not seem unreasonable to ask it to set out how it will establish those, and, after a financial year, to report back. It is claimed that this organisation has an important, and, in the view of some noble Lords, unique contribution to make to the lives of young people. It is therefore important to require it to show that it sits alongside the main trends within the voluntary sector. For example, many people working in community organisations serving the Muslim community are saying to the Government— consistently and in many different ways—that the Prevent agenda is not working. It would therefore be remiss of us not to require the NCS—if it does have the role being described by its advocates—to actively work with those charities to ensure that community cohesion and diversion from extremism are part of its achievements.

Amendment 31, which requires that the NCS’s annual report includes its efficiency and effectiveness, is justifiable given that it is not up against competitive challenge. It is also not unreasonable to require diversity among its trustees. But of all these amendments, the two that matter the most are Amendments 28 and 29. It is right that Parliament should know the extent to which the trust has collaborated with and resourced the rest of the voluntary sector given that it will be one of the few sources of money for volunteering. It is also right that its report should include comparisons with alternative provisions. I have not yet been able to find a report giving the unit cost of the NCS including its overheads. Will the Minister give us that figure in his response? There is a suggestion from a number of other voluntary organisations that it is a very costly programme in comparison to them. I would very much welcome a response on that because before we commit this large resource to a body which is going to be set down in stone we should have some answers about the level of accountability that we can expect.

[Baroness Scott of Needham Market (LD)]

My Lords, I shall speak to Amendment 27 in this group. At the risk of incurring the wrath of the noble Baroness, Lady Finn, it adds to the reporting requirements of the NCS. In my experience, having to provide a detailed business plan and reporting back mechanisms does not have to stifle innovation. Most of the most innovative organisations and businesses around the world have detailed business plans and they report to shareholders, so I find the argument quite difficult. Indeed, I shall go further and say that business planning tools used properly can generate innovation and the reporting requirement can make an organisation focus on the things that those who are funding it believe are important. They can be a driver for innovation, not a barrier to it. The NCS, like any body in receipt of quite large sums of public money, will find that it will be overwhelmed with freedom of information requests if it does not willingly provide the information at the beginning.

In my amendment I am seeking to introduce to the business planning and reporting requirements measurement against the implementation of the Public Services (Social Value) Act 2012. When it was passed, the Act was based on two thoughts. The first was that public procurement generally tends to be at scale and cuts out SMEs and smaller organisations, and the second was that the cumulative spending power of public bodies could be much better used in the economic development of local areas than is usually the case. A review carried out last year by the noble Lord, Lord Young, suggested that the Act had those impacts. It has worked well, but it is underused. I was very pleased that the Government more or less accepted those arguments when they accepted my amendment to the Bus Services Bill and included a reference to the Act in the statutory guidance.

Evidence to the Select Committee on Charities currently sitting in your Lordships’ House has contained many references to the difficulties faced by small charities in participating in public procurement exercises, and a number of them have specifically referenced the Public Services (Social Value) Act as a useful vehicle for being able to do that, and they would like to see it more widely used.

The NCS is going to be a huge provider. On our previous day in Committee, the noble Lord, Lord Stevenson, talked about the problems of scaling up. I worry about that too. The NCS has written to me very fully and outlined the work that it has been doing with small local providers in a pathfinder scheme. It has given an undertaking that it wishes to widen and deepen its approach. I welcome that, but the recurring theme in this debate is about protecting the commitments currently made by the NCS into the future because it can commit only with its current board and current chair. Unless we have something in the Bill we cannot accept that those commitments will go on for ever.

There are a number of reasons why the Government should accept this amendment. The use of public money to support small and medium-sized charities will add to their sustainability and begin to avoid what someone has described to me as the growing Tesco-ification of the charity sector. There is also an issue about larger providers squeezing out smaller subcontractors. The NCS can use its considerable purchasing and contracting power to ensure fairer treatment. That would be the right message to send out to the sector, which is feeling a little beleaguered and unloved by government. It would help to ensure that more cash is used locally, generating local jobs. It would also help to create genuinely local solutions with providers which understand their neighbourhood. Anyone who does school visits regularly knows how very different areas can be, even those that are geographically quite close together.

Finally, there is something about risk. A larger number of smaller contracts is inherently less risky in terms of collapse or mismanagement than putting all the eggs in just a few baskets. One of the keys to innovation is size, and smaller local providers would be much more innovative and at less risk than the large ones.