Community and Voluntary Sector

Baroness Twycross Excerpts

Thursday 31st October 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)]

My Lords, I thank my noble friend Lady Morgan of Drefelin for securing this excellent debate on such an important topic, not just for my department but for society as a whole. She has a wealth of experience in this field, as do so many noble Lords who have spoken today. I congratulate my noble friend on her recent appointment as president of the NCVO.

I congratulate the noble Baroness, Lady Porter of Fulwood, on her maiden speech. I have no doubt that the noble Baroness will make a valuable contribution to the work of this House.

We are quite tight on time and a lot of questions were raised during the debate, so if I do not respond to specific questions, I will write and place a copy of the letter in the Library.

As the title of the debate acknowledges, the voluntary and community sector plays an absolutely vital role in all areas of public life, right across the UK. It is no surprise that there is general cross-party recognition of the sector’s value, as has been reflected in today’s debate. I personally had the pleasure of working in the charity sector, being a trustee, and working closely with the voluntary and community sector as chair of the London Resilience Forum. I know that the sector has a hugely valuable role, not least during the Covid pandemic, as has been noted in the debate.

The right reverend Prelate the Bishop of Newcastle referred to the sector as the glue that holds society together, a point reflected in the speech of the noble Baroness, Lady Porter. My noble friend Lord Parekh noted that the relationship between the voluntary sector and the state is one, essentially, of culture.

My noble friend Lady Morgan highlighted the economic value of the sector. The Government highly value the work that the sector does and the social value it delivers; it is an incredible force for public good. We recognise the sector’s economic value, with civil society contributing over £22 billion to the UK economy and employing approximately 981,000 people. A 2023 survey by the NCVO reported that, for every £1 generated by a community organisation, £2.50 is created for the local economy. There have been numerous other statistics cited in this debate.

There are approximately 160,000 registered charities in England, 9,000 in Wales, 25,000 in Scotland and 7,500 in Northern Ireland. The breadth of the sector is vast, both in the types of organisations within it and the variety of work that they do. Organisations might be large multinational charities responding to international crises, such as the Disasters Emergency Committee, which recently launched the Middle East humanitarian appeal through which the Government are matching public donations to provide urgent humanitarian assistance up to £10 million. However, we must not forget—noble Lords definitely have not—the importance of the thousands of local groups run solely by steadfast volunteers, including sports clubs and community libraries.

There were so many examples of the contribution of this sector; I had meant to reflect some of the examples that noble Lords gave, but there are far too many for me to list without going way over time. All of them are clearly making a valuable contribution, both locally and to our society. I particularly recognise the point from the noble Baroness, Lady Barker, about their role in innovation, which is one that we forget at our peril.

As my noble friend Lady Thornton noted, social enterprises and community businesses also make an incredibly important contribution as part of the broad umbrella of civil society organisations. The DCMS is currently delivering the Social Enterprise Boost Fund to drive local growth and innovation. We recognise that the issues affecting such organisations are different from those of other civil society groups and we will, and do, work closely with colleagues from DBT and HMT to develop policy solutions in this space.

I particularly welcome the focus by the noble Viscount, Lord Younger, on his legacy during his time as a Minister. I will write with an update on the projects that he mentioned, which I have not been able to secure in time for today’s debate.

It is clear that civil society organisations perform a multitude of functions, including the relief of poverty, tackling environmental issues, supporting conservation and heritage, and providing education and training. The sector consistently rises to some of the major challenges that society faces, whether that be the Covid-19 pandemic or the civil unrest this summer. I reassure the noble Baroness, Lady Fraser, that we do not view the voluntary sector as an add-on; we view it as essential. I noted my noble friend Lord Griffith’s point about the role of churches.

Voluntary, community and social enterprise organisations are an essential and major provider of services across the country, delivering almost £17 billion-worth of UK public services each year, including 69% of contracted homelessness support and 66% of contracted domestic and sexual violence support. The noble Baroness, Lady Gohir, focused particularly on the charities and organisations that support women in this sphere.

The sector plays an important role in advocacy and campaigning, with an ability to amplify the voices of different groups, evidence people’s lived experience and speak truth to power. This includes work by my noble friend Lady Morgan during her tenure as the chief executive of Breast Cancer Now and in her continued work within the sector.

One of the sector’s unique strengths is voluntary and community organisations’ rich understanding of the areas and communities in which they are embedded. Indeed, they are often trusted when formal public services are not and are able to reach underrepresented groups in society to provide critical support and services to those most in need. In 2018, 90% of households reported having used a charity service at some point.

The sector is therefore essential to deliver our government missions effectively. I will not touch on all five but, as an example, the sector will be a critical partner in building an NHS fit for the future, with direct delivery responsibilities for a large array of community-based health services. Civil society will play a particularly pertinent role in the preventive space, including interventions to tackle loneliness—which has come up in the debate—or employment coaching for those returning to work with health conditions or disabilities.

The noble Lord, Lord Addington, raised charities’ access to schools, and I will raise his points with my noble friend the Minister of State for Education. However, voluntary and community organisations are, in the Government’s view, fundamental to our approach to improving opportunity for all. For example, the charity Football Beyond Borders found in its 2021-22 impact report that young people at risk of exclusion who participated in the programme were 11 times more likely to achieve their GCSE English and Maths than those excluded from school and attending alternative provision.

The noble Baroness, Lady Porter, and the noble Lord, Lord Addington, both raised points around youth. The Government are committed to intervening early to prevent young people being drawn into crime and other poor outcomes. Fundamental to this is the delivery of the Young Futures programme. The Young Futures hubs will reach every community, delivering universal youth programmes as well as support for young people at risk of being drawn into crime, or facing mental health challenges. The establishment of prevention partnerships in every local authority will help map local provision, identify at-risk young people, and bring together local services to tackle local drivers of serious violence and better support young people.

This Government understand that, to achieve our vision for these missions throughout the whole of the UK, we must work more effectively and in genuine collaboration with the voluntary and community sector. Doing so will help us deliver for the public, 61% of whom—I was surprised it was only 61%—believe that Britain would be a better place if charities and community groups had more involvement in decision-making at a national level, according to the Law Family Commission on Civil Society in 2020.

As my noble friend Lady Pitkeathley said, a reset with civil society is needed. This Government, led by our Prime Minister, are committed to resetting the relationship with civil society and ensuring that the sector is recognised and valued for the crucial support it provides to so many people. I hear what my noble friend said about the importance of partnership and I will pass on the points made by the noble Baroness, Lady Barker, on this issue.

My noble friend Lord Kestenbaum focused on the value and significance of the word “covenant” and the covenant itself. DCMS has worked closely with key civil society bodies to develop a framework for the new covenant between the Government and civil society, which was launched by the Prime Minister earlier this month. There is currently an eight-week period of engagement during which we want to hear from the rich diversity of the civil society sector across the UK. My noble friend Lady Wilcox raised the importance of including devolution in the mix of the covenant. I reassure her, and my noble friend Lord Murphy, that we recognise the importance of learning from best practice across the devolved nations.

Policy on civil society and many of the issues that civil society organisations focus on are, as my noble friend Lord Murphy highlighted, devolved. Over the coming months, DCMS plans to engage and listen to devolved Governments and civil societies across all four nations, to help inform the development of the covenant framework.

I am proud that DCMS holds responsibility for civil society policy across government, recognising and responding to the pressures the sector faces. I acknowledge, however, that this is not an easy time for voluntary and community organisations, many of which have had to reduce or adapt their services, or even close their doors, in the face of the financial pressures of the last few years.

In response, DCMS supports the sector through a variety of mechanisms. This includes the delivery of direct funding to voluntary and community organisations, such as in the response to the Covid-19 pandemic and to the cost of living challenges last year. Our role at DCMS also covers developing other funding sources for the sector, from growing the impact investment market to supporting organisations to apply for government contracts. It includes driving innovation and best practice, such as through the Know Your Neighbourhood Fund, focused on increasing volunteering and tackling loneliness.

My noble friend Lord Bassam, the noble Lord, Lord Hastings, and the noble Baroness, Lady Gohir, referred to the potential of the dormant assets. The dormant assets scheme has unlocked £982 million across the UK to date. In England, this has been directed to independent, expert organisations to deliver innovative programmes seeking to address complex social challenges at scale. The Government will shortly set out how they intend to allocate the £350 million expected to flow into the dormant assets scheme in England between 2024 and 2028 to the named causes: youth, financial inclusion, social investment and community wealth funds.

We have taken a phased approach to implementing the expansion of the scheme into the three new sectors. Any further expansion will need to be carefully considered and will require close collaboration between the Government, RFL and industry. The Government recently ran a call for evidence, seeking views on the expansion of the scheme.

I will now touch on the points raised by the noble Baroness, Lady Gohir, about the implications of the Budget, including the potential impact of national insurance contribution and minimum wage increases—a point on which I feel she and the noble Baroness, Lady Barker, potentially differed in their views. These decisions and the minimum wage increases were necessary as part of the package in the Budget to restore economic stability. I also highlight that the minimum wage increase will potentially benefit some of the lowest-paid workers in the sector, so we need to understand the balance.

However, the Government recognise the need to protect the smallest businesses and charities, which is why we have more than doubled the employment allowance to £10,500, meaning that more than half of businesses with national insurance contribution liabilities will either gain or see no change next year. Businesses and charities will also still be able to claim employer national insurance contribution reliefs, including those for under-21s and under-25 apprentices, where eligible. More broadly, our tax regime for charities, including exemption from paying business rates, is among the most generous of anywhere in the world, with tax reliefs for charities and their donors worth just over £6 billion for the tax year to April 2024.

My noble friend Lady Morgan raised points around charities withdrawing from public sector delivery. I am aware that cost increases will compound the fact that public sector grants and contracts have often not covered rising services costs for organisations in the sector. On an individual basis, commissioners are able to adjust contract terms where appropriate, through existing provisions in contracts.

On procurement, mentioned by the noble Baronesses, Lady Barker and Lady Gohir, and my noble friend Lady Morgan, a key initiative being introduced by the Cabinet Office is the new Procurement Act, which includes a host of reforms that make it easier for smaller providers, such as VCSEs, to bid for public contracts. On the points made by the noble Baroness, Lady Barker, about public procurement and social value, this Government recognise social value as a vital element of public procurement. DCMS is also working to deliver the VCSE contract-readiness programme to help improve the capability of VCSE organisations when bidding for public contracts.

Crucially, the tough decisions taken in the Budget will allow for vital investment into public services. The Chancellor announced yesterday that the Government are providing an additional £233 million in grant funding for homelessness services, over £250 million to continue testing children’s social care reforms and a £1 billion uplift to SEND and alternative provision funding other public services, to allow local authorities to further support those most in need. Much of this investment will of course be delivered through the voluntary and community sectors, as outlined by many of the examples in today’s debate.

Yesterday’s Budget was focused on “investment, investment, investment”, and this includes exploring a way for socially minded investors to support the Government to deliver better social outcomes, aligned with their missions, with further details to be announced in the spring. Alongside the important funding landscape, the Charity Commission for England and Wales, as well as the charity regulators in Scotland and Northern Ireland, help to ensure that charities are appropriately and robustly regulated and carry out their responsibilities effectively and in line with the law. I noted the noble Baroness’s points on the Charity Commission and will feed them back to the Minister, Stephanie Peacock.

A number of noble Lords, including the noble Baroness, Lady Scott, mentioned the importance of volunteering, not just what it contributes to society but what it gives to the person volunteering. The Government are aware that what really drives civil society are those people who constitute it—both the staff and the amazing contributions of volunteers. In 2021-22, approximately 25 million people in England volunteered at least once, and my noble friend Lord Rooker gave a vivid portrait of what volunteers deliver. We want to see as many people as possible getting involved and taking action on the causes that mean the most to them. My noble friend Lord Bassam also raised the challenge of recruiting volunteers, and we support people to volunteer through a range of government policies and programmes, including supporting this year’s Big Help Out campaign in June, which amplified local volunteering programmes and opportunities for people to support their communities. Despite this, the recruitment and retention of volunteers is an increasing challenge for charities, with barriers ranging from a lack of awareness to opportunities to time constraints—I am aware I have one of the latter.

We are committed to removing these barriers and to supporting organisations to adapt to a changing world where increasing numbers of volunteers want to get out in a less formalised way. The Government’s reform of employment rights should help enable this. I probably do not have time to go into the points from the noble Baroness, Lady Sater, on the volunteering premium and the benefits, but I will revert to her. I will also respond to the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Black, on volunteering and community ownership, and to the noble Viscount, Lord Younger, about young people volunteering.

We know that charities and their trustees play a valuable role in society, and I am hugely sorry not to be able to go through all the other points I had, but I note the time. I finish by taking this opportunity to say thank you again to the noble Baroness, Lady Morgan, for securing this debate, and to all those Peers who have taken part, and to say a heartfelt thank you to all those working and volunteering in the sector for the invaluable work they do day in, day out.