Charitable Sector

Lord Beecham Excerpts

Tuesday 5th October 2010 Lords Chamber

[Lord Beecham]

My Lords, for a new Member of your Lordships' House, learning how to navigate its geography and its procedures is the parliamentary equivalent of a novice London cabbie doing the knowledge, so I add my thanks to those of other new Members to the officials of the House: universally efficient, helpful, courteous and, in my case at least, patient beyond any reasonable expectation.

In another place, it is customary for new Members to extol the virtues of those to whose place they have succeeded and the constituency that they represent. Like most Members of this House, I do not have any predecessors. Indeed, in a long local government career, my antecedents—especially my paternity—have often been called into question. However, like the noble Baroness, Lady Ritchie, and the noble Lord, Lord Shipley, I have a constituency, because I, like them, am a serving councillor. I am not sure whether the noble Lord, Lord Shipley, who was the second leader after me but one, was sent to keep an eye on me or me to keep an eye on him, but at least we can provide each other with a pair as and when required.

I represent a ward in the west end of Newcastle, Benwell and Scotswood ward, which I have represented, albeit on different boundaries—derived, I may say, after due process involving extensive consultation and inquiry—for 43 years. It is among the 10 per cent most deprived wards in England, notwithstanding significant investment in recent years. I view the subject of this debate through the prism of the area which I represent and as someone engaged with a number of charities and voluntary organisations, local and national, listed in the register—although, I am bound to admit, often in a capacity more ornamental than useful.

The ward I represent has a population of about 12,000 people, and within it I can count 20 different distinct geographical communities and many different communities of interest defined by housing tenure, age, gender, faith, ethnicity or employment status—interests which may sometimes compete or even conflict, and which ultimately require to be mediated. That is one of the roles of local government. Although poor in economic terms—albeit with some areas more comfortably off within it—the ward is rich in organisations. Some are formal charities with paid staff; others are informal and rely on volunteers, bringing to the provision of local services and the championship of that community the intrinsic virtues of the charitable and voluntary sector: local knowledge and engagement, innovative approaches and, perhaps, a disposition to be less risk-averse than the statutory services tend to be.

Within the area, we have tenants’ and residents’ groups, friends of local parks, a community health project, credit unions, welfare rights organisations, luncheon clubs, a community garden and nature park, allotments, youth clubs and more besides. In addition, there are larger organisations such as housing associations, perhaps not easily distinguishable from statutory or private sector bodies, and citywide organisations such as Age Concern, whose local president I am. Well endowed as we are in terms of activity, in truth, most of the local organisations depend on a relatively small number of activists—about 240, it has been calculated—usually, as it happens, women, who are often involved in more than one organisation. I am lost in admiration for people who have a daily, weekly struggle to keep their lives and families together but devote so much time, commitment and energy to the welfare of their community.

However, it is a plain fact that while social capital is available in the community, finance simply is not. A sample of 11 significant organisations in the area has shown that collectively they have an income of about £2 million a year. Of that, £1.4 million comes in grants from the city council, the Government, the National Health Service or other national organisations of that kind; £450,000 comes from trusts; £85,000 from the lottery; and £76,000 from the local community—that is to say, 4 per cent from within the area itself, which is not very surprising given the nature of its socio-economic profile. So the voluntary and community sector in that ward is critically dependent on external and, in effect, statutory funding for the continuation of its activities. We must not lose sight of that.

That is equally true across the city as a whole. In Newcastle, we have 2,200 voluntary and community groups that employ the equivalent of 5,000 full-time employees, so they play a significant part in the local economy as well as delivering services. As has already been mentioned, demand is increasing as a result of the recession at the same time that income is falling for these organisations. Many of them have already sustained in-year cuts that have caused problems across a range of services. In fairness to the city council, which is in a political control that I am not entirely comfortable with, it has drawn down on reserves to make good some of the cuts that have been imposed this year on government programmes in the city, but it will not be able to do that next year. An example is the cuts in the migration fund, which has affected two organisations in the ward that I represent to the extent of £70,000 this year, and their future is now very much in question. There is real concern on the financial side among organisations that are delivering the service. There is concern not only about those organisations but about organisations such as the Newcastle Council for Voluntary Service, of which I am a vice-president, which provides support, back-up and a voice for the sector. I was particularly pleased to hear the Minister refer to that kind of organisation as ones that the Government would seek to support. It is crucial that they should do so.

To describe this kaleidoscope of different organisations as a big society is perhaps to use the wrong adjective because it seems to me to reflect the small society of the particular and the local. We will shortly learn just how tight the financial parameters will be within which statutory and non-statutory services and organisations will have to operate. With that in mind, I hope that the call of many organisations for a reform of gift aid will be heeded and that we will see an improvement in the way that it is administered. It is a practical way of enhancing the income of charitable organisations and encouraging donors, and many noble Lords have said that it is necessary.

The sector clearly has an important role in a mixed economy of provision as well as in advocacy. That role is often governed by contracts, and I hope that the voluntary sector is not seen as a way of delivering services more cheaply, particularly at the expense of its employees. I recall one case in my own authority in which home help services were outsourced to charitable organisations paying barely above the minimum wage, compared with the not-very-princely sum of £7 an hour that the city council was paying. I do not think that the sector looks to perform that kind of role. On the other hand, procurement processes should facilitate the role of the sector by ensuring that contracts are not too large or long to be accessible to smaller organisations. If we want to encourage them to participate, we ought to provide for that.

In the past few years, I have been privileged to attend the annual Compact meetings, originally initiated by my noble friend Lord Filkin, and have there suggested that the sector needs to engage in the scrutiny of public services and needs to be subject to scrutiny because accountability is surely a two-way street. I have suggested that there should be further promotion of peer review in the sector. It has been very successful in local government. I welcome the partnership improvement programme, which has brought together senior officers from councils and the third sector. It has accredited people from the sector to serve with council peers, assisting councils in their review processes. Places have been made available on leadership training courses, and there is scope to build on the work of organisations such as Common Purpose and to encourage secondments between the sector and the public sector. We clearly need to bring them together. Support for the sector does not and must not imply conflict between the sector and the public sector in general, especially local government. We need to promote synergy between the two, bringing together civil society and civic society in the interests of the community and good governance.