Lord Maude of Horsham
Main Page: Lord Maude of Horsham (Conservative - Life peer)Department Debates - View all Lord Maude of Horsham's debates with the Cabinet Office
(13 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
2. What steps he plans to take to ensure that the big society bank has a social mission as part of its statutory remit.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
In our social investment strategy, announced on 14 February, we set out that the big society bank will be an independent institution with a locked-in social mission and initial capital provided by the banks. Sir Ronald Cohen and Nick O’Donohoe are working with us and the banks to put forward a proposal on how best and most speedily to achieve that.
Tom Blenkinsop
As how the big society bank will be set up and the terms on which it will receive capital from UK banks are still unclear, will the Minister explain how he will guarantee the bank’s social mission and ensure that it does not become like other mainstream lenders?
Mr Maude
As I said, the social remit will be absolutely built into its mission; it is a crucial part of it, so it will be locked in. I have to say that criticism comes poorly from Labour Members who have talked about creating a social investment bank for many years. Frankly, on taking office last May, I expected to find well-prepared plans, but when I opened the file, I found it pretty much empty.
Simon Hughes (Bermondsey and Old Southwark) (LD)
The Minister will know that I welcome the bank. What priorities will it have to fund projects associated with, and supporting, young people?
Mr Maude
That will be one of the bank’s priorities. The legislation allowing the money from dormant bank and building society accounts to be put into a social investment bank provides a priority for youth projects. As I say, this will be a serious priority. The bank will be able to provide wholesale funds into the already growing social investment market, for which there is a huge demand. We want to see much more money—including, over time, mainstream finance from the mainstream banks—being made available for this market.
Tessa Jowell (Dulwich and West Norwood) (Lab)
We welcome the progress the Government have made in setting up the big society bank, and we note that it will be launched with £300 million-worth of capital at the end of this year. However, community projects also rely on revenue funding to support capital investment and according to estimates from the Association of Chief Executives of Voluntary Organisations, the total loss of revenue faced by civil society organisations will be at least £1.14 billion in the next financial year, rising to £3.1 billion a year by 2014-15. Does the Minister accept these figures and, if not, will he undertake to provide the Government’s own estimates of the revenue losses faced by community organisations over that period?
Mr Maude
The social investment bank planned by the last Government would have received a meagre £75 million of investment at best, and probably a great deal less than that.
I do not know whether the right hon. Lady noted what my right hon. Friend the Secretary of State for Communities and Local Government told the conference of the National Council for Voluntary Organisations yesterday. He said that the Government had “reasonable expectations” that local authorities would not impose greater cuts in their funding for community, social and voluntary organisations than they imposed on their in-house services, and that if authorities did not follow those “reasonable expectations”, he would contemplate making them statutory.
The fact is that we face the biggest budget deficit in the developed world. As a result of the legacy of the Government of whom the right hon. Lady was a prominent member, we are spending £4 for every £3 in revenue, and we cannot carry on like that. The necessity—and it is a necessity—to eradicate the structural deficit is something for which the right hon. Lady should bear her full share of responsibility.
John Pugh (Southport) (LD)
3. What assessment his Department has made of the potential efficiency savings from the use of teleconferencing.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Teleconferencing and video conferencing are a key part of our strategy to minimise travel in the civil service. Officials have been encouraged, indeed instructed, to use alternatives. Telephone calls can be quite helpful in that regard, when possible. So far, Departments have saved £50 million in the current financial year by avoiding travel, but by the better buying of travel services we have saved an additional £50 million. We are also reducing the cost of teleconferencing itself. We have opened up fresh discussions with major suppliers, and as a result of the Crown renegotiations that I have been overseeing, one of our suppliers has already offered a significant reduction in its audio conferencing tariffs.
Mr Tom Watson (West Bromwich East) (Lab)
Teleconferencing provides a key opportunity for digital policy. The head of that policy in the Minister’s Department was appointed without a fair and open competition, as a former party staffer. That was one of 30 appointments revealed by freedom of information releases this week. Can the Minister tell me who those 30 people are and what they do?
Mr Maude
Of course I understand why the hon. Gentleman is so outraged by the idea of people with party affiliations fulfilling a public service vocation, because of course none of that ever happened under his party’s Government—a Government who, with the hon. Gentleman as one of the principal operators, distinguished themselves by their approach to cronyism.
I can tell the hon. Gentleman that anyone who has been appointed to a civil service role has passed all the appropriate tests, which, as he will know from his experience as a Minister in my Department, are extremely rigorous.
Peter Aldous (Waveney) (Con)
4. What progress his Department has made in establishing a big society bank.
Miss Anne McIntosh (Thirsk and Malton) (Con)
5. What recent representations he has received on the big society bank; and if he will make a statement.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Sir Ronald Cohen and Nick O’Donohoe are working with us and with the banks to develop a proposal for the big society bank. As I have said, it will initially be capitalised by an investment from the mainstream banks. We are currently seeking to secure state aid approvals from the European Commission so that money from dormant bank and building society accounts can be directed towards the big society bank. Nothing along those lines had been done when the Government took office. In the meantime, we are working with the Big Lottery Fund to ensure that interim arrangements are in place by April, so that we can make early investments as soon as the first round of dormant bank account money becomes available in the summer.
Peter Aldous
Youth clubs such as the Metro, Boston Lodge and Colville House play an important role in my constituency. What guidance and financial assistance will be given to them, and to those operating new voluntary sector schemes whose aim is to take over the running of other local services such as crossing patrols and libraries, and when will that guidance and assistance be available?
Mr Maude
As my hon. Friend will know, a key part of our approach to public service reform will be encouraging voluntary and social enterprises to bid for the delivery of public services. They are being given a massive opportunity to develop different revenue streams and deliver public services in a responsive and agile way. The big society bank will deliver extra wholesale funding to the social investment market for start-up and development capital for such organisations. In the meantime, for some organisations the transition fund will provide bridging finance until those revenue streams become available.
Miss McIntosh
My question was about representations received, because there is a lot of interest in the big society bank in Thirsk, Malton and Filey, but there is also concern that if match funding is required, it will trigger the 2.5% referendum call on local government spending under the Localism Bill. Will this issue be addressed?
Mr Maude
I will look into that. The big society bank will provide private investment to bulk up the important social investment market. We have had numerous representations on this matter, most of them saying, “Please get on with it because we were very disappointed about waiting for so long for the last Government to do anything at all.”
Chris Ruane (Vale of Clwyd) (Lab)
Will the big society bank give grants as well as loans, and will the loans be set at commercial or preferential rates?
Mr Maude
The big society bank will not make grants. It is a bank, so it will make loans and provide investment capital for this important and growing sector. One of the problems in the social investment market has been that Futurebuilders was able to give both grants and loans, which was very distorting for the large and growing number of intermediaries in that market. The bank should be an investment organisation, not a giver of grants.
Mark Durkan (Foyle) (SDLP)
What steps have been taken to ensure that the big society bank will be relevant and accessible in all regions? Also, is it being impressed upon the banks that the coming arrival of the big society bank will not obviate their duty to show consideration and support for the third sector in the current challenging funding environment?
Mr Maude
I am grateful to the hon. Gentleman for that relevant question. The introduction of the big society bank certainly does not obviate the broader need to support voluntary and social enterprises, in the interests of local residents. The bank’s remit will be UK-wide. The money put in by the banks will be for UK purposes, but the money coming into the big society bank in due course from dormant bank accounts will be for England only, unless the devolved Administrations decide to put their share of that money into the big society bank, which I hope they will be encouraged to do.
Rosie Cooper (West Lancashire) (Lab)
6. What estimate he has made of the likely change in the number of jobs in the voluntary sector in the next three years.
Anas Sarwar (Glasgow Central) (Lab)
8. What assessment he has made of the progress of the work of the big society ministerial group.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The informal ministerial group on the big society and decentralisation supports progress across government on cross-cutting issues, such as the role of the voluntary community and social enterprise sector in public service delivery, the progress made in vanguard areas and the compact between the voluntary sector and the state.
Mr Speaker
Order. The House must come to order. This is very unfair on the Minister. He is offering the House an informative answer and it must be heard.
Anas Sarwar
Thank you, Mr Speaker. I also thank the Minister for his answer. Given that opinion polls show that the majority of the British people have not even heard of the big society and that the majority of those who have think it is just a cover-up for the cuts, does the Minister believe that the work of the ministerial group has been a resounding success? Does he not believe that Ministers’ time would be better spent doing credible work in their own Departments?
Mr Maude
I am sorry that the hon. Gentleman does not think that building a bigger, stronger and more cohesive society is worth while, particularly given that the role of the state is having to retrench severely as a result of the financial incontinence of the previous Government of the party that he supports. I am sorry to have to remind him that when the coalition Government took office his Government were spending £4 for every £3 in revenue and had the biggest budget deficit in the developed world. So less money is available and building a bigger, stronger society, which I would have thought he would support, is a very worthwhile exercise for not only the whole Government, but the whole of Parliament.
Robert Halfon (Harlow) (Con)
Will the ministerial group examine the role of the big society bank to see whether it can be run on national credit union lines, so that it can link up with local credit unions and ensure that the money cascades down to community groups at the grass-roots level?
Mr Maude
The social investment market has been growing in recent years but it needs additional wholesale funds, both from the big society bank and from freeing up the guidelines on investment by trustees of big philanthropic foundations. That will grow the social investment market significantly, and the credit union movement, which is extraordinarily important and has a very important social mission, can be an important partner in that progress.
Alison McGovern (Wirral South) (Lab)
Will the Minister or the “Secretary of State for the big society” have a quiet word with Wirral borough council, which has closed important care and respite homes too quickly in order to let the non-government sector fill the gap? That is giving the big society a bad name.
Mr Maude
I refer the hon. Lady to the remarks made by the Communities Secretary yesterday. We do believe in localism; we believe in local authorities being accountable, not to Whitehall, but to their own local residents. Each local authority has to justify its decisions but, as my right hon. Friend said yesterday, we have expectations that local authorities will not impose greater cuts on their funding for voluntary organisations than they do on their own costs. We would expect them to have regard to that.
Mr Speaker
Order. The House must come to order. We want to hear Joseph Johnson.
Joseph Johnson (Orpington) (Con)
10. What steps he is taking to reduce the risk of fraud in public sector procurement.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The National Fraud Authority estimates that £21 billion is lost to fraud in the public sector each year, on top of which there is a so far unquantified loss from error and from uncollected debt. It is estimated that £2.4 billion of that £21 billion is lost to procurement fraud, and that is unacceptable. The Prime Minister has asked me to chair a counter-fraud taskforce comprising members from government and private sector experts to tackle the issue. We are overseeing a series of pilots, including one on procurement, to drive forward ways to tackle public sector fraud, and we will report our findings in due course.
Joseph Johnson
I thank the Minister for that answer. That figure of £21 billion is truly shocking. Will the Minister update the House on progress towards developing a more robust methodology for quantifying how much taxpayers’ money is being wasted in this way?
Mr Maude
It is actually difficult to know exactly how much is being lost. The numbers are increasing each year, but that is largely because there is a better handle on the data. The quality of much Government data is lamentably poor and it is particularly difficult to obtain accurate figures on some procurement fraud, such as collusion or bid rigging. However, in one of the taskforce pilots, the Department for Transport is using data analytics to detect overpayments from the Department’s accounts payable systems. A similar exercise undertaken by the Home Office detected and recovered no less than £4 million in overpayments as a result of fraud or error.