Stronger Charities for a Stronger Society (Charities Committee Report)

Lord Rooker Excerpts

Tuesday 16th January 2018 Lords Chamber

[Lord Rooker (Lab)]

My Lords, I was a member of the committee and I much enjoyed it—it was the first time I had sat on an ad hoc committee and I found it incredibly useful. I pay tribute to all the members, and in particular the chairmanship of my noble friend Lady Pitkeathley. I have taken a message on board and have come to have a moan. I point out that I am a trustee of the British Motor Sports Training Trust, which does not train drivers but the volunteers and the marshals, and when we started our work I was a trustee of the James Brindley hospital school in Birmingham.

We had some good outside visits. I particularly remember the visits to Manchester, but we did not confine ourselves just to England; we had a successful visit to meet charities in Cardiff. Since the report was published, I have addressed a couple of meetings around the country, one with a group of regional funders—infrastructure bodies—and the other with the Rural Community Council. The message from both was of pleasure that we had not piled red tape on charities; we deliberately set out not to do that.

I will make only a couple of points. First, local government has a tendency to try to snuff out charities on the dubious but unspoken ground that it, the council, should deliver all the services as a job-creation exercise. This is a somewhat Stalinist approach—everything from the centre. In my experience, the driver—I will not give examples—is as much officers as elected councillors. This is apparent when you read the evidence relating to public sector commissioning. I read all the evidence, and we had some fantastic items of evidence, but when you read the evidence on public sector commissioning, it is all there. We deal with this in particular in recommendations 18, 20 and 21. I shall not go over the details, as I shall certainly not speak for long, but those three recommendations are core.

Without core costs, a charity cannot operate. Core costs are part of the service—they are part of the delivery —and we really need to watch what happens here in relation to our recommendations. I accept the government caveat relating to legislation in respect of recommendation 18 on social value, but I am not really sure that all local authorities know what social value is.

The other key point that I want to raise relates to the training of trustees and staff. We particularly set out to deal with this vital issue at some length in recommendations 1 and 8. Training is a core cost in the same way as the paid staff of a charity, who in some cases organise hundreds of volunteers, are a core cost. A core part of the charity is the person who organises the volunteers. People who donate to charities say, “Oh no, we only want to give to the front end—to the delivery part. We’re not interested in the back office”. However, without the back office, you cannot have delivery, and that point came across again and again in the verbal and written evidence that we took. Training is good in any organisation.

Of course, it should be made much easier for charities to merge. I fully accept that there are too many charities, but they are started with the best of intentions and I would not want to snuff that out. Eight thousand charities a year are started. The Charity Commission undertakes a massive enterprise in registering 8,000 new charities a year, as well as regulating the existing ones, but it should be made easier for charities to merge and to amend the terms under which they operate if circumstances change. It is not a failure to merge like- minded charities if various things change—although that is how it has been put across in the past—and that message has to be put out to both the trustees and the Charity Commission. I would like to see a Charity Commission whose members have hands-on, third sector experience. That is highly desirable, but it is a matter for the Government, not for the Charity Commission.

I want to make a final couple of points, one of which relates to recommendation 41. It will be incredibly difficult to ask charities to pay for the regulator. People will not want to donate to a charity in order to pay for the Charity Commission. The commission is a government department; it is not a quango. It is not a non-departmental public body and it is not an executive agency; it is a non-ministerial department exactly like HMRC and the Food Standards Agency. They are just departments that do not have a Minister mucking around and interfering day to day. In other words, they are quasi-independent; nevertheless, they are government departments. You are going to have a hell of a job asking the donor to pay for a government department. We went through all this when the FSA was set up in the late 1990s, so I think that that will be difficult.

On the other hand, a very small minority of charities pay their chief executives enormous six-figure salaries, and I do not see a backlash from the donors. So there is an issue there. It would seem that some donors are quite happy about that because you do not see a backlash. In the past, I have raised the question of charities owning trading companies which pay their chief executives over £1 million.

Finally, this is something that we did not spend a lot of time on, but we raised the issue of trustee membership. That can be a problem. I know of one trustee just entering their fifth decade of trusteeship. One might say, “Oh, they’re elected every four years, so all that is looked at”, but there has to be a time when the founder trustees are told, “You’re in the way of change and fresh blood coming in”, although we did not quite put it like that in our report.

I think that it is a really useful report, notwithstanding the Government’s lukewarm response to the recommendations. It takes a long time to write a short report, and that is one of the problems. However, the response needs watching and following up. I know that the idea of ad hoc committees is that they are set up, they report and that is it. But we have not had that many of them—they have been in place for less than three or four years—and there will come a time when the House ought to say, “Hang on, let’s have a look at the outcomes of the ad hoc committees we have set up”. They are specific and special, and different from all the others, and we need to see whether they do what it says on the tin.