Charities (Protection and Social Investment) Bill [ Lords ] (First sitting)

Anna Turley Excerpts

Tuesday 15th December 2015 Public Bill Committees

[The Chair]

Copies of written evidence that the Committee receives will be made available in the Committee Room. We will now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. A Member who has put their name to the lead amendment in a group is called first; other Members are then free to catch my eye to speak on any or all of the amendments within the group. A Member may speak more than once in a single debate.

Please note that decisions on amendments take place not in the order in which they are debated, but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection and grouping lists, and decisions are taken when we come to the clause that the amendment affects. I hope that explanation is helpful. I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following the debates on the relevant amendments.

Clause 1

Official warnings by the Commission

[Anna Turley (Redcar) (Lab/Co-op)]

I beg to move amendment 2, in clause 1, page 1, line 16, after “give” insert “at least 14 days”.

To require a minimum period of 14 days’ notice of a warning.

It is a pleasure to serve under your chairmanship, Mrs Main. Thank you very much for this opportunity. As we stated on Second Reading, we wholeheartedly welcome the Bill and the intention to clarify and support charity law, particularly by introducing greater transparency, greater effectiveness in governance and greater efficiency. The Bill will also give charities a new power to make social investments.

The intention behind clause 1 is to introduce a new official warning for the Charity Commission where it considers that there has been a breach of trust or duty, or other misconduct or mismanagement. Our amendment, which we believe is important, would require a minimum period of 14 days’ notice if a warning is issued.

We welcome the clause in principle. We understand that the purpose behind it is to fill a gap for low-level breaches of the statutory provisions of the Charities Act 2011 or of the fiduciary duty where there are low risks for assets and services. The National Audit Office welcomed it and said it will give the Commission

“a stepped approach so that, rather than just having, on the one hand, advice and guidance and then the nuclear option of a statutory inquiry, it gives the Commission something in between”.

We welcome the principle of the warning process.

However, we have some concerns about the clause, particularly on the lack of safeguards, which we believe could threaten the independence of charities and fundamentally change the relationship between the Charity Commission and its volunteer trustees. The commission already has a number of powers to deal with regulatory concerns—even low-level concerns. In particular, it can do so by way of operational compliance cases, which it routinely carries out.

Statistics from the Charity Commission show that between 1 April and 30 September 2015 it opened 575 operational compliance cases into registered charities. If the matter is urgent, the commission can already open a statutory inquiry without notice and suspend the trustees, pending the use of additional protective powers. The decision to open a statutory inquiry and the subsequent exercise of protective powers can be appealed to the charity tribunal, known as the first-tier tribunal. There are no plans to change that.

Operational compliance cases are likely to be regarded very differently from the new official warnings, which could have a significant impact on a charity. First, it is likely that the public issuing of an official warning, which is allowed in this version of the Bill, will carry far more stigma than an operational compliance case and could risk damage to a charity’s reputation, with a resulting drying up of funding and support.

Secondly, failure to comply with a warning automatically gives rise to a right for the commission to take further, significant protective action in relation to a charity, after opening a statutory inquiry. That is not the case with an operational compliance case, so this is a fundamental shift in the relationship between charities and the commission.

[Peter Kyle (Hove) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Main.

The relationship between the regulator and charities is a sophisticated one, and it is important that the Charity Commission plays a supportive role as well as a challenging one. Does my hon. Friend agree that the ability to send a warning notice without notice is a sign of failure in the relationship between the regulator and the charity, rather than one of support or challenge?

[Anna Turley]

My hon. Friend makes a really important point. The relationship is long standing, sophisticated and complex. It is right that there is an opportunity to give notice of a warning in the Bill. Our issue is that there is no significant timeframe and no notice of the timeframe. I will explain why that is such a critical issue, but my hon. Friend is absolutely right; it is important that there is a nuanced and balanced relationship and opportunities for both sides to state their case in any dispute.

I will now focus on the amendment. The Bill helpfully ensures that before issuing a warning, the commission must give notice of its intention to do so. However, there is no indication in the legislation of timescales for a warning. The briefing from the commission states that

“the Commission has confirmed it will ensure that a reasonable time for representations is given”.

It continues:

“The timing is likely to vary for warnings in different cases, depending on how much engagement and warning the charity has had during engagement with them, and there may be times when the timescales might have to be relatively short (if, for example, it relates to a time critical incident)”.

It states that operational guidance for its staff will be published. However, this seems very vague and gives total discretion in this situation to the commission. What is a reasonable time? Could that mean a matter of hours or a phone call before a press release is sent out? We know the potential damaging implications for a charity of publicity around the warning.

[Jo Stevens (Cardiff Central) (Lab)]

The problem with the term “reasonable” is that it is subject to interpretation. We can tell from case law and statute that what is reasonable in one circumstance is not reasonable in another. This will create a lack of clarity around the implementation of the Bill. Does my hon. Friend agree that it would be much better to have clarity and specific time limits so that both the Charity Commission and the charities are clear about what the expectation is?

[Anna Turley]

I totally agree. That is the purpose of the amendment. There is a lack of clarity around “reasonable time”. Not only is that pretty indefinite, but it puts the onus back on staff at the Charity Commission, which could place an undue burden on them and leave open to interpretation what the definition of a reasonable time could be. That is why it is important to have a timeframe in the Bill.

Without a timeframe, there might be no opportunity for a charity to prepare a defence or to correct an unconscious mistake, which could be the cause of the warning, or to let trustees know. We might end up in a ridiculous situation in which they could read about a warning for their charity in a newspaper or a sector magazine because, as the Bill is drafted, the Charity Commission can publish the warning. Such a warning, especially if published, could have a substantial impact on a charity’s ability to raise funds and might have significant reputational damage.

It may be felt that a prescribed period of notice is not necessary because the Charity Commission will act reasonably and proportionately. I do not doubt that will always be its intention; I know that the Charity Commission does an extremely good job in difficult circumstances, often with many resource pressures. However, recent experience shows that is not always the case. In a recent High Court case involving the commission and the Joseph Rowntree Charitable Trust, the Lord Chief Justice referred to “ludicrous time limits” imposed by the commission. He also said that he could understand why it was felt that the Charity Commission had behaved in an extremely high-handed manner in that case, and suggested that there should have been

“an awful lot more time spent at the beginning talking, as people normally do, and not issuing ultimatums”.

There is therefore a real danger that the commission, if allowed scope to use this new power in a disproportionate way, may well do so, however well meaning its intentions.

If the power is intended to be used only for low-level matters, a minimum notice period of 14 days is entirely appropriate. It is not clear why there should be any objection to that. For more serious matters where the Commission is able to take more extensive regulatory action, it will be able to use its other powers without notice. That is the existing situation. The Joint Committee on the Draft Protection of Charities Bill recommended that a reasonable minimum notice period to make representations over a draft warning should be clear in the Bill. That safeguard has not been included and the amendment seeks to rectify that.

Moreover, it was clear, even from the Government’s response to the Joint Committee’s report, that a recipient should have an opportunity to make representations on a proposed warning and for these to be considered by the commission before the warning is published. There is no minimum notice period, and it is possible that a recipient will not have a meaningful opportunity to make representations. We know that there have been many situations in which advice and support given by the commission can be challenged and are open to interpretation by the charity.

[Jo Stevens]

A warning could have human rights implications. It might harm a trustee’s reputation, for example, or be in breach of his or her rights under article 8, particularly in the absence of a fair trial, as preserved by article 13. Is my hon. Friend concerned that the Bill has implications for human rights?

[Anna Turley]

I completely agree with my hon. Friend. A later amendment sets out the right of appeal to the charity tribunal, which we think is an important safeguard. Even without that appeal, giving no notice whatsoever could entail significant risks, particularly with regard to reputational damage, as the Human Rights Act sets out.

[Peter Kyle]

My hon. Friend is being generous with her time. Trustees of boards of charities are volunteers, and they give up their time very generously. Quite often, boards are cautious in their approach. Does my hon. Friend think that seeing warning notices handed out to other charities might well be a deterrent to people giving up their time and lead to uncertainties over governance arrangements?

[Anna Turley]

My hon. Friend makes another excellent point. We know how difficult and challenging it can be around the country to get good trustees and to get people to stick with it. Trustees are under a lot of pressure because of regulations and time commitments. There is the risk that the measure will disadvantage trustees and deter them from putting themselves forward. If a warning has been published, the reputational damage could be huge.

The Lord Chief Justice referred to “ludicrous time limits”. He also said that he could understand why it was felt that the Charity Commission had behaved in an extremely high-handed manner and that there was a real danger that the Commission, if allowed the scope to use this new power in a disproportionate way, may well do so, however well meaning its intentions.

We are not seeking to remove the power to publish a warning, because we think that it is important. The ability to publish a warning should be there, because of the opportunity it gives to create greater weight behind a warning. However, we think that before that step is taken there should be significant opportunity for a charity to challenge it. That is what our proposed 14 days’ notice seeks to do.

The power to publish a warning, the potential impact of which cannot be overstated, means that the public, media and funders will become aware of it. They will not be able to distinguish between a low-level issue that is giving rise to the warning and something that is much more severe. In the court of public opinion, such issues often become conflated. This year we have already seen a huge media furore relating to the charitable sector. Although relevant to only a small number of charities, it has had a substantial and damaging effect on trust in the sector. The publicity could lead to a choking off of donations and the loss of grant funding and corporate sponsorships, leading to closure of services and redundancies.

To give advance notice of 14 days of a warning, as our amendment proposes, would allow a charity to ensure that steps can be taken immediately to remedy a situation, where it is a small administrative error, to explain any extenuating circumstances and to challenge that with the Charity Commission. It would allow the conversations mentioned by the Lord Chief Justice in the High Court case to take place in a supportive and trusting environment.

We believe that there is no reason why there should not be a 14-day notice period ahead of a warning. We hope that the Government will support our amendment.

--- Later in debate ---

[Maggie Throup]

The problem is that if the evidence has been destroyed, no one knows whether it was there. That is the case I want to make. We want to make sure that correct action can be taken in a timely fashion.

[Anna Turley]

The hon. Lady said that the measure could make the powers of the Charity Commission similar to those of other regulators. However, while many other regulators have the power to issue warning notices, they are often exercisable only in the case of a breach of a statutory requirement. This proposed power goes much further than that. A warning can be given on the strength of

“a breach of trust or duty or other misconduct or mismanagement”.

The hon. Lady will agree that that gives the Bill a fairly broad scope. The adverse publicity and possibility of more severe regulatory action that could flow from that would not match what had actually been breached at that stage.

[Maggie Throup]

I have to disagree with the hon. Lady. Regulatory abuse in charities is of course rare, but it is vital that measures are in place to ensure that the public and, indeed, the many charity volunteers do not lose confidence when it happens.

Clause 1 provides a suitable means of protecting our many charities, small and large, from unscrupulous behaviour. It will maintain the confidence of the public, the many donors and the amazing volunteers, as well as those employed by charities. I am delighted to have been able to speak in support of the clause, which I commend to the Committee.

--- Later in debate ---

[Mr Wilson]

Clearly it is not enough, because the Charity Commission has asked for the additional powers. I am sure the Charity Commission would be only too happy to answer the detailed question about the number of affected charities.

I want to return to the safeguards, because there are a number of important safeguards on which we should focus our attention. First, the Charity Commission must give notice of its intention to issue a warning to a charity and its trustees. The notice must specify a number of matters, including the grounds for issuing the warning and any action the Charity Commission considers should be taken by the charity to rectify the breach that has given rise to the warning in the first place.

The notice must specify a period for representations to be made about the proposed warning, and the Charity Commission must take account of any representations before it issues any warning. An official warning could also highlight the likely consequences of any further non-compliance, which would be likely to require a more significant intervention by the regulator, such as the opening of a statutory inquiry and subsequent use of its temporary protective powers or its permanent remedial powers.

[Anna Turley]

I appreciate the Minister setting out those important safeguards. However, there is little evidence about the timeframe in the Bill, which means that charities have no control over their ability to present their arguments and let their trustees know. We will continue to press on this issue unless the Minister has some analysis of what is a reasonable time.

--- Later in debate ---

[Mr Wilson]

The criteria for issuing an official warning are now clearly stated in the Bill—breach of trust or duty, or other misconduct or mismanagement. These are not as narrow as the criteria recommended by the Joint Committee, but we decided that limiting the warning power to a failure to comply with a limited range of statutory provisions, or order or direction of the Commission, would result in a power that was only half effective at best. Charity law is a mix of statute and case law, and the scope of the warning power needs to reflect that. It would be wrong to limit the warning power to just breaches of statutory provisions or commission orders or directions, as this would limit the regulator to issuing warnings on less than half the legal framework.

I recognise that a breach of duty might not always be completely clearcut, but it is right that the regulator of charities should be able to reach a view on whether a charity’s trustees have breached their duties, and should be warned about their conduct. It would be wrong to expect the Charity Commission to have to open a statutory inquiry and consider exercising its more serious compliance powers in cases where charity trustees have breached their duties but not a specific statutory provision.

[Anna Turley]

The Minister is being extremely generous with his time. Does he agree that there are things that lie between breaking a statutory definition and what we are talking about here, which is quite a low level of concern: a breach of trust or duty, or other misconduct or mismanagement? That is quite broad in scope. Should there not be further definition—not necessarily in statute, but perhaps from the Charity Commission—to identify the criteria for that?

[Mr Wilson]

The Charity Commission is always prepared to listen to representations and to consider further guidance, but as I will come on to explain, I do believe there should be further guidance as part of what we are discussing.

--- Later in debate ---

[Mr Wilson]

My daughter has just taken up knitting. She is only eight and is doing a fantastic job.

It is clear that party political activity is outside the bounds of what charities should be doing. I think everyone accepts that. Sometimes there is a grey area, and if something is reported to the Charity Commission, it would rule one way or the other. I have stated on many occasions on public platforms that it is right that charities should be able to speak up for their beneficiaries, whether the Government like it or not, and I stick to that principle.

Another issue raised was the risk that adverse publicity could result from the publication of a warning. As I have said, it is important that charities are accountable to donors, beneficiaries and the general public. Since the 2006 Act, one of the commission’s statutory objectives has been to enhance that accountability. The argument against the clause is effectively that charities should not have to be accountable for things that they have done wrong. That is not fair to donors, beneficiaries and the general public, and reduces the incentives for charities to make future improvements.

A point was made about whether the commission should be allowed to publish warnings at all. Charities exist for public benefit and depend on public support, so there should be transparency. Official warnings should be published if the regulator considers it necessary to intervene, unless there is good reason not to publish the details of an official warning. Publishing those details also encourages compliance, thereby increasing the efficacy of the power.

Any published details of warnings would have to be removed by the commission after a certain period—as I said earlier, the commission currently archives after two years. There would be an opportunity to make representations about the factual accuracy of a statutory warning before it is published. A process for representations is included in the clause, following the recommendations that came during pre-legislative scrutiny. The commission has said that it will consult on and publish guidance on how it will use the official warning power before the power commences.

The hon. Member for Hove asked about the balance between the Charity Commission as friend versus the Charity Commission as regulator. I think we all agree that the commission needed to improve its regulatory performance on compliance and enforcement—the National Audit Office made that point—but that is not to belittle its other important regulatory functions, such as registration, guidance and permissions. We agree with Stuart Etherington of the National Council for Voluntary Organisations that in the past the commission sometimes blurred the distinction between being the regulator and being a friend of the sector. Getting the balance right is not particularly easy, but I am confident that the commission’s current leadership will try. The lack of guidance would create risk for the sector, but the commission’s guidance is well regarded and much has been done to simplify it.

The hon. Member for Ilford North briefly mentioned the commission’s need for extra resources to do its job. It has said that the powers would help it to undertake its compliance and enforcement work more efficiently, which is one of the reasons why we are introducing them. Gaps and weaknesses in the commission’s existing legal powers have occasionally frustrated its efforts to tackle abuse, resulting in delays and wasted costs that the Bill will help to minimise. We are helping the commission to become more efficient and to use its resources better than in the past.

A wider point was made about the amount of money that the Charity Commission receives. Obviously, all parts of Government need to contribute toward efficiency, and that includes the Charity Commission just as much as everyone else. Nevertheless, we recognise the need for targeted additional resources. In October we announced an extra £1 million of funding for 2015-16 and a further £8 million in capital investment between now and March 2017. That will be spent on technology and front-line operations, which will allow the commission to deploy its resources more effectively to prioritise its work.

I am sorry, but I do not support amendment 2. I hope the hon. Member for Redcar will understand that in practice, in the vast majority of cases, the commission will give sufficient notice, which I would expect to be 14 days. That will be set out in guidance that will enable some flexibility for particularly urgent cases. On that basis, I hope that she will not push the amendment to a vote.

[Anna Turley]

I thank the Minister and everyone who participated in the debate. There is a wealth of experience in this room from within the sector and on the frontline, which does credit to this place and has informed the debate. I echo colleagues’ sentiments about charities’ fantastic work in local communities, in particular their work with the most deprived in some our most challenged communities. We appreciate the work that trustees do and the value that they provide while giving up so much precious time. In the spirit of working with the Government on the Bill, we hope that it will, through better support and guidance, allow trustees and charities to develop their role and create a better regulatory environment.

I am reassured by everything the Minister has said, but we will continue to want to iron out some issues throughout the Bill’s proceedings. While the vast majority of charities abide by the regulations and work incredibly hard to fulfil the criteria, I agree that our attitude cannot be that charities can do no wrong. Equally, our attitude cannot be that charities can do no right. Charities may have felt somewhat beleaguered over the past few months as a result of some media campaigns, so it is important that we send a message that we want to support them in doing the right thing. Some concerns remains, however. The Minister said “proportionate” a lot, and we are putting a lot of trust in the Charity Commission to decide what is proportionate. While I welcome his notification that the commission will set out in guidance the timeframe for issuing warnings, I look forward to seeing the detail.

[Wes Streeting]

The Opposition’s amendment specifies a 14-day window before a warning notice could be issued. Is my hon. Friend aware that several voices in the voluntary sector say that that does not go far enough, but that what she has proposed is a sensible compromise that gives flexibility and fair notice?

[Anna Turley]

My hon. Friend is absolutely right. We received many representations from the charity sector suggesting that 28 days was the preferred option. We thought that 14 days was sufficient to give people the chance to notify trustees and to take immediate action to challenge concerns. The amendment is fair and I hope that the commission will consider our 14-day proposal as a good timeframe when setting out its guidance, so we look forward to seeing the detail.

I also look forward to exploring some of the Minister’s examples of when action must be swift and what steps the commission will take in such circumstances. I am also glad that the sector will be able to contribute during the consultation period. In the light of the safeguard of this being proposed by the commission and the constructive discussion with the Minister, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Anna Turley]

I beg to move amendment 1, in clause 1, page 2, line 15, at end insert—

‘(2) In Schedule 6 to the Charities Act 2011 (appeals and applications to Tribunal) insert in the appropriate place—

--- Later in debate ---

[Jo Stevens]

The Government have been reducing access to judicial review proceedings, which is another reason why this is of particular concern.

[Anna Turley]

My hon. Friend makes an excellent point. We know that judicial review is pretty much inaccessible without legal assistance, and that cuts to legal aid have had a hugely detrimental impact on people who are trying to access justice.

[Robert Jenrick]

The hon. Lady is making a good point. Doe she agree that perhaps the best way to tackle that problem is through guidance from the Charity Commission? If the Care Quality Commission issues a warning, there is no formal way to appeal against it, but in the guidelines there is a 10-day period in which representations can be made to the CQC, which happens all the time. Then the CQC, having read the representations and at its discretion, can withdraw its warning.

[Anna Turley]

The hon. Gentleman makes an excellent comparison, but what happens if, at the end of that representation, the Charity Commission does not agree? Where is the right of redress or recourse after that? Judicial review is too large, bureaucratic and expensive. It is a complex, time and resource-intensive activity that is largely inaccessible without legal assistance. It is widely known as the remedy of last resort for public body decisions when all other avenues of appeal have been exhausted.

There may be a perception among the public that charities should not use their funds to pursue judicial review applications, in particular in the light of some of what we have seen in the media in the last few days about how charities spend their money, which goes against the grain of what we are trying to encourage. It has been said that if it were possible to appeal against a warning, the commission might be reluctant to issue warnings full stop, as there would be a risk that appeal after appeal would gum up the system. This implies an awareness that judicial review is not really a remedy, as it so much more costly, complex and inaccessible than an appeal to the tribunal. In any event, research suggests that of the 103 inquiries opened by the commission between April 2014 and April 2015, no more than 5% were appealed to the tribunal, which is not a significant proportion. If the warning power is meant to be only for low-level issues but could precipitate adverse publicity—we have already discussed that at some length this morning—and the exercising of the commission’s protective powers, it is illogical that it should be more difficult to challenge than the exercising of the commission’s more extensive regulatory powers, such as the power to remove trustees, which can be challenged in the tribunal.

It is also worth noting that there seems to be confusion over whether the warning power can be used for low-level or medium-level concerns. When the power was first suggested, the Cabinet Office said that it would be for medium-range abuses, for which the commission’s protective powers could be used but it is not likely to be proportionate to do so. Yet the explanatory notes to the Bill say that it will be used where the risks are relatively low. There is still a huge lack of clarity about the difference between a medium-range and a low-level concern. The possible implications of a warning, as we know, are harsh for low-level matters, so it is important that charities have a right of redress and recourse to a tribunal. Without it, they might be unable to disprove what could potentially be false allegations. We also want to ensure that the Charity Commission considers warnings extremely seriously before issuing them.

[Mr Wilson]

I am grateful to the hon. Lady for her explanation of this amendment. I have already explained our thinking behind the official warning power at some length, and I do not intend to repeat it now, the Committee will be relieved to hear. I will try to be brief, but I do want to explain our thinking on why we propose relying on a representations process and judicial review as the means to challenge an official warning, rather than a right of appeal to the tribunal.

To use a footballing analogy, I consider official warnings to be like a yellow card, whereas statutory inquiry and the corrective and remedial powers that follow are more of a red card. It is absolutely right that the commission’s protective and remedial powers are subject to rights of appeal to the charity tribunal, but I do not accept that the warning power is in the same category.

Clause 1 provides for the commission to give notice of its intention to issue an official warning and for a period for representations to be made, which the Charity Commission will be obliged to consider before deciding whether to proceed with issuing the official warning. There is then the option of judicial review of the commission’s decision. We consider that that is proportionate in the sort of low-level yellow-card cases in which an official warning would be issued. It is exactly the same as the current position when the commission publishes details of its operational compliance case reports into non-inquiry cases that have attracted public interest and highlight important lessons for charity trustees.

The problem the commission currently has is that in between 20% and 30% of those non-inquiry cases, its advice and guidance is simply ignored, or the issues are not rectified in full. We believe that a right to appeal an official warning to the charity tribunal would be disproportionate and could render the power impractical for its intended purpose, which is to enable the commission to respond proportionately to the low-level non-compliance, misconduct or mismanagement that sometimes take place. The commission has told me that the resources required to defend tribunal proceedings would be disproportionate to the issues at stake in official warning cases, rendering the official warning power unusable from the commission’s perspective. The last thing I want to do, as I have said, is to give the Charity Commission powers that it cannot use because they are too bureaucratic, and that it could be criticised for failing to exercise several years down the line.

The Joint Committee on the draft Bill looked at the issue in some detail and agreed with us, stating:

“Although we note the arguments by some that the issue of a warning should be subject to appeal to the Tribunal, we see the practical difficulty this would present to the Commission as disproportionate to the benefits of doing so. On the assumption that the Government agrees to our recommendation that the necessary details be added to the face of the Bill, we are satisfied that the issuance of a warning does not need the further safeguard of an appeal beyond the ability to seek judicial review.”

It is important to point out that if the Charity Commission sought to escalate matters when an official warning had been ignored, by opening a statutory inquiry, the opening of the statutory inquiry would itself be subject to a right of appeal to the charity tribunal. Similarly, if the commission were to exercise one of its protective or remedial powers, that would also be subject to a right of appeal to the charity tribunal, so there are already two layers of appeal rights when a statutory inquiry is involved. It would seem wrong to add another layer of appeal to the tribunal in the case of an official warning, which could be used to frustrate commission regulatory action.

The Charity Commission has a high success rate on appeal—there were no successful appeals to the tribunal against the commission’s decisions to open a statutory inquiry in 2014-15. That shows that the concerns that some have expressed about the commission’s decision making are not based on reality. The issue for the commission is the amount of work and time that each tribunal case takes, even when it does not have merit. In 2012-13 appeals were made to the tribunal in five cases, and in 2014-15 appeals were made in 32 cases. The judicial review system is much better set up for setting right genuine wrongs, while discouraging or disposing of cases that are unmeritorious or that have been brought with the calculation that delay through litigation is the best tactic for avoiding robust regulation.

The requirement in clause 16, which I urge members of the Committee to look at if they have time, for a review of the legislation to begin within three years of enactment, will provide a timely opportunity to review the commission’s exercise of the official warning power and any judicial reviews of its exercise of that power.

The hon. Member for Redcar made a couple of brief points, one of which was about judicial review being costly and inaccessible. The administrative court judicial review system is much better set up for dealing with the concerns that are expressed—for putting right genuine wrongs, as I have mentioned—because there is a filter system. The tribunal, unlike judicial review, does not have a filter system in which the court’s permission to go ahead is sought. Cage is a recent example. The High Court refused permission on two of the three grounds, avoiding the spending of significant amounts of time on complex human rights arguments that were not arguable.

As for costs, a system such as that of the High Court, where costs are usually paid by the loser to the winner, can act as a sensible deterrent, encouraging parties on both sides to act reasonably and in accordance with the overriding objective.

Another question from the hon. Lady was whether the provision amounts to a direction power. The answer is no, it does not. An official warning is not the same as a direction power. The Government agreed with the Joint Committee’s recommendation to set out more detail in the Bill about the content of an official warning, including that the commission should specify how a charity should rectify any breach.

In some cases, such as a failure to file accounts, it will be obvious how a breach can be rectified. In others it will be less clear, and it is important for the commission to be able to set out guidance on the actions it considers necessary to remedy a breach. Ultimately, however, it will be for the charity’s trustees to decide how they will remedy a breach and then to demonstrate that they have done so effectively. A warning cannot force charities to take a particular course of action.

I think I dealt earlier with why there is no appeal in relation to warnings, so I shall not do that now. I hope that the hon. Lady will be persuaded to withdraw the amendment on the basis of my response.

[Anna Turley]

I thank the Minister for his thorough and helpful response. Again, we will not press the matter to a vote, but we still have significant concerns. As a football fan I liked the Minister’s metaphor about yellow cards, but with a yellow card there is no immediate repercussion other than having to be a bit more careful about the next tackle. For a charity, there are potentially quite damaging repercussions of a warning, particularly given the public notification. There could be an impact on a charity’s ability to fundraise, its reputation and its ability to find trustees. Those are wide-ranging implications, and something of such seriousness needs to be able to be challenged.

We still have not come to a conclusion on that point. I take the Minister’s point about the lack of error making so far in the Charity Commission’s decisions, and I commend it for that, but that is not to say that it will always be perfect. The point about warnings is that they are more low-level, so the likelihood of error is going to be substantially lower. As yet, there is no means of redress, other than judicial review, if a warning has been incorrectly given or if it is subsequently found that the Charity Commission did not abide by due process. Judicial review seems hugely disproportionate, particularly in the case of smaller charities, for what seems like the small issue of a warning. There ought to be proper discussion about different means of redress and a way of allowing a charity to challenge the Charity Commission formally.

We will not press the amendment to a vote, and I appreciate the Minister’s point that the Commission will be setting out further information in its guidance. I also welcome the Minister’s acknowledgement that the Charity Commission cannot force charities to take a particular course of action on the back of a warning. That is a welcome message to the sector. Of course, people will want to rectify any errors or issues that have led to a warning being given. I am sure many will want to guard their ability to decide the future of their charity and not be directed on how to run it by the Charity Commission. I look forward to seeing more from the Charity Commission on how it intends to ensure that.

We look forward to working through further clarification away from the statute book, but on the basis of the Minister’s comments I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[The Chair]

As I said earlier, we will not be having a debate on clause 1 stand part.

Clause 1 ordered to stand part of the Bill.

Clause 2

Investigations and power to suspend

Question proposed, That the clause stand part of the Bill.

[Anna Turley]

Clause 2 sets out the powers for the Charity Commission to take action where a charity fails to remedy a breach as specified under a warning. Our amendment 3 sought to ensure that where a warning had been challenged through the charity tribunal the charity was not automatically able to take action under clause 2. Given that we withdrew our previous amendment, I decided not to move amendment 3, because it was pursuant on a charity tribunal.

--- Later in debate ---

[Mr Wilson]

My apologies, Mrs Main. I missed that—it was all too quick for me. I am a bear with a slow brain.

Clause 3 enables the Charity Commission to take account of a person’s other relevant conduct outside of the charity under inquiry. The provision will enable the commission to consider whether there is evidence of misconduct or mismanagement in other charities or conduct outside charities that could undermine public trust and confidence in charities and therefore ought to be taken into consideration before the commission determines how to act.

On the face of it, that appears to be a very broad power, but it is not. There are significant safeguards, which I will set out. First, there must be a statutory inquiry open into charity A of which the person is a trustee or employee and the Charity Commission must be satisfied that there is misconduct or mismanagement linked to that individual in charity A before it can consider any of their conduct outside the charity as a makeweight in its decision-making. Secondly, the commission, when exercising its powers, must provide a statement of reasons under section 86 of the Charities Act 2011, which would set out all the evidence it relied on in making the decision. This would include any evidence from outside the charity, which must, of course, be relevant evidence. Finally, there is a right of appeal to the charity tribunal in relation to the exercise of the commission’s compliance and remedial powers, ensuring judicial oversight of the exercise of the relevant power.

The Charity Commission could only take account of conduct that would be relevant to the management or administration of a charity and would have to set out in its statement of reasons, under section 86 of the Charities Act 2011 or under the new official warning power in clause 1, the conduct that it was taking into account in decisions to exercise any compliance powers. The Charity Commission would not be able to take into account any conduct that was not relevant to the management or administration of a charity.

Let me give an example of when the commission would expect to rely on this power in practice. Allegations are made against an individual who is a trustee of charity A about abuse of vulnerable beneficiaries in a charitable care home. The Charity Commission opens a statutory inquiry and determines that there has been misconduct by the trustee. During the course of the commission’s inquiry, other regulators provide the commission with evidence of past misconduct that resulted in the individual’s employment in a care home being terminated. The commission would be able to take this other evidence into account before making a decision on what action would be proportionate in the circumstances.

As things stand, the commission would be able to give no weight to this other evidence of unacceptable conduct. Another example could involve an individual who is a trustee of two charities, charity X and charity Y. He may have been involved in misconduct in charity X and the commission may have already taken action in relation to charity X. The regulator may then have concerns about similar misconduct taking place in charity Y but, as the law stands, the commission cannot take into account the individual’s track record from charity X. This provision would enable the commission to do so.

We made amendments to the Bill in the other place to modernise the language of this provision and others in the Charities Act 2011. These changes were suggested by Lord Hope of Craighead, who chaired the Joint Committee and is a former deputy President of the Supreme Court. He argued, rightly, that there is no place in the 21st century for the term “privy to”. It was used in the Bill and the 2011 Charities Act to identify trustees who knew about misconduct or mismanagement but turned a blind eye. We have now replaced the term “privy to” with,

“knew of the conduct and failed to take any reasonable step to prevent it”.

That is much better for the understanding of the lay reader of the legislation, which is something we must bear in mind when we consider that trustees are almost all volunteers. This clause makes sensible changes that will help the commission with its compliance casework, and I commend it the Committee.

[Anna Turley]

I thank the Minister for that thorough and detailed explanation. He will be aware that we have tabled no amendments to this clause because we fully support it. It has been through a great deal of pre-legislative scrutiny and scrutiny in the other place, so we support that the clause stand part of the Bill.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Power to remove trustees etc following an inquiry

Question proposed, That the clause stand part of the Bill.

[Mr Wilson]

Clause 4 basically does two things. First, it amends the existing power in section 79 of the Charities Act 2011 to allow the Charity Commission, in the course of an inquiry, to establish a scheme in relation to a charity. A scheme is a legal document made by the commission which can amend, replace or extend the trusts of a charity. It can set out new objects and purposes for a charity or amend or remove a prohibition or restriction.

Under the current law, the Charity Commission can make a scheme only where there is evidence of misconduct or mismanagement and a need to protect charity property or secure its proper application. Clause 4 would change that so that the Charity Commission can make a scheme where there is either evidence of misconduct or mismanagement or a need to protect charity property or secure its proper application. The commission considers this change to be necessary to enable it to take action in some cases where only one of the limbs can be demonstrated, but where commission action is necessary. Let me give two examples.

--- Later in debate ---

The clause was widely supported by the witnesses and the Joint Committee during pre-legislative scrutiny. I hope that the Committee will agree that this is a common-sense provision that closes a significant loophole in the law.

[Anna Turley]

As with the previous clause, we support this measure. We believe it will give the Charity Commission an important power to safeguard the integrity of a charity, particularly its public profile. Misconduct and mismanagement are extremely serious and should be taken extremely seriously. As the Minister identified, the ability to address this loophole has long been missing from the Charity Commission’s powers. Representatives of the sector have not raised concerns with us about this proposal. They understand it is an important opportunity for them to protect themselves against misuse and abuse. On that basis, we are happy to support the clause.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Power to remove disqualified trustee

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Mr Wilson]

I know that my officials like to pack a lot into my speeches, so they have longer paragraphs. Obviously it is important that we have proportionality. This is the sort of issue that arises dozens of times a year, so it is a regular occurrence and we need to take action to try to control and eradicate it.

Another example might be where a charity trustee is disqualified by virtue of having been convicted of theft. The person refused to resign his position, which was problematic for the charity because it affected their quorum for business and decision-making purposes and there was no power to remove a trustee within the charity’s constitution. The trustee board is already at its maximum size and is unable to act further. This new power would allow the commission to remove the trustee so that the charity can continue to operate quickly and safely.

The commission has estimated that the power would be used dozens of times each year to remove people who were refusing to stand down even when they had been told they were disqualified. This indicates that there is an issue to deal with. It is important to equip the commission with powers to take steps to remove a disqualified trustee from their role quickly and effectively. The new power was welcomed by the Joint Committee on the draft Bill and I commend it to the Committee.

[Anna Turley]

I thank the Minister for that full and thorough explanation. As trustees of charities—which many members of the Committee are—many of us feel it is important to fulfil our duties fully and with confidence, should a fellow trustee board member not fulfil their duties and be disqualified as a result. The Charity Commission’s standards for disqualification are high—it has set the bar at a good level. We wholeheartedly support the clause because we think it is in the best interests of trustees around the country. They want the integrity of their boards protected, and it is important that those who have been disqualified can be removed, because trustees often do not have the ability to do so themselves. The clause gives more powers to the Charity Commission, but we wholeheartedly support them and we know it will use them wisely.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Sarah Newton.)

Charities (Protection and Social Investment) Bill [Lords]

Anna Turley Excerpts

Thursday 3rd December 2015 Commons Chamber

[Anna Turley (Redcar) (Lab/Co-op)]

It is a privilege to respond to the Bill on Second Reading as shadow Civil Society Minister. I thank the Minister and his colleagues for bringing the Bill before us, and for the open and co-operative way in which they have sought to engage with us. It is much appreciated. I thank all the civil servants involved in drafting the Bill, and all the charities and organisations that have contributed to its development and to our understanding. I also thank noble Lords, who used their customary wisdom and experience to refine and improve the Bill in its passage through the other place.

This is a good and important Bill, and we on the Labour Benches welcome it. There is, of course, some room for improvement, and I will come on to that in my speech, but its objectives are to be welcomed. We all know the vital role that charities play in building a strong and flourishing civic society. Thousands of people around the country give up their time every day to work as trustees and volunteers. Thousands more depend on the vital services they provide. As the Minister said, charities change and save lives. They support the poorest and the most vulnerable. They pick up the pieces of social and economic failures. They heal, they tend the sick, they bring dignity in old age and they give children the best start in life. We owe it to all of them to provide a secure and robust regulatory environment that inspires confidence and allows the sector to flourish.

The sector has had a difficult year. The regulation of the sector has come under increasing scrutiny and we have seen high-profile cases that have been deeply concerning. We have seen poor governance, financial mismanagement and, as the Minister set out, concerning fundraising methods. These cases are extremely rare, but they are deeply disappointing to the rest of the charitable sector. It is important that we support and encourage confidence in the wider sector by clamping down on any abuse. That is why we welcome the Bill.

It has been good to see the sector itself step up to the plate to tackle so many of these concerns. It is vital that we play our part in supporting the sector in that process by giving it the legislative and regulatory environment it needs. It is also vital that we get the right balance: a strong and sound regulatory environment that ensures trust but allows charities the freedom to be innovative, enterprising and, crucially, effective in delivering their social aims and objectives.

We welcome the core aims of the Bill. We support providing stronger protection for charities in England and Wales from individuals who are unfit to be charity trustees. That is vital to ensure good governance and prevent abuse. We support the measures to equip the Charity Commission with new and strengthened powers to tackle abuse more effectively and efficiently. To ensure confidence in the sector, it needs to be able to respond quickly and decisively to any concerns raised. Further clarifications are required, however, and we will work with the Minister to resolve them in Committee.

I want to put on record at this point my pleasure in hearing the Minister say the Government will use the Committee stage to look again at fundraising: at whether self-regulation is sufficient and what steps we can take if it fails. We look forward to working with him on that.

We welcome the aim to give charities a new power to make social investments; some are already doing that, but it is important we give charities the reassurance to enable them to do so. We know that one in three British consumers will pay more for products with a positive social or environmental outcome. It is important that we enable the charitable sector to encourage that.

There are some areas, however, where we believe the Bill can be improved. We will look to work with the Government during the progress of the Bill in Committee to do so. We will be seeking to discuss the following points.

First, on the freedom to speak and engage in political discourse, we continue to oppose the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014. We intend to use the passage of the Bill to highlight and defend the right of charities by law to campaign and speak out on issues in line with their objectives. So often, it is charities that end up picking up the pieces of our policy failures. It is vital that we give them the right to campaign on their issues, and to challenge and hold us to account. That is a key part of a strong, healthy democratic and civic society.

Secondly, on clause 9 and the disposal of assets, the clause sets out that

“The Charity Commission shall ensure that independent charities are not compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes.”

We will continue to defend clause 9, so as to give housing associations the statutory backing to ensure they can make their decisions in the best interests of their tenants, and not be bullied by a Government determined to sell off and run down affordable housing. We think it is absolutely right that charities have the freedom to dispose of their assets in the way that they see fit.

Thirdly, on the protection of children and vulnerable adults, the Bill provides an opportunity to better protect children and vulnerable people. We are grateful that the Government accepted proposals in the other place to include people on the sex offenders register as among those who will be debarred from being trustees, but we believe there are other measures we can look at to strengthen that area. We will bring them forward in Committee.

Finally, on clarifying some of the powers of the Charity Commission, the Bill seeks to strengthen the powers of the Charity Commission. We believe there should be a strong, well supported regulator of charities that acts fairly and has the appropriate powers. Ultimately, the regulator must preserve public trust and confidence in charities. However, some provisions in the Bill could threaten charities’ independence. For example, there are no objections in principle to giving the Charity Commission the power to give warnings to a charity, but the current drafting raises some concerns within the sector.

For example, the commission can issue a warning if it thinks there has been a breach of duty or trust or other misconduct or mismanagement. It is possible that the commission could issue a warning about an issue of relatively low concern. Also, a disagreement between the trustees and the commission could arise about whether the warning was justified. It is therefore important to attach safeguards to the issuing of a warning, and failure to comply with it should not in itself have significant consequences that could be disastrous for charities. I hope that we can continue to discuss the matter further in Committee. In addition, the commission should give adequate notice of its intention to issue a statutory warning.

These are issues that should be discussed in Committee because clearer guidelines should exist on the number of days and other protective remedial powers. Given the implications a warning would have for the charity in question, we should also consider a right of appeal to the charity tribunal. I look forward to working with Ministers on those issues as we go through Committee.

In summary, we believe all these areas can be discussed and looked at in more detail as we take the Bill forward in Committee. This is an important Bill. It has some room for improvement, but offers a great deal to build trust and confidence in the charitable sector, which is why the Opposition will support it. I look forward to working with Ministers in Committee.

Community and Voluntary Sector Funding

Anna Turley Excerpts

Tuesday 24th November 2015 Westminster Hall

[Michelle Donelan]

I agree. I am very much involved with the carers’ organisation in my constituency and I completely understand that point.

We need to go further to encourage and enable more people in long-term unemployment to go into volunteering schemes. We already do that, but we need to work more closely with volunteer centres to ensure that it happens more. There is a lot of concern about the loss of benefits to volunteers, so there is much work to do there.

We need to invest to encourage more young people to volunteer as well. Some fantastic work has already been done, such as that of the National Citizen Service. It is important today to focus not only on the negatives, but on the positives. Seventy-five thousand young people have changed their lives and got involved in their communities through the NCS. We should take note of the things that are working as well.

[Anna Turley (Redcar) (Lab/Co-op)]

I share the hon. Lady’s positive view of the NCS and its good work with young people. At the same time we are seeing huge cuts to youth services across local authorities and the NCS works with a fairly small number of young people compared with the great majority who can access mainstream services. Does she not think that the cuts to local authorities also impact on young people’s preventive services?

[Michelle Donelan]

The cuts to youth services are for a totally different debate, because they are not purely about volunteering. There is a vast variety of youth services depending on the different areas and models involved. There is also the question of replacement: in many areas, including mine, the council has worked closely with the community to offer a replacement service that is the most cost-effective and efficient for the people using it.

In addition, the Government are providing funding for campaigns such as the national Step Up To Serve #iwill campaign, which aims to make social action part of the lives of as many 10 to 20-year-olds as possible. More remains to be done, however, and I am quite shocked that there is still no formal encouragement in respect of the value of getting volunteering into schools, through things such as voluntary placements. We have always had a system of work placements, but there has never been a system of voluntary placements as a formal mechanism in the UK. I have approached my local volunteer centre about the issue, and we are trying to do something with willing schools in my constituency.

We need to change the ethos and encourage more businesses to allow voluntary days, which would build on the Government’s initiative on that. There have been other great investments, which we should not fail to mention, such as Big Society Capital, tax relief for social investment, social impact bonds and £70 million for social investment in the investment and contract readiness fund.

--- Later in debate ---

[Anna Turley (Redcar) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mrs Moon, and my privilege to respond as shadow Minister for Civil Society. It is also a great pleasure to follow the hon. Member for West Dunbartonshire (Martin John Docherty) who set out clearly and powerfully the role of the community and voluntary sector in Scottish civil society and its impact on the Scottish economy. He also talked about the Big Lottery Fund, which I will discuss in some detail. I share his deeply held concerns.

I thank my hon. Friend the Member for Bradford West (Naz Shah) for calling this extremely important and timely debate. She set out eloquently and passionately the challenges faced by the community and voluntary sector. She also gave a heartfelt example of how crucial services such as the Blenheim Project in her constituency are to people in need, in particular at times of crisis.

Tomorrow, the Chancellor will set out his departmental spending priorities. It is his chance to set out his vision for the kind of society and economy he wants to build. The question for us today is whether that vision will be one that recognises and values the role that the community and voluntary sector can play in building a safe, healthy, decent and prosperous society. Many Members have set out fantastic examples of great work done by civil society organisations in their local areas, as well as the challenges such organisations face.

The hon. Member for Chippenham (Michelle Donelan) mentioned Mind. Many of us would want to pay tribute to the great work that Mind does, not least in my own constituency, where it has been dealing with some of the repercussions of the huge job losses we have faced. She made a really important point about the preventive role it plays in reducing pressure on our public services. That also made me think of the importance of investment to prevent costs further down the line in public services. She also mentioned gift aid. There is an important message for the Government on that: they should look again at whether they might loosen the eligibility criteria for the small donations scheme, which so far has generated only £21 million, not the £105 million expected. That might be something that they could explore further.

My hon. Friend the Member for Clwyd South (Susan Elan Jones), who is chair of the all-party group on civil society and volunteering, spoke eloquently about the importance of core funding. Any of us who have had experience of working with the voluntary and community sector will know how important that funding is to enable voluntary organisations to keep the lights on and keep functioning, when often grant money for specific projects is more readily available. She also talked about the importance of new technology. There are some really interesting issues there that we can look to take forward.

The hon. Member for Central Suffolk and North Ipswich (Dr Poulter) made some important points about businesses giving up time for people to volunteer. It is important always to look at the contribution that everyone can make, not just the professionals within the community and voluntary sector. We recognise the importance of diversity of funding and of capacity within the sector; to my mind, however, we must not lessen the importance of the role of partnership with public services and the support of local authorities and central Government, as they are often absolutely critical to funding projects that would not necessarily get private sector support.

My hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) talked eloquently about the impact of cuts on the devolved Administrations and on local government, and the effect that had on local communities in his area. My hon. Friend the Member for Swansea East (Carolyn Harris) paid tribute to Hands Up For Down’s, which sounds like a really excellent organisation doing great work. She also mentioned the impact of cuts to the Big Lottery Fund.

My hon. Friend the Member for Cardiff Central (Jo Stevens) talked eloquently about Open Public Services, which ranks alongside the big society as a flawed philosophy, set out by the Government five years ago. It has seen many contracts gobbled up by the private sector and larger charities, to the detriment of smaller charities, as my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq) also pointed out. I thank all my colleagues for their important contributions to the debate.

The worry for many of our hard-working community and voluntary sector volunteers and professionals, as well as those who rely on their vital services, is whether the Chancellor will tomorrow hasten his assault on the sector, which has already seen the big society agenda disappear like a mirage, wiped out by a wave of cuts over the past five years. Figures I have received from the NCVO show the sector is already receiving £1.7 billion less of its income from Government than it was in 2010-11, and the number of grants to the sector from Government has halved since 2002. The charity sector faces a shortfall of £4.6 billion by 2018-19 on current spending trajectories. Charities and community groups have been hit by a triple whammy of cuts to their grants and income; a reduction in local government support, with partnering public services facing their own drastic cuts, leading many of them to cut preventive services; and having to deal with a large rise in demand.

As my hon. Friend the Member for Bradford West mentioned, according to the Charity Finance Group, 70% of charities expect demand for their services to continue to rise in the next 12 months. In 2009, the figure was half that, with only 36% of charities thinking demand would rise. Charities know they are picking up the consequences of this Government’s economic and social policy failures. They are often catching the people who have fallen through the gaps and are too often failed by the state. Charity and community groups are fearful of tomorrow’s statement. They are asking whether tomorrow will see a spending review that puts the final nail in the big society coffin and shows that, like the Tories of the past, this is a Government who believe in neither the state nor society.

Nowhere is that threat more clearly exposed than in the expected cuts to the Big Lottery Fund, as many of my colleagues have rightly set out. The Big Lottery Fund has been a vital ingredient in helping many community organisations to deliver vital services in the local community and transform lives, particularly in our most deprived areas. The rigour that the Big Lottery Fund applies to its funding process ensures that charities can prove they work to change people’s lives—a rigour that has been sadly lacking from the Government’s own direct distribution of money to charities, as highlighted by the Kids Company saga.

If it is true that the Chancellor intends to take around £320 million from the Big Lottery Fund and redirect it to the Department for Culture, Media and Sport to spend on arts and sports, it is a shameful act of misappropriation. The Chancellor should not be raiding the people’s lottery to plug gaps in his departmental spending, to try to compensate for the total failure of his long-term economic plan. The British people donate these funds when they buy lottery tickets in good faith that the money will go to good causes—village halls, youth clubs, playgrounds, domestic violence support, care for older people and those with disabilities, and the many groups we have heard about this afternoon. Ninety per cent. of Big Lottery Fund grants are less than £10,000, and they are a lifeline to small local groups, as my hon. Friend the Member for Bradford West set out, so this act will hit the smallest charities doing the most important work in the most deprived areas.

As the former Conservative Prime Minister John Major recently said, lottery money was to be from the people, for the people. The guiding principle has always been that lottery money adds to, rather than replaces, public funding. Is the Minister going to allow that principle to be shredded to compensate for his Government’s failure to protect and support our public services? Is he aware that some 3,800 charities are still waiting for the repayment of £425 million that was taken from the Big Lottery Fund to help pay for the 2012 Olympics? Depriving vulnerable people and communities of support during this difficult time is outrageous and is contrary to the very nature of what players of the lottery expect will happen with their contributions. I urge the Minister to ask his right hon. Friend the Chancellor to think again.

In conclusion, I hope the Minister will give some reassurance to the community and voluntary sector ahead of tomorrow that the Government still value the contributions it makes to our society. In 2009, the Prime Minister, then Leader of the Opposition said he wanted to

“set free the voluntary sector and social enterprises to deal with the…problems that blight so many of our communities”.

Far from setting them free, this Government are starving them of funds and forcing many of them, as we have heard today, out of operation. I urge the Minister to fight for the future of a sector that is vital to the strength, health and dignity of our society.

--- Later in debate ---

[Robert Halfon]

As I said, I suggest the hon. Lady holds her horses and waits to see what happens in 24 hours. I will talk about what we have already done to fund civil society and big society in a moment.

The Government recognise that individuals are looking beyond the state and want to help friends, family, their community and their local services. People are becoming far more community-minded and are asking not what their community can do for them, but what they can do for their community. Millions give their time, energy and expertise to help others, and they put service above self. I am wearing a Heart 4 Harlow badge, which is from a social action project created by faith communities in my constituency. They work together to do social action and to help our town. This social action—this people power—is the foundation of the bigger and stronger society that we all desire.

It is no surprise that the Charities Aid Foundation found that the UK is the most generous nation in Europe. That means that the public are giving twice, which it is important to note, both in their taxes and personal donations. With all the talk of funding, it is also worth noting that taxpayers are giving about £13 billion a year to charities up and down our country—remember, that is not Government money, but taxpayers’ money.

We should also note that five years ago, our country was broken. We had experienced the deepest recession in living memory and the deficit between public spending and the Government’s revenue was unsustainable. Unemployment had risen to record levels and household debt was higher than many of us would agree is sensible. The societal issues that stemmed from those circumstances meant that public services and civil society both faced an incredible challenge—one of increasing demand, but without the ability easily to invest increased resources to meet it.

[Anna Turley]

If the Minister is setting out the challenges and saying that there is a consequence for public services and the big society, we are now five years on and the crisis is even greater for the community and voluntary sector. Is that not a consequence of the last five years of economic policy as well?

[Robert Halfon]

As I said, the taxpayer is spending £13 billion a year, which is a sizeable chunk of money, on charities.

I turn to the Government’s achievement over the last years in pursuit of this vision. There is, for example, the community organisers programme, which is training more than 6,500 organisers to work in hundreds of cities, towns and villages. Community organisers are not about replacing existing jobs or services; they are about people power, giving social entrepreneurs, charity workers and volunteers the real tools to help themselves. One example is the work of community organiser, Tania Swanson, in Clacton in Essex. She works with the Rural Community Council of Essex to assist with projects on affordable housing, energy efficiency and community farming, as well as on many other community initiatives.

The big society has meant the establishment of the Centre for Social Action, too, which has seen an investment of around £70 million of real money from the Cabinet Office, commissioners, local authorities, philanthropists and other partners into 215 social action projects in England, working alongside and helping public services. Just as the Government have liberated business entrepreneurs from red tape and regulation, so the big society has worked to free charities, voluntary groups and social entrepreneurs from red tape. There has been £200 million of investment to help charities transform themselves to be more effective. We have seen the creation of the world’s first social investment bank, Big Society Capital. A prime example of that, and one I know about, is the £825,000 invested into the Essex social impact bond to help vulnerable young people avoid care or custody and stay at home with their families.

To me, perhaps one of the most exciting and forward-looking of the big society projects is the National Citizen Service, which was highlighted by my hon. Friend the Member for Chippenham. It gives young people a real chance in life and a real experience of community ethos, social action and important skills that they will have for life. Over 5 million hours of volunteering has been given by NCS participants to their local communities; that is a whole generation for whom social action has become the norm, not the exception. Ensuring that future generations are more socially minded is key to the work of the National Citizen Service. A lot of work has been done to help young people. In my constituency of Harlow, we have the Young Concern Trust, which does an enormous amount to support disadvantaged young people.

I said earlier that the big society was about social capital, social entrepreneurship and people power, and that that is the continued mission of the Government over the next five years.

Oral Answers to Questions

Anna Turley Excerpts

Wednesday 21st October 2015 Commons Chamber

[Anna Turley (Redcar) (Lab/Co-op)]

Q11. On 16 September, the Prime Minister told this House that he would do everything he could to keep steelmaking on Teesside. He failed. Now we learn that the £30 million support package that the Government promised for retraining and economic regeneration is not only going towards the statutory redundancies of those who lost their jobs: I have an email from the Minister with responsibility for the northern powerhouse to a constituent in Stockton South that says it will also be used to pay for the final salaries of those who have lost their jobs in the past month. This is an insult. How much more injustice does the Prime Minister think the people of Teesside can endure?

[The Prime Minister]

We will do everything we can to help, including the financial package that the hon. Lady set out—making sure we help people with retraining and new opportunities, and with bringing new industries to the area—but let me tell her what we cannot do. We cannot in this House set the world price of steel and we cannot overcome the fact that the SSI plant had lost £600 million in this Parliament. Those are the facts which, frankly, Opposition Members have to engage with.