National Citizen Service Bill [HL]

Baroness Barker Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Tuesday 22nd November 2016 Grand Committee

[Baroness Finn (Con)]

My Lords, Amendments 19 and 23 are in my name and those of my noble friends Lord Maude of Horsham and Lord O’Shaughnessy. Their purpose is to insert the word “primary” before the reporting requirements on the exercise of functions for both the business plan and the annual report. While I appreciate that this is a small word change, we argue that its insertion is critical for two reasons. First, it would prevent the new organisation drowning in excessive bureaucracy; secondly, it is consistent with the draft royal charter which refers in Article 3 to the primary functions of the NCS Trust.

One of the main reasons for the success of the NCS thus far has been its flexibility to respond rapidly and positively to feedback on the programme and to adapt quickly to change. This flexibility is essential when engaging with teenagers. To mire the trust in excessive bureaucracy will hinder, and potentially kill, its ability to adapt quickly and innovatively to new challenges. If the trust is expected to produce a business plan every year about every one of its activities, that would have the regrettable effect of stymieing the NCS’s ability to innovate and to engage with emergent trends, platforms or partnerships.

The new body should of course publish a business plan that lays out the primary functions of delivering the National Citizen Service. This will allow transparent scrutiny of the unit cost of delivery as well as its broader stakeholder engagement. Such scrutiny, which will permit proper accountability, is completely appropriate. However, to insist on more onerous reporting requirements, which would be inconsistent not only with the draft royal charter but with other public bodies, including other royal charters, would detract from the NCS’s ability to deliver a quality and engaging programme.

If the NCS is to achieve its hugely ambitious programme to grow threefold in the next three years, it is vital that it sticks to its core vision while retaining the ability to be nimble. To allow this, the reporting requirements should be kept as straightforward as possible, not weighed down by ever more onerous obligations. I beg to move.

[Baroness Barker (LD)]

My Lords, I have a number of amendments in this group, whose purport is somewhat different from that set out by the noble Baroness, Lady Finn.

When this legislation is passed, the National Citizen Service will no longer be a start-up; it will be a sizeable body with a very sizeable budget. Therefore, it is not unreasonable to expect that its reporting requirements will be different from those which it currently has as a very small community interest company. As such, and not a charity, the NCS has a lower level of financial reporting requirement than many of the organisations with which it has to do business and from which it has to commission its services.

I make no apology for the number of the amendments in this group which deal with accountability. I appreciate that we are talking about a royal charter body but the voluntary sector has had one of the worst years on record and has suffered a great deal in terms of its reputation and public support, precisely because it has not been living up to the higher standards of reporting which it should demonstrate—way above the public sector.

These amendments stem, to a large extent, from the acknowledgment of the noble Lord, Lord Maude, on Second Reading, that the NCS was deliberately set up to sit apart from the rest of the voluntary sector while being almost entirely dependent on it for the delivery of its outcomes. The NCS is, and will be in the future, a central commissioner of services from the voluntary sector, and as other resources diminish that will become increasingly important as a larger percentage of the money available for volunteering will be tied to this scheme. The greater freedom of action a body has, the higher standard of accountability it should aspire to. That is why the level of detail we require about any charity’s accounts is much higher than for anywhere in the private sector. The lack of competition to the NCS makes it wise to require a greater degree of transparency and detail in its reporting than we might have otherwise. Recent examples like Kids Company and Work Programme show that the lack of a requirement for proper accountability can be extremely damaging. It is with that in mind that we have proposed a number of amendments.

Given its purpose and set apart though it is, this organisation cannot deliver co-ordination with other voluntary organisations unless it has good relationships with them. It therefore does not seem unreasonable to ask it to set out how it will establish those, and, after a financial year, to report back. It is claimed that this organisation has an important, and, in the view of some noble Lords, unique contribution to make to the lives of young people. It is therefore important to require it to show that it sits alongside the main trends within the voluntary sector. For example, many people working in community organisations serving the Muslim community are saying to the Government— consistently and in many different ways—that the Prevent agenda is not working. It would therefore be remiss of us not to require the NCS—if it does have the role being described by its advocates—to actively work with those charities to ensure that community cohesion and diversion from extremism are part of its achievements.

Amendment 31, which requires that the NCS’s annual report includes its efficiency and effectiveness, is justifiable given that it is not up against competitive challenge. It is also not unreasonable to require diversity among its trustees. But of all these amendments, the two that matter the most are Amendments 28 and 29. It is right that Parliament should know the extent to which the trust has collaborated with and resourced the rest of the voluntary sector given that it will be one of the few sources of money for volunteering. It is also right that its report should include comparisons with alternative provisions. I have not yet been able to find a report giving the unit cost of the NCS including its overheads. Will the Minister give us that figure in his response? There is a suggestion from a number of other voluntary organisations that it is a very costly programme in comparison to them. I would very much welcome a response on that because before we commit this large resource to a body which is going to be set down in stone we should have some answers about the level of accountability that we can expect.

[Baroness Scott of Needham Market (LD)]

My Lords, I shall speak to Amendment 27 in this group. At the risk of incurring the wrath of the noble Baroness, Lady Finn, it adds to the reporting requirements of the NCS. In my experience, having to provide a detailed business plan and reporting back mechanisms does not have to stifle innovation. Most of the most innovative organisations and businesses around the world have detailed business plans and they report to shareholders, so I find the argument quite difficult. Indeed, I shall go further and say that business planning tools used properly can generate innovation and the reporting requirement can make an organisation focus on the things that those who are funding it believe are important. They can be a driver for innovation, not a barrier to it. The NCS, like any body in receipt of quite large sums of public money, will find that it will be overwhelmed with freedom of information requests if it does not willingly provide the information at the beginning.

In my amendment I am seeking to introduce to the business planning and reporting requirements measurement against the implementation of the Public Services (Social Value) Act 2012. When it was passed, the Act was based on two thoughts. The first was that public procurement generally tends to be at scale and cuts out SMEs and smaller organisations, and the second was that the cumulative spending power of public bodies could be much better used in the economic development of local areas than is usually the case. A review carried out last year by the noble Lord, Lord Young, suggested that the Act had those impacts. It has worked well, but it is underused. I was very pleased that the Government more or less accepted those arguments when they accepted my amendment to the Bus Services Bill and included a reference to the Act in the statutory guidance.

Evidence to the Select Committee on Charities currently sitting in your Lordships’ House has contained many references to the difficulties faced by small charities in participating in public procurement exercises, and a number of them have specifically referenced the Public Services (Social Value) Act as a useful vehicle for being able to do that, and they would like to see it more widely used.

The NCS is going to be a huge provider. On our previous day in Committee, the noble Lord, Lord Stevenson, talked about the problems of scaling up. I worry about that too. The NCS has written to me very fully and outlined the work that it has been doing with small local providers in a pathfinder scheme. It has given an undertaking that it wishes to widen and deepen its approach. I welcome that, but the recurring theme in this debate is about protecting the commitments currently made by the NCS into the future because it can commit only with its current board and current chair. Unless we have something in the Bill we cannot accept that those commitments will go on for ever.

There are a number of reasons why the Government should accept this amendment. The use of public money to support small and medium-sized charities will add to their sustainability and begin to avoid what someone has described to me as the growing Tesco-ification of the charity sector. There is also an issue about larger providers squeezing out smaller subcontractors. The NCS can use its considerable purchasing and contracting power to ensure fairer treatment. That would be the right message to send out to the sector, which is feeling a little beleaguered and unloved by government. It would help to ensure that more cash is used locally, generating local jobs. It would also help to create genuinely local solutions with providers which understand their neighbourhood. Anyone who does school visits regularly knows how very different areas can be, even those that are geographically quite close together.

Finally, there is something about risk. A larger number of smaller contracts is inherently less risky in terms of collapse or mismanagement than putting all the eggs in just a few baskets. One of the keys to innovation is size, and smaller local providers would be much more innovative and at less risk than the large ones.

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[Lord Ashton of Hyde]

Yes, I can see the point there. I believe, but could not swear to it, that it is open only to graduates at the moment. But I am certainly happy to look at that. We can come back to it later.

[Baroness Barker]

Perhaps the Minister could consider one point, which was made by the noble Lord, Lord Blunkett, when he said that it was important that the NCS be subject to comparison with other charities. Having listened to what the noble Lord, Lord O’Shaughnessy, said about the charter, does the Minister accept that some of us understand that it is quite possible for the NCS to be evaluated in the terms set out in the Bill, but that nowhere in any of this is there a requirement for there to be a comparison with any other service? Could he therefore explain, perhaps in writing, where it should be possible for anyone who wishes to to compare the work of the NCS Trust with the rest of the sector to find out the data on that? Is it the National Audit Office?

[Lord Ashton of Hyde]

I will certainly consider what the noble Baroness has said and will write to her if there is anything more. I think this goes back to what the noble Baroness said at the beginning of the previous day in Committee about the uniqueness of the NCS Trust. The NCS Trust is unique and therefore a direct comparison, especially with the charitable sector, which has been referred to a lot, is not necessarily appropriate. This is not a charity. I take the point that it uses a lot of taxpayers’ money and it must be held accountable but I do not think there is a direct comparison with it as a commissioner of work from the voluntary sector. It is not part of the voluntary sector itself. That is off the top of my head, but of course I will go back and check with my officials that I have not said something awful.

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Moved by

[Baroness Barker]

42: Clause 9, page 4, line 5, at end insert—
“( ) Her Majesty’s Revenue and Customs must—(a) inform the NCS Trust and the Secretary of State annually of the costs of fulfilling its duties under this Act; and(b) include this cost in its annual report under section 6(4) of the Government Resources and Accounts Act 2000 (resource accounts: scrutiny).”

[Baroness Barker]

My Lords, the Minister and I have differed on whether the term “unique” is applicable. In this regard it certainly is, because the NCS will have the unique privilege of being advertised to every 15, 16 and 17 year-old by Her Majesty’s Revenue and Customs. I thank the Minister for the explanations that he gave to noble Lords not just at Second Reading but in meetings about how that will happen and about the rationale for choosing the HMRC, which is the body with the most accurate information about 16 and 17 year-olds. He will know, because we had a discussion, that I have a reservation about a very small group of 16 and 17 year-olds for whom this may present a problem—that is, transgender young people, who may be written to using names that are no longer appropriate, and so on. That issue is not to be solved within the Bill; it is a wider issue than that, but I hope that it is one that, given the universal nature of this contact, the Government might give some consideration to.

The value of being able to contact every 16 and 17 year-old is immense. Quite how valuable it is we will come to know only in years to come when we have the annual reports, which will tell us whether the body has achieved the universal coverage of young people expected of it. In the meantime, it might be valid to know the cost of doing this, so we have come forward with the amendment. It is, again, a matter of reporting to high standards. Charities are often required in their annual reports to make declarations about help that they have had in kind. I know that it is not intended that the body be a charity, but none the less it seems to me that government could be open about the extent to which the trust is having this additional, not to say unique, promotion to young people, so that we and all others who will watch this organisation intently can see how well it performs, given the unique nature of its support. I beg to move.

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[Lord Ashton of Hyde]

My Lords, I thank noble Lords for bringing us to Clause 9 and the new power for HMRC, which has caused a lot of comment in the course of the Bill. I reiterate that this is not the only marketing measure the NCS Trust will use. Your Lordships need only to look at its Twitter account to see its social media presence. However, this power is a means of ensuring, as far as government can, that as many young people as possible have the opportunity to hear about the NCS. HMRC will send on the information but it will not feel or look like an HMRC communication. My speaking notes say it will be colourful and exciting—I am sure it will—and it will be written by those at the trust who know how to communicate with young people effectively.

Amendment 42 in the names of the noble Baroness, Lady Barker, and the noble Lord, Lord Wallace, alludes to the importance of ensuring that the cost of HMRC writing to young people is value for money. The charter specifies that in all it does the trust must have regard to value for money and I think this is a principle that we all agree on. HMRC will recover the costs it incurs from the use of its staff, time and resources. These costs will therefore be met from the budget allocated to the NCS rather than from HMRC’s own budget. It is HMRC policy to do so and therefore, as an operational matter, it will need to inform the Secretary of State for Culture, Media and Sport. The expenditure will therefore be included in the NCS expenditure listed in DCMS’s accounts.

The noble Lord, Lord Stevenson, raised the subject of who will be the author of the information HMRC sends out to young people or their parents or carers. I made the point that HMRC will act almost as a delivery service for the NCS Trust—a post person, if you like. The noble Lord’s amendment is in keeping with that in changing the ability for the trust to determine the content of the communication into an obligation to do so. Although “may” is one of my favourite words, we agree with him. This is something I intend to return to on Report.

On my noble friend Lord Cope’s wish to omit the whole clause, I understand his point. As a humble Treasury Whip, I too stood at the Dispatch Box and argued for the need for confidentiality of HMRC information, because it has been shown to aid taxpayer confidence and therefore increase the tax take. However, I respectfully disagree with the argument that this will open the floodgates. HMRC is using the data—only names and addresses—on the NCS’s behalf specifically to prevent it leaving HMRC custody and to keep it confidential. It will maintain its centuries-old commitment to keep confidential all information about individual taxpayers. In fact, this is about not taxpayers, but child benefit recipients. HMRC suits this purpose because it has central government’s best data on young people because of child benefit data. At the age of 16, young people receive their national insurance number from HMRC, which marks the transition to adulthood. At the same time, they become eligible for the NCS, an experience we want to become a rite of passage. The same is not true of road safety or flu jabs, which are ongoing concerns and have a closer affinity with other parts of the public sector, such as the NHS and the DVLA.

With those explanations, I hope noble Lords will feel able not to press their amendments.

[Baroness Barker]

I thank the Minister for his response. He will appreciate that, because no other organisation is given this benefit in kind, it is something which noble Lords will look at with considerable care in future years, not least to see its efficacy. However, I beg leave to withdraw the amendment.

Amendment 42 withdrawn.