Dormant Assets Bill [HL] Debate
Full Debate: Read Full DebateBaroness Barran
Main Page: Baroness Barran (Conservative - Life peer)Department Debates - View all Baroness Barran's debates with the Department for Digital, Culture, Media & Sport
(3 years, 2 months ago)
Grand CommitteeI start by thanking all noble Lords who spoke for their reflections and remarks on the amendments in this group. My noble friend Lord Hodgson put forward Amendments 54 and 55; the noble Lord, Lord Bassam, put forward Amendment 56; and the noble Lord, Lord Blunkett, put forward Amendment 56A. As we have heard, these amendments seek to enable specific causes to be supported through the Bill—namely the establishment of community wealth funds or provisions for primary financial education—and, in the case of Amendment 56, to clarify that the National Lottery Community Fund could not deliver a community wealth fund itself.
I shall start by responding to my noble friend Lord Hodgson and the noble Baroness, Lady Kramer, regarding Amendment 54. I assure your Lordships that any future restrictions on spending in England would be contained in secondary legislation.
I recognise that many of these amendments have been tabled with the purpose of sparking a conversation on these initiatives; it is without question a conversation worth having. My noble friend Lord Hodgson expressed very eloquently, as did the noble Baroness, Lady Lister, the value of local community organisations and the needs of those communities. I have certainly seen, on my own visits, similar examples of the value that they can bring. Indeed, more broadly—and clearly beyond the scope of this legislation—we are hoping very much that both the levelling up fund and the UK shared prosperity fund will invest in what I think we described as the infrastructure of everyday life, much of which we have talked about this afternoon.
I also echo the comments of the noble Lord, Lord Blunkett, about South Yorkshire’s Community Foundation and the great work it does, mirrored across the country by many other local community foundations.
While we think that this is a conversation worth having, we are clear that a consultation, as set out in Clause 29, is the best way to agree future spending priorities for England. The noble Lord, Lord Bassam, suggested that I would argue that we need more evidence before we can support a single cause. In one way, I agree with him, but there is a question before that. The point of the consultation is not just to identify the causes and restrictions that will be placed on future moneys; it is also to understand which of these should take priority in future and why. To do so, we need to identify the principles on which we would make such a prioritisation. Attempting to arrive directly at the answer by including specific causes in the Bill would limit and potentially distort the scope of the consultation and compromise its transparency, inclusivity and impact. Work on preparing the consultation will begin following Royal Assent, provided that the Bill passes with this measure. We will need to determine what these principles should be.
I hope it is helpful if I give a few examples of the kinds of issues that I think are important to discern through the consultation. For example, we might consider the benefits of focusing thematically at scale across England. We could take the example of the work Fair4All Finance is doing in trying to put an end to high-cost credit in this country—something I am sure we can all agree would be a great achievement. Contrast that with locally driven initiatives, such as the community wealth fund; we have heard much about their merits. I am not trying to argue that one is right or wrong; I just think that we need the discussion between competing priorities.
We could also think about the size of the problem that we are aiming to tackle. The noble Baroness, Lady Kramer, also helpfully pointed out that this is not an endless flow of money. These should be problems that can be addressed within a certain timescale, so that the quantum and duration of the money released from the scheme in future would make a material difference—on Monday, noble Lords raised points about the ability to attribute and measure the impact achieved with the funding—as well as unlocking other funds using it. That point was raised by the noble Lord, Lord Triesman, and others at Second Reading. The work that the Youth Futures Foundation is currently doing, for example, focuses on expanding the evidence base on what works and has the potential to influence the way an entire sector approaches programme delivery. In another example, Big Society Capital has had a clear success in levering more funds in to the social investment sector.
I have heard that your Lordships care about impact. I am also keen to ensure that the impact of the existing causes, as highlighted by the noble Baroness, Lady Kramer, and how far into their journey of achieving their missions the current organisations are, are taken into account. I stress that I raise these as illustrative examples of the types of conversations that should be had before determining which causes are not just good ones to support but the best causes for this unique type of funding. We need to get as much clarity as possible on how best to define future funding restrictions, to ensure that these funds achieve the greatest possible impact. It is, therefore, vital that we enable a public consultation to take place before making any changes or additions to the current uses of dormant assets funding in England.
We cannot commit at this stage to changing the recipients of this funding in primary legislation. This includes by referencing community wealth funds or financial education, as well as whether or not the National Lottery Community Fund should deliver them, as the amendment in the name of the noble Lord, Lord Bassam, proposes. Given this, it is also not the time to prescribe the distribution mechanism for how future funding might best be administered. While the Secretary of State already has the power to add or remove distribution bodies, the National Lottery Community Fund has fulfilled this role for the past decade and there are no plans to change this. It has access to an extensive network of delivery partners, and has well-established systems of governance, accountability and assurance in place. For these reasons, I am not able to accept these amendments.
I now turn to why Clause 29 should stand part of the Bill. This clause amends part of the mechanism for distributing dormant assets funding in England so that it aligns with the model used in the devolved Administrations. As the noble Lord, Lord Bassam, highlighted, it will provide the scheme with greater flexibility to respond to changing social and environmental needs in the future by enabling the Secretary of State to make an order restricting the purposes of dormant assets funding in England. The Committee has heard this afternoon about the genuine tension that exists between flexibility of funding and the longevity and visibility of it. We believe that the consultation will help us understand this.
The noble Baroness, Lady Kramer, asked me to specify the “winners and losers”. I hope very much that the winners of a consultation will be those that have the greatest impact from the use of the funds and which address issues that communities care about. Expansion of the scheme could unlock around £880 million more for good causes across the UK. In light of this sizeable amount, a changing social and environmental context in the wake of Covid-19, and public calls for input, it is right that we consider how to use this funding most effectively. Clause 29 enables us to do this while ensuring that these decisions have an appropriate degree of scrutiny.
As I have outlined further, the Government have committed to launching a public consultation on the social or environmental causes in England, provided this measure passes. The current restrictions will continue to apply until this consultation has been processed and an order is made. Any new restrictions will have to be approved by both Houses through the draft affirmative procedure.
This power will not affect the additionality principle: the distribution of dormant assets funds cannot be a substitute for government spending programmes. We will discuss this further as part of the debate on Amendment 60 from the noble Baronesses, Lady Kramer and Lady Bowles of Berkhamsted. With that, I ask noble Lords not to press their amendments and I commend that Clause 29 continues to stand part of the Bill.
I have received a request to speak after the Minister from the noble Lord, Lord Knight of Weymouth.
My Lords, I want to speak relatively briefly in support of my noble friend Lord Blunkett’s Amendment 56A. I find the procedure slightly odd—I am still trying to influence the Minister after she has asked for it to be withdrawn—but I will give it a good go.
The importance of financial education and financial literacy in primary education does not need too much arguing. I recall a friend of mine, Emily, who finished secondary with four A-levels about three or four years ago. She chose to become a successful actress rather than go to university. About six months after she started work—she got work very quickly—she was furious that her education system had not told her about taxation and that suddenly she had to put money aside to pay her taxes as a self-employed actress.
That reinforced for me that we have an education system that is really passive on this. I was delighted a couple of years ago, when I was working for a company called TES, to be involved with the Bank of England and the Beano on producing some financial literacy resources for primary schools, which were very well received. I also endorse the work of KickStart Money.
It has become particularly acute that we must do more in primary education because of the cashless nature of our transactions. According to a survey this month published by, I think, Yahoo, fewer than a quarter of transactions in this country are now paid with cash. Children no longer see and feel money exchanging hands. They are no longer adding it up and making sense of 1p, 2p, 5p, 20p, 50p, £1, £10 and so on because it is not part of what most of us handle any more. There are apps. My stepdaughter will be 10 tomorrow. We use an app for her called RoosterMoney, which helps her with some of these things. But there has been an impact for primary schoolchildren on their numeracy, their understanding of debt, and of how their school is paid for and how their teachers are paid, because it is taxation and public money. These are really important parts of citizenship.
While the noble Baroness, Lady Kramer, was talking I thought that, although the amendment is about resourcing financial literacy in primary schools, I had better quickly check the primary curriculum to see what is in it. There are two mentions of “financial”. One is in respect of what the curriculum requires years 5 and 6 to do in terms of spelling. The noble Baroness asked whether there is something horribly wrong in the Department for Education. It is so obsessed with things such as spelling in English that you have to learn how endings that sound like “shall” are spelled, as in “official”, “artificial” and “financial”. The only other mention is in the context of maths. It says that studying maths is a good idea and “necessary for financial literacy”, so it gets a slight mention but that is it. There is no real requirement, but there is a little bit of a nudge that there is a good reason for studying maths. We have to do better.
This amendment, and putting something in statute, would give some priority and send a positive signal from government that we should do more on this. It would be able to fund some of the teacher training that is important to give primary school teachers better confidence and competence around how to link this in to various parts of the curriculum, because it is not just in maths that you can teach financial literacy. Of course, it could fund more of those resources so that it is not just down to the Beano, the Bank of England, KickStart and others and we have some properly evidence-based resources that help teachers to link across the curriculum in an engaging and interesting way for primary school students.
I urge the Minister to reflect and perhaps have a chat with some of her colleagues in the Department for Education—particularly the Schools Minister, who is obsessed with spelling, punctuation, grammar and maths but, frankly, is not really that interested in very much else in terms of what is specified in the national curriculum. We could do better.
I thank the noble Lord for his remarks. I absolutely do not deny in any way the importance of financial education, but the issue here is not the importance of any individual cause. The challenge we are faced with—or the privilege that we will all have—is to contribute to a conversation about the right cause for this particular stream of money, with its unique features, and that includes the existing causes that are funded. We will be putting the cart before the horse if we focus too much on causes to go into the Bill; rather, we should put the combined intellect of your Lordships and others into making sure that we spend future moneys in the best way possible.
My Lords, I am grateful to all noble Lords who have taken part in this debate. I had better begin with an apology to the noble Baroness, Lady Barker, for not having name-checked her as a member of the committee. The truth is that I saw who signed their name to the amendment, but I did not see who was going to speak to it. That is an explanation, not an excuse. I know her as a doughty fighter, and I hope that she will accept this apology for not expressing my thanks to her.
She rightly drew attention to concerns about duplication and what we discussed in our committee about what we call “new initiative-itis”, where ideas are started by a Minister wishing to make a mark but they are abandoned after six months, whether they are good or bad is not followed through with and the institutional memory is never properly adjusted. I accept that. Indeed, I accept the caution from the noble Baroness, Lady Kramer, about future funds flow. She pointed out that this is not an endowment fund but a flow that stops flowing when the money is spent.
I share the point made by the noble Baroness, Lady Lister, that we need continuity. There is sufficient visibility over the next five or 10 years to be able to provide the financial continuity that both she and I see as an important part of the community wealth fund concept.
In response to the point made by the noble Baroness, Lady Barker, about duplication, some of the plan methodologies that we have seen from the Community Wealth Fund Alliance are distinctive and will provide a different approach that is not duplicated elsewhere. However, I accept the strictures of both noble Baronesses.
I am grateful to the noble Lord, Lord Bassam of Brighton, for his support. His suggestion of pilot studies as a means of beginning to build institutional memory was interesting.
I am also grateful for the support of the noble Lord, Lord Blunkett. Of course I accept his remarks about financial education. He and I have discussed many times the narrowness of the national curriculum, which fails to provide education in many of the most important parts of what makes a citizen an effective and worthwhile person knowing their rights and their responsibilities. Financial education surely must be a part of that.
Finally, the response of the Minister was, as ever, smooth and beguiling, and I am trying hard not to be beguiled. I think she said that the current drafting already implies what is made explicit by Amendment 54. Well, if the amendment makes it explicit, let us have the amendment, so that that is explicit, as opposed to relying on the interpretation of the words “at some date in the future”. I hope that my noble friend will come back to that and think a bit more about it, and also about the points that the noble Baroness, Lady Kramer, made.
On Amendment 55, the Minister said that consultation would begin as soon as the Bill becomes law. She referred later to the cart and the horse, and I have to say that that sounds like cart and horse to me because, essentially, Clause 29 throws all the cards up in the air, they will come down where they may, and the only way that your Lordships’ House, or indeed Parliament, will have to influence what happens after that will be by means of regulations. I fully accept that we will have a chance to look at them, but as has been said this afternoon, and as Members of the Committee know, they represent a lower level of scrutiny and of being able to amend what is proposed.
I understand the Minister’s reluctance to accept the amendment, and the weaknesses of the community wealth fund concept at this point in its history, but I hope that she will find time to reassure the people who are working hard in the Community Wealth Fund Alliance that the fact that the Government are reluctant to accept the amendments does not mean that they do not think it is a worthwhile concept. It is a worthwhile concept, and the Government ought to be finding ways—pilot schemes, as the noble Lord, Lord Bassam, suggested, and other ways—to encourage institutional memory and practice to develop in this area. Unlike the noble Baroness, Lady Barker, I think that the idea is distinctive, offers something that no other groups will offer and will be able to do so over a sufficiently long time to make it an attractive prospect in helping to rebuild our social capital. I hope that the Minister will think again about her remarks on Amendment 54. Let us make sure that we have absolute clarity about what can and cannot happen. In the meantime, I beg leave to withdraw the amendment.
My Lords, Amendments 57, 58 and 59 put forward respectively in the names of the noble Lord, Lord Bassam, the noble Baronesses, Lady Kramer and Lady Barker, and the noble Baroness, Lady Lister, seek further commitment and clarity regarding Clause 29 and the statutory duty to consult. I thank the noble Baroness, Lady Merron, for setting out so clearly the importance of the consultation process: we concur absolutely with the spirit of her remarks and I hope that my remarks on the earlier group show quite how critical we see the consultation as being as part of the Bill.
The noble Baroness, Lady Lister, asked me to commit that a question about a community wealth fund will be in the consultation. We need a collective agreement on what goes into any consultation document, so I am unable to give her that reassurance today. Similarly, I hesitate to make any comment in relation to the specific community wealth fund initiative, however caveated in the way she suggests, because I do not want to give the impression that any decisions have been made before they have been. We are genuinely going into this consultation with the aim that I outlined on the earlier group; I hope she will accept that.
As noble Lords have noted, Clause 29 mirrors the approach for distributing funding that is already used in the devolved Administrations. In line with their process, the Secretary of State will consider who it is appropriate to consult and has committed to launching a full public consultation on the social and environmental causes in England, provided this measure passes. This will give the public and sector participants the opportunity to contribute their views before any change may be made to the current English causes. The devolved Administrations have similarly undertaken public consultations on the distribution of their portions before laying orders.
I will respond to the points raised by the noble Lord, Lord Bassam, and the noble Baronesses, Lady Kramer and Lady Merron. Making further specifications in this clause could imply that these stakeholders are more important than other groups which it might be equally appropriate to consult.
I turn to the amendment of the noble Baroness, Lady Lister, on the length of the consultation. It will be open for a proportionate amount of time to allow for considered and good-quality responses, and will be in line with Cabinet Office guidance. She will be aware that, in response to the challenges faced by many groups, but including small community organisations, we have extended the time period of consultations where necessary, particularly, most recently, during the pandemic. For the reasons I have set out, I am not able to accept these amendments and I ask that noble Lords do not press them.
My Lords, I have had one request to speak after the Minister, from the noble Baroness, Lady Lister of Burtersett.
I thank the Minister for, as usual, responding very fairly, but I have a number of questions. She said, and I understand why, that she cannot commit to including the community wealth funds in the consultation document, but will she at the very least commit to considering it when discussing what will go into the consultation after the Bill becomes law?
The Minister did not respond to my fundamental question—it was raised also by the noble Baroness, Lady Kramer—about the difference between what the Bill says about consultation and what she herself has said about it. I asked specifically whether she would take the matter away and have another look at it before Report. If the Government are committed to consulting community groups and so forth, why does the Bill not say so? It is sending out a very bad message if it stays like it is. I want to push her on that. Will she at least look at what has been said today and see whether the drafting of the Bill could not be improved? As has been pointed out, there has already been quite a large number of government amendments. This amendment would not change what the Government plan to do, but it would give a clear signal to the outside world that the consultation would, to use my noble friend’s word, be “meaningful”.
On the timescale, the Cabinet Office gives very little guidance now. Can the Minister at least confirm that she accepts that, given the kind of groups we want to hear from, “proportionate” points towards a longer rather than a shorter timescale for consultation?
I am happy to commit to consider the community wealth fund proposal as we review the range of questions that go into the consultation. I apologise to the noble Baroness: I thought I had answered her questions. The framing in the Bill mirrors that of the devolved Administrations, which is why it is drafted in the way that it is. The Secretary of State has said in public that there will be a full public consultation on the social and environmental causes—I have said it several times at the Dispatch Box—so that is a matter of record.
I thank the Minister for her response to the debate. I note that she acknowledged the importance of consultation and indicated that she concurred with the spirit of my remarks, which I welcome. However, I want to press the point raised by my noble friend Lady Lister about the need for the consultation to be meaningful, not just in how it is but in how it looks, how it feels and how it will work. My noble friend referred earlier to matters in the Bill being “not a good look”. I hope that the discussion today will support any changes the Minister might seek to make as we move along in the process to make the Bill, which is intrinsically good, “a good look” rather than to lose out by being in certain cases less than a good look. The quality of consultation is particularly important in that regard.
The Minister reiterated the point that the Secretary of State will decide who will be consulted and that a “proportionate amount of time” would be spent on the consultation. I believe that is all understood. However, the discussion today seeks to move us beyond that. The Minister’s argument sounds basically to be along the lines of we must trust the Secretary of State and be content with what is known as a “proportionate amount of time”. The point made so well by various noble Lords today is that perhaps it would be a better Bill if we were to be rather more focused and explicit about what we are offering, in terms both of timescale and of those who will be consulted.
I hope that the Minister will reflect on the thinking and consideration that has been given today. I thank noble Lords who have taken part in the discussion on this group, which has shone a light on the ways we could improve matters. I am sure that we will revisit this as we continue to consider the legislation. With that in mind, I beg leave to withdraw the amendment.
My Lords, we are grateful to the noble Baroness, Lady Kramer, for tabling Amendment 60, which touches on an issue raised by many on Second Reading. I thought I heard the Minister, who has been extremely courteous throughout these proceedings, mention the Government’s intention to treat funds from dormant assets as additional to what is distributed through the other distributing bodies fed from the National Lottery.
The inclusion and identification of new dormant asset proceeds is welcome. I acknowledge the earlier commitment that these funds will remain additional, rather than replacing other types of financial help; that is extremely important. The noble Baroness, Lady Kramer, has laid out the case well. There is consensus that we do not want funding of this nature to be replacement funding for mainstream government financing programmes.
If it is really the Government’s intention that this money should be used on top of other funding sources, I ask the basic, simple and fundamental question: where is the harm in the Government accepting this amendment? If they did, there would be a clear statement of policy intent, giving a clear direction on the face of the Bill. If the Minister says that the Government cannot do so, I shall be extraordinarily disappointed. However, I would be more than happy to work with colleagues across the House on this—and with the Government themselves, if they are not content to accept the amendment—to bring forward an alternative to the text in this amendment on Report. There probably is consensus that that would be the right thing to do.
Another important factor to bear in mind is that dormant asset funding will grow only as we find new dormant assets that can be used for charitable purposes. In no way should they be seen as an alternative source of funding, replacing government mainstream funding. For that reason, it would be right to put a commitment in the Bill, as a statement of principle, so I am more than happy to support the noble Baroness’s amendment.
My Lords, as we have heard, Amendment 60 in the names of the noble Baronesses, Lady Kramer and Lady Bowles of Berkhamsted, seeks to confirm the principle of additionality. As I noted at Second Reading and during Monday’s debate, and as the noble Baroness, Lady Kramer, also noted, the principle of additionality is set out in Schedule 3 to the 2008 Act and will continue to be a core principle of the scheme. The Act describes additionality as
“the principle that dormant account money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by … a Government department”
or devolved Administration. The Bill does not alter the part of the 2008 Act in which the principle is defined, which affects all of the UK as opposed to just England.
The noble Baroness, Lady Kramer, asked to whom the principle applies. It applies to the National Lottery Community Fund, as she rightly said, not the Secretary of State in DCMS. That is because the National Lottery Community Fund is the main distributor of the funding and the accounting officer for the dormant asset funds, so there is also a read-through to the spend organisations on additionality, which I think was implicit in her remarks.
I absolutely respect the noble Baronesses’ and other noble Lords’ wish to get real clarity on what we mean by this principle but I hope that noble Lords will, on reflection, agree that the current definition gives a useful degree of flexibility. At one end of the spectrum, there are social and environmental causes that are clearly for government to fund, but, as the Covid pandemic has shown, there are areas in the economy that most of us would never have expected to receive government funding that have now received it, for example the furlough scheme. So we have flexibility depending on pandemics and other economic circumstances on where government funds, and that is well captured in the definition as we have it.
I propose to provide a couple of example of how the additionality principle has worked to date. I do not intend to be comprehensive but to show how it has worked in practice because I think that concern that it could in some way be departed from was behind a number of your Lordships’ comments, and I hope to reassure them that that is absolutely not the case.
The most obvious example of the principle is that it allows the scheme to fund something that would normally be seen as outside the scope of government intervention. A good example of that was the creation of the world’s first social investment wholesaler, Big Society Capital, which used a combination of dormant assets and leveraged private co-investment to make it happen. As another example, the principle of additionality could enable dormant assets funding to test interventions and gather evidence that could then be used as a model for other funders. For example, Big Society Capital and its associated fund managers have worked for a long time on homelessness using innovative social investment.
My Lords, Amendment 64, in the name of the noble Baroness, Lady Barker, proposes that all dormant assets funding must be distributed to registered charities or social enterprises. If I may, I will remind the Committee that there are two parts to the process of distributing dormant assets funding in England. First, the National Lottery Community Fund distributes funding to four independent, specialist spend organisations, which focus on one of the three causes currently specified in the 2008 Act. Secondly, the spend organisations themselves distribute funding to beneficiaries to deliver initiatives, in line with their respective objectives.
As your Lordships are aware, as independent organisations, the spend organisations are empowered to determine the best way to deliver long-term interventions to tackle youth unemployment, to increase the financial well-being of people in vulnerable circumstances and to grow the UK’s social investment market. This focus on creating systems change at scale is a major driver behind the scheme’s success to date. The unique flexibility that the scheme offers enables the money to be deployed innovatively and, as a result of this innovation, some of the bodies that distribute the funding do not happen to be registered charities or social enterprises themselves.
I have heard the emphasis that your Lordships have placed on ensuring the maximum impact of the scheme. Given the social and environmental focus required of the funding, as I have said in previous debates and in evidence to the committee which the noble Baroness, Lady Barker, referred to, it is hard to imagine that charities and social enterprises will not continue to be key partners in maximising this impact. I echo the comments of all the noble Baronesses who spoke on this group: I, too, absolutely recognise the important value of social enterprises. I have been working with a number of them, particularly in relation to implementing the social value Act and the important role that they can play in delivering government contracts in future.
However, organisations deliver impact on a spectrum. Impact-driven charities and social enterprises are an integral and important part of this spectrum, but we should not exclude mission-locked and mission-focused organisations that may differ in legal status. This is particularly so in light of the diversity of mission-locked organisations—many of which are led by individuals from black or other minority communities, which I know is an issue that the noble Baroness, Lady Barker, referred to and sees as important.
Organisations that can deliver impacts which meet the objectives of the scheme should be able to do so; this should not be limited in terms of legal form or status, through primary legislation or otherwise. As I noted earlier this afternoon, it is imperative that we afford the public and our voluntary industry participants the opportunity to have a say in how future funding in England is distributed. Making changes to the recipients of this funding without first consulting would risk the legacy of the scheme that I know we all wish to see expanded and thriving. For these reasons, I am not able to accept this amendment and therefore hope that the noble Baroness will see fit to withdraw it.