Dormant Assets Bill [HL] Debate
Full Debate: Read Full DebateBaroness Kramer
Main Page: Baroness Kramer (Liberal Democrat - Life peer)Department Debates - View all Baroness Kramer's debates with the Department for Digital, Culture, Media & Sport
(3 years, 2 months ago)
Grand CommitteeMy Lords, it is a pleasure to be able to speak in support of Amendment 55, tabled by the noble Lord, Lord Hodgson of Astley Abbotts—not least because, as he said, I was a member of the Select Committee on Citizenship and Civic Engagement, which he so ably chaired.
I must admit, it is only recently that I have been made aware of the campaign for a community wealth fund and that I have joined the APPG for “Left Behind” Neighbourhoods. However, I have been persuaded by the evidence from the Local Trust and others that a community wealth fund—or, to take on board what the noble Lord said, perhaps community wealth funds—potentially represents a key building block in the aspiration, shared across the political divide, to build back better or, as Sir Michael Marmot put it, to build back fairer.
In his new report, The Marmot Review 10 Years On, Sir Michael emphasised this:
“Empowering and sustaining communities was central to the 2010 Marmot Review”—
his original review of health inequalities. He also observed:
“Over the last 10 years, these ignored communities and areas have seen vital physical and community assets lost, resources and funding reduced, community and voluntary sector services decimated and public services cut”.
Both in his report and in his Covid update, he called for investment
“in the development of economic, social and cultural resources in the most deprived communities.”
In a similar vein, as I noted at Second Reading, a number of bodies, including the Legatum Institute, have argued the importance of social investment to the levelling-up agenda. According to a recent survey published by NPC, the general public believe that levelling up must address social needs, and just yesterday, the Education Select Committee referenced the idea of a community wealth fund when discussing the implications of the levelling-up agenda for education and children’s outcomes.
While dormant assets, as underlined at Second Reading and in line with the additionality principle, must of course not be used as a substitute for government funding, the idea of community wealth funds as proposed in this amendment provides an opportunity for “empowering and sustaining communities”, to quote Marmot. It would be targeted at a very specific group of communities or neighbourhoods: those in which serious deprivation is combined with lack of social infrastructure, or what Community Links calls “civic inequality”. In its recent report Making a Good Place, Community Links concludes:
“The case for investment in social infrastructure is strong, not just because of the long-term benefits that it brings and the need to address civic inequalities, but also because of the pressing situation created by the Covid-19 pandemic, which makes it all the more important to create good places that promote good mental and physical health and well-being and resilience to other attacks.”
According to Local Trust, which spearheaded the campaign for a CWF, in its experience communities lacking in places to meet and social infrastructure, such as youth centres—so it does include support for young people—pubs, cafes, parks and community hubs, can find it difficult to nurture the social interactions and bonds that play an essential part in developing a community’s civic spirit. The trust argues that investment in social infrastructure is foundational in that it helps to build knowledge, skills and confidence in marginalised communities, thereby contributing to a lasting legacy of change. In response to the noble Baroness, Lady Barker, what is important is the knowledge of continuity of funding that one does not necessarily get from local philanthropy.
As a report from the IPPR Environmental Justice Commission shows, this can strengthen environmental as well as social action in deprived communities. The commission argues:
“For communities to thrive in a climate changing world they must be given greater ownership and agency”.
As I said at Second Reading, in a point that has already been made, a particularly attractive aspect of the CWF is the emphasis its advocates place on the control over spending decisions that it would give to local residents. I quoted the Public Services Committee, which has consistently made the case for user involvement in the development of services if those services are to meet local needs and to be resilient.
There is growing recognition that failure to embed genuine community involvement is one reason why past local-area initiatives have not been as successful as they might have been. To quote Community Links again:
“Community participation in decision-making ensures that investment genuinely serves those it aims to support and also helps build capacity within the community”.
The proposals for a CWF contain detailed suggestions for how this could be done and how to build accountability into its structures. That perhaps goes some way to address the concerns of the noble Baroness, Lady Barker, as to why this kind of structure is necessary: it perhaps adds something to what is there already.
Polling research carried out for Local Trust and its experience of running the Big Local programme suggest there is a real appetite in deprived communities to take on the challenge, provided there is appropriate funding and support to build capacity and confidence. Research in so-called left-behind areas found that three-fifths agreed that local residents have the capacity to make real change in their area, while seven out of 10 said it should be local people and community organisations leading decisions about how any funding should be spent.
The release of new dormant assets under the Bill provides a timely opportunity to invest in such areas through proposed community wealth funds, which, as we have heard, have the support of over 420 organisations, including the NCVO, and 35 local or combined authorities. Again, the fact that it has such strong support from the voluntary sector, the NCVO and others perhaps goes some way to counter the concerns raised by the noble Baroness, Lady Barker.
While I am not looking to pre-empt the consultation that we will discuss shortly, I hope the Minister will be able to give us some idea of the Government’s views about the proposal for community wealth funds as an appropriate use of a portion of the dormant assets that will be released. At Second Reading, despite it having been raised by a number of noble Lords, I think she carefully avoided commenting on it. I hope she will be able to provide a sympathetic response that will give hope to the 423 organisations in the community wealth fund alliance, and to those living in the deprived communities that stand to benefit from such funds.
My Lords, there is a clause stand part element to this group and I shall address it first as it has not been the subject of discussion. It is important to make the point that Clause 29 removes the requirement to focus on the needs of young people, financial education, access to finance and social investment from primary legislation and puts the responsibility for the areas of focus into future secondary legislation—I know that the current rules stay in place until the first SI comes. That is a troubling issue that Parliament has to consider because we all know that statutory instruments cannot be amended and that killing them is a constitutional crisis, so Clause 29 asks us to change the framework very substantially, and that is an area that Parliament has to consider.
I do not mean to be insulting to the Government, but cronyism is a real worry—frankly it is a worry with any Government—as are fads and fancies. They are not ill intentioned but they tend to mean that attention diverts from one place to another and lacks long-term consistency. It is very hard to deal with in secondary legislation. Will the Minister discuss whom she anticipates will be the winners and losers when we make this change and remove these various obligations from primary legislation? We really do need to know.
A great deal spills on to the consultation process, which the Minister will no doubt mention. We shall deal with that in another group, but I point out now that, although I am sure the Minister will talk about public consultation, it is not in the legislation. There are a lot of issues to deal with around that.
I now turn to Amendment 54, moved by the noble Lord, Lord Hodgson, which I was glad to sign. I hope it is just that the drafters of the Bill wrote a badly constructed sentence and that the transparency that we would have hoped for is intended. Given the number of government amendments, I suspect the Bill has suffered from some rather rushed drafting, and if there is a government amendment to sort this sentence out, I would not object and I am sure no other Member of the Committee would.
The heart of the discussion today has been the proposal of the noble Lord, Lord Hodgson, supported by many others, for the specific inclusion of a community wealth fund. I can see scope for very good work here, but I have heard three concerns, some expressed here, and I want to pick up on them quickly. My noble friend Lady Barker talked towards one of them, but she did not explicitly mention it. It is about the character of the dormant assets fund. It is not an endowment fund. The numbers in the dormant assets fund are large because we were capturing 10, 15 or perhaps even 20 years of dormant assets that had been sitting around and were unspent. I reckon that dormant assets from banks and building societies are fairly close to exhaustion now. There will be new ones every year, but the bulk of dormant assets have already gone through the system. We are now drawing in more assets but they will follow the same pattern, and we may find future assets to put into the fund.
The noble Baroness, Lady Barker, made the point that you can create something very successful and provide it with funding that can last for five years but, if it has no sustainable funding beyond that point, one is in something of a bind. I am not sure that many people have realised the character of the dormant assets fund. The point is that it should be exhausted and driven down to as close to zero as soon as possible by a combination of reclaim and the paying out of money. It cannot be replenished and continually provide support for many of the community wealth funds in the way that has been described. Sadly, there has to be some real thinking about how all that would work.
My Lords, I put my name to Amendment 57. The essence of the case has already been well covered so I shall be brief, but brevity should not be taken as indicating that I do not attach considerable importance to this amendment.
The Committee will recall that, a couple of minutes ago when I was moving an earlier amendment, I emphasised the need for local views to be taken into account and the fact that, to be effective, “local” must mean precisely that. It is charities and voluntary groups, which are often quite small, that can speak most authoritatively about the needs of their local areas and communities, hence the first part of this amendment. It is obvious that the groups that are the likely recipients of funding under the scheme will have the most relevant first-hand experience or views about how the scheme is or should be operating.
There is a danger, of course. I fully accept that trying to discern what local communities really want is not always easy and may require particular effort. That is why there is a temptation to fall back on what I referred to a few minutes ago as gatekeepers. While many gatekeepers are absolutely fine, we need to ensure that those who are holding themselves out are sufficiently well plugged in to the detail.
In that connection, I re-emphasise the point I made—it was also made by the noble Baroness, Lady Lister, a minute ago—that the concept of community wealth funds are relatively unknown and therefore, to get a proper consultation on how they might work, the Government are going to have to do a bit of pitch rolling, if I may use a cricketing analogy, to ensure that the contributors to the consultation process have a full understanding of what they are being asked to respond about. Having said that, Amendment 57 seems likely to provide the objectives to be fulfilled, which is why it has my support.
My Lords, I welcome the noble Baroness, Lady Merron, as I think this is her first outing in a Grand Committee in the House of Lords, and she is basically doing it in a prison visitors’ set-up. We probably feel like that sometimes here. She made the absolutely key statement: that consultation needs to be meaningful. That certainly underpins everything that I have to say.
I am exceedingly troubled by the very narrow list of consultees in the Bill. The Minister talks about the public, but has felt it really important not to put public consultation in the legislation. We really need an understanding of why she is so determined that the public will not appear in that consultation list. Obviously a Secretary of State who thinks it appropriate can do so, but it is not inherently appropriate in the way that the Bill is drafted. That really is important and it needs to be justified.
The noble Baronesses, Lady Lister and Lady Merron, and the noble Lord, Lord Hodgson, talked about the importance of including charities more broadly. I would add social enterprises. The noble Lord also pointed out the significance of local views.
It may be that I am an old cynic but I deal with a lot of consultations, particularly in the finance sector—they tend to be HMRC or Treasury-driven—and I am extremely conscious that a handful of voices get listened to. They are the sort of recognised powerhouses, the usual suspects and whatever else. Everybody else might get a little answer to one particular point that they make but very rarely—in fact, never within the field that I have covered—have I seen anybody other than that central core of usual suspects have any significant impact on the outcome, and lead to a different approach as a consequence of the consultation. I am extremely troubled by the way in which all this is currently structured and by its essential identification of only one big usual suspect: the Big Lottery Fund. Frankly, it is not fair to the Big Lottery Fund to make it carry that full burden alone, in the way that has been done.
My Amendment 58, also signed by my noble friend Lady Barker, was tabled because I am spitting tacks generally at the way that there is no role for Parliament in these consultations. From the many exchanges I have had with HM Treasury I know that, when there is a consultation, regulators take exactly the same point of view: that any parliamentarian is welcome to write in. Well, first, you do not find many parliamentarians with the time to develop and do all that but, secondly, they are not among the usual suspects who ever get seriously considered. It is not worth the candle most of the time and I have no reason to think that any other department will be very different in its attitude.
The first time that parliamentarians will have any impact will thus be in the useless process of dealing with a statutory instrument that they cannot amend or kill. This seems fundamentally disrespectful to Parliament. In an area such as this, we are essentially looking at Parliament in many ways as the guardian of people’s money that they have somehow missed or lost, or whatever else, so it is even more important that there should be that much wider voice speaking.
In Amendment 58, which is slightly hopeful, I have popped in a requirement to engage directly with Parliament. This problem will have to be resolved because consultation is increasingly becoming the substitute for scrutiny and accountability. It is not designed to do that in the way that it is structured at the moment.
I will pick up the point made by the noble Baroness, Lady Lister. It is quite shocking that we do not even have a reliable framework now for a consultation: it is back to departmental discretion. That is not appropriate. It is highlighted again in the Bill and, for all these reasons, I find this very troubling. We need a justification from the Government on their approach to consultation, and the answer is not: “In this instance, we’ve decided to do something very broad and general, so be happy”. Why is it in no way captured within the legislation itself?
My Lords, the Grand Committee has certainly more than touched on the topic of additionality in previous groups of amendments, but I felt it was important to table a specific amendment. I am not at all precious about its wording; I just wanted to make sure that it got discussed directly.
From the beginning of the legislative process—even ahead of it, when she was kind enough to brief us—the Minister has spoken about the importance of the principle of additionality and reassured noble Lords that that principle would sit behind the dormant assets fund. I had a look to see where this is in the legislation. I am not the best comber of legislation so I would be delighted if the Minister were able to enlighten me if I have got it wrong. I can find a reference to additionality in the statues of the Big Lottery Fund; I can find it again in the 2019-22 management agreement between DCMS and the Big Lottery Fund. However, in the 2008 Act, which is entirely consistent with those two items, I only found it in the reporting and accounts requirements in part 3 of Schedule 3, which says:
“The report shall set out the Fund’s policy and practice in relation to 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”
and the various devolved Administrations. Have I missed something? I cannot read anywhere that it is a requirement on the department or the Government to ensure that the structure is such that additionality is a fundamental principle. Have I missed it? Is it somewhere in the legislation and I have gone past it? If I have, I am very willing, and will be quite relieved, to be corrected.
The Bill in front of the Committee will allow other organisations to become major distributors, not just the Big Lottery Fund. Is the additionality principle particular for that fund? Will it be applied to other distributors? It seems that the issue is not discussed in any way. I am used to legislation in which, basically, Parliament empowers and instructs the Government to adhere to certain principles, and I cannot see that it is in here. If somebody can help me with that, I would be very grateful. As I have just described, the principle also has a sting in it. As I quoted before, it is
“to fund projects, or aspects of projects, for which funds would be unlikely to be made available by”
the Government. One can see the temptation to blur lines.
I have no requests to speak after the Minister, so I call the mover, the noble Baroness, Lady Kramer.
I am grateful to everybody who has spoken. Obviously, the Minister is trying to give me some reassurance, but it has not taken me all the way, I have to confess. Although the additionality principle is in the Bill, it is there only in the context of shaping the work of the Big Lottery Fund; it is not there in the shape of a fundamental principle that applies, necessarily, if the Big Lottery Fund were to become one of several bodies managing distribution, for example, or if there were to be a different route for distribution. It is not sitting at that fundamental level; it is sitting at least one arm’s length away. So, I continue to have that concern.
I fully accept that the Minister has given some very good examples of additionality, but if she would care to look again at the GOV.UK website, to which I drew her attention when we were discussing some of these issues earlier in the week, it is a stretch to imagine that the additionality principle is applying to the £150 million from dormant bank and building society accounts involved in providing support to charities as a consequence of the Covid epidemic. Indeed, the way the Government discuss it—running it in with their own £750 million of additional funding—makes it very clear that they see this as a single programme, and express themselves very naturally and honestly in that way. There is a real question: do we say, “In extremis, forget the additionality principle”, in which case that ought to be acknowledged up front? Or do we say, “It’s always been a fairly weak principle and rather blurred; we have some good examples, but it is not something we are really going to press”? A lot of understanding needs to come from that.
When we go through a new Act, of course, Covid is at the front of our minds now, but I very much hope that in a matter of time it will not be and we will be back to normal procedures. We really need to know how the Bill will operate when it becomes an Act, because it will continue into that future period. So, I raised the issue of additionality and I think we could use some better answers. I absolutely still do not understand why it is not written in such a way that it applies to the government department’s actions. That is just beyond me, because I have certainly seen the Government draft similar constraints for other government departments in other areas, and I have certainly seen them accept amendments that do the same kind of thing. It just strikes me as a bit peculiar to see the way it has been handled here. I think all of us are concerned that it should be a tight ship and not a leaky one. Saying all that, I will, of course, withdraw my amendment.
My Lords, I declare an interest as a member of the All-Party Parliamentary Group on Social Enterprise, at whose recent AGM I had the pleasure of listening to the Minister address the subject that we are coming to now. I admit that one of the reasons why I wanted to table this amendment was that, up until approximately an hour ago, the Committee had had very little discussion on social enterprises. We had, naturally, tended to focus on community groups and voluntary sector organisations and that is the trouble; social enterprises are always getting lost in discussions such as this. They also get lost when we come to talk about industrial strategy and so on. I wanted to focus some attention back on them because the dormant assets funding that has been released so far into the Big Society Capital fund and the Access foundation has been really important. It has helped more than 5,000 social enterprises since 2010, dormant assets worth £460 million have been put through social investment, and it has directly supported more than 1,500 organisations. It will be pleasing to some noble Lords that the vast majority—82%—of those organisations have been outside London, so the investment has been going into communities which are, by definition, less wealthy.
Social Enterprise UK, whose chair is the noble Lord, Lord Adebowale, is currently investigating the impact of that, but we know that it is still difficult for social enterprises to access finance and that access to what finance exists is uneven. There is a particular deficiency in support for some minority ethnic organisations. It has always been the case that women and people from minority communities in any walk of life or business have had more difficulty than others in accessing capital. The biggest problem has been access to what is known as patient risk capital—long-term investments—for social enterprises. Dormant assets are exactly what would work for that.
That is the background to my amendment, which seeks to do two things. One is to limit the beneficiaries of the dormant assets scheme to charities and social enterprises. The reason for this is that, as the primary purpose of this legislation moves away from Parliament and down through departments, and given the experience of a year ago, when we watched the Government scrabbling to find money down the back of departmental sofas to put towards the voluntary and community sector, there is a feeling out there that we have to protect these funds from temporary political exigencies. We particularly need to protect against the creation of new vehicles, some of which may be companies, in an attempt to deliver the agreed main outputs of this fund.
Secondly, my amendment would limit the distributing bodies to being charities or social enterprises. We have already seen the emergence into that field of one entity which is not a charity or social enterprise. My noble friend Lady Kramer, who comes from the banking profession, has in previous discussions noted that if colleagues in her former profession were to see a profitable avenue to go down, they might well develop a new arm to do that. In the scope of banking it is not a massive amount of money, but we are talking about billions of pounds of assets.
It is for those reasons that I have tabled this amendment, and it is those issues that I wish to test in discussion. I therefore beg to move.
My Lords, I shall be brief, because my noble friend Lady Barker has basically laid out the case. I suspect that it was thought a given by everybody in 2008 that the money would go to charities and social enterprises; it probably never occurred to them to do anything else. We live in a much more varied world these days, so it would seem to make sense to add the clarity which the amendment seeks.
When we considered some of the amendments on who should be consulted, they talked about charities. There is a tendency to forget the social enterprise sector and the crucial role it plays. It is a rapidly growing role. I was stunned to learn of the findings of a survey recently conducted by Social Enterprise UK to work out the size of its sector. It started off with the assumption that it was a sector of around £24 billion and discovered that it was one of around £60 billion. An awful lot gets missed and somehow goes under the radar. We need to make sure that attention is appropriately drawn. The amendment is successful in doing that.
As we move into the post-Covid world, we will need to pull all the good levers that we have. That means the social enterprise lever as well as the charitable lever. Making sure that the language matches the reality strikes me as significant and useful. I hope that the points that my noble friend has made will be taken on board. Sometimes it is important to make things explicit, particularly in legislation. I cannot think that it constrains the Government in any way that they would find unacceptable, but it may ring the bell of DCMS when it does the consultation to think, “One of the usual suspects we need to go and listen to is going to be in the social enterprise world; it won’t just be in the big charities world”. Sometimes, we have to do something to make sure those messages get through.
Although the amendment forms a different group, it certainly speaks to a number of the issues raised in previous debates over the past few days in Grand Committee. I am glad that the amendment is before us, because it shines a light on something very important in respect of social enterprises.
At Second Reading, I recall the noble Baroness, Lady Barker, raising several concerns about the Government’s approach to the dormant assets scheme, including about the long-term viability of projects and whether enough is being done to support social enterprises. She has just restated those concerns. Social enterprises are a crucial part of our economy, as they bring together those dual goals in respect of business but also social in a particular way that enhances our communities.