Voluntary Sector and Social Enterprise

Baroness Scott of Needham Market Excerpts

Thursday 21st June 2012 Lords Chamber

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[Baroness Scott of Needham Market]

That this House takes note of the role of the voluntary sector and social enterprise.

[Baroness Scott of Needham Market]

My Lords, I am delighted to have the opportunity today to introduce a full-length debate on the voluntary and social enterprise sector. Whether it is care for the elderly, support for people with disabilities, the provision of housing, advocacy, magistrates dispensing justice, protection of our wildlife or conserving our built heritage, the voluntary and social enterprise sector is at the centre of it. In this Olympic and jubilee year, the efforts of volunteers will be showcased in a way that we can all hope will leave a lasting legacy.

I am looking forward to the contributions of noble Lords from all sides of the House, and I declare a non-pecuniary interest as the chair of the England Volunteering Development Council.

We have come to use the expression “third sector” to embrace a whole gamut of activities from the voluntary sector: social enterprise, mutuals, co-operatives, community interest companies and a host of arrangements which no longer fall into the neat, old-fashioned public/private split.

The voluntary sector and what we now call social enterprise have been around for centuries. In my part of East Anglia, the medieval guilds were as much about welfare as they were about trade. In recent times, we have become used to vital services being delivered by the voluntary sector, the WRVS Meals on Wheels service being a great example. However, today’s picture is very complicated indeed. Many services previously provided by the public sector are now being carried out by voluntary organisations and by social enterprises which have spun out from their original public services.

A significant number of large charities have created social enterprises to generate income for them, and some social enterprises, such as housing associations, now have commercial arms that generate income which is ploughed back in to help fund their social objectives. Most of the tens of thousands of these organisations are very small indeed, and have every intention of staying that way. Support has grown up in the form of a number of umbrella bodies such as Volunteering England, Community Service Volunteers and Social Enterprise UK.

What truly defines this sector is that it is full of people who have identified a need, and have set out to fill it. If the Government did nothing at all, this sector would still exist—philanthropy and concern for humanity have existed since the dawn of time—but to really maximise its impact, what government at all levels does, and does not do, is important. So I want to use today as a chance to think about some of the ways in which the Government can nurture the sector by genuinely recognising and promoting the enormous contribution made by volunteers and by those who have chosen business models which put society before profit.

Every year, more than 20 million people across the UK volunteer around 100 million hours and the estimated economic impact of their activity is in excess of £40 billion. The impacts are virtually incalculable. The YMCA alone estimates that it impacts on half a million young people every year. I particularly want to talk about volunteers rather than charities because my fear is that Government are putting too much emphasis on giving money, as opposed to giving time.

It is funny that many people do not really think of themselves as volunteers; they just get on with it. For example, carers, many of whom are very young, carry a huge responsibility. Tens of thousands of people volunteer as an integral part of their faith. People who run heritage railways or arts organisations do not consider themselves as volunteers but enthusiasts. Last week, I chaired a meeting at which former Olympic athlete Dave Moorcroft was talking about the Join In project and he mentioned the athletics club where he started his career. He spoke of someone who had volunteered there for decades, who, when complimented on his volunteering, said, “I'm not a volunteer, I work here. I just don't get paid”.

It is worth reflecting on the nature of volunteering, and the language that we use to describe it. A case study highlighted by the CSV demonstrates this really well. A London hospital which had had little success in its general appeal for volunteers, began to make more specific calls: for example, it asked for Bengali speakers to help patients, which resulted in people coming forward very quickly as they could see that they were needed. Understanding motivation is really important when we think about volunteering in the context of unemployment. Charities and social enterprises are marvellous at providing paid employment for those who have particular employment challenges: for example, ex-offenders, long-term unemployed, and people with disabilities and mental health problems.

The Sue Ryder organisation runs a scheme for ex-offenders which costs £50,000 a year to run and places around 100 people a year in its shops as a pathway to get them back to work. As it costs more than £40,000 to keep someone in prison, that is massively cost effective. For many others, it is a great thing to use volunteering as a way of keeping people engaged and ready for work. However, I have real concerns about making volunteering a conditional part of receiving benefits. That comes with enormous problems. The idea of forced volunteering is anathema to much of the voluntary sector. Perhaps bespoke social enterprise companies would be a better way of providing such opportunities if the Government believe that conditionality is right.

Understanding more about attitudes to volunteering is really important at a time when more public services are being delivered by voluntary organisations, charities and social enterprises, either because it is a deliberate policy or as a response to cuts. We need to know what volunteers think about job substitution and whether they feel that their good will is being taken for granted.

We do not know much about public attitudes to services provided by volunteers. It is important that recipients do not see themselves as somehow receiving second-rate services because they are no longer being delivered by the local council or health authority. The services are often better. We need to ensure that there is no kind of stigma attached to being seen as the beneficiary of charity either through an individual act of volunteering or through a charitable organisation. I am not aware of much research that has been done in this area but it is highly relevant to public attitudes and to the attitudes of the organisations that commission services.

One aspect of recent public service cuts is that people are stepping up to ensure that the things they value, such as libraries, continue to exist. Volunteering is a free gift from the volunteer, but not a free good to society—professional staff are needed to manage volunteers. In order for third sector organisations to thrive, they not only need to feel valued but to be supported. We know that these organisations and individuals thrive when supported by high-quality information, training and advice from local and national infrastructure bodies. The role of these organisations in offering support, sharing good practice and building partnerships is essential. The national survey of volunteering showed that 31% of regular volunteers said their volunteering could be much better organised, and 28% said there was too much bureaucracy.

I know that the Government are committed to getting more people to volunteer and with modern technology it is easier than it has ever been to match people’s enthusiasm with organisations, but it does not work as well as local volunteer centres which offer face-to-face advice and match up individuals with the right organisations. It is very costly for charities to deal with unsuitable volunteers and demotivating for the individuals.

It is also important that the Government understand that volunteer organisations do not have limitless capacity to take on volunteers. They often need some element of professional guidance and back up. A recent survey carried out by the Lloyds TSB Foundation showed that half of all small to medium charities have seen an increase in interest in volunteering, which is only to be welcomed, but a third of them were unable to cope with the demand.

The social enterprise sector is one of the most exciting developments of recent years, although it has existed in various forms for centuries. If you have ever bought a copy of the Big Issue, or been to the Eden Project or shopped at the Co-op, then you have supported a social enterprise. A recent report from Social Enterprise UK highlighted how social enterprise is contributing to the economic fight-back in many of the most deprived communities, in a way in which neither the public nor private sectors have been able to do. The report showed how social enterprises are being run by younger people than seen in the traditional SME sector, have a higher proportion of female directors and more directors from black and minority ethnic communities.

One thing that social enterprises and the voluntary sector have in common is that they are being held back by conventional public sector procurement practices. There are a number of reasons for this. Risk aversion is one of them. Lack of knowledge and understanding is another and the dreaded “economies of scale” another still. But these have to be overcome if our third sector is to continue to thrive, and the benefits of sustainable and innovative alternatives to conventional services are to be realised.

Earlier this year my noble friend Lord Newby took the Public Services (Social Value) Bill through this House and I pay tribute to him for that. Public bodies will now be required to consider how the services they commission might add value to the well-being of their areas. In practice, this could mean that mental health services could be delivered by organisations actively employing some people with a history of mental health problems who really understand the services that they are delivering. Housing providers could create jobs for the long-term unemployed in housing management and catering contracts could include use of local suppliers. It is not about spending more, but about thinking how you spend to give more local impact.

I hope that the Government will undertake to work with public sector commissioners to implement the Act when it comes into force in January, as it could transform the way in which services are delivered. We have to stop being scared of small-scale providers—in many areas they are being frozen out by large contracts. I was really pleased to hear about Oldham, where special efforts have been made to allow microsocial enterprises to compete using an organisation called Community Catalysts. All sorts of stories have emerged from there, including one about two women who were fed up with working for a large impersonal domiciliary care organisation. They set up their own social enterprise and care for 15 people in a highly personal and flexible way.

The Government last week announced that they are making £19 million available to support social enterprises and will be placing lead officers in all the major departments to take the lead on the work. That is to be welcomed. Will the Government now consider a similar approach for the voluntary sector? It is always a problem for any government to deal with issues which cut across departments but it is imperative that all parts of government think about how they can make a difference. For example, the Home Office could make the new portable criminal record checks free for volunteers. The DWP still needs to work on clarifying the impact that volunteering has on the payment of benefits. We really need the Treasury to think again about the VAT regime. The Sue Ryder organisation told me that one of its hospices typically pays £44,000 a year in VAT while an identical NHS operation would get 57% of that back. The changes to health services need to be mindful of the role of third sector providers, through including them on the health and well-being boards, and ensure that Monitor effectively carries out the fair play field review.

There is so much evidence about what the third sector in all its glorious complexity delivers. It delivers where no one else does and often does it better. Beyond the matter of service delivery comes the impact on society where contributions are made by individuals whose motivations are rooted in the place where they live. The impact of volunteering and of being involved in social enterprise—two related but different activities—is marked both for providers and for people who receive the services. Where public services have spun out to become social enterprises we often see much increased levels of productivity because individuals are more motivated by being able to concentrate on what they care about and in knowing that the profits that they make are desirable because they are reinvested.

The impact of volunteering on the well-being of the volunteers is well known, especially after retirement when an estimated quarter of people report that they volunteer. The third sector contributes so much in so many ways that it is difficult to value enough their contribution in creating the cohesion, the social capital and the trust that we all need in order for individuals, communities and society to thrive—but value them we should. I beg to move.

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[Baroness Scott of Needham Market]

My Lords, we have had an excellent debate today. Having six minutes in which to speak is sensible compared to the time given us in some debates; it gives noble Lords an opportunity really to develop their arguments. I particularly enjoyed the way in which we have woven together the broad context of the relationship between markets, society, the third sector and so on, with really good examples of local case studies from right across the country, which both demonstrates the points that we are making and in many cases are really quite inspiring.

A number of issues and themes have arisen which we would never get agreement on if we spent the whole day here, and we have to set those aside. But we have also identified a number of specific problems—and, more importantly, a number of solutions to those problems, which make follow-up from this debate very important, provided that government is prepared to listen. It was a debate that was characterised at least until the very end by an absence of overt party-political point-scoring, and it was the better for that. The role of this sector in our society is beyond measure, and I am delighted that across the House today we have recognised that.

Motion agreed.