Deregulation Bill

Baroness Scott of Needham Market Excerpts

Tuesday 18th November 2014 Grand Committee

Moved by

[Baroness Scott of Needham Market]

87B: After Clause 78, insert the following new Clause—
“Births, marriages and death registration: historical searches
(none) After section 34 of the Births and Deaths Registration Act 1953, insert—
“34A Historical searches
(1) The Registrar General may provide a copy of an historical record held by him, which need not be a certified copy, to any person who makes a search and requests such a copy.
(2) A copy provided under subsection (1) may not be used in place of a certified copy as proof of an entry in the register.
(3) For the purposes of this section—
(a) an “historical record” means any entry in a register held by the Registrar General which is more than one hundred years old on the date on which such a request is made;(b) a copy of a record which is not a certified copy means a paper, electronic or other duplication as may be prescribed in regulation.(4) The Registrar General may charge such fees as appropriate in relation to making and delivering a copy of a record which is not a certified copy, but such a fee shall be no more than £3.00 per record.””

[Baroness Scott of Needham Market (LD)]

I rise to offer the Government an early Christmas gift, cunningly disguised as Amendment 87B. It is a rare jewel; a genuine piece of deregulation which no one as far as I can tell opposes, which saves money and does not cost anything. I shall explain.

In 1837, a system of civil registration of births, deaths and marriages was introduced into this country. For most of the time since then, it has been a legal requirement to register these events with the district registrar, who issues a certificate. The framework has remained largely unchanged since then. Anyone can order a copy of a certificate from the General Register Office, which is currently set at a cost of £9.25. Because possession of a certificate does not confer identity, these certificates could be used for any purpose and many of us at some point or other may have used this service to order a copy certificate.

The one group of people in this country who could really use this service much more extensively are those, like me, who are researching their family history. Should noble Lords think this is a minority pursuit, one website alone, Ancestry, has 2.7 million global subscribers. The success of programmes such as, “Who Do You Think You Are?”, along with the relative ease of internet searching, has led to an explosion of interest in genealogy. This will almost certainly increase this year as the result of the wonderful coverage of the centenary of World War I.

Genealogists from across the globe can trace their ancestors back to these islands. The Irish and Scottish Governments have been much quicker than the English and Welsh Governments to appreciate the great tourist value in people looking for their roots. For genealogists, the information on general registration certificates is invaluable. Birth certificates contain the father’s name and occupation and the mother’s maiden name. A marriage certificate will record both the father’s name and occupation, so in theory you could use the general registration to trace ancestors back for well over 200 years. An ancestor dying in 1837 at the start of registration might well have been born in the 1750s.

Sometimes, the GRO is the only way of resolving the matter by distinguishing between individuals of the same name on census and parish records, but this valuable resource is nothing like as well used as it could be because the only form in which it is legally allowed to be given is by ordering and paying £9.75 for the full certificate. That is not the case in many jurisdictions. In Ireland, for example, the essential information is provided for €4. In Scotland, an extract can be ordered online through the authorised provider, ScotlandsPeople Centre. The General Register Office issues many thousands of historic copies every year. Even at £9.75 it does not make a profit from them. As I will explain in a moment, it would almost certainly be happy to find a less onerous way of doing this kind of historic business. It would also fit in very well with the Government’s deregulation agenda and the drive to digitise public services.

Turning to my amendment, I recognise and say at the outset that my limited expertise will not have produced an amendment that the Government would accept in its current form. But the fundamental point, aimed at allowing the GRO to change the regime for historic events of more than 100 years ago, is one that I hope the Government will take away for consideration. It would mean that for a much reduced fee—I have suggested £3—the data could be sent by e-mail, rather than be issued in a long-form certificate. One hundred years simply reflects the period after which census data are made public and was the period chosen in the 2002 White Paper. A different time could be chosen, or differentials between births, marriages and deaths established.

This issue has been discussed since 1990. A public consultation in 1999 showed overwhelming support for such a change. The GRO itself proposed similar changes in a 2005 regulatory reform order. Ironically I was a member of the Delegated Powers and Regulatory Reform Committee at the time, but sadly the GRO proposed a whole package of measures rather than simply this specific change. Had there been this change only, it probably would have been successful, but unfortunately the package was considered far too wide ranging for a regulatory reform order.

I caution the Government against putting off making this modest reform until a wider package of measures can be drawn up in their own Bill. The reality is that GRO reform is always unlikely to be a priority in the legislative programme of any new Government. The fact that the GRO has been unable to get a Bill in three terms of the Labour Government and one term of the coalition Government says it all. As I said, this is a probing amendment only, which I hope the Government will take away and consider. I recognise that the GRO will need time to consult on changes and draw up the details, but this can be done by secondary legislation. The important thing is to get this change into this Bill. I beg to move.

[Lord Wallace of Saltaire]

My Lords, I thank the noble Baroness very much. In listening to her, I was remembering that I discovered a new third cousin 10 days ago when the political adviser to someone in the Government in the Emirates got in touch with me. I recognised his unusual name, which happens to be my mother’s maiden name. In inviting him, I asked him to bring the names of his great-grandfather and great-great-grandfather. He arrived with an A3 family tree and the comment from his uncle that the missing bit was a group who had moved away from Somerset, which is where this uncommon local name comes from, and were alleged to have set up as fishmongers in Leicester. That was my grandfather. I now have a new third cousin and quite a useful set of additions to our family tree. I also have a strong desire to visit Australia, where the third cousins who have made good live. They are apparently very generous to their visitors. I should also say that this summer my wife and I were in north Yorkshire looking for her family and we spent a very enjoyable and constructive time in the local history section of Stockton library. The local historians were extremely helpful and provided us with a number of useful bits of family history, including some birth certificates for nothing. The local dimension is as important as the national one.

I can reassure the noble Baroness that officials in the Home Office who lead on this issue will be very happy to meet her soon to discuss the issue further. There are, however, a number of technical issues which mean that the Government cannot accept the amendment as it stands for reasons that I will summarise. The proposed new clause would enable copies of historic births, deaths and marriage records aged 100 years or more to be provided in formats other than a paper certified copy or certificate. It allows for such copies to be produced on paper, electronically or in another prescribed format with a stipulated cost to the customer of,

“no more than £3 per record”.

The amendment seeks to address restrictions laid out in primary legislation that currently prescribe that the only way to access information from a civil registration record, regardless of age, is to purchase a certificate either from the GRO or from the register office where the event was registered, at a standard cost of £9.25 or £10 respectively. While recognising that allowing historic civil registration records to be treated differently from modern records may support government objectives around transparency of data and digitisation, there are some aspects of the clause that make it unworkable in its current form.

For example, the proposed new clause limits the amount that can be charged for an historic record to £3, but further work would be needed to ensure that this allows for compliance with Treasury rules regarding the management of public money—such as rules about full cost recovery. Of course, specifying the fee cap within the clause hinders a regular review of fee levels, as any resultant changes would require further amendment to primary legislation.

The title of the proposed new clause refers to,

“Births, marriages and death registration”,

but the clause seeks to amend only the Births and Deaths Registration Act 1953, which does not provide for the issuing of marriage certificates. We would expect any amendment that provides for a change to the issuing of marriage certificates to be included in the separate marriage legislation, which is the Marriage Act 1949. In addition, the clause applies the same definition of “historic” to all types of records, but this is not aligned—as the noble Baroness has suggested—with the systems of civil registration in place in Scotland and Northern Ireland, which operate under separate legislation. The legislation in place in Scotland and Northern Ireland provides for records to be defined as historic at 100, 75 or 50 years respectively, depending on whether the information relates to a birth, marriage or death, which goes further than the proposed clause suggests.

The clause makes no changes to the information available from the register office where the event was registered, meaning that while the GRO could make historic records available more cheaply centrally, local register offices would have to continue to provide any information from a record, regardless of its age, in the form of a certificate. The impact on the local registration service of introducing a legal distinction between modern and historic records needs further consideration: the amendment as it stands would disadvantage local authorities, which would continue to be legally obliged to maintain the original historic records but would see the demand for information from them decrease as customers chose a cheaper, centrally provided service.

The Government therefore cannot accept the amendment as drafted on the grounds that a number of aspects would prove problematic in practice. In addition, by defining all records as “historic” at 100 years, rather than following the precedent of Scotland and Northern Ireland, and preventing the change to be applied to marriage records by failing to amend the Marriage Act 1949, the clause as it is currently drafted fails overall to achieve the intended aim of opening up as wide a range of records as possible to greater public access. We therefore express sympathy with the aim but reservations about the clause as currently drafted, and we offer an invitation to meet and discuss it further. On that basis, I urge the noble Baroness to withdraw her amendment.

[Baroness Scott of Needham Market]

My Lords, I am grateful to the Minister and certainly look forward to having a meeting to see how we can progress this further. I have been trying to talk to somebody about this for about five months now, so I hope that even at this late stage it is not too late to bring something forward for the next stage of the Bill, because this is a very important issue for people researching family history. As I have already said, there are many millions of such people. The point about local offices is, of course, valid, but the fact is that most people who order copy certificates would do so through the website of the national GRO. That particularly applies to people from abroad. We should be doing everything we can to open up our records where appropriate to people resident both here and abroad who look to us as their historic homeland. I look forward to having meetings as soon as possible and perhaps taking this further. I beg leave to withdraw the amendment.

Amendment 87B withdrawn.

European Union Committee: Report on 2013-14 (EUC Report)

Baroness Scott of Needham Market Excerpts

Thursday 24th July 2014 Lords Chamber

[Baroness Scott of Needham Market (LD)]

My Lords, I wish to focus my remarks on the work of Sub-Committee D, which I have had the honour to chair since May last year. This is not in any way to downplay the important work undertaken by the Select Committee itself. Our report into the role of national parliaments is a timely and valuable contribution to a growing debate across Europe and reflects the leadership shown by my noble friend Lord Boswell, whom I thank for his personal support for my work. In my work on the sub-committee, I try very hard to reflect the principles outlined in the report on the role of national parliaments —namely, that of engagement with counterparts and officials from across the EU and looking at policy before it reaches its final legislative form.

Our work this year was dominated by the topic of food waste, to which I shall return in a moment. Some of our scrutiny work followed up on the excellent work undertaken by my predecessors, the noble Lords, Lord Carter of Coles and Lord Sewel, and it shows, I believe, the value of well considered inquiries undertaken early in the policy-making process. This is a hallmark of much of the work across the sub-committees and it is something that we do well.

In 2008, the committee published a report on reform of the common fisheries policy. Five years down the line, I am delighted to say that the work came to fruition. Regulations to reform the CFP were adopted that strongly reflected the key themes of our committee’s 2008 report, including the decentralisation of decision-making and the introduction of a discard ban. Last summer, when the deal was done, the committee turned to the practical implementation of these policies, particularly the discard ban. It remains one that we should be watching.

The second major dossier that reached its end point last year was the reform of the common agricultural policy—although, of course, it never reaches an end; it is like painting the Forth Bridge. Under the chairmanship of the noble Lord, Lord Carter of Coles, the sub-committee had undertaken an inquiry into innovation in EU agriculture. Redirecting the juggernaut of the CAP is no small task, but incremental steps have been taken along the lines proposed by the committee in its report, and I am pleased to say that the committee continues to press the important themes of research and knowledge transfer as the process of implementation returns. It has also clearly become more of a priority for the Government because this week they have announced new investment in agricultural research.

One way in which we pressed those themes was through our recent report into the prevention of food waste in the EU. On-farm innovation is a very important element of tackling food waste at the initial stages of the food chain. The press and public interest that our report drew surprised even us; the press office tells me that it received more coverage than any House of Lords report it could ever remember. I want to trade anecdotes with my noble friend Lady O’Cathain and the noble Lord, Lord Boswell. The Independent described our committee as a “true adornment” of your Lordships’ House.

It is very important now for us to follow up this work. The European Commission recently produced amendments to its waste legislation that very strongly reflect the recommendations that we made in our report to have an aspirational food waste reduction target—not legislatively binding—and to work on standard definitions across the EU. We are awaiting more information from the Commission and a non-legislative communication from it in the autumn. We will also hold a seminar to look at the practical barriers to redistribution of surplus food. I am now constantly being briefed by organisations and businesses across the country and, indeed, Europe on the work that it is doing to reduce food waste. I think that demonstrates that we are regarded as leaders in this thinking.

I turn briefly to some other work. We are currently in the midst of a very intensive period of work, within the EU and internationally, on future approaches to energy and climate policy. It was very pleasing that messages in our report last year with regard to EU energy policy have been reflected in the Commission's proposed policy for energy and climate change through to 2030. This relates particularly to the importance of creating a stable environment to support long-term investment. I am also very pleased that, as the Energy Bill was making its way through this House, noble Lords made a number of references to the work that we had done in our committee. This shows that there is a crossover between the work that we do in the European scrutiny context and in the wider work of the House. Work on energy and climate change will be at the headlines of our next inquiry, into EU regional marine co-operation, which we launched at the beginning of this week. We are trying to bring a number of these things together, such as fisheries, energy interconnectivity and knowledge transfer. I hope that what I have said gives a sense of the work that we have been doing and that we plan to do, and demonstrates that we continue to seek to build and follow up on previous work.

There is a further point that I wish to make. It is a matter not for the Government but for this House. The new rotation rules that have now been introduced for the European committees will result in a two-thirds change of membership of my committee and that of a number of others next year. I suggest that a two-thirds change really runs completely counter to the principles of gathering experience and ensuring the effective running of the committee. As if that were not bad enough, after I had thought about it, I realised that the changes will mean that, every third year, two-thirds of the committee will disappear. I hope that the House will rethink that because it will make our work very difficult indeed.

I am grateful to all members of my committee, who are a joy to work with. They contribute a huge amount of their time, their experience, their expertise and, above all, their enthusiasm to make us successful. I should like to pay particular tribute this evening to Lord Lewis of Newnham, who died earlier this month after a long illness. His interest in all aspects of our work, coupled with his immense knowledge of chemistry, made his contribution invaluable. We miss his deceptively gentle, incisive questioning and his kindness.

Finally, we would not be so effective if it were not for the work of our staff. I put on record my thanks to our committee assistant Mark Gladwell, our clerk Patrick Milner, his predecessor Aaron Speer and our policy analyst Alistair Dillon, whose encyclopaedic knowledge of the range of work we cover is always truly astonishing.

--- Later in debate ---

[Lord Wallace of Saltaire (LD)]

My Lords, I think this is the third time we have had an annual debate on the work of this extremely important committee. I regret that we are very much at the last hour of a Thursday evening and keeping the staff here, and that we are rather thinly staffed on the Benches at the moment, because this is an extremely important committee. When the noble Lord, Lord Boswell, introduced this debate I thought about how long this committee has gone on and how closely many of us have been involved with it. When I first became a Member of this House, the then Clerk of the Parliaments, Michael Wheeler-Booth, enjoyed entertaining people in front of me by saying that when he was the first clerk to the committee one of its first witnesses was a rather nervous young woman academic. He gave her a double gin and tonic before she gave evidence to the committee to steady her nerves. The young academic was Helen Wallace, my wife.

Shortly after I joined the House, I was posted to Sub-Committee F and, because the chair resigned unexpectedly, I became its chair. I had an experienced clerk to train me and then found myself with an entirely newly appointed and totally inexperienced clerk called Christopher Johnson, whom I was expected to train. I think he has done quite well since then and I hope the committee is happy with the highly experienced clerk he now is.

We all need calm and reasoned debate on matters European and we all realise how enormously difficult it is amid the cacophony of ignorant prejudice all around us to hold to a highly reasoned and calm debate, often on highly technical issues, set out in highly technical language which, nevertheless, can touch on major UK interests and dilemmas. As some noble Lords may know, I have been involved very closely in the balance of competences reports. I hope noble Lords have followed these with increasing confidence because we have attempted to see them very much as a parallel process of evidence-based consideration of British interests in European co-operation and of how far the current balance of competences suits British economic, social and political bodies engaged with European policy.

I say to the noble Lord, Lord Bach, that the reason some reports have only just been given to the committee is that the third round of this four-round exercise was completed only some weeks ago, and the 11 reports were published on Tuesday of this week. These included the delayed report on the free movement of persons and the single market report on financial services and capital, which was mentioned in last evening’s debate and provides a high-quality analysis of some of those complicated issues.

The fourth round is now in process. We hope to complete that before the end of the year. It will include a report on subsidiarity and proportionality, a matter of active interest to the noble Lord, Lord Hannay, among others. The fourth round has only seven papers, but because they are on complicated, cross-cutting issues, these will be some of the most difficult. I hope that this will all feed back into the work of your Lordships’ European Union Committee.

There is another report coming up on enlargement. The noble Lord, Lord Bowness, touched on how complex and delicate a subject that has now become. There is another on citizenship, voting and the related issues of individual rights within the European Union.

In the process of negotiating the balance of competences papers through three rounds now, I have discovered how much overlap and interaction there is between UK engagement with the European Union and with other multilateral organisations through which the UK pursues and negotiates its economic security, regulatory and political interests: the OECD, the OSCE, the WHO—within which the EU operates as a regional body for certain purposes, which I did not know until I read the balance of competences health report—the IMF, the Bank for International Settlements, the Food and Agriculture Organization and so on. There is a case for this House to consider in the new Parliament whether it should not at least experiment with one or two more committee inquiries that will look at how the UK works through other technical and specialised international organisations.

The need for calm and reasoned debate, particularly on questions such as Russia and Europe, came home to me as I picked up my Daily Mail this morning and saw the full-page article by Stephen Glover which explains that it is the EU’s fault that the Dutch aircraft was shot down over eastern Ukraine. One need not go through the various stages through which he demonstrates that it is entirely the EU’s fault. There is no mention of the pressure from within Ukraine itself for closer relations with the European Union. In December 1991, I spoke at a conference in Kiev, when Ukraine had been independent for three weeks, at which the Prime Minister announced that among the two strategic aims of the state’s foreign policy was to join the EU within three years. I was then asked to explain why that might be a little more difficult than he expected. There was no mention in the article of the Bush Administration’s encouragement of Ukraine and other states to join NATO—“No, it is the European Union’s fault. President Putin is a splendid man and everything that is wrong with the country is the fault of those dreadful people in Brussels”. That means that we absolutely need detailed arguments demonstrating where British interests are better pursued at an EU level or better pursued at the national level, and thus to unpick, one by one, some of the arguments that are produced in the other direction.

The noble Lord, Lord Harrison, asked me a specific point about whether the Government had been invited to engage with the euro group and whether we have declined or not. I do not know the answer to that. I will draw it to the attention of my Treasury colleagues and promise that we will respond to the committee as soon as we can.

The noble Lord, Lord Bach touched on the extent to which the Foreign Office co-operates with the committee. As a Foreign Office Minister, I am impressed by the quality of FCO officials working on European issues, the balance of competences and a number of other areas. We are keen to co-operate as far as possible with the committee; that, of course, is part of the strategy of wanting to strengthen the role of national parliaments. Mr Lidington appearing before the committee before the June Council was seen as an experiment, but it is certainly something that we might well take further.

I would merely mention, in terms of what I understand are the Labour Party’s intentions for the other place, that the Commons European Scrutiny Committee proposals—to which the Government have now also responded—suggest that it would be more useful in the other place for departmental Select Committees to become more directly engaged with European issues themselves, rolling the European dimension in with the regular spread of sectoral policy in the United Kingdom.

Extending the role of national parliaments is one of the targets of the coalition Government’s EU reform agenda, which requires active engagement with the Brussels institutions and other national parliaments, with the National Parliament Office, which we maintain in Brussels, and with COSAC. I note the slightly mixed message about COSAC from the noble Lord, Lord Boswell. I am sure that it is much better than when I used to go to COSAC.

We are experimenting with reasoned opinions and yellow cards. Some other parliaments have already produced more reasoned opinions and yellow cards than either of the two Houses of the British Parliament; that is something that we clearly need to take further.

I take the various critical points that the noble Lord, Lord Hannay, made—that there is a shortage of time, which we need to discuss again at the Commission, that there has been resistance from within the Commission to reasoned opinions and that we need to strengthen links also between national parliaments and the new European Parliament, which is an issue to which we must all return.

[Baroness Scott of Needham Market]

Would my noble friend accept that a particular role for government departments in all this is the speed with which Explanatory Memoranda are issued. Certainly on my committee, we have had problems when the clock is ticking on the reasoned opinion taxi meter and we are still waiting for the Government’s Explanatory Memorandum.

[Lord Wallace of Saltaire]

We all understand that that is part of the problem and the pressure, and we are doing our utmost to look at that as well. I also take the point made by the noble Lord, Lord Hannay, that effective scrutiny necessitates the earliest possible engagement with developing areas of policy, looking at work programmes and strategic views.

I am glad that the noble Lord, Lord Boswell, feels that the Government’s scrutiny performance has improved somewhat in the last year. It is one of those things on which we all have to maintain the pressure. Civil servants are always very busy and Ministers always have too many things in their in-tray, but we have to keep up the pressure on all that.

The noble Lord, Lord Bach, asked whether the Government’s evidence on the abuse of free movement rights could be shared with the House. Much of that is in the free movement of persons paper that was published on Tuesday. Having been very closely involved in negotiations over that paper, I might say that the evidence is not always entirely clear; that is part of the problem in discussing questions of free movement of persons and labour and the abuse of free movement rights. That is partly because we do not have exit controls in this country and partly because we do not collect all the central evidence. For example, I questioned at one stage an academic study that suggested that there were 40,000 British citizens receiving benefits in other states in the EU. That is an academic estimate, but nobody is entirely sure whether that is an exact figure. So there are many problems in addressing that very complicated issue.

The noble Earl, Lord Caithness, asked whether the UK had been diffident in its approach to the financial transaction tax. The Government have been very closely engaged with this issue since publication and, indeed, took a case to the European Court of Justice on that issue to raise the question of how far it would be appropriate for the European Union to move on that subject. We remain actively engaged.

The noble Lord, Lord Tugendhat, talked about the Transatlantic Trade and Investment Partnership. That will be a central but extremely difficult issue for the coming year; we know that there will be lobbies not just in France and elsewhere but in this country that will want to raise negative issues about TTIP. That is something that we will clearly have to follow.

May I say, as spokesperson for the Cabinet Office and therefore dealing with a lot of data sharing issues, that I would welcome the European Union Committee looking further at aspects of the digital single market as well as data sharing and data protection? Some months ago, I asked for a briefing within Whitehall on the digital single market and officials from five different departments came to brief me, demonstrating just how complicated an issue it is. After all, this is all one issue in a complex, multi-levelled set of issues for government that is driven by the speed of technological change. I am constantly struck by how much faster technology is taking us down the road to online, cross-border transactions than we previously understood. The digital single market is a major priority in the Government’s drive for EU reform and it is part of the extension of the single market to services, as services and manufacturing intertwine and overlap. It will be a difficult issue also in TTIP, as data regulation, the cloud and the role of the US service providers hit the issue of data protection.

I am conscious of the time. I hope that I have answered most of the issues, but I see that there are one or two questions still to come.

Voluntary and Charitable Sectors

Baroness Scott of Needham Market Excerpts

Thursday 26th June 2014 Lords Chamber

Moved by

[Baroness Scott of Needham Market]

To move that this House takes note of the role played by the voluntary and charitable sectors.

[Baroness Scott of Needham Market (LD)]

My Lords, it is a great pleasure to introduce today’s debate, and I am grateful to my noble and learned friend Lord Wallace of Tankerness and my noble friend Lord Newby for selecting this topic on one of two Liberal Democrat debate days. I declare an interest as chair of the National Volunteering Forum, as a trustee of the Industry and Parliament Trust, and as patron of Ace Anglia, which provides advocacy and support to people with learning disabilities in Suffolk, and of Wings of Hope, which is an educational charity focused on India and Malawi. I very much look forward to hearing from the other 20 noble Lords who will speak in the debate. With all due respect, between us we have many hundreds of years of experience in this sector, and I think the insights today will be very valuable.

What makes this sector so vibrant, so flexible, often challenging and occasionally frustrating is its very breadth. Charities such as the National Trust, the RSPB and Oxfam are household names. They have hundreds of thousands of members and significant incomes. There are thousands more tiny local charities set up to respond to particular circumstances, sometimes even the plight of one individual who needs help. There are around 161,000 registered charitable organisations, and an estimated 600,000 which are not registered. However, 90% of charitable income is made by the top 10%. I would not want this morning’s debate to go by without paying tribute to the millions of volunteers and family carers who, often under very trying circumstances, display a quiet daily heroism.

This sector provides both quality-of-life services, such as those of the National Trust, and lifesaving services, such as those of the RNLI and the Red Cross. The Society of Friends reminded me of the important role which charities play in the campaign for change, and how important that is at a time when people are increasingly disengaged from party politics. Of course, as we go into the general election next year, I reflect that most of the political activity which is undertaken in this country is done by unpaid volunteers. We should remember that contribution, too. In some cases, the volunteers provide the service, and in others they raise money so that professionals can do their jobs. Charity shops alone raise around £300 million every year for their organisations.

With this variation, finding the right policy framework for all of these circumstances is very difficult to get right, both for government and for regulators such as the Charity Commission. It also makes it quite difficult for the sector to speak with one voice. I will leave it to other noble Lords with more experience to talk in depth about the legal and financial framework for charities. However, I want to start with a few general comments on that aspect, before going on to talk about volunteering, which is the main thrust of what I want to say today.

The total yearly income of the charitable and voluntary sector is £39.2 billion. That is down £700 million on the previous year, largely as a result of reduced public funding. Despite the recession, NCVO says that charitable giving is holding up reasonably well, although anecdotal evidence suggests that organisations are having to work much harder to raise their money. Voluntary organisations are also reporting an increase in demand for their services, and there is now a real question about how long they can afford to do more with less.

The recent cross-party report, Creating an Age of Giving, referred to a civic core of givers, but it refers to the fact that that core is ageing and shrinking. Investment in schemes such as payroll giving and technology that enables text donations, for example, and the use of social media, have proved to be very worthwhile. I hope that the Minister will tell us whether the Government will continue to provide the seed corn money required to develop such schemes.

Gift aid is really important, but the new small donation scheme is looking significantly underspent. Anecdotally, it would appear that that is because it is just too complicated. Will the Government undertake to see whether that is the case and make changes quickly if they need to be made?

UKCF’s Shine a Light research of December last year found that people are nearly twice as likely to feel confident when they give money locally, as opposed to nationally, that it is actually going to help those who need it most. More than half of them would give more and give it locally if giving was easier and they could see the impact of their donation. That is emphasised by the publication, just this morning, of a report by the Charity Commission on public trust and confidence. It makes the same point about people wanting to see how their money is being spent and the impact.

One area where you can best see that at work is in the community foundation movement. Like most shire counties, Suffolk has a community foundation, which supports a wide variety of charity and community projects throughout Suffolk. By making endowment-giving easy, it has provided a sustainable way to support local organisations. Match-funded schemes such as Community First have been a real boost. I hope that the Government will keep that success in mind and work with the community foundations to see how the schemes might be expanded. Recent evidence is showing an increase in local giving and a more thoughtful model of giving, which is a really important part of building a strong civic society.

Of course, what makes the charity sector is the volunteers. The best estimate is that there are about 15.2 million people volunteering every month, so there is clearly an incredible capacity for volunteering in this country, but there are concerns that the volunteer workforce is ageing. People are working longer, caring for very elderly relatives themselves, perhaps even becoming less altruistic, and it is becoming difficult to recruit new volunteers. It takes money to resource organisations and projects specialising in helping people to access volunteering opportunities, but we need to do that to widen the pool from which our volunteers are drawn. For example, the Access to Volunteering fund, piloted in three areas, supported about 7,000 disabled volunteers to become involved. That brought with it reports of improved well-being and significantly reduced isolation.

A few years ago, I had a conversation with a researcher who was looking into something called micro-volunteering. Partway through, I realise that what she was actually talking about was what I would have called “doing someone a favour”. In today’s disconnected, slightly impersonal world, that sort of thing is dying out. It seems very odd to people of our generation, but there is a huge role for social media, for example, in making those connections between people, because the old community connections are lessening.

It is also important to recognise that the old model, where volunteers would commit a certain amount of time every week and would do so over a lengthy period, is very challenging for a lot of younger volunteers who have work and family commitments. They need more flexible volunteering opportunities. In Suffolk, the 2012 Olympic volunteers have formed a sort of permanent cohort of volunteers who come in and out for all the major events in the county; its success is in its flexibility. New technologies can be really important.

There was a time when the public, private and charity sector all had separate but very well understood roles. The picture is now much more complex and the lines between them are really quite blurred. Some of these developments have welcome aspects, but there are challenges. One of the most difficult issues facing the sector is the use by government of volunteering as part of unemployment policy. As I said before, we can all accept that volunteering can play a really important part in getting unemployed people out of the house, learning new skills and generally increasing their self-esteem. However, there is sometimes a question of compulsion. Someone who is made to volunteer in order to get their benefits is not a volunteer, and we should not call them one. These are work placements, and we have to understand that it makes life quite tricky for the existing volunteers to be working alongside people who are there only under duress.

Secondly, the Government need to remember that charities and voluntary organisations do not have an unlimited capacity to absorb volunteer labour wherever it comes from. There are too many reports of jobcentres simply sending people along to voluntary organisations with no thought as to how the organisation is actually going to use them. The voluntary organisations themselves need enough professional staff to be able to manage volunteers effectively, even when they are welcome.

All this is made very complicated by the increasing use of the third sector to deliver public services. Current estimates are that the contracts are worth just over £11 billion. I am in favour of this development, but we have to recognise that it limits the ability of the charity or voluntary organisation to set its own priorities. What happens then is that gaps in service begin to appear. It also compromises the perception of the public about the charity as independent of government. That has come out very clearly in the report published by the Charity Commission today: when a charity becomes dependent on public contracts for its survival, its independence can be jeopardised.

I shall make one or two points on the question of tendering for public services and the issues facing charities that wish to participate. First, the bidding process is often based on driving down price, which usually means labour costs. Most voluntary organisations do not pay their staff particularly well, but they do want to be fair. They want to pay the living wage and give their staff decent terms and conditions, but it is often difficult for them because they are competing with the private sector, which has no compunction about the use of zero-hours contracts or short-term contracts or with paying less than the living wage. Quite often the third sector is heavily disadvantaged when it comes to tendering. It is not just a moral question; evidence from the Living Wage Commission demonstrates that the Treasury could save more than £3.6 billion per year if everyone was paid the living wage. I wonder whether it is the business of the public sector to be discouraging the voluntary and charitable sector, which treats its workers well, by favouring the private sector.

Too often the relationship between the voluntary sector and the statutory commissioners is “us and them”. The commissioners are very controlling and do not really look at value or service delivery; it is really just about the money. Of course, when budgets are so pressed and when financial survival, territorial ambitions and all these things come into play, we can see why this might happen, but I think it is time for the Government to review it. Government and local government are major commissioners of services from the charity sector, so I support the NCVO call for a review of public sector markets to see whether they are still fit for purpose. A lot more training is needed for commissioners to ensure that when they say that service users’ needs must come first, it actually means something and is genuinely reflected in procedures. That means that we have to talk to the users. That is one reason I became patron of Ace Anglia in Suffolk: it provides advocacy for people with learning disabilities. It is really important to have a dialogue with people when tendering for the services that are going to affect them. Too often, it is either all about the money or it is about a superficial judgment of what people might like. You actually have to talk to people.

Sam Younger, just before he left the Charity Commission, said:

“There is too much duplication in the charity sector and too many charities are inefficient and poorly managed. Too many people set up a new charity without establishing whether there is a genuine need or whether another charity is doing similar work … the result is duplication and inefficiency … especially in an environment where charities are competing for resources”.

That is the dilemma. When you look at it like that, from a strategic point of view, what he says makes absolute sense: there is not enough money to go around so duplication is a luxury that we cannot afford. However, if you look at it from the bottom up, from the point of view of individuals, there are many examples of where, collectively, the private, public and even voluntary sectors are simply failing to meet their needs. When that happens, the obvious response is to set up a new charity. That is why something like 2,500 new charities are being set up every year.

As I said at the beginning, the picture is complex and in many ways is getting more so. However, and I think that we would all agree with this, everywhere across the country we see volunteers, charities and community groups of all sizes taking an active role in addressing the problems of their area, building communities and campaigning for change. They are building a stronger civil society and a new social economy, and we should do everything that we can to help them.

--- Later in debate ---

[Baroness Scott of Needham Market]

My Lords, I thank each one of the 20 contributors to the debate whose contributions have been thoughtful, wise and, above all, rooted in experience. What has come out is that, despite all the challenges there is still an essential optimism for the future of the sector and its importance. We have given the Government much to think about and I hope that they will reflect seriously on the points that have been made.

They say that charity begins at home. I wonder whether collectively, as an institution and organisation, we are doing enough here. Parliament is one of the largest employers in London and I have tried for two years to set up a volunteer system for our own employees, and have had no traction with that. Perhaps other noble Lords might like to help me. I am not sure that we do payroll giving. I do not know whether we are collectively setting the example that we should, despite all the good work that I know we all do individually.

Motion agreed.

European Union Committee: 2012-13 (EUC Report)

Baroness Scott of Needham Market Excerpts

Tuesday 30th July 2013 Lords Chamber

[Baroness Scott of Needham Market]

My Lords, I will speak on the work of Sub-Committee D which, for the uninitiated, deals with agriculture, fisheries, environment and energy. I have had the honour to chair it since the start of this Session in May, but all credit for the past year’s work must go, of course, to my predecessor, the noble Lord, Lord Carter of Coles. I extend my thanks to him and to his committee during that session; he has set a remarkably high bar. I also note that since May, without the benefit of quotas, we now have 50% female and 50% male chairs of the EU sub-committees.

The obvious feature of the past Session for Sub-Committee D was the addition of energy policy to the remit following the reduction in the number of sub-committees. While this was a substantial new policy area, it was very well aligned with the committee’s existing responsibility for climate change policies. As one might expect, the sub-committee approached its new remit with great enthusiasm and, as we have heard, chose to focus on EU energy policy for its principal inquiry during the previous Session.

The energy report was debated only yesterday in Grand Committee, so I will not dwell on content. However, I am pleased that many noble Lords made reference to our report during the debate in Committee on the Energy Bill. It is pleasing that an EU committee report has served the House in its wider context of scrutinising UK legislation—which helps to emphasise the obvious point, that UK legislation cannot be scrutinised in isolation from EU legislation, and vice versa.

Our energy report received widespread press coverage in the UK and beyond and has been referred to by the members of the parliaments of many other member states. Our report was primarily timed to feed into discussions at EU level on its future energy and climate change policy framework. It is pleasing that the report was published in good time to do that. I know that the Commission has been drawing on some of the material and phrases from our report in its consideration of future policy options. Our phrase “the energy trilemma”, to describe the balance between affordability, sustainability and security of supply, is now coming into common parlance.

Beyond the inquiry, the sub-committee’s scrutiny focused on major reforms to the common agricultural policy and the common fisheries policies. Both have demonstrated the long-term added value of the work that we do in this House on EU scrutiny. In the case of fisheries reform, for example, the thrust of the new package very much reflected the sub-committee’s 2008 report. In the case of agricultural reform, the new rural development policy reflects several of the recommendations that the sub-committee made in its Innovation in EU Agriculture report some years ago. While EU decision-making is slow, and it is difficult sometimes to show immediate policy impact, I think that we can demonstrate the long-term beneficial effects of examining policy areas at an early stage of their development.

Not content to just leave these issues as they lie, the sub-committee is undertaking short pieces of work on how these reforms will be implemented. In fisheries, we have recently held evidence sessions to examine issues relating to the new ban on discards of over-quota fish. In agriculture, we will hold several sessions with stakeholders in the autumn to have a look at implementation issues and concerns on CAP reform.

Turning to the sub-committee’s plans for the new Session, we are about to launch a new inquiry into food waste prevention, examining how EU policies can assist rather than hinder attempts to prevent food wastage, and how local, national and EU initiatives can be harnessed most effectively. This will build on previous work that we have done on agricultural innovation and fisheries discards. We hope that this will feed into work being done by the European Commission on food waste and on waste policy more generally. In particular, it is our aim to produce a piece of work that will be helpful to the incoming European Parliament and the Commission next year; it is an attempt to build a “coalition of the willing” with other member state parliaments.

The noble Lord, Lord Carter, and I have been very fortunate to have an enthusiastic and knowledgeable committee backed by a skilled and dedicated secretariat. They absorbed the new area of energy policy with great enthusiasm. However, I flag up my strong belief that any further attempts to reduce EU scrutiny committees should be resisted. From my experience on Sub-Committee B previously and now Sub-Committee D, I do not believe that either could take on a new major policy area without the quality of the work suffering in some way.

The Minister for Europe and the Foreign Secretary have recently flagged up the importance of national parliament scrutiny of EU legislation, and they are right to do that. However, if we are to do such work, it needs to be properly resourced and supported, not just in this House. Frankly, I am dismayed at how much time my small team of three has to spend chasing up government departments which do not provide information on time and within deadlines, or which produce explanatory memoranda that are neither explanatory nor particularly helpful. Above all, we must be very cautious not to see the important issue of national parliament scrutiny of the EU obscuring the need for effective scrutiny of government action within the EU. That is a very important part of the scrutiny role of this House and it is one that we must hold on to.

Voluntary Sector and Social Enterprise

Baroness Scott of Needham Market Excerpts

Thursday 21st June 2012 Lords Chamber

Moved by

[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.

--- Later in debate ---

[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.

Businesses: Regulation

Baroness Scott of Needham Market Excerpts

Tuesday 19th June 2012 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, we all understand that there is a constant tug-of-war between those who want more regulation and those who want less. For example, what I do should be entirely unregulated because I can be trusted, what you do should be carefully controlled, and what he does should be stopped.

[Baroness Scott of Needham Market]

Is my noble friend aware of pilot studies that have recently been carried out in Solihull and Leicester, where local regulators have sought to reduce burdens on small businesses by streamlining the amount of information they collect, co-ordinating inspection visits and sharing data? Can he say whether the evaluation has been carried out, and when we can expect to see the results?

[Lord Wallace of Saltaire]

I thank the noble Baroness for that question. Yes, that is exactly the sort of thing that the Better Regulation Delivery Office is concerned about. Eighty per cent of regulatory inspection and enforcement is carried out by local authorities, so that the experiment being conducted with these authorities is intended to feed very much into improving the quality of local regulation.

Public Services (Social Value) Bill

Baroness Scott of Needham Market Excerpts

Friday 27th January 2012 Lords Chamber

[Baroness Scott of Needham Market]

My Lords, I thank my noble friend Lord Newby both for picking up the mantle of this Bill and for the work he does on the All-Party Group on Social Enterprise. It is of course a fact that all providers are able to think about social value; it is also a fact that most of them do not, which is where there is a real gap and a need for social enterprises. There is a lot of talk about social enterprise, mutuals and not-for-profit at the moment, but it is interesting how many misconceptions there are about the sector. People think that somehow it is an offshoot of the voluntary sector; that social enterprise is something new; that social enterprises are necessarily small; and that they do not have profit-making as an objective. Of course these things can be true, but not necessarily.

I was a board member of the Lloyd’s Register, a not-for-profit distribution organisation which works in the field of safety. At 250 years old it certainly is not new, and with over 5,000 employees it certainly is not small. Last year, I went to talk to the head of Hackney Community Transport, which was originally a small dial-a-ride service and is now a multimillion pound business and operates some commercial services as well. Both demonstrate the key identifiers of social enterprise, its public good and its not-for-distribution profit, but both have also demonstrated that social objectives can be good, sound commercial business.

However, those two examples are exceptional in the field. Most social enterprises are small and operate locally, and in this is both their strength and their weakness—a strength because they offer tailored services, based on a real understanding of the needs of service users; but a weakness because, as we have heard, they find it very hard to get a foothold in the market for public services, which is dominated by large enterprises. There is a wealth of evidence from around the country that small social enterprises—as well as small businesses—face often insurmountable hurdles in the public procurement process, so this Bill is designed to address that most significant problem faced by the sector.

I have to be honest enough to admit to some misgivings about this approach. I do not much like duties and requirements being piled on to local government by central government. We have had far too much of that in the past. The previous Government introduced a general well-being power to local government, and the coalition has gone further by introducing the power of general competence. We also have the Sustainable Communities Act, which is relevant in this area, as is the right to challenge introduced in the Localism Act. Local authorities have the powers required by this Bill and some use them, as we have heard, but many more do not. Given this legislative framework and the wealth of evidence about how beneficial this sector is, we need to think about why this is simply not happening. It may be because some are blinkered, as my noble friend Lord Newby said, but it also comes down to two other things: money and capacity.

Local authorities have been finding savings year on year for some time and face a very stringent settlement this year. Rightly, their priority is the protection of front-line services so they strip away back-office functions, which include the staff who work on procurement and managing contracts. With fewer people working in that area, public authorities find it easier to manage fewer, larger, more straightforward contracts rather than a plethora of smaller suppliers offering services that really have to be thought about. This is not just an issue for social enterprises; it is a major problem for small local businesses. It is even happening now in the voluntary sector; I have been watching as around the country small local voluntary agencies have been losing local authority contracts to large suppliers.

There is another problem for local authorities. When you outsource something, you have to keep the risk in-house. If the service goes wrong, the risk remains with the local authority. That explains the risk aversion that we tend to see in local authorities that the noble Lord, Lord Wei, so trenchantly referred to.

The attitude of public procurement authorities is understandable, though short-sighted. I am afraid of going down the route of compulsory competitive tendering. I have watched that process for the past 30 years, and at the beginning large savings and efficiencies were indeed made and the regime was judged a success. Over time, though, as the smaller in-house suppliers disappeared, competition in the market lessened to the extent that in some areas—waste and local buses are two that spring to mind—there is now very little competition left in the market. That is bad for the public purse and for public services, and we must not go the same way in the social enterprise and voluntary sector.

The Bill, and government support for it, would go a long way towards sending a message to public bodies that they can adopt a different approach that values local services with the added public value that they can bring. It is a sad fact that local service providers still look very much to Whitehall departments for direction.

There are problems with measuring social value—it is not straightforward—and that is another area where the Government can help. As well as initiatives that are needed to improve the social enterprise sector, such as the creation of the School for Social Entrepreneurs or the academy proposals being developed by the noble Lord, Lord Mawson, we also need to work with the public sector to learn most effectively how we can evaluate and assess social value so that these factors can be taken into account by the decision-makers.

We also need to learn how to think about and measure the benefits of social enterprise that are much more difficult to measure: the improved productivity that comes along when people are motivated by working to their own objectives and feel a direct sense of responsibility to service users, and the community benefits that come from people working who are active and engaged in their own service delivery.

Words of support are all very well but there comes a time when action has to be taken. Passing this Bill will not of itself make things happen, but it will be an important first step. If social enterprises, SMEs and local charities benefit from this approach and thrive, the larger commercial organisations will also begin to think more seriously about social value, and then we all win.

Social enterprise is unusual. It does not matter what your political philosophy is; there is something in it for you. It is about enterprise, social value and communities, and it is often good for the environment. I am sure that we can all join together to support not just this Bill but other measures to help this sector to grow.

Social Enterprise

Baroness Scott of Needham Market Excerpts

Thursday 6th October 2011 Lords Chamber

[Baroness Scott of Needham Market]

The noble Baroness, Lady Andrews, has done the House a great service by tabling this debate today, which has demonstrated that huge disagreement is not needed for an interesting debate. We by and large agree, but nevertheless there have been lots of different and interesting points. It is perhaps not surprising that we agree because one thing which unites us, wherever we sit, is a sense of public service. That is why we are active in your Lordships’ House. It is also why we do what we do outside this House. As we go around the country, the ideal of public service is absolutely alive and well. Everywhere there are people who, in some way or another, devote their life to service to the public.

Until fairly recently, I regarded public service and the public sector as synonymous. I was wrong and I admit it. I was also wrong to believe—as I did until 1997—that all that was wrong with our public services was a lack of funding. I am sure that privately if not publicly even Members opposite would accept that the large amounts of money put into public services in the last 10 or 15 years have not delivered the outcomes for many of our citizens that we would have hoped. I am not going to theorise why, although I strongly feel that the blame, if you want to call it that, does not usually lie with individual workers. Personally, I deplore the demonisation of people who choose to work in the public sector.

However, if we are looking for solutions and ways to improve public services, the solutions very often lie with the people who are working within our public services. They are the key to reform and making services more flexible, responsible to individual need and circumstances, locally focused and cost-effective. Last year, I met a former youth worker in Suffolk who had left the county council and set up, almost by accident, a social enterprise. She is doing great things with young people with multiple problems. Local social services had to admit that they had virtually given up on those young people, but that lady has been able to deal with it.

Earlier in the summer, I met Dai Powell, who runs Hackney Community Transport. Founded in 1982 from very modest beginnings, it now operates across the country and last year provided more than 12 million passenger journeys. Government need to be sure that they know where these existing, very successful models of social enterprise are. Something like Hackney Community Transport should be used as a benchmark for service delivery, because it is not only cost-effective and efficient but also ethical and locally responsive. It would make a change for government to benchmark against that rather than conventional service delivery.

In this current economic climate, as we have heard, there is a great incentive for this sector to grow, but the danger is that it is seen as some way of getting public services on the cheap, which it certainly is not. Nor will this growth somehow happen all by itself. Some will of course, but if we are to see the step change that the Government seek, then the Government have to get serious about it.

How do they do that? First, they have to play their part in creating a culture in which social enterprise is seen as a serious career option for people leaving education and for those looking for work, and not as some sort of last resort of employment. In this regard, Ministers’ attitudes are crucial both in terms of saying the right thing and ensuring that social enterprise is seen as an intrinsic part of service delivery and not bolted on as an afterthought. It needs to be mainstreamed into all policy and legislative decisions.

Secondly, the sector needs support. I recently spent a very enjoyable day with the School for Social Entrepreneurs in Ipswich, where I met a variety of people seeking to set up social enterprises. Their dedication and enthusiasm will carry them a very long way, but professional support in finance and business planning, legal frameworks and so on is key, and this is where the school comes in. The Ipswich school is great, but we need more of this sort of thing right across the country. We also need social enterprises which themselves help other social enterprises. My colleague in Suffolk, Craig Dearden-Phillips, does this very well through his business, Stepping Out. Social enterprises need help not only in being established but in scaling up, as my noble friend Lord Newby, said, although not every social enterprise wants to get bigger—that is precisely the point.

If services are to be divested from local authorities or health trusts, it is senior managers from those bodies who are likely to head the social enterprises. If they are to make the transition from senior manager to chief executive, they will need help in doing so. Social enterprises continually cite public procurement policies as a major obstacle to growth. The Government need urgently to address that.

For many years now, local authorities have been encouraged to join together to create purchasing consortia to benefit from economies of scale from larger contracts, but this simply has the effect of freezing out new providers who are smaller and in the long run generates higher costs by driving diversity and competition out of the market.

Traditional procurement and commissioning tend to focus on hard financial data and lose sight of those rather harder-to-measure aspects such as advocacy, support and accessibility—those things which make social enterprise so attractive.

The Government have to give serious thought not to giving a handout to this sector but to giving it a step up, perhaps by thinking about quotas for the transfer of services or, as my noble friend Lord Newby said, about speeding up the process, which is so protracted that it stymies local initiative. Starting a new social enterprise is a huge risk for the individuals concerned. They need assurances over length of contracts and the future of the pensions that they have built up while working in the public sector.

The other major problem, which a number of noble Lords have addressed, is finance, both in terms of availability and affordability. A policy of credit easing—or whatever we call it— needs to be extended to mutuals and social enterprise.

Social enterprise has so much to offer us in terms of value for money, flexibility and genuinely responsive public services. The track record of such organisations in some of the poorest and most deprived parts of our country is already impressive, but we can do so much more to unlock the energy and enthusiasm of all these people who are genuinely committed to public service.