Community and Voluntary Sector Funding

Dawn Butler Excerpts

Tuesday 24th November 2015 Westminster Hall

[Naz Shah (Bradford West) (Lab)]

I beg to move,

That this House has considered funding for the community and voluntary sector.

It is a pleasure to serve under your chairmanship, Mrs Moon. I welcome the presence of the Minister, who will respond to this debate.

Given the value that the charity, community and voluntary sector adds to the communities we represent and the incredible services that it provides to our constituents, such as mine in Bradford West, it is fitting that we debate this important issue as the sector faces difficult and economically challenging times and increasing user need. We are on the verge of another round of Government spending cuts, and in many places the cuts have already done irreparable damage to the community and voluntary sector. There have been many changes over the past five years to grants, commissioning and procurement for small, medium and large charities. Many should have offered a lifeline to vital projects in our constituencies in the face of austerity, but the reality is that they could not.

The previous and current Governments committed to reforming the voluntary and charitable sector and helping it to be buoyant at a time when it was most needed. The big society project translated to commitments made in this House, but in reality little progress was made in communities that saw funding falling, grants drying up, short-term procurement opportunities, increasing costs and plateauing revenue streams. We have seen projects and charities that provide innovative services and important community projects close and others struggle to stay afloat. By and large, the charity sector has tried to adapt to the challenging economic environment, but we should create a culture in which it can thrive and serve, because there are intangible and immeasurable benefits to the services it provides. I believe that all parties recognise that fact, but are the Government giving it due consideration?

On procurement, a recent study by the National Council for Voluntary Organisations on the financial sustainability of the sector showed that since 2009 there has been a £2.3 billion reduction in Government contracts, and that the sector faces a £4.6 billion annual shortfall by 2018-19 in the funding it needs to maintain its current level of service. The simple fact is that the need for charitable services is increasing, as demonstrated by a report published by the Charity Finance Group in December 2014, which showed that more than 70% of charities expect demand to increase. We have to recognise that, if we are to maintain the same level of services, we must take action now to ensure the long-term sustainability of the community and voluntary sector.

[Dawn Butler (Brent Central) (Lab)]

I congratulate my hon. Friend on securing the debate. On the issue of sustainability and the need for charities, I want to mention two charities in my constituency. First, given that this will be the coldest and longest winter in 40 years, the services that Energy Solutions provides to the community are essential. Secondly, although World AIDS Day is coming up on 1 December, the Community Health Action Trust has had its funding cut, which means that it can no longer serve the community and test people rapidly for HIV, which is on the increase among heterosexuals.

[Mrs Madeleine Moon (in the Chair)]

Order. I ask that interventions are interventions, rather than mini-speeches.

--- Later in debate ---

[Michelle Donelan]

The cuts to youth services are for a totally different debate, because they are not purely about volunteering. There is a vast variety of youth services depending on the different areas and models involved. There is also the question of replacement: in many areas, including mine, the council has worked closely with the community to offer a replacement service that is the most cost-effective and efficient for the people using it.

In addition, the Government are providing funding for campaigns such as the national Step Up To Serve #iwill campaign, which aims to make social action part of the lives of as many 10 to 20-year-olds as possible. More remains to be done, however, and I am quite shocked that there is still no formal encouragement in respect of the value of getting volunteering into schools, through things such as voluntary placements. We have always had a system of work placements, but there has never been a system of voluntary placements as a formal mechanism in the UK. I have approached my local volunteer centre about the issue, and we are trying to do something with willing schools in my constituency.

We need to change the ethos and encourage more businesses to allow voluntary days, which would build on the Government’s initiative on that. There have been other great investments, which we should not fail to mention, such as Big Society Capital, tax relief for social investment, social impact bonds and £70 million for social investment in the investment and contract readiness fund.

[Dawn Butler]

In addition, business rate relief for charities is worth £1.7 billion. Does the hon. Lady not think that they should be excluded from the Government’s plans for rate relief? Those plans will hinder charities’ ability to provide services to the community.

[Michelle Donelan]

That is one thing we could look at, but it is not the only thing, as I shall get on to in the rest of my speech.

More needs to be done and it is time we looked at gift aid in particular. On average, the charity sector loses almost £1 billion a year from people not opting into gift aid. Perhaps we should not only promote it more as a mechanism, so that people understand it, but look at the logistics of having an opt-out instead for the working population. That might be one solution.

When compared with the state, charities are often far better placed to deliver services and value for money, as well as being far more knowledgeable about those services. The charities also provide specialised local knowledge and learning for volunteers. Young people can gain skills and a preparation for life and employment, while older volunteers can impart their own knowledge and reduce the training burden carried by charities. Charities may also reduce demand on the NHS as people stay active and healthier during volunteering. There are thousands of voluntary organisations in Wiltshire that bring in money from inside and outside the county in addition to Government funding.

While central Government may be able to replicate the functions of a local charity in part, that is not sustainable. That also does not take into account the unseen costs of not funding those charities, such as the loss of expert knowledge and the unquantifiable but large wider social benefit that community charities provide. I welcome the Government’s recent initiatives, but I urge them to go further. The reality is that we will need to rely more and more on the voluntary sector in coming years, so it is imperative that we support and promote it today.