Charities: Government Grants

Lord Bridges of Headley Excerpts

Wednesday 10th February 2016 Lords Chamber

[Lord Harries of Pentregarth (CB)]

I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare a non-financial interest as chair of the Commission on Civil Society and Democratic Engagement.

[The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)]

My Lords, less than 7% of the £130 billion of grants paid each year goes to the non-profit sector. From 1 May, departments will be required to insert the clause in all new and renewed grant agreements unless Ministers decide, in exceptional circumstances, to qualify or remove the wording. Before 1 May, departments are encouraged to engage with any grant recipients who are likely to be affected by the clause. It will be for departments to employ existing financial controls and take appropriate action if they believe a clause to have been breached.

[Lord Harries of Pentregarth]

I thank the Minister of his Answer, but would he not agree that charities that are so often at the front line of meeting human need are in the best position to gauge the effect of government policies on those whom they are trying to help? Therefore, they have a duty to bring any concerns to bear to the Government. In the light of that, does the Minister agree with the compact signed by the Prime Minister in 2010 with civil society that the Government will,

“respect and uphold the independence of civil society organisations to deliver their mission, including their right to campaign, regardless of any relationship, financial or otherwise, which may exist”?

[Lord Bridges of Headley]

First, I pay tribute to the work that the noble and right reverend Lord does in this area and all his contributions to this debate. I understand that there has been concern about this clause. I assure him, the House and charities that, of course, charities will be able to provide advice and guidance to government if it is part of the work that they are being paid to do. This clause aims to prevent taxpayers’ money being used to lobby politicians and government on all manner of other issues. The Government believe that the new clause is compatible with the compact and does not in any way prevent grant recipients from campaigning and lobbying, using their other funds. It simply requires clarity on what the grant funding can be used for.

[Baroness Barker (LD)]

My Lords, the Government have adopted this policy following a lobbying campaign by the Institute of Economic Affairs, according to its 2014 accounts, funded by a source which it declines to disclose. Is it the Government’s intention that charities commissioned by the Government for their expertise will have their ability to influence government policy restricted, while charities funded by anonymous donors, such as tobacco companies, will not?

[Lord Bridges of Headley]

I slightly dispute the second point. I draw the noble Baroness’s attention to the fact that DCLG has used this clause in 56 contracts since February 2015. For example, the Church Urban Fund, which the noble and right reverend Lord will know, the LGA, Mencap and the Royal College of General Practitioners have all received grants under the new clause. Shelter, likewise, has received a grant, and is currently running its Power to Renters campaign. A number of noble Lords will no doubt have received communications from it as regards the housing Bill.

[Lord Leigh of Hurley (Con)]

My Lords, I declare an interest as having served on the Etherington review of fundraising by charities. Would my noble friend the Minister not agree that, given that individual donors in this country give some £8 billion a year to charities, they should be encouraged to give greater transparency and accountability for the funds that they use for lobbying rather than for good purposes?

[Lord Bridges of Headley]

I entirely agree with that. I pay tribute to the excellent work that charities do up and down the breadth of this country and to the considerable contribution that many millions of people make in time, energy and commitment. I point out to your Lordships that, obviously, this clause is aimed at the £130 billion paid out in grants annually. While we may be talking here about charities, we should not forget the £74 billion of grant funding that goes to local government, the £24 billion to ALBs and public corporations, the £8 billion to international recipients and the £4 billion to the private sector.

[Baroness Royall of Blaisdon (Lab)]

Would the Minister agree that charities are and must be seen to be independent of government, regardless of their financial arrangements? Would he also agree that any perception that charities are being limited in what they can and cannot say about public policy issues because of their funding would be damaging to public trust in civil society?

[Lord Bridges of Headley]

Of course I agree with that, but I strongly believe that this clause does not do that. I point out that for a number of years government departments have included a provision that taxpayers’ money should not be used for political activity and this new clause simply clarifies what that means.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, on Tuesday last week we completed the Charities Bill. At 8.32 am on Saturday the Government announced this new policy. Did the Minister know about it on Tuesday when we completed it and would it not have been better to announce it then, when there could have been a debate on this important matter in Parliament, rather than issuing it by diktat?

[Lord Bridges of Headley]

On the first point, I assure the House that this actually goes much wider than just relating to charities. As I said, it relates to numerous other points. I would also draw your Lordships’ attention to that fact that this has existed in the DCLG and been piloted since February 2015. The DCLG has not received any complaints that it has hindered the work of those charities involved.

[Noble Lords]

Answer.

[Lord Bridges of Headley]

And no, I did not know about this at that point.

[Lord Hay of Ballyore (DUP)]

My Lords, we have huge salaries being paid to senior charity staff right across the United Kingdom. Some of these staff are being paid more than the Prime Minister. How can that be justified at a time when many of these charities are struggling financially? Can I ask the Minister whether any of the money paid to charities from government grants goes towards salaries?

[Lord Bridges of Headley]

Part of the process that we are trying to ensure is that these grants are properly audited and that we know exactly where the money goes. Regarding the salaries that charities pay to their senior employees, that is obviously a matter for the charities, but I am sure that they will be noting the considerable public scrutiny that they are under—and rightly so.

[Lord Dubs (Lab)]

My Lords, will the Minister accept that there is a world of difference between money going from government to a charity for project work and money that the charity earns by its own fundraising? Surely the fundraised money should be used for purposes not covered by what the Minister said, and charities should be free to spend their money for advocacy as they think fit.

[Lord Bridges of Headley]

That is exactly right and that is what they will continue to be able to do.