Charitable Sector

Lord Hodgson of Astley Abbotts Excerpts

Tuesday 5th October 2010 Lords Chamber

[Lord Hodgson of Astley Abbotts]

My Lords, we have had a galaxy of new talent on display this afternoon from right across the political firmament, a veritable aurora borealis of political speeches. It gives me the greatest pleasure to congratulate my noble friend on her distinguished maiden speech. She and I have had the pleasure of working together for many years. I know first hand of her contribution to the charitable and voluntary sector, which she described in most modest terms. She has contributed to the alleviation of child poverty and to youth crime prevention and education. In her role as a senior councillor in the Royal Borough of Kensington and Chelsea, she headed up family services and children’s services, thereby coming into contact with many of the issues that have formed some of the most sensitive topics that we are discussing today. Thoughtful, considerate and sympathetic she certainly is, but there is also a hint of steel. She will be no pushover in your Lordships' House, which is as it should be. I am sure that we will hear many more distinguished contributions from her.

I need to declare an interest. I am president of NCVO—many speakers have referred to the contribution of our chief executive, Sir Stuart Etherington, who manfully sat through 20 of our speeches earlier today before the attractions of the bar proved, I think, too strong. I am also chair of the Armed Forces Charities Advisory Committee. Having listened to 21 speeches, it is clear to me that there is an understanding in all parts of the House of the value of the charitable and voluntary sector, so I do not propose to go over those general points again save in one respect. As some noble Lords have remarked, most charitable and voluntary groups are very small. The Charity Commission records that more than 80 per cent of registered charities have an income of below £10,000 per annum. The level at which annual income has to be recorded is £5,000—above that level, registration is required. During the passage of the Charities Act in your Lordships' House, we argued strongly that we should not have a £5,000 level. We argued it in particular because the Cabinet Office taskforce which set the whole Bill rolling with its report, Private Action, Public Benefit, suggested a £10,000 minimum. We have a quinquennial review, as my noble friend Lord Taylor has said. When we have that review, I hope that we will do something to raise that level.

This is not just about red tape; these charities and voluntary groups have their primary emphasis on the delivery of services. Administration not only diverts precious time and money but can result in the leaders of the group, particularly of smaller groups, becoming overconfident form-fillers rather than competent service providers. In the words of one report, the organisation can become “process perfect but outcome deficient”.

However, we are discussing a huge movement. Those who have seen the Charity Commission briefing will have seen the last four charities that it registered—Redditch Nightstop, Hunsley Christian Youth Trust, Liverpool North District Scout Council and Thorpe Bay University of the Third Age. That shows how the charity movement touches every part of our lives in every part of the country. It will play a critical role in the development of the big society because it is flexible and responsive to local needs. What works in Shrewsbury will not work in Sheffield; what works in Bradford will not work in Bournemouth. While I appreciate and understand the role of the state as a universal provider, being a universal provider inevitably makes you something of a one-club golfer.

So much for the big picture; in the few minutes that I have left, I shall focus on just two points: the red tape taskforce that I have been asked to chair, and time and money—the essential ingredients, the petrol and oil, which fuel voluntary organisations. As my noble friend said, the taskforce has been asked to make recommendations to reduce the bureaucratic burden on small organisations, especially in the charitable, voluntary and social enterprise sector. We are a small group—just six—because we want to achieve focus, but we represent charities, voluntary groups and small businesses. I like to think that we have a reasonably extensive bandwidth of political representation as well.

That leads me to an important point. One person who has given us evidence said that this issue is “too important to be left to politicians”. That is not fair, because politicians have the capacity to give wing to these ideas and aspirations—or not, as the case may be. I think that what he really meant were the twin dangers, referred to in previous debates, of this sector becoming a political football and of politicians, and perhaps the media, too, sometimes playing up and overemphasising risks and dangers in the sector to sell newspapers or to make a TV programme attractive to watch.

There will be failures and setbacks—there probably ought to be if our voluntary sector is vibrant and edgy—but they need to be set in context. Of course, accidents are terrible; of course, one understands the reaction of anguished parents, families and friends and their asking for regulations to prevent another occurrence of a particular event. However, one needs to ask in all humility: will the proposed regulation prevent the next accident or are we merely shutting the stable door after the horse has bolted? Will the regulation merely shift the risk? For example, a child not going on a school trip may play football in the street and be injured there. Will the regulation prevent the provision of a service which will potentially enrich the lives of many people, both the recipient and the provider? My noble friend Lord Taylor referred to trust. We need to have trust, judgment and responsibility uppermost in our mind when we come to look at the regulatory and bureaucratic burden that we put on our small charities and voluntary groups.

Noble Lords will not need me to tell them that there is no silver bullet for this issue; it is a subject with a high degree of granularity, inch by inch, yard by yard, not just regulatory but attitudinal. Voluntary groups like to complain about regulations but often seek to shelter behind them. Noble Lords have enormous experience of these issues, and I hope that they will not be backward in coming forward to provide examples—but highly granular ones, please, because that is what we need if we are to make a difference.

One consequence of being appointed to the taskforce was that I was interviewed by “Newsnight” on Hastings beach in front of a Punch and Judy stall in a high wind. So high was the wind that when the BBC kindly brought out tea and biscuits, the biscuits blew away. I had an opportunity to talk to the Punch and Judy man. I will not weary the House with the bureaucratic nightmare that he finds himself in, but he said that the show, which includes Mr Punch, Judy and the crocodile, which eats someone along the way, historically has as its law enforcer—the Punch and Judy movement is now 350 years old, first recorded by Samuel Pepys in 1662—the Beadle. The Punch and Judy man said, “Of course, no one understands what a Beadle is now, so I call him the health and safety inspector, and he always gets a laugh”.

I turn to time and money: first, time. We may not all be financially rich but we all have 24 hours in our day. The statistics from the NCVO state that 26 per cent of people volunteer once per month and 41 per cent volunteer once per year. What can we do to increase those numbers? That is a key question that our taskforce is seeking to address: what stops people volunteering? Is it the intrusive nature of the paperwork? Is it their inability to find a way to link up with a charity? Is it the conditions of their employment: that they have no time? Is it the social attitudes among their peer group? Especially, what stops young people volunteering? A very interesting paper has just been issued by the Charity Commission on the shortage of young people as trustees, to which my noble friend Lady Bottomley referred.

Finally, I turn to money. We need to do more to encourage the creation of grant-giving foundations. My noble friend Lady Ritchie referred to that in her remarks. Individuals who have made substantial sums of money should be encouraged to set up foundations. It will be said that they can give such money via gift aid, and so they can, but it is not quite the same. A foundation can provide sustained, year-on-year giving, often for leading-edge and/or unpopular causes, important issues of public policy that do not immediately tag at the heartstrings. Why are those foundations not appearing in sufficient numbers? There are issues of administrative and tax complexity. There are issues of legal requirements imposed by the Trustee Act. There is public exposure to adverse publicity. One of my more intelligent American friends said, “The British disease is not idleness, it is envy”. People fear that if they have a foundation, they will be written about and receive adverse publicity about their activities. Then there are social attitudes, possibly fewer now, by which it is somehow vulgar to have a foundation which carries your name.

To such people, I say only that Oxford University is a world-class university. The Oxford University library is called the Bodleian Library. It was founded and financed by Sir Thomas Bodley in 1598, and the university museum at Oxford, the Ashmolean, the first university museum in the world, was set up by Elias Ashmole in 1677. We have a long history of charitable giving of that sort, and people should not be worried about having foundations which carry their name in the way that the Bodleian and the Ashmolean carry the names of their founders.

The sector has a proud record. There is much work ahead of us if we are to build on that splendid past, especially in the inevitably lean years that lie ahead of us.