National Citizen Service Bill [HL]

Lord Maude of Horsham Excerpts

2nd reading (Hansard - part one): House of Lords
Tuesday 25th October 2016 Lords Chamber

[Lord Maude of Horsham (Con)]

My Lords, I am glad to have the chance to speak in this important debate. I was involved early on in the life of NCS. When David Cameron appointed me Minister of the Cabinet Office in 2010, straight after the general election, he said: “Oh, and by the way, you’ll have responsibility for implementing National Citizen Service”. Knowing as I did that this was very much his personal vision, personal idea and pet scheme, it was perhaps not the most reassuring task to be given. I am hugely grateful to my colleague Nick Hurd, who was my deputy in the Cabinet Office and who very personally, in a very hands-on way, took responsibility for making this vision a reality. It was a huge privilege and responsibility for us both to take this through. It was designed and conceived as a rite of passage for young people from childhood to adulthood. It took them out of their comfort zone. It brought young people together from all backgrounds; it was of the essence that there was a social mix and that this was a process of young people getting to know people they would not have otherwise come across.

I urge your Lordships, if you have the chance next summer, to go and visit some of these schemes and talk to the young people, because you will hear some incredibly moving stories. I visited many schemes over this period and talked to hundreds of participants, and a couple of stories stick with me. I asked a young Afro-Caribbean girl from south London what she was getting out of it and she said: “It is often said older people don’t understand young people. What you don’t understand is that young people often don’t understand each other”. She also said: “I have spent time in this scheme with young people I would have thought came from another planet and yet I find we have the same interests, the same concerns, the same anxieties and the same kind of aspirations”. The story that that told me of the social cohesion that can come out of the small-scale stories here was powerful.

I also recall a young man in one of the schemes in Yorkshire. I asked him what he was getting out of it and he said—this has always stayed with me—“I always thought I wasn’t very likeable and yet I have come here in a different context, out of school, out of the existing relationships, put in with a lot of other young people who I didn’t know, and I have made friends in a way I wouldn’t have made friends before”.

If you talk to the staff, they will all say that in the short weeks that the NCS scheme takes, you can see almost before your eyes young people maturing, growing and becoming bigger people. That is incredibly powerful and moving. When you talk to the young people and ask them what they are getting out of it, they will all talk about getting more confidence; they are becoming more confident. The reality is that there is a social and economic payback from the scheme. Some of it is short term, for sure, but some of it will be much longer term. You get young people who know themselves better, know each other better and therefore know their country better; who are more likely to be ready for work and employable when they leave school; and for whom social action is much more likely to have become a habit.

I am delighted that the Bill is making the scheme permanent. That is really important. I give credit to Members in other parties who have embraced the scheme. When the scheme was very much the personal vision of one Prime Minister from one party, it would have been easy for other parties to want to stay clear of it and for a potential different Government to want to change it. I pay particular credit to the noble Lord, Lord Blunkett, for the part he played in gaining wider support for it across the parties.

The Bill makes the scheme a permanent feature of the landscape of our nation, and that is extremely good news. I have one or two issues with it. I think it is fair to say that the journey from 2010 to here was not always easy. At the beginning, officials wanted us to issue a White Paper. That is normally the response of civil servants—I say that with a little trepidation, a few feet away from the former Permanent Secretary to the Treasury. We resisted a White Paper: we did not want it to be set in stone, we wanted to get on and do it, try new ways of doing things, see what worked and develop it on that basis. That has been the approach all the way through, and it will be incredibly important in the years ahead that it does not become set in stone; the new trust must want to innovate.

In the early days, many of the existing youth organisations rather resented what we were doing. They thought it was distracting money from supporting their organisations. Then, when we had resisted that, some of them tried to persuade us to badge what they were already doing as NCS. I remember several of them coming to say, “We do something pretty close to this, so why can’t we just get the credit and the money for it?”. We said, “No, this is distinctive, new, doing something genuinely different from any other scheme”. It was important that we were rigorous in insisting that it remained different.

Then, when it became too big for it sensibly to be managed in-house by our brilliant team in the Cabinet Office, we were urged to create a quango. I so strongly endorse what the noble Lord, Lord Blunkett, said: that it must not become an NDPB—or whatever the initials are. We resisted that; we insisted that the NCS trust should be genuinely independent of government. Obviously, we were going to take a very close interest in it, because it was disbursing very large amounts of public money, but I believe that it was right for it to be wholly independent from government.

We faced the same argument when we were setting up Big Society Capital, the world’s first social investment bank, taking money from dormant bank and building society accounts and putting it into a social investment bank to support social enterprises and charities. This was the brainchild of Sir Ronald Cohen. The previous Labour Government had planned that it should be a quango, but again we insisted that it should be totally independent from government and unrestrained by the sense that the Government were always looking over its shoulder.

The royal charter approach gives it permanence, which is important and a clear positive. The danger is that the independence becomes imperilled. I do not think I have heard the phrase arm’s-length body here but when that phrase is used it is normally meant to convey the sense that it is at a distance from government —but as we know, of course, at the end of an arm is a hand, and the hand can be used to hold and control the body. That must not be the case with this new entity.

Of course I understand the need for accountability with very large amounts of money. I do not think that I am open to accusations of being cavalier about public money. The work I led in the Cabinet Office in the last Government saved the taxpayer more than £50 billion accumulatively, so I take the responsibility for public money pretty seriously. However, it has often occurred to me that the Civil Service is often much more interested in scrutinising to death how others spend public money, rather than in how government itself spends money. We need to beware of the danger of creating accountability to the extent that it inhibits the entrepreneurialism which is important here.

I agree with the noble Lord, Lord Blunkett, on the appointments. I would go further than he did and say that the Government should not even be appointing the chair of this body. Yes, the chair should be subject to approval by the Government. I agree with the noble Lord that Stephen Greene, the current chair of the NCS Trust, has been brilliant. He is entrepreneurial, passionate and knowledgeable; he has devoted a huge amount of time and energy to making this work. However, he is unconventional, and frankly I doubt whether he would have survived going through the often tortuous process of the public appointments morass that we often struggled with.

I support the Bill but I hope we can explore in Committee how it can be less of an arm’s-length body and more of a body that is located at least one step away from government so that the Government can intervene—that is obviously necessary with this amount of money being spent—but not day by day, week by week or month by month. It should be at a distance where, to intervene, the Government have to do something proactive so that this is not routine control. It needs to be an event out of the ordinary that prompts intervention by the Government. I hope we can explore that as we take this important Bill forward.

National Citizen Service Bill [HL]

Lord Maude of Horsham Excerpts

Committee: 1st sitting (Hansard): House of Lords
Wednesday 16th November 2016 Grand Committee

[Lord Maude of Horsham (Con)]

My Lords, the noble Lord, Lord Blunkett, declared his interest as a member of the board of the NCS Trust. I declare an interest as the Minister who, with my brilliant colleague Nick Hurd, brought the National Citizen Service into existence, and I hope your Lordships will forgive a certain amount of proprietorial pride in what we created and my very deep concerns. As the Bill takes NCS into the next stage of its existence and what I think we all hope will be a permanent place in the life of this nation—with the important role that is now proven to be the case that NCS can play in creating this rite of passage for young people on the journey from childhood into adulthood—I am concerned that we get this right, so I make no apology for the amendments that I and my noble friends have put down or for supporting other amendments put down by the noble Lord, Lord Blunkett.

I completely agree with what the noble Lord, Lord Blunkett, has just said. It is an interesting group of amendments, because they go in opposite directions. Amendments tabled by the noble Baroness, Lady Barker, crave more control by the Government, or more scrutiny, oversight and powers to intervene in the management and conduct of the trust. Amendment 16, in the name of the noble Lord, Lord Stevenson of Balmacara, suggests that there should be a chief executive who is the accounting officer, which would make it look and feel much more like a quango or a government department. The noble Lord is nodding approvingly—he is now shaking his head, although I am not sure at which part. But whatever it is, I do not like it. I do not want the NCS Trust, the body that administers this admittedly very large and growing amount of public money, to be something that looks, feels and behaves like a quango.

We deliberately set the trust up at the outset—frankly, against some of the advice we were given at the time —as a body genuinely independent of the Government. It was not to be without scrutiny by the Government—how could that be the case? As I said to your Lordships at Second Reading, I was the Minister who presided over a programme saving very large amounts of public money, and I do not think I can be accused of being cavalier with the use of public money. But the essence of the NCS Trust was that it should be entrepreneurial and able to innovate, to do things quickly and to be agile rather than being subject to endless scrutiny and endless intervention. It was not to become the kind of arm’s-length body that has a very firm grip by the hand at the end of the arm, which is why I and my noble friends have put down Amendments 14 and 15, which would make it absolutely clear that the NCS Trust board shall be independent of government.

That is not to say that the trust could appoint whoever it likes as chairman or members of the board; that is not what we have in mind. It is clear that it has been the case with the NCS Trust so far that the appointment of the chair and the members of the board have been subject to approval by Ministers. It would not have been possible for Stephen Greene, the brilliant chair of the NCS Trust, to have been appointed without us and indeed the Prime Minister of the day approving his appointment. Things were done a little less formally than is proposed here but, none the less, that was the reality. Your Lordships would expect that to be the case and we expect that to be the case in the way that the arrangements will work in the future. Therefore, it is very important to have a clear, bald statement on the face of the Bill to say that:

“The Board shall be independent of Government, with all appointments subject to fair and open competition”.

On the independence of the trust, it is important to establish from the very beginning that this is not to be an NDPB, which is a clumsy formal word for what we all think of as quangos—quasi-autonomous non-governmental organisations. We have established quite clearly that it is perfectly possible within the nomenclature or the way in which different types of bodies are classified for this, as a very unusual and I would say unique body, not to be classified as an NDPB. That is for all the reasons that the noble Lord, Lord Blunkett, set out.

This programme has touched the lives of hundreds of thousands of young people. We hope that over the years and decades ahead it will touch and change the lives of millions more. I cannot stress enough to your Lordships how important it is that this is seen to be not a programme run by the Government. Nothing could kill it more surely and definitively than that.

I agree that my noble friend the Minister and his colleagues want this to be set up in a way that enables there to be proper scrutiny and, as a last resort, the ability to intervene directly—because as a last resort the Government will always have the ability to withdraw the funding from the trust and to set up another administrative body if it goes completely out of kilter. Although I have that sympathy, I urge them to keep in mind and resist the tendency that all of us who have been Ministers have seen at every stage: that is, the desire of the government machine to reach out its hand—its no doubt very caring hand—to control what goes on outside the reach of government. That is of the utmost importance for the future success of this programme.

The programme has already demonstrated a very high degree of success with the young people whose lives it has touched and changed. It has attracted the support of political parties across the spectrum, after quite a high degree of initial scepticism, and huge swathes of voluntary bodies from the youth sector and beyond. It has been very successful but it is a fragile vessel that needs to be treated with great care. Therefore, I urge the Minister and his colleagues to take these amendments away and reflect on the fact that this is the way to give the best chance of success for the future and to guarantee independence, subject to scrutiny and the appointment of the chair being made, as we said, by the Prime Minister or on the recommendation of the Prime Minister to Her Majesty; and with the ability of the Prime Minister to approve appointments to the NCS Trust board for the rest of its membership. We strongly argue that there should not be a nominated government representative on the board, which smacks of having a nark in the camp and could undermine the crucial sense of independence that will make all the difference for the future.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have Amendment 49 in this group. Before turning to it, I have to say that I was underwhelmed by the comments of the noble Baroness, Lady Barker. It seems a shame if we should not be prepared to consider positive ways to deploy the very large sum of money in a programme that is already proving itself successful. She expressed concerns about bodies being squeezed out, and the noble Lord, Lord Blunkett, made the point that the National Citizen Service Trust is a delivery operation. The opportunity is therefore for smaller charitable and voluntary groups. I entirely agree with her that there is a danger that they could be squeezed out; we shall be debating that in a series of amendments later on in Committee. The underlying thrust of what is being achieved with the Bill is entirely praiseworthy and we want to make sure that we maintain that. To take some of the details, my noble friend Lord Maude made a very important point about the need for it to be seen as independent of government to give it the best possible way forward.

Where I can be more sympathetic to the noble Baroness, Lady Barker, was in her remarks about the way that royal charter companies operate. They are tied into a very inflexible structure, to return to a point that I made at Second Reading. I understand the need for a royal charter, which would have the stardust in it. It is a great thing to be able to talk about as part of the sales pitch for this operation and will help the delivery groups as well. But all the evidence that I received when I worked in the charity world was that a royal charter makes an organisation very difficult to handle structurally.

Your Lordships can see this in the draft charter that has been tabled. If the Committee turns to the way that it deals with charter amendments at article 15, it can be seen to lay out quite an elaborate procedure for changes to the governing documents. The difficulty put to me before, not apropos of the Bill but of royal charter companies generally, is that most such changes have to be dealt with by the Privy Council, which is not of itself very familiar with this sort of activity. The Privy Council is therefore quite concerned about how it is to happen and what the implications are, so there is a good deal of back and forth—of talking and discussions—before a decision can be reached.

At the end of that, while I understand that the National Citizen Service Trust is not directly a charity, it will have a public benefit objective. The Privy Council will not want to find that it is allowing something to happen that could be done by a charity. It would then go off to talk to the Charity Commission. The whole system would start again, with a further series of questions going back and forth, and it would therefore be a very slow process. The Privy Council does not want to appear on the front page of the tabloids for having allowed something to happen which may of itself be undesirable and, even more importantly, would not have been allowed by the Charity Commission. In my view, if the NCS Trust is to be successful—and along with other noble Lords, I certainly hope that it is—and to go from 58,000 young men and women a year to 300,000, there will be changes to this document. We do not know what or when they will be, or how many there will be, but I suspect that there will be a lot of them.

My Amendment 49 is designed to keep the stardust implied by the royal charter but to simplify the procedures for changing the governing documents. It suggests that changes to the constitution, which is the key governing document, would require the permission of the Charity Commission and the giving of notice to the Privy Council, which could complain and therefore block it by talking to the Charity Commission. That would give the control, the proper parameters, that my noble friend Lord Maude referred to as being desirable. For changes to the by-laws, which are so far not extant but will come into being in due course and which are of a lower order of magnitude and importance in corporate governance, notice is to be given to the Charity Commission and the Privy Council. Again, complaints and objections could be made to stop it if required.

Finally, where the board or trust wished to move administrative matters from a constitution of by-laws, this could be done but again notice would have to be given to the Charity Commission. These changes are designed to provide the balance referred to by other noble Lords and the stardust that a royal charter implies but at the same time to enable the National Citizen Service Trust board to move reasonably quickly and to be flexible—my noble friend Lord Maude talked about the need for it to be flexible. It needs to be able to return to and react to changes. This measure would enable it to do so much quicker than in the structure presently envisaged. I hope that the Government will look favourably on the amendment.

--- Later in debate ---

[Lord Ashton of Hyde]

The norm in these sorts of organisations is that the Government get involved in individual pay decisions, full stop, so this is a more light-touch proposal. If I am wrong on that—

[Lord Maude of Horsham]

Unless something dramatic has changed, the Government approve pay decisions only when they are above a certain level. There is a requirement that if it is proposed that someone should be paid above the Prime Minister’s salary, it goes to the chief secretary and the Chancellor for approval. Other than that, I do not believe that there is that kind of level of detailed control.

[Lord Ashton of Hyde]

I take my noble friend’s point. I agree that above a certain level—which is, as my noble friend Lady Finn said, what happens in this case if it goes above the Prime Minister’s salary—it goes to the chief secretary. I think the answer is that we will have to come back to this and make sure that what I have said is correct. We can come back to it on Report, if necessary.

--- Later in debate ---

[Baroness Barker]

My Lords, I thank all noble Lords for their contributions to what was an important testing-out of the Government’s proposals. The Minister spoke helpfully about the tensions in what people had said were important for the National Citizen Service and in their attitudes to it. That is often the case when a charitable voluntary body is set up. What matters is what decisions people take, which are crucial to the body being able to achieve the objectives set for it. Some people were worried about status. I am not bothered about the status of the organisation; much more important is its effectiveness and efficiency in achieving its objective.

It is interesting that the Government have chosen to go down this route. From the long list of priorities that the Minister read out, he cited permanence. I think that the Government have put that above all else and built a structure that starts with permanence and then works through in a different order to other things. There are different ways to achieve a number of points that noble Lords raised. On independence, the noble Baroness, Lady Finn, gave a description of a board of which the Prime Minister had oversight. Well, the Prime Minister has no oversight of the appointment of a charitable board. There are many instances of long-standing charities with a national reach—some of them have royal patronage, the Prince’s Trust being one—where there is no government interference at all, even though there is certainly accountability for public funds. If independence was what the Government really wanted, they would not have gone down this track.

The noble Lord, Lord Blunkett, was right to talk about the National Citizen Service being subject to high standards of scrutiny and accountability. Other charities, because of the way in which their services are commissioned and are open to competition, are even more subject to such standards. I fear that, given the rigidity of the structure envisaged and the permanence that is expected of it, it would be easy for the trust to let standards slip and for those not to be challenged for some considerable time.

I come back to the two points that are of fundamental importance. First, nothing that the service does is unique; it is designed in a unique fashion, but its interactions with young people and the outcomes it achieves for them are not unique—they could be delivered by other organisations. Secondly and most importantly, the service has not been subject to comparative analysis. I say to the noble Lord, Lord Blunkett, that it is not about rolling up. If any charitable organisation in this country knew today that it could count on having £1 billion-worth of income over the next five years, it would be in a spectacularly unusual position. The Government are asking us to invest that amount of money in what the noble Lord, Lord Maude, called this “fragile vessel”.

We may not have got very far today in seeking the answers that some noble Lords want. I do not want to control the organisation; I want it to be accountable.

[Lord Maude of Horsham]

When I talked about a fragile vessel, I was not talking about the trust but about the programme and degree of confidence that it has inspired in young people. That is fragile and we must not put it at risk.

[Baroness Barker]

I am happy to stand corrected but the rest of us who have compared it with similar organisations would consider it to be a fragile vessel: it has not been going for very long and it has achieved what it has only with exceptional political support. I remain, like the noble Lord, Lord Hodgson, unconvinced that this structure is right. I will, however, go away and look at what the Minister said, particularly about the accounting regulations, which we will come to in more detail later. I beg leave to withdraw—