Community and Voluntary Sector Funding

Debate between Naz Shah and Madeleine Moon

Tuesday 24th November 2015 Westminster Hall

[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.

[Naz Shah]

My hon. Friend the Member for Brent Central (Dawn Butler) makes a valid point. We are seeing that theme across the country.

The £2.3 billion reduction in Government funding is interesting. It will come through a number of streams, because the third sector has a symbiotic relationship with many Government-funded organisations, not least local councils, whose budgets have been decimated by austerity. However, the wider point is that the Government have been unable to build the third sector’s capacity to apply for more complicated contracts through increasingly complex and larger tendering processes.

--- Later in debate ---

[Naz Shah]

I thank the hon. Gentleman for that comment. Although I agree that the third sector is doing a valuable job and is working hard, if one considers the Tory Government’s proposed £300 million-plus cuts to the Big Lottery Fund, which I will refer to later, that will put my comments in context.

In communities such as my constituency of Bradford West, where more than 26% of children are already living in poverty, the average weekly wage is more than £110 less than the national average. In another ward in my constituency is a specialist project catering for black and minority ethnic women fleeing violence, which would have soon closed due to pressures facing the local council were it not for the intervention of the Big Lottery Fund, the input of which in my community is literally life-changing. Across my great city there are many other examples of the axe falling heavily, and all of them have a few things in common. They are smaller VCS organisations, providing vital services and lifelines to those most in need of support and plugging the gaps where statutory services are not delivering strongly.

The Government are making it harder to secure grants and funding at a time when demand is increasing and capacity is already stretched to maintain current service levels. The top-heavy austerity measures and the slashing of Bradford council’s budgets by almost half by 2020 have led to a short-termist view, wholly created by the Conservative Government. Whereas councils were previously able to take long-term views on VCS funding, the parameters of that work have now been narrowly defined. The money available has been restricted to reduce costs, there has been a drive for efficiency and to obtain ever-increasing best value, and a reduction in unit costs has led to the likes of the Blenheim Project being placed in vulnerable positions. The situation is set to get significantly worse and have an impact on other areas of the VCS and charitable economy.

The Government fail to realise that much of local government, the NHS and the third sector operate in a symbiotic relationship, helping to create a robust mechanism to meet needs across the board. Taking out the third sector or reducing its ability to operate under financial strain will have an impact on the drive to reduce admissions, promote self-care and increase community capacity for home care and the promotion of health. We are only storing up problems for the future. Saving money in that way is a false economy.

Along with the provision that we have lost due to charities such as the Blenheim Project closing, the Bradford district has lost expertise and the ability to reach out to places and groups that need help. The project closed its doors at the end of September 2015 after 37 years of supporting hundreds of vulnerable, homeless women and children. As a result, Bradford has lost jobs and 17 rooms for vulnerable people, and wider community involvement and community development has ended. A successful church community project has closed, leading to the loss of valuable expertise that knew its community exceptionally well. There are many other such cases across Bradford, and the picture is repeated in constituencies across the country. It is not unique to Bradford West.

My final point is about potential cuts to the Big Lottery Fund. We have been hearing reports of a 30% reduction, with the money being used to cover a hole in the finances of the Department for Culture, Media and Sport equating to between £300 million and £320 million a year. If true, that will be devastating to VCS organisations across the entire country. I will use the example of my constituency to illustrate just how damaging the loss of 30% of grant money would be to small organisations, in particular small charitable projects. Since 2014, the fund has commissioned 466 projects in my constituency to the tune of £4.9 million, almost 90% of which were for under £10,000. It is an amazing array of projects, targeting some of the most vulnerable and the most in need. From that alone, we can see how a reduction in grant awards would decimate the small community projects that can have transformational impacts on people’s lives as they often concentrate on specific, niche needs. The Anah Project in Bradford is only there because of the Big Lottery Fund. Furthermore, as I said, we have seen changes to the awarding of grants, a lack of capacity in the VCS to apply for more complex funding and the loss of funding from struggling local councils. In all, plainly, the big society appears to be even more hollow than first feared.

Unlike the Government in their approach to communities such as mine in the north, the Big Lottery Fund does not discriminate. It gives out funding to individual projects, based solely on the value they add and, most importantly, on need. We could face a betrayal not only of the great work that individuals and organisations do in the community with lottery funding, but of the members of the public who elected this Government. Many will feel that the Government are overstepping the mark if they backtrack on the principle of the additionality of lottery money, which has been reiterated time and time again by successive Governments. The money is there for the community, not for this Government or any Government to plug holes in their funding.

I want assurances from the Government that they are considering the long-term implications of their decisions and the pressure that they are putting on the VCS. More has to be done to tackle the inequality in procurement and the manner in which contracts are decided if we hope to be able to retain some of the most valuable and innovative community engagement work across all sectors in the foreseeable future. Charities and voluntary organisations need to be able to plan their funding and projects on a longer-term basis. The Government not only have a responsibility to help build capacity in the third sector through investment, but they also need to give assurances on the unknown costs by making critical decisions, such as on council tax relief for charities. Ultimately, the Chancellor must not use the Big Lottery Fund to act as tape to cover up poor financial planning in central Government. As John Major said, lottery money is from the people for the people.

[Mrs Madeleine Moon (in the Chair)]

Given the number of Members who have indicated their wish to speak in the debate, with the authority of the Chairman of Ways and Means I impose a time limit of six minutes on Back-Bench speeches.