Public Services (Social Enterprise and Social Value) Bill

Nick Hurd Excerpts

Friday 19th November 2010 Commons Chamber

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

The hon. Gentleman is making several assumptions about the Government’s position that may be proved wrong. I think he has lost sight of the fact that we are discussing a private Member’s Bill.

[Jon Trickett]

Will the Parliamentary Secretary deny that the Cabinet Office helped to draft the Bill? He will not. I understand that that is precisely what happened. I understand that the Bill showed its face in the House only 36 hours ago. Why? I was told that it was delayed until the last possible minute because the Cabinet Office was drafting it. Perhaps the Parliamentary Secretary will confirm that. If it is a private Member’s Bill, why was the Cabinet Office drafting it?

There have been tensions locally with not only local authorities but others about plans for how some social enterprises run services. Members on both sides have made the point that we want high-quality, properly resourced social enterprises, not those that are the victims of a cuts mentality. Labour Members do not want the option of social enterprise driven through on the back of a cut in the quality of service or a reduction in the quality of conditions at work for the people who are employed in the enterprise.

We have no objections to the Bill’s aims, but we are concerned about the manner of its introduction. More consultation before it came before the House would have been better—I have already said that it arrived here only 36 hours ago. We are all proud of the social enterprises in our constituencies throughout the nation. How can it be that they have had no opportunity to examine the Bill before Second Reading? How can it be that the small business and local government sectors are expressing different views about it? Perhaps it is because it was introduced so late. Does the hon. Member for Warwick and Leamington genuinely believe that he provided sufficient time for the House to consult?

We have also heard a lot about how the Bill fits into the Government’s idea of a big society, but until we know what the big society is, how can we assess the applicability of the measures? I am not the only one who does not fully understand what the big society is; many in the voluntary sector do not know what it is either. Famously, the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton), also has no idea what the big society is. He said recently:

“The trouble is that most people don’t know what the Big Society really means”.

In what sounded slightly like a whinge, he added:

“least of all the unfortunate ministers who have to articulate it.”

--- Later in debate ---

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

The House has rightly expressed its admiration for my hon. Friend the Member for Warwick and Leamington (Chris White). I have a great deal of empathy with him, as I remember my shock at seeing my name at the top of the private Members’ ballot a few months after my arrival in this place. I have been on his journey, and I wish him every success on it.

Once the right hon. Member for Salford and Eccles (Hazel Blears) had recovered from the shock of being described as dreary—

[Steve Baker]

On that point—

[Mr Hurd]

It is a little early in my speech to give way.

Once the right hon. Lady had recovered sufficiently, she expressed her admiration for the quiet determination shown by my hon. Friend the Member for Warwick and Leamington. She knows a great deal about determination, quiet or otherwise, and she was entirely right in what she said. I wish to add my sincere congratulations to him, not just on his good fortune at the ballot box but on his subsequent tenacity in building a coalition and the way in which he presented his case today. It is a considerable demonstration of his commitment to improving public services and trying to get a better deal for taxpayers.

I also wish to confirm from the start that the Government are happy for the Bill to go into Committee, if that is the will of the House. We will seek to amend it, in ways that I will explain, but we support the core proposition of the Bill that we should place a firmer requirement on commissioners—those who do the very difficult job of shaping and purchasing public services on our behalf—to consider the potential to maximise the social, environmental and economic impact of every pound they spend on behalf of the taxpayer. In doing so, the Bill builds on the principle of the best value duty, as my hon. Friend the Member for Castle Point (Rebecca Harris) said.

The Bill is also consistent with what the Government are trying to achieve with the big society agenda. I genuinely hope that that issue becomes less partisan over time, not least because—as my hon. Friend the Member for Warwick and Leamington and the right hon. Lady, the former Secretary of State, said—the message builds on the aspirations of, and actions taken by, former Governments. Given the problems and challenges that we face as a country, it must be right to challenge all of us to think about our obligations and personal responsibilities beyond just paying taxes and obeying the law. It must be right to work together to try to find better ways to do things and, in that process, to try to tap into the skills, talents, ideas, experience and entrepreneurial energy that exists in our communities, but which too often feels shut out from the system. It must be right to encourage and support people to come together to try to solve problems and improve life for themselves and their communities.

I am lucky in the job that I do—and the hon. Member for Hemsworth (Jon Trickett) will find this, too, as he now shadows me—to visit every week communities and community organisations in which people are coming together to try to make a contribution and to do some good to improve life in their area. It is genuinely inspiring and gives me great confidence that we have a firm foundation on which to build this bigger and stronger society, if we can do more to encourage and support it.

[Nadhim Zahawi]

My hon. Friend makes precisely the point about which the shadow Minister was confused. The procurement officers will not be compelled to do something from the top down, but will have the same choices before them as they have always had. Rather, they will be asked to look imaginatively at those choices. We are talking about benevolent libertarianism and a nudge forward—not what the shadow Minister was confused about.

[Mr Hurd]

I do not think that the Opposition were confused in any way: I think that they knew exactly what they were trying to do. However, my hon. Friend is right. This is not a heavy-handed approach: it is a requirement to consider, where relevant and proportionate. My hon. Friend the Member for Congleton (Fiona Bruce) suggested that it was a catalyst—a good word—to try to open more minds to a better and more intelligent way to commission, which considers the opportunity to achieve multiple outcomes through the transaction.

The big society agenda is not a Government programme, but the Government have an enormously important role to play. The Prime Minister has been clear about the three strands of action that people can expect from the Government, one of which—a very important one—is public service reform. Early in the new year we will publish a White Paper on public service reform that will make it clear what we are trying to achieve and how we intend to achieve it. Our desire is that public services will be built on stronger relationships with the communities and citizens they serve, and that they will be, in the words of my hon. Friend the Member for Warwick and Leamington, more local, more personalised and more responsive. We want to devolve power to people on the front line who know how things can be done better, including extending the right to provide that was initiated by the previous Administration. We want to try to encourage and unlock that energy that sits inside the public services, which we feel has been constrained and stifled by a regime of overly oppressive targets and bureaucracy.

[Hazel Blears]

I have expressed to several hon. Members my concern about the process of transferring assets, possibly to social enterprises, which then swiftly progress to private, commercial organisations. Does the Minister agree that where public sector assets, purchased by the taxpayer, are to be transferred to other organisations there must be an asset lock to ensure the proper stewardship of the assets and democratic governance within the legal framework of those organisations?

[Mr Hurd]

I hear the right hon. Lady’s concern. She makes a valid point, and she used a very important word—“stewardship”. I totally agree that there is a duty of good stewardship. That contains two elements: a requirement to make sure that public assets are used most productively for the public, and a requirement to make sure that they are not misused in any way. In some ways that is a contracting issue. The right hon. Lady will know that social enterprises take many different organisational forms, and that there is a bespoke legal form for social enterprise called the community interest company, which specifically provides for an asset lock. However, that falls outside the immediate scope of the Bill.

I was talking about why we think the Bill is consistent with our ambitions and aspirations for public service reform. One of our aims is to encourage greater diversity of supply and provision. Here there may be some theological differences between us and the Opposition. We have a strong desire to try to incentivise and encourage much greater flexibility at a local level, such as providing opportunities to pool budgets and integrate services. She may be aware of some pilots that we are encouraging through the Cabinet Office on local integrated services, where the onus is much more on getting out there to find out what the community wants. All those aspirations will be backed up by action that will be reflected in the White Paper.

In the context of encouraging greater diversity of supply, on which the Bill touches, we have an explicit commitment in the programme for Government and the coalition agreement to support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable those groups to have a much greater involvement in running public services.

[Mr Chope]

Clause 1 calls on the Secretary of State to prepare a national social enterprise strategy. We do not need to legislate for that if, as my hon. Friend is saying, the Government are already going to do it of their own free will. Are they going to do it and, if so, when?

[Mr Hurd]

I will come to clause 1, and I think that my remarks will give my hon. Friend some reassurance.

We are determined to try to open up the public services markets to a broader diversity of suppliers, and we have been specific about wanting to encourage social enterprises, charities and the voluntary sector to have a bigger role. Why? Most constituency MPs have a sense of the reason. Faced with some of the really stubborn and expensive social problems that this country faces—expensive in terms not only of money but of human cost—there is overwhelming evidence in certain cases, such as the hard job of getting people back into work or keeping people out of jail, that a social enterprise or community-based solution is often most effective in doing the really difficult work. We have to respond practically to the challenge—the right hon. Member for Salford and Eccles, as a former Secretary of State for Communities and Local Government, knows that it is a challenge—of opening up those public services markets to try to create more space for these organisations to participate and add value. It is not about trying to do things on the cheap, but about trying to deliver better solutions and to “do more with less”, to use the cliché of the moment. That requires a radical reform of commissioning and how the state buys, because, as the right hon. Member for Salford and Eccles said, there is a strong feeling out there, represented by the Social Enterprise Coalition and others, that the system is obstructive and gets in the way.

That is why I and the Office for Civil Society are determined to get this right and are on the point of issuing a consultation document setting out what we need to change in state commissioning to fulfil the coalition Government commitment to create more space for social enterprises, charities, co-operatives and mutuals. The consultation document will ask the following main questions: in which public service areas could the Government create new opportunities for civil society organisations to deliver, and why? How can the Government make existing public service markets more accessible? How can commissioners use assessments of full social, environmental and economic value to inform their commissioning decisions? How can civil society organisations support greater citizen and community involvement in all stages of commissioning? And how we can reduce the amount of bureaucracy, form-filling and regulation that gets in the way of and infuriates and frustrates civil society organisations? The whole business of applying for and reporting public money is a bureaucratic nightmare for too many organisations and is often totally disproportionate to the sums of money involved. We are determined to do something about it.

In that context, the Bill’s core proposition—a requirement to consider social and environmental value where it is relevant and proportionate—is a useful complement to our own work of reform and commitment to making it easier for voluntary and community organisations and social enterprises to deliver public services. The Bill has the scope to ensure that commissioners consider the full effect of services on the people whom they serve and enable them to maximise the social, environmental and economic value of every penny they spend.

The Bill reinforces our commitment to value for money. In these tight economic times, it is particularly important that we achieve maximum value in our spend, but our observation is that currently some commissioners miss the opportunity to secure the best price and meet the wider social, economic and environmental needs of the community. Under procurement law, a contract must be awarded on the basis of the tender that is most economically advantaged or offers the lowest price. The Bill does not undermine or circumvent this requirement or otherwise undermine the Government’s value-for-money agenda and efficiency reform. On the contrary, it is anticipated that by taking full economic, social and environmental value into account, the quality and efficiency of public contracts can be improved.

I think that most hon. Members will see the potential for that just from their observations and visits. In my constituency, Hillingdon borough contracts a good proportion of public landscaping work with a company called Blue Sky. It is the only company in the country where someone has to have a criminal record to work. It does a brilliant job in offering employment opportunities to people coming out of jail—a critical milestone in proving to a future employer that they can be trusted. The people of Hillingdon are delighted with the service and the council are very satisfied with the price, and through this process we are making a huge impact on helping people to turn their lives around. I have spoken to some of the people working there. Some of them travel the length of the Central line every day to be on the course, because they see it as their way out.

That is intelligent commissioning at its best, and we want to encourage more of it. I remember visiting a social firm called Clarity that makes soap and liquids for cleaning hands. What differentiates this business is that, as I walked around the floor, I noticed that every single employee was disabled in some way—often in major ways. Again, this is an opportunity for them to build their own sense of worth and confidence, and to carve a different path that otherwise would have been shut to them. That is another opportunity for intelligent commissioning.

There are lots of other examples. In 2006, the London borough of Camden renewed its schools catering contract. At that point, there had been significant dissatisfaction with the quality and performance under the contract. There was a best-value service review prior to retendering, involving extensive consultation with parents, teachers, pupils and local social enterprise and voluntary and community stakeholders. The remit included consideration of wider social environmental and economic factors, and the new contract was shaped around the results of the review. As a result, the uptake of meals by children in primary and special schools rose by 10%, and teachers reported indirect benefits from the new contract. It has improved service and food quality without an increase in contractors’ margins. Again, that is intelligent commissioning.

[Hazel Blears]

The Minister will have heard me refer to the innovative construction company, B4Box, which has worked on a legal framework for JCT Contracts. Would the Minster be willing to meet me and Aileen McDonald of B4Box to discuss how that legal framework might be used as a basis for wider scaling up of such innovative construction projects?

[Mr Hurd]

I would be delighted to arrange that meeting. Aileen McDonald sounds wonderfully inspiring, and if she can help us to open doors to more intelligent commissioning, we should be all ears.

[Ben Gummer]

The Minister has provided some good examples of what he called intelligent commissioning, and I provided an example of a bad commissioning decision. Would he characterise that as unintelligent commissioning? If so, is that not precisely what the Bill is trying to correct?

[Mr Hurd]

My hon. Friend was good enough to introduce diverse representation from Ipswich, and the anger about the decision was palpable. It might be risky to comment from afar without knowing the details, but what struck me about the commissioning decision was that if 65% of the demand for the contract was based in Ipswich, it seems odd that there was no consultation. The process effectively removed an organisation that was clearly successful in delivering what the contract intended to deliver and had a massive social impact and value in that community. The decision seemed to be taken a long way away from the people who needed the help, and that is a problem.

The spirit of the Bill builds on the Government’s commitment to economic growth and the promotion of entrepreneurship. It is appropriate that it should come to the House in global entrepreneurship week, and the day after social enterprise day, which many hon. Members celebrated. We should not forget that social enterprises are, first and foremost, businesses that contribute £24 billion—that seems to be the official figure—to the UK economy and employ more than 800,000 people. As the hon. Member for Hemsworth powerfully said, they make an enormous contribution by creating and stimulating markets, bringing wealth into struggling communities, creating jobs, supporting disadvantaged people into employment, pioneering innovative products in ethical markets, and attracting new people into business, particularly the young, women and people from minority ethnic communities.

I was struck by a recent comment from Steve Jobs, who leads Apple, a brand that is always associated with innovation. He said that innovation is the difference between leaders and followers. The country desperately needs leadership and people who are capable of pointing to better ways of doing things, and it is in the social entrepreneur community that there are genuine leaders.

I was in Sheffield last week visiting a social enterprise, Zest, which has incredible leadership. It demonstrates how youth services can be run in such a way that young people turn up. It shows how libraries can be run in a way that involves the community, and how to engage with the public on public health issues. I sat at a table with people from the local PCT and the local council, hoping that they were learning and reflecting on how much money might have been wasted over the years. Organisations such as Zest are showing the way forward and opening minds to doing things better.

The point was well made, not least by my hon. Friend the Member for Congleton and, I think, the right hon. Member for Salford and Eccles, that this is not just about social enterprise. Social value is not just about an organisational form called social enterprise, however broad that form might be. I hope that the Bill will also be a catalyst to encourage traditional businesses to speak up more about what they are doing in the community. We all know from our constituencies that many businesses, often family owned businesses with a strong sense of community, do a huge amount, but there is now a challenge, in the context of the big society, to everyone in traditional businesses to think harder about their social responsibility and their commitment to the community. The Government will be saying more about that shortly.

I have set out why we support many of the principles and objectives of the Bill, but we are legislators and we have a duty to ensure that the legislation that passes through the House is robust, is needed and adds value. I suspect that that is one of the themes that we can anticipate hearing from the most distinguished Friday face in the Chamber, my hon. Friend the Member for Christchurch (Mr Chope).

I want to get into the detail of the Bill. The primary measure that the Government support is clause 3, which deals with contracts of contracting authorities. As my hon. Friend the Member for Warwick and Leamington has already outlined, clause 3 requires contracting authorities to consider how they might promote or improve economic, social or environmental well-being through a contract. In policy terms, we often refer to this well-being as “value”, because commissioners who already voluntarily follow this approach tend to attribute a quantifiable worth to it and consider it as part of their wider evaluation of bids to deliver public services. The title of the Bill reflects this commonly used terminology.

The Government are supporting this measure for two main reasons. First, and most importantly, the Bill sends an unequivocal message to those spending public money that it is vital that they maximise the value achieved by every penny. This is particularly important in the current public spending context. We acknowledge that many of the best commissioners already recognise the importance of this and are exemplars to the public sector. Yesterday, I was privileged to sit in on the first meeting between the London Probation Trust and two social enterprises. The conversation covered how the trust could work differently to commission social enterprises to set up community enterprises such as cafés, garden centres and small garages to employ offenders in the community. This is an example of a commissioner thinking outside the traditional box, and that is the kind of progressive commissioning that we want to encourage.

[Steve Baker]

Will the Minister join me in celebrating the brilliance of some of our public sector employees, and confirm that we are reforming not because we are challenging the individuals but because we are challenging the system? In some places, it is the system that we have inherited; in others, it is the system that has been established over a much longer period. Will my hon. Friend join me in celebrating the talents of our public sector employees?

[Mr Hurd]

I certainly will, and it is important to do so. This is largely about freeing people who work in the public sector to express themselves more and to explore their own ideas of how things can be done better. I remember vividly a visit to Merton, where one person working in the mental health field had recognised that the system was failing some people with multiple chaotic problems in their lives. He had shown leadership and pulled people round a table and said, “What we are delivering isn’t good enough.” Together, they produced a new system of support, and the people receiving that support came into the room to talk to me about it. Two of them burst into tears of gratitude. It is very rare for the public to weep with gratitude for the public services that they receive, and this was a direct consequence of one person’s ability to think differently. We want to encourage more of that, but it requires action to create the space and to send the message that, yes, it is okay to think differently and show innovation inside the public services. We need to unlock the potential to do things better.

[Mr Chope]

Before my hon. Friend moves from clause 3, will he explain why it is mandatory on local authorities? I thought that the Government believed in localism and would trust local authorities to make these judgments themselves without Government interference.

[Mr Hurd]

It is a requirement to consider, where “relevant” and “proportionate”, and it does not compromise local authority autonomy in responding to the requirement. It is simply a requirement to consider. I do not see it as heavy-handed; it is simply designed to be a catalyst to encourage more people to think more intelligently about commissioning.

The need to support commissioners in this process was raised earlier. It is not just about sending a stronger signal on the requirement to consider, as there are also issues about how to measure social value and how to support commissioners. That is why the Cabinet Office has supported the measuring social value project to try to create a methodology and tools to make measures that are realistically capable of implementation. There is a clear need to advance and bring together some more standard and consistent methodologies in this area.

Furthermore, through the national programme for commissioning, we have trained well in excess of 2,000 commissioners across England and across a range of public service areas. All the commissioners have had the opportunity to receive specialist training in measuring wider social, environmental and economic value. I am delighted to say, following the comprehensive spending review, that we are going to continue this training beyond March 2011. I sat in on a session in Birmingham and it struck me that there are many commissioners out there who would like the chance to do things differently and to do more with the voluntary community sector and with social enterprises, but need some help—busting a few myths and getting some practical support. The process of engagement through the partnership improvement programme for commissioning is, I think, valuable. I am delighted that we can continue with it.

We feel that these policy interventions are important in supporting the objectives stated in our coalition programme, but we also feel that they will be insufficient without some legislative intervention to achieve the goals. That is why we support clause 3. Returning to the point made by my hon. Friend the Member for Christchurch, we believe that these provisions are consistent with the Government’s wider localism agenda in three main ways.

First, the Bill will support the Government’s commitment to community empowerment as a fundamental element of localism. The Bill includes a requirement on commissioners to consider whether to consult the intended beneficiaries of the service in considering how to take account of wider social, environmental and economic value. Although that does not require commissioners to engage with their communities, it sends out a strong message about the importance placed by the Government on involving local citizens and communities in shaping the services they receive. This will inevitably improve community involvement in commissioning and help to ensure that it responds to the full range of communities’ priorities.

Secondly, while empowering communities, the Bill also respects the need to ensure the autonomy and flexibility of commissioners in responding to local needs. Commissioners retain the discretion to determine how social, environmental and economic value is taken into account. The Bill does not stipulate the methodology that should be adopted by commissioners, and it is right not to do so. Local autonomy is maintained.

Thirdly, the Bill does not impose an additional burden on contracting authorities. The specification that contracting authorities are required to take wider value into account only where it is relevant and proportionate means that authorities can use their common sense and avoid excessive costs or bureaucracy. It also allows them to use and draw on existing infrastructure and opportunities to consult their beneficiaries and make sensible decisions in the interests of the people they serve. For example, it is highly likely to be “relevant” and “proportionate” to consider the wider social impact of a service and to consult citizens when contracting for a citizen-facing service such as social care as opposed to a contract by councils for use by an authority’s employees. The Bill therefore requires a common-sense approach, with the authorities having appropriate discretion.

I have explained where we support the Bill and I would now like to spend a few minutes explaining what conditions we attach to our support. Although we support all the objectives, a number of conditions are attached. If the Bill goes into Committee, with the will of the House, we intend to table amendments. These will include the removal of clauses 1 and 2, which refer to a “national social enterprise strategy” and “local authority strategies”.

I am not theological about strategies. Having been in business for 18 years before entering Government, I think that on the whole it is probably a good thing to have a strategy. However, I believe that, particularly in this context, strategies should be governed by the need of the moment, and should be driven by conviction rather than by a requirement to comply with some bureaucratic process. I do not want the process of drawing up strategies to be bureaucratic. I do not want it to be simply an exercise in producing more glossy brochures that fill up the bookshelves in our offices, which are not read and which do not have real traction. Strategies must be driven by need and by conviction at the time.

[Steve Baker]

I congratulate the Minister on his wisdom in attaching this condition to the Bill—I find it hugely reassuring—but will he say a little about clause 2(3), which deals with the definition of social enterprises? I should be grateful for the Government’s definition of a social enterprise.

[Mr Hurd]

I am rarely accused of wisdom, so this is a pleasant moment that I shall relish.

The definitions of social enterprise in the Bill are in the context of requiring a social enterprise strategy, which we do not consider necessary, but there is a legitimate point to be made about defining social enterprise, because, as I mentioned earlier, there is a broad spectrum of social enterprise activity. At one end of the spectrum are businesses that are acting in a socially responsible way or making big social contributions to their communities, while at the other end is pure social enterprise.

The definition developed by the sector is as follows:

“A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.”

That is a reasonable start, but there is a spectrum of activity, including charities which are tendering for contracts and trying to generate new revenue streams through that process, and which consider themselves to be hybrids in that sense. So there is no straightforward answer to my hon. Friend’s question.

As I was saying, the Government are uncomfortable about legislating for strategies at both a national and a local level. Several Members—including the hon. Member for Hemsworth, the Opposition spokesman—have agreed that that goes against the grain of localism. We therefore do not agree with legislating for local social enterprise strategies, however desirable they might be as components of existing sustainable community strategies.

None of that should be taken as reflecting any lack of Government support for social enterprise, or even a lack of desire to communicate a strategy. The Office for Civil Society is working with the Department for Business, Innovation and Skills and others across Government to produce a refreshed national strategy for social enterprise, which we will publish in March 2011.

The former Secretary of State for Communities and Local Government, the right hon. Member for Salford and Eccles, knows both the value and the difficulty of working across Government, but I think it extremely important that we do so in this context. My colleagues from DBIS have embraced the opportunity, and we look forward to producing the refreshed strategy in March. In particular, we will step up engagement with the social enterprise sector so that we better understand the needs of enterprises and the opportunities that could be unlocked. We want to consider how to maximise our support for social enterprises.

[Fiona Bruce]

May I invite the Minister to meet representatives of the Eden project and the Message Trust? I believe that they have much to offer local communities: indeed, they aspire to engage with up to 60 local communities across the nation.

[Mr Hurd]

I should be happy to do that. I have written to all Members of Parliament offering them the opportunity to bring in representatives of voluntary community sector organisations in their constituencies. I understand that there is tremendous enthusiasm out there, and that organisations are anxious to understand the big society agenda better and what it could mean for them. The invitation is open to all Members on both sides of the House.

We consider social enterprises to be valuable in terms of making a social impact and our determination to promote enterprise and private-sector growth. We are making it easier to run a social enterprise by establishing a taskforce to reduce bureaucracy and red tape for social enterprises; reducing the small-profits rate of corporation tax to 20% from April 2011; offering a one-year temporary increase in the level of small business rate relief from October 2011; and taking a different approach to regulation by introducing the one-in, one-out rule, whereby we will not introduce any new regulation without abolishing existing regulations with a net cost to business.

Secondly, we are ensuring the resilience of the social enterprise sector by developing a big society bank to help grow the new market of social investment that is seeking to blend financial return with social impact. It is a real market, but also an embryonic one and we want to accelerate its growth. We think the big society bank can be a catalyst for that, such as by making it easier for social enterprises to access the capital they need. That will come on stream in quarter two or quarter three of next year.

As has been said, we have—at a time when there is very little money around—set up a £100 million transition fund to support voluntary community organisations and social enterprises delivering front-line services that stand to be affected in the short term by reductions in spending. We have also included social enterprises in the offer to access a £1.4 billion regional growth fund to invest in projects and programmes with significant potential for growth and employment.

Finally, we are making it easier to do business with the state by opening up markets for social enterprises, as I have discussed. There will be a fundamental reform of public services with an explicit commitment to try to create more space for social enterprises, charities and voluntary organisations to help us deliver better public services.

With the two conditions of our resistance to legislating for strategies both at national and local authority level, we support the Bill’s objectives. We think it is consistent with the big society agenda and our public service reform aims, and with our intention to make it easier for charities, voluntary sector organisations and social enterprises to deliver public services. We think it will help us maximise value for the taxpayer and improve the process of consultation with communities in the shaping of public services. It will support social enterprise, which in itself is a worthy aim. It simply proposes a duty to consider, where relevant and proportionate. It does not compromise autonomy or add additional burdens. It is about trying to turn best practice into standard practice and to deliver the best possible value to taxpayers, and it is on that basis that we are prepared to support the Bill.

[Mr Christopher Chope (Christchurch) (Con)]

I am very grateful to the Minister for the compliments he paid me earlier—I took them as compliments anyway. I congratulate him on having looked at this Bill in some detail, and on having reached not dissimilar conclusions to those that a number of my hon. Friends had already reached, and which were articulated earlier in the debate. There is no need for me to go over those concerns again as I presume that my hon. Friend the Member for Warwick and Leamington (Chris White)—whom I congratulate on having introduced the Bill—will be happy to accept the conditions laid down by the Minister. If my hon. Friend does not accept them, his Bill is obviously unlikely to make much more progress.

If my hon. Friend does accept the conditions, we will have a Bill that is far removed from the long title it had when it was first presented to the House on 30 June this year. It will effectively be a Bill about procurement for local authorities and public bodies. That covers a specific area, and what pleases me is that clause 3(2) states:

“The authority must consider how it might promote or improve the economic, social or environmental well-being of the relevant area by means of such a contract.”

That is different from the definition of a social enterprise in clauses 1 and 2, which confine it to being one

“that promotes or improves the social or environmental well-being”.

Economic well-being is vital to our communities up and down the land, and that is why I am pleased by the distinction drawn by clauses 1 and 2 on the one hand and clause 3 on the other. I understand why my hon. Friend the Minister is more enthusiastic about clause 3, because of the insertion of that element.

Earlier, I mentioned the exchanges that I have had with the Federation of Small Businesses, which I am sure will be equally pleased by the development, which will be surprising to some, in my hon. Friend’s announcement. The FSB is keen to point out that there are 4.6 million micro-businesses in this country, but only 16% of the value of public sector contracts currently goes to small and micro-businesses. The federation was worried that such businesses would be squeezed out by social enterprises.

[Mr Hurd]

Perhaps my hon. Friend will be reassured if I draw to his attention the Cabinet Office announcement in November of a series of measures designed to make it easier for small firms and organisations to do business with Government. They include measures to progress the Government’s aspiration to award 25% of Government contracts to small and medium-sized enterprises.

[Mr Chope]

I am sure that that will be greeted with great enthusiasm by small businesses throughout the country. To achieve that, we do not need legislation; all that is required is positive will on the part of the Government. There are many examples across the public sector of small-scale enterprises being squeezed out by larger organisations in the procurement process.

--- Later in debate ---

[Mr Chope]

I agree absolutely. There are so many examples. The local community may be dependent on the local post office, but the Post Office is a national organisation with a national network. None the less, it is ever so important that the local branch of that national network in a particular village is maintained and viable. The same is true of the local pub. It does not have to be owned as a freehold by somebody local; it may be part of a national pub chain. That makes no difference to the important role that it will play in helping to maintain the local community. We could go on with lots of other examples.

I turn now to the “residue” of the Bill, and I should tell my hon. Friend the Member for Warwick and Leamington that I do not mean that disparagingly—perhaps “a distillation of the Bill” would be a better expression. When we get to clause 3, we are left with a duty on local authorities not to do anything, but to consider something. My hon. Friend said that that does not offend against the principles of localism and that it is legitimate for the Government to require local authorities, and thereby councillors, to consider particular things.

[Mr Hurd]

Just to clarify, my hon. Friend is narrowing his remarks down to the local authorities, but clause 3 actually applies to public authorities that are contracting authorities as defined by the Public Contracts Regulations 2006. That is, the clause applies to bodies that are already subject to procurement law, which include Government Departments, local authorities and many other bodies.

[Mr Chope]

I am grateful to my hon. Friend for that correction and I am sorry that I was concentrating just on the local authority side. Local authorities are independently accountable through their councillors to their electors for what they think and do, and that is localism, but I can understand that there is a stronger case for saying that unelected public authorities, such as hospital trusts or ambulance trusts, must consider something before they do it because there is a democratic deficit between the people and those organisations.

I only wish that the South Western Ambulance Service NHS Trust had given some consideration to how it might have improved

“the economic, social or environmental well-being”

of my constituency before deciding on the procurement process for the hospital car service. If ever there was an activity that is best kept local, where it is most flexible and offers the best value for money, it is the hospital car service. It was run by the ambulance trust, which stopped doing that. However, instead of being given to a range of local providers, it was given to one particular taxi firm, thereby squeezing out organisations with volunteer drivers and imposing significant extra costs on many of the people being taken to and from hospital. That is only one example. If that particular organisation had thought a bit more, perhaps in accordance with clause 3, things would have been different.

Oral Answers to Questions

Nick Hurd Excerpts

Wednesday 20th October 2010 Commons Chamber

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

1. What recent steps his Department has taken to increase opportunities for young people to volunteer.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

In the current financial year, the Department has provided £39 million in grants to the v organisation. On 22 July, the Prime Minister announced the introduction of the national citizen service to give young people an opportunity to develop the skills needed to be active and responsible citizens, mix with people from different backgrounds and start getting involved in their communities.

[Mrs Hodgson]

I thank the Minister for his response. At a fringe event at the Conservative party conference, I understand that the Minister for the Cabinet Office was quoted as saying that in his opinion the big society would be “chaotic and disorderly”. That being the case, I feel that his heart is perhaps not in it. How can he go on to encourage young people to volunteer so that they can pick up the right skills and be employed fruitfully in the future?

[Mr Hurd]

We are absolutely committed to that, and the national citizen service will be an extremely important opportunity to connect young people with their own power to make a difference in their communities. I know that the hon. Lady took a strong interest in that through her work on the Select Committee on Children, Schools and Families. If she had had the opportunity to talk to some of the young people who had taken part in this year’s pilot, she would have been as impressed as I was by the transformative effect that it had on them and on how they view their community and their own power to make a difference. We are very excited about it.

[Duncan Hames (Chippenham) (LD)]

Voluntary organisations in my constituency rely on the great efforts of many people who are retired, and they are crying out for younger volunteers. Those volunteers need not just be teenagers, however. What plans do the Government have to facilitate opportunities for volunteering by people of working age?

[Mr Hurd]

We have planned a series of initiatives for the forthcoming years to promote wider volunteering and to connect people again with their own power to make a difference locally—that is the heart of the big society. I cannot be drawn on the detail of those plans, because they are subject to the spending review.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

If voluntary service for young people is to work, the third sector has to still be alive. This afternoon the Chancellor is going to try to drive a steamroller over the big society. Can the Minister explain why, in answer to parliamentary questions from my hon. Friend the Member for Glasgow Central (Anas Sarwar), three quarters of Whitehall could not say what contracts they had in place with the third sector? How can the Department protect the third sector from cuts this afternoon if it does not know what contracts are in place? Is the Minister not, in effect, flying blind?

[Mr Hurd]

I suspect that the right hon. Gentleman will eat his words later when he hears the Chancellor. I do not see any steamroller in evidence in relation to the big society, which is absolutely central to the Government’s mission. A central strand of that mission is to open up the public services to a more diverse set of providers, including and specifically contributions from the voluntary and community sectors. As the right hon. Gentleman well knows, they are in a position to add a huge amount of value. That is a specific commitment of this Government, and we are going to deliver on it.

[Stuart Andrew (Pudsey) (Con)]

2. What steps he has taken to increase the efficiency of his Department’s mechanisms for Government procurement.

--- Later in debate ---

[Charlotte Leslie (Bristol North West) (Con)]

7. What recent progress has been made on establishing the national citizen service.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

In July, the Prime Minister announced the start of the bidding process for providers of national citizen service pilots. We have been really pleased with the response, and in the next few weeks we expect to announce the successful bidders. We expect to provide places for about 10,000 young people, with a good geographical spread.

[Mary Macleod]

The national citizen service is a great example of how young people can make a difference in their local communities. What can I do to persuade people in Brentford and Isleworth to get more involved in the project?

[Mr Hurd]

I thank my hon. Friend for her interest. As I said, the successful bidders will be announced shortly. They will be responsible for recruiting local young people and communicating the opportunities in their area. If a pilot is run in her area, I urge her to support its provider, as I would urge all MPs to do. The experience of young people in the pilots that have already taken place just down the road from her in Hammersmith has been extremely positive.

[Charlotte Leslie]

In my constituency, some of the richest wards exist side by side with some of the poorest wards in the country. Can the Minister reassure me that children from more disadvantaged backgrounds will also be encouraged to get involved in the national citizen service?

[Mr Hurd]

I can certainly give my hon. Friend that assurance, and those children will be more than encouraged. Involving people from all kinds of backgrounds is a central aim of the programme and a key part of its value. As part of the commissioning process, organisations bidding to deliver a pilot next summer have been asked to set out their specific plans to support the broadest range of young people to participate. [Interruption.]

[Mr Speaker]

Order. There are still far too many private conversations taking place in the Chamber. I want to hear, and I hope the House wants to hear, Steve Rotheram.

--- Later in debate ---

[Stella Creasy (Walthamstow) (Lab/Co-op)]

The tender document for the national citizen service pilot sets out the Government’s refusal to meet the total costs of the programme. Just how much of the bill does the Minister expect the voluntary sector and young people themselves to meet?

[Mr Hurd]

The cost of the pilots will be revealed as a result of the spending review. We are committed to two years of pilots to test a range of approaches to delivering the service, which will help us to identify the most cost-effective way forward. We will have a clear idea of the likely costs of a wider roll-out of the national citizen service once we have evaluated the two-year pilot phase.

[Richard Fuller (Bedford) (Con)]

5. What assessment he has made of the likely effect on social enterprises of reductions in Government expenditure.

“Building a Stronger Civil Society”

Nick Hurd Excerpts

Thursday 14th October 2010 Written Statements

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

I am today publishing a strategy for voluntary and community groups, charities and social enterprises. The document sets out the scale and nature of the opportunities being made available to civil society organisations as part of the Government’s wider reform agenda, and spells out some of the practical measures that the Government are taking to support this vital sector.

I am also today publishing a Cabinet Office consultation document, asking for views on how infrastructure support for frontline civil society organisations can be improved.

I have placed copies of both documents in the Libraries of both Houses. The documents are also available on the Cabinet Office website at: www.cabinetoffice.gov.uk.

Bogus Charity Bag Collections

Nick Hurd Excerpts

Wednesday 13th October 2010 Westminster Hall

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

It is a great pleasure to serve under your chairmanship, Mr Gray. I warmly congratulate my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) not only on securing the debate, but on presenting her arguments extremely forcefully. It is also important to register the presence of the hon. Member for East Dunbartonshire (Jo Swinson), who performed a similar useful exercise back in 2007, so she represents some continuity in terms of pressing the case for continued action on this extremely emotive and difficult issue.

As my hon. Friend said so well, we clearly have a problem. We all know, even just from walking the streets of our constituencies and knocking on the doors, that the public are more and more exposed to leaflets, bags and requests for information, and that is irritating them. There has been a change in the economic incentives underlying the behaviour that my hon. Friend is concerned about. Prices for second-hand textiles and clothing are at about £700 to £900 a tonne, so there is some serious money to be made.

The Fundraising Standards Board tells me that there has been a 100% increase in complaints to it over the past year. The media and various Members of Parliament are taking an interest in the issue, which is clearly serious. However, this is not so much about the sums involved or the cash cost to charities, which outside bodies estimate at between £5 million and £15 million a year. What concerns me is the issue of public confidence in charities at exactly the time when we want to encourage more people to give. This is clearly an important issue of public confidence.

Three types of collection activity potentially damage the sector’s reputation. The first is outright fraud, which involves fake charities adopting the names of real charities for their collections, pretending to be charitable and stealing clothes that are left on doorsteps; my hon. Friends the Members for Chatham and Aylesford and for Truro and Falmouth (Sarah Newton) identified such activities. The second area of activity involves misleading literature that gives the impression that there is a charitable beneficiary, when that is not in fact the case. The third area of concern is the actual theft of bags of clothing left out for legitimate charities to collect.

All that behaviour is absolutely reprehensible, but the question is what we can do about it, and I take on board the point that the issue has been raised over some time. A lot of activity is going on, but the question is how effective it is, and it is important to review that. There are three levers that the Government can pull: more and clearer regulation, enforcement and education. The Government’s position is that the challenge and the priority relate more to enforcement and education than to further regulation.

The regulatory base that is in place is sufficient, and, as my hon. Friend the Member for Chatham and Aylesford will know, collections are regulated under the House to House Collections Act 1939 and the House to House Collections Regulations 1947. Where collections are undertaken by a commercial collector on a charity’s behalf, the necessary commercial participation agreement under part 2 of the Charities Act 1992 must be in place. As a Government who see themselves as being in the business of deregulation rather than of adding to regulation, our instinct is therefore not to reach immediately for the regulatory lever, not least because we would be concerned about imposing additional costs and burdens on those who perform their activities in a wholly legitimate way.

My hon. Friend rightly pressed me about the implementation of the Charities Act 2006. She will be aware that it is due for review next year—there is a requirement on the Government to review its workings and implementation—and I have already made an explicit commitment in public that a review of the issues before us will be an explicit part of that process.

The honest answer to my hon. Friend is that if I thought that full implementation of that measure would transform the landscape and make a huge difference, I would have carried that out some time ago. In fact, the advice that I have received is that the net impact of implementation could be marginally deregulatory, in the sense that it would effectively replace the requirement to get a local authority licence to operate in a specific area with a requirement to get certification from the Charity Commission to operate anywhere. I am not entirely persuaded that that would solve the problem, but research is being conducted and, as I have said, there will be an explicit review of the issue in the context of the review of the Charities Act 2006. My hon. Friend has that undertaking from me.

Enforcement was a central concern of my hon. Friend. We look to various players in the field to make a difference and an impression: local trading standards officers, the police and, of course, those responsible for regulating advertising standards in the context of leaflets that are arguably misleading. The debate has prompted me to review what is going on, and on the face of it I am reasonably encouraged by the level of activity and what that tells me about the underlying concern of the agencies responsible.

For example, I welcome the work that the Fundraising Standards Board is doing with the Trading Standards Institute to develop a toolkit to guide all trading standards officers through the relevant legislation and through what evidence is needed to tackle bogus charity collections and effect successful prosecutions. As my hon. Friend will know, the process in relation to detection and evidence is extremely difficult. However, there is clearly partnership work going on to develop a toolkit that will help trading standards officers in that difficult work.

[Tracey Crouch]

I thank the Minister for what he has outlined, but I dispute whether it is difficult to detect the people in question. Quite often they clearly state where they will be, and at what time. It is misleading or misguided to think that it is difficult to catch them and find evidence. It is often very easy to catch the perpetrators in the act. I feel that sometimes it is not a question of catching them; it is a question of the process afterwards—prosecuting them. That is where the slow-down is.

[Mr Hurd]

I understand and accept my hon. Friend’s point. As to difficulty of detection I was thinking not so much of the person in the van as of the mastermind in the control room—the real villain of the piece. I also think that the public will play an increasingly important role in detection and evidence. For example, in my constituency we have rolled out the concept of neighbourhood and street champions, people who have value as the eyes and ears of public agencies, on a range of issues. In the present context they could play an important role in detection and evidence-gathering.

I was trying to summarise some of the welcome activity that I detect is going on among various agencies who are trying to work together to develop better practice. The Institute of Fundraising has a current consultation on its code of fundraising practice on house-to-house collections. That code will apply to all collections of money and goods made house to house, whether they are carried out by volunteers, fundraising organisations or third party agencies.

I note that the National Association of Licensing and Enforcement Officers is doing some work on developing guidance for local authority licensing officers on house-to-house collection of goods. I have looked again at what the Advertising Standards Authority is doing as the UK’s independent regulator of advertising. Again, I am satisfied that it takes the issue seriously and that its connections with the Office for Fair Trading are reasonably robust, so as to create the opportunity to act against those who mislead the public through advertising material.

The police’s sense of their local priorities clearly presents an issue, but the Office of the Third Sector, as was—it is now the Office for Civil Society—has been in regular contact with the Association of Chief Police Officers. I give my hon. Friend the Member for Chatham and Aylesford a personal undertaking to write again to ACPO to press the issue, and to raise the matter of cross-border co-operation that she specified.

The level of fines and the effectiveness of deterrence also needs to be considered. I understand that one of the maximum fines, for collecting without a licence, is about £1,000. There seems to be a mismatch between that and the price of a tonne of textiles, so again I shall write to the Ministry of Justice to explore its appetite for a review of the level of fines and deterrence.

To deal briefly with education, I have reviewed what has been done. My hon. Friend will know that the Office of the Third Sector was instrumental in co-ordinating the “Give with Care” campaign. It distributed about 500,000 leaflets around the country. That was relaunched in 2010. The Charity Commission has been extremely proactive, and keen to raise awareness of fraud and theft. The media, Members of Parliament and various other stakeholders have played an important part in raising the profile of the issue, notifying the public and encouraging them to report suspicious behaviour and perhaps to be more rigorous in checking the claims made on the material shoved through their letter boxes.

I acknowledge that there is a problem, and I congratulate my hon. Friend on raising it again. The more I look at the matter, the less easy it is to see an easy, quick-fit solution. The nature of the activity is in the shade and at the margin of the law. As I have tried to stress, our instinct is that the question is much more one of enforcement and education than regulation. There is a lot of activity and there are many programmes. The question has been raised—and I join in asking it—whether the activity is sufficiently robustly co-ordinated. Despite the levels of activity, there is always scope to do more and think harder about the issue. My hon. Friends the Members for Chatham and Aylesford and for Truro and Falmouth have both put some concrete, specific ideas on the table.

I want to close with an invitation to my hon. Friend the Member for Chatham and Aylesford: given the scale and complexity of the problem, it is time to convene a round table of those people who are actively engaged in trying to reach a solution. I will do that, and my hon. Friend is invited to participate in that event, given the leadership role that she has played, through tabling her early-day motion and obtaining the debate.

The challenge will be for the people around that table to think afresh, review what we are doing and consider whether we could take cleverer, more co-ordinated and more robust actions to get on top of the problem. There is clearly a significant risk that the problem will undermine the confidence of the British public in giving to charity, at exactly the time when we want them to give more.

“Making it Easier for Charities to Sell Land”

Nick Hurd Excerpts

Tuesday 7th September 2010 Written Statements

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

I have today published the Government’s response to the consultation “Making it easier for charities to sell and make other disposals of land”. Copies are available in the Libraries of both Houses and on the Cabinet Office website at: www.cabinetoffice.gov.uk.

Superannuation Bill

Nick Hurd Excerpts

Tuesday 7th September 2010 Commons Chamber

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

This has been a serious debate. It has been very sober in tone, and that is entirely right because we all know that there is tremendous anxiety out there about job losses and potential changes to the compensation scheme. Many Members have received representations on this matter, and many came to the House today to express strong constituency interests. They included my hon. Friends the Members for Cheltenham (Martin Horwood), for Stafford (Jeremy Lefroy) and for Vale of Glamorgan (Alun Cairns), and they represented those interests very strongly.

What was striking as I listened to the debate was the consensus about the need for reform. That was not seriously questioned. The issue before us, then, is how, in seeking to reform the compensation scheme, we strike the right balance in treating fairly civil servants who lose their jobs or give them up voluntarily. As was stressed consistently throughout the debate, particularly by my hon. Friend the Member for Gloucester (Richard Graham), the issue is especially important to the large number of civil servants who are not well paid. How do we strike the right balance between being fair to them and discharging our responsibility to the taxpayer at a time when there is tremendous pressure on the Government to get public spending under control, as my hon. Friend the Member for South Staffordshire (Gavin Williamson) emphasised? My hon. Friend the Member for West Suffolk (Matthew Hancock) was entirely right to introduce the concept of fairness to future generations when talking about the need to get the deficit under control and tackle it with vigour.

As for the case for change, my right hon. Friend the Minister for the Cabinet Office made the Government’s starting position very clear. This legislation is not an attack on the civil service. Many Members have placed on the record their appreciation of the crucial work undertaken by civil and public servants every day and across all Government Departments, and no one recognises that more than a young, new Minister with no experience of Government who relies on civil servants and the dedication and support that they give.

We simply believe that the current arrangements for compensating civil servants are unaffordable and unsustainable. My hon. Friends the Members for West Worcestershire (Harriett Baldwin) and for Vale of Glamorgan were right to express the surprise that their constituents would feel on understanding that in this day and age public servants are eligible to receive payment of up to three times their annual salary or, for older workers, enhancements to pensions and lump sum payments costing more than five times their salaries. That seems disconnected from constituents’ experience of the real world, disconnected from statutory terms—a point well made by the hon. Member for Birmingham, Yardley (John Hemming)—and clearly out of kilter with terms in the private sector, as my hon. Friend the Member for Devizes (Claire Perry) argued.

The view of the coalition Government is that the status quo is unacceptable. As we made clear in the coalition programme, we want to bring this scheme more closely into line with that of the private sector. Critically, that view was shared by the previous Government, who tried to reform the scheme honestly, but ultimately without success. That view was apparently shared by five of the six unions involved in the negotiations, as they agreed to the package on offer. The case for change seems to have been accepted by the majority of speakers.

On affordability grounds alone, a responsible Government dealt the hand that we have been dealt on the public finances would have had to take action. As my hon. Friend the Member for West Worcestershire pointed out, there is also a risk of the current situation distorting decisions and creating unfairness. We do not want to take decisions on people’s future based on how easy or cheap it is to make them redundant. The effect of the current scheme is to make it particularly expensive to make the highest-paid public servants redundant. We do not want uncertainty to drag on, as it is bad for everyone and will breed only more insecurity. We want the uncertainty to end decisively.

As I said, I heard no serious arguments against reform. The debate on the Opposition side, honest as it was, was mostly about process and how the Government are going about this business. Strong reservations were made about the possible certification of the legislation as a money Bill, but that is clearly a matter and a judgment for you, Mr Speaker, at the end of the Bill’s passage.

My hon. Friend the Member for Harwich and North Essex (Mr Jenkin), the Chairman of the Public Administration Committee, raised concerns about the risk of a legal challenge to the Government’s approach and wanted comfort on the robustness of our legal advice. He will be aware that trade union members and some hon. Members have placed on record the risk of a legal challenge, so he will not expect me to go into the details of the legal advice. I can confirm, however, that it is robust.

The main argument from Labour Members was, “Why not go back to the deal that was almost struck? Why not amend the legislation so as to impose the terms agreed with the five unions earlier this year?” The truth is that the previously agreed terms were struck down by the courts and were not accepted by the Council of Civil Service Unions. Although those terms had much to recommend them, we would prefer not to see some aspects in the new scheme—for example, compulsory terms more generous than those on voluntary departure. Rather than embedding the scheme in primary legislation, we have sought to limit the costs of the current scheme while discussing the contents of a new scheme.

While I understand the concerns expressed by many Members about process, I believe that there is a danger of missing the central point. Reform is necessary—the status quo is not an option—and we want to achieve reform through negotiation. The Minister for the Cabinet Office has informed the House of his meetings with the Council of Civil Service Unions on 13 July, and of an imminent meeting. There are ongoing discussions almost daily, which he has described as genuine and sustained. We have sent a clear signal of flexibility on terms for voluntary redundancy, and have expressed a clear determination—this will be important to the House, given the concerns that have been expressed—to agree on terms that are fair to the lower paid. The model that we are exploring seeks to taper the protection given to the very lowest paid, but the limits and thresholds of such protection are clearly a matter for detailed negotiation, and should not be the subject of speculation in the House.

Why is the Bill necessary? It is necessary until we can reach an agreement with all the unions, because the current position enables them to veto any meaningful reform—a point grasped by the hon. Member for Birmingham, Yardley and many others—and they have demonstrated a willingness to use that power. Until we have secured agreement, we would be failing in our duty to the taxpayer if we retained the status quo and did not address the excesses.

The Bill does not itself introduce a new scheme, but merely limits the amounts that can be paid out under the terms of the current scheme. We have made it clear that those limited amounts represent the absolute minimum that the Government are prepared to offer staff. My hon. Friend the Member for Harwich and North Essex described that as an austere statutory base, but what was not mentioned was that the Bill makes it possible to adjust the amounts in one direction only, namely upwards. The Government seek to provide an example for other employees on good practice in relation to staff issues, and therefore have no desire to limit payments to the statutory minimum. The Bill caps the amounts to be received by staff departing on voluntary terms to payments calculated under the current terms, but limited to a maximum of 15 months’ pay. For those who are formally dismissed, the limit will be 12 months’ pay.

The Bill contains a sunset clause, and its effect can be brought to an early end if we are able to agree on a new scheme. We genuinely hope that that will happen. My hon. Friend the Member for Harwich and North Essex asked about the need for a sunrise clause as well as the sunset clause. I think it is impossible for us to be sure of every circumstance that could lead to a need to revive the Bill. The Government are therefore keen to maximise their negotiating flexibility. If we are unable to agree on a new scheme with the unions, the Minister for the Cabinet Office will have to renew the caps every six months by affirmative resolution.

The tone of the debate was extremely serious and consensual when it came to the need for reform, but I took exception to the suggestion by some Labour Members that the Government had no sensitivity in relation to the human consequences that might be forced on them. Labour Members chortle, but that suggestion is offensive to any Member on this side of the House. I do not think that anyone goes into politics to make other people redundant, except their direct political opponents. It is deeply offensive to ascribe the wrong motives to the Government. The coalition’s priority is to reach a long-term agreement on a new scheme with all the unions involved: an agreement that is fair to the civil service and fair to the taxpayer. The Bill is needed in case we are unable to reach such an agreement. It introduces caps so that we can limit the costs of the current scheme while we discuss the content of the new scheme.

[John McDonnell]

I do not intend to embark on any party-political knockabout during the last few minutes of the debate. A key issue raised was process, which is important because it can demonstrate fairness. One of the failures of the House in the past has been the way in which it has rushed through legislation. A lack of scrutiny, both here and in the other Chamber, undermines the potential for good legislation.

The Speaker will determine whether this is a money Bill, but the Government have designated it thus, and I should be grateful if the Minister would clarify the reason for that. Given the definition in “Erskine May” of a money Bill, I see no reason why a Superannuation Bill can be so designated. I think it would be useful to rehearse the arguments in front of the Speaker, so that a wise decision can be made.

--- Later in debate ---

[Mr Hurd]

I understand the argument. It is based on the fact that this is about money and public expenditure, but as the hon. Gentleman knows the main point is that my view is irrelevant because it is the judgment of the Speaker that counts and the Speaker will make his judgment before the Bill completes its passage through Parliament. It is ultimately a matter for the Speaker to decide.

[Matthew Hancock]

Whatever the result of the vote on the amendment, the Minister is right to say that the tone of the debate all day has been in favour of reform of some kind, so is he as surprised as I am that we have just heard from the Opposition Front Bench that they will vote against the whole Bill, which means they will be voting in favour of £500,000 payouts to some at a time of such economic difficulty?

[Mr Hurd]

My hon. Friend makes an important point about the lack of coherence in the Opposition’s position. They have set out clearly, and confirmed today, that they recognise the need for reform—and we have paid full tribute to the very honest effort they made when in government to reach an agreement. They recognise the reality of the situation, which is that effectively one union is holding the situation and the process hostage, and in all responsibility to the taxpayer we cannot let that continue. We have to break the deadlock, and that is the purpose of this Bill. It is needed in case we are unable to reach an agreement with the unions. It introduces caps so that we can limit the costs of the current scheme and we can go about the very serious business of reducing public expenditure while we discuss the contents of the new scheme. The critical point is that the Government’s aim is to reach an agreement that is sustainable through negotiation. Those negotiations are ongoing and vigorous, and they are being held in good faith.

[Mr Jenkin]

Will my hon. Friend take this opportunity to correct the Opposition on one other point, which is that it would not in fact be possible to return to the February settlement because that has, effectively, been nullified by the courts? Even if all the unions now agreed to the February settlement, that settlement has been kyboshed by the courts, and even if they had agreed to it at the time, had there been a challenge in the courts and it had been successful—and it would have been—that would have nullified the settlement. This Bill is therefore indispensible.

[Mr Hurd]

My hon. Friend makes an extremely good point and he states a fact that I have placed on the record before: that the previously agreed terms were struck down by the courts and were not accepted by the Council of Civil Service Unions. The deal failed, and there is no guarantee that it would succeed in future.

[Paul Goggins]

It is important to be clear about this. The ruling was not about the content of what was proposed by the previous Government and agreed by five of the unions; it was about the fact that the legislation did not allow the Government to compel the solution. It is important that Members are clear about that before they vote tonight.

--- Later in debate ---

[Mr Hurd]

And our intention is to negotiate an agreement. This Bill is not the endgame. It is an interim measure which we hope to repeal as soon as possible, and it is on that basis that I commend the Bill to the House.

Question put, That the amendment be made.

Oral Answers to Questions

Nick Hurd Excerpts

Wednesday 14th July 2010 Commons Chamber

[John Glen (Salisbury) (Con)]

4. What progress he has made in establishing the Big Society bank.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

The Government are committed to setting up that independent wholesale bank to develop the market for social investment. It will be funded by dormant bank accounts and I will work with ministerial colleagues to establish it by April 2011.

[John Glen]

When visiting the River Bourne community farm in my constituency in Salisbury and many other community groups, I found that one of their big concerns is the bureaucracy that they might face when accessing the funds from the Big Society bank, though they are encouraged by its creation. Will my hon. Friend confirm the process and the means whereby small community groups, which do not have the information, can access those much needed funds?

[Mr Hurd]

The intention is for the bank to be as independent and unbureaucratic as possible. It will be a wholesaler, not a retailer, so it will support intermediaries that are growing the market for social investment. If it invests in social enterprises in Salisbury, it will do so through intermediaries that have structured financial products, such as social impact or community bonds that connect private capital with the opportunity for good, and for social impact.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Has the Minister had any discussions with credit unions? The big idea of a bank is very similar to what already exists. Why reinvent the wheel?

[Mr Hurd]

I have had a series of discussions with several intermediaries in the marketplace that are in the business of trying to encourage and support social investment. The intention is for the bank to stand behind and support those intermediaries to allow them to do more.

[Mr Christopher Chope (Christchurch) (Con)]

5. What recent representations he has received from trade unions on proposed changes to the terms and conditions of employment of civil servants.

--- Later in debate ---

[Mr Mark Spencer (Sherwood) (Con)]

6. What plans he has to support the voluntary sector.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

As the House has heard, we intend to reduce the bureaucratic burdens on the sector and get more resources into it, not least through the Big Society bank and a new community grants programme. We want to reform commissioning to make it easier for voluntary sector organisations to compete for public sector contracts.

[Mr Spencer]

Rumbles is a charity in my constituency that provides training for young people with learning difficulties. It has enjoyed a good relationship with local colleges, supplying national vocational qualifications, but recent budgetary pressures have put the whole system under threat. What will the Minister do to help support the relationship between local colleges and local charities and volunteers?

[Mr Hurd]

I thank my hon. Friend for giving me advance notice of his specific constituency interest. I have liaised with the Department for Education, which is very clear that the voluntary sector has an important role in ensuring that all 16 to 18-year-olds can access learning opportunities that best suit them. However, the Department pointed out that it is for colleges to decide what their learning offer should be. On a more constructive note, if Rumbles believes it has a learning offer that will fill a gap in the 16-to-18 learning market, it should discuss it with the local authority and seek to become a 16-to-18 provider in its own right.

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

7. What recent discussions he has had with ministerial colleagues on the compact between the Government and the voluntary sector.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

The right hon. Gentleman has a long-standing interest in this area. The Government are fully committed to the compact, as the Prime Minister stated when he launched the big society programme at No. 10 on 18 May. That is why my right hon. Friend the Minister for the Cabinet Office and Paymaster General has written to Ministers with responsibility for the big society agenda to ask them to consider the compact as decisions on in-year budgetary savings and efficiencies are taken.

[Alun Michael]

I welcome the Minister to his new responsibilities, and I am sure that we will look at the detail of this matter in the coming months. Departments and Government agencies are large and powerful, whereas voluntary organisations are generally small and innovative. Does he therefore agree that supporting the compact process is an important responsibility of Ministers across Departments, as is ensuring fairness in how Departments deal with the voluntary sector organisations that are vital to their work?

[Mr Hurd]

I totally understand the right hon. Gentleman’s point. That is why we have set up a group of Ministers with responsibility for the big society agenda. The first meeting of those Ministers will be chaired by the Minister for the Cabinet Office and Paymaster General next week. The compact and our plans to strengthen the transparency and accountability of its implementation will be on the agenda.

[Richard Ottaway (Croydon South) (Con)]

8. What efficiency savings have been identified by his Department’s efficiency and reform group.

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[Robert Halfon (Harlow) (Con)]

11. What plans he has for future Government support for local voluntary groups; and if he will make a statement.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

We want to encourage more people to set up and join local voluntary groups, and we want those groups to have much more influence over the issues that affect their communities. Our plans include the training of new community organisers, who can be fantastically effective in that context, and a new community grant programme to help put money in the hands of neighbourhood groups to implement their own neighbourhood plans.

[Robert Halfon]

Is the Minister aware that in Harlow the big society has been operating for some time? Will he agree to visit successful charities such as the Michael Roberts charitable trust and Rainbow Services, which are ready to pilot the big society reforms, independently of Government and at the heart of the community?

[Mr Hurd]

I am delighted to hear that the big society is alive and well in Harlow, and I know that my hon. Friend is a passionate advocate of the values that underlie it. I am happy to confirm to him that I will visit Harlow on 29 July and I look forward to seeing what is being done, what we can learn from and what we can build on.

[Mr Nigel Dodds (Belfast North) (DUP)]

Does the Minister share my concern that many voluntary and community organisations that deliver public services and value for money could be targeted unfairly for cuts in the present economic environment if sufficient and proper consideration is not given to their efficiency and effectiveness?

[Mr Hurd]

I share that concern, and that is why I am working with colleagues in the Department for Communities and Local Government and our strategic partners to try to identify examples of best practice, especially where local authorities are working in a partnership with the voluntary and community sector to manage this difficult transition carefully.

[Gavin Barwell (Croydon Central) (Con)]

I welcome what my hon. Friend said about the community grant fund, especially given the difficult financial climate that many local authorities face. Can he tell us more about the timing of that fund?

[Mr Hurd]

The programme is subject to approval in the comprehensive spending review, but all being well our intention is for it to be operational early next year. The focus will be on trying to provide grass-roots community grants to deprived areas that are characterised by high levels of economic deprivation and low levels of social capital.

[Steve Baker (Wycombe) (Con)]

14. What efficiency savings have been identified by the efficiency and reform group.

Oral Answers to Questions

Nick Hurd Excerpts

Wednesday 9th June 2010 Commons Chamber

[Fiona Bruce]

The requirements for people to obtain more than one Criminal Records Bureau check when working or volunteering with different community organisations is causing much duplication and expense, both to individuals and to community groups such as Crossroads Care Cheshire East in my constituency. Will the Minister consider reviewing the CRB check procedure and introducing one single registerable and transferrable check for each individual?

[Mr Hurd]

I welcome my hon. Friend to the House and wish her every success in following in some quite formidable footsteps. The point she makes is extremely important and that frustration has been expressed to me by a number of voluntary organisations. I hope that she will be pleased to know that, in the coalition agreement, the Government are committed to reviewing the criminal records and vetting and barring regime and I will make sure that the relevant Minister in the Home Office is aware of her concerns. She and I will be following that review very closely.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

I welcome the hon. Gentleman to his new and important role. Given statements made in recent days by the Prime Minister and others about deep and early cuts in public spending at the same time as statements about an extended role for voluntary organisations in the delivery of public services, I am sure that, as the Minister for the voluntary sector, he will want to move swiftly to reassure anyone who thinks that there is any suggestion that this means that the Government want to get public services on the cheap. He will want to rebut that suggestion very swiftly. Therefore, will he confirm to Members on both sides of the House who value greatly the work of voluntary organisations that he and other Ministers will uphold the compact with voluntary organisations and, in particular, the commitment to three-year funding as a minimum and to full recovery of costs for volunteering?

[Mr Speaker]

Again, I am afraid that that question was a little on the long side. I know that the answer will not be.

[Mr Hurd]

The hon. Gentleman makes an important point, but it is a bit rich coming from a member of a Government one of whose last acts involved the breaching of the compact by the then Minister for the third sector. The compact is an important framework for the relationship between the state and the sector at a very important time in its development. We want the sector to work more closely with the state and the compact has an important part to play in making sure that that relationship works productively.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

5. What plans he has to visit the emergency planning college at Hawkhills.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

The emergency planning college is in my hon. Friend’s constituency and does extraordinarily valuable work in training people to support this country’s resilience in all types of emergency. I have no current plans to visit the college but my hon. Friend is, I am sure, about to tell me why that is a missed opportunity.

[Miss McIntosh]

May I take this opportunity to invite my hon. Friend, whom I congratulate on his appointment, to visit the college? I know that he would be very welcome. Such a visit would act as a morale booster to the college. Will he extend its role to make sure that we can in future pre-empt tragedies such as we have seen in Cumbria and to ensure that all the emergency services are put through their paces at regular intervals to prepare for any such incidents in the future?

[Mr Hurd]

I welcome my hon. Friend back to the House and I thank her for her question. Clearly we need to be proud of the college, which is a national centre of excellence and has won awards, including, I believe, a best in the world award, for its work? I understand that it has been through a recent reorganisation. If it would welcome a ministerial visit, I would be happy to do so. [Interruption.]

[Mr Speaker]

Order. May I remind the Minister that it is very important to face the House, because otherwise Members cannot hear? The Minister can come back to the Dispatch Box.

[Mr Hurd]

I think that I had finished, Mr Speaker. If the college would welcome a ministerial visit, I will be happy to fit that in.

[Katy Clark (North Ayrshire and Arran) (Lab)]

6. If he will bring forward proposals to equalise rates of pay between staff in the civil service and in non-departmental public bodies.

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[David Tredinnick (Bosworth) (Con)]

8. What plans he has for the future regulation of charities.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

The Government are committed to making it easier for people to set up and run charities and to reduce the amount of regulation, monitoring and reporting that has been imposed on the sector. I am meeting the chair and chief executive of the Charity Commission next week to discuss this further.

[David Tredinnick]

I welcome my hon. Friend to his post. Will he discuss gift aid at that meeting? At present the administrative burden falls largely on the charities and that should be rectified.

[Mr Hurd]

We know how important gift aid is to the sector, and I will meet the Economic Secretary to the Treasury to discuss reform. We have said that we would like to reduce the bureaucratic burden associated with gift aid which falls on charities, and disproportionately on small charities. The Treasury-led gift aid forum is examining the case for reform and will report in September.

[Tessa Jowell (Dulwich and West Norwood) (Lab)]

I, too, welcome the hon. Gentleman and the other Ministers to the Front Bench. In reviewing the regulation of charities, it is also important to maintain both the capacity and the capability of charities. Perhaps the Minister can therefore explain to the House the reasoning for ending the funding of the Futurebuilders programme, which was widely acclaimed in a recently published evaluation by Sheffield Hallam university, and which is building the capacity of precisely the organisations that the Government want to take more responsibility for delivering services?

[Mr Hurd]

We have not closed the funding for Futurebuilders. As the right hon. Lady well knows, Futurebuilders is effectively shut for business. It has spent the money. We have taken a decision to use the future income from the loan book to fund our programmes for training community organisers and a new community grants programme.

[Tessa Jowell]

That is precisely the problem: the Futurebuilders programme is an investment fund, with loans made that are then recycled to other organisations. The Government have decided to end the programme and, therefore, effectively to shut it. Why?

[Mr Hurd]

The programme has run its course, and we have taken a decision on where to recycle the income. We think that the future of loan finance delivery is through the big society bank, and we want to encourage the traditional banking industry to meet the sector’s debt needs. That is the future—not the Futurebuilders programme, which distorted the market, rather than built it.

[John Mann (Bassetlaw) (Lab)]

11. What recent assessment he has made of the contribution of Cabinet Committees, Sub-Committees and working groups to the work of his Department.

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[Mr Graham Allen (Nottingham North) (Lab)]

13. Whether he has had recent discussions with third sector organisations on the financing of early intervention programmes; and if he will make a statement.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

I salute the hon. Gentleman’s pioneering work in that area, and he will know that the voluntary and community sector can be a very helpful provider of early intervention services that reduce the drivers of demand on the state. I shall be in contact with my colleagues in all relevant Departments about any future policy developments on early intervention, and about how the Office for Civil Society can contribute.

[Mr Allen]

I welcome the Minister to his place. Will he meet me and a Treasury Minister to discuss how we can release the bonds on the voluntary and charitable sectors so that they can raise money in the City of London in order to pursue early intervention through social investment bonds? Will he agree to meet me?

[Mr Hurd]

I can certainly speak for myself and agree to meet the hon. Gentleman. He will know about the interesting work on social impact bonds, which bring in private capital for investment in early intervention and involve payment by results. That will be an important part of the future.

[Mr Peter Bone (Wellingborough) (Con)]

Does the Minister agree that voluntary organisations are preferable to state organisations when providing early intervention?

[Mr Hurd]

I am sure that that is the experience of most colleagues in the House—if they have been to visit social enterprises or community organisations and seen the extraordinary work that they can do and the different relationships that they can have with the people whom they are trying to help.

[Mr Speaker]

There was some very helpful co-operation there from a Government Back Bencher, the hon. Member for Wellingborough (Mr Bone), and indeed, I pay tribute to the Minister on the Front Bench for responding in such a pithy and, I hope I can say, timely fashion. The House will be very grateful and will join me in thanking both the hon. Member for Wellingborough and, indeed, the Minister in his response from the Front Bench.

I ask the House to stand and to observe one minute’s silence in memory of those who lost their lives in west Cumbria a week ago today.