Public Sector Funding
Debate between Nick Hurd and Jeremy Corbyn(13 years, 8 months ago)
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Mr Hurd
I wish to make progress.
The wider context is extremely important. It is not just about TimeBank, or the other organisations mentioned by the hon. Members for Bolton West (Julie Hilling), for Makerfield (Yvonne Fovargue), for Nottingham South (Lilian Greenwood) and for Wolverhampton North East (Emma Reynolds). There is considerable concern in communities across the country about the impact of the cuts.
It would have been nice to have heard more recognition from the Opposition about the economic context, but that fell to my hon. Friends the Members for Banbury (Tony Baldry) and for Warwick and Leamington (Chris White). The fact is that we are spending £120 million a day in interest, and that is entirely unsustainable. A sector that receives £13 billion of taxpayers’ money cannot be immune from the process.
The public hate to see politicians playing the blame game, and I understand that, but nor should we take them for fools. I believe that they understand the basics—that the Labour Government left this country massively over-borrowed and that the coalition Government were elected to sort it out. That means that tough choices have to be made by councils. As my hon. Friends the Members for Warwick and Leamington and for Castle Point (Rebecca Harris) said, some have decided to give priority to cutting internal costs and making efficiencies before making cuts in the voluntary and community sectors. Others have taken a different course for very different reasons.
No one pretends that it is an easy business—it is not—but the Government want to put in place active programmes to help the voluntary and community sector manage the transition. We understand the need for such a transition—from a situation in which too many organisations depend on state income to one in which the sector will have to diversify its sources of income in new ways.
We want to help manage the transition because we see big opportunities for the voluntary and community sector to do more to deliver more public services, and to have a bigger voice at the local level, exactly the point made by my hon. Friend the Member for Banbury. In future, there will be many more arguments about local priorities, and the voluntary and community sector can give a voice to people who often struggle to have their voices heard. The localism agenda will give them a big opportunity. We are obviously very ambitious in our wish to encourage people to give more time and money to help others.
Mr Hurd
I do not have time to give way.
People will go to charities and the voluntary sector. There are significant medium and long-term opportunities for the sector, but we have to help manage the short-term transition.
That brings me to the transition fund and the specific questions raised by the hon. Member for Islington North (Jeremy Corbyn). Most of the answers are contained in the basic statement. The fund had to be rationed. It had to be targeted on those organisations most vulnerable to a cut in public grant or contract. We took advice from the sector on the criteria. We had to set an income threshold.
We are proud of the progress that BIG fund has managed for us. I visited an organisation yesterday that has benefited from it. The charities’ fund is £100 million, and it was topped up yesterday by £7 million from the Department of Health. That is serious money, and it will help organisations that are particularly vulnerable, or that have more than 60% of income vulnerability to the state, to make the transition.
The hon. Member for Ceredigion (Mr Williams) asked about the big society bank. It is not a panacea for cuts in grant. It is a serious strategic long-term intervention, designed to make it easier for the sector to access capital. I expect between £60 million and £100 million from dormant bank accounts to be released in the third quarter and be made available for deployment. I expect £200 million to come from the four major banks before the end of the year. The balance of the bank’s capitalisation will come from the rest of the dormant bank accounts, once they have passed through the state aid process, but it is difficult to pin that down at the moment.
We are talking about a £600 million opportunity—a serious attempt to make it easier for social entrepreneurs to access capital in this country. It is part of our programme to help the voluntary and community sector play a full role; it will help to build a stronger society, which we want to encourage, and a better partnership between the state, business, the voluntary and community sector, and active citizens who feel empowered to take more control over their lives.