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Charities Bill

I am glad to have caught your eye, Mr. Deputy Speaker. I noted in the early part of the debate the increased willingness shared by all parties to consider the transfer back to the voluntary sector of public services offered for the public good. I have long been a supporter of that since my time as leader of a city council in which we actively supported the voluntary sector through providing a variety of financial and common services, such as accountancy services—many voluntary organisations of all kinds greatly appreciated that. I therefore need no persuasion of the merits of that course of action. If one steps back 150 years or so, many services that we now take for granted were provided by voluntary—either charitable or mutual—means. There remains much to commend locally based mutual or other voluntary structures providing those services. It helps to create stronger mechanisms of community involvement in the services that people enjoy. Examples remain. Many hon. Members will have been lobbied about, for example, transferring air ambulance services to the public sector. I have surprised many of my constituents by saying that that may be an inappropriate approach. It is preferable to give better support to the existing, robust voluntary organisation, which provides the service. Simply adding it to the national health service is the wrong answer to the specific problems that the service may encounter. Let us consider the lifeboat service. Few would describe that as anything other than a vital service that is offered to part of our community. Yet no one would suggest that the state should provide it directly. We acknowledge that charitable and voluntary organisations can often provide major public services, not only smaller, locally based ones. Recent years have seen the modernisation of mutual and co-operative law, in which I played a small part. I see this Bill as a further step towards providing a modern framework. My right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael) set out clearly the importance of choice in providing models of control and direction for social entrepreneurs. That is exactly what we should do. There are models that work in particular circumstances, and we should not be prescriptive. We should, however, have a modern set of laws that allow people to proceed with certainty. If we are to facilitate the increased use of mutual and charitable organisations to provide public services, however, we need not only to provide the certainty of law but to address how to regulate them. I listened carefully to those parts of the debate that dealt with the merits of a lighter touch, to which I will refer when I discuss a particular local example. Two aspects of the Bill are especially welcome. First, the emphasis on public benefit is absolutely right. I commend the Government’s approach in that regard, and I am not that tempted to take a more prescriptive route. I may have the honour to serve on the Committee, and if I do, I shall listen carefully to the arguments for a more prescriptive approach. I will need some persuading, however, that a looser framework in which experience can be brought to bear might not be better. Secondly, the greater freedom to trade that charities will have is welcome and absolutely essential in the modern day. If we are to encourage the use of such models, however, we need to consider how their functions are to be regulated. The tools to be used must be proportionate to the purpose in which we are engaged. Normally, small charities would carry little risk. However, my experience indicates that a deliberately light touch can attract those wishing to pursue their own interests with minimal observation, to the extent of having no proper means of compelling even such basic methods of accountability as filing accounts and holding appropriate governance meetings. I shall return to that later. Running a small charity can also be a frustrating activity, and it is only human nature for some to feel inadequately rewarded for their efforts and to feel that perhaps there are other routes to enhance their circumstances in recognition of their efforts. Events in my constituency—I am sad to hear that I am far from the only Member to criticise the commission in this regard—suggest that the commission has only modest tools and rather less will to address those sorts of instincts. That has led me to suggest alternative models of control to those who are interested in establishing voluntary groups in my area. I am afraid that, because of my experience, I have not suggested that people use charitable vehicles for their purposes. Because of what I have seen, I prefer other, better regulated bodies to be used. That also led me to oppose vehemently leaving to the Charity Commission the regulation of trusts that might run individual or groups of state schools. I felt that that was a wholly inadequate approach to the regulation of trusts, and I was relieved that the Government conceded at the last minute that Ofsted would have a function of inspecting trusts as well as the schools for which they were responsible. I urge that further thought be given to how to identify risk of malpractice, even in relatively small charities. One approach that I commend is to insist on at least the basic provision—I do not demand audited accounts—of accounts of some kind. Another is to insist on all active charities holding appropriate governance meetings—which do not have to be frequent, but should at least be annual—to determine their continued activity and their officers. I shall press those and other arguments in the Committee if I have the honour to serve on it.