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Third Sector Review

The hon. Gentleman mischaracterises the proposals, but I shall allow the Minister to explain the extent to which he does so. The third issue on which I want to focus is the review's proposals to create a healthy environment for the third sector. I welcome the proposed £80 million investment in supporting organisations for front-line charities. Often, the micro-charities that have been so praised in this debate simply do not have the infrastructure to enable them to do all the things that they aspire to do. They require underpinning support, ranging from meeting rooms to IT support and training. The review's proposal is sensible, but I ask the Minister to take care to ensure that, when making the investment, he does not create a self-fulfilling circle of slightly smug organisations that look inwards and not outwards. There is a serious risk. I hear wonderful organisations in my constituency who work with some of the most deprived, marginalised and excluded communities express concern that the council for voluntary service is always using its own rooms so they can never get somewhere to meet, or that the CVS's discussion with the local borough council is a closed loop that does not include small organisations. It is vital that this investment is used to help people to reach out. I would suggest, for example, that it is used to help develop different models of accountability for voluntary organisations. At present, many of the funding streams are frankly oppressive. If we could find simpler ways of allowing local voluntary organisations to provide appropriate accountability for taxpayers' money, we could make it easier to give money. That is a problem that is worrying Government to some extent. In their innovative proposal to provide endowment funds and community network funds, I read between the lines and become anxious about accountability and processes. The initial paper that was published in June suggested explicitly that there would be £50 million of capital grant in"““endowments for community foundations to make sure they can provide grants in the future for community groups.””" That seems to be happening rather slowly, and I am anxious about that because I am keen on making progress as swiftly as possible. There is a good reason for that. At the moment, many community foundations, certainly in Berkshire, are operating through the local network fund. Local network funds will run out in March 2008, which means that foundations will have to have made their final grant-making decisions by that date and from then on will no longer need the staff who make grants. Unless some of these funding streams are in place in time for them to continue, we will lose a significant on-the-ground source of expertise that can facilitate such small, targeted, grant-giving micro-organisations. Community foundations solve problems that are often under the radar of local authorities, often developing witty and intelligent ways of finding funding. I urge that this resourcing should happen quickly. This is an intelligent paper in terms of providing resources to local organisations. When I speak to charities, I always say, ““Find lots of places to get money from. Don't just be a one-legged stool, because otherwise what will happen is what happened to Battersea law centre””, which I mentioned earlier. Wandsworth council cut off its grant and it was about to fall over until one of the grant-making trusts that I was involved in gave it a grant. Following that, it developed the capacity to raise money from private law firms, charities and trusts, and has continued successfully ever since without Wandsworth council. It is very important that organisations have sources of income that are as diverse as possible. They should generate their own income through social enterprise, secure grants from charities, get money from the public sector, find sources of money from businesses, and so on. The proposals on funding in the paper will help with that. There is a particular concern about community assets. Community organisations should be able to acquire assets and use them in order to generate funds. I am sometimes depressed about effective voluntary organisations failing to milk their assets sufficiently well. We should put pressure on them to do that, but, as a caveat, we also need to ensure that where a public asset is put into a community organisation's plans, there is a guarantee about its return to the public if that particular community organisation comes to an end. I hope to be reassured by the Minister who sums up that there are proposals to do that. I have spoken a lot about the important role that I think local endowment funds can play. One of the reasons why I think that and why I welcome the proposal for that, is that they can generate charitable giving. We need to increase and normalise the degree of such giving in the UK. This proposal will help to do that, but we should examine other proposals that also achieve that. There has recently been much talk in Parliament about the Government taking money off people after they have died, but they should encourage people to give away money before they die. We should urge the Chancellor to examine the model of the remainder trust or living legacy, which is used in the United States, to encourage people not only to retain security in their lifetime, but to give substantial assets to charitable causes. There are imaginative ways in which we can encourage charitable giving without nationalising. I once heard Darcus Howe powerfully, and in his inimitable voice, say to Ken, when talking about the Greater London council and voluntary organisations, ““Don't you nationalise our efforts.”” He meant that statutory takeover can diminish human effort, which is at the heart of charity. The interesting thing about this strategy is that it is good at avoiding such traps. I urge the Minister to go further down the routes I have mentioned to ensure that in avoiding those traps, the Government avoid some of the little traps in their good strategy that could diminish its effect.