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Third Sector Review

We have had an excellent debate. Members in all parts of the House have made it clear that the third sector is alive and kicking, and all the better for it. All around the country, in every community, it is standing up for people, campaigning for change, creating stronger communities, transforming our public services and building many new social enterprises. As we heard from all who spoke today, the third sector makes an enormous contribution to our society, to our economy—as we were reminded by my hon. Friend the Member for Loughborough (Mr. Reed)—and our environment. As one who has worked in the voluntary sector and run a social enterprise, and as one of many Labour and Co-operative Members who have spoken in the debate, I feel privileged to be the Minister responsible for the third sector. Ours is the only country to have such a post. Last night I had the privilege of presenting the Social Enterprise of the Year award to Divine Chocolate, which makes and sells fair trade chocolate and supports thousands of cocoa farmers in Ghana. It was a great occasion to celebrate the achievements of a growing movement in the sector, which involves 55,000 social enterprises—including many community co-operatives—with a turnover of £27 billion. I also had the privilege of presenting awards at the Third Sector and Charity Times gala evenings in September. Both occasions recognised the wonderful work of volunteers, voluntary organisations and community groups in every walk of life, up and down the country. Individual volunteers as well as organisations give their time—in some cases, their whole lives—to the service of others. As was pointed out by my right hon. Friend the Minister for the Cabinet Office, the third sector is the glue that binds us together: 35 million people who make regular donations of charity, 20 million volunteers, more than 600,000 paid staff and nearly half a million organisations driven by their values and passionate in their desire to meet people's needs, build stronger communities, give a voice to the voiceless and change society for the better. The truth is that successful, thriving communities rely on a successful and thriving third sector. We have a strong economy, and our public services, performing better than ever before, are essential to a fair and prosperous society, but they are not enough. For social justice and a sustainable economy, and for every individual to be the best that he or she can be, we require the unique contribution of third sector organisations—reaching out to people whom Government often cannot reach, being flexible, responding to people as individuals with diverse needs, developing new ways of tackling the hard issues that still confront many communities, and driving and energising the campaigns that change our society for the better, Our vision is simple. It is the vision of a thriving third sector, robust in its independence, growing in size, flourishing in confidence, and becoming stronger in new partnerships with local and central Government. It is that vision that is spelt out in our third sector review, which was published in July this year after the largest consultation ever conducted with the sector. Our vision is of Government action that recognises the needs of the diversity of organisations in the sector and the different roles that they play in society. It is the vision of a new and genuine partnership between Government and the sector—not a one-sided partnership to control the sector or a neglectful partnership that leaves it to sink or swim alone, but a partnership that is about working together to improve people's lives and creating an environment that enables the sector to thrive: a relationship that celebrates the independence of the sector and its right to campaign, and that works with it to achieve common goals. As I have said, this has been a very good debate. The hon. Member for Tunbridge Wells (Greg Clark) referred to the contribution of my hon. Friend the Member for City of Chester (Christine Russell). We heard not only an eloquent description of her personal history of involvement in the third sector, but a moving account of the work of voluntary organisations in the supporting people programme, and the way in which residents were empowered and skilled in her community. Both she and my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) spoke of the role played by credit unions—small co-operatives working in local communities and reaching out to people in times of crisis. My hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins) gave a very good description of what often happens in voluntary organisations: a user of a service—her example was Sure Start—becomes a volunteer in that service and may go on to become a part-time employee, making a transition that would not otherwise be possible. Other hon. Members, such as the hon. Member for Rochford and Southend, East (James Duddridge), mentioned the importance of umbrella bodies and local infrastructure organisations. They provide vital training, support and advice to small voluntary community groups on the front line, and that is why the Capacitybuilders fund included in the review is so important. The hon. Member for Broxbourne (Mr. Walker) was one of many hon. Members to talk about the importance of volunteering, and I quite agree that it is a critically important part of our civil society. I am especially enthusiastic about young people undertaking volunteering, a subject about which my hon. Friend the Member for West Bromwich, West (Mr. Bailey) spoke. Last year, the youth volunteering charity v was launched with Government funding, and it has already created more than 200,000 volunteering opportunities for young people all over England. This year, we will launch a new national youth volunteering programme to guarantee provision for youth volunteering across the whole of England. My hon. Friend the Member for Loughborough reminded the House of the importance of the role that volunteers play in the world of sport, as they do in many other spheres. All hon. Members will be aware that, this winter, many children and young people in our constituencies will be out playing football, rugby or whatever sport it is that they want to participate in, but the referees, touch judges, coaches and people who wash the kit are the unsung heroes of our communities. My hon. Friend is one of them, and they are the people who make it possible for so many youngsters to take part in sporting activities. I was dismayed to hear my hon. Friend the Member for South Swindon (Anne Snelgrove) describe how voluntary youth organisations in her constituency were being cut by the local authority. The opposite has happened in my county: statutory youth organisations have been cut and voluntary youth organisations have been asked to pick up the pieces and deliver the same service on the cheap. That is not an acceptable way forward for voluntary organisations at a local level. My hon. Friend also reminded us of the contribution made by local companies in her constituency, and I am sure that the same is true across the country. She made a point of mentioning payroll giving, which we should do more to enhance. Interestingly, some 370,000 employees donated £27 million through payroll giving in 1997-98, and those totals had risen to 605,000 and £85 million in 2005-06. That shows that more people are donating through the payroll giving scheme, but we could do better in that regard. My hon. Friend the Member for Edinburgh, North and Leith also mentioned employee volunteering, and I agree that we could do more in that important area. My right hon. Friend the Prime Minister has charged Baroness Neuberger with the task of looking at how public sector employees might improve the quantity and quality of volunteering in their organisations. I turn now to deal briefly with some of the points raised by the right hon. Member for Horsham (Mr. Maude). He mentioned the role played by the Department for Work and Pensions pathways to work procurement, but I need to put him right on a couple of facts. In phase 1, two out of 15 contracts for prime contractors were awarded to third sector organisations, accounting for some £40 million, or 17 per cent. of the total budget. However, the subcontracting story for the other organisations is also very positive, with 164 of the 374 subcontractors coming from the third sector. That shows that the accusations made by the right hon. Member for Horsham and the hon. Member for Tunbridge Wells (Greg Clark) that the third sector was not playing its part in delivering the contracts were entirely wrong. Indeed, we have asked Mavis McDonald, a former Cabinet Office permanent secretary, to conduct a review, and we are working to ensure that we learn all the lessons from the past when we go through the commissioning processes. However, I am confident that we are going in the right direction. The right hon. Member for Horsham also mentioned the National Offender Management Service. NOMS has allocated some £600,000 a year from next year, over three years, to provide strategic funding for national third sector infrastructure organisations to advise and support a diverse range of voluntary and community organisations that are working with offenders. The criteria and planning of the programme will be developed with third sector organisations, which seems to be a positive development. We touched a lot on encouraging social enterprises. The hon. Member for Lewes (Norman Baker) and my hon. Friend the Member for Loughborough mentioned the importance of social enterprises in the work of regional development agencies. I confirm that I met the RDA chairs yesterday and discussed how they were spending some £6 million of both office of the third sector resources and their resources to ensure that social enterprises feature large in their work through Business Link and to promote social enterprise in their regions and the new integrated regional structures that they are developing. My hon. Friend the Member for West Bromwich, West described very well the role and history of the Co-op movement, as one part of social enterprise, on meeting needs and campaigning for change over 200 years. The hon. Member for Caernarfon (Hywel Williams), who is not in the Chamber, described two social enterprises in his constituency that make a real difference to people's lives. Many people talked about funding and supporting the environment for a healthy third sector. Let me say a few words about gift aid reform. In 2000, the Government made several improvements to the gift aid scheme. The value of gift aid for charities has increased from £135 million in 1996-97 to more than £860 million in 2006-07. I am pleased that there has been a remarkable success story under this Government. In this year's Budget, the Government announced that they would consult the charitable sector on measures to increase the take-up of gift aid. Contributors to the consultation, including hon. Members who are in the Chamber, have highlighted concerns about the system and areas in which they would like improvements. We expect to publish a summary of responses later this autumn. We would expect to discuss any proposals arising from the consultation with the sector ahead of next year's Budget. Several hon. Members raised concerns about the Compact. I can tell the right hon. Member for Horsham that the commissioner left his post as chair of the commission for personal reasons, because of the time required for the post. However, I am pleased that we have succeeded in appointing an interim commissioner pending public competition: Helen Baker, who is a non-executive director of the commission. I affirm that there is still a strong case for an independent organisation or entity to take operational responsibility for the Compact so that there can be an impartial voice for its successful implementation. We remain fully committed to the Compact. The review announced a continued focus on the Compact as a means to build the relationship with the third sector at all levels of government. We will provide new investment for the commission for the Compact over the comprehensive spending review years, which will be set out later this year. My hon. Friend the Member for South Swindon mentioned Compact week, which will be at the beginning of November. I hope that that will be another opportunity for central and local government organisations to affirm their commitment to implementing the Compact proposals. There will be an annual review of the Compact in December when Ministers from all Departments will meet the third sector to discuss further progress. We heard about the importance of the stability of funding and full cost recovery. The hon. Member for Tunbridge Wells was a little negative about that—it is true to say that he was negative about everything. The proportion of Government funding reported as including full cost recovery has risen from 49 per cent. to 57 per cent. The Compact's annual survey shows that the amount of funding based on full cost recovery increased from 25 per cent. in 2002 to 42 per cent. in 2005. Of course, there is more work to be done, but we are demonstrating that we are taking forward work to embed a culture change across Government in the way in which we work with the third sector, including through programmes such as those to train commissioners. On the three-year funding, I remind the House that as Minister with responsibility for the third sector I will report annually on progress across Government to the Chancellor and the Chief Secretary to the Treasury, who will write shortly to Departments to remind them of the Government commitment that submissions would be made to us by the end of the year on how three-year funding is being implemented, and how it is being cascaded to other agencies. The hon. Member for Rochford and Southend, East asked a question about the charitable status of independent schools. The Charities Act 2006 makes clear the principle that charities must be ““for the public benefit””. Independent schools are just one group of charities in whose case the presumption of public benefit is being removed. In any decision on whether charities, including independent schools, are ““for the public benefit”” and so qualify for charitable status, the key is access. To pass the public benefit test, an organisation has to be accessible to a sufficiently large section of the population. I look forward to the Charity Commission—the independent regulator—producing its final public benefit guidance later this year. Finally, let me turn to campaigning.