Charities

Oral Answers to Questions — Duchy of Lancaster – in the House of Commons at 11:30 am on 1st April 2009.

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Photo of David Jones David Jones Shadow Minister (Wales) 11:30 am, 1st April 2009

What assessment the Charity Commission has made of the effect of the economic downturn on charities.

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Photo of Kevin Brennan Kevin Brennan Parliamentary Secretary (Cabinet Office) (Third Sector)

The Charity Commission recently published its second economic survey of charities, which showed that just over half of the charities surveyed are feeling the impact of the downturn. While 30 per cent. of those surveyed have seen their incomes decrease, 32 per cent. say that they have already taken steps to combat the impact of the downturn. The full results of the survey are available in the Library of the House.

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Photo of David Jones David Jones Shadow Minister (Wales)

As the Minister has indicated, the economic survey revealed that charities were feeling the impact of the downturn, but 20 per cent. of them reported that they were experiencing increasing demand for the services that they offer. Given the increasing importance of the third sector in delivering what are often core services, can he say what the Government are doing to help ensure that those services are maintained in the downturn?

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Photo of Kevin Brennan Kevin Brennan Parliamentary Secretary (Cabinet Office) (Third Sector)

I am grateful to the hon. Gentleman for that question. Although the survey showed that 5 per cent. of charities reported that they had had to cut services or were holding off new services as a result of the downturn, only 2 per cent. reported that they had had to reduce staff during the recession. We have introduced our "Real Help Now" recession action plan to meet the demands of organisations in the third sector, as they have made it clear that they are worried about the increase in demand at a time when it is possible that their income will fall. The package includes a modernisation fund to help charities meet the challenges of the recession and a fund to help charities in the front line that are working in the most deprived areas, as well as schemes to increase social enterprise and volunteering.

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Photo of Adrian Bailey Adrian Bailey Labour, West Bromwich West

Although the recession is having an impact on potential funding streams for charities, does my hon. Friend agree that they may also be affected by a rise in the demands made on them by people who become unemployed? Another effect of the recession may be that people leaving jobs might want to contribute their skills to the charitable sector. It is most important that the sector is geared up to maximise the benefit and the potential that it can deliver to both groups. Will he say what is being done about that?

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Photo of Kevin Brennan Kevin Brennan Parliamentary Secretary (Cabinet Office) (Third Sector)

As part of our recession action plan, we have made available, together with the Department for Work and Pensions, up to £10 million to broker volunteering opportunities for people who become redundant during the recession. That will enable them to learn new skills and offer some of the skills that they have already to the charitable sector. That is extremely important, as is the fact that charities must consider how best to modernise themselves as they respond to the downturn. That is why, at their request, we introduced the £16.5 million modernisation fund that will help them to work together more closely, for instance by occasionally sharing back-office functions or possibly, where appropriate, merging operations.

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Photo of John Howell John Howell Conservative, Henley

The Prime Minister promised in his Romanes lecture in Oxford that science would somehow be exempt from the recession's effects. Can the Minister say how that is likely to play out for charities that provide scientific research?

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Photo of Kevin Brennan Kevin Brennan Parliamentary Secretary (Cabinet Office) (Third Sector)

I am sure that the hon. Gentleman is one of those hon. Members—they come from all parties—who agree that charities make a huge contribution to scientific research in this country. The Government have been extremely progressive in creating an environment in which the third sector has been able to develop research, especially in medicine and genetics. The Prime Minister is absolutely committed to ensuring that this country is one of the best countries in the world for scientific research.

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Photo of Derek Wyatt Derek Wyatt Labour, Sittingbourne and Sheppey

I have more than 200 charities in my constituency. Given the success of directgov.uk in corralling websites across Parliament and Government, would it be possible to do the same for charities? Could some of the software used in directgov.uk be made available for charities on a portal?

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Photo of Kevin Brennan Kevin Brennan Parliamentary Secretary (Cabinet Office) (Third Sector)

I am glad that my hon. Friend has given me an opportunity to tell the House that we are introducing a new funding portal. As a single gateway for third sector organisations, it will direct them to appropriate funding. I am working with the Parliamentary Secretary, Cabinet Office, my hon. Friend Mr. Watson, to ensure that it will fit in with the digital programme that the Government already have in place. My hon. Friend's question also gives me an opportunity to announce that measures being put in place today will enable smaller charities to cut up to £5 million of red tape.

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

It is clear that many charities are having a really tough time because of the recession. It has now been admitted that the Financial Services Authority knew of the risks with Icelandic banks as long ago as the beginning of last year, at which stage it informed both the Treasury and the Bank of England. Why were charities and the public not warned of the risks of investing in those banks? Will the Minister apologise for that failure, which has accentuated the financial woes that charities now face?

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Photo of Kevin Brennan Kevin Brennan Parliamentary Secretary (Cabinet Office) (Third Sector)

I have had the opportunity to meet representatives of the charities involved in the "Save Our Savings" campaign, and I have also met MPs who have charities in their constituencies that have been affected by the Icelandic bank problems of recent months. The Government are continuing to listen to the concerns of third sector organisations whose investments are tied up in the administrative process. I know that my hon. Friend the Economic Secretary to the Treasury met representatives of some of the affected charities just last week, and that he is considering the outcome of that meeting.

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Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

Listening is all very well, but sorry still seems to be the hardest word. Charities face a really tough time, so is it not doubly important that the Charity Commission monitors effectively the links between charities and violent extremists? Charities rightly have special status, which we all support, but at a time when funds for them are limited, it is important that they are bona fide. Will the Minister ensure that action is taken against charities such as Green Crescent, which seems to have been supporting terrorism in Bangladesh?

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Photo of Kevin Brennan Kevin Brennan Parliamentary Secretary (Cabinet Office) (Third Sector)

Links between charities and terrorism are, of course, completely unacceptable, although extremely rare, as I am sure the right hon. Gentleman would agree. The Charity Commission takes any such allegations seriously. It published a counter-terrorism strategy that was updated last year, and it works closely with police and other agencies. Green Crescent, which he mentioned, is subject to an ongoing investigation by the Charity Commission, which has already taken action to freeze the charity's bank accounts and has suspended a trustee. It is important to maintain investment in the third sector during this downturn. The £100 million cuts to the Cabinet Office budget, which would have come in today, certainly would not be the way to help the third sector at this time.

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