Public Bodies Bill [HL] — Committee (7th Day)

Part of the debate – in the House of Lords at 3:30 pm on 28th February 2011.

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Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative 3:30 pm, 28th February 2011

My Lords, I thank the noble Lord, Lord Warner, for introducing this amendment, and the noble Lords, Lord Dubs and Lord Evans of Temple Guiting, for their contributions, which give me an opportunity to explain how the Government see the role of NESTA. It is government policy to reduce the number of NDPBs and NESTA did not meet the Cabinet Office criteria for remaining an NDPB. However, NESTA and its activities are still considered highly valuable to UK growth and innovation. The Government are clear that they want that work to continue. That view will be widely held throughout the House.

We have no intention of winding down NESTA and its activities. Instead, the proposed reconstitution of NESTA as a charity, with its £329 million endowment held in a separate charitable trust, will allow it to continue its valuable work. Far from halting its activities, establishing NESTA as a charity preserves its ability to deliver its public benefit mission at no cost to the taxpayer. I confirm the analysis of the noble Lord, Lord Dubs, that there is no question of saving the taxpayer money in this matter, since the body is independent of taxpayer funding. We can further distance it from government and enhance its independence by making these changes. It will therefore cease to be classified as an NDPB and as part of the public sector. We have already worked closely with NESTA to develop the detail of this reform. We will seek Charity Commission approval for the proposed new model. This model builds on that successfully used by the Millennium Awards Trust, which similarly derived much of its funding from the National Lottery. We want to build on that model.

Once NESTA becomes a private sector charity, the Government will no longer select or appoint the trustees. The separate charitable trust, which will be created to hold the endowment in the public sector, will have a protector. The intention is for the protector to be appointed by Ministers and for NESTA the charity to be the trustee of the trust. The role and powers of the protector are yet to be defined but they will be based on the Millennium Awards Trust model. This is a very positive step that is being taken by the Government. We firmly believe that this model represents an opportunity for NESTA to continue its success. However, we also believe that NESTA's current status as an NDPB is by no means a prerequisite for it to continue to flourish. Establishing NESTA as a charity is part of the Government's wider commitment to hand power to the big society and not simply to rely on central bureaucracy to control public life. The Government's proposed model reflects this objective while safeguarding the public interest in the large endowment managed by NESTA.

I have been asked by many noble Lords about the nature of the discussions that we have had with the Charity Commission. There was an initial discussion with the Charity Commission last December and there has been an exchange of correspondence since then. This is designed to ensure that the objects of NESTA are charitable. BIS and NESTA itself have carried on these discussions. They are positive and we are confident about their outcome. While there have been no public consultations, officials worked closely with NESTA's senior management team to develop the charitable option and NESTA consulted informally with its board of trustees, which is supportive of the change in status. NESTA also consulted several key stakeholders. Its staff were informed on 14 October 2010, following the Government's announcement on public bodies reform. Since then NESTA has held regular meetings with staff to inform them of the transitional process and provide the opportunity to address any questions or concerns that they had.

In a statement released at the time of October's announcement, NESTA's chair, Sir John Chisholm, said that the board welcomed the decision and described it as an extremely positive move for NESTA. The statement also contained endorsements from Sir James Dyson and from Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations. Since then, NESTA has written to key stakeholders and engaged with the public via its website and social media sites, giving details of the proposed transition and welcoming any questions regarding the change in status. In the light of these considerations, I hope that the noble Lord will feel able to withdraw his amendment.