Stronger Charities for a Stronger Society (Charities Committee Report) - Motion to Take Note

Part of the debate – in the House of Lords at 3:09 pm on 16th January 2018.

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Photo of Baroness Pitkeathley Baroness Pitkeathley Deputy Chairman of Committees, Deputy Speaker (Lords) 3:09 pm, 16th January 2018

My Lords, I have worked in or with the charitable sector for most of a long working life, and I begin by declaring my interests as set out in the register and drawing attention to my position as president of the National Council for Voluntary Organisations. I was therefore delighted to be appointed to chair the House of Lords Select Committee on Charities. I most warmly thank the members of the committee, many of whom are speaking in this debate, for their commitment, diligence and wisdom. I also express thanks on their behalf to our excellent special adviser, Rosie Chapman, and our staff, Matt Korris, Simon Keal and Gabrielle Longdin. Their skill and professionalism were much valued by us, and thanks particularly to Matt Korris as he took over at short notice following the illness of a colleague. Our thanks are also due to those who submitted evidence, appeared as witnesses and hosted our visits outside Westminster.

The committee managed to reach consensus after much robust discussion, and we came up with 100 conclusions and 42 recommendations. I think few of your Lordships will disagree with the statement at the beginning of our report:

“Charities are the eyes, ears and conscience of society. They mobilise, they provide, they inspire, they advocate and they unite”.

The timing for the committee was significant. It was recognised that we are living in a time of profound economic, social and technological change and that the environment in which charities work is altering dramatically. In addition, some high-profile failures in the charity sector had eroded trust and, at the same time, newspapers published a series of reports alleging that some of the best-known charities in the UK used exploitative and unethical fundraising methods, so it was the right time to set up a committee which focused on the charitable sector. I have been told many times that the report—we called it Stronger charities for a stronger society—is an important milestone for the sector.

In the limited time available, I can give only a flavour of our 42 recommendations, but as the Government will respond to the debate, I will concentrate on those recommendations to which we hope to achieve a response. Those are, for example, that better government consultation with the sector is vital—it must be improved—that commissioning and relationships within the contract culture must also be improved and that more encouragement should be given to consortia in the bidding processes. A consultation should be launched on employers giving time off for trustee duties. The impact of devolution and of Brexit on the charitable sector have scarcely been considered and must be addressed.

We also comment on the Charity Commission, itself going through major changes at present and considering whether to charge charities to part-fund its services. We raise concerns about that and emphasise that if it goes ahead, we need to be clear what the benefits for charities would be and must ensure that no burden falls on small charities.

Your Lordships will know that the normal process is for the Government to respond within three months. As the general election intervened, we understood that there would be a delay, but I do not think we could have anticipated a delay of almost 10 months in the Government’s response, for which the newly appointed Minister apologised when the response was eventually produced. I am bound to say that when committee members read it, their most frequent reaction was, “What on earth took you so long?”. The Government’s response to the committee’s inquiry addresses its recommendations point by point, it is true, but most recommendations are dealt with only briefly.

There is general recognition of the importance of the charity sector, although little reference to the specific challenges it faces in the current economic and fiscal climate. It acknowledges that the sector is growing but not what is driving the growth. Increased demand for services and support from charities is mentioned only in passing, while our witnesses constantly emphasised that charities are being asked to do more with fewer resources, and the problem of getting even their core costs funded.

The response lacks a sense of co-ordination regarding how the Government, and particularly the Office for Civil Society, plan to respond to some of the challenges and opportunities the sector faces. There are repeated commitments to consult or work with charities, sector bodies and other stakeholders to consider how to strengthen charities, but no reference to how those commitments might be monitored or followed up, or the likely timeframes.

Overall, the response is largely focused on actions that the Government have already taken or are considering through a proposed civil society strategy. There is little or no detail as to the concrete steps the Government intend to take to enact or support the recommendations they agree with. Absent also from the response is a sense of the Government’s priorities for the charity sector and how, for example, they envisage charities’ role in civil society might change, and their increasing role in the delivery of public and other services.

I freely admit to disappointment in the government response, but I take some consolation from the recent announcement that the Government are preparing a civil society strategy. In her letter to me accompanying the response, the Minister acknowledged that the report will be,

“extremely helpful as we set the direction of our work preparing for the strategy”.

I am sure the development of a new strategy is the Minister’s own idea, but I feel that the Select Committee I chaired can take at least some credit for making her aware that better understanding of the charitable sector and the problems it faces is vital if it is to fulfil its potential.

The Minister goes on to say that this is an important opportunity to improve partnerships between sectors and local communities to build a stronger and fairer society, and that the strategy will recognise the value that civil society brings and help to unlock its enormous potential. Amen to that. But can the Minister update the House on the proposed strategy? What is its timetable? How will it be consulted on? Will some kind of guiding or advisory body oversee it? How will the sector be represented and consulted? I cannot emphasise too strongly that no strategy, however well intentioned, will be of any value at all unless put together with the sector, which in turn represents the needs of the beneficiaries of charitable services, who know about their own needs and what services are required to meet them.

I know that today, the Minister, for whom I have the greatest respect, will promise this co-operation, but I am afraid that the Government have form on this. Their decision not to amend the lobbying Act in the way my noble friend Lord Hodgson recommended—I call him my noble friend, although he sits on the other side of the House—which most charities thought was the best way to safeguard that precious function, being the voice of their beneficiaries, was a great disappointment to charities. The Government have promised to work with charities to help them understand the legislation and give them the confidence to campaign. As yet, I regret to say, we have seen no sign of this, so my confidence in their commitment to partnership is a bit weak.

We also made recommendations about the Charity Commission, and I was grateful for its response—also recently received—in which it accepted most though not all of my committee’s recommendations. However, here I must raise an issue of particular concern to the charitable sector. The current chair, with whom the committee had extensive contact during our inquiry, is standing down at the end of this month. In due course, I am sure there will be opportunities to pay tribute to William Shawcross for his sterling service to the commission. The process of appointing a successor has been going on for several months, and it is understood that the names of suitable candidates were approved by the DCMS at the beginning of December and passed to No. 10 some four weeks ago at least. Still no announcement has been made. This is extremely undermining for the commission’s staff and, of course, unsettling for the whole sector, as this is a most significant appointment for charities.

I have two questions to ask the Minister about this, and if she is not able to answer today I hope she will get the relevant information and write to me with all dispatch. Is the delay simply because the appointment is seen as insufficiently important to come to the top of someone’s in-tray, at a time when, admittedly, No. 10 has a lot else on its mind; or is some kind of political influence perhaps being exerted? I am sure she would agree that this would be highly inappropriate in the case of an appointment which must, above all, be totally neutral politically. When will a decision about this important post be made?

So I have had a few moans about things and I have no doubt that my colleagues will have a few more, but there have been many positive outcomes since the report was published.

Many of our recommendations, including on governance, were for the sector itself and did not have to wait for a government response. Good governance is essential to a strong charity sector. Charities need robust structures, processes and good behaviours in order to deal effectively with their beneficiaries. We call for new efforts to provide training and development for trustees and recommend that charity boards should be more engaged in self-reflection, checking out how they operate, doing appraisals, examining their behaviours and measuring their impact. We urge infrastructure bodies to identify any shortcomings in the provision of such training and advice and do more to raise awareness of what does exist.

We were very concerned about the lack of diversity on many trustee boards. Of course, boards should reflect their beneficiaries in terms of ethnicity, age and background but when the commonest way of becoming a trustee is still because someone asks you, boards are almost bound to be limited to the same kinds of people. As we know, charities are concerned about the supply of trustees. How do you get them? Where are they going to come from in the future? We need to emphasise more that this is a two-way street. You give something as a trustee but you get something back. It may be something for your CV; recovery from illness or bereavement; learning a new skill. These are perfectly valid reasons for becoming a trustee but those recruiting should be open about this.

My committee felt it was most important to do a lot of work on increasing the sector’s self-confidence—to give acknowledgment and recognition. I am therefore very pleased that the report has been so well received by the sector. In a pretty difficult environment for charities, the consensus achieved seems to have been particularly helpful. Several commentators have said that it is, in effect, a road map for strengthening the sector and I very much hope that is how it can continue to be used. I am delighted to say that the sector has taken up the challenge and is using the report to help further the recommendations. NCVO and ACEVO convened a group of membership organisations and set up a series of working groups to see how this joined-up approach can help us make the proposals in the report a reality. They include governance, diversity, leadership, campaigning, public services and volunteering.

The willingness of the charitable sector to work together, to examine itself and put its own house in order, is a great example which should be recognised and valued. The sector itself knows that trust in charities took a knock in recent years; it may be getting better but it can never be taken for granted. Levels of probity and transparency must be constantly monitored. Charities’ confidence in themselves is important in this regard, and I hope the report has increased that. I know that we shall hear from other contributors to this debate about their own concerns, so I will conclude with a quote from the CEO of the Big Lottery Fund, who told us that:

“You cannot run the Big Lottery Fund without, every morning, being overwhelmed by what people in this country achieve in the charity sector. It is glorious and a wonder”.

I am sure we would all agree

Charities face greater operational and environmental pressures than ever before but their principles are enduring and they have always helped society through periods of upheaval such as the one we face at present. I have no doubt they will do so again, but they must be recognised and supported in the vital work they do. I beg to move.