[David Amess in the Chair] — Public Sector Funding

– in Westminster Hall at 12:00 am on 23rd March 2011.

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Motion made, and Question proposed, That the sitting be now adjourned.—(Brooks Newmark .)

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government) 9:30 am, 23rd March 2011

I am pleased to have secured a debate on the important topic of the effects on the voluntary sector of reductions in public sector funding. I am also pleased to serve under you as Chair, Mr Amess.

In the current economic context, a thriving community and voluntary sector is vital. Locally, people with debt problems need their citizens advice bureau, carers need their carers centre and people need support from organisations that work with children with special needs or with people who have long-term conditions. The previous Labour Government have a proud record of support for a stronger voluntary sector. We doubled the funding to the sector from £5.5 billion to £12 billion in 2009, and created the first ever Minister for the third sector, with an office putting the third sector at the heart of Government. In addition, we gave the third sector a strong voice in Government through the Third Sector Partnership Board.

We also supported social enterprise. At the end of 2010, there were approximately 62,000 social enterprises in the UK, contributing at least £24 billion to the economy and employing 800,000 people. Labour did much to boost and encourage volunteering in our communities when we were in government. Some 850,000 charity trustees serve on the governing body of a charity, and 780,000 paid staff work in the sector to provide services and to support and encourage volunteering. There are also 2.7 million volunteers, on whom many small charities rely. For example, my local citizens advice bureau in Walkden has 20 volunteers a day working with staff who are trained debt advisers or are trained to offer legal advice.

Some 40% of adults report that they have volunteered formally at least once in the past 12 months, with 25% volunteering formally at least once a month. However, despite the coalition Government’s rhetoric about the big society, cuts in funding from central and local government are damaging the sector. It has been estimated that the voluntary sector is facing cuts of £1.1 billion just this year, rising to more than £3 billion next year. There are also real fears for the capacity of the voluntary sector. At a time when the Government are talking about localism and creating opportunities for charities and community organisations, the sector will almost certainly do less this year than in previous years.

The collaborative website, www.voluntarysectorcuts. org.uk, is mapping those cuts. One of them is a grant cut of £500,000 from the Office for Civil Society to the volunteering support organisation, TimeBank. I want to discuss that as an example of what initiatives are affected when such a cut is made. TimeBank was set up in February 2000 and was funded by the Home Office and the BBC as a support agency to inspire a new generation of volunteers. Its vision is to make volunteering part of the fabric of everyday life. In the past 10 years, TimeBank has helped and encouraged 30,000 people into volunteering. For example—this is a good example to consider at the moment—in 2004, TimeBank asked people to back London’s bid for the Olympics and 14,000 potential volunteers responded. That has now risen to 100,000 people who want to volunteer for the Olympics. In the same year, it recruited 1,900 people aged 20 to 35 for volunteering opportunities with hospices. In 2008, 1,400 parent volunteers were recruited to mentor other parents for Home-Start. TimeBank offers tailored support to anyone interested in volunteering or running a dedicated help desk and website. The organisation has established good practice and provides space for local, regional and national sharing of experience. It runs a dedicated help desk and website to signpost people towards volunteering opportunities and to increase accessibility and engagement.

TimeBank recently launched something called the volurater, which is a forum like TripAdvisor that allows people to review their volunteering experience. TimeBank says that the cancellation of its funding from the Office for Civil Society means that its support functions will be severely undermined. The staff and resources for that work have been paid for from the core funding that it receives from Government. All its other funding streams are ring-fenced for programme or project delivery, so the loss of £500,000 of grant funding puts a significant proportion of TimeBank’s work under threat. As I said, the volurater is a review tool for volunteers to rate their volunteering experiences. It aims to help to drive up standards in volunteering across the board and to give volunteers a voice. No other organisation has such a tool for volunteers, and it is now under threat.

Junction49 is also under threat. It is a web platform aimed at young people that acts as a type of Facebook for volunteers. It was set up in 2007, and it allows young people to share and develop ideas, and to make a difference in their communities by setting up volunteering projects. Junction49 has supported 1,145 young people, and helped them to volunteer through advice, support and connecting them with other like-minded people. TimeBank’s website and newsletter are also at risk. The website receives 16,000 new visitors a month, and is designed specifically to help people to volunteer. The website includes ideas and inspiration, such as a blog, a postcode search for local opportunities and a “how to get started” section. There is also a help desk that is contactable by phone or e-mail, with a dedicated staffing resource to answer questions about volunteering and help people along the way. TimeBank has a monthly electronic newsletter that is sent out to 300,000 volunteers whom it calls time givers, and it includes ideas and tips about volunteering. Regular social media activity—the type of things I have been describing—drives people to the website and raises awareness of volunteering issues and best practice. It also helps with recruiting volunteers and signposting volunteering opportunities.

TimeBank also runs programmes to match people with volunteer mentors. I shall mention two of those that are under threat as a result of the funding cuts. TimeBank has worked in partnership with Carers UK to develop a mentoring programme for new carers, who often feel overwhelmed by their responsibilities. Those two organisations are providing new carers with access to information and advice from a mentor who has been a carer themselves. A groundbreaking TimeBank project called Shoulder to Shoulder supports ex-servicemen and women returning to civilian life who have mental health problems. More than 20,000 people leave the service to return to civilian life each year, and around a quarter of those have a mental health problem. One in five of those have a mental health problem resulting from traumas and injuries that they experienced during their service.

Another valuable area of work for TimeBank is support for businesses involved in employee volunteering. Participating organisations include Sky, Virgin, Vodafone, Sony, T-Mobile and even the Cabinet Office. Years ago, I worked on such a project with the organisation, Business in the Community. I arranged community development assignments for staff from organisations and corporate companies, such as IBM and Marks & Spencer. Support for that type of volunteering from business is needed if such things are to happen. I know how valuable that is, both for the employee who volunteers and for the community organisation for which they volunteer. For instance, in 2008, TimeBank organised T-Mobile employees to help young people who are not in education, employment or training set up their own projects and design a mobile application to tackle a social issue. That work could also be under threat.

In December 2010, the Minister posted a message on Twitter congratulating TimeBank on its 10th anniversary. Cutting one sixth of its funding three months later is hardly the right way to support an organisation with a 10-year track record of innovative support for volunteering. TimeBank’s chief executive has said:

“This decision will hugely undermine the Government’s vision for a Big Society…For the past decade we have made an important contribution to mobilising an army of 300,000 volunteers and to improving the quality of volunteering across the board. Without this vital core funding we will not be able to continue to deliver the level of service that we have based our reputation on and will have to considerably reduce our activities and staff as a result.”

Photo of Emma Reynolds Emma Reynolds Shadow Minister (Foreign and Commonwealth Affairs)

I have an example in my own constituency. Kids in Communication is a youth media group that operates KicFM, and it has recruited 5,000 volunteers in the past decade. I urge the Minister to look at that group with some urgency. It will run out of funding at the end of next week. He has previously mentioned that 50% match funding might be available. If we are going to create a big society and sustain it, we need such organisations to recruit volunteers. By rolling back the funding, the Government are decreasing the number of volunteers in society, which goes against the whole spirit of the big society.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

Indeed, and I thank my hon. Friend for her intervention. I personally believe that some of the decisions to cut grant funding to organisations that support volunteering, such as TimeBank and the one that my hon. Friend has just mentioned, are difficult to understand, because Ministers have talked about encouraging social action and the need to support the community and voluntary sector. In fact, we recently had a debate on the big society in the House. The Minister said:

“I really believe that we have barely scratched the surface of what can be achieved in this country if we strike a more effective and balanced partnership between Government, business and civil society”.—[Hansard, 28 February 2011; Vol. 524, c. 131.]

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I congratulate my hon. Friend on securing the debate. Is the real problem that the Government do not appear to understand the role of the voluntary sector? It is often professional, well run, well organised and extremely hard-working. It brings in lots of money from charities and other places, but it absolutely relies on basic core funding in order to succeed. The Government seem to confuse it with charitable good works in small towns, and that model simply does not apply to complex, urban areas such as the one that I represent.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

Indeed. That is right, if there is an urge, as the Minister has said, to discuss partnerships between Government, business and civil society. I talked earlier about employee volunteering from business in the voluntary sector. That has to be arranged, however, because there is a big, wide cultural gap between the private sector and the voluntary sector. We cannot just leave a new business volunteer to flounder in an organisation. I used to arrange business volunteering as part of a job that I did in the past. I know that someone needs to be the link in-between, so I very much agree with my hon. Friend.

The Minister described one strand of action for the Government as

“encouraging more social action in our communities”.—[Hansard, 28 February 2011; Vol. 524, c. 132.]

How on earth is that going to happen if we cut away the infrastructure of organisations such as TimeBank?

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport)

I congratulate the hon. Lady on securing the debate. She has very clearly outlined the case for volunteers in our society. Every one of us in the Chamber this morning will be aware of the work of volunteers. It seems as if Ministers are diverting money to sports, heritage and arts, and away from voluntary and charity groups and those who do good work in the community. Does she share my concern that there are more worthy cases in relation to the voluntary and charity work that is done in the community?

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

Indeed. I said in my opening paragraph that in the current economic context issues such as debt advice and other ways in which people volunteer in communities and societies are crucial. Volunteering in sports organisations is important, and sport and culture are important too, but in the current context the social function of volunteering roles are vital, so I agree with the hon. Gentleman.

I shall return to the question of how the Government will encourage more social action if they close off financial support to those small—and they are small—but vital charities that support and encourage people to volunteer. I just want to touch briefly on support for carers, which is one strand of the work that TimeBank is seeking to do, and which is under threat. Support for carers is vital and will become even more so, given the cuts and uncertainty that are now affecting us as a result of proposals in the Health and Social Care Bill. Schemes such as the one developed by TimeBank are essential, and working with Carers UK to put new carers in contact with experienced carers could be a lifeline. Such a scheme helps the new carer to care more effectively, which is important in our communities.

Photo of Chris White Chris White Conservative, Warwick and Leamington

With regard to TimeBank, is the hon. Lady aware that it is seeking to set up an initiative whereby MPs can bank their volunteering? Would she support that initiative, as I do?

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

I would certainly support that, but I cannot imagine how the hon. Gentleman thinks that TimeBank will set up new projects if his Government are cutting away its infrastructure funding. It is astonishing that he should raise that today.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

No, let us leave it at that. The Minister and hon. Members have to understand that we cannot remove £500,000 of an organisation’s funding and then expect it to carry on with new initiatives. Clearly, it would not be able to do so.

I was discussing the vital scheme that TimeBank is setting up with carers. The groups with which TimeBank works are crucial in our society, but carers are in a special category. Carers who care for more than 50 hours a week are twice as likely to suffer from ill health, while those who care for a person suffering from dementia or stroke disease are even more at risk of ill health. If we do not support carers, therefore, we are causing additional health problems in our communities. In my local area, there are some 22,000 carers, one in four of whom care for more than 50 hours per week.

How are we to take initiatives if we cut the infrastructure funding for organisations? Last week, the Carers Identification and Support Bill, which I introduced, was not debated because we spent much of the time discussing a string of Bills introduced by Mr Chope. I am sure that hon. Members who are here on Fridays understand that that is a common occurrence these days. There are no new measures to support carers in the Health and Social Care Bill, so how will they be supported? Will the Minister tell us why his Government’s cuts to TimeBank have been made, as they will cause the potential loss of a new way to support carers—people who give their up so much of their lives caring for family and friends?

The debate on funding must focus on the important issue of support for the infrastructure of the voluntary sector. Organisations such as TimeBank are on the front line of finding and supporting volunteers for charities, such as hospices and the Olympics, and they help to support and mentor carers. Labour’s support helped maintain high levels of participation in volunteering. Cuts to the funding of volunteering charities will result in the organisational cutbacks that I have discussed, and which will lead to a decrease in volunteering, not an increase. I hope that the Minister will tell us today, as my hon. Friend Emma Reynolds encouraged him to do, that he will think again, and that some way can be found to reverse cuts which could be damaging to the cause of volunteering.

Several hon. Members:

rose —

Photo of Sir David Amess Sir David Amess Conservative, Southend West

Order. I have some words of advice. Westminster Hall debates are important, and the proper procedure is for hon. Members to drop a note to the Chair beforehand if they wish to speak. Certainly, when I am chairing proceedings, those hon. Members will receive preference when I call speakers. If an hon. Member pops in, makes an intervention and clears off before the end of the debate, that is to be deprecated—hon. Members have to stay for the whole debate. Finally, I know which hon. Members wish to speak, but I do not know whether other hon. Members have come to the Chamber to make speeches or interventions. There are five Government Members and eight Opposition Members waiting to speak, and the winding-up speeches will begin at 10.40 am. As hon. Members have taken the trouble to be here, I would like to call everyone. However, they can do the maths as well me, so it is up to them to share the time out.

Photo of Tony Baldry Tony Baldry The Second Church Estates Commissioner 9:48 am, 23rd March 2011

I think, Mr Amess, that coming in, making an intervention and disappearing is known as doing a Spink, is it not?

It is a great pleasure to follow the very thoughtful speech made by Barbara Keeley. She and I are involved as officers of the all-party group on carers. I think there is no one in this Chamber who does not support the work of volunteers and we would all like to see the maximum amount of volunteering. We all have to accept, however, that we start from a position of having to manage an enormous budget deficit. Each and every day, the Government have to spend £120 million, just on interest, to service the deficit. I did a calculation the other day. I added up all the money that the Government give to my constituency through the local district council, the money it gives in grants to Cherwell district council, Oxfordshire county council, the Oxfordshire primary care trust and Thames Valley police for the whole of Oxfordshire, Berkshire and Buckinghamshire. The total equates to just 11 days’ interest on the budget deficit. We all have to put this in some sort of context.

I want to make some general comments about local government. I have come to the conclusion that the way it operates will have to change radically and fundamentally, and I shall give the House examples of that. We have had a system under which we all pay our taxes, the taxes go to the Treasury, the Treasury allocates money to local government, and local governments, from their largesse, allocate money to voluntary groups in their area, as they see fit. Voluntary groups have very much been rentiers, dependent on the largesse of local government and what it has chosen to give them. That needs to change considerably.

First, there needs to be a commitment by local government to allow much greater community scrutiny. May I give the House an example of why that is the case? On Saturday, I met with campaigners in Deddington in my constituency who want to retain their library. As we discussed the situation, it became apparent that we have in Oxfordshire a public library service, but also a schools library service, which is operated completely separately. That prompts the question, why do we need two services? What happens with back office costs? As we discussed the matter further and began talking about the mobile library, we realised that it was going to villages to which, at the same time, the GP surgery—in the village that has the library—sends transport to collect people to come into the surgery.

As the discussion continued, it struck me that, under that system, the risk is that the greatest cuts will be made at the front end—that is, at the service end—yet no one has had an opportunity to understand the full central costs of running the services. The local authority has not been subjected to complete scrutiny so that people may make proper value judgments about whether it is ensuring that any spending reductions it has to make are fairly distributed between it and the services that it might hitherto have supported.

There is a danger that local authorities will simply retrench to their statutory obligations and duties, and say, “If we don’t have a statutory duty to do this, we won’t do it.” However, as we all know, the reality is that, for a long time, part of the fabric of society has been local authorities funding all sorts of organisations and operations that are not necessarily part of their statutory obligations.

There needs to be a new obligation on local authorities to subject themselves to much greater community scrutiny, and that would happen in part if they had to put all their expenditure online and be much more transparent about how they spend their money. Transparency is one thing, but we also need to ensure that they subject themselves to much greater scrutiny so that people can ask questions about how money is spent.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

The hon. Gentleman is talking about local authorities retrenching and cutting back on support for the voluntary sector, but I have just outlined an example of the Government doing that. Does the same duty fall on the Government when they start retrenching and substantially cutting grants to charities?

Photo of Tony Baldry Tony Baldry The Second Church Estates Commissioner

The hon. Lady is already able to scrutinise Government decisions—that is exactly what she is doing today in this Chamber. She will have the benefit of a response from my hon. Friend the Minister, whom I am sure will answer her questions about TimeBank, which is an excellent charity and an excellent initiative, in his winding-up speech. Local government needs to take a new approach to scrutiny.

My second point is about engagement. My constituency happens to have been confronted with a threat to the local general hospital. Over time, that has constructively resulted in much greater engagement between local authorities, the primary care trust and various campaigning groups, which has been incredibly successful. As a consequence, we have managed to keep the local hospital as a general hospital.

It strikes me that that is a new, organic pattern of engagement between the local authority and, importantly, its officers, and members of the voluntary and community sectors. There are no rigid demarcations as to who is accountable or who is elected. It involves people coming together constructively to try to work out what is in the best interests of the community as a whole. We need the local government, its officers and elected members to be involved in much more of that sort of broader community engagement so that there can be an ongoing discussion with the community.

My last point is that there needs to be much greater commitment on the part of local government and central Government to put opportunities to tender out to social enterprises and voluntary organisations, and they need to be much clearer about how that should happen. The last example from my constituency is a new social enterprise in Banbury that was set up by people who had been working for many years with offenders at Bullingdon prison who were addicted to or had a dependency on drug or substance abuse. They have been doing excellent work involving ex-offenders in therapy. They have a good, reputable board of trustees, including some eminent doctors and others, and are doing a great deal of work with people who voluntarily self-refer. However, they could do a great deal more in the rehabilitation revolution by offering their services to people who may recently have come out of custody or may be in danger of going into custody—for example, there could be referrals from the courts.

The difficulty is that there is a disconnect in the rehabilitation revolution between how such groups get referrals, who buys the services and how they buy services. If government collectively wants social enterprises to develop, there needs to be a much clearer indication of where, within the machinery of central Government and local government, organisations can buy services. Otherwise, it will be extremely difficult for social enterprises to grow because they will have no idea how they might be able to maintain a sustainable income.

We are in incredibly challenging times because of the need to tackle the budget deficit, but we also have an opportunity to rethink much of what we do and how we approach central Government and local government. In the past, there has been a completely top-down, paternalistic, dirigiste system in which a citizens advice bureau at the bottom of the pile is lucky if it gets a grant each year from the district council. We should turn that on its head. There should be a bottom-up, community-driven process of priorities so that people in Deddington or Adderbury who are concerned about their library can drive the agenda, rather than it being imposed on them from the top. We should see this as an opportunity for real change.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 9:58 am, 23rd March 2011

I hope hon. Members will accept that the maths that I have done are correct. Four-minute speeches would get us all into the debate. Are you, Mr Amess, in a position to impose a four-minute limit?

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I look forward to your unofficial imposition of a four-minute limit.

I welcome this debate and congratulate my hon. Friend Barbara Keeley on securing it. The voluntary sector is very important in our society. It is important for community cohesion and for newly arrived communities, and, in inner-urban areas such as the one I represent, it is a crucial part of the social fabric of both local government and health services. It is highly professional, efficient and well organised, and stressful for those who work in it. I am president of Voluntary Action Islington, formerly Islington voluntary action council, and a trustee of several local organisations, including Hanley Crouch community centre, Elizabeth House and a new-ish group called Light Project International, which provides weekend and after-school activities for young people, so I am acutely aware of and involved in the valuable work done by the voluntary sector.

The voluntary sector has always been a combination of a small amount of general fundraising from events and collections, and much larger funding from local health authorities, local government, various charitable institutions and, occasionally, business donations. That is complicated, and we should have regard and respect for those people who manage community centres and local organisations, and spend an inordinate amount of their time stressing over funds, staff and conditions, and funding applications. They spend a fantastic amount of their time completing funding application forms. An industry has grown up, with professional fundraisers offering to complete application forms and to fundraise for fixed fees or a proportion of the funds raised.

We must think through the efficiency of having highly skilled community centre managers spending sometimes 70% of their time on fundraising activities, which obviously diminishes a centre’s day-to-day work. A clearer, more defined role for local government and local health authorities in supporting and funding over a much longer period would be much more efficient. The current system is not efficient.

I have been involved in voluntary sector organisations in my constituency for a long time, and in a previous incarnation I was chair of community development in Haringey council. We developed community centres, particularly for minority ethnic communities, disability groups and others, as a way to bring in people in partnership with local authorities and health authorities. I strongly support the voluntary sector, but am sanguine about its role.

When I hear the Prime Minister talking about the big society, there seems to be a complete disconnect between my experience in inner urban London and what the voluntary sector means there, and the vision that he seems to have of fairly well-off retired people donating money to run a library and so on in a community with highly skilled people with time and money on their hands. That is not the reality of life in my community. If the council closed a library, which fortunately it has not done, and offered it to the local community to run, it would not happen, not because people do not value the library—they absolutely do—but because they do not have the time, the money or the skills necessary to do it. If we want to maintain the social fabric of our society, we must be prepared to put public money into voluntary organisations with the add-on benefit of community usage and all that goes with that. However, as my hon. Friend the Member for Worsley and Eccles South said, that core funding is essential.

Another point for the Minister, which I hope he will answer seriously, is the operation of the transition fund. As with every other community in the country, mine faces enormous cuts in local government expenditure and less grant money from the health authority, as well as less money from London Councils. There are great difficulties. The Government established the transition fund, but I have concerns about it. I received a good brief on it from Gerard Omasta-Milsom, director of Islington Peoples Rights, which is a very good voluntary advice agency. He says that to be eligible for the transition fund, applicants must be

“spending… 50 per cent of your total income delivering frontline… services”.

I wish that someone would define what a front-line service is. It is easy to say that we must support people on the front line and not those in the back office, but if a community centre does not have a bookkeeper, a cleaner, a caretaker or someone to repair computers and so on, it does not work. There cannot be a simplistic distinction between the front line and the back office. It is the totality of the service that is most important.

Another condition on transition fund applicants is that they

“have approved annual accounts that are no more than 12 months old which show that… your total income for that year was between £50,000 and £10 million and” that

“at least 60 per cent of your total income came from taxpayer-funded sources.”

But £50,000 is quite a lot. We set up a community chest system in Islington, which operated until the Government cuts, and the council has now set up a new but smaller community chest. It gives small grants to new, seedcorn organisations such as new Somali organisations—we have a growing Somali community in Islington. The grant may be as little as £4,000 or £5,000, and in some cases even less. When such organisations are small and have only just come into existence, a small investment goes a long way.

The briefing goes on to say that free reserves could

“pay for your organisation’s total expenditure for no more than six months.”

I do not understand that requirement. Anyone who is running an organisation must have enough money to pay for ongoing costs and redundancy costs for at least three months. I hope that the Minister will tell me two things: first, whether the transition fund will be simplified and will continue beyond this financial year and, secondly, whether, as it has been so vastly oversubscribed throughout the country, he will speak to the Chancellor and obtain more money for it.

As every other part of the Budget seems to have been leaked, there will be no harm done if the Minister tells us exactly what part of the transition fund will be made available to the voluntary sector. It is vital to put money into such organisations and to keep them going. The health, well-being and strength of communities are so important. Removing the seedcorn funding and the basic running cost is damaging, and I hope that the Government will think again about that.

Photo of Mark Williams Mark Williams Liberal Democrat, Ceredigion 10:06 am, 23rd March 2011

It is a pleasure to serve under your chairmanship this morning, Mr Amess. I pay tribute to Barbara Keeley for initiating this debate. It is a privilege to follow Jeremy Corbyn and the four-minute suggested time limit. He did not quite stick to it, but his maths were welcome.

The issue is an urban one, but also a rural one. I represent a large tract of rural west Wales, which has a proud history of volunteering, and I will start with the Welsh perspective. There are 30,000 groups throughout Wales, and 650,000 volunteers. It was estimated that in 2005, 54% of adults in Wales were volunteering in one way or another. Many of those groups—some 10,000—received no public funding whatever and relied on donations, as they had incomes of up to perhaps £10,000 a year. They ran small projects, with the emphasis on developing volunteers’ skills.

A huge number of other schemes in Wales relied on core funding in one manifestation or another, whether from our Assembly Government or through local authorities. I shall cite some examples in my constituency, and their valuable work. Many operated under the guise of a scheme initiated by our National Assembly which is called the Communities First project. It is very relevant in deprived urban communities, and in scattered rural communities. I am not sure whether it is the Liberal Democrats’ policy in the forthcoming Assembly elections to retain that project, but they should do so, because it has been a laudable success in my part of Wales.

The village of Ystrad Meurig wanted a mobile phone mast, because it did not have any reception, and it was supported in that by the Communities First project. A scheme to develop a youth club in one of my deprived wards in Aberystwyth was not short of volunteers, but it needed strategic leadership to organise and support them. I suspect that the idea that under the big society, green shoots of initiative will spring up throughout the country is far from the reality. That may happen in many cases—the hon. Member for Islington North spoke about protecting libraries, and we heard about the enthusiasm in Deddington in Oxfordshire. However, many of our communities require a lead and some measured core funding.

The hon. Member for Worsley and Eccles South referred to citizens advice bureaux. I have two excellent bureaux in Aberystwyth and Cardigan, and my wife is a trustee of one of them. Again, there is an abundance of volunteers, but what really worries citizens advice bureaux is the cut in the central training budgets, which affects volunteers’ ability to deliver a critical service to my constituents. We have heard about carers. I launched a project with Crossroads Care, an organisation in mid-Wales working to support carers with training, enabling them to take advantage of new flexible working structures and, when given the opportunity, return to the labour market. More than anything, carers require the stability of core funding, and I hope that the Minister will address that issue.

The Liberal Democrats held a much heralded conference in Sheffield a few weeks ago. The party was, in my view, discussing sensible proposals for the national health service, but tucked away in the agenda was a motion on volunteerism. That might seem peripheral, but it is a helpful pointer to show what can be done. I suggest that the Minister look at a couple of points raised in a paper that we debated, which was launched by my noble Friend Baroness Barker. The paper pointed out that we do not always make the most of opportunities available for funding the voluntary sector. In October last year, a report by ResPublica described the system of gift aid as an “antiquated” bureaucracy, and pointed out that digital processing of gift aid could be worth £750 million to charities. The Minister was present at that launch, and he indicated that he would think about the proposal. Is there any news on that?

The report also suggested that charities should make more use of social networking to raise funds. Many charities have done good work using social networking, but many others have not. We suggest a fund to provide a social networking school for charities: in other words—yes—public funds to encourage charities and give them the training and expertise that they need. We cannot hide from the fact that voluntary sector budgets will face cuts as a result of cuts to public spending, but local authorities have shown that the way in which such cuts are managed can have a major impact. I do not want to get into a debate about £16 billion of cuts by this party or £14 billion by that party, and the effect on the voluntary sector. Nevertheless, Tony Baldry was right to make a point about transparency. People and communities need to see the situation and put pressure on local authorities to drive the agenda as they see fit. That is a wise initiative.

Photo of Lilian Greenwood Lilian Greenwood Opposition Assistant Whip (Commons)

On local authority funding, we must understand why communities with the greatest deprivation are suffering the highest cuts. Transparency is required on that issue.

Photo of Mark Williams Mark Williams Liberal Democrat, Ceredigion

I do not deviate from that message at all. My constituency includes communities with high rates of deprivation, so that is a strong point. As has been stated, however, the role of this debate and of Parliament is to allow hon. Members to challenge the Minister, and the hon. Lady has done so effectively in her intervention.

I would like to hear more from the Minister on the big society bank. I note his written statement, and I agree with what the hon. Member for Islington North said about the limitations of the transition fund, particularly the scale of that fund, which is oversubscribed. It would be a tragedy if some of our voluntary organisations were allowed to wither because of its limitations.

The written statement published this week talks about “developing a proposal”, “engaging with the sector”, “further development work” and talking to the European Commission about state aid approval. Impatience with this matter has been well articulated by the voluntary sector, and I would appreciate it if the Minister indicated what time scale he is working to. In reality, the big society bank seems to be some way off. There are concerns about the ability to defend charities and the voluntary sector from local authorities. The transition fund is over-subscribed. The stakes are high and there is a mixed message about how the voluntary sector can respond.

There is a great deal of support for the principles behind the big society, if not the term itself. It was noticeable that our Sheffield motion did not contain one reference to the big society, although volunteerism was described as “principled.” There will be unanimity across the Chamber on the role that volunteers can—and should—play in our society, working co-operatively with local authorities to deliver meaningful services to people on the ground. There are still huge, immediate concerns about funding, and I hope that the Minister will allay some of those concerns in his response to the debate.

Photo of Lilian Greenwood Lilian Greenwood Opposition Assistant Whip (Commons) 10:15 am, 23rd March 2011

I thank my hon. Friend Barbara Keeley for securing this debate. I will try to be brief. The Minister and I have already debated the future of the voluntary sector in Nottingham. As he knows, I believe that the Government are cutting public spending too far and too fast, and I have already mentioned my concern that the cuts are not being distributed fairly. The cuts will have a devastating impact on the city that I represent, and those who will bear the brunt of that impact are the very people least able to withstand it.

A number of hon. Members have expressed concerns about the limitations of the transition fund. Given the time scale involved, that fund will not protect the services that people rely on, the jobs of those working in the voluntary sector, or volunteering opportunities. In the short time available, I would like to focus on that last aspect.

The Government have stated that a key objective of the big society is to encourage and enable people to play a more active role in society. It is therefore incomprehensible and strange to make cuts that undermine the organisations that provide such opportunities. Nottingham has a volunteer centre that supports groups to recruit and retain volunteers, as well as helping volunteers to find suitable placements. In the past year, the centre matched about 2,500 people with volunteering opportunities in the city. In less than two weeks, however, all funding to support volunteering in Nottingham will end. The volunteer centre is particularly affected by the scrapping of the working neighbourhood fund and the national youth volunteering programme, which is called vinvolved. Eight members of staff will lose their jobs.

In Nottingham, over half of the volunteer centre’s service users are aged 25 or under; 16% of those supported by the v project last year were classed as NEET—not in education, employment or training. At a time of record youth unemployment, when one in five young people are unable to find work, it is counter-productive and short-sighted to cut that vital link to skills, training and confidence for the most disadvantaged groups. Figures released last week by the House of Commons Library show that over 3,500 young people aged 24 and under in Nottingham constituencies claim jobseeker’s allowance. In some areas, 19 young people are chasing every vacancy advertised by Jobcentre Plus.

The Government’s decisions do not only affect young people, and 40% of those who come to the volunteer centre are out of work. The loss of the service will reduce the opportunities available for people to retrain and improve their skills and employability, and it will also deprive organisations of volunteers who could help to deliver vital services. On CSV “Make a Difference Day”, I helped out at the local Barnardo’s shop. I talked to the volunteers, some of whom had become staff, and I heard how important volunteering was, particularly for people who were returning to work after a long period caring for a family, those getting into work, and those with learning difficulties or a disability. Taking away that opportunity removes that stepping stone into work.

Unfortunately, as hon. Members have mentioned, many local community and voluntary sector groups are unsure about the future of their own services. They will also lose the capacity to recruit and train volunteers. For most organisations, fewer paid staff means fewer volunteers, not more. I hope that the Minister appreciates that cutting resources to organisations that provide people with work and life experiences, skills training and support, is not sensible, practical or affordable. Finally, I invite the Minister to visit the volunteer centre in Nottingham so that he can see the outstanding work being done, hear what people have to say, and learn why they are so worried about the future of volunteering in the city, and about the future of the unemployed and vulnerable under this Government.

Photo of Chris White Chris White Conservative, Warwick and Leamington 10:19 am, 23rd March 2011

I, too, am grateful for the opportunity to speak in the debate. The issue affects a range of communities, including in my own constituency.

We all appreciate that these are difficult economic times and that it is tough to find savings, but the first message that we should be sending out from the debate, and one that I support my right hon. Friend the Prime Minister in articulating, is that local authorities should consider every other available saving before reducing support to our voluntary services. We should be squeezing budgets, sharing services, cutting back-office institutions, generating efficiencies and trying to get maximum value for money in procurement before we even begin to consider reducing funding for voluntary organisations. Warwickshire county council, for example, has cut its youth service budget, yet it has so far made only a 2% reduction in staffing. That is not how it should be. Every local authority should view reducing spending on voluntary organisations as a last resort.

Photo of Rebecca Harris Rebecca Harris Conservative, Castle Point

In my experience, quite a lot of councils have risen to the challenge from my right hon. Friend the Prime Minister. My local borough council in Castle Point has gone so far as to cut members’ allowances this year to secure the funding for Crossroads, the Association of Voluntary Services and the citizens advice bureau, because it recognises their importance to the local community. Many councils are doing a very good job in that regard.

Photo of Chris White Chris White Conservative, Warwick and Leamington

I thank my hon. Friend for her intervention. It is clear that her council is a very good example of best practice.

Photo of Emma Reynolds Emma Reynolds Shadow Minister (Foreign and Commonwealth Affairs)

Has not the chair of the Local Government Association, who is a Conservative, said that the cuts imposed by central Government on local government go way beyond efficiency savings and will therefore necessarily put local government in the impossible position of having to cut some services?

Photo of Chris White Chris White Conservative, Warwick and Leamington

I refer the hon. Lady to the fact that these are difficult economic times, which were not brought about by the coalition, and something needs to be done. At the moment, I do not see the Opposition doing anything at all to begin to address some of these issues.

Voluntary services in a range of areas, from welfare to social care and from youth services to health care, enable the public sector to reduce “failure demand”, which is one of the biggest costs to the taxpayer. Because we fail to do the right thing the first time, we end up having to make more expensive interventions further down the line. That is not the right approach to providing services. Local authorities should work with the voluntary sector to use its expertise and understanding of the needs of service users to build better platforms. Although voluntary organisations can be a short-term expense, they can also generate significant savings in the long term. If anything, we should seek to shift funding towards voluntary organisations, rather than taking funding away from them.

An excellent report by the Association of Chief Executives of Voluntary Organisations called “Replacing the State?” gave four strong reasons why voluntary organisations are better placed to provide services than traditional in-house bodies. They are local and focus on the needs of their users, rather than on what is best for providers. They have higher levels of co-ordination, as they have a community-wide focus. They command a high level of public trust. They are incredibly innovative and able radically to change the delivery of services for the better.

There is an even plainer economic argument. Voluntary organisations are already saving the public sector more than £20 billion in staffing costs, given the fact that 17.1 million people volunteered in 2010. If we cut the funding on offer to the sector, we will reduce the infrastructure that channels those volunteers, either leaving people without services or leaving the public sector having to hire paid staff. I believe that if we integrate voluntary organisations further into public service delivery, we will not only see long-term costs go down, but we will be able to secure the future of many important groups throughout the country—something that can benefit all our local communities.

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield 10:24 am, 23rd March 2011

I congratulate my hon. Friend Barbara Keeley on obtaining the debate. In the short time available, I will consider two areas. The first is the cuts to the advice sector throughout the country and the complexity of the funding for that sector. Local authority funding constitutes the building blocks on which a local bureau or a local advice centre works, although such places have a range of other funding. The National Association of Citizens Advice Bureaux has recently published a report to show that, throughout the country, bureaux face on average a 15% cut. There are some notable exceptions, both good and bad, but a simple salami-slicing approach has been taken in a number of cases. Local authorities have not appreciated the cost to them of cutting those services—when the services go, people end up on their doorstep in a worse position.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport)

Does the hon. Lady agree that a time of economic austerity, when the demands on citizens advice bureaux are greater than ever before, is a time not to cut funding for CAB and the work that they do, but to encourage them and give them more funding?

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

I thank the hon. Gentleman for his intervention. I completely agree.

Also at risk was the funding for face-to-face debt advice, which has been given a year’s reprieve, although there are still arguments about the management costs centrally. It is proposed that social welfare law should go out of the scope of legal aid funding at the very time when we are introducing a new welfare system. Many bureaux have funding from primary care trusts, which are also going. Advice agencies could disappear—97% of law centre funding is under threat. I make this plea to the Minister: will he please look across the board and bring all the Departments together when they consider the funding for advice services? Otherwise, the cuts to each Department will affect that sector particularly badly.

I also want to consider my local services in Makerfield borough. Makerfield and Wigan benefit from 24,900 volunteer hours a week, and 68,835 people benefit from the services provided. Those volunteers need the support of paid staff and, often, the support of the infrastructure organisations. We would not expect any employee to work without the support of management and without a decent regime of health and safety, supervision and career development, so why do we expect volunteers to do that? That is what the cuts mean—the volunteers will not be there without the support of those paid staff.

Central Government are looking at cutting the infrastructure organisations. One particular concern for my local council for voluntary service is the vinvolved funding. Over three years, the vinvolved project in Wigan has dealt with 1,071 youths, most of whom were classified as NEET—not in education, employment or training. There has been a significant reduction in repeat antisocial behaviour orders for that group and an increase in the number of people going into work. Cutting that programme will leave those youths with nowhere to go. They will be back on street corners in the neighbourhoods that have previously complained about them. It is so important to young people that they be brought into volunteering. My local branch of Age Concern has pointed out to me the value of bringing those young people into its organisation and the cross-generational work that that has engendered.

Photo of Emma Reynolds Emma Reynolds Shadow Minister (Foreign and Commonwealth Affairs)

Is it not sheer madness for the Government to cut vinspired when youth unemployment is at record levels?

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

Absolutely. My local CVS managed the future jobs fund in my borough, and youth unemployment among 18 to 24-year-olds was reduced by 56% in 2010 as a result. It halved the number of jobseekers from 900 to 450 in that period. To cut that at this time, when young people are coming out of education and training without a job to look forward to, is sheer folly.

I do not believe that the big society is new—in my borough or in any other borough—but I do believe that, due to the cuts, it is becoming the shrinking society, which is dangerous.

Photo of Julie Hilling Julie Hilling Labour, Bolton West 10:28 am, 23rd March 2011

I congratulate my hon. Friend Barbara Keeley on securing the debate. I want to follow what seemed to me to be her theme—what on earth are the Government playing at? In their wholesale rush to get rid of everything that the Labour Government did, they are destroying structures that would help to deliver the big society. I shall talk specifically, as did my hon. Friend Yvonne Fovargue, about vinvolved—the national young volunteers service. Its aim was to get 500,000 young people into volunteering.

It developed out of millennium volunteers and was directly funded by the Government. It has eight days left to be saved.

The initiative was funded by the Government and run by v, the independent charity. There were 107 vinvolved teams nationally. Its focus was on creating new volunteering opportunities, including working with community and voluntary organisations, to create more high-quality, diverse volunteer opportunities for young people; supporting local organisations that work with young volunteers; brokering 16 to 25-year-olds into volunteering opportunities; finding the right opportunities for new and existing volunteers; helping young people to set up their own voluntary projects; and championing youth-led action, with each team including a youth action team made up of young volunteers giving advice on what projects and work vinvolved teams should get involved in.

What happened? Young people were matched to opportunities that suited their interests and aspirations, and that were sensitive to their individual circumstances. That was particularly important for young people with multiple barriers to participation—for example, people leaving care, asylum seekers, refugees and people with mental health issues. The vinvolved project particularly targeted young people who would not normally be involved in volunteering and who faced great difficulties in their lives. Such young people were at risk of being socially marginalised. However, apart from the effect on the young people themselves, there is also a real cost to society when young people are no longer part of it and have additional needs, which society must then tackle.

In matching young people with appropriate and fulfilling volunteering opportunities, which in turn acted as a stepping-stone for their progression, vinvolved allowed many young people to find a new, positive direction. The project enhanced employability and provided references for young people who had problems and who may never have completed their secondary education. Those young people may have had nobody in their lives to provide a reference for them, but they got one through their volunteering opportunities. The project also supported those at risk of social exclusion, increasing their confidence, helping to overcome feelings of isolation and loneliness, and improving community relations as young people from different communities came together to work across communities and with people from different backgrounds, including with lesbian, gay, bisexual and transgender young people, and black and minority ethnic young people. I should add that the voluntary work brokered by Manchester vinvolved equates to £232,380—I like the precise figure it has produced—based on salaries at the national minimum wage.

I could speak for a great deal longer about vinvolved, but I am aware of the time. I could also speak for a long time about the wonderful young people who have been involved in the project, whom I had the honour of meeting at an awards event for Greater Manchester a few weeks ago. Those young people have overcome their disabilities and other issues, such as the need to care for relations or the fact that they have come from broken homes or experienced homelessness, and they have gone on to contribute enormously to the society they live in. Without projects such as vinvolved, such young people will not get involved in volunteering, because they need organisations to support them, bring them together and give them the chance to make a difference to their lives and the lives of people in the community.

The vinvolved initiative is the sort of project that the Government need if they are ever to deliver their big society. I agree with my hon. Friends that we already have the big society, but if we want to extend and expand it, we must have projects that support the voluntary sector and that help young people and adults into volunteering. There are only eight days left to save vinvolved, and I really hope that the Minister will act so that we can continue a project that serves the needs of young people and their communities in such a splendid way.

Photo of Catherine McKinnell Catherine McKinnell Shadow Solicitor General

I am here to listen to the debate and to contribute where necessary, Mr Amess, but I have not prepared a speech.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

I apologise. I am embarrassed, because we have six minutes left before the winding-up speeches. Does anyone else want to contribute?

Photo of Catherine McKinnell Catherine McKinnell Shadow Solicitor General

I could certainly make a contribution, Mr Amess. You simply took me by surprise.

Photo of Catherine McKinnell Catherine McKinnell Shadow Solicitor General 10:34 am, 23rd March 2011

I congratulate my hon. Friend Barbara Keeley on securing this important debate. It has been very instructive to listen to the contributions made from both sides of the Chamber.

People in Newcastle are concerned about the speed with which the local authority cuts have been imposed and about the impact that that has had on the voluntary sector and support for it. Newcastle is one of the cities that has a thriving citizens advice bureau service, and it served more than 26,000 people last year, but it has now received a 20% salami-sliced funding cut, which is one of the worst cuts to services in the country.

The issue remains very much the speed with which the cuts have been imposed on local authorities, as well as their impact on different regions, particularly urban areas, where cuts to funding to combat deprivation have had a disproportionate impact—for example, in cities such as Newcastle upon Tyne.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

Clearly, all Members in the Chamber share the view that the volunteering sector is important, but while listening to Opposition Members’ contributions I had the strong feeling that we have created an over-dependence on the public sector for volunteering organisations’ funding in the past 10 years. That over-dependence is as much about creating a big state as it is about creating a big society.

Does the hon. Lady agree that many of the best organisations working with local communities—certainly in constituencies such as mine—are free from Government intervention and Government funding? The point has been strongly made that there are bureaucratic issues in volunteering when organisations depend on Government funding. We need to create a society in which people volunteer, but do not depend on Government funding to do so.

Photo of Catherine McKinnell Catherine McKinnell Shadow Solicitor General

I do not agree with the hon. Gentleman’s assertion. I agree that there are some fantastic voluntary organisations that do not rely on any public funding. They are supported, and have to be supported, across the country, and they are warmly welcomed. However, one of the main issues is that the abilities of those organisations are not necessarily distributed in such as way as to target the most hard-to-reach areas, which require more structured funding to support and assist voluntary activities. That point has been made very clearly by my hon. Friends and, indeed, by Government Members.

Photo of Stella Creasy Stella Creasy Labour, Walthamstow

There might be another interpretation of the points raised by Guto Bebb, which is that there is a fundamental misunderstanding of the relationship between the voluntary sector and the state, and of the importance of funding in ensuring that the voluntary sector has had the capacity to thrive over the past 13 years. One of the dangers now is that services will be affected when funding is taken away and that the capacity to thrive, as well as the voluntary sector’s ability to deliver activities and to be a voice for many people in our communities, will be damaged. Some of the comments that we have heard reflect a misunderstanding of why it is so important to support the voluntary sector if we want volunteering to thrive and if we want to tap into all the benefits it offers our society.

Photo of Catherine McKinnell Catherine McKinnell Shadow Solicitor General

I thank my hon. Friend for her intervention. That is exactly the point that needs to be made. As my hon. Friend the Member for Worsley and Eccles South said at the beginning of the debate, there is genuine concern that we need to understand how the voluntary sector works, how it is funded and how it is supported. There is huge concern about the Government’s pursuit of an economic policy that is reducing the deficit at a rate that is too fast, that is reckless and that will cause long-term damage to our civil society.

I want to put those issues on the record. The voluntary sector in Newcastle continues to thrive, but it sits in sheer trepidation, because most organisations have no security of funding beyond the end of this month.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

Before my hon. Friend finishes, does she agree that we could characterise this debate as one in which Government Members have hectored and lectured local authorities about not cutting grants to voluntary organisations in their areas, even though Ministers are cutting the number of their strategic partners from 42 to 14, and cutting their funding, too? Is it not inappropriate for coalition Government Members to lecture local authorities about what they must and must not do, when they themselves are scything away the infrastructure of the voluntary sector?

Photo of Catherine McKinnell Catherine McKinnell Shadow Solicitor General

Absolutely. The point could not have been put more clearly. I thank my hon. Friend for that intervention and for giving me the opportunity to contribute to this important debate.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Cabinet Office) 10:40 am, 23rd March 2011

May I say how delighted I am to serve under your chairmanship, Mr Amess? I begin by paying tribute to my hon. Friend Barbara Keeley for securing this extremely timely debate. Its timeliness is evidenced by the large number of Members here this morning.

At this time, up and down the country, voluntary and community-based organisations are extremely concerned about their funding situation. Some, sadly, are trying to cope with vastly reduced budgets for next year and uncertainty as to whether they can even continue to operate. My hon. Friend in her amazingly comprehensive contribution, pointed to Labour’s proud record of supporting the voluntary sector—in contrast, I think, to the withdrawal of funding we see from the coalition parties. She used the cuts to TimeBank as an example of how that withdrawal will affect volunteering and volunteering support organisations. I want to speak about TimeBank in a minute or two.

My hon. Friend also emphasised the importance of supporting advice services, particularly in today’s economic climate. My hon. Friend Yvonne Fovargue stressed that issue in what I thought was a very passionate contribution. My hon. Friend the Member for Worsley and Eccles South also reminded us, as she often does, of the need to continue to support carers. My hon. Friend Jeremy Corbyn hit the nail on the head when he said that this Government simply do not understand the nature of the modern-day voluntary sector and its wide range of activities, or the complexity that exists in the neighbourhoods in which it operates or the complexity of the problems that it must face.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

On that point, did not Jeremy Corbyn highlight the complexity of the funding system put in place by the Labour Government?

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Cabinet Office)

Actually, I think the point my hon. Friend made was that the current Government do not understand the nature of the modern-day voluntary sector. That point was emphasised by my hon. Friend Catherine McKinnell in her spontaneous but extremely informed—if I may say—contribution. If he will forgive me for saying so, the contribution from Tony Baldry verified the point made by my hon. Friend the Member for Islington North. Other Members also made useful points, which I will deal with as I go through my speech.

I want to emphasise two things at the outset. First, in government, as in opposition, Labour knew that the deficit had to be reduced, but, crucially, we would not have cut so deeply or so quickly. Evidence seems to suggest that it is the up-front cuts to local government and central Government Departments that are proving so damaging to the voluntary sector. We know that it is some of our poorest areas with the highest levels of need that are facing the largest cuts. That point was excellently made by my hon. Friend Lilian Greenwood, who spoke about the huge impact the cuts to the voluntary sector will have on her constituency.

Secondly, it seems particularly unfair to ask more of the voluntary sector in terms of delivering services and filling gaps in provision, while cutting the resource base of a range of civil society groups. It has led the National Council for Voluntary Organisations to conclude:

“The scale and speed of the cuts affecting the voluntary and community sector are severe and there is a very real danger that the sector will not be in any fit state to contribute to the ‘Big Society’ unless further action is taken.”

I can see little evidence that the Government are taking that further action.

The Government often raise the transition fund, which was mentioned by Members today, as the mechanism for plugging the gap. However, it is restrictive in coverage and demands significant change from a great many organisations—for example, they must become social enterprises—and a huge number of the 1,700 applications are still being assessed. Other funding that may reach the sector in future, such as that from the big society bank, is unlikely to be made available early enough to prevent some organisations from going under, regardless of how useful they are to their local communities, and we heard examples of that today. My hon. Friend Julie Hilling made a passionate speech about vinvolved in her constituency and the need for it to continue to support young people’s volunteering. Cuts are being made regardless of how good organisations are at providing services or supporting volunteers.

We have had some indication of what the impact of the cuts will be. The sector receives £12.8 billion from a range of statutory sources, and about 52% of that comes from local authorities. Overwhelmingly, that is in the form of contracts for services delivered, rather than grants. I am not sure that Government Members picked up that point. Although it is difficult to put a precise figure on the totality of the cuts affecting the sector nationally and locally, the available estimates put it at somewhere between £3.2 billion and £5.1 billion. That is a huge sum, and a substantial proportion of the sector’s income from statutory sources. At the same time, giving is £700 million less than its pre-recession level, so the gap is not being plugged by another source. The end of transitional relief on gift aid in April 2011 will cost the sector at least £100 million, and the increase in the main rate of VAT to 20% will cost the sector an estimated £150 million per year. This adds up to a range of cuts and cost-saving measures by the Government that are impacting on the sector’s ability to deliver.

The Government want to encourage more services to be delivered by employee-owned companies, mutuals, co-operatives and social enterprises. Of course, Opposition Members are not against that as a general policy direction, especially as it is one that we started while in government. We are against the rushed withdrawal of funding from organisations without time for them to develop new sources of funding and without a framework to help them to manage the transition from a charity or partner in service delivery with the local council to a social enterprise or something similar. That transition takes time, support and resources.

There seems to be a particular willingness on the part of Government to cut infrastructure organisations such as TimeBank, Volunteering England, local CVSs and similar agencies. Where organisations directly support volunteers, drastic cuts might be very short-sighted indeed, especially when the previous citizenship survey showed a reduction in the number of people volunteering. We need to have more volunteering support organisations, or at least support the ones we have adequately. TimeBank and Volunteering England do an excellent job at supporting volunteer development, so why dismantle tried and tested methods of effective volunteer support in the vague hope that something might become available in future?

We know from the Charity Commission that voluntary organisations employ approximately 780,000 staff, supported by 2.7 million volunteers who help them to fulfil their aims. It appears that the Government want to rely on volunteers more and more, but they do not always recognise that volunteers need to be trained and encouraged. The cuts agenda may put at risk the key planks of support for volunteers.

My hon. Friend the Member for Worsley and Eccles South told us how Labour has supported the voluntary sector. We understand it and value it, particularly its expertise and flexibility, and its ability to innovate. Before Labour left office, we set out radical plans to boost funding for volunteers and to make asset-transfers to the third sector. We designed the social investment wholesale bank, which was ready for launch, and launched the social impact bond. We also supported the move for more mutuals and co-ops. We would like to see the Government building on that agenda, not dismantling it. We do not want to see the sector devastated by unnecessarily deep and rapid cuts, that at worst will merely provide an opportunity for the further marketisation of our public services.

Photo of Nick Hurd Nick Hurd The Parliamentary Secretary, Cabinet Office, The Parliamentary Secretary, Cabinet Office 10:50 am, 23rd March 2011

It is a great pleasure, Mr Amess, to serve under your chairmanship. I congratulate Barbara Keeley on securing the debate and on the way that she spoke. However, special congratulations are in order for Catherine McKinnell on thinking so quickly on her feet, and on representing so sincerely sentiments that I heard directly only a few weeks ago in Newcastle from people concerned about what is going on.

The hon. Member for Worsley and Eccles South spoke passionately about TimeBank, and tried to make some wider points. I know that she has a particular interest in carers, and has done some distinguished work in this place since being elected on that important agenda. The leadership of TimeBank is here, and those people are probably shooting daggers at me; we shall meet soon to discuss the decision, but of course they will not agree with it.

I shall start with the specifics before going on to wider matters. I make no apology for rationalising the Office for Civil Society strategic partner programme. We inherited a situation with more than 40 strategic partners and almost as many civil servants, at a cost of some £12 million a year. I could not see what value the taxpayer was getting from that programme, and I received a lot of support from within the sector to rationalise it.

The intention to rationalise was communicated to all strategic partners in July 2010. As a result, all partners were effectively at risk of seeing some reduction in their funding. We announced yesterday that we would be reducing it to nine organisations or partnerships, and I am satisfied with the mix. The simple fact is that no organisation has the right to be a strategic partner of the Government. The right has to be earned, and the process must be run robustly and professionally by civil servants, I received a recommendation about those nine organisations, but unfortunately TimeBank was not included. I do not expect it to like that decision, but it was a robust process which I think was run properly.

Photo of Nick Hurd Nick Hurd The Parliamentary Secretary, Cabinet Office, The Parliamentary Secretary, Cabinet Office

May I finish my point about figures, because it is perhaps the most important? Does it mean that TimeBank and other organisations that are working hard to manage and structure volunteering opportunities and inspiring people to volunteer will have no further opportunity to access taxpayers’ money? Of course not. I refer the hon. Lady and all with an interest in the subject to the recently published Giving Green Paper, which will lead to a White Paper. In it, we made it clear that we will be investing in a volunteering infrastructure programme with voluntary match funding, which will be worth about £40 million over this Parliament. There will be opportunities for TimeBank and other organisations to add value to those programmes.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

As the Minister is touching on his reasons for cutting away at the infrastructure of an organisation that supports volunteering for hospices, for the Olympics and for carers, I invite him to explain exactly why—beyond a departmental goal to rationalise the number of strategic partners—the Government are cutting away at a vital organisation? The same question could be asked about others. TimeBank is crucial to supporting volunteering, and has an excellent 10-year track record. Indeed, he sent it a message when it achieved its 10-year anniversary. Why is he doing this?

Photo of Nick Hurd Nick Hurd The Parliamentary Secretary, Cabinet Office, The Parliamentary Secretary, Cabinet Office

I tried to explain why earlier. We ran a process to identify a shorter list of strategic partners, with criteria; TimeBank and other organisations on a longer list did not make it through that process. As I said, no organisation has the right to be a strategic partner of the Government, but I do not expect them to be comfortable with that.

I have to tell the hon. Lady that her approach is symptomatic of the previous Government’s approach to public money. There was absolutely no rigour in the strategic partner programme that we inherited; we are trying to introduce it for the first time. The hon. Lady speaks about our cutting funding, but she completely ignores the fact that there will be further opportunities, in what are frankly more appropriate programmes, for organisations such as TimeBank to access taxpayers’ money and continue their work.

Photo of Nick Hurd Nick Hurd The Parliamentary Secretary, Cabinet Office, The Parliamentary Secretary, Cabinet Office

I wish to make progress.

The wider context is extremely important. It is not just about TimeBank, or the other organisations mentioned by the hon. Members for Bolton West (Julie Hilling), for Makerfield (Yvonne Fovargue), for Nottingham South (Lilian Greenwood) and for Wolverhampton North East (Emma Reynolds). There is considerable concern in communities across the country about the impact of the cuts.

It would have been nice to have heard more recognition from the Opposition about the economic context, but that fell to my hon. Friends the Members for Banbury (Tony Baldry) and for Warwick and Leamington (Chris White). The fact is that we are spending £120 million a day in interest, and that is entirely unsustainable. A sector that receives £13 billion of taxpayers’ money cannot be immune from the process.

The public hate to see politicians playing the blame game, and I understand that, but nor should we take them for fools. I believe that they understand the basics—that the Labour Government left this country massively over-borrowed and that the coalition Government were elected to sort it out. That means that tough choices have to be made by councils. As my hon. Friends the Members for Warwick and Leamington and for Castle Point (Rebecca Harris) said, some have decided to give priority to cutting internal costs and making efficiencies before making cuts in the voluntary and community sectors. Others have taken a different course for very different reasons.

No one pretends that it is an easy business—it is not—but the Government want to put in place active programmes to help the voluntary and community sector manage the transition. We understand the need for such a transition—from a situation in which too many organisations depend on state income to one in which the sector will have to diversify its sources of income in new ways.

We want to help manage the transition because we see big opportunities for the voluntary and community sector to do more to deliver more public services, and to have a bigger voice at the local level, exactly the point made by my hon. Friend the Member for Banbury. In future, there will be many more arguments about local priorities, and the voluntary and community sector can give a voice to people who often struggle to have their voices heard. The localism agenda will give them a big opportunity. We are obviously very ambitious in our wish to encourage people to give more time and money to help others.

Photo of Nick Hurd Nick Hurd The Parliamentary Secretary, Cabinet Office, The Parliamentary Secretary, Cabinet Office

I do not have time to give way.

People will go to charities and the voluntary sector. There are significant medium and long-term opportunities for the sector, but we have to help manage the short-term transition.

That brings me to the transition fund and the specific questions raised by Jeremy Corbyn. Most of the answers are contained in the basic statement. The fund had to be rationed. It had to be targeted on those organisations most vulnerable to a cut in public grant or contract. We took advice from the sector on the criteria. We had to set an income threshold.

We are proud of the progress that BIG fund has managed for us. I visited an organisation yesterday that has benefited from it. The charities’ fund is £100 million, and it was topped up yesterday by £7 million from the Department of Health. That is serious money, and it will help organisations that are particularly vulnerable, or that have more than 60% of income vulnerability to the state, to make the transition.

Mr Williams asked about the big society bank. It is not a panacea for cuts in grant. It is a serious strategic long-term intervention, designed to make it easier for the sector to access capital. I expect between £60 million and £100 million from dormant bank accounts to be released in the third quarter and be made available for deployment. I expect £200 million to come from the four major banks before the end of the year. The balance of the bank’s capitalisation will come from the rest of the dormant bank accounts, once they have passed through the state aid process, but it is difficult to pin that down at the moment.

We are talking about a £600 million opportunity—a serious attempt to make it easier for social entrepreneurs to access capital in this country. It is part of our programme to help the voluntary and community sector play a full role; it will help to build a stronger society, which we want to encourage, and a better partnership between the state, business, the voluntary and community sector, and active citizens who feel empowered to take more control over their lives.