March 23, 2011
Nick Hurd responds to a backbench MP’s debate on public sector funding and the voluntary sector.
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd): It is a great pleasure, Mr Amess, to serve under your chairmanship. I congratulate the hon. Member for Worsley and Eccles South (Barbara Keeley) on securing the debate and on the way that she spoke. However, special congratulations are in order for the hon. Member for Newcastle upon Tyne North (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 something like £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.
Barbara Keeley rose-
Mr Hurd: 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 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.
Barbara Keeley: 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?
Mr Hurd: 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.
Barbara Keeley rose-
Mr Hurd: 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.
Jeremy Corbyn rose-
Mr Hurd: 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 the hon. Member for Islington North (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.
The hon. Member for Ceredigion (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 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.