January 26, 2011
Nick Hurd responds to a back bench MP’s debate on community cohesion. He highlights the Government’s aim to promote a greater culture of social responsibility and a greater role for the voluntary sector.
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd): It is a pleasure to serve under your chairmanship, Mrs Main, for the first time. We have had an excellent, wide-ranging debate and you have chaired it very firmly. I congratulate the hon. Member for Sedgefield (Phil Wilson) on not just securing the debate, but battling flu so valiantly and presenting a sincere picture of his concerns for his constituency.
I have picked out three things that I would like to respond to directly. First, I shall discuss the hon. Gentleman’s suggestion that the Government do not really know what big society means-he talked about fresh air in that context. I would also like to address his valid concern about cuts to the voluntary community sector, which was picked up by his colleague who represents the beautiful city of Durham, the hon. Member for City of Durham (Roberta Blackman-Woods). I would then like to deal with the issue of landlords and how their practices risk unsettling, dividing and undermining communities.
Out of courtesy, if I could address the specific issue first, I will undertake to write to the Minister for Housing and Local Government on the issue of a national register. That subject is not my direct responsibility and I am sure that there are lots of complexities underlying his suggestion, so I will write to the Minister for Housing and Local Government to alert him to the concern expressed in this debate. I have discussed the matter with a colleague who represents a seat in Cornwall. That is a long way from Sedgefield, but it has exactly the same problem he mentioned. That area adopted the grass-roots solution of personal advocacy. Basically, the community was fed up with the situation, so it got together and lobbied directly the people causing the problem and forced a change in policy. I do not know how applicable that is in Sedgefield, but there are examples around the country where that problem has been tackled by grass-roots action-a very big society response. I will write directly to the Minister on his behalf.
Phil Wilson: Will the Minister give way?
Mr Hurd: I will not take an intervention at this point because I want to move on from that issue.
I shall address the hon. Gentleman’s main concerns about what the big society is, what the Government are trying to achieve and what we mean by it. If he wants to look at the record tomorrow, he will see that my hon. Friend the Member for Banbury (Tony Baldry) articulated the matter as well as anyone, when he talked about trying to promote a greater culture of social responsibility. The idea is not fresh air because, as the hon. Member for City of Durham and various hon. Members pointed out, a lot of wonderful activity is going on in constituencies across the country, where people are working together and giving up time to try to find better ways of doing things, supporting initiatives and getting things going.
The Government want to throw a bigger spotlight on that activity to try to make it easier for people to do more such things and be more ambitious. The matter should not be divisive. My hon. Friend the Member for Wirral West (Esther McVey) put the argument beautifully. We should all be encouraging such things. I shall put the matter simply: it is about trying to encourage more people to get involved. There is no point pretending that all is rosy in the garden, as I think both Labour Members were saying when they cited the citizenship survey. We know that the country faces enormous challenges and that there are very stubborn, expensive social problems. It seems absolutely ridiculous to continue pretending that the state, people here or in Whitehall or even local authority chief executives somehow have all the solutions.
From my constituency, I know that we have barely begun to scratch the surface of the value that residents-constituents-can bring to the idea in terms of tapping into the talent, expertise, experience, ideas, networks and skills that are out there in communities. The big society is about trying to get more people involved and engaged in traditional volunteering or in that hugely important valuable work that we all know about from our constituencies. It is about providing the opportunity to give time to help improve someone else’s life. The value of that is two-way. Of course, we want to encourage more of that, but it is by no means the whole story. The big society is also about trying to get more people involved in shaping the future of communities, in the decisions that really matter and in trying to save things if things need to be saved, such as post offices, pubs, shops or whatever. It is about trying to combat the voice that I hear from constituents who say, “It’s not worth getting involved because it’s not as if we can change anything.” That is what we want to change.
The big society goes beyond that into the reform of public services and trying to open those up and get the people who pay for them and use them more involved in them. Again, in my constituency, I get a sense that people are becoming increasingly resentful of just taking what they are given and feeling that matters are being dealt with in a very detached way. Yes, this is about encouraging more volunteering, but it is also about getting people more involved at a local level in shaping the public services that they use. My hon. Friend the Member for Hexham (Guy Opperman) used the powerful expression, “giving the power back,” which I liked. The hon. Member for Carshalton and Wallington (Tom Brake) was entirely right: that is what people want; they would like to get more involved. The citizenship survey showed that, and we are trying to make it easier.
There is a specific, proactive, big role for Government. There is no point in pretending that suddenly Government will disappear. The Government will play a hugely important part in all our lives, whatever the scale of the spending cuts. However, when it comes to making it easier for people to get involved and making the case for that more compelling, the Government are absolutely committed and on track, and will be delivering through three strands of action.
The first strand is about transferring real power to communities. That is now moving from words to realities. The specific measure has been mentioned-the Localism Bill. I am very pleased about and encouraged by the welcome that it has received, not least from the hon. Member for City of Durham. It is raising expectations. I think that that is right. People are excited about it, which suggests that its time has come. It is a huge piece of legislation, with lots of new rights and opportunities. However, there is more to the issue than just legislation.
The hon. Member for Carshalton and Wallington challenged me to be more specific about what we are doing to get out of the way. He was entirely right. If he listens to my right hon. Friend the Secretary of State for Communities and Local Government, he will get the sense that that is a Secretary of State who wants to do exactly that. He wants to change the whole nature of his Department so that it works for citizens.
The hon. Gentleman may be aware that our approach is to send this message to communities: “Tell us what is getting in the way and we will work to see what we can do to remove it.” There is a specific barrier-busting service, of which he may be aware. That flows from a very powerful piece of legislation called the Sustainable Communities Act 2007, which I took through Parliament as a private Member’s Bill. Already, communities are responding to this invitation: “Tell us what’s getting in the way and we will see whether we can remove it, but give us the specifics.” The new website was launched a few weeks ago, and I think that more than 50 proposals have come in already. That is on top of the 300 different proposals that we had for the first wave under the Sustainable Communities Act. These things are community driven, so there is a real determination on our part to get out of the way.
The second strand is about public service reform: opening up the public services to new providers, including, specifically, the voluntary and community sector; bringing those services closer to the people who use them; and liberating people who are in the front line delivering the services. My hon. Friend the Member for Banbury talked passionately about schools. He will know from his experience with local heads about their desire to be liberated. Specifically in relation to public service reform, a White Paper, which I think will be published next month, will set out our stall on that and explain exactly how we intend to go about it.
The third strand is about social action-trying to inspire people and make it easier for them to give time and money to get things done locally to help people. Again, the words are now being backed up by actions. The Cabinet Office has published a Green Paper on giving, which will lead to a White Paper. We seek fresh ideas on what Government can do with partners-the charitable sector and business-to make it easier for people to give time and money.
We have announced the pilots of the next phase of the national citizen service. Again, that is a powerful, positive programme, which is designed to connect young people with their ability to make a contribution to their communities. I think that one of the biggest pilots, involving 1,000 young people, is taking place on the edge of the constituency of the hon. Member for Sedgefield. I urge him to engage with it, because I have seen that that programme can be very powerful in lifting the aspirations and confidence of young people.
The hon. Member for City of Durham rightly challenged me on this important point: the big society must be open to all. We all know that some communities are in a stronger position than others to take advantage of it. I represent a relatively affluent, suburban constituency on the edge of London, a long way from Sedgefield. My communities are well networked, strong and ambitious and, I think, will respond quickly to that agenda, but other communities will need some help.
The Government are determined to be proactive in encouraging, supporting and helping those communities to help themselves. That is one of the driving forces behind our community organiser and community first programmes, which we will be announcing more details of soon. The aim will be to establish, in those communities, people who can bring people together, organise communities and start building networks-people who have the confidence to start getting people together to get things done. With that will be a neighbourhood grant programme. Again, that will be targeted on the most disadvantaged areas, where the social capital is lowest. It will put money into the hands of neighbourhood groups to help them to develop and deliver on their own plans. The hon. Member for City of Durham mentioned the big society bank. That is wholly designed to make it easier for social entrepreneurs-people who want to take a bit of a risk to get things happening and who want to do things differently in those areas-to access capital.
The Government are doing things, but things are also beginning to happen in communities. My hon. Friend the Member for Banbury was very modest about his pioneering work on developing job clubs in his constituency. My hon. Friend the Member for Hexham is getting a big society initiative going in his constituency. In my constituency, I am convening people in exactly the same way-in one ward, people are concerned about the future and feel that they need to come together and think about a neighbourhood plan for the area. I am facilitating that.
Last week I was in Halifax, where groups of people from the public sector-different stakeholders-were gathered round a table, talking about partnership in a way that they never had before, because they felt that that was possible and they were being encouraged to do it. One could sense that they were not going to go back to the bad old ways of sitting in their silos and just pursuing their individual targets and budgets. Something is happening and changing out there, and it needs to, because we have to find better ways of doing things.
I shall spend the time left to me on dealing with the very important issue of cuts to the voluntary and community sector, which is an emotive issue for many hon. Members. I have written to every Member of Parliament, inviting them to bring in representatives of their voluntary and community sector to talk to me about that, and many have taken up the invitation.
Of course, the voluntary and community sector is hugely important to this project, because of its ability to support and mobilise people, but it is not-we should be frank about this-the whole story. Business has a hugely important part to play, as do citizens and residents groups and as do Government. Charities are not a proxy for community, but they are a hugely important partner in the process.
There is a very difficult issue, which we should not underestimate, in relation to managing the transition. However, we need to be honest about this. Unfortunately, the sector cannot be immune from the cuts. The nation is spending £120 million a day in interest and borrowing £1 for every £4 that we spend. That is not sustainable. We have to reduce public spending on a scale that means that, unfortunately, the sector cannot be immune. That would have been a reality confronted by the Labour Government, exactly as the hon. Member for Carshalton and Wallington emphasised, so there are cuts and there will continue to be cuts.
Tom Brake: Will the hon. Gentleman give way?
Mr Hurd: I would rather not, because I would like to finish this important point. The numbers being bandied around are entirely speculative. The Government are monitoring the situation closely, at central and local government level, because we are concerned that the process should be managed properly. We established a transition fund, which has now closed. That process was well run. From the Prime Minister down, we have sent a strong steer to local authority leaders that we do not expect them to take the easy option of making cuts to the voluntary and community sector before they have taken the opportunity to pursue their own efficiencies. Many councils, such as Reading and Wiltshire, which I heard about today, are increasing the amount of funding that they are giving to the voluntary and community sector. We are continuing to invest in the training of commissioners. We have reviewed and updated the compact, which is the framework that steers the relationship. The Office for Civil Society is continuing to invest to support and strengthen the sector.
We have three priorities. We ask ourselves, “What are we doing to make it easier to run a charity or voluntary sector organisation?” We are continuing to invest in infrastructure to support the sector. We are examining the red tape and regulation that get in the way. There are reviews across Government in respect of the Criminal Records Bureau and health and safety. Again, we are trying to get out of the way where we can. We are actively examining ways of getting more resources into the sector. The giving Green Paper is about trying to stimulate more charitable giving. The social investment bank-the big society bank-is about trying to grow a new market of social investment. We are reviewing everything that we can to try to make it easier for charities, voluntary organisations and social enterprises to deliver more public services.
The transition that we have to manage is very difficult, but we are trying to help the sector to work towards a future in which it can be a very active player in the big society, delivering more public services, helping to give people a voice at local level, and benefiting from the extra time and money that we hope people will give. The Government are absolutely determined to make it easier for people to get involved, to live in even better connected communities and to feel part of something bigger.
November 19, 2010
During the Second Reading of this Private Member’s Bill, Nick Hurd outlines the Government’s position and generally backs the Bill except that he does not support the need to legislate for strategies at a national and a local level as that goes against the grain of localism.
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd): The House has rightly expressed its admiration for my hon. Friend the Member for Warwick and Leamington (Chris White). I have a great deal of empathy with him, as I remember my shock at seeing my name at the top of the private Members’ ballot a few months after my arrival in this place. I have been on his journey, and I wish him every success on it.
Once the right hon. Member for Salford and Eccles (Hazel Blears) had recovered from the shock of being described as dreary-
Steve Baker: On that point-
Mr Hurd: It is a little early in my speech to give way.
Once the right hon. Lady had recovered sufficiently, she expressed her admiration for the quiet determination shown by my hon. Friend the Member for Warwick and Leamington. She knows a great deal about determination, quiet or otherwise, and she was entirely right in what she said. I wish to add my sincere congratulations to him, not just on his good fortune at the ballot box but on his subsequent tenacity in building a coalition and the way in which he presented his case today. It is a considerable demonstration of his commitment to improving public services and trying to get a better deal for taxpayers.
I also wish to confirm from the start that the Government are happy for the Bill to go into Committee, if that is the will of the House. We will seek to amend it, in ways that I will explain, but we support the core proposition of the Bill that we should place a firmer requirement on commissioners-those who do the very difficult job of shaping and purchasing public services on our behalf-to consider the potential to maximise the social, environmental and economic impact of every pound they spend on behalf of the taxpayer. In doing so, the Bill builds on the principle of the best value duty, as my hon. Friend the Member for Castle Point (Rebecca Harris) said.
The Bill is also consistent with what the Government are trying to achieve with the big society agenda. I genuinely hope that that issue becomes less partisan over time, not least because-as my hon. Friend the Member for Warwick and Leamington and the right hon. Lady, the former Secretary of State, said-the message builds on the aspirations of, and actions taken by, former Governments. Given the problems and challenges that we face as a country, it must be right to challenge all of us to think about our obligations and personal responsibilities beyond just paying taxes and obeying the law. It must be right to work together to try to find better ways to do things and, in that process, to try to tap into the skills, talents, ideas, experience and entrepreneurial energy that exists in our communities, but which too often feels shut out from the system. It must be right to encourage and support people to come together to try solve problems and improve life for themselves and their communities.
I am lucky in the job that I do-and the hon. Member for Hemsworth (Jon Trickett) will find this, too, as he now shadows me-to visit every week communities and community organisations in which people are coming together to try to make a contribution and to do some good to improve life in their area. It is genuinely inspiring and gives me great confidence that we have a firm foundation on which to build this bigger and stronger society, if we can do more to encourage and support it.
Nadhim Zahawi: My hon. Friend makes precisely the point about which the shadow Minister was confused. The procurement officers will not be compelled to do something from the top down, but will have the same choices before them as they have always had. Rather, they will be asked to look imaginatively at those choices. We are talking about benevolent libertarianism and a nudge forward-not what the shadow Minister was confused about.
Mr Hurd: I do not think that the Opposition were confused in any way: I think that they knew exactly what they were trying to do- [ Laughter. ] However, my hon. Friend is right. This is not a heavy-handed approach: it is a requirement to consider, where relevant and proportionate. My hon. Friend the Member for Congleton (Fiona Bruce) suggested that it was a catalyst-a good word-to try to open more minds to a better and more intelligent way to commission, which considers the opportunity to achieve multiple outcomes through the transaction.
The big society agenda is not a Government programme, but the Government have an enormously important role to play. The Prime Minister has been clear about the three strands of action that people can expect from the Government, one of which-a very important one-is public service reform. Early in the new year we will publish a White Paper on public service reform that will make it clear what we are trying to achieve and how we intend to achieve it. Our desire is that public services will be built on stronger relationships with the communities and citizens they serve, and that they will be, in the words of my hon. Friend the Member for Warwick and Leamington, more local, more personalised and more responsive. We want to devolve power to people on the front line who know how things can be done better, including extending the right to provide that was initiated by the previous Administration. We want to try to encourage and unlock that energy that sits inside the public services, which we feel has been constrained and stifled by a regime of overly oppressive targets and bureaucracy.
Hazel Blears: I have expressed to several hon. Members my concern about the process of transferring assets, possibly to social enterprises, which then swiftly progress to private, commercial organisations. Does the Minister agree that where public sector assets, purchased by the taxpayer, are to be transferred to other organisations there must be an asset lock to ensure the proper stewardship of the assets and democratic governance within the legal framework of those organisations?
Mr Hurd: I hear the right hon. Lady’s concern. She makes a valid point, and she used a very important word-“stewardship”. I totally agree that there is a duty of good stewardship. That contains two elements: a requirement to make sure that public assets are used most productively for the public, and a requirement to make sure that they are not misused in any way. In some ways that is a contracting issue. The right hon. Lady will know that social enterprises take many different organisational forms, and that there is a bespoke legal form for social enterprise called the community interest company, which specifically provides for an asset lock. However, that falls outside the immediate scope of the Bill.
I was talking about why we think the Bill is consistent with our ambitions and aspirations for public service reform. One of our aims is to encourage greater diversity of supply and provision. Here there may be some theological differences between us and the Opposition. We have a strong desire to try to incentivise and encourage much greater flexibility at a local level, such as providing opportunities to pool budgets and integrate services. She may be aware of some pilots that we are encouraging through the Cabinet Office on local integrated services, where the onus is much more on getting out there to find out what the community wants. All those aspirations will be backed up by action that will be reflected in the White Paper.
In the context of encouraging greater diversity of supply, on which the Bill touches, we have an explicit commitment in the programme for Government and the coalition agreement to support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable those groups to have a much greater involvement in running public services.
Mr Chope: Clause 1 calls on the Secretary of State to prepare a national social enterprise strategy. We do not need to legislate for that if, as my hon. Friend is saying, the Government are already going to do it of their own free will. Are they going to do it and, if so, when?
Mr Hurd: I will come to clause 1, and I think that my remarks will give my hon. Friend some reassurance.
We are determined to try to open up the public services markets to a broader diversity of suppliers, and we have been specific about wanting to encourage social enterprises, charities and the voluntary sector to have a bigger role. Why? Most constituency MPs have a sense of the reason. Faced with some of the really stubborn and expensive social problems that this country faces-expensive in terms not only of money but of human cost-there is overwhelming evidence in certain cases, such as the hard job of getting people back into work or keeping people out of jail, that a social enterprise or community-based solution is often most effective in doing the really difficult work. We have to respond practically to the challenge-the right hon. Member for Salford and Eccles, as a former Secretary of State for Communities and Local Government, knows that it is a challenge-of opening up those public services markets to try to create more space for these organisations to participate and add value. It is not about trying to do things on the cheap, but about trying to deliver better solutions and to “do more with less”, to use the cliché of the moment. That requires a radical reform of commissioning and how the state buys, because, as the right hon. Member for Salford and Eccles said, there is a strong feeling out there, represented by the Social Enterprise Coalition and others, that the system is obstructive and gets in the way.
That is why I and the Office for Civil Society are determined to get this right and are on the point of issuing a consultation document setting out what we need to change in state commissioning to fulfil the coalition Government commitment to create more space for social enterprises, charities, co-operatives and mutuals. The consultation document will ask the following main questions: in which public service areas could the Government create new opportunities for civil society organisations to deliver, and why? How can the Government make existing public service markets more accessible? How can commissioners use assessments of full social, environmental and economic value to inform their commissioning decisions? How can civil society organisations support greater citizen and community involvement in all stages of commissioning? And how we can reduce the amount of bureaucracy, form-filling and regulation that gets in the way of and infuriates and frustrates civil society organisations? The whole business of applying for and reporting public money is a bureaucratic nightmare for too many organisations and is often totally disproportionate to the sums of money involved. We are determined to do something about it.
In that context, the Bill’s core proposition-a requirement to consider social and environmental value where it is relevant and proportionate-is a useful complement to our own work of reform and commitment to making it easier for voluntary and community organisations and social enterprises to deliver public services. The Bill has the scope to ensure that commissioners consider the full effect of services on the people whom they serve and enable them to maximise the social, environmental and economic value of every penny they spend.
The Bill reinforces our commitment to value for money. In these tight economic times, it is particularly important that we achieve maximum value in our spend, but our observation is that currently some commissioners miss the opportunity to secure the best price and meet the wider social, economic and environmental needs of the community. Under procurement law, a contract must be awarded on the basis of the tender that is most economically advantaged or offers the lowest price. The Bill does not undermine or circumvent this requirement or otherwise undermine the Government’s value-for-money agenda and efficiency reform. On the contrary, it is anticipated that by taking full economic, social and environmental value into account, the quality and efficiency of public contracts can be improved.
I think that most hon. Members will see the potential for that just from their observations and visits. In my constituency, Hillingdon borough contracts a good proportion of public landscaping work with a company called Blue Sky. It is the only company in the country where someone has to have a criminal record to work. It does a brilliant job in offering employment opportunities to people coming out of jail-a critical milestone in proving to a future employer that they can be trusted. The people of Hillingdon are delighted with the service and the council are very satisfied with the price, and through this process we are making a huge impact in helping people to turn their lives around. I have spoken to some of the people working there. Some of them travel the length of the Central line every day to be on the course, because they see it as their way out.
That is intelligent commissioning at its best, and we want to encourage more of it. I remember visiting a social firm called Clarity that makes soap and liquids for cleaning hands. What differentiates this business is that, as I walked around the floor, I noticed that every single employee was disabled in some way-often in major ways. Again, this is an opportunity for them to build their own sense of worth and confidence, and to carve a different path that otherwise would have been shut to them. That is another opportunity for intelligent commissioning.
There are lots of other examples. In 2006, the London borough of Camden renewed its schools catering contract. At that point, there had been significant dissatisfaction with the quality and performance under the contract. There was a best-value service review prior to retendering, involving extensive consultation with parents, teachers, pupils and local social enterprise and voluntary and community stakeholders. The remit included consideration of wider social environmental and economic factors, and the new contract was shaped around the results of the review. As a result, the uptake of meals by children in primary and special schools rose by 10%, and teachers reported indirect benefits from the new contract. It has improved service and food quality without an increase in contractors’ margins. Again, that is intelligent commissioning.
Hazel Blears: The Minister will have heard me refer to the innovative construction company, B4Box, which has worked on a legal framework for JCT Contracts. Would the Minster be willing to meet me and Aileen McDonald of B4Box to discuss how that legal framework might be used as a basis for wider scaling up of such innovative construction projects?
Mr Hurd: I would be delighted to arrange that meeting. Aileen McDonald sounds wonderfully inspiring, and if she can help us to open doors to more intelligent commissioning, we should be all ears.
Ben Gummer: The Minister has provided some good examples of what he called intelligent commissioning, and I provided an example of a bad commissioning decision. Would he characterise that as unintelligent commissioning? If so, is that not precisely what the Bill is trying to correct?
Mr Hurd: My hon. Friend was good enough to introduce diverse representation from Ipswich, and the anger about the decision was palpable. It might be risky to comment from afar without knowing the details, but what struck me about the commissioning decision was that if 65% of the demand for the contract was based in Ipswich, it seems odd that there was no consultation. The process effectively removed an organisation that was clearly successful in delivering what the contract intended to deliver and had a massive social impact and value in that community. The decision seemed to be taken a long way away from the people who needed the help, and that is a problem.
The spirit of the Bill builds on the Government’s commitment to economic growth and the promotion of entrepreneurship. It is appropriate that it should come to the House in global entrepreneurship week, and the day after social enterprise day, which many hon. Members celebrated. We should not forget that social enterprises are, first and foremost, businesses that contribute £24 billion-that seems to be the official figure-to the UK economy and employ more than 800,000 people. As the hon. Member for Hemsworth powerfully said, they make an enormous contribution by creating and stimulating markets, bringing wealth into struggling communities, creating jobs, supporting disadvantaged people into employment, pioneering innovative products in ethical markets, and attracting new people into business, particularly the young, women and people from minority ethnic communities.
I was struck by a recent comment from Steve Jobs, who leads Apple, a brand that is always associated with innovation. He said that innovation is the difference between leaders and followers. The country desperately needs leadership and people who are capable of pointing to better ways of doing things, and it is in the social entrepreneur community that there are genuine leaders.
I was in Sheffield last week visiting a social enterprise, Zest, which has incredible leadership. It demonstrates how youth services can be run in such a way that young people turn up. It shows how libraries can be run in a way that involves the community, and how to engage with the public on public health issues. I sat at a table with people from the local PCT and the local council, hoping that they were learning and reflecting on how much money might have been wasted over the years. Organisations such as Zest are showing the way forward and opening minds to doing things better.
The point was well made, not least by my hon. Friend the Member for Congleton and, I think, the right hon. Member for Salford and Eccles, that this is not just about social enterprise. Social value is not just about an organisational form called social enterprise, however broad that form might be. I hope that the Bill will also be a catalyst to encourage traditional businesses to speak up more about what they are doing in the community. We all know from our constituencies that many businesses, often family owned businesses with a strong sense of community, do a huge amount, but there is now a challenge, in the context of the big society, to everyone in traditional businesses to think harder about their social responsibility and their commitment to the community. The Government will be saying more about that shortly.
I have set out why we support many of the principles and objectives of the Bill, but we are legislators and we have a duty to ensure that the legislation that passes through the House is robust, is needed and adds value. I suspect that that is one of the themes that we can anticipate hearing from the most distinguished Friday face in the Chamber, my hon. Friend the Member for Christchurch (Mr Chope).
I want to get into the detail of the Bill. The primary measure that the Government support is clause 3, which deals with contracts of contracting authorities. As my hon. Friend the Member for Warwick and Leamington has already outlined, clause 3 requires contracting authorities to consider how they might promote or improve economic, social or environmental well-being through a contract. In policy terms, we often refer to this well-being as “value”, because commissioners who already voluntarily follow this approach tend to attribute a quantifiable worth to it and consider it as part of their wider evaluation of bids to deliver public services. The title of the Bill reflects this commonly used terminology.
The Government are supporting this measure for a two main reasons. First, and most importantly, the Bill sends an unequivocal message to those spending public money that it is vital that they maximise the value achieved by every penny. This is particularly important in the current public spending context. We acknowledge that many of the best commissioners already recognise the importance of this and are exemplars to the public sector. Yesterday, I was privileged to sit in on the first meeting between the London Probation Trust and two social enterprises. The conversation covered how the trust could work differently to commission social enterprises to set up community enterprises such as cafés, garden centres and small garages to employ offenders in the community. This is an example of a commissioner thinking outside the traditional box, and that is the kind of progressive commissioning that we want to encourage.
Steve Baker: Will the Minister join me in celebrating the brilliance of some of our public sector employees, and confirm that we are reforming not because we are challenging the individuals but because we are challenging the system? In some places, it is the system that we have inherited; in others, it is the system that has been established over a much longer period. Will my hon. Friend join me in celebrating the talents of our public sector employees?
Mr Hurd: I certainly will, and it is important to do so. This is largely about freeing people who work in the public sector to express themselves more and to explore their own ideas of how things can be done better. I remember vividly a visit to Merton, where one person working in the mental health field had recognised that the system was failing some people with multiple chaotic problems in their lives. He had shown leadership and pulled people round a table and said, “What we are delivering isn’t good enough.” Together, they produced a new system of support, and the people receiving that support came into the room to talk to me about it. Two of them burst into tears of gratitude. It is very rare for the public to weep with gratitude for the public services that they receive, and this was a direct consequence of one person’s ability to think differently. We want to encourage more of that, but it requires action to create the space and to send the message that, yes, it is okay to think differently and show innovation inside the public services. We need to unlock the potential to do things better.
Mr Chope: Before my hon. Friend moves from clause 3, will he explain why it is mandatory on local authorities? I thought that the Government believed in localism and would trust local authorities to make these judgments themselves without Government interference.
Mr Hurd: It is a requirement to consider, where “relevant” and “proportionate”, and it does not compromise local authority autonomy in responding to the requirement. It is simply a requirement to consider. I do not see it as heavy-handed; it is simply designed to be a catalyst to encourage more people to think more intelligently about commissioning.
The need to support commissioners in this process was raised earlier. It is not just about sending a stronger signal on the requirement to consider, as there are also issues about how to measure social value and how to support commissioners. That is why the Cabinet Office has supported the measuring social value project to try to create a methodology and tools to make measures that are realistically capable of implementation. There is a clear need to advance and bring together some more standard and consistent methodologies in this area.
Furthermore, through the national programme for commissioning, we have trained well in excess of 2,000 commissioners across England and across a range of public service areas. All the commissioners have had the opportunity to receive specialist training in measuring wider social, environmental and economic value. I am delighted to say, following the comprehensive spending review, that we are going to continue this training beyond March 2011. I sat in on a session in Birmingham and it struck me that there are many commissioners out there who would like the chance to do things differently and to do more with the voluntary community sector and with social enterprises, but need some help-busting a few myths and getting some practical support. The process of engagement through the partnership improvement programme for commissioning is, I think, valuable. I am delighted that we can continue with it.
We feel that these policy interventions are important in supporting the objectives stated in our coalition programme, but we also feel that they will be insufficient without some legislative intervention to achieve the goals. That is why we support clause 3. Returning to the point made by my hon. Friend the Member for Christchurch, we believe that these provisions are consistent with the Government’s wider localism agenda in three main ways.
First, the Bill will support the Government’s commitment to community empowerment as a fundamental element of localism. The Bill includes a requirement on commissioners to consider whether to consult the intended beneficiaries of the service in considering how to take account of wider social, environmental and economic value. Although that does not require commissioners to engage with their communities, it sends out a strong message about the importance placed by the Government on involving local citizens and communities in shaping the services they receive. This will inevitably improve community involvement in commissioning and help to ensure that it responds to the full range of communities’ priorities.
Secondly, while empowering communities, the Bill also respects the need to ensure the autonomy and flexibility of commissioners in responding to local needs. Commissioners retain the discretion to determine how social, environmental and economic value is taken into account. The Bill does not stipulate the methodology that should be adopted by commissioners, and it is right not to do so. Local autonomy is maintained.
Thirdly, the Bill does not impose an additional burden on contracting authorities. The specification that contracting authorities are required to take wider value into account only where it is relevant and proportionate means that authorities can use their common sense and avoid excessive costs or bureaucracy. It also allows them to use and draw on existing infrastructure and opportunities to consult their beneficiaries and make sensible decisions in the interests of the people they serve. For example, it is highly likely to be “relevant” and “proportionate” to consider the wider social impact of a service and to consult citizens when contracting for a citizen-facing service such as social care as opposed to a contract by councils for use by an authority’s employees. The Bill therefore requires a common-sense approach, with the authorities having appropriate discretion.
I have explained where we support the Bill and I would now like to spend a few minutes explaining what conditions we attach to our support. Although we support all the objectives, a number of conditions are attached. If the Bill goes into Committee, with the will of the House, we intend to table amendments. These will include the removal of clauses 1 and 2, which refer to a “national social enterprise strategy” and “local authority strategies”.
I am not theological about strategies. Having been in business for 18 years before entering Government, I think that on the whole it is probably a good thing to have a strategy. However, I believe that, particularly in this context, strategies should be governed by the need of the moment, and should be driven by conviction rather than by a requirement to comply with some bureaucratic process. I do not want the process of drawing up strategies to be bureaucratic. I do not want it to be simply an exercise in producing more glossy brochures that fill up the bookshelves in our offices, which are not read and which do not have real traction. Strategies must be driven by need and by conviction at the time.
Steve Baker: I congratulate the Minister on his wisdom in attaching this condition to the Bill-I find it hugely reassuring-but will he say a little about clause 2(3), which deals with the definition of social enterprises? I should be grateful for the Government’s definition of a social enterprise.
Mr Hurd: I am rarely accused of wisdom, so this is a pleasant moment that I shall relish.
The definitions of social enterprise in the Bill are in the context of requiring a social enterprise strategy, which we do not consider necessary, but there is a legitimate point to be made about defining social enterprise, because, as I mentioned earlier, there is a broad spectrum of social enterprise activity. At one end of the spectrum are businesses that are acting in a socially responsible way or making big social contributions to their communities, while at the other end is pure social enterprise.
The definition developed by the sector is as follows:
“A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.”
That is a reasonable start, but there is a spectrum of activity, including charities which are tendering for contracts and trying to generate new revenue streams through that process, and which consider themselves to be hybrids in that sense. So there is no straightforward answer to my hon. Friend’s question.
As I was saying, the Government are uncomfortable about legislating for strategies at both a national and a local level. Several Members-including the hon. Member for Hemsworth, the Opposition spokesman-have agreed that that goes against the grain of localism. We therefore do not agree with legislating for local social enterprise strategies, however desirable they might be as components of existing sustainable community strategies.
None of that should be taken as reflecting any lack of Government support for social enterprise, or even a lack of desire to communicate a strategy. The Office for Civil Society is working with the Department for Business, Innovation and Skills and others across Government to produce a refreshed national strategy for social enterprise, which we will publish in March 2011.
The former Secretary of State for Communities and Local Government, the right hon. Member for Salford and Eccles, knows both the value and the difficulty of working across Government, but I think it extremely important that we do so in this context. My colleagues from the DBIS have embraced the opportunity, and we look forward to producing the refreshed strategy in March. In particular, we will step up engagement with the social enterprise sector so that we better understand the needs of enterprises and the opportunities that could be unlocked. We want to consider how to maximise our support for social enterprises.
Fiona Bruce: May I invite the Minister to meet representatives of the Eden Project and the Message Trust? I believe that they have much to offer local communities: indeed, they aspire to engage with up to 60 local communities across the nation.
Mr Hurd: I should be happy to do that. I have written to all Members of Parliament offering them the opportunity to bring in representatives of voluntary community sector organisations in their constituencies. I understand that there is tremendous enthusiasm out there, and that organisations are anxious to understand the big society agenda better and what it could mean for them. The invitation is open to all Members on both sides of the House.
We consider social enterprises to be valuable in terms of making a social impact and our determination to promote enterprise and private-sector growth. We are making it easier to run a social enterprise by: establishing a taskforce to reduce bureaucracy and red tape for social enterprises; reducing the small-profits rate of corporation tax to 20% from April 2011; offering a one-year temporary increase in the level of small business rate relief from October 2011; and taking a different approach to regulation by introducing the one-in, one-out rule, whereby we will not introduce any new regulation without abolishing existing regulations with a net cost to business.
Secondly, we are ensuring the resilience of the social enterprise sector by developing a big society bank to help grow the new market of social investment that is seeking to blend financial return with social impact. It is a real market, but also an embryonic one and we want to accelerate its growth. We think the big society bank can be a catalyst for that, such as by making it easier for social enterprises to access the capital they need. That will come on stream in quarter two or quarter three of next year.
As has been said, we have-at a time when there is very little money around-set up a £100-million transition fund to support voluntary community organisations and social enterprises delivering front-line services that stand to be affected in the short term by reductions in spending. We have also included social enterprises in the offer to access a £1.4 billion regional growth fund to invest in projects and programmes with significant potential for growth and employment.
Finally, we are making it easier to do business with the state by opening up markets for social enterprises, as I have discussed. There will be a fundamental reform of public services with an explicit commitment to try to create more space for social enterprises, charities and voluntary organisations to help us deliver better public services.
With the two conditions of our resistance to legislating for strategies both at national and local authority level, we support the Bill’s objectives. We think it is consistent with the big society agenda and our public service reform aims, and with our intention to make it easier for charities, voluntary sector organisations and social enterprises to deliver public services. We think it will help us maximise value for the taxpayer and improve the process of consultation with communities in the shaping of public services. It will support social enterprise, which in itself is a worthy aim. It simply proposes a duty to consider, where relevant and proportionate.
It does not compromise autonomy or add additional burdens. It is about trying to turn best practice into standard practice and to deliver the best possible value to taxpayers, and it is on that basis that we are prepared to support the Bill.