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October 2009 Monthly Archives

Third Sector (Recession)

October 28, 2009

Nick Hurd calls on the Government to explain its plans for reform of gift aid.

Mr. Nick Hurd (Ruislip-Northwood) (Con): We should be concerned that more than 10,000 charities have ceased operating in the past six months, according to the Charity Commission. After two years of consultation, we are still no clearer about Government plans to make gift aid easier and more effective for charities. Instead, we are now getting signals from private meetings that the Treasury actually wants to scrap tax reliefs for higher rate payers who give to charity. This must be the wrong time to be hiding things from the sector. When will the Government come clean on their plans for the reform of gift aid?

Angela E. Smith: The number of charities has reduced, but from talking to the Charity Commission we find that that is about the cleaning up of the charities list. There are charities that have been on the list for some time but have not been functional, or there may have been mergers.

This Government have a proud record on gift aid, and several changes have been brought in.

Mr. Hurd indicated dissent.

Angela E. Smith: The hon. Gentleman may shake his head, but it is absolutely true. A number of changes have been brought in to simplify and improve the system and get more money out to charities. I understand the frustration of some charities that want to see change more quickly, particularly on the issue of higher rates, but the problem is that there is not agreement among the charities themselves about the best way forward. We are in talks with the Treasury about how best to address the matter, but the improvements that this Government have made have increased the amount of gift aid going to charities. The number of donations has more than doubled since 2001, when we first started making changes. I understand the frustrations, but we are working with the Treasury to ensure that there are improvements.

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Local Spending Reports

October 28, 2009

Nick Hurd criticises the Government for failing to implement measures in the Sustainable Communities Act 2007 such as the publication of Local Spending Reports especially at a time when there is public demand for greater transparency.

Mr. Nick Hurd (Ruislip-Northwood) (Con): We have had a rather good debate since we made it through the first 10 minutes of the Secretary of State’s speech. That 10 minutes was badly judged, because the subject of the debate is legislation characterised by strong cross-party support. It was my privilege to be the promoter of the Sustainable Communities Act 2007, and, as I sense that it will probably represent the pinnacle of my usefulness in this place, I am obviously keen to see it implemented properly. However, I am not alone, because, as the hon. Member for Falmouth and Camborne (Julia Goldsworthy) put it very well, many people can claim credit for what is a genuinely cross-party Act.

The simple truth is that it is on the statute book for one reason only, and that is people power. It is a grass-roots Act, forged by a wide, deep and extremely determined coalition who want to change how the decisions that shape the future of their communities are made. They are disappointed, and their disappointment is reflected in early-day motion 1064, which has been signed, as my hon. Friend the Member for Meriden (Mrs. Spelman) said, by more than 250 Members, including more than 90 Labour Members. Feelings run strongly through all parts of the House.

This debate has delivered some very clear messages to the Government. First, the 2007 Act is an important law that deserves greater attention from the Secretary of State, and I think that we have secured it in the run-up to and during this debate. Secondly, there is a perception that the Government have not delivered their promises on local spending reports. Thirdly, now is the time to change that perception and send a much stronger signal that the Department is committed to making the Act work, not just paying lip service to it. That has been the key theme of a good debate.

I shall acknowledge in particular two contributions, not least because they come from new players on the Act’s well trodden stage. On intervention and in a brief but telling speech, my right hon. Friend the Member for Charnwood (Mr. Dorrell) drew on his considerable and relevant experience, not least as Financial Secretary to the Treasury. When he acknowledges that the importance of the Act is the transfer of effective power, we should listen. It was also useful of him to draw on his direct experience of Total Place in Leicester.

I also particularly welcomed the contribution from my hon. Friend the Member for Henley (John Howell), not least because he was not a Member when the legislation was debated. He none the less drew deeply on his experience as a county councillor and on the direct experience of wrestling with the challenge of partnership working. He stressed the importance of words such as trust and transparency and, critically, the importance of the ability to change how things are delivered. Without that sense of the potential to change how services are delivered and who delivers them, we will not be able to make the progress that we need.

The theme is clear: the Government could and should do better. I should like to do two things: first, make it quite clear why we are disappointed; and secondly, try to persuade the Government to change gear. Critically, they should get over the “not invented here” syndrome and seize the opportunity that the 2007 Act provides to get people involved again in the decisions that shape their communities, and to transform the efficiency of public expenditure. Never has that need been more pressing, and the key word that will drive such transformation is “transparency”.

So why are we disappointed? It is worth going back to what the Act set out to do. Its guiding principle was that local people know best, and that we should have much greater influence over the decisions that shape the future of the places where we live and work. To that end, the Act required the Government to seek proposals by local authorities for new policies and powers they needed to promote more sustainable communities. The Local Government Association would act as a selector, and the Secretary of State would have a duty to reach agreement on a shortlist of proposals. To assist local authorities in this process, the Government were required to produce local spending reports that would give local authorities and the communities they serve new information on public expenditure in the area, and local authorities would be free to challenge existing expenditure and make the case for the transfer of function and resource.

That goes to the heart of the response to the Secretary of State’s concerns about the absence of quality of service from the debate, because the local spending reports are in fact a catalyst for challenging and driving up quality. The example that we used in Committee, as agreed by the then Minister, was that of Business Link. The scenario was one whereby a local authority had a locally set target about supporting local businesses. The provision of full, effective local spending reports would have shown the local authority what Business Link was spending in the area. If the local authority and the community that it serves felt that Business Link was not doing an adequate job, it could then, under the provisions of the Act, make representations to get the function and the budget transferred from Business Link.

If colleagues think through that example, they will see what potential the Act has to change the dynamics of how decisions are taken at a local level and to challenge whoever makes them. That could be a real motor for driving up quality and for asserting local priorities. As the hon. Member for Stroud (Mr. Drew), the auntie of the Act, observed—I sincerely welcome his remarks—it is a wonderful opportunity for the voluntary sector. As shadow Minister for charities, social enterprise and the voluntary sector, I have said to people in the sector, “This Act is a great opportunity for you—seize it,” and they recognise that fact.

The bottom line, as anyone who was involved in the long trench warfare over the Bill in Committee knows, is that local spending reports were always seen as the meat in the sandwich—the genuinely radical part of the Act, as it now is. My hon. Friend the Member for Meriden stressed that in her opening speech. It was also clear that the reports had to be as comprehensive as possible in order to be useful—a key word used by the Secretary of State. In the consultation response, the chief executive of Labour-controlled Gateshead said:

“Unless a comprehensive picture of expenditure is given within a specified spatial area, the reports could provide a misleading picture.”

The then Minister “got” this. He was frank about complexity, as the Secretary of State said. Nevertheless, the direction of travel was clear. That May, the House was told that the local spending report would cover all public expenditure in each local authority—in so far as it is possible to define it—that it would cover both current and future spending, and that it would include all public agencies. That could not be clearer. Such transparency must be right, not only because it is fundamental in giving local people meaningful influence, as the LGA put it recently, but because it is the natural bedfellow of efficiency and finding better ways of doing things.

There is a more fundamental point, which was made strongly by the hon. Member for Falmouth and Camborne. In 2009, surely we have a right to know what is being done in our name, in our area. We live in a world where we have so much information at our fingertips, yet it is almost impossible to find out what the state is doing in our name, in our area. I am a Greater London MP—or a Middlesex MP, as we prefer to say. I am told by London Councils that £74 billion of public money is being spent in London, £5.6 billion of which is being spent by 169 non-departmental public bodies, 15 of which spend about 80 per cent. of that money. I would like to know what they are doing in Hillingdon. How hard can it be to get that information? It is absurd that in 2009 my local authority does not know what the Metropolitan police are spending in the borough of Hillingdon, or how much flexibility the borough commander has over that budget: they need to be partners. There has to be a better way, and the public know it. This place should need no lectures about the public appetite for greater transparency. It is growing, and we must respond to it.

That is what the Act was intended to do, but what was actually delivered? One year after it was ratified it was formally launched at the LGA by the then Secretary of State, who had inherited it from her predecessor. Two things were clear to me as I sat in the audience. The first was that local spending reports were barely on her radar screen, and that she saw political risk in them because of the potential comparisons between areas. The second, which came from talking to officials, was that one year on, no real work had been done on making the local spending reports happen in a substantial way, even though they were due to be published six months later. That told me that there was no leadership or political will at the top of the Department, and that not enough time had been allowed to make the system work. Members can take their pick between cock-up and conspiracy. In my experience these things are normally cock-ups, but that is not the perception among supporters of the Act. The message that we received was that there was no political will at all driving the process.

I should say that it is not all bad news. As the hon. Member for Stroud said, we should take encouragement from how many councils responded to the Act despite wholly inadequate local spending reports. The LGA, acting in its role as selector, now has a large number of proposals to sift through, some of them very radical indeed. However, the LSRs were a big disappointment. The starting point was wrong, with the ambition limited to local authorities and primary care trusts, as the responses to the short consultation made clear. As the Secretary of State said, the Government responded and added lines of expenditure, but not enough. They did not even begin to engage with quangoland, and there were glaring exceptions, as my hon. Friend the Member for Meriden and my right hon. Friend the Member for Charnwood have ruthlessly exposed.

Moreover, the relevant information is quite hard to find, being tucked away in pretty impenetrable Excel spreadsheets in the bowels of the departmental website. People find it difficult to engage with them, and they are given no prominence at all. Disappointingly, everything indicates that, as the LGA puts it, the first LSRs

“reflect a minimalist approach to the concept of, and commitments to, Local Spending Reports as discussed in Parliament during the passage of the Sustainable Communities Act”.

It states that they

“fall short of the ambitions for LSRs shared across all political parties at…local level.”

That sense of disappointment is shared by local authority leaders in Wealden, who have said that the LSRs

“fall significantly short of expectations and are of little or no value in developing proposals”.

According to Merton council,

“it is questionable about how useful this information is given that a great deal of it is already publicly available and that the data included is very high level”.

The truth is that the Government have simply repackaged information that, for those who could be bothered to look for it, was already in the public domain. The Secretary of State trotted out 96 different reasons why it was all so difficult, straight out of the Sir Humphrey playbook, but he did not convince us.

What makes the situation even more frustrating is that the Government actually appear to be committed to the mapping of expenditure. They have developed their own project, Total Place, which we have discussed at length, and they support it with taxpayers’ money, but they drag their feet on local spending reports. That looks to me like a bad case of “not invented here” syndrome. [Interruption.] The Secretary of State groans, but that is our perception.

The hon. Member for Stroud made a good point about potential confusion in the marketplace between LSRs and Total Place, and how the two will be reconciled. The debate has been useful in giving us a sense of the Government’s aspirations in that direction and highlighting the value of having the Treasury fully bound into the process, which we acknowledge. Still, the fundamental question is: if it can be done in Cumbria, why can it not be done elsewhere? I am not sure whether we have had sufficiently good answers to that. If part of the problem is that central Government do not hold the information, why can they not go and get it? If the problem is that the Department does not have the power of information gathering, we must consider what can be done to change that situation, and whether it is worth having that debate in public.

My concern is that local spending reports have not told local authorities’ leaders anything that they could not have found out for themselves. For those who went ahead and submitted proposals there is no visibility to show when they will get a decision on them, and for those interested in making proposals at a subsequent phase, there is no visibility to show how that will work. The risk is that an already sceptical market of local authority leaders will shrug their shoulders and move on. That will frustrate the grass-roots campaign that believes in the process and wants change.

I think that the Government have misread the mood, and a large number of organisations feel the same way, including Unison, the Public and Commercial Services Union and the Federation of Small Businesses. A range of organisations have expressed disappointment and have urged the Government to do better.

The Government have set out their stall. They say, “Give us a chance. We’re getting there. As you know, government is terribly complicated and we’ve got to be careful about costs. There’s terrible inertia out there.” My response is that we will judge them by their actions, not their words. We have heard plenty of words, but they have not delivered.

I have three tests: first, let us hear a statement from the Department on how it intends to try to reach agreement with the LGA on submitted proposals. The Department is silent, and it should not be. Secondly, let us hear the Government make it clear that this process is not a one-off, and that local authorities will have the opportunity to submit new proposals in the near future. Thirdly, let us set a timetable for the delivery of effective local spending reports that include quangos—my hon. Friend the Member for Meriden made the very good point that it is actually in quangos’ interest to do more to explain to the public what they do, to justify their existence.

I am sure that government is complicated, but I am also sure that it is less so when people are clear about their priorities and really drive them. Effective LSRs cannot be that hard, because Total Place pilots seem to have the information. There will be costs, but they must be tiny compared with the efficiency savings that should be the dividend of greater transparency; that point was made by the hon. Member for Falmouth and Camborne.

Transparency must be a priority now. If the Minister has any doubts about that, I urge her to look at what is happening in the USA. Months, not years, after the election of President Obama, the default setting was changed from closed to open. Look at the Missouri accountability portal. It is not an obscure Excel file, but four buttons to click on. Look at SeeThroughNY, USAspending.gov or data.gov, the strapline of which is “Discover. Participate. Engage.” In America, they have been bold in opening the books, throwing open the doors and letting the light and the people in. They do it because they know that it will be the catalyst to engagement, efficiency and innovation; here, we continue to live in the dark.

That is not the future. The 2007 Act has wedged the door open and it will not close again. I urge the Government to listen to Parliament, embrace the future, change the default setting to open government, not closed government, start to treat people intelligently and commit now to full local spending reports that include quangos—and just get on with it.

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