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Third Sector Organisations

Volume 490: debated on Wednesday 1 April 2009

3. What recent discussions he has had with third sector organisations on the effects of the economic downturn on their funding streams; and if he will make a statement. (267960)

My Department is in constant contact with the sector to monitor the effects of the downturn. That is why we are determined to invest £500 million to support the sector over this comprehensive spending review period, and why we committed £42 million in extra targeted help in January.

Does the Minister accept that the double whammy of the economic recession will mean not just reduced charitable donations, but the possibility of reduced lottery moneys for charities as a result of reduced ticket sales? Does he accept that children’s hospices in particular and smaller charities in general will be particularly affected? Will he ensure that appropriate practical advice is given to both children’s hospices and smaller charities so that they can weather the period of the recession?

I congratulate my hon. Friend on the work that he does representing and speaking up for hospices in his constituency. The third sector and charities such as those that he alludes to go into the downturn in stronger health than ever before, because we have doubled public income to the third sector from £5.5 billion to £11 billion. We are determined to do more. That is why we are spending £500 million over the comprehensive spending review period, and why we are determined to bring forward reviews and reform of Gift Aid.[Official Report, 2 April 2009, Vol. 490, c. 10MC.] The tax system is now worth £4 billion to charities. Where there are opportunities for us to bring public services, charities and voluntary groups closer together, and to use that strategy to strengthen charities, we will do that. That is why the Department of Health has asked Futurebuilders to manage £100 million-worth of investment in social enterprises over the next couple of years.

While endorsing what the right hon. Gentleman has said, may I ask him, as he is well known for his memos to his colleagues and his officers—

They may be excellent, but could one go out today outlawing that ridiculous term, “third sector”? I have had a go at him about it before. It causes confusion. Let us have some plain English for once. Let us get rid of downturns and third sectors, and talk the English language.

As ever, I am grateful for the hon. Gentleman’s advice. I will put immediate thought into how such a memo could be drafted and propagated—perhaps through The Mail on Sunday.

Is my right hon. Friend aware that in South Ribble, the Tory council has cut funding to a number of voluntary organisations, including the citizens advice bureau, the women’s refuge, Victim Support and a charity helping young homeless people? Will he agree to look into the problem of cuts in local authority support for the voluntary sector just at the time when extra rather than less support is needed?

I am sad to hear about the lack of support that my hon. Friend’s local authority is showing to the third sector. Local authorities are vital partners in ensuring that the civic strength of this country becomes greater still over the years to come. We are collecting information right the way across the country about how well local councils are supporting, or in my hon. Friend’s case not supporting, their local charities and voluntary groups, and we will publish those data over the next couple of months.

I commend the right hon. Gentleman for setting up the modernisation fund, which we have already heard about. In his discussions with the third sector—a perfectly sensible name, by the way—will he make it clear that in these straitened financial times he will give greater weight to organisations that show that they will collaborate and co-operate with other similar third sector organisations in their locality, so that some of the duplication and waste that we see in the third sector can be cut out?

I will do my best.[Official Report, 2 April 2009, Vol. 490, c. 10MC.] The hon. Member for South-West Devon (Mr. Streeter) is right. Very often it is smaller organisations that make the biggest difference to their communities. That is why we wanted to step up the amount of funding that goes through grassroots grants. In the hon. Gentleman’s constituency, I understand that there are about nine organisations which receive about £27,000-worth of grassroots grants. Often those small amounts of money will make the world of difference, as he knows. When the Charity Commission recently asked the question of the sector—however we choose to define the sector—84 per cent. of respondents said that they were more interested in collaboration in the months to come. That is why the modernisation fund, which I am glad to be able to tell the House opens for business today, will provide £16.5 million not just to organisations seeking to merge and grow stronger, but to those that seek advice on how to collaborate more effectively in order to do the job that they are so passionate about.

What is my right hon. Friend’s Department doing to help voluntary organisations that work with the unemployed?

Volunteering organisations in particular have enormous potential to help people get back to work. We are absolutely determined that long-term unemployment, which so scarred this country during the 1980s, will not be an outcome of this recession. That is why the Prime Minister and my right hon. Friend the Secretary of State for Work and Pensions have set out clear plans to make sure that, after six months, people are given extra training, the opportunity to get extra help to get back to work, or the opportunity to start volunteering in their local communities. That is why the third sector action plan, which we published in January, provided for about £10 million to create about 40,000 volunteering opportunities, to make sure that there is no return to long-term unemployment in this country.

State funding now outstrips donations as the largest source of charities’ funds, especially in health and human services; in some cases, more than 80 per cent. of such charities’ total income is made up of Government funding. Those charities in particular are at real risk at the moment as Government Departments come under increased pressure to save money and cut costs. We have already heard this morning that there is increased demand for those services in particular. Will the Minister commit to talking to other Departments to make sure that vital funds are not cut from charities at this time and that they can carry on providing fundamental public services?

Absolutely. We are trying to strengthen the sector over the years to come; that is why we have provided for such a unique and unprecedented amount of money to go to the sector in the months to come. It is important that we strengthen the role of charities and voluntary groups in delivering public services and helping to deliver public services. That is why Futurebuilders is providing so much money to help exactly with that task, why the Department of Health is investing £100 million to help social enterprises step up to provide public services and why the Department for Children, Schools and Families is also providing £100 million to help. This is already a cross-Government effort.

Charities that work abroad, such as Oxfam and International Service, face the same pressures on fundraising as charities that work in the UK. However, they have an additional pressure because the money that they spend abroad has fallen in value by 20 or 25 per cent. as a result of the change in the value of the pound. Will my right hon. Friend speak to the Department for International Development, and other British Departments of State that fund international charities, to see what additional help can be provided to ensure that those charities’ Government-funded programmes of work continue at the same level as was originally anticipated?

I will, of course, have those conversations on my hon. Friend’s behalf. It is important that we do not just talk about how we can strengthen the role of charities and other groups in delivering international aid, but that we back that with concrete plans to increase funding. That is why so many on the Labour Benches are proud of our commitment to increase overseas aid, despite the difficulties that our economy faces.

It is hard enough to run a voluntary organisation, but now really important community organisations such as churches and sports clubs are facing huge increases in their water bills as a result of new surface water drainage charges. Some clubs are reporting tenfold increases in their bills. It is extraordinary that those changes should have been made without any impact assessment. Surely the one thing that the Government must do in these times is avoid making things even harder for people trying to help their communities. Will they step in now and impose a moratorium on the changes, at least until an impact assessment is done? That would be real help now.

I am grateful for that advice. I understand that Brian Moore in The Daily Telegraph has been leading a campaign on that exact issue, for which I commend him. As the hon. Gentleman knows, we are determined to make sure that there is specific, targeted, focused help for organisations that are facing new pressures, such as a decline in income and a step up in demand for their services. That is why we put £42 million of help on the table in January. Where there are additional pressures and Government action could help, we will, of course, have those conversations with my colleagues across Government.