Charles Walker raises his concerns about the corporatisation of larger charities and the effects this could have on squeezing out smaller, local charities.

2.38 pm

Mr. Charles Walker (Broxbourne) (Con): It is a great privilege to speak in this review of the third sector. I promise the House that in my brief contribution, I shall not stray into anything that could be deemed to be partisan. I am sure that I shall be pulled up if I do.

The UK’s charitable sector is one of this country’s great successes. All of us, wherever we are from, have the right to be deeply proud of it. There is something very British about charities, which do a fabulous job. As the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) so eloquently made clear, they give people an opportunity to engage with their local communities, and they also provide an opportunity for people to engage with the wider world.

I shall not detain the House, but I want to relate a brief family anecdote. My young son was recently part of a team of 196 people who took part in the great north run. Being nine years old, he ran only the two-mile stretch, but the aim of the group as a whole was to raise to money for something called Vicky’s Water Project, in memory of 28-year old Vicky Buchanan, who, tragically, was killed last year. They were running collectively to raise money on behalf of ActionAid to support the creation of several clean water projects in Ethiopia, which will save many thousands of lives over the next 50 or 100 years. Between them, the young people—actually, they were not all young; some were as old as 76—raised £403,000. People ask how they can go beyond their community to play their part as global citizens to help the wider world, so it is fantastic that we have charities such as ActionAid and Christian Aid that enable such things to happen.

Locally in Broxbourne, we have the good charity Millennium Volunteers. If I am not mistaken, I think that the Government had something to do with setting it up. I get involved in many of its projects, and it does fabulous work throughout my constituency all year round. We also have Groundwork. The hon. Member for Staffordshire, Moorlands talked about getting businesses involved in charity, and Groundwork brings together businesses for team-building days and puts them out in the community doing good work in deprived areas, which is to be hugely welcomed. The charitable sector is a great success story for this country, and I hope that it has a long, prosperous and bright future ahead of it.

I question some of the figures relating to volunteers. Like all hon. Members in the Chamber, I spend a lot of time visiting local charities and attending their annual general meetings. It seems to me that the same people often carry out similar roles for different charities, and double or triple up their roles. People who lead charities say that over the past 10 or 20 years, as people have become busier or had different calls on their time, it has become more difficult to recruit volunteers. I hope that Ministers and our Front Benchers—and we in Parliament collectively—can address that situation and ensure that volunteering remains something that people want to do.

The Public Administration Committee, of which I am a member, has been examining the delivery of services in the public sector by charities. I understand why the Government would like to involve charities in the delivery of public sector services because it might represent an attractive new model of delivery. No doubt many charities are already doing an excellent job of delivering public services, and those that will be brought into the fold will also do so. However, I would like to focus on some possible downsides. This is not a criticism, but a genuine set of concerns.

There is a danger that a form of corporatisation or nationalisation of charities will rob them of the very essence of what makes them so special. A number of charities, many of which are doing a fantastic job, receive more than 90 per cent. of their income stream from local or national Government. The excellent charity Turning Point readily admitted to the Select Committee that 95 per cent. of its funding came from the Government. One must thus question whether it is still a charity, or whether it has more of the characteristics of a corporate organisation. Such concerns are legitimate because the Charity Commission discovered through research last year that 40 per cent. of charities delivering public sector services did not have a complaints procedure. That is worrying and needs to be addressed, because I know that companies delivering services to the public sector must have a complaints procedure so that people can escalate and feed back their concerns.

I am troubled and slightly concerned that large national charities, with their economies of scale, can squeeze out good local providers that are very much in tune with the needs of their local communities. That is particularly true for the charities in my constituency that deal with alcohol and drug abuse. We have two very good niche charities, Chrysalis and Vale House. They take very different approaches to managing substance abuse, but both provide an excellent service. My concern centres on the fact that when contracts to deal with, say, substance abuse are tendered on a countywide basis, small charities do not have the scope, coverage or expertise to bid for them.

James Duddridge (Rochford and Southend, East) (Con): Has my hon. Friend noticed that since primary care trusts got even bigger, there has been a move away from funding micro-organisations? For example, in Southend, the primary care trust used to be contiguous with the borough boundaries, and there was very good cross-working. Now that the PCT is larger, there is a disinclination to commission work from small voluntary organisations and charities.

Mr. Walker: My hon. Friend makes a valid point, and I am certainly beginning to come across that problem in Hertfordshire. We have gone from having multiple PCTs to a single PCT, and a number of smaller charities are having their funding cut. It is a concern that large charities win contracts, and as a result squeeze out well-established local providers, who provide a service that is focused on and tailored to the local community. That is not a criticism of large charities and national organisations that provide services, because I am sure that they do a very good job, but we have to make sure that we create a space in which both kinds of organisation can exist.

Mr. Sheerman: Is there not a danger in stipulating who can compete for a particular contract? The third sector is very broad; the hon. Gentleman has talked mainly about charities, but the co-operative movement is part of the third sector. The sector includes a diverse range of large and small co-operatives and charities. There are also charities that do not really act like charities. Public schools have been in that position for a long time; they do not operate like real charities. If we get too tidy-minded, we might restrict the range and diversity of the third sector.

Mr. Walker: The hon. Gentleman makes some good points, but we have to make sure that we create space for all types of providers, and that we do not favour a group of larger providers over smaller providers. I am sure that most Members would agree, because we all have small charities serving our constituents and constituencies. Another concern about the growth of very large charities is that it could reduce confidence in public giving. If the public see super-mega-charities getting 90 or 95 per cent. of their money from central Government, there is a danger that they might say, “What’s the point of me giving money to charities?” The point, of course, is that although large charities may get lots of money, there are tens of thousands of smaller charities that are desperate for money. We have to make sure that people realise that that option is still open to them, and that there are still many deserving organisations towards which they can direct their money.

People in my constituency are slightly worried that large charities will spend too much time looking towards Government, who fund them, as opposed to towards the end user or client group. Those concerns may be unfounded, but it is my responsibility to bring them to Parliament and to the Minister’s attention. We have talked about political campaigning quite a bit today, and I think that there are legitimate concerns about it. Larger charities have taken on the persona of corporate organisations, and it is amazing how many marketing, public relations and public affairs people they now have. My local charities do not have any people of that sort, because all the money that they raise goes on delivering charitable services to the end users, but large organisations have a lot more money to hire those people, who I am sure do a difficult and important job.

Anne Snelgrove: The hon. Gentleman is making a thoughtful speech and has made some good points. I agree with his point about keeping the balance between large and small organisations. However, I ask him to be cautious on the subject of the number of people employed in PR by national charities. Most national charities that I have anything to do with are keen to emphasise that they keep their overheads to an absolute minimum. If they have people in such posts, it is to enable them to raise more money. The hon. Gentleman does the charities a disservice without meaning to by suggesting that they may be wasting money on those posts, because I do not think that they are.

Mr. Walker: I thank the hon. Lady for her intervention. I do not mean to suggest that the charities are wasting money, but that constituents looking in from the outside may worry about how their money is being spent. It is incumbent on charities, and important for them, to keep explaining why PR staff are important.

Of course, political campaigning has a role in the charitable sector and I would not want that to be eroded, but all hon. Members have probably been on the receiving end of some fairly aggressive single issue campaigns which basically said, “If you don’t support my position, I’m going to withdraw my vote from you.” We in Parliament know that there are very few black or white decisions to be made in public policy. Instead, there are many shades of grey in politics. As politicians, we must balance the competing interests of our constituents. I make a plea, more to charities than to my colleagues, to be mindful of that.

Gift Aid is a fabulous mechanism for charities to raise additional money for good works. The claiming back of Gift Aid, though, can be time consuming. I am sure that many people who give to charity never get around to filling in the Gift Aid forms so large sums of money are potentially lost. Will the Government consider allowing charities to report at the end of the year the amount of money that they have received from charitable donations—gifts from the public—and the Treasury to provide a lump sum on top of that to reflect the Gift Aid? That would remove from the donor the responsibility of filling out the forms, and from the charity the responsibility of collecting them. The Government would accept the audited amount and provide an additional 25 per cent. on top of that.

My final point concerns the Olympics. In Broxbourne we are very lucky—we have the canoeing, and we are grateful for that. It will be a powerful tool for the regeneration of Waltham Cross, a fairly deprived area of my constituency. However, I am concerned that quite a large sum that would have gone to charitable organisations is being diverted from good causes to fund the Olympics. We need to be mindful that that will have an impact on the ability of charities to provide services in our communities. The lottery should primarily be for the little extra things that make life worth living—a cricket pavilion, an extra football field—and not so much for core funding. I entirely appreciate the importance of cancer scanners, but those are better left to the NHS to provide, as opposed to the lottery fund.

That is my brief and modest contribution to the debate, and I thank the House for listening so intently.

2.53 pm

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