HC Deb 06 July 2004 vol 423 cc812-20

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]

7.35 pm
Matthew Taylor (Truro and St. Austell) (LD)

I am grateful for the opportunity to raise an extremely important issue, which has been raised in the other place and by other Members of Parliament, not least by a number of Labour Back Benchers, who have been expressing concern with an early-day motion and representations to Ministers. No doubt they, like me, have been contacted by local neighbourhood watch members and co-ordinators who are aware of the concerns that have been raised at national level.

First, it is worth saying that there is pretty much universal support in the House for local neighbourhood watch schemes. They have been extremely effective, they are essentially voluntary, they exist in many parts of the community, across the country, and their success is perhaps best illustrated by the fact that many insurance companies will offer discounts on insurance for people who live in areas where neighbourhood watch schemes are active. Whereas many of the Government initiatives for which we argue in terms of tackling crime cost money—whether that is more police on the beat, or some other campaign—neighbourhood watch comes at very little cost to Government or local police authorities, it is done by volunteers and it works. There is not much else that can be described in those terms. It is invaluable.

The national body is a registered charity and was formed in 1995 by volunteers, for a number of reasons. Partly, it was in response to quite a controversial speech by the then Home Secretary, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) and leader of the Conservative party, who proposed changes to neighbourhood watch, which implied getting out and being active on the streets. The volunteers were concerned that that implied a kind of vigilantism, which they did not want. One of the reasons for the formation of the organisation was therefore to give a voice to concerns at national level and to make representations to Government on an independent basis. It does more than simply provide a voice for the local organisations and volunteers; it also provides support, training, legal advice and conferences.

The reason that I have sought this Adjournment debate is that there now seems to be a serious question mark as to whether that national association will be able to continue in existence at all. It has been reliant for some years on a national sponsorship deal, which it sought to renew with a new organisation, and thought that it had succeeded in doing so, but at the last moment it was effectively blocked by a Home Office decision. It sought Government support as an alternative on a temporary basis, but that has been blocked because the Government claim that an audit cast doubt on the organisation's financial viability—the organisation has no argument on the financial issue, which is why it supports the Government sponsorship, so there is a degree of tautology in the Home Office's argument. In addition, the audit highlights a shortage of money, not poor bookkeeping, which is the impression that has been given.

James Purnell (Stalybridge and Hyde) (Lab)

I support completely what the hon. Gentleman said about the great work of the neighbourhood watch in all our areas, including in my area of Stalybridge and Hyde. I am slightly unsure about whether he is saying that there should be ongoing financial support from the Government. My understanding of the position of the association is that it wanted to have private money as its long-term base of funding, so that it can remain independent.

Matthew Taylor

The organisation wants to maintain its independence, for the reasons that I mentioned at the outset. That is partly why it was formed in the first place. The point is that because the sponsorship deal is caught up in a wrangle with the Home Office, temporary funding is needed to see the organisation through. That is why the argument that it is not financially viable is a bit of a tautology. The Home Office accepts that it would be viable if the sponsorship were there; the Home Office has caused problems with the finalising of the sponsorship deal; the organisation has therefore asked for temporary funding; the Home Office appears to be saying that it will not provide the funding on the ground that the organisation has not enough money to run itself. That is clearly a circular argument.

I want to start with the issue of the private funding, because it needs to be explained. The original sponsorship arrangement was with Norwich Union. It was in place from 1994 until 2003. I do not think there is any dispute about the fact that it worked well. There were no Home Office objections, and it involved the exclusive commercial use of the neighbourhood watch logo. That was, of course, key to the process in which Norwich Union was involved: it wanted to be seen to back an organisation, have the use of the logo and support the local neighbourhood watch. No doubt it considered that commercially advantageous as well. The arrangement was ended by Norwich Union when its ownership changed and it had new priorities, not because of any dispute with the association or any disagreement about the important role of neighbourhood watch.

Over the past 18 months, the association has been working to secure new sponsorship. A major high street bank has agreed to sponsorship, essentially on the same terms as Norwich Union. As a result, by 2008 £1 million per annum would be flowing to local neighbourhood watch groups. The agreement was due to be signed on 19 March, but the Home Office and Treasury solicitors wrote to the association's trustees on 17 March—just two days beforehand—threatening possible legal action over the logo.

That brings me to the issue of the logo. As far as I can see, there is no history of any original dispute with the association. After all, the logo has been used in this way for many years, with, it appears, complete Home Office agreement. In 2002, however, another insurer, Direct Line, began using it without permission.

Following a challenge, the association and the Home Office were asked by Direct Line's insurers to provide evidence of copyright. They failed to do so. There were no documents and no artwork to be provided by the Home Office to show that it had the copyright. The Treasury solicitors were apparently saying that most records since 1985 had been destroyed. In the meantime, it emerged not only that Direct Line was going down this route, but that the home watch logo—which is used instead of the neighbourhood watch logo in some areas—had been registered by two companies, with no authorisation or agreement whatever.

The advice to the National Neighbourhood Watch Association from its lawyers was that it had no option but to protect the neighbourhood watch trade mark itself, as the Home Office could not establish Crown copyright. Private commercial companies were rapidly starting to use it, and it was clearly at risk of being lost altogether and abused by other private organisations. For the Home Office to suggest that the association had some ulterior motive in deciding to register copyright at this point is ludicrous. Why would it want to abuse its own logo, given that it consists effectively of local organisations that have come together at national level? Nor was it seeking to do anything that it had not done before with Home Office agreement. The Norwich Union agreement had been in place for many years; the association simply sought to replicate it.

The Minister wrote to me saying, by this action, the National Neighbourhood Watch Association sought to change the entire basis on which Neighbourhood Watch has always operated". I cannot see how that can be true, given that for so many years it operated on exactly that basis. The registration process was carried out through all the usual channels, with advertisements in the appropriate journals, and the association's lawyers took it through the process. Nor was the process clandestine. The issue of copyright was discussed with Home Office officials following proceedings against Direct Line. In January 2003, the Home Office suggested that ownership be transferred to the National Neighbourhood Watch Association—and that is in writing.

The Home Office knew about that process for months, so why wait until just two days before the signing of a commercial sponsorship arrangement? There were never any objections about Norwich Union's usage. Exclusivity is clearly essential if the national association is to secure commercial sponsorship. It sought Crown copyright action to stop Direct Line abusing the logo and other organisations registering it. It would have been happy if the Home Office could have stopped other organisations abusing it. That is what it wanted, but that did not happen.

The central point is to ask whether the Minister—I appreciate that these are difficult issues—will agree to step back and reconsider the issue. As I understand it, there is no issue for the National Neighbourhood Watch Association about who has the copyright. The issue is that, whether the copyright is in the hands of the national association or the Government, the aim is to stop private companies abusing it, as Direct Line sought to do and as others have done in registering the home watch title.

That brings us to the issue of public funding. Following the breakdown of the commercial sponsorship proposal at the last minute, the Government allocated grants through to the end of 2003 and early 2004 to help to resolve the inevitable financial shortfall, but further support is being withheld due to what the Government describe as an audit report. The Minister wrote to me, saying that government accounting rules preclude giving public funds to organisations which are financially unsound. The way in which the matter has been reported would give the impression that there was something wrong with the financial management of the national association. The Mail on Sunday, for example, quotes a Home Office source as saying: NNWA's books are not in good shape". The Home Office view is that they are "financially unsound" but it was not an official audit. It was a funding review, which concluded that, without the commercial sponsorship, the national association is short of funds. However, that is why it is applying to the Government for funding. It would not be asking them for that if it were not short of funds. I cannot see what the dispute is.

Until I hear from the Minister, all I can take is the national association's view. It says that at no point did the auditors find fault with its accounting controls or processes. Indeed, it has a good financial performance record. It has been audited by KPMG year after year in accordance with charity law. Not only has KPMG approved the books but it has not issued a management letter for the past three years, which is more than can be said of many companies, so the financial management is, in any normal sense, clearly sound. Indeed, if there is an issue about people getting the figures wrong, it is to do with the Government's own financial review, since its authors did not consult the national association management during the review, or share their findings prior to publication so that matters could be clarified or resolved if there were concerns.

The proof of the pudding—no audit company would allow that to happen because it would check with the organisation—is that on 17 May a Home Office official wrote to the national association admitting that owing to a misunderstanding I am not confident that the profit and loss account at Appendix 4 of the report is entirely accurate". Therefore, if there is any mismanagement here, it seems to be with the Government, not the national association.

Clearly, the authors of the audit recognise that the association would be self-supporting if a contract with a commercial sponsor were secured, which brings us back to the question of why that is effectively being blocked.

We know from debates in the House of Lords that the Government have now said that they would step in if the NNWA folds. The Lords Home Office Minister said that if the national organisation … has to fold, of course, we will put measures in place to ensure that there is a national support network."—[Official Report, House of Lords, 27 May 2004; Vol. 661, c. 1434.] But the whole point of the network is not just that it runs conferences and provides training and support, but that it is an independent voice for the local volunteers. Frankly, in effect the NNWA appears to be being nationalised through the back door and taken over by the Government. That is highly inappropriate for an organisation that is entirely dependent on volunteers.

Last weekend, The Observer reported the Minister for Crime Reduction, Policing and Community Safety as saying that the Government want to "beef up" neighbourhood watch schemes to become "Neighbourhood Action schemes". What does the Minister mean by "Neighbourhood Action schemes"? That sounds rather like the proposals introduced by a former Conservative Home Secretary, who talked in 1995 about "Getting them out on the streets, rather than just looking through their windows". In fact, that was the very issue that led to the formation of the NNWA, which argued that it did not think that an appropriate use of the volunteer network.

The Minister will agree with me about the importance of Neighbourhood Watch at a local level. I hope that she agrees that the ideal solution is to maintain a national umbrella organisation that reflects and responds to local community groups, and which is able to continue to provide support and training, and an independent voice and conferencing, for such people. That is important not least because it is much the most likely way of continuing to get people to take part in the NNWA.

In the light of that, and given that Ministers have never had a problem with exclusive use of the logo being the basis of the organisation's funding and sponsorship, it is a little hard to understand why it should be such a great problem now. If they do not want the NNWA to hold the copyright, it should be simple to resolve the problem through Crown copyright processes. In the light of my discussions with the NNWA, I do not believe that it has any problem with that idea. However, the NNWA and local neighbourhood watch associations—and, indeed, the Government—cannot live with people such as Direct Line simply using the logo ad hoc, with Government solicitors apparently unable to prove that there was Crown copyright. In the light of that understanding, I hope that the Minister will reconsider and see whether there is a way to resolve these issues.

A number of criticisms have been made of the NNWA that are misplaced, and I shall give one more example of why I am concerned about the funding review—the so-called audit. The review argues that the NNWA secured premises in Buckingham gate that were more expensive than elsewhere, but we should remember that that was part of the Norwich Union sponsorship deal, which was self-funding. In fact, that brought in a profit of £50,000 per annum, rather than resulting in a net cost; indeed, that is admitted elsewhere in the funding review document.

Secondly, the review looked at eight comparators, including moving elsewhere—it was to either Stockport or Stockton, I cannot remember which—where rents were as low as £16.50 per sq ft. But because of existing staff costs and the sponsorship deal, that would have proved more expensive than the offices that the NNWA had secured. The costs were the lowest of the eight comparators examined—a fact that would have been known, had the authors of the funding review taken the trouble to discuss matters with the NNWA before publication.

I know that the Minister did not herself conduct the review and that she is reliant on information from her officials, but there are real issues that need to be resolved. The NNWA has been pressing for a meeting for some time, and she has now agreed to meet its representatives. I hope that, in the light of what I have said, she will meet them with a very open mind, and that we can solve these problems in a manner that deals with the concerns of various Members, including her own Back Benchers.

7.54 pm
The Minister for Crime Reduction, Policing and Community Safety (Ms Hazel Blears)

This debate is very important. Probably every single Member will know of neighbourhood watch and many will be members of home watch schemes in their constituencies. It is an amazing organisation—there are 155,000 local schemes covering 6 million people in this country—and the largest volunteer organisation that we have. I want to put on record at the outset the Home Office's huge regard for the work that neighbourhood watch does, not just in monitoring crime but in playing an increasingly active part in making communities safer. Much of that work is done selflessly by volunteers up and down the country.

The Home Secretary has made it clear in his Edith Kahn and Scarman lectures that we regard neighbourhood watch as a key component of the civil renewal programme on which we are seeking to embark, which aims to build capacity in local communities to be able to tackle some of the issues. The work of neighbourhood watch is beyond question.

The question today is about the status of the National Neighbourhood Watch Association, its relationship with the Home Office, its funding, its use of the logos and its relationship with local and regional parts of the neighbourhood watch movement. I want to address each of those matters in turn.

It is important to bear in mind that the NNWA was set up only nine years ago and did not exist when neighbourhood watch came into being some 20 years ago. It is a relatively new organisation that had the general aim of furthering the objectives of neighbourhood watch, but was not set up either to take over the running of neighbourhood watch, nor to control, supervise or in any way regulate the way in which local neighbourhood watch schemes operated at local level. It was not the sort of national organisation to which local organisations would be subservient, setting rules, regulations and supervising operations. It is a different organisation.

Mr. Paul Tyler (North Cornwall) (LD)

I have listened with care to what the Minister has said about the network, and we all endorse what she says about the importance of those involved feeling that they are volunteers. Does she accept that the national association was set up democratically by the network and was not imposed from above? Does she also accept that there is an important point here regarding perception? The perception of the volunteers is that there is a control-freak tendency in the Home Office that wants to take over the network. If that were to happen, the volunteers would simply leave in their droves.

Ms Blears

There are two issues, here. The first is whether the national association was set up democratically. There are lots of interpretations of the word "democratic". It is my understanding that local associations are not required to affiliate to the national association. They do not elect people in the normal way; we do not see every single member of the home watch organisations having one vote in electing the trustees. We are not talking about that kind of subscription organisation in those terms. Some local organisations are affiliated; some are not. We have had letters and e-mails from local volunteers who have never heard of the national association, so I do not entirely accept the hon. Gentleman's contention that this is a vibrant, democratic organisation, owned by its members.

I want to put a stop here and now to the second issue that the hon. Gentleman raised. There is absolutely no intention within the Home Office to take over neighbourhood watch. It is a vibrant volunteer organisation, and we want to support, facilitate, enable and empower it to develop in the way that many local organisations want.

I recently met some active co-ordinators from neighbourhood watch who said that they thought the organisation was in need of some updating and development. It is not active in many of the inner-city, high-crime areas in the country and many neighbourhood watch volunteers would acknowledge that the coverage needs to be developed into areas that could benefit from such volunteer activity. Perhaps there are not enough young people involved in some of our neighbourhood watch activities. If we want to ensure that neighbourhood watch addresses something like antisocial behaviour—a big concern now—as well as crime, we need to see how we can develop the organisation. But there is absolutely no intention for us to dominate it from the centre; we want to facilitate it locally.

James Purnell

I think that many will welcome the Minister's point that the Home Office has no interest in controlling the organisation. I was delighted to hear that my hon. Friend will shortly have a meeting, but in advance of it, can she tell us how big a stumbling block the copyright of the logo is? I encourage her to use her good offices, as she has already, to find a way through that particular problem.

Ms Blears

I want to deal with the issue of the copyright logo and to refute the suggestion that the Home Office's last-minute intervention into copyright matters was designed to frustrate the success of the sponsorship deal. That was absolutely not the case. Indeed, my understanding is that the Home Office intervened as soon as it became aware of attempts by the national association to seek copyright of the logos. Had it been brought to our attention earlier, we would have been in a position to intervene earlier.

The logo is an important matter. The Central Office of Information designed it in 1994 on behalf of the Home Office. It is therefore Crown copyright. We received complaints from local neighbourhood watches and from one police force that the National Neighbourhood Watch Association had, in early 2003, registered the logo as its own trade mark. That was done without consulting the Home Office, the police or neighbourhood watch more generally. That is why we are attempting to take steps to resolve that situation with the national association to restore ownership and control of the neighbourhood watch trade marks to the Home Office, because we want to ensure that local and regional associations can continue to use it. If exclusive use of the trade mark is given to any sort of commercial organisation, the local associations could be debarred from using it themselves, which would be an absolute tragedy, because the local associations need access to the well recognised trade mark.

Matthew Taylor

I appreciate that the Minister is reliant on her brief, but I have to ask her why, if there is a clear Crown copyright, it was not possible to establish it in the court case with Direct Line, which took to using it on the grounds that it was not copyrighted? Also, why did the Home Office make a written suggestion in January 2003 to transfer the ownership to the NNWA as a means of resolving the problem?

Ms Blears

I have not had sight of the letter to which the hon. Gentleman refers, but I will happily consider it and respond to it in due course. Neither am I aware of the particular negotiations in the court case, but I will happily respond when I can. I can tell the hon. Gentleman that the original deal with Norwich Union was not an exclusive deal. It retained the right for local and regional associations to use the copyright. What we are talking about here is the possibility of an exclusive deal, which would be damaging to the interests of the local organisations, and it is not where we want to go.

On the funding position, the Home Office audit was mentioned. I have to say to the hon. Gentleman that the audit did express concern about the high central costs of the accommodation and the high salary costs that the national organisation continued to fund. The concern about the accounts was that the revenue forecasts for 2003–04 and 2004–05 were based on unfounded assumptions about continued Home Office funding of £618,000. If a revenue forecast contains assumptions about funding that have not been agreed, any organisation would clearly be concerned about the financial basis of future viability.

Despite the assertion of he NNWA that it wanted to remain independent and have private sponsorship, the Home Secretary agreed to £350,000 of central Home Office support in order to tide the national organisation over its difficult period when the Norwich Union sponsorship was withdrawn. There was a commitment from the centre, despite the protestations about the organisation's independence. I entirely respect that, but the Home Secretary decided that the Government could not keep providing more public funding when the audit showed that the organisation was unwilling to take control of its high central management costs in respect of salaries and accommodation and that it was building into its budget a reliance on continued Home Office funding rather than on the private sector funding that it was seeking to obtain.

I understand that the current proposals for an agreement with Lloyd TSB involve a third party with a joint venture company called Hot Listed Ltd. I am not sure why the organisation is involved with that joint venture because it appears that the company is not making any financial investment towards the sponsorship deal with Lloyds TSB. That matter would also have to be considered in establishing whether it was an appropriate way forward for the association.

As the hon. Member for Truro and St. Austell said, I confirmed in an oral reply that I would be happy to meet the—

The motion having been made after Seven o'clock, and the debate having continued for half an hour, MADAM DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at five minutes past Eight o'clock.