§ 3.3 p.m.
§ Lord Bottomley rose to call attention to the needs of voluntary organisations following the abolition of the GLC and Metropolitan Counties; and to move for Papers.968
§ The noble Lord said: My Lords, it is my intention to deal generally with voluntary organisations and then to mention those voluntary bodies with which I am particularly involved, and briefly to explain the difficulties caused to them by the abolition of the GLC and the metropolitan authorities. I am sure that there are many other noble Lords who have expert knowledge and experience who will highlight the problem now facing voluntary organisations which has been caused by the present Government's policies.
§ All our social services have their origins in voluntary efforts. Many have now been taken over by central and local government. We remember people like William Booth of the Salvation Army, Octavia Hill, who was concerned with the housing of the poor, Benjamin Waugh, the founder of the National Society for the Prevention of Cruelty to Children, Thomas Barnado, whose name still survives in the homes that he provided, Charles Booth of the London School of Economics, who wrote the outstanding book on social services, and Canon Samuel Barnett, founder and first warden of Toynbee Hall.
§ Toynbee Hall is an outstanding example of voluntary service to the enrichment of life and extended education for deprived sections of society. This university settlement in the East End of London celebrated its 100th anniversary last year. Among many leading personalities who gave their services voluntarily were the late Sir Huw Wheldon, Sir William Beveridge, and Clement Attlee, the post-war Labour Prime Minister.
§ Toynbee Hall is associated with the beginnings of free legal advice, the Workers' Educational Association, the Citizens' Advice Bureaux. The first Citizens' Advice Bureau was established at Toynbee Hall. They now operate throughout the country and their offices are staffed mainly by volunteers. Any member of the public can enter a Citizens' Advice Bureau and obtain free, confidential and impartial advice on any subject. I was associated with the Citizens' Advice Bureaux when I was a Member of Parliament for Middlesbrough, and I know of their excellent work.
§ Last week I met the centre organiser in Middlesbrough who told me how valuable an Asian part-time assistant was in dealing with the minority groups; there is a substantial number of ethnic minority groups in Middlesbrough. She told me that because of lack of money they would soon have to dispense with her services.
§ In Rochester, for which I first sat for Parliament, an association of carers was formed in 1981, with the help of the Equal Opportunities Commission, to assist and advise anyone caring for a disabled or elderly relative at home. It proved highly successful but its future is now insecure. The association made repeated requests for a grant for the current year without success. Caring for disabled and elderly people at home saves the Government millions of pounds, but if the association of carers does not receive financial help, it may have to give up that voluntary work.
§ The Middlesbrough law centre provides an important service for deprived sections of the urban area of the district. Middlesbrough Council has been helpful, but the pressure on public sector funds gives 969 little hope to its being able to meet its present commitments, let alone pay for the increased pressure on the service.
§ The abolition of the GLC and the metropolitan authorities will cause great difficulties for the arts, the theatre and for sports organisations. The local authorities were generous contributors to the funds of those bodies. If money is not forthcoming, it will mean that young people will be deprived of adequate training facilities and equipment to enable them to improve their own skill and initiative.
§ Other countries realise the value of their young people competing in world events such as athletics, swimming, football and cricket and putting up good performances. National pride constrains them to do better than we do in providing the facilities for young sportsmen and women to give of their best. Other members of society are being denied opportunities to enjoy visits to the theatre. The threat to Sadler's Wells is an example. Art galleries and cultural centres are having to restrict their activities.
§ I live in the London borough of Waltham Forest. That council asked the Department of the Environment for £900,000 to help voluntary organisations which until then had been funded by the GLC, but the council is to get only one-third of this amount. This means that voluntary bodies, such as the Co-operative Development Agency and the Council for Voluntary Services, will not get sufficient money to do their work satisfactorily. Many other voluntary organisations are closing down altogether.
§ I am chairman of the Attlee Memorial Foundation. The foundation pioneered Phoenix House, which is doing excellent work in curing drug addiction. The foundation is also responsible for creating and running a playground for able-bodied and disabled young people in Tower Hamlets. There, Asian and other young people can join together in games and entertainment, thus establishing good race relations. With the abolition of the GLC, it is uncertain whether funds will be available to carry on this good work. In the Tower Hamlets district, many voluntary bodies previously getting help from the GLC have been told that they can get no further financial assistance. The same can be said of other districts. In Merseyside, for instance, there are many organisations which are being denied help.
§ In the early 1960s, Middlesbrough shared the doubtful distinction with Notting Hill of facing the first racial upheavals in the country. The council took immediate steps to keep the problem under control and to prevent it happening again. As part of this campaign, the council has provided an international centre which, incidentally, I opened last Saturday. The place was packed to capacity with representatives from Asian, African, Middle East and West Indian communities. To be sure of success, more money is needed, but government policy is making it difficult for this to be provided. Speaking last weekend at the Conservative Party Conference in Felixstowe, the Prime Minister paid a particular tribute to workers in victim support schemes. She said that they had helped 125,000 people last year. She also said, "They do wonderful voluntary work."970
§ The Government are to give a grant of £130,000 to help the National Association of Victim Support Schemes in their work. But the National Association of Victim Support Schemes considers that the grant is insufficient to meet the needs of many schemes currently facing extreme financial difficulties. Accordingly, there is little chance that the grant will be adequate to alleviate the problems of those schemes which are likely to be affected in the next financial year, due to the abolition of the GLC and the metropolitan authorities.
§ Last month Princess Anne launched the South Save the Children Fund. The proceeds of the fund will go towards projects maintained by the Save the Children Fund in the third world. Some local authorities are sympathetic but now say that they are unable to give any money.
§ Voluntary organisations vary in their purpose, size and sophistication. I have mentioned the national charities. There is also the multitude of smaller groups which put so much effort into their particular subjects. Among these are the many local resident groups, those concerned with bringing help to people in distress, self-help groups set up by unemployed people and many ethnic minority organisations. It is clear that these voluntary organisations make a valuable contribution to the wellbeing of our society. They provide services and assistance for those in need: small groups can often operate more rapidly and flexibly in response to requests for help; they mobilise volunteers and other community resources and they bring new needs to our attention and are not constrained by an identity with authority.
§ In these difficult times with mass unemployment, with so many people living close to the poverty line and with an increasing proportion of the population who are elderly, we need to provide positive support and encouragement for voluntary organisations. People have more free time than they have ever had, through enforced unemployment, redundancy, early retirement or a reduced working week. This represents a tremendous reservoir of skills and experience. We cannot tackle the problems of society alone. We need the commitment and valuable work which voluntary organisations provide.
§ The VAT concessions to charities which were announced in yesterday's Budget are very welcome. They will, for instance, help such bodies as the Spastics Society. That organisation was taxed on goods which had to be purchased to provide the care, education and advice for those who suffer from cerebral palsy. The more facilites that were provided, the greater was the tax burden. The VAT concessions will therefore enable more work to be done.
§ Another welcome move by the Chancellor is the encouragement by tax relief given to workers who contribute through the payroll and companies which make gifts to voluntary bodies. But these concessions do not compensate for the reduction and, in many cases, the abolition of grants previously made by the GLC and the metropolitan authorities. The needs of voluntary organisations are very real. Some are in the process of winding up their affairs. The help offered to charities in the Budget will not assist them in providing the services that they were able to give before.971
§ In 1978, the Wolfenden Committee produced and published a report on the role of voluntary organisations. It was then estimated that 5 million people worked voluntarily for some organisation every year. This voluntary work was equivalent to that done by at least 400 full-time staff. The Government have established a transitional fund with a budget of £20 million to fund single district voluntary activity in the metropolitan county and Greater London Council areas.
§ The mechanism for transitional funding is very similar to that used for urban aid and comprises 75 per cent. Department of the Environment funding and 25 per cent, district or borough funding in the first year, with the department's contribution declining to zero in 1989–90. Final allocations by the Department of the Environment were announced on 12th February. The councils were then informed of the projects which the department had approved. This has meant that local authorities have not had time to agree which voluntary organisations they are prepared to fund by 31st March. As a consequence, many organisations which were unsuccessful in receiving approval from the department and will not now have an assured alternative funding, have staff working through redundancy notices and are in danger financially.
§ Some organisations have attracted European Social Fund money. At present, this depends upon the metropolitan county and the European Social Fund matching each other's contribution pound for pound. If the transitional allocation is less than the current and anticipated funding given by the metropolitan counties and the GLC, then the ESF money of the same amount is also lost. This is therefore a double blow.
§ Collective arrangements are provided for in Section 48 of the Local Government Act 1985, and enable districts or boroughs within the metropolitan counties and GLC to establish a scheme for funding collectively countrywide voluntary sector work. These collective schemes are not working except in one case where there has been a substantial arrangement—the Richmond scheme in Greater London. Greater Manchester too has provided a budget, but in the case of West Yorkshire there has been no budget. In Merseyside, there has been no agreement and in the West Midlands, where belatedly last month it was agreed to fund five organisations, there has been none of a social welfare nature. There are no schemes in South Yorkshire or Tyne and Wear.
§ The timetable for this post-abolition funding scheme is hopelessly inadequate to enable the voluntary organisations to put their bids into the scheme, receive the outcome and plan accordingly for their future funding if necessary, or to enable the local authorities to provide a working scheme and to provide fair and considered responses to grant applications. Voluntary bodies depend on voluntary contributions as well as grants from central and local government and their earnings from commercial undertakings and investments. There is a vital role to be played by voluntary organisations in a wide range of services to the community. It is very desirable that those who voluntarily give of their time, love and talents to help others should share with those who are 972 professionally engaged in caring for the less fortunate members of society.
§ The Government are expecting more and more effort and achievement from voluntary bodies and yet making it more difficult for them to do their work. I was a member of the post-war Labour Government when the structure of the modem welfare state was established. There were many who questioned the need for voluntary social organisations. We now realise that voluntary effort is needed more than ever to blaze the trail for fresh development and to keep authorities in touch with basic needs. I beg to move for Papers.
§ 3.25 p.m.
§ The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur)
My Lords, it is clear from the list of speakers that many of your Lordships welcome the opportunity this debate provides to discuss the possible effects of abolition on the voluntary sector, and that they will be grateful to the noble Lord, Lord Bottomley, for raising the matter and for the concerned and clear manner in which he has expressed his views. The Government also welcome the debate. It gives me an opportunity to set out the Government's position and to remind your Lordships of the action we have already taken to help, as the noble Lord, Lord Bottomley, said, this most important aspect of our national life.
Let me first say where the Government stand. Contrary to the impression that the noble Lord, Lord Bottomley, has just given, we have a first-class record of support for the voluntary sector. Central government grants to voluntary organisations have risen from about £93 million in 1979–80 to more than £224 million in 1984–85, an increase of over 57 per cent, in real terms. The Manpower Services Commission has also provided increasing support for voluntary organisations engaged in programmes for the unemployed. In 1984–85, it is estimated that such payments amounted to more than £414 million. Through the urban programme and other schemes we have promoted increased funding for voluntary bodies by local authorities. And we have helped voluntary bodies in less direct ways, particularly by improving the treatment of charities. Since 1980, we extended tax relief for gifts by covenants to the higher tax rates; we reduced the minimum period for donations by covenants from more than six years to more than three; we exempted direct gifts and bequests to charities from capital transfer tax and development land tax; and we extended VAT reliefs for medical equipment and aids for the disabled.
In addition to all that, your Lordships will have noted the far-reaching proposals contained in the Budget speech of my right honourable friend the Chancellor of the Exchequer yesterday. In it, he proposed three new types of tax relief: first, on donations by companies. Companies (other than close companies) will be able to claim tax relief for one-off gifts to charity, broadly in the same way as they can now claim relief for gifts by four-year covenants. The relief will be on gifts up to a maximum equal to 3 per cent, of the ordinary dividends paid by the company. Secondly, there is higher rate relief. The Government will remove the present annual limit of £10,000 on the amount of charitable giving through deeds of covenant 973 for which an individual taxpayer may claim higher tax relief. Thirdly, there are payroll deduction schemes. There will be a new scheme from April 1987 to encourage individuals to make donations to charity through deductions from their wages and salaries. Employees of participating firms will be able to get tax relief on donations of up to £ 100 a year. So I think our credentials in this field are impeccable. There are no grounds whatever for believing that we would deliberately or by neglect inflict serious damage on the voluntary sector.
Last year, during the Committee stage of the Local Government Bill, my noble friend Lord Elton gave specific assurances that it was not our intention to damage worthwhile voluntary activity through abolition. In support of those assurances, we provided a package of measures. Funding of the voluntary bodies concerned is of course a matter for local authority decisions, and the measures were designed to facilitate the change for voluntary bodies which now have to seek funding from districts rather than counties. Let me remind your Lordships of those measures; and no doubt my noble friend Lord Elton, when he comes to reply, will answer particular queries.
First, we ensured that local authorities have the powers they need to fund voluntary bodies. In Section 48 of the Local Government Act 1985 we provided the power to set up collective schemes for funding countywide voluntary bodies. This was a new power and supplemented the numerous powers individual authorities already have to fund the voluntary sector. In particular, it ensures that boroughs and districts operating Section 48 schemes do not have to fund countywide projects under Section 137 of the Local Government Act 1972. We took that funding right out of the 2 pence limit.
Our second measure was to ensure that boroughs and districts have the resources they need. The rate support grant settlement ensured that successor authorities have access to all the resources that the GLC and metropolitan authorities would have had next year if they had still existed; and the settlement, as those of your Lordships from shire counties will know, took due account of the needs of our cities. I should make clear that there is no GRE for voluntary sector grants, but there are GREs that recognise the need for many of the services that voluntary bodies help to provide. And in London, where the value of GLC grants was particularly large and unevenly distributed, it proved possible to take specific account of the geographic distribution of £35 million of GLC grants to local voluntary bodies.
Thirdly, as well as all the existing resources, we added transitional grant. I must make it absolutely clear that that is extra support. It is not and never has been intended to support all the projects that boroughs and districts are taking on from the counties. Transitional grant is, if you like, an incentive payment to local authorities. It is an indication of the priority that we give to voluntary bodies. It recognises that local authorities have to make positive decisions to fund voluntary bodies. It is an encouragement for them to do so. But we have always made clear that £20 million did not represent a Government valuation of projects local authorities would take on. Nor were we surprised when it was oversubscribed. That was always 974 expected: we would have been surprised and disappointed had it not been. The transitional grant allocations have been made, and project approvals issued, and the Government's role there is virtually complete.
Fourthly, we took a whole series of actions to ensure that successor authorities considered the needs of voluntary bodies in good time. In April last year we gave a grant to the London boroughs, and seconded staff to Richmond, to ensure that what would be by far the most complicated and largest collective scheme got under way in good time. In May last year my honourable friend Sir George Young wrote personally to the leader of each metropolitan district drawing attention to the needs of voluntary bodies and urging early action both on individual grant giving and on collective schemes. He offered Government assistance with the costs of setting up collective schemes. What a pity it was not taken up in the way that it should have been!
In July last year the Local Government Act placed a duty on co-ordinating committees to consider the need for collective schemes—a duty that has been fully complied with. In August last year authorities were asked to submit initial transitional grant bids by mid-October, mainly to ensure that authorities would start looking at voluntary sector applications in good time.
All the indications are that, taken together, those measures have been effective. Let me deal with collective schemes first. Local authorities are under no obligation to report to Ministers on their actions, but I understand that in every area they have considered whether or not to have a scheme. In all the areas except Merseyside, there was a clear decision either to have, or not to have, a scheme. I must emphasise that decisions were taken. It was not a question of neglect or default. In Tyne and Wear, for example, the authorities saw a need for a collective scheme for projects dealing with economic development only. In the West Midlands, there was, I understand, a clear view that, wherever possible, voluntary projects should be funded by individual districts.
In Greater Manchester, positive decisions have been taken that some organisations are to be funded and some are not. In London and West Yorkshire, schemes have been set up and arrangements have been made for temporary support to organisations where final decisions have not been taken. In South Yorkshire and on Merseyside, the authorities are, I understand, in agreement that collective schemes are not the right way forward, but they have expressed their willingness to assist county-wide voluntary bodies on an individual basis.
Let me turn now to individual authority decisions. I must make it clear once more that local authorities have no duty to report to us either what their decisions are or when they take them. But my understanding is that many authorities have already taken their grant decisions, or will be taking them very soon. All but two of the Conservative authorities in London, for example, have made their decisions, and the other two are on the point of doing so. I have no doubt that councillors in those authorities where final decisions have not been taken are just as aware as we are of the needs and worries of the voluntary sector. I am sure that voluntary bodies are knocking on their doors as 975 loudly as on your Lordships' doors; and it must be the case that all authorities are capable of taking final decisions in time, as many have done already.
Both in collective schemes and locally, decisions will have been taken not to fund or to reduce funding for some voluntary bodies. Some of those cases will no doubt be mentioned today. But let me stress that those are decisions for local authorities: they, and they alone, are responsible for taking them. My noble friend Lord Elton told your Lordships on 20th May last year that there would be no Government interference with them, and that we could give no guarantees about what local authorities may in the end decide. The need for public support of local voluntary bodies is to be judged at local level, in the light of local priorities, by locally-elected councillors. Surely that local power to decide is the best basis for the difficult decisions that have to be taken.
I thought it important to stress early in the debate that the Government have provided local authorities with the means and resources to fund voluntary bodies-. The timetable for decisions has been tight, but not impossible. There is no reason why all authorities should not take decisions by the end of the month or, as in the case of the London boroughs grants scheme, provide interim funding where decisions have not been finalised. The worries expressed last year, that the boroughs and districts would not provide substantial levels of funding for voluntary organisations, have proved groundless. The worries that districts and boroughs would be unable to co-operate over voluntary bodies have been largely overcome.
I am confident that the final area of concern, that decisions may not be taken in time, will also prove to have been a worry without foundation, and I look forward to a flourishing voluntary sector in our cities for many years to come.