Oral Answers to Questions
Debate between Nick Hurd and Steve Baker(10 years ago)
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Mr Hurd
No, I do not accept that. The hon. Lady ignores the fact that the Government have already provided almost £200 million in transition funding for front-line charities and infrastructure organisations to help them through difficult times. We have managed to secure some additional money in the 2015-16 Budget to support more transition work, particularly for middle-sized charities, which we think is needed. She is ignoring all the help we have given so far.
Steve Baker (Wycombe) (Con)
Our country once enjoyed a rich and vibrant tapestry of organisations between charity and the state, such as co-operatives, friendly societies and other mutuals. Does the Minister share my dismay that the left has abandoned its own traditions?
Mr Hurd
Those are not of course the only traditions that the left has abandoned over the years; it is very hard to see what is left. I am very proud that Government Members are leading the work to encourage more mutualisation, particularly in relation to encouraging people to spin out the services they currently offer inside the public sector, and to offer them and improve them as public sector mutuals.
Public Services (Social Enterprise and Social Value) Bill
Debate between Nick Hurd and Steve Baker(13 years, 5 months ago)
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The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
The House has rightly expressed its admiration for my hon. Friend the Member for Warwick and Leamington (Chris White). I have a great deal of empathy with him, as I remember my shock at seeing my name at the top of the private Members’ ballot a few months after my arrival in this place. I have been on his journey, and I wish him every success on it.
Once the right hon. Member for Salford and Eccles (Hazel Blears) had recovered from the shock of being described as dreary—
Mr Hurd
It is a little early in my speech to give way.
Once the right hon. Lady had recovered sufficiently, she expressed her admiration for the quiet determination shown by my hon. Friend the Member for Warwick and Leamington. She knows a great deal about determination, quiet or otherwise, and she was entirely right in what she said. I wish to add my sincere congratulations to him, not just on his good fortune at the ballot box but on his subsequent tenacity in building a coalition and the way in which he presented his case today. It is a considerable demonstration of his commitment to improving public services and trying to get a better deal for taxpayers.
I also wish to confirm from the start that the Government are happy for the Bill to go into Committee, if that is the will of the House. We will seek to amend it, in ways that I will explain, but we support the core proposition of the Bill that we should place a firmer requirement on commissioners—those who do the very difficult job of shaping and purchasing public services on our behalf—to consider the potential to maximise the social, environmental and economic impact of every pound they spend on behalf of the taxpayer. In doing so, the Bill builds on the principle of the best value duty, as my hon. Friend the Member for Castle Point (Rebecca Harris) said.
The Bill is also consistent with what the Government are trying to achieve with the big society agenda. I genuinely hope that that issue becomes less partisan over time, not least because—as my hon. Friend the Member for Warwick and Leamington and the right hon. Lady, the former Secretary of State, said—the message builds on the aspirations of, and actions taken by, former Governments. Given the problems and challenges that we face as a country, it must be right to challenge all of us to think about our obligations and personal responsibilities beyond just paying taxes and obeying the law. It must be right to work together to try to find better ways to do things and, in that process, to try to tap into the skills, talents, ideas, experience and entrepreneurial energy that exists in our communities, but which too often feels shut out from the system. It must be right to encourage and support people to come together to try to solve problems and improve life for themselves and their communities.
I am lucky in the job that I do—and the hon. Member for Hemsworth (Jon Trickett) will find this, too, as he now shadows me—to visit every week communities and community organisations in which people are coming together to try to make a contribution and to do some good to improve life in their area. It is genuinely inspiring and gives me great confidence that we have a firm foundation on which to build this bigger and stronger society, if we can do more to encourage and support it.
Mr Hurd
My hon. Friend was good enough to introduce diverse representation from Ipswich, and the anger about the decision was palpable. It might be risky to comment from afar without knowing the details, but what struck me about the commissioning decision was that if 65% of the demand for the contract was based in Ipswich, it seems odd that there was no consultation. The process effectively removed an organisation that was clearly successful in delivering what the contract intended to deliver and had a massive social impact and value in that community. The decision seemed to be taken a long way away from the people who needed the help, and that is a problem.
The spirit of the Bill builds on the Government’s commitment to economic growth and the promotion of entrepreneurship. It is appropriate that it should come to the House in global entrepreneurship week, and the day after social enterprise day, which many hon. Members celebrated. We should not forget that social enterprises are, first and foremost, businesses that contribute £24 billion—that seems to be the official figure—to the UK economy and employ more than 800,000 people. As the hon. Member for Hemsworth powerfully said, they make an enormous contribution by creating and stimulating markets, bringing wealth into struggling communities, creating jobs, supporting disadvantaged people into employment, pioneering innovative products in ethical markets, and attracting new people into business, particularly the young, women and people from minority ethnic communities.
I was struck by a recent comment from Steve Jobs, who leads Apple, a brand that is always associated with innovation. He said that innovation is the difference between leaders and followers. The country desperately needs leadership and people who are capable of pointing to better ways of doing things, and it is in the social entrepreneur community that there are genuine leaders.
I was in Sheffield last week visiting a social enterprise, Zest, which has incredible leadership. It demonstrates how youth services can be run in such a way that young people turn up. It shows how libraries can be run in a way that involves the community, and how to engage with the public on public health issues. I sat at a table with people from the local PCT and the local council, hoping that they were learning and reflecting on how much money might have been wasted over the years. Organisations such as Zest are showing the way forward and opening minds to doing things better.
The point was well made, not least by my hon. Friend the Member for Congleton and, I think, the right hon. Member for Salford and Eccles, that this is not just about social enterprise. Social value is not just about an organisational form called social enterprise, however broad that form might be. I hope that the Bill will also be a catalyst to encourage traditional businesses to speak up more about what they are doing in the community. We all know from our constituencies that many businesses, often family owned businesses with a strong sense of community, do a huge amount, but there is now a challenge, in the context of the big society, to everyone in traditional businesses to think harder about their social responsibility and their commitment to the community. The Government will be saying more about that shortly.
I have set out why we support many of the principles and objectives of the Bill, but we are legislators and we have a duty to ensure that the legislation that passes through the House is robust, is needed and adds value. I suspect that that is one of the themes that we can anticipate hearing from the most distinguished Friday face in the Chamber, my hon. Friend the Member for Christchurch (Mr Chope).
I want to get into the detail of the Bill. The primary measure that the Government support is clause 3, which deals with contracts of contracting authorities. As my hon. Friend the Member for Warwick and Leamington has already outlined, clause 3 requires contracting authorities to consider how they might promote or improve economic, social or environmental well-being through a contract. In policy terms, we often refer to this well-being as “value”, because commissioners who already voluntarily follow this approach tend to attribute a quantifiable worth to it and consider it as part of their wider evaluation of bids to deliver public services. The title of the Bill reflects this commonly used terminology.
The Government are supporting this measure for two main reasons. First, and most importantly, the Bill sends an unequivocal message to those spending public money that it is vital that they maximise the value achieved by every penny. This is particularly important in the current public spending context. We acknowledge that many of the best commissioners already recognise the importance of this and are exemplars to the public sector. Yesterday, I was privileged to sit in on the first meeting between the London Probation Trust and two social enterprises. The conversation covered how the trust could work differently to commission social enterprises to set up community enterprises such as cafés, garden centres and small garages to employ offenders in the community. This is an example of a commissioner thinking outside the traditional box, and that is the kind of progressive commissioning that we want to encourage.
Steve Baker
Will the Minister join me in celebrating the brilliance of some of our public sector employees, and confirm that we are reforming not because we are challenging the individuals but because we are challenging the system? In some places, it is the system that we have inherited; in others, it is the system that has been established over a much longer period. Will my hon. Friend join me in celebrating the talents of our public sector employees?
Mr Hurd
I certainly will, and it is important to do so. This is largely about freeing people who work in the public sector to express themselves more and to explore their own ideas of how things can be done better. I remember vividly a visit to Merton, where one person working in the mental health field had recognised that the system was failing some people with multiple chaotic problems in their lives. He had shown leadership and pulled people round a table and said, “What we are delivering isn’t good enough.” Together, they produced a new system of support, and the people receiving that support came into the room to talk to me about it. Two of them burst into tears of gratitude. It is very rare for the public to weep with gratitude for the public services that they receive, and this was a direct consequence of one person’s ability to think differently. We want to encourage more of that, but it requires action to create the space and to send the message that, yes, it is okay to think differently and show innovation inside the public services. We need to unlock the potential to do things better.
Mr Hurd
It is a requirement to consider, where “relevant” and “proportionate”, and it does not compromise local authority autonomy in responding to the requirement. It is simply a requirement to consider. I do not see it as heavy-handed; it is simply designed to be a catalyst to encourage more people to think more intelligently about commissioning.
The need to support commissioners in this process was raised earlier. It is not just about sending a stronger signal on the requirement to consider, as there are also issues about how to measure social value and how to support commissioners. That is why the Cabinet Office has supported the measuring social value project to try to create a methodology and tools to make measures that are realistically capable of implementation. There is a clear need to advance and bring together some more standard and consistent methodologies in this area.
Furthermore, through the national programme for commissioning, we have trained well in excess of 2,000 commissioners across England and across a range of public service areas. All the commissioners have had the opportunity to receive specialist training in measuring wider social, environmental and economic value. I am delighted to say, following the comprehensive spending review, that we are going to continue this training beyond March 2011. I sat in on a session in Birmingham and it struck me that there are many commissioners out there who would like the chance to do things differently and to do more with the voluntary community sector and with social enterprises, but need some help—busting a few myths and getting some practical support. The process of engagement through the partnership improvement programme for commissioning is, I think, valuable. I am delighted that we can continue with it.
We feel that these policy interventions are important in supporting the objectives stated in our coalition programme, but we also feel that they will be insufficient without some legislative intervention to achieve the goals. That is why we support clause 3. Returning to the point made by my hon. Friend the Member for Christchurch, we believe that these provisions are consistent with the Government’s wider localism agenda in three main ways.
First, the Bill will support the Government’s commitment to community empowerment as a fundamental element of localism. The Bill includes a requirement on commissioners to consider whether to consult the intended beneficiaries of the service in considering how to take account of wider social, environmental and economic value. Although that does not require commissioners to engage with their communities, it sends out a strong message about the importance placed by the Government on involving local citizens and communities in shaping the services they receive. This will inevitably improve community involvement in commissioning and help to ensure that it responds to the full range of communities’ priorities.
Secondly, while empowering communities, the Bill also respects the need to ensure the autonomy and flexibility of commissioners in responding to local needs. Commissioners retain the discretion to determine how social, environmental and economic value is taken into account. The Bill does not stipulate the methodology that should be adopted by commissioners, and it is right not to do so. Local autonomy is maintained.
Thirdly, the Bill does not impose an additional burden on contracting authorities. The specification that contracting authorities are required to take wider value into account only where it is relevant and proportionate means that authorities can use their common sense and avoid excessive costs or bureaucracy. It also allows them to use and draw on existing infrastructure and opportunities to consult their beneficiaries and make sensible decisions in the interests of the people they serve. For example, it is highly likely to be “relevant” and “proportionate” to consider the wider social impact of a service and to consult citizens when contracting for a citizen-facing service such as social care as opposed to a contract by councils for use by an authority’s employees. The Bill therefore requires a common-sense approach, with the authorities having appropriate discretion.
I have explained where we support the Bill and I would now like to spend a few minutes explaining what conditions we attach to our support. Although we support all the objectives, a number of conditions are attached. If the Bill goes into Committee, with the will of the House, we intend to table amendments. These will include the removal of clauses 1 and 2, which refer to a “national social enterprise strategy” and “local authority strategies”.
I am not theological about strategies. Having been in business for 18 years before entering Government, I think that on the whole it is probably a good thing to have a strategy. However, I believe that, particularly in this context, strategies should be governed by the need of the moment, and should be driven by conviction rather than by a requirement to comply with some bureaucratic process. I do not want the process of drawing up strategies to be bureaucratic. I do not want it to be simply an exercise in producing more glossy brochures that fill up the bookshelves in our offices, which are not read and which do not have real traction. Strategies must be driven by need and by conviction at the time.
Steve Baker
I congratulate the Minister on his wisdom in attaching this condition to the Bill—I find it hugely reassuring—but will he say a little about clause 2(3), which deals with the definition of social enterprises? I should be grateful for the Government’s definition of a social enterprise.
Mr Hurd
I am rarely accused of wisdom, so this is a pleasant moment that I shall relish.
The definitions of social enterprise in the Bill are in the context of requiring a social enterprise strategy, which we do not consider necessary, but there is a legitimate point to be made about defining social enterprise, because, as I mentioned earlier, there is a broad spectrum of social enterprise activity. At one end of the spectrum are businesses that are acting in a socially responsible way or making big social contributions to their communities, while at the other end is pure social enterprise.
The definition developed by the sector is as follows:
“A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.”
That is a reasonable start, but there is a spectrum of activity, including charities which are tendering for contracts and trying to generate new revenue streams through that process, and which consider themselves to be hybrids in that sense. So there is no straightforward answer to my hon. Friend’s question.
As I was saying, the Government are uncomfortable about legislating for strategies at both a national and a local level. Several Members—including the hon. Member for Hemsworth, the Opposition spokesman—have agreed that that goes against the grain of localism. We therefore do not agree with legislating for local social enterprise strategies, however desirable they might be as components of existing sustainable community strategies.
None of that should be taken as reflecting any lack of Government support for social enterprise, or even a lack of desire to communicate a strategy. The Office for Civil Society is working with the Department for Business, Innovation and Skills and others across Government to produce a refreshed national strategy for social enterprise, which we will publish in March 2011.
The former Secretary of State for Communities and Local Government, the right hon. Member for Salford and Eccles, knows both the value and the difficulty of working across Government, but I think it extremely important that we do so in this context. My colleagues from DBIS have embraced the opportunity, and we look forward to producing the refreshed strategy in March. In particular, we will step up engagement with the social enterprise sector so that we better understand the needs of enterprises and the opportunities that could be unlocked. We want to consider how to maximise our support for social enterprises.
Oral Answers to Questions
Debate between Nick Hurd and Steve Baker(13 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Hurd
The programme is subject to approval in the comprehensive spending review, but all being well our intention is for it to be operational early next year. The focus will be on trying to provide grass-roots community grants to deprived areas that are characterised by high levels of economic deprivation and low levels of social capital.
Steve Baker (Wycombe) (Con)
14. What efficiency savings have been identified by the efficiency and reform group.