How will the recession affect charities?

It's nice that New Labour haven't scrapped the splendid title Chancellor of the Duchy of Lancaster. Yesterday saw questions to the Chancellor and the Cabinet Office.

Shadow Deputy Secretary of State for Wales David Jones asked about the impact of the recession on charity:

"The Parliamentary Secretary, Cabinet Office (Kevin Brennan): The Charity Commission recently published its second economic survey of charities, which showed that just over half of the charities surveyed are feeling the impact of the downturn. While 30 per cent. of those surveyed have seen their incomes decrease, 32 per cent. say that they have already taken steps to combat the impact of the downturn. The full results of the survey are available in the Library of the House.

Mr. Jones: As the Minister has indicated, the economic survey revealed that charities were feeling the impact of the downturn, but 20 per cent. of them reported that they were experiencing increasing demand for the services that they offer. Given the increasing importance of the third sector in delivering what are often core services, can he say what the Government are doing to help ensure that those services are maintained in the downturn?

Kevin Brennan: I am grateful to the hon. Gentleman for that question. Although the survey showed that 5 per cent. of charities reported that they had had to cut services or were holding off new services as a result of the downturn, only 2 per cent. reported that they had had to reduce staff during the recession. We have introduced our “Real Help Now” recession action plan to meet the demands of organisations in the third sector, as they have made it clear that they are worried about the increase in demand at a time when it is possible that their income will fall. The package includes a modernisation fund to help charities meet the challenges of the recession and a fund to help charities in the front line that are working in the most deprived areas, as well as schemes to increase social enterprise and volunteering."

Shadow Minister for the Cabinet Office and Shadow Chancellor of the Duchy of Lancaster Francis Maude went on the same issue:

"It is clear that many charities are having a really tough time because of the recession. It has now been admitted that the Financial Services Authority knew of the risks with Icelandic banks as long ago as the beginning of last year, at which stage it informed both the Treasury and the Bank of England. Why were charities and the public not warned of the risks of investing in those banks? Will the Minister apologise for that failure, which has accentuated the financial woes that charities now face?

Kevin Brennan: I have had the opportunity to meet representatives of the charities involved in the “Save Our Savings” campaign, and I have also met MPs who have charities in their constituencies that have been affected by the Icelandic bank problems of recent months. The Government are continuing to listen to the concerns of third sector organisations whose investments are tied up in the administrative process. I know that my hon. Friend the Economic Secretary to the Treasury met representatives of some of the affected charities just last week, and that he is considering the outcome of that meeting.

Mr. Maude: Listening is all very well, but sorry still seems to be the hardest word. Charities face a really tough time, so is it not doubly important that the Charity Commission monitors effectively the links between charities and violent extremists? Charities rightly have special status, which we all support, but at a time when funds for them are limited, it is important that they are bona fide. Will the Minister ensure that action is taken against charities such as Green Crescent, which seems to have been supporting terrorism in Bangladesh?

Kevin Brennan: Links between charities and terrorism are, of course, completely unacceptable, although extremely rare, as I am sure the right hon. Gentleman would agree. The Charity Commission takes any such allegations seriously. It published a counter-terrorism strategy that was updated last year, and it works closely with police and other agencies. Green Crescent, which he mentioned, is subject to an ongoing investigation by the Charity Commission, which has already taken action to freeze the charity’s bank accounts and has suspended a trustee. It is important to maintain investment in the third sector during this downturn. The £100 million cuts to the Cabinet Office budget, which would have come in today, certainly would not be the way to help the third sector at this time."

South Staffordshire MP and national treasure Sir Patrick Cormack engaged in some frantic semantics:

"Sir Patrick Cormack (South Staffordshire) (Con): 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—

Ian Lucas (Wrexham) (Lab): Excellent memos.

Sir Patrick Cormack: 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.

Mr. Byrne: 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."

Liam Byrne has been much mocked for circulating a memo to civil servants with a series of diva-like demands relating to how he likes his coffee, how newspapers should be set out etc. It also included the fabulous sentence "Eliminate absolutely, positively all extraneous words". Yesterday the Minister gave a passable impression of someone who is willing to laugh at himself.

South West Devon MP Gary Streeter incurred the wrath of Sir Patrick:

"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?

Mr. Byrne: Now I feel terribly conflicted.

Sir Patrick Cormack: Sort him out!

Mr. Byrne: I will do my best. 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."

Shadow Minister for Charities, Social Enterprise and Volunteering Nick Hurd had a suggestion about water bills:

"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.

Mr. Byrne: 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."

Shadow Minister for Disabled People Mark Harper had a question on the pay of civil servants with disabilities:

"What plans the Government have to create additional jobs in the civil service during the recession. [267962]

The Parliamentary Secretary, Cabinet Office (Mr. Tom Watson): The Government are committed to helping people and businesses as we fight through the economic downturn. Our priority is to support people back into work. In the hon. Gentleman’s own area of interest, the civil service is playing its part. For example, the Department for Work and Pensions is recruiting 6,000 more front-line staff in Jobcentre Plus.

Mr. Harper: I am grateful to the Minister for that answer. When he is looking at civil service recruitment, will he consider the fact that every Government Department pays its disabled employees less than its non-disabled employees? The Home Office, which is the worst offender, pays disabled employees a third less than their non-disabled counterparts. Will he take action to stamp out that discrimination?

Mr. Watson: As I say, I know that the hon. Gentleman has a personal interest in this area. The record on recruitment for civil servants with disabilities is a good one. We have doubled the number of civil servants claiming to be disabled since 2001. I understand the hon. Gentleman’s point and I will take a look at it."

Tom Greeves