Social Justice Committee, 03 Oct 2001

Meeting date: Wednesday, October 3, 2001

Official Report 232KB pdf

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Voluntary Sector Inquiry

We are resuming slightly early, but given the committee's interest in the voluntary sector, that will allow us a few more minutes to question Jean McFadden. I issue a warm welcome to Jean McFadden, who is the chair of the Scottish Charity Law Review Commission and—I am sure we all agree—a distinguished individual in many other spheres. Before we ask questions, I will allow Jean to spend a few minutes outlining the work of the Scottish Charity Law Review Commission.

I put together a briefing note for members, which I assume you all have; I do not intend to go over it, but I will expand on one or two parts of it.

We were given a year to report, but we could have done with a bit longer. Towards the end of the period we could have used a bit more time, particularly in relation to public charitable collections, but there was pressure on us to report within a year and before the general election.

From your point of view, the most important part of our report is the defining principles that we recommend for Scottish charities—they are given near the top of the second page of the briefing note. At the moment, charitable status in Scotland is given by the Inland Revenue, which uses English law to decide whether an organisation should become a Scottish charity. The Inland Revenue is using law that dates back to 1601, when charities were defined in terms of the advancement of religion, education, poverty relief and so on.

We feel that using those English legal principles to recognise charities results in the ordinary man or woman in the street not perceiving charitable organisations as such. An example of that is a local authority company, such as the one we set up to run the Glasgow Royal Concert Hall. That is a local authority business, but it has charitable status. I am sure that my colleagues in Glasgow, particularly the director of finance, would be horrified to hear me recommending that charitable status should be removed, but the ordinary person in the street does not think that that company is charitable.

It is the same with quangos. Some Government-sponsored non-departmental bodies have charitable status. Again, the ordinary person would think that that was an abuse of the word charity.

I am sure that there are mixed views on exclusive private schools, but if we used the test of public benefit, which is our first proposed defining principle, I think that doubts would arise over the charitable status of such schools.

Some organisations that people might think should be charitable do not get charitable status under English law. For example, although not impossible, it is difficult for a tenants association, which is run for the benefit of its community, to gain charitable status. Some campaigning organisations, such as Amnesty International cannot get charitable status because one of the tests under English law is that charities should be non-political.

We have recommended four defining principles for a Scottish charity. First, a charity should be for the public benefit—that should be its overriding purpose. Second, it should be non-profit distributing—that principle is not particularly controversial. Third, it should be independent—I have added "of government." By that we mean that an organisation such as a quango or a local authority company should not be eligible for charitable status if more than a third of the members of its governing body or board of directors is appointed by central or local government. In the fourth principle, we have inserted the word "party" before the word "political" to widen the range of campaigning organisations that could get charitable status.

We think that those four principles should bring into the charitable net a much larger number of voluntary organisations than can currently become charities. I am thinking of tenants organisations, for example. There has also been a lot of discussion about self-help groups. Should self-help groups be recognised as charities? This is where matters get a bit complicated. If all the trustees of a self-help group are beneficiaries, but not all its beneficiaries are trustees, perhaps it should be a charity. For example, a tenants association is set up to benefit all the tenants in an estate; the members of the tenants committee are tenants and are therefore beneficiaries, but there are perhaps only a dozen trustees out of several hundred beneficiaries.

We think that an organisation where all the trustees are all the beneficiaries, such as a mutual organisation, should not become charitable because there is no wider public benefit. That is controversial, particularly with the Scottish Council for Voluntary Organisations—SCVO. Nevertheless, those are the principles that we have put forward. The intention is that the word "charitable" should designate a much larger number of organisations than at present.

The report talks about the regulation of charities. We make the important recommendation that a new body should be established with the powers that we set out in the report—we suggest that it should be called CharityScotland. That body would be similar to the Charity Commission for England and Wales.

Thank you for that introduction. To kick off, I will ask some general questions. Was any consultation carried out with groups who might now be entitled to charitable status under your recommendations? If so, what were their general views?

We consulted widely. We drew up two questionnaires. One was a short leaflet that we sent out to every organisation that we knew was recognised as a charity. We got that information from SCVO. We sent out a much more detailed questionnaire to umbrella organisations such as SCVO and the Institute of Charity Fundraising Managers. We sent the larger questionnaire to about 100 organisations.

We also held six road shows in Glasgow, Edinburgh, Dumfries, Inverness and two other places that I cannot remember at the moment. We threw those meetings open to the public and a range of people attended each meeting. We got a huge amount of information back from the consultation process.

The main problems that were identified in the consultation process were, first, that the definition of charity is out of date—I have already discussed that. Secondly, the current organisational structure in Scotland was seen as unsatisfactory, because there is no body like the Charity Commission for England and Wales and the regulation of Scottish charities is split among seven organisations at the moment—it is fragmented. Thirdly, comments were made about accounting thresholds; as I am not an accountant and I know nothing about tax law, I hope that you do not ask me any questions about that, because I would need to duck them. Fourthly, the public and the charities want an authoritative source of advice and information on all aspects of being involved in a charity. Fifthly, the protection of the public is regarded as important. That point applies not only to charitable work, but to public charitable collections. When someone puts money in a tin, they do not get a receipt, there is no audit trail and they have no idea where the money goes.

Those were the five big areas that we concentrated on.

If the Executive does not take on board all your recommendations, what do you believe that the key priorities should be?

First, I would like the definition of charity to be widened. That is the first priority. Secondly, I would like the currently fragmented structure to be reorganised into what we describe as a one-stop shop. There are some arguments about whether the organisation that registers charities and provides advice and information should also be the body that regulates, so that it is both the friend of charities and the policeman. We came down in favour of a single body combining all the functions, but if that is not possible or is not regarded as satisfactory, a single body should be established for the friend-of-charity function.

I open the session up to other members.

You mentioned that the law on the definition of a charity dates back to 1601. Will you explain a bit more about what you envisage happening when a Scottish charity does not meet charitable status as defined by the Inland Revenue? Have you discussed that?

If a body becomes recognised as a charity, it is entitled to a range of tax reliefs. That is a reserved matter and, although we made a few recommendations that we would like to be taken up on a UK basis, there is nothing that the Scottish Parliament can do about the tax position. However, there are other benefits of being a Scottish charity, one of which is relief from non-domestic rates on premises that the charity occupies. At the moment, charities get 80 per cent rate relief but bodies that are not charities, such as my tenants association, must pay the full amount. Registered charities also have easier access to funds, because some of the big trusts will donate only to recognised charities. There is a huge range of voluntary organisations all over Scotland that would benefit from being recognised as Scottish charities, even though nothing can be done about the tax position.

You point out that you are examining the issue in a Scottish context. One of the benefits of devolution may be the fact that the Scottish Parliament is able to determine what is right for charitable organisations in Scotland. In that regard, how might the Scottish Charity Law Review Commission differ from that in England and Wales in terms of the recommendations that it makes? Have you discussed with the Charity Commission in England and Wales the modernisation agenda that it is pursuing? That would allow you to work in a complementary manner.

We had at least two meetings with the Charity Commission, and Richard Fries, who used to be the head of the Charity Commission, was a member of our organisation. We benefited enormously from his contribution. We did not set out to model ourselves on the English organisation, because we wanted to be distinctively Scottish. If there are similarities with the set-up in England, that is because it is to the advantage of Scotland. I deliberately did not find out too much about the way in which the Charity Commission works south of the border, because I did not want my thinking to be influenced.

The Charity Commission is undergoing a modernisation agenda. I think that someone has been seconded to the Cabinet Office from the English equivalent of the SCVO, the National Council for Voluntary Organisations, to work on the modernisation of charity law in England and Wales. Various recommendations in our report relate to the need to have liaison and concordats between the two organisations. Having too much divergence would not be sensible, because many of the large charities, such as Oxfam, are English charities that operate in Scotland. We do not want to make operating in Scotland so bureaucratic that they are driven away.

Obviously, many charities that operate in Scotland also operate throughout the UK. What consideration have you given to the implications of your recommendations on that situation? What will happen about charities whose headquarters were in England if your recommendations operate in Scotland but are not similarly implemented in England and Wales?

We recommend that a new body, which we would call CharityScotland, should be the regulator and the registrar of all charities that operate in Scotland. However, we recommend that there should be a simplified form of registration and regulation for English-based charities, as they would have another principal regulator, the Charity Commission. As I said, we do not want top-heavy bureaucracy to drive away such charities.

Members will have noticed a smooth transition from the deputy convener to the convener. I add my welcome to the welcome that has already been extended to our witnesses—I should also welcome myself to the committee, I suppose. I thank Kenny Gibson for taking over while I was unable to be here.

I have a couple of questions that the committee has been considering. Can you explain more fully the reasons behind your recommendation that there should be four defining principles for Scottish charities?

We were aware that there are 44,000 voluntary organisations in Scotland, employing 100,000 people, but that only about 27,000 of those organisations are recognised by the Inland Revenue as Scottish charities. There was a considerable body of evidence from the voluntary sector that a large number of those organisations that are not recognised do charitable work and have charitable aims. Many of those voluntary organisations are prevented from reaping the benefits of being a charity by the outdated law that is applied by the Inland Revenue for the purposes of recognition. At the outset, our aim was to widen the net and to be more inclusive. We felt that those four principles would widen the net.

The convener was not in the room when I mentioned the self-help groups and gave the example of the tenants association in which all the tenants on the committee are beneficiaries. It is not impossible for such an organisation to get charitable status, but it is difficult. We think that it should be acceptable for a self-help group to have charitable status.

We also widened the net by suggesting that an organisation should be non-party-political as opposed to just non-political. The definition non-political excludes organisations such as Amnesty International, Greenpeace and various other campaigning organisations. Campaigning to change the law is seen as a political aim and therefore not charitable under the current definitions.

Our aim, therefore, is to bring a lot more of those 44,000 voluntary organisations into the net and, incidentally, to get Amnesty International to set up its headquarters in Scotland.

Preferably in Glasgow.

Yes, of course.

I understand that you mentioned mutuals in your opening statement, so forgive me if I am asking about something that has been covered. Can you explain why you recommended specifically that mutual societies should not be given charitable status? Have you had any feedback from mutuals about that view?

We had quite an argument about that in the commission. Our recommendations were unanimous and we did not divide over anything because, in some cases, we had to come to a consensus that did not satisfy everybody.

I will give an example. Senior civil servants in the Scottish Parliament could set up a credit union that would be open only to those in the highest positions. That would be a mutual society because all the civil servants would be members and they would all be beneficiaries. Would that be a charitable organisation? Would there be a wider public benefit? Should that credit union be entitled to charitable status and have the ability to get grants from other organisations? If the members bought their own wee clubhouse, should they get rates relief?

Our view is that where an organisation benefits only itself, it is not charitable. It would not meet the wider public benefit test.

Do you think that that applies to all mutuals or co-operatives?

Personally, I do not. I went along with the recommendation because of the example that I have just given, but I was not convinced that an organisation such as a food co-operative should not have charitable status. I am not sure where the line should be drawn. Perhaps the application of the wider public benefit test would mean that the food co-operative could be included whereas the civil servants' credit union could not.

I congratulate you and the commission on the report, which is a useful contribution. Having said that, can I ask how you came up with the horrible name CharityScotland? That is a serious point. In the eyes of the public, a name such as the Scottish charity commission would carry a modicum of initial recognition, whereas CharityScotland will not. Will you not give yourself more problems by choosing such a PR-type name?

Is the word commission terribly meaningful? I am not sure that it is. When one says charity commission, one knows what that means, but the word commission on its own is not meaningful.

We did not spend too long on the name. We had one or two away days when we started at nine o'clock in the morning and went on until nine o'clock at night. My recollection is that—as we were slumping one day—one of the commissioners said, "Let's call it CharityScotland." Then we argued about whether it should be a capital S or a capital C, or a small S or a small C, but the suggestion was made about what we should do about the name. So we said, "That's it, we'll call it that." However, do not think that we are absolutely thirled to it.

Out of little acorns, mighty institutions grow.

Is there a role for on-going Government power of regulation with regard to public benefits? By that I mean a power to deal with the mutual issue by regulation and allowing certain types of organisation, such as the food co-operative, to be included. Once the main structure is in place, there could be a reserved power for the Government or the Scottish Executive to add categories for what seem to be good public purposes, perhaps after consultation. Is there potential for that?

Yes. Perhaps it should not be the Government that adds categories. Our view would be that charityScotland should have the power to widen out the principles.

We wanted the initiative to be something that would stand the test of time to enable new organisations—organisations that we have not even thought of yet—to be brought into the net in 50 years' time. We did not envisage a string of Scottish statutory instruments to set out new categories. We thought that categories would be decided internally.

You mentioned a divide—the friend or policeman issue—between the regulation and the advice role. The alternative view was that a body such as SCVO would be funded to provide advice of the friendly type that you talked about from within the sector. Why did you reject that idea in favour of keeping it all together as CharityScotland?

We did not envisage CharityScotland taking over everything that SCVO does. We envisaged CharityScotland having a role in advising people how to set up a charity and how to deal with the management and governance. In areas that already had a good source of information, CharityScotland would direct the organisation to SCVO or to the Institute of Charity Fundraising Managers or another appropriate body.

Do you foresee significant problems with the gatekeeper role? For example, will there be problems about who qualifies and who does not, who gets struck off the roll for no longer qualifying and who does not? Will a lot of applications have grey areas? An example is the public benefit test, which is a difficult and arguably subjective test to apply in practical terms. You mentioned independent schools and I can think of a number of other organisations of the same kind, which are putatively public and for which one can see a public argument, but more restrictions could also apply. Will there be many areas in which you will have to make decisions in individual instances? Have you any assessment of the scale of the problem?

If the nettle of exclusive public schools is to be grasped—and I emphasise the word "exclusive"—there will be howls of protest. As I said in answer to a previous question, we cannot do anything about tax reliefs, but I am sure that non-domestic rate relief is of considerable benefit to such organisations. That is likely to be the most controversial issue.

Do you envisage a phasing-in period? For example, an organisation such as an exclusive public school has a budget, and under the present law it is entitled to do certain things. Do you envisage a period for organisations that will no longer be charities to adapt to the change and deal with the financial consequences?

Yes. That would only be fair.

How should CharityScotland be funded? Should it be a Government-funded body, or should it be funded by charges on the charities that are regulated?

One of the questions that we asked in our questionnaire was whether organisations would be prepared to pay for various services that would be provided by CharityScotland. You will not be surprised to hear that the answer was a resounding no. The corollary of that is that we envisage CharityScotland as a centrally funded organisation, which is probably right under the circumstances. A small charity should not be diverting some of its funds from its charitable objectives.

My question was prompted by your analogy about people shaking tins in your face, which is the public perception of so many fundraising ventures. Can you outline in more detail the proposed framework on public charitable collections?

At the moment, the law relates only to the collection of cash, and the definition of "public place" is quite restricted. Do you know what I mean when I talk about tabard collectors?

Yes, I do.

They have hit the streets of Edinburgh and Glasgow, and have penetrated as far as Ayr. They collect on behalf of the big charities, but they do not collect money—they collect direct debits or standing orders—so they are not regulated, and there is no limit to their numbers. They are not doing anything unlawful. They come out in large numbers, and they work closely together.

There is no escape.

Yes. They are also not volunteers. Many people do not realise that they are paid. That was a big issue for the public. We recommend that new legislation should cover all types of cash and non-cash donations, and that people who are not volunteers should be identified as such.

We recommend that every organisation that is registered as a Scottish charity by CharityScotland should have standing permission to collect either in public or in private places, provided that they have the permission of the owner or manager of the premises. The fact that an organisation is registered with CharityScotland should be enough to prove its status. The role of local authorities should be to check on local organisers, which they do at present with the police running checks, and if possible—this may not be easy—to check on the probity of individual collectors. I imagine that that would be difficult, but if it could be done, we would recommend it.

We also recommend that charityScotland should administer a national calendar of dates, which could easily be done on computer, so that a number of charities do not descend on Edinburgh or Glasgow on the same day. We recommend that everybody who is involved in licensing public charitable collections should receive better training than they do at the moment, and that there should be closer liaison between local authorities and the police.

What powers should CharityScotland have in relation to charities whose expenditure on fundraising is considered excessive? People will be twitchy about that sort of thing when they give to a charity. There is no audit trail for public donations, but when one looks at the accounts, one realises that the charities have spent all that money to gather in money.

We recommend that every charity should send in an annual return, including accounts, to CharityScotland. The amount that is spent on fundraising should be separately identified in those accounts. If that amount raises concern and is seen as excessive, CharityScotland should have the power to investigate and to call in the charity to explain.

Rather than that being a specific amount, would you think in terms of it being a percentage?

Yes. It would have to be a percentage so that it could keep up with the times. I cannot remember whether we have a specific percentage in mind at the moment. I do not think we have, but there is certainly a specific recommendation that there should be power to investigate.

I echo Robert Brown's thanks for the work that you and the commission have undertaken. Your presentation has helped to shed some light on the recommendations.

I return to the suggestion of new legal forms for charities. You mentioned that in your presentation but did not expand on it. Would you expand on the review commission's recommendations concerning the new legal forms for charities and the trustees' power of investment?

I should have said that one of the problems facing the voluntary sector at the moment is that the flow of volunteers seems to be drying up. One of the reasons for that is that people are worried that they are liable for losses. There are a number of different legal forms that a charity can take, such as being a charitable company.

The Department of Trade and Industry initiated discussions in 1998, which resulted in the recommendation that there should be a new form of organisation called a charitable incorporated organisation. That form of organisation would limit the liability of the people who were involved in the governance of a charity. Worries about liability came through strongly in the consultation. People want cast-iron guarantees that their liability would be limited. To coincide with the DTI report, we made an interim recommendation on that matter before we had finished our work. We recommended that there should be a separate legal form for incorporating charities, called charitable incorporated organisations. That form should be open to all charities but it should not be forced upon them; it should not be mandatory, but it should be restricted to charities.

On the trustees' powers of investment, the powers that exist in Scotland are significantly more restricted than they are in England and Wales. The accountants were in control of the discussions that related to this part of the review, so it is not an area that I know a great deal about. There seems to be a recognition that the law has moved on in England and Wales in relation to trustees' powers of investment while, to the detriment of charities, it has not moved on in Scotland. There is a feeling that Scotland should legislate to bring the law up to date with English law.

I want to ask about the proposed new framework to make it easier for charities to reorganise and get access to accounts that have lain dormant for a while. In my constituency, I know of organisations that have had difficulties in that regard. What difficulties has the commission found, and how would your recommendations deal with them?

The founding documents of some charities were written a long time ago and do not take account of the fact that the purpose for which the charity was set up might disappear. For example, a charity for the relief of little boys who have been sent up chimneys no longer has a charitable purpose but might still have money. Under the present law, it can be expensive and complicated to reorganise. People might think that the money that is held in that charity's name and is lying in a bank account should be given to a similar modern cause—local children's organisations, for example—but it is difficult to get at it if all the trustees are dead and gone.

We recommend that CharityScotland should be the body that would oversee the reorganisation of Scottish charities and make it easier to reorganise, while protecting the public and the money that has been donated.

A series of recommendations, which are contained in the report, were made by an official called the Scottish charities nominee. A charity's account is declared to be dormant if there has been no movement in the account for 10 years. We think that that period should be shortened. We see no point in money that was meant for a charitable purpose simply lying in a bank account because the purpose for which it was intended is no longer relevant.

That brings us to the end of our questions. Would you like to add anything?

There has been huge pressure for the reform of charity law in Scotland for many years. A number of reports, including the Kemp report, have been produced, but the UK Parliament has not found the time to do anything about it. There is a legislative and organisational muddle in Scotland and there is a huge body of people doing good work who want charity law to be modernised. The Scottish Parliament has the opportunity to do that and I hope that, if the Scottish Executive agrees with our proposals, legislation will be prepared as early as possible.

I thank you for attending today and acknowledge the work that you put into producing the report.

Meeting adjourned.

On resuming—

I welcome Dr Nick Fyfe from the University of Dundee and Dr Christine Milligan from the University of Lancaster, who are the authors of the Economic and Social Research Council paper "Voluntary Organisations, Social Welfare and the City". I understand that the witnesses will first give a brief presentation using the overhead projector. We will see that presentation, then ask questions.

I thank the committee for inviting us to speak. We have provided a short briefing paper and more extended analysis of the results of our research, so I will simply outline some of the project's key objectives and how we conducted some of the research.

Our main aim was to understand the development and distribution of social welfare voluntary organisations in Glasgow by examining the relationships between organisations, local communities and levels of government—Glasgow City Council and the Scottish Parliament.

The project's first objective was to establish what types of voluntary organisation are active in Glasgow, where they are and why they are there. We were interested in the reasons for the locations of voluntary organisations—that reflects partly our background in geography. We wanted to separate the broad structural reasons that might influence the distribution of voluntary organisations—which relate to matters such as funding—from more local issues that relate partly to the role of social entrepreneurs and the fact that some individuals are active in the community and establish organisations.

The second main objective of the research was to establish what forms of relationship develop between voluntary organisations in the places where they are active. We were interested in the role that organisations play in promoting active citizenship, for example, and the extent to which voluntary organisations empower local citizens by engaging with their concerns.

The third objective was to study the impact of the political context on the development of voluntary organisations. We were interested in forms of relationship that organisations have developed with different tiers of the state and how they affect the development of organisations, their priorities and related matters. We were especially interested in the way in which organisations perceive the Scottish Parliament's impact on their activities.

I will describe briefly how we conducted the research, which had three elements. The first was to construct a database of all voluntary organisations in Glasgow, which was a difficult task, partly because organisations come and go quickly—there is a rapid turnover. However, we drew on a database that had been developed jointly by Glasgow Council for the Voluntary Sector and Glasgow healthy city partnership. We used that in combination with a database that was held by the Mitchell library in Glasgow to create a database of about 2,500 organisations that are involved in social welfare. With that database, we were able to begin to map the distribution of voluntary organisations in the city. Slide 1 shows all 2,500 organisations that are engaged in social welfare and the boundaries of social inclusion partnership areas. The map relates to our interest in considering the uneven distribution and development of organisations in the city.

Using a geographical information system, we were also able to link the distribution of organisations to deprivation in the city. By mapping a deprivation score, one can see the extent to which areas of relatively high deprivation have a high or low number of voluntary organisations. In the report, we mentioned that areas such as Drumchapel are relatively well served by local organisations whereas areas such as Pollok in the south-west are relatively poorly served.

We were interested in three sets of organisations in particular: those working in health—mental health in particular—crime and criminal justice and black and ethnic minorities. From the database, we were able to pull out organisations that are involved in mental health, for example, and map their distribution in relation to what might be taken as an indication of need—that is, the number of mental health referrals in Glasgow. Slide 3 shows the distribution of voluntary organisations that are involved in mental health, and the location of statutory organisations. Some indication is given of the level of need in the number of referrals.

Slide 4 shows the distribution of crime and criminal justice organisations throughout the city and tries to map a measure of crime, although crime is notoriously difficult to map, taking into account the problems of criminal statistics. We used an indicator from the Scottish deprivation index that is not particularly satisfactory, but it was all that we had access to at that level. That indicator measures crime according to household insurance data and gives some indication of crime risk in different parts of the city. We were particularly interested in the distribution of neighbourhood watch groups. A key point that emerged was that, in many ways, the areas of highest crime had the lowest levels of participation in organisations such as neighbourhood watch groups. That is not too surprising and has been found in other studies.

The third area in which we were interested related to black and ethnic minority groups. Slide 5 maps the distribution of black and ethnic minority voluntary organisations with the proportion of ethnic minority populations in different parts of the city. Unfortunately, the map is based on the 1991 census, which were the only data to which we had access at the time. As soon as the 2001 census data are available, we can put them into the computer system and remap them.

Using the geographical information system, we were also able to consider the area of benefit of, and access to, voluntary organisations in the city. I will use the example of an organisation that is based in the west of the city. The red line on the map shows the area that the organisation says that it serves—that organisation's area of benefit. However, if we measure the accessibility of that organisation in walking distance to and from it, the area that is within 15 minutes of the organisation is relatively small. Although the organisation claims to serve a much wider area, many people in the fringe areas will have problems accessing the organisation because they are at least an hour's walk from where it is located.

There were two other elements to the research methods. First, a questionnaire survey was sent to all organisations that are involved in work on crime, on black and ethnic minority issues and on health. We also conducted interviews with representatives of voluntary organisations from those three sectors. For each sector, we were particularly interested in interviewing organisations that are based in Glasgow but that operate on different geographical scales. We were interested in local organisations that serve a particular community or neighbourhood, city-wide organisations and national organisations that had branches in the city. That enabled us to examine the differences in how organisations engage with local communities at local and national tiers of government.

Thank you for that useful presentation. Do you intend to conduct similar research in other areas of Scotland?

Yes. We are working on that at the moment. We have considered the study and its results and we think that elements of it are replicable throughout Scotland. We are working to put together another proposal for a much wider study. We are particularly interested in examining what is going on in rural areas, as well as in urban areas.

Your research highlighted important disparities between areas of greatest need and availability of particular services. Do any particular types of service suffer from that mismatch?

On crime, the distribution of neighbourhood watch is particularly interesting in that it tends to be concentrated in relatively affluent areas that have relatively low levels of crime. Neighbourhood watch is much more poorly represented in areas in which there are much greater crime problems.

On black and ethnic minority groups, we also noticed inertia in the location of the relevant voluntary organisations as the distribution of those populations in the city changed. The populations have moved away from the central areas of the city in which they initially settled and into the more suburban areas, but the voluntary organisations are still largely concentrated in central parts of the city. The needs of the groups that have moved to the more peripheral areas of the city are perhaps less well served.

In mental health, there were clear examples of lack of availability of voluntary resources in certain areas. We know that there is a link between mental health and deprivation, but some deprived areas have fairly limited access to the services that voluntary organisations provide and which people who have mental health problems find beneficial.

In the second paragraph on page 10 of your paper, you write:

"The current SIP initiative, for example, has created what one interviewee described as a ‘feeding frenzy' for funding among voluntary organisations in the SIP areas."

Do you believe that, in order to take advantage of funding, voluntary organisations are moving into areas that they otherwise would not be in?

There is evidence to support that argument. A number of people that we interviewed said that the SIP areas are having an agglomerative effect. In other words, because those areas receive funding, other funders are directing money towards them. Voluntary organisations are trying actively to find ways in which they can develop services in those areas so that they can access funding.

Is not that what social inclusion partnerships are supposed to do? They exist in the areas of greatest deprivation, so is not that what we want to happen?

There are a number of issues. It is correct that SIP areas have that aim, but many voluntary organisations are losing out as a result. That is happening to organisations that serve a population that is not geographically based, such as elderly and disabled people. Those groups are finding it more difficult to access funding so there is a need to develop thematic SIPs to address those issues.

So, might the effect of SIPs be the displacement of organisations from one area to another, rather than the provision of additional services?

Yes. Organisations that are not located in SIP areas are not able to obtain the level of funding that they had in the past, so they are trying to develop services in those areas.

Did you gain an idea of what happens to organisations when regeneration initiative status ends? Do such organisations continue to operate in that area or do they cease or scale down their operations?

We interviewed organisations that work in priority treatment and urban aid areas. They made the point that while they have access to funding initiatives they can develop elaborate services; however, when the funding ends they have the problem of how to keep the service going. In some cases—especially local branches of national organisations—it is possible to keep services going, but organisations made the point that such branches become almost a liability. Because of the resources that are available in such areas, big services are developed, which the organisation must maintain when the main stream of funding has ended.

The organisations talked about the existence of Rolls-Royce services in some parts of Glasgow and Mini services in others. That situation is a result of the funding initiatives, which allow the organisations to expand some services in more elaborate ways than they can expand others.

I will take up from where Kenny Gibson left off. One of your findings was that the sparseness of voluntary organisations in some areas of Glasgow reflects the weakness of the voluntary sector infrastructure. Will you expand on that and tell the committee about what led you to that conclusion?

The initial mapping process revealed that some areas of the city have less voluntary sector infrastructure than others and we wanted to unpack the reasons for that. We found that in some areas key individuals in previous initiatives had made a significant effort to access different sources of funding and had become good at developing successful proposals.

Other areas, for instance Pollok, have considerably less infrastructure and there is less knowledge about how to write proposals. As a result, such areas are not able successfully to access funding. One individual who allocated funding said that when a proposal from Pollok is received, the funding body is desperate to accept it, but proposals must be examined thoroughly. In some areas there is a need to develop knowledge and expertise.

The problem is not just about human resources; it is also about physical resources and having appropriate accommodation and premises that can be used to set up organisations. Several organisations told us that there are areas of the city where they cannot find appropriate or affordable accommodation, and that that makes it difficult to develop services in those areas.

Let us take that a bit further, in terms of whether the lack is of accommodation or of the necessary skills for taking forward project applications. Did you find any solutions to the difficulty that you identified when you were undertaking your investigation?

One proposal would be to start some kind of training initiative for those areas as a means of developing potential knowledge skills. The question of accommodation is extremely difficult. Two of the areas that we looked at have significant problems because of a lack of physical infrastructure. I am not sure how that could be dealt with: we might be talking about purpose-built accommodation or accommodation being made available by the local authority.

Those are areas to which you suggest national or local government would have to go and assist.

The problem of accommodation would need to be dealt with at a local level. Funding could be set up to establish some kind of training body that would enable organisations to develop the necessary skills. That could be developed locally or nationally.

You emphasised the difference between local organisations and organisations that are affiliated to national groups of one sort or another. Can you expand a wee bit on the basis for that distinction, in terms of resources, decision-making and so on?

Decision-making is important. In some areas, organisations that felt that they benefited from being part of a national organisation in terms of access to resources and so on also felt that they had somehow lost their local identities. In the past, they had perhaps provided local services that people were involved in because they were committed to their local area. However, in becoming part of a regional or national organisation, it was felt that that identity was being diluted and that decisions were being imposed on them by wider committees and structures.

We found that local volunteers sometimes viewed that negatively, even though others would say that the organisations were delivering a much more professional service as a result of being part of a national structure. That is especially important in matters such as criminal justice and mental health. One person described the local volunteers as having been dangerous mavericks in the past, who did not have the proper training and who were not properly accountable. We found that one of the benefits of organisations' being part of national organisations was that a much more professional service was being provided for local people.

The other side of that coin is the comment that you made in your report about the clientisation of people because of staff becoming more professional. I take it that you mean that people are becoming more dependent on and more requiring of professional advice, which does not sound like a very good thing. Do you have any thoughts on why that came about and what can be done about it? Is it a problem?

In mental health, for example, which is a sensitive area, people feel the need to have professionally delivered services. Newspapers have reported numerous cases in which local communities have become upset because a service is moving in that they do not think is professional. There is considerable onus on organisations dealing with such services to be seen to deliver their service well and professionally. The kind of service that I am talking about is slightly different from, for example, a voluntary service mental health drop-in centre, where there is more of a sense of ownership of the organisation. We are talking about the diversity of organisations and recognising the need for that diversity. Some organisations deliver highly professional services and some need to deliver more ownership-based services.

What I am trying to get at is the extra element. What is it that the voluntary sector or the involvement of volunteers adds to the service that one might get from a local authority or the Government? Is it the human touch? Is it the smallness of the organisation? What is the key to the importance of the voluntary sector contribution?

That is an interesting question. The reality is that some large voluntary organisations are becoming more like the private sector. I describe them more as non-profit organisations than as voluntary organisations. What is important about smaller voluntary organisations is that they are much more in tune with the needs of local people. It is important to foster that kind of relationship with local people. Some large organisations have stated that, because they have become so large, they are beginning to lose touch with people. It is important to keep fostering that contact.

Did you detect a problem arising from the fact that individual local groups may have had different objectives from those of the council or any related pressures because of funding? I am interested in the turnover of voluntary organisations in a place such as Glasgow. Is there a high turnover? Do only certain types of organisation have a high turnover? Does that have an effect on the independence of the voluntary sector? Can you give us a flavour of that issue?

It was interesting to find that, because we chose three different areas of social welfare, very different relationships with the council emerged and developed.

The crime and criminal justice organisations had a close relationship with the city council. That is part and parcel of the wider changes in the way in which crime and criminal justice are now seen as issues to be addressed by local authorities and not just by the police and criminal justice organisations.

The black and ethnic minority groups now have a much-improved relationship with the council; more effort has been put into consultation, for example. However, at a day-to-day, pragmatic level, those groups still found that there were real difficulties. One example is that most of the meetings with the council were held during the day when none of the members of those groups could attend. If those meetings had been held in the evening, people would have been able to attend. Many funding initiatives were inappropriate. For example, a lot of money was attached to millennium projects. However, a Muslim organisation said that the millennium meant nothing to it and so it could not access that money. Muslim organisations also cannot access lottery funding.

Within the sectors that you considered, there are obviously a variety of sources of income, such as charitable donations on the one hand and service provision funding on the other. Are charitable donations an important aspect or are they largely subsumed by state funding in one shape or another?

Probably the latter. That is particularly true for health and criminal justice organisations. The bulk of their funding comes from Government sources.

On page 10 of the submission, you make the interesting observation that

"the weak infrastructure for voluntary organisations in some areas of the city is bound up with the city's political geography."

You have distinguished between those who were in the ruling group and those who were not, as well as between those who were thirled to the idea of municipal is best and those who were not. How solid is that suggestion? If it contains substance, it is a serious assertion. For example, if a councillor had been elected recently, he would not have much influence over the distribution of voluntary groups, whereas it would be a different issue for someone who had been there for 20 years. How much depth is there behind that assertion, which is an interesting one?

At one level, the suggestion is largely anecdotal, but it was one of those anecdotes that was continually repeated in the Glasgow context. The assertion was that some areas of the city had not been served as well because of the history of the internal politics of the council. We have no specific evidence to back that up, but it was raised continually in interviews with us as a way of beginning to explain the map of voluntary organisations in the city.

Was the distribution of voluntary groups related to the maps that you produced? Did you link the distribution to council wards?

Not specifically.

There was no specific link. We have not focused on the issue, but that is not to say that we could not focus on it with the kind of systems that we have put in place.

I have done research in other areas and similar issues were raised. Much of that is linked to the fact that some councillors are aware of what the voluntary sector does whereas others still maintain a view that is based on what the voluntary sector was like in the past. I guess that we must raise awareness among councillors about the good work that many of the charitable organisations do in the community and make them recognise that many of those organisations are delivering professional services.

It must be emphasised that not only councillors but council officers in some councils held the view that municipal is best; it was at that level that voluntary organisations were having difficulties.

Thank you. With a bit of discipline, we can squeeze in the remainder of the questions.

I shall be brief and I hope that the response will be brief, too. You state that training and work experience are important motivations to volunteers. Was there any evidence of promoting volunteering in economically deprived areas? Why do you think that larger organisations offer fewer opportunities for voluntary workers?

I will answer the second part of your question. In our experience, the larger voluntary organisations try to deliver much more professionalised services, which means that there is less of a role for the volunteer. Those who join as volunteers must go through rigorous training to be able to deliver the kind of services that the organisations want to deliver.

We did not consider specifically trying to promote voluntary activity in deprived areas, other than in the context of the social inclusion partnership initiative, which led to a well-developed voluntary sector infrastructure.

You say in your report that voluntary organisations expressed concern that they were not involved in local authority policy formulation. Did they tell you how they would like to improve that relationship? Did they give you suggestions about how it could be improved? It was interesting that they said that they had much better relationships with the Scottish Executive, which involves them in decision making, but that they felt that they were being consulted to death. I would appreciate your comments on that last point and on whether there is anything that the Parliament can do to ensure that the voluntary sector is fully consulted and supported as part of that consultation process.

The development of the local compacts is crucial in improving the flow of information between local authorities and the voluntary sector. Our impression was that it was relatively early days in the operation of the compact. The picture was uneven. Some departments in the council were much further forward in developing better relationships, whereas others still subscribed to the idea that municipal is best. On a practical level, some organisations said simply that the timings of meetings, for example, would make a huge difference to how much they were able to participate in discussions with councillors and council officers.

In my local authority, North Lanarkshire, the chief executive's department is responsible for the compact and the overall liaison with the voluntary sector. Were you aware of a similar structure in Glasgow, with a central point of contact—an umbrella—for the local authority's contact with the voluntary sector? Different organisations may be interested in different departments, such as social work or education.

The council has a committee whose job is to implement the compact throughout the departments. Most organisations were aware of that. Some were aware of it through umbrella organisations such as the Glasgow Council for the Voluntary Sector, which they would use as a kind of channel to enter into discussions with the council about the way in which the compact could impact on their work.

As Nick Fyfe mentioned, the picture is uneven. That is partly to do with the different kinds of organisations. For example, it is fair to say that the council was making a lot of effort to involve black and ethnic minority groups. Those groups felt that they were located outside the decision-making structures and did not quite see the relevance of those structures to their organisations. They needed to be advised on the benefits of being involved. There were other areas—for example, crime and criminal justice—where organisations had an extremely good relationship with the local authority and where there were good links into the policy-making process. That diversity needs to be taken into account.

You made a point about organisations feeling that they were being pulled into SIP areas in order to secure funding. Were those organisations local ones or Glasgow-wide ones? If they were Glasgow-wide organisations, we might reasonably ask them why they were not already operating in those areas where there was clearly a need. Is the SIPs structure in effect asking them to address a need within communities that so far have not been supported?

The organisations tended to be Glasgow-wide or national ones. Because the SIP areas overlapped with other territorial initiatives, such as the areas of priority treatment, organisations were often already there. Because of the need to innovate and create a new organisation that would allow them to tap into SIP funds, they used their existing operation to develop new initiatives.

It is important to recognise the tensions for voluntary organisations if they are located outside a SIP area and it looks as though their funding is drying up. The organisations feel that they have a responsibility not only to the client group that they are set up to serve but to those people who are employed within their organisation. There is a tension between the need to retain jobs for people within the organisation—as I think the previous witness mentioned, the voluntary sector is a huge employer—and the need to serve a particular client group. The attempt to balance those tensions can sometimes be a driving force behind the need to seek funding to keep the service going.

Equally, it is understandable in social policy terms that one would seek to draw those organisations into areas that have a great deal of need that has not been met in the past.

Yes.

Are there any final points before we finish this session?

One thing that I came across in the east and north of the city was the issue of distribution. Organisations such as Maryhill citizens advice bureau were on the wrong side of Maryhill for the SIP. There was an issue in Easterhouse to do with the broader organisations and the more local ones. Is it a general issue that some organisations operate in an area but are constrained by artificial boundaries in respect of having access to money?

Yes. We came across clear evidence that some organisations were located on the wrong side of the street. There were difficulties for organisations that served a Glasgow-wide population and therefore could not access funding for a particular area.

I thank you both for attending the committee, for your presentation and the materials with which you have provided us, and for answering our questions.

Meeting adjourned.

On resuming—