Building the Big Society

Defining the Big Society Delivering the Big Society Financing the Big Society Can big ideas succeed in politics?

With Clive Barton, Roberta Blackman-Woods MP, Rob Brown, Sir Stephen Bubb, Patrick Butler, Chris Cummings, Michele Giddens, David Hutchison, Bernard Jenkin MP, Rt Hon Oliver Letwin MP, Jesse Norman MP, Ali Parsa, Michael Smyth CBE, Matthew Taylor and Andrew Wates

Clifford Chance 10 Upper Bank Street London E14 5JJ

Thursday 31 March 2011 Reform is an independent, non-party think tank whose mission is to set out a better way to deliver public services and economic prosperity. We believe that by reforming the public sector, increasing investment and extending choice, high quality services can be made available for everyone. Our vision is of a Britain with 21st Century healthcare, high standards in schools, a modern and efficient transport system, safe streets, and a free, dynamic and competitive economy.

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T 020 7799 6699 [email protected] www.reform.co.uk Building the Big Society / Reform Contents

Building the Big Society Introduction 2 Pamphlet articles 5 Full transcript 14

www.reform.co.uk 1 Building the Big Society / Reform Introduction Nick Seddon, Deputy Director, Reform

The Big Society is this Government’s Big “lacking a cutting edge” and “has no Sir Stephen Bubb spoke in favour of this Idea. Part philosophy, part practical teeth”. Others are outright hostile. They feature of the Government’s public service programme, it is the glue that holds see it as a cover for cuts. “You can hardly reforms and argued for a partnership together the Coalition’s efforts to reduce build a bigger society if the very people at between the state and voluntary and the size of the state and make it work the heart of the vision are cutting back on charitable organisations, with the state much better for the citizen. In a speech on the work they do”, said Sir Stephen Bubb, withdrawing from the delivery of services 14 February 2011, the Prime Minister Chief Executive of ACEVO. Patrick Butler, but continuing to provide both funds and defended his idea for a Big Society and Editor of Society, Health and Education a strategic overview. Roberta-Blackman said that: “This is my absolute passion, Policy at The Guardian, believes the whole Woods MP, Shadow Minister for Civil I think it’s a different way of governing, a discourse has become “toxic” and that the Society, said that this redrawing the different way of going about trying to Government needs to find a new narrative. boundaries displayed continuity with many change our country for the better and it’s of the ideas and projects of the New To address these issues, Reform going to get every bit of my passion and Labour governments of 1997-2010. She convened a major policy conference, attention over the five years of this referenced decades of leftwing critiques of “Building the Big Society”. We brought Government.” Ministers – including the state and statutory services. Rob together around 150 delegates, from Rt Hon Oliver Letwin MP, Minister for Brown, Senior Partner at PA Consulting, politics, journalism, public service, Government Policy, who is in charge of outlined a vision of a “Bold State” that business and the third sector to listen to the programme – have told us that the Big manages demand, understands needs and debate the presentations of a range Society means more volunteering, and makes markets. In his view the state of high profile speakers on the topic. The stronger local government and, most should remove itself from all management aim of the conference was to engage with importantly, new ways of delivering public of services and instead work with citizens the ideas – and act as a practical forum to services. Reform has spoken to to help them commission the services develop them into workable solutions for organisations that exemplify all of these they need. This would require greater delivery and financing. ambitions – from charities providing health strategic capacity in the state to and education to private companies Defining the Big Society understand need and direct resources, organising their employees to help in the Bernard Jenkin MP, Chair of the Public but the result in his view would be a community. But in truth these were things Administration Select Committee, which is smaller, more potent state. they were doing long before this undertaking a review of the Big Society, Delivering the Big Society Government was elected. Is the Big opined that we were “in danger of making If the Big Society is about restructuring Society a new paradigm – or an old this much too complicated”, quoting and reengineering services, the task is to paradigm rebranded? Edmund Burke to suggest that at essence identify the areas where the state can the concept is about a return to “the little Reform has been holding a series of make a real difference and add value, platoon we belong to in society”. Michael sell-out meetings on this subject. The ceasing to do things that do not contribute Smyth CBE, Visiting Professor at Queen main reason for such interest is that, a enough value. Citizen-consumers would Mary, University London, suggested that year on, people are still trying to be empowered, supply would be although the Big Society has no clear understand what it means. Among the liberalised. The Big Society has to be definition it does not need one: “if it does many challenges for the Government, less about involving the widest possible range nothing but raise consciousness as to the than half of the population have ever heard of individuals and organisations, private, optimal relationship to be found between of the Big Society, according to the polls. public, voluntary and hybrid in public individual responsibility, local innovation It divides those who have heard of it. The services and social action. So far, the and civic action will it not have done concept has been criticised as vague, Coalition Government’s Ministers have good?” Then again, in his address to the woolly and confusing by political described the Big Society very heavily in conference Rt Hon Oliver Letwin MP opponents and allies alike. Even the terms of a “soft” word cluster – that is, a was clear that a vital dimension is opening evangelical Lord Wei, the Government renewed civil society with revivified civic up public services by enabling charities, Advisor on the Big Society, says it is institutions such as charities and voluntary social enterprises, private companies and “mysterious”. Vincent Nichols, the organisations. Some 700,000 charities mutuals to offer people high quality Archbishop of Westminster, said it is and voluntary organisations across the services.

2 www.reform.co.uk BuildingPaying for the long Big termSociety care / Reform / Reform country make a huge contribution and making companies. The impression given not apart from it.” A joined-up approach perhaps they can do more. But on their by Downing Street is that it wants the to society and the economy should seek own they won’t be able to meet the private sector off the table for this to boost growth through new enterprise challenges faced over the coming years Parliament. and business, since job creation is likely with soaring demand and shrinking to be a decisive factor in building strong Financing the Big Society supply. Already, in his commentary about local communities and economies. The The corollary of smaller, smarter how fiscal consolidation is translating into money under management in mainstream government has to be an expanding local government cuts, Patrick Butler financial services dwarfs the money being non-state sector – greater individual described a “Napoleonic retreat. In the funnelled in through social investment, so responsibility, enhanced civil society chaos good charities and vulnerable financial services organisations can work organisations, ownership of services beneficiaries are being left along the way.” to invest a greater proportion of assets in transferred out of public hands, social investments, while building the The central role that profit making contestability for any organisation that resources and expertise necessary to companies can play has been almost can demonstrate high standards and evaluate the opportunities presented by entirely missed. This is not to say that the affordability. Although money will continue these assets. To date, not enough has market in public services should be to flow from central and local government been said about the role of venture capital loaded in their favour. But it is to departments and authorities, through and private equity investment. The recognise that for-profit companies are commissioning and procurement balance of risks and incentives needs to uniquely suited to the needs of the arrangements, there will be much less of be sufficiently attractive for investors to moment – eliminating the government it. As Liam Byrne, former Chief Secretary see a return for their investment in deficit and improving public services. In to the Treasury, put it last year, “there is addition to the Big Society receiving a fact, only for-profit companies have the no money left”. The next wave of reform financial injection. Reform will continue to scale to make the big changes that will, therefore, require new sources of build understanding of the conditions ministers need to see happening. It is the funding. We need to understand how to needed to introduce fresh investment in profit motive that gives companies turbo-boost capacity and scale as well as our public services. another crucial incentive – to cut costs capability in the non-state sector. – which is in perfect harmony with the Can big ideas succeed in politics? One way is to develop innovative needs of the day. The final session focused on the role of instruments that draw further investment. big ideas in politics. Throughout the day, Clive Barton, Director of Corporate The Big Society Bank, which according to a number of people described the Big Affairs at Serco, outlined the kinds of recent announcements may be supported Society as a “theology”. If this is the case partnership that can develop: his by the high street banks to the tune of then Jesse Norman is a believer. The company’s strengths (scale and access to £1.5 billion, is the right kind of idea. Social MP and author of The Big Society funding) have been allied with the Finance is, in effect, an investment bank mounted a spirited defence of the Big strengths of local charities and social for charities, helping them raise capital by, Society, arguing that along the way enterprises (understanding need and local among other things, designing new capitalism has to change. Matthew innovation) to deliver better services. products such as Social Impact Bonds. Taylor, Chief Executive of the RSA, is Andrew Wates, Director of The Wates The aim is to raise £5 million from more doubtful. Like Patrick Butler, he Group, explained how businesses such investors to fund a project at argued that the policy has become “toxic” as his own can encourage their staff to Peterborough prison intended to reduce because of the gap between rhetoric and volunteer – and do so in large numbers. reoffending rates. Critically, the financial reality. To resolve this dispute, more Ali Parsa, Managing Partner of Circle, return to investors will be linked to the needs to be done on the practical policies outlined the opportunities in this paradigm project’s success: if reoffending rates that will make it possible to deliver the for employee owned companies like his drop by at least 7.5 per cent over six vision. Clearly, the Big Society is not really own. He said that what matters is to get years, the Government will give a share of a new idea, but it will need renewed value. Liberalising supply and transferring the long-term savings to investors. Pro commitment. ownership to profit making organisations rata rewards will allow investors a are ways to achieve something of the maximum annual return of 13 per cent. “open texture” described by Rt Hon David Hutchison, CEO of Social Oliver Letwin MP. Finance, outlined the potential value and impact of payment for results. Another, For this reason it is tragic that some of the Bridges Ventures, is a sustainable growth biggest critics of the private sector have investor with £150m under management been Government Ministers themselves. whose commercial expertise is used to During the recent retreat from the NHS deliver both financial returns and social reforms, for example, David Cameron and and environmental benefits. Its Executive Nick Clegg went out of their way to attack Director, Michele Giddens, described “privatisation” of the NHS. In other areas how investing in for-profit small and of policy, the Cabinet Office, which should medium enterprises can deliver market be driving public sector reform, has spent solutions for social problems. a year putting pressure on its private sector suppliers and looking positively at Chris Cummings, Chief Executive of the idea of “mutuals” – by which it means TheCityUK, outlined the role of non-profit organisations owned by their mainstream financial services. “Too often employees. Furthermore, Eric Pickles last it is suggested that financial services are week announced the idea of guaranteeing not part of the ‘real economy’ – but they contracts for charities but not profit are in every part of the real economy and

www.reform.co.uk 3 Building the Big Society / Reform Programme

08.15 – 08.45 Registration and breakfast

08.45 – 09.00 Welcome and Nick Seddon, Deputy Director, Reform introduction Mark Payne, Partner, Clifford Chance LLP

09.00 – 09.50 Defining the Given the financial constraints facing Government, it has become imperative for the state to limit its activity. Big Society One of the Government’s main ambitions in public service reform is to open up public service delivery to a range of new providers, building the Big Society. Yet definitions of precisely what this entails have been vague. What should the Big Society do as the boundaries of state provision are drawn back? Which services can be more effectively and efficiently delivered by non-state providers? Roberta Blackman-Woods MP, Shadow Minister for Civil Society Michael Smyth CBE, Visiting Professor, Queen Mary, University of London Sir Stephen Bubb, Chief Executive, ACEVO Rob Brown, Senior Partner, Local Government, PA Consulting Chair – Nick Seddon, Deputy Director, Reform

09.50 – 10.10 Tea and coffee

10.10 – 11.00 Delivering the The Big Society would see the Government move from being a funder and provider of services to just a funder. Big Society This shift will require a wave of new providers and different kinds of delivery models. What are the barriers preventing private and third sector organisations from becoming service providers? Is the private sector keen to take on a greater role? How will charities and social entrepreneurs fit in? What kind of new structures might exist in this new world order, for example mutuals and co-operatives? Bernard Jenkin MP, Chair, Public Administration Select Committee Patrick Butler, Editor of Society, Health and Education Policy, The Guardian Clive Barton, Corporate Affairs Director, Serco Group plc Andrew Wates, Director, The Wates Group Ali Parsa, Managing Partner, Circle Chair – Andrew Haldenby, Director, Reform

11.00 – 11.30 Keynote speech In his keynote speech to the conference, Rt Hon Oliver Letwin MP, Minister for Government Policy, will set out his vision of the Big Society. Chair – Andrew Haldenby, Director, Reform

11.30 – 11.50 Tea and coffee

11.50– 12.40 Financing the The next wave of public sector reform requires new sources of financing. The Government has plans to Big Society establish a Big Society Bank – how will this work in practice? How can UK public services compete with international bidders for capital investment? Is the balance between risks and incentives attractive enough to secure investment from the financial services sector? What are the right models of delivery to make financing viable? How will payment by results work? David Hutchison, Chief Executive Officer, Social Finance Chris Cummings, Chief Executive, TheCityUK Michele Giddens, Executive Director, Bridges Ventures Chair – Patrick Nolan, Chief Economist, Reform

12.40 – 13.10 Can big ideas The Big Society is an ambitious vision and involves a different approach to delivering public services. But what succeed in politics? is the political challenge of implementing radical decentralising change? How can big ideas like this succeed? In this session, Nick Seddon will chair question and answers with two experts on civil society. Matthew Taylor, Chief Executive, RSA Jesse Norman, Member of Parliament for Hereford and South Herefordshire, and Author, The Big Society Chair – Nick Seddon, Deputy Director, Reform

13.10 – 13.15 Close Nick Seddon will sum up and close the conference

13.15 – 14.15 Lunch

4 www.reform.co.uk Building the Big Society / Reform Pamphlet articles Defining the Big Society

Michael Smyth CBE as to the optimal relationship to Rob Brown standardised services, it must be found between individual reframe its core role to working Government and responsibility, local innovation Big Society, Bold with and through the citizen and society and civic action will it not have State community, helping them to done good? hold the supply side of public Less obvious is the service to account in achieving delineation of the route which, policy outcomes. the Prime Minister says, leads We call this way of working from public sector reform to the “Bold State” because it will increased community require real courage to develop engagement and thence to the the new relationships and emergence of a robust culture of organisational architecture philanthropy and volunteering. needed to underpin this Certain of the citizenship demand side partnership with Whilst a world of opacity and The Big Society offers a initiatives by which the an empowered citizen. We see ambiguity is arguably in the compelling vision of citizens, Government has set greatest three key areas of change: commercial interests of every communities and businesses store (such as the free schools • A better ability to engage with legal practitioner, the law itself “owning” their public services, movement) will surely only gain the electorate and taxpayer, tends towards precision and such that they are prepared to traction by the provision of the understanding the outcomes clarity. In that context there is contribute more of their own unimpeachably statist, indeed and measures that they want an irresistible temptation for effort and motivation to public old-fashioned, use of and using this to advise any lawyer who is asked to outcomes. Tapping into this administrative assistance by politicians and decision- define the Big Society to focus hitherto unrecognised hidden, civil servants. makers on ways to achieve aridly upon the technical task of “dark” energy of community If a thousand street-corner these parsing and interpretation. engagement could have flowers are to bloom the • A dedicated capacity to work Why “Big” as opposed to spectacular benefits for public seed-corn requires to be with, and advocate for, “Good”? Is small no longer goals such as health, crime supplied by Government and by citizens, communities and beautiful? Why “Society” rather prevention and social care. us. This need give rise to no businesses who are eligible for than the “Communities” to Yet the Coalition has faced contradiction, and it would public support, supporting which we supposedly belong on an uphill task in winning over surely be productive to agree at and encouraging them in account of race, religion or hearts and minds, in part the outset that the options that finding the right solutions or sexual orientation (but rarely by because of unease at the lie ahead are not binary in provision for their needs reason of geography, age or perceived risks of letting go of nature. The appeal of a world in • The separation of all service indeed class)? Is the term a central control. But also, whilst which we all help each other a delivery from this demand- small state euphemism? we await the White Paper on bit more is irresistible. There side role of the state and the Notwithstanding the hectic public services reform, the should be no embarrassment stimulation of an increasingly contributions of citizen Coalition has yet to articulate in saying that there is still a role diverse mixed economy of journalists in cyberspace and clearly and simply the profound for Government in securing self-managing service- feature writers in newsprint nature of the changes the Big that end. providers drawn from public, (who will perhaps one day Society demands for how the private, third sector or acknowledge David Cameron’s machinery of state is configured Michael Smyth CBE was for self-help groups. initiation of the mother of all and run. more than 20 years a partner This is a smaller, but national conversations), much It is radical reform of the at Clifford Chance and arguably more potent state. It fevered speculation as to the state that offers the key to sometime head of its public promises an exciting future for essence of the Big Society creating the Big Society, reform policy practice public services. perhaps misses the point. Is not aimed at making it a conductor its most obvious function an rather than a player. In place of Rob Brown, Senior Partner, existential one? If it does controlling through the Local Government, PA nothing but raise consciousness monopolistic provision of Consulting

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Roberta Blackman- For volunteers as well as for Sir Stephen Bubb in the market. This is exactly the charitable and voluntary wrong approach and will Woods MP organisations across the Charities – at the ultimately have a profoundly The Big Society – a country, the Big Society already heart of the Big negative impact on the lives of British tradition exists and has done for a long Society the people they aim to support. time. My strong concern, Retrenchment and however, is that the Government organisational isolation must is in danger of undermining the not become a fallback for any Big Society if it does not give chief executive. For Big Society enough time for the voluntary to work, leaders from all sectors sector and communities to must keep lines of develop new models of communication open, look at operation or to plan effectively the potential for partnership for their futures given the depth, working and draw on a broad scale and timing of spending range of expertise to ensure The Big Society has, without cuts. They should be working For some time now ACEVO have efficiency savings are driven doubt, aroused the intellectual together in partnership with the been vocal in promoting the across the public service delivery curiosity of both the left and the voluntary sector and central role that charities can spectrum. right. Yet almost a year on from constructing frameworks of play in building a Big Society, in We all recognise the huge its flagship launch, a canonical support. particular through delivering challenges facing local definition remains elusive. Much high quality and effective government, but for the of the language of the Big Society Roberta Blackman-Woods MP, services in a way that saves the Government’s Big Society plans actually builds on a rich tradition Shadow Minister for Civil state money. The innovative and to flourish we must be clear that in this country of community, Society outcomes-focused interventions the voluntary sector should be localism, co-operation and designed and delivered by many seen as a central part of the building a better society for all, charities have been fundamental solution. The sector should be suggesting that although the in turning round the lives of involved in constructive Government coined the term the some very vulnerable people and discussions on mapping future Big Society, the reality is that it have often succeeded where the service provision in a local area did not invent it. state has failed. It will be and ensuring that the voices of As an Opposition, we want to essential, therefore, that in underrepresented or vulnerable see strong, well-resourced building the Big Society, groups are not ignored in the public services that are able to particularly during this period of drive towards increased partner with the voluntary fiscal restraint, both large and devolution and localism. sector. We also see a key role for small charities that are It seems increasingly clear social enterprises and mutuals delivering in this way are that the success or failure of the in improving service delivery, enabled to survive and even Big Society vision will depend on and see a key role for community scaled up to meet an anticipated developing a new era of organisers in helping rise in demand. reciprocity and renewed communities to articulate their In recent months, however, commitment to collaboration needs and shape services. The we have been contacted by an between the public and Big Society is to a certain extent increasing number of charity voluntary sector. I would urge all continuing what Labour started chief executives who are decision-makers in local in office through its broad pointing to examples of local government and across the direction of travel: by authorities who seem to have voluntary sector to engage in encouraging volunteering; identified the funding allocated these discussions which, we supporting and seeking to to the voluntary sector as “an hope, will form the basis for a expand the number of social easy cut to make”. In some areas new approach towards the enterprises and third sector we hear of statutory agencies delivery of improved outcomes organisations; looking at ways to who appear to be actively for local communities. enhance the role of mutuals and retrenching, breaking lines of employee-owned companies; communication with the sector Sir Stephen Bubb, Chief and encouraging a greater sense that have developed over many Executive, ACEVO of community. years and creating uncertainty

6 www.reform.co.uk Building the Big Society / Reform Delivering the Big Society

Bernard Jenkin MP community and voluntary Patrick Butler Christopher Hyman groups for several years. The Changing the Government has already started Ambition without CBE culture of this process by the opening up of funding? Putting the Big government the NHS, by the establishment Society into of new free schools, and by practice giving new powers to local communities such as the Community Right to Buy. The Public Administration Select Committee (PASC) is conducting an inquiry into the Big Society, in which we will examine the impact of spending The idea that the voluntary and cuts, the role of the voluntary community sector should Under the personal stewardship sector and co-operatives, and deliver more public services is of the Prime Minister, the idea the consequences for Last year the Prime Minister an explicit coalition policy aim, of the Big Society has become accountability. PASC will also outlined his vision of the Big shared by ministers and many in one of the defining missions of consider the implications for Society, calling it “the biggest, the charity sector. So why has this Government. He sees it as central government and for the most dramatic redistribution of this aspect of the Big Society an opportunity to mend our Civil Service of policies which power from elites in Whitehall become so mired in “broken society” and to improve require them to promote and to to the man and woman on the controversy? Why has the our public services. enable, rather than to manage street.” It is an idea that few goodwill that existed towards The Big Society project and to direct. This has the could argue is not a noble one. the policy within the voluntary involves giving local potential to be a huge culture Now it is up to those who believe sector collapsed so rapidly? communities more power to change for government and for in the Big Society to understand For many in the charity world, take decisions and shape their how it goes about the business of how to deliver it. the Big Society was just a few society, opening up public governing. The Whitehall From our experience in months ago a symbol of services and enabling people to machine and the Civil Service delivering front line, essential opportunity and progress. It has play a more active part. This is have yet to understand the full public services, we know that become a toxic sign of not a new idea but one rooted in implications of the change in communities are stronger where government hypocrisy, broken British traditions. Edmund culture and mindset which will the user at a local level has promises and ineptitude – an Burke wrote of the “little be required. greater involvement in how their avoidable disaster. The hopes platoons” between the The Big Society presents us services are run; in our case, that the Big Society would see an individual and the state: “To be with an opportunity to where we work in partnership expansion of voluntary-led social attached to the subdivision, to reinvigorate civic-mindedness, with local people. For us in Serco, creativity have been dented, not love the little platoon we belong to empower citizens and to the Big Society captures the least by government-imposed to in society, is the first principle transform how government belief that when communities, spending cuts that will force (the germ, as it were) of public operates. If it is done well, it will businesses and government work thousands charities to close or affections”. It is in these little change this country for the together, there can be better massively reduce services they platoons, such as families and better. outcomes for all. deliver on behalf of the state. voluntary associations, that the The Government has said that Addressing the conference I will ties of custom which hold the Bernard Jenkin MP, Chair, it wants to open up public explore the reasons why the Big wider society together are Public Administration Select services to a range of providers in Society vision of a greater role for forged. Committee order to improve outcomes. voluntary sector providers – in However, this Government’s Opening up services to be run by theory, an easy win for the Big Society project has been a range of local, voluntary, public Coalition – has turned into a criticised for being either too and private providers can bring Government own goal. vague or a “cover” for spending enormous benefits to the end cuts. This is unfair as the Prime user. Innovation will no longer Patrick Butler, Editor of Minister has been talking about be a buzzword but a reality; a Society, Health and Education transferring power to local diversity of providers will Policy, The Guardian people and empowering increase competition and

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encourage decision-makers to services. The Big Society is at its wanted to do more. So we have choose who can provide the best best where definitive outcomes introduced a new policy which service at the best value; and, at can been shown. Let success in provides further paid days to do the end, we will see a greater one community act as the beacon voluntary work and have responsiveness to public need. for others – this, after all, will be provided a nationwide database How this works in practice is the real proof of success. which matches volunteers to vitally important. How do you local projects. We are not alone take the poetry of the vision and Christopher Hyman CBE, Chief in doing this, but if we can lead convert it into the prose of Executive, Serco Group plc by example, and spread the everyday life? There is no silver word, some of the impact of the bullet in how this is achieved, Andrew Wates Government’s withdrawal can be often it is complex and takes mitigated. time. Nevertheless it is Leading by example Our second initiative is our achievable and there are three ambition to employ a social parts to how the Big Society can enterprise on each of our sites. succeed in practice. These non-profit making local First, responsibility – organisations can often be left in individuals, groups and business place after our project completes, will need to take ownership. It helping to provide a stable base relies on what you might call for the community. In the last 12 social responsibility, but does not months we have placed 50 orders come for free. Taking on new with social enterprises worth responsibility takes courage. The concept of the Big Society over £1 million. The numbers People need to feel empowered could prove both a threat and an may sound small but as most to make those choices and be opportunity for business. The employees are from enabled to execute them. implication of Government disadvantaged backgrounds the Second, working together. reducing its role in providing benefits are already perceptible. Many of the services Serco social services, and asking So the message is that every provides see us working closely communities to fulfil this need, company has the opportunity to with communities and citizens. is going to present an enormous explore similar initiatives in their One example is our welfare to challenge. own marketplace. Programmes work business which has seen us In many ways, business is well need not be costly to have a work with local charities and placed to lead in this response. powerful sustainable impact and community groups to get 18,000 We know the disciplines of the will help strengthen relations long term unemployed people market place, how to deliver and between business and the back into work. It is a reality that we understand the implications communities in which we all live. a diversity of groups working of failure. together in a spirit of partnership Like every responsible Andrew Wates, Director, can produce excellent results. We company, Wates has for many The Wates Group find that the relationships we years recognised its obligations have with our charity partners to the environment and are of mutual benefit – we rely on communities in which we work. them for their passion, specialist With the implications of the Big expertise and local knowledge Society in mind, we have recently and they rely on us for our introduced two new initiatives. infrastructure, quality systems The first relates to volunteering. and understanding of how to We have always encouraged our manage and deliver large scale people to volunteer with our services effectively and focus being around our annual efficiently. Community Day in which the Finally, focus on the outcome. whole company participates. But Let’s be innovative in how we our people told us that they approach the delivery of public

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Ali Parsa the factory fulfilled their fiduciary duty to sell the Transferring power institution to the highest bidder. Yet in so doing, they destroyed the long term interests of the enterprise, those whose livelihoods depended upon it, and the local community in which they lived. State ownership can have similarly devastating consequences. In Mid Staffordshire hospital, When we were first introduced patients suffered and died in to the idea of a Big Society in the large numbers because the wake of the financial crisis, interests of Ministers and civil many doubted its relevance to servants – finances, foundation the problems at hand. At its trusts and waiting time targets simplest form, its relevance – took priority over the day to depends on the answer to this day interests of patients. key question: was the crisis How can we overcome this incidental or structural? The conflict? The answer is simple: crash came when banks we must push power out to the over-traded credit they should users and doers in our not have had, and ministers enterprises. Building a Big over-spent cash they did not Society is about building a have. Were these actions balanced society. A society in exceptionally careless or which the state, financial structurally inevitable? institutions and civic society I believe the latter. have comparable powers. A Economically speaking, we have society in which it is impossible achieved a very curious state of for remote intermediary affairs, where the people who institutions to lock the frontline work in our organisations and out of decision-making. A society generate value give most of that in which long term sustainability value away – either to the state in comes first. taxes or to financial institutions in pensions, savings and interest Ali Parsa, Managing Partner, payments. Through time, the Circle state and financial institutions, as economic intermediaries, have used the money entrusted with them to take a controlling stake in over 90 per cent of our productive assets. The problem arises when the short term interests of remote owners and the long term interests of the enterprises and employees diverge. The pernicious effects of this divergence were exposed in the Cadbury factory saga. The financial institutions who owned

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Chris Cummings Doing so will help toward the Michele Giddens growth businesses and we have need for the industry to change shown that commercial capital The role of financial its public perception to one built Investing in the Big can be used to achieve impact. services on the values of integrity, Society In choosing where to invest, fairness and responsibility. Now we are guided by challenges in is the time for the kind of the UK which create both exciting visions and strategies pressing social and that can alter this perception environmental needs and a clear and in turn drive forward the opportunity for businesses with Big Society: empowering innovative solutions to organisations beyond the state problems. Whether it is in to take social action and, in addressing the challenge of an doing so, enabling them to be ageing population, improving financially self-sustaining. our environment or equipping Financial services, and In the aftermath of the financial The fact that local issues are the next generation to compete associated professional services, crisis there has been an increasingly important to people globally, entrepreneurship can already play a vital role in the increasing focus from investors, is contrasted to the way play a pivotal. That is why our communities we serve. This is policymakers and businesses as decisions have been increasingly investments are increasingly not just about sponsoring events, to where and how sustainable centralised – this is true in focused on four themes: supporting local sporting and economic growth can be government and commerce. under-served areas (60 per cent cultural activities, and important generated. Clearly, a challenge Subsidiarity can mean lots of of our investments are in the community causes, but it is also of this scale cannot be answered small companies or it can mean most deprived 10 per cent of the about helping our staff to use just through more volunteering systematically empowering the country); environment; their expertise to make a real or increased philanthropy, far reaches of a network. The education and skills; health and difference in society. It is through although increases in both latter looks more likely to well-being. that service that the sector shows would be welcome. We believe succeed in a world where capital We have also begun to itself as being truly deep-rooted that entrepreneurship, social underpins financial strength expand on this approach to in the everyday lives of people investment and social enterprise and, importantly, we need a investing, with the launch of the and communities across the all have key roles to play in regulatory structure that allows Sustainable Property Fund, country. Too often it is suggested building an effective version of for this. which invests in properties in that financial services are not the Big Society. There is clearly a need to regeneration areas and buildings part of the “real economy” – but Historically, much of the ensure that all parts of civil showing environmental they are in every part of the real financial services sector has been society, individual and leadership, and a Social economy and not apart from it. sceptical of investing money into corporate, contribute and are Entrepreneurs Fund which The same is true of civil society projects with the dual objective seen to be contributing. The provides equity-like capital to and we welcome the Big Society of delivering economic and financial services sector must help social enterprises scale. agenda as an opportunity to social return. However at step up the good work to bring The success of the Big Society redress the sense of separation. Bridges Ventures we believe that money and skills to benefit the depends on whether it can focus There are direct ways social impact and superior communities in which they are the investment community on financial services can play an financial returns are not based. More work is underway the opportunity to encourage important role in contributing to necessarily mutually exclusive. than typically portrayed, but entrepreneurialism and social a bigger, stronger society. They Talented and ambitious there is more to do. TheCityUK innovation. It also depends on can work to invest a greater entrepreneurs are needed in is seeking to assess this current building the evidence to show proportion of assets in social sectors where it is possible to work and looking to promote institutional investors that investments, while building the create powerful socio-economic further work. innovative social investment can resources and expertise growth. deliver superior returns. necessary to research and At Bridges Ventures we are Chris Cummings, Chief You can find out more at evaluate the opportunities dedicated to developing and Executive, TheCityUK www.bridgesventures.com. presented by these assets. This supporting flourishing will likely lead to the businesses that achieve positive Michele Giddens, Executive development of new products to social and environmental Director, Bridges Ventures open up that opportunity to a outcomes. Over the last eight broader and better informed years our Venture Funds have community. invested £70 million in over 30

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Peter Mann life’s ups and downs will provide an opportunity for the Opportunities for Government to channel money innovation into the Big Society. The concept of Big Society ISAs is interesting but we will need to ensure that these are structured to enable a “win win”. The investor should see a return for their investment in addition to the Big Society receiving a financial injection. Why stop at ISAs? We may see Big Society funds emerging with a profit The Big Society presents us with share between the investor and an opportunity to industrialise the Big Society or perhaps funds the sense of community spirit with deliberately inflated annual which exists within the UK charges giving the Big Society a today. Many individuals and steady revenue stream. companies are already When it comes to financing committed to giving something the Big Society the opportunities back to their local communities are there. We have been given a but there are clearly blank canvas and an invitation to opportunities to build upon this paint any picture we want. and channel even more resources into good causes. Peter Mann, Chief Executive There are two main resources Officer, Skandia that the Big Society needs to address in order to achieve its aims. The first resource is people’s time and the second resource is financial. Without people investing time into Big Society projects it is going to be hard to see this initiative succeeding and without the right level of financial backing projects will have much less impact than we would like. Many companies are already addressing the first resource issue by giving their people time within the year to devote to local community projects, however much more can be done in this area. When it comes to financing the Big Society there are already many good ideas emerging. The use of dormant bank account balances is a good one but this has a limited life span. Encouraging more individuals to save for their own retirement and protect themselves against

www.reform.co.uk 11 Building the Big Society / Reform Can big ideas succeed in politics?

Matthew Taylor a deeper progressive project. At commentariat, the Opposition a Labour Party conference in the and the grandees of the third The Big Society – later 1990s John Prescott was sector claim to despise the idea engaged, resourceful told of an opinion poll that they cannot stop talking about it. and pro-social revealed that people were more I have no need to disguise my likely to the think the Third Way enthusiasm for the concept. was a chocolate bar than a After all, my first annual lecture political programme: “that’s for the RSA – back in 2007 – funny” he said “I always thought was on the topic of what I it was a fudge”. inelegantly called “the social But what of today’s grand aspiration gap”. I argued that if idea; the Big Society. It has “we are to be the people we need inevitably been the subject of to be to create the future we say sardonic humour. At a recent we want” we need a population RSA event a speaker got a good which is in aggregate more Can big ideas succeed in laugh when he said “the Big engaged, more resourceful and politics? I guess the answer to Society or, as my grandmother more pro-social. This is, by the this question lies in part in what used to refer to it, ‘society’”. way my answer to the question we mean by a big ideas and what More damaging has been the “what is the idea behind the Big we mean by success. Cool consistent complaint that the Society”. Britannia was a big idea which concept is vague or that it is My problem is not the idea referred to something real; the merely a cover for cuts. So if but its implementation. This success of the UK in the creative David Cameron and Steve Reform conference is a valuable and cultural industries. But as Hilton had hoped the Big opportunity to discuss this. But no one who is cool calls Society would be greeted with let me end with a quotation from themselves cool, the phrase popular acclaim they must be Tory Council leader, Sir Merrick came across as silly and disappointed. If on the other Cockell: “in the end Government hubristic. hand their objective was to get cannot build the Big Society. It New Labour’s Third Way was the idea into the bloodstream can prepare the ground and get also a big and timely idea; and of public discourse and (if I out of the way”. Right on Sir namely that social democracy can mix my metaphors) try to Merrick, but if you know how to had to adapt to modernity and create a new political prepare the ground while in particular the rise of battleground they have more cutting deep into community consumerism and the impact of reason to be pleased. sector budgets you have globalisation. But it was a rotten Literally not a day of mine answered a question still brand. Not only had there been goes by without receiving an baffling the rest of us. other, discredited, third ways in invitation to attend or speak at a the past, but the idea smacked of Big Society themed event. Matthew Taylor, Chief tactical realignment rather than However much the Executive, RSA

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Jesse Norman MP The Big Society also carries of the institutions between the with it a deep critique of our individual and the state. A genuinely big idea conventional neo-liberal This, then, is the goal of the economics. Within government Big Society – to reinvigorate our and general public alike, that institutions and our civil life has bred a dismal notion of through a far richer humans as rational utility understanding of human maximisers, which has capability. It involves passing reinforced the political power from Whitehall to local centralisation of recent decades. communities, cutting away the One result has been a popular red tape that throttles enterprise, view of human beings as natural promoting community What exactly is the Big Society? shirkers who resist change, leadership and trusting people to Is it just “a big fat lie”, as Polly dislike responsibility and will take responsibility for their own Toynbee suggests, or something only work if bullied or bribed. actions. more profound? The paradox is that the more Even a slow transformation I think the Big Society is in people are controlled from of this country into a more fact that most pervasive and above, the more demoralised connected society would release unsettling of things; a genuinely they become, leading to greater staggering amounts of social big idea, which fundamentally failure and greater control – a energy and capital. This energy redefines the centre-ground of vicious and self-fulfilling circle. lies shackled beneath the surface British political debate. It is But we secretly know this of British society at present; neither a product of the left, nor picture is wrong. We know that held back by deference, class of the right. It is not ideologically it coarsens our public life, division, regulation, poverty, opposed to the state, just deeply undermines trust and degrades foolish theory and lack of concerned about the state’s our civic expectations. We know political imagination. It is time capacity to meet the social and that there are routine aspects of to power it up and set it free. economic needs of 21st century our daily lives like volunteering Britain. It offers a vision of a or philanthropy which it cannot Jesse Norman MP, Member of connected society whose focus is properly explain. We know that Parliament for Hereford and not merely on the state and the there are virtues such as loyalty South Herefordshire and individual, but on all the and long term thinking which author, The Big Society: the institutions in between, be they seem to run directly counter to anatomy of the new politics the family, the sports club, the it. What we need instead is a school or the nation state itself new, compassionate economics – the institutions that give our which recognises the nature of lives meaning. human capability and the value

www.reform.co.uk 13 Building the Big Society / Reform Full transcript

Welcome capacity and capability in the non-governmental sector very broadly. Nick Seddon: Ladies and gentlemen, shall we start? So what does today comprise? Well you’ll We’re running slightly behind time so I’m going to hopefully all have copies of your brochures, and chivvy us into action. My name is Nick Seddon and without running you through in too much detail you’ll I’m the Deputy Director of Reform. For those of you see that it’s divided up in a way that I hope will advance who don’t know Reform we are an independent, the discussion. So we start with defining the Big charitable, non-party think tank that was set up in Society. What does this concept mean? How do we 2002 to find a better way to deliver public services and conduct the kind of strategic diagnosis of the role and economic prosperity. I’m delighted that we’ve got function of the state, and how do we draw boundaries? such a strong group of people here and that we will The second session is about delivering the Big have such a strong group of people here throughout Society. That might mean moving government from the day. So thank you all for coming. being a funder and provider of services to being a The subject of the day’s discussion, as you all funder but not a provider of services, and hopefully a very well know, is the Big Society. It’s becoming an greater pluralism of provision will come about as a incredibly well known concept and has wide currency consequence. We then have a keynote speech from now. David Cameron, to sort of give you a few quotes Oliver Letwin. Some have said that he is the architect or give you some of the groundwork for it, David of the Big Society concept and he’s certainly very close Cameron said: ‘There is such a thing as society. I to the Prime Minister in terms of policy development, simply believe it is not the same thing as the state.’ On and we’re delighted that he’s going to able to come 14 February he said of the Big Society: ‘This is my and set out his vision for the Big Society today. absolute passion, and I think it is a different way of Then after that we’ll be talking – I said that we governing, a different way of going about trying to were going to be talking about actual mechanisms and change our country for the better.’ instruments – and after that we’re going to be talking The Deputy Prime Minister has talked about a about financing the Big Society. So, for example, there fundamental resettlement of the relationship between will be some people in this room who think the Big the individual and the state, which is about taking Society Bank is not going to be able to turbo boost the power away from politicians and giving it to the capacity and capability of the third sector and private people. And this is something that has cross-party sector. So what are the incentives that we need? What consensus, at least in terms of the broad headlines. are the ways of bringing in greater investment? And The Labour Party has very clearly made a point of then finally we have a discussion which may become engaging quite deeply with this concept. pugilistic but hopefully whatever happens will be I was just reading – there’s a magazine outside great fun between Matthew Taylor and Jesse Norman by Serco, one of our sponsors. There’s an article in it on how big ideas play out in UK politics and whether by Nick Boles and in that there is a quote of a tube or not indeed big ideas can succeed in politics. driver who says: ‘Now if we’re all going to be a part of It remains to me to say a little bit by way of this Big Society we keep hearing about, you’ve got to thanks. We have a stellar line-up of speakers today, stand back and let people off the train.’ which I take as a very good sign that people think [laughter] these are the right subjects to be discussing. Everybody that is speaking is so amazingly high Nick Seddon: Which tells you just how wide the profile that they probably aren’t used to a time limit of currency is. There is nevertheless a lot of controversy, five minutes, but – as indeed I’m sure everybody here knows. And to give [laughter] you a sense of that controversy, Polly Toynbee has called the idea ‘a big fat lie’. And while today is Nick Seddon: But I for one shall be tinkling my glass definitely not about engaging in sort of any of the when the five minutes comes up. You’ve been warned. negatives, we need to try and make sure that we can I want to thank not just the broad range of speakers move the thinking forwards. but very specifically the sponsors and supporters of I was – again to quote another – I was in a taxi Reform and of today. They are PA Consulting and on the way home last night and the taxi driver said to Circle and TheCityUK and Serco and Clifford Chance. me: ‘Yeah, I get the Big Society. In fact I’m all for it. It’s not just their financial support that is But the devil is in the detail, innit.’ And he’s absolutely important. It’s their intellectual capital. And that right. And today is really about the detail. And the enables us to – their financial support enables us to propelling force of this conference is going to be an maintain and sustain our independence, which is so unashamedly hardheaded look at instruments and very important to us – and they feed into our work in mechanisms, because I think that that’s where we very important ways as well and our thinking. And need to move the discussion on. We will be talking one of the things that Reform has always done in about flexibility and about accountability and about terms of its positioning is work very hard to bring into value for money, and I think that the issue for this the Westminster dialogue both the private and third Parliament is going to be how to boost, or turbo boost, sectors with policy makers and politicians of all types.

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So my last thanks really are to Clifford Chance for Nick Seddon: Thank you. hosting us in this wonderful venue where they have [applause] hosted us many times before. Clifford Chance are very great supporters of Reform and I know that the Nick Seddon: Could we have the first line-up of subject that we’re talking about today is one that they panellists please. Andrew is going to give you your are very, very involved in their local area and also with seating. So I promised the taxi driver last night when I support of charities all over the country. So I’m very was talking to him that by the end of the day we would pleased to hand over to Mark Payne to finish off these have all the detail that he was looking for, and all the introductory remarks. Thank you. answers. So it begins here. [applause] Defining the Big Society Mark Payne: Thanks Nick. So on behalf of Clifford Chance, welcome to all of you to today’s Reform Nick Seddon: This – I’ve said quite enough now so conference on the Big Society. We’re delighted to I’m just going to move quite quickly on. I mentioned support Reform, one of our long-standing partners in earlier that really what we are talking about now is a thought leadership. Today’s events hopefully will kind of strategic – an attempt to make and conduct a help us to understand better how we can all give strategic diagnosis of the role and function of the state, shape to, and ultimately deliver, perhaps, the Big to look at where the boundaries lie, what the state Society. As we all know, the UK is going through a does, what it doesn’t do. I think these are kind of difficult economic time at the moment. And as we concepts that are easier in principle than perhaps they continue to work our way out of this period, I think are in practice. We’ve got a fantastic panel of speakers it’s clear that our government needs to reform. At a to discuss these issues. I said that I’d give them all five time when public spending is being cut, the Big minutes and then hopefully what we will get is a very Society is about ensuring that more stakeholders step interactive discussion between you, the audience, and in to maintain and enhance the quality of people’s the panel with the ideas thrown up. lives. The Big Society has several reforms in mind: The first person that’s going to speak is Roberta giving communities more powers, opening up public Blackman-Woods, who is to my right immediately. services, and encouraging people to take an active And Roberta is the Shadow Minister for Civil Society role in their communities. But we also know that the with a particular brief that involves engaging with the private sector has a key part to play in making the Big Big Society idea, a Member of Parliament for Durham Society a success. and has been since 2005. She previously served as Clifford Chance is firmly committed to the shadow across a number of briefs, including the success of the Big Society. Our approach to corporate business brief, and has worked in higher education, responsibility is underpinned by our guiding defence, and the Cabinet Office. principles as a firm, which have three main strands: I’ll do all the introductions now. The second our people, our community, and our environment. speaker is Michael Smyth who spent 20 years here at Our commitment to our community is perfectly Clifford Chance as a partner with overall responsibility aligned with the Big Society’s values through our and vision of the pro bono work that Clifford Chance charitable and volunteering initiatives and our pro does. And Michael is an author. He’s written a book on bono efforts. For example, in 2008 we established the business and the Human Rights Act, and consults very Clifford Chance Foundation, set up to provide a broadly and works in the charity sector very broadly. focused and coordinated approach to charitable The next speaker is Stephen Bubb – Sir Stephen giving. Last year the Foundation committed over Bubb, lest I get I trouble – who is the Chief Executive £2.4 million to over 90 charities in more than 40 of the Association of Chief Executives of Voluntary countries. Even in the market downturn our Organisations. And he’s also the Secretary General of commitment to pro bono work has been Euclid, which is the European third sector leaders undiminished. In 2010 our lawyers logged over network. So Stephen brings a sort of international view 57,000 hours of pro bono work, amounting to to some of this discussion as well as a UK focus. And something like £17 million of value. One little bit of quite interestingly Stephen also sits on, as a non- that was myself and our team in the real estate executive chair, the venture capital fund which invests department putting Reform into their new premises in community enterprises. in Hope House. We also seek to get our non-lawyer And then the next speaker is Rob Brown who is a staff involved in pro bono activities and in 2010 we Senior Partner in the local government practice at PA set a target for our services staff of 10 hours Consulting. And Rob, again, has worked previously in volunteering per year. the private sector and also in the voluntary sector and But enough about us. Let’s get on with the in local government but has been at PA now for 15 conference. We have an excellent line-up of speakers years and working across a number of briefs and has today and a fascinating range of panel sessions which published on empowerment within organisations. Nick has outlined. So once again welcome to Clifford So we have a broad conspectus of expertise Chance, and thank you for helping to make the day a today, ladies and gentlemen. And Roberta, would you success. Nick, I’m going to hand back to you now. like to start us off?

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Roberta Blackman-Woods: Yes. groups. And I want to just very quickly read a quote for you. This is something – I think you’re going to be Nick Seddon: Do you want to stand? surprised when you find out where this is from. ‘The ways in which we interact with the state are Roberta Blackman-Woods: Yes, shall I stand here? contradictory. They leave many people confused. We seem to need things from the state, such as childcare, Nick Seddon: As you wish. houses and medical treatment. But what we are given is often shoddy or penny-pinching. And besides, it Roberta Blackman-Woods: If everyone can hear me comes to us in a way I’ll stand here if that’s okay. First of all, Nick, can I that seems to limit thank you and Reform for the invitation. It’s really But even before the election our freedom and great to be with you this morning. We just started – we had started to move reduce the control the Labour Party – started its policy review of civil away from the view that the we have over our society this week. So these are very much preliminary lives.’ thoughts you’re going to get from me and probably state should be a sort of Now I think just some random thoughts. So forgive me for that, uniform – or provide a that could probably but we have just started the process. uniform delivery model. We have come from It is undoubtedly the case that the Government were already placing more Greg Clark or Oliver is seeking to redraw the boundary between the state Letwin. In fact you and the individual. And I think the arena where these emphasis on social might be surprised arguments are probably being most keenly contested enterprises and mutuals, to find out that it is in the whole field of delivery of public services. The particularly post the banking came from Big Society, I think, is the overarching narrative that is crisis. But I think my view is something called really setting the Big Society very much against the the Conference for state, or at least as a necessary corrective to the state. that if we had learned more Socialist And according to its advocates – and let’s not forget from our founding principles Economists in 1979. that it is – really this is an ideological project being we could have moved to a So the point I’m driven by the Prime Minister. It brings with it, they more responsive mode for making is that there hope, less public funding, a desire for more enterprise is also a critique on and volunteering, and possibly more diversity and the delivery of our public the left of how the pluralism in the services we use. services much earlier. state operated in the The reason I say ‘possibly’ more pluralism is delivery of our that I don’t think any of us yet know how the Big services. And I think one of the things that we did in Society agenda will play out. We don’t know how government was not adequately consider the negative many social enterprises or co-ops or employee-owned aspects of the statutory services. companies will be established or what will happen if But saying the state is contradictory does not they fail. Will that simply usher in the private sector? equate to saying it is totally repressive or oppressive. So the key question really around all of this is Phillip Blond of ResPublica and government advisor what do we believe the role of the state to be? Is it as said at a Westminster meeting recently that the state funder, commissioner, provider of services, quality is malign. I think this is as bad as saying the state is controller, or can we have a mixture of these? And I always good. What we know is that communities, think what we’re saying from Labour at the moment is particularly disadvantaged ones, need support from as a society we have not yet had that discussion. And government, and they need this from the state at what we need to ask particularly of government is central and local level, and that actually what is key does it see a role for the state as enabler. is putting frameworks of support in place for We like to think, in Labour, that statutory community activity and often doing this in agencies can work in partnership with other partnership with others. So that leads us to be providers, and in government we considered concerned about how the state and Big Society is partnership with the voluntary sector as central to actually being conceptualised at the moment. Often service innovation and delivery. But even before the we think when Government Ministers talk about the election we had started to move away from the view Big Society they have a sort of twee Surrey village in that the state should be a sort of uniform – or mind – and can I apologise to everyone who is from provide a uniform delivery model. We were already Surrey immediately. placing more emphasis on social enterprises and [laughter] mutuals, particularly post the banking crisis. But I think my view is that if we had learned more from Roberta Blackman-Woods: But I hope you’re our founding principles we could have moved to a following my drift. It’s about local people sort of more responsive mode for the delivery of our public running a library or running a club – a local club. And services much earlier. I think that at the moment we don’t have it Many, many years ago one of the things I did in conceptualised to deal with really the complexity of my academic life was look at the nature of the problems that are experienced in our most relationship between the state and community disadvantaged areas such as outer housing estates

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that have truly complex problems often associated In my view, if the only role of the Big Society idea was with entrenched unemployment or addiction or existential in the sense that it encouraged a national alienation. discussion, then I think some good will have been done. And so what I’m saying is communities require Not that it can be entirely devoid of content. If people different levels of resourcing and input, and if social are to be encouraged to do more they need to know enterprises are really to offer employment why. And having been given an explanation they find opportunities in the most disadvantaged coherent, their enhanced activity will have to be communities, and if all our areas really are to be facilitated and, whisper it softly, in many instances that empowered to shape and deliver the services that may involve forms of state action. Who else to provide they want, then I think we need a framework and a what’s fashionably been dubbed as a ‘nudge’ in these timetable in place to deliver that that is simply not circumstances other than the centre? In any event, if there at the moment. So that is our current challenge we’re all in it together we can’t be expected to do it all by to the Government. But we also need to start asking ourselves surely? communities what they really want. Thank you. Consider the legal advice sector about which I [applause] hope I still know a little. Much more scope, in my view, for the rolling Nick Seddon: Roberta, thank you very much. out of twinning Michael, would you like to follow? I’m in confessional mode arrangements. This and I must tell you I’m law firm has for Michael Smyth: May I sit? confused because I’m years had a invited to tell you what I sustainable Nick Seddon: Please do. relationship with a think the definition of the legal aid firm in Michael Smyth: Thank you, Nick. Thanks to Big Society is when I’m not West London Roberta. Good morning everyone. I see the clock on sure it admits of any clear whereby 20 lawyers the Clifford Chance wall says 8.20 which just shows definition, or indeed needs from Clifford things have gone backwards since I worked here. Chance are [laughter] one. seconded there each year. But it’s pretty Michael Smyth: I’m in confessional mode and I much exceptional within the legal profession, and one must tell you I’m confused because I’m invited to tell reason for that is because of the very significant cost you what I think the definition of the Big Society is involved. But it doesn’t require any legislation. It when I’m not sure it admits of any clear definition, or doesn’t require regulatory action. This can be done. indeed needs one. Like the elephant, we know it But it does of course presuppose that there are when we see it. I’m also personally conflicted. The not-for-profit partners with whom hot shot law firms law loves certainty and precision, but lawyers love can twin in the months and years to come. ambiguity and And in that context it’s obviously problematic to ... communities require vagueness. So the hear an organisation which is surely emblematic of better part of me what’s best in British society like the Citizens Advice different levels of resourcing delights in the very Bureau, formed in the furnace of social activity that and input, and if social elasticity attaching was firing up during the Second World War, when it enterprises are really to offer to the Big Society says that its networks are going to be substantially employment opportunities idea. It’s not as if reduced over the next year. What about volunteering? it’s a piece of There is a lot of it about, you know, not least in Canary in the most disadvantaged precision Wharf, invariably employer led. No doubt more can communities, and if all our engineering. It’s be done. areas really are to be not as if, I recall – But the fact that many institutions in this estate although I was a do terrific amounts in the volunteering sense empowered to shape and little bit young at shouldn’t hide the fact that other forms of traditional deliver the services that they the time – Lyndon British civic engagement are in decline. In this want, then I think we need a Johnson outlining institution 30 years ago you would have had a framework and a timetable the four corners of significant number of local councillors or magistrates the Great Society or youth group leaders. Those people barely exist in place to deliver that that is with any degree of anymore and it’s not the fault of government of any simply not there at the granularity. What hue. It’s a function largely of the relentlessness of moment. we can say most modern life. And it seems to me that that will only be profoundly about cured by action encouraged and facilitated by the him is ‘by their actions ye shall know them’. And centre, aka the state. plainly that phrase was a springboard for him for the And lastly the subject of philanthropy. Plainly, rolling out of significant pieces of legislative reform as Vivien Duffield has been saying in recent days, the intended to alleviate poverty and remove racial benchmark in that regard is the cultural support for discrimination. the philanthropy that exists in the United States

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where to a large extent it’s underpinned by faith, but At heart it’s about how do citizens, how do also facilitated through the tax system. A top Wall communities relate to service delivery. For the third Street lawyer dies disgraced if he hasn’t a significant sector our role has been growing phenomenally and background in the not-for-profit world and doesn’t will grow and will continue to grow. And the reason have a well-funded family donation. That’s not the we want to deliver public services is not because we case in this country. think this is great, we like contracts. We’re not Serco. Now if that’s to change – and if it’s not to be We’re not their bottom line profit. We’re their bottom inaugurated by the re-emergence of mass communal line a better deal for people with mental health religious activity of the type which I suspect one or two problems, with disabilities. And the reason charities of you in this room would not relish – then plainly it have been involved in delivering public service, and has to be encouraged by government. Because they have been so for over 1,000 years, is because they otherwise I think any attempt to bootstrap and see a believe as organisations, as communities, they can do step change in philanthropic activity in this country it better. – particularly amongst the professional classes who So I strongly support the Government’s don’t consider themselves rich, whether objectively programme for reform. I think it’s actually quite judged they are – is to be secured. So all in all I think exciting. I’m probably in a minority – a strong everything is to play for. A valuable idea, but I do think minority – that it would be a disaster if it propels us towards an arid thinks that some binary: Big Society, small state future. I’ve no doubt And the reason charities parts of the health that’s not what the Government has in mind, but if have been involved in reforms could be we’re all in it together, we all have to work together. delivering public service, and really radical and [applause] important for they have been so for over individuals and for Nick Seddon: Michael, thank you very much. Stephen. 1,000 years, is because they patients. I think believe as organisations, as what’s happening Stephen Bubb: Thank you. Well Nick, you started off communities, they can do it in DWP and what this morning with a few of your favourite quotes on Kenneth Clarke is Big Society. I’m going to give you mine. This is Francis better. doing in MOJ could Maude writing in The New Yorker magazine defining revolutionise the Big Society. You’ll find this helpful. ‘This will be very way we relate to the state. This is good and we are messy. This will be quite anarchic. This will not be absolutely on board for working with that. neat.’ He then goes on to say, rather chillingly, ‘You But there are challenges. There are challenges to have to accept that there will be things going wrong the state and there are challenges to us as a sector. The that you can’t do anything about because we are challenges to the state really are how do they as a big saying we’re not responsible for that anymore. You organisation really reform the whole way the public are.’ Now these sorts of incoherent ramblings are fine services are commissioned. How do they get joined when you’re in opposition. But as a programme for up? How do they free up commissioning from the government it simply will not do. And that’s been one dead hand of the anally retentive procurement of the problems the Government has had. The officer? narrative around Big Society is incoherent. And I think the challenge for us as a sector is And if I’m having a go at Francis, who I like very that against a background where the Government is much, I must also have a go at our current Opposition going to commission more from external providers, who are also incoherent on this issue, and I wish how do we respond as a vast – you know, we are a Roberta well in her review because the Labour Party sort of messy sector. There are thousands of us. Our really does need to sort out whether they think Big strengths are often in small organisations. Our Society is a con and strengths are in large organisations. So how do we a cover for cuts or form consortia to take advantage of the At heart it’s about how whether they think opportunities? How do we reorganise? How do we do citizens, how do the Tories have think about mergers and alliances and partnerships? communities relate to stolen it from them. And these are difficult things for a very proud and service delivery. But you can’t have it diverse sector. both ways. And I And then I want to particularly talk about how think Maurice we can really revolutionise the financing of the Glasman’s interesting musings on this subject are sector, and I believe that loans and social investment really not helping things greatly. are where the Government is beginning to have Now what do I think the narrative about Big really quite a good programme. The Big Society Bank Society is about? Well for me – and this I think is is a great innovation, actually dreamt up by the last important – the narrative which resonates is about government and rebranded, we sort of forget that. how we as citizens and communities relate to the state But it’s potentially really big. And I think potentially particularly in the delivery of public services. And for if this idea is taken in terms of Europe – I think we me this is a really important agenda, and it’s not a are already talking to the Commission about the managerial agenda about reforming public services. potential for a European social investment bank.

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There are other ideas in the States on this. I think if Society is one of autonomous agents. It’s motivated we can get access to capital – because this is our big customers interacting with responsive self-managing problem we have in the sector, that traditionally our providers. In this world the state needs to let go and finances come from grants, from what we can make empower, not control. But letting go is a tough ask for on contracts or philanthropy. We’ve never really a democratic state. Citizens taking control of their been able to access capital. And of course the private own services raises the prospect of all sorts of sector grows in service delivery through accessing unpredictable capital, and that’s what we now need to do as a consequences and sector. I believe the key is to anxieties about I want to just end by reflecting on some of the redefine the core role of the postcode lotteries points that Michael made about the role of the state. state. Bluntly put, it needs to and the inequitable And I think at the core – and this isn’t discussed much become a demand side distribution of I don’t think, Nick – at the core of the divide on Big resources. Society is ideologues on the right do see this as an business rather than a So how is it agenda for a much diminished and a smaller state supply side business. Its that in a democratic with the responsibility devolved to individuals and core strengths should be state you can potentially to charities to sort of get on with it. So a maximise the minimal state. And certainly with the history of understanding people’s empowerment of charity over the centuries has been the importance of needs and people’s the citizen on the a partnership approach where the state is absolutely behaviours, actively one hand – the clear it funds – it funds welfare services from taxation managing demand, helping citizen and for example – but doesn’t necessarily deliver those communities – but services. And it also crucially maintains its role – its to commission and retain a focus on strategic role – in determining how services are advocate for services, and democratic delivered. And that strategic role remains very making markets. objectives on the important and where we work in partnership with the other? I believe the state. So for me the state relationship, the state and key is to redefine the core role of the state. Bluntly put, our sector remains crucial to what I see as a good Big it needs to become a demand side business rather Society agenda. Thank you. than a supply side business. Its core strengths should [applause] be understanding people’s needs and people’s behaviours, actively managing demand, helping to Nick Seddon: Thank you very much, Stephen. Rob, commission and advocate for services, and making over to you. markets. At the risk of sounding like Sir Humphrey and probably damning the whole enterprise before it Rob Brown: Morning everyone. I want to follow very even starts I’ve called this the ‘bold state’ because I much in the line of some of the comments that have think it will take real courage to transfer, to introduce already been made, helping to define the Big Society the dynamic of the customer so comprehensively into by talking about the nature of the state machine that’s the workings of the public system. needed to support it. And David Cameron has said, I But what does this boldness mean in practice? I think, we must use the state to remake society. Well just want to conclude with what I think are the three yes, but the state is not yet fit for that purpose. So we areas where I would urge the Coalition to be brave in need to use society to first remake the state. driving reform. Firstly, empowered customers need I say this because like the other speakers I’m empowered providers. So the bold state needs to be passionate about what the concept of the Big Society courageous in genuinely separating itself, I would has to offer. My own personal experience of working suggest, from the direct management of all services in in and with the creating a genuinely level playing field between all voluntary sector service providers, whether organised within the David Cameron has said, I and with leading public sector, private sector, or third sector. think, we must use the state edge public bodies The second act of bravery, I would suggest, is to to remake society. Well yes, restructuring develop a dedicated capacity to work with the demand but the state is not yet fit for around their side of the system, a capacity to reach out to citizens, customers has given communities, businesses who are eligible for public that purpose. So we need to me first-hand support, work with them, empower them, help them use society to first remake experience of what to commission the right solutions or provision for the state. the concept of the their needs. And this is actually happening. For Big Society can offer example, some councils – some leading edge councils in terms of citizens, communities, businesses owning – are already defining their core role as that of their own services such that they’re prepared to put customer service, of working with the citizens, helping more of their own efforts into their success. guide them to the right solutions, whether that’s But my experience also tells me that this vision provided internally by the council or externally by requires a new and more trusting relationship other bodies in the third sector and elsewhere. between the citizen and the state. The world of the Big But the third and perhaps bravest act, I would suggest,

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is to have the courage to manage this system through jobs and a question about the identifying of social a greatly enhanced strategic capacity, to really improvement outcomes. Rob, do you want to come understand need, target areas of priority and define back first on this question of outcomes? the range of viable solutions open for use by the community. That is the means by which you retain Rob Brown: Would you mind just repeating the democratic control of the purpose of public money question? and make sure it goes to those people for whom the electorate have said. Carmel McConnell: Thank you very much. Carmel So the outcome: a state that is probably a McConnell from Magic Breakfast. In the definition fraction of its current size if you measure it in terms of stage wouldn’t it be helpful rather than just sort of direct employment, but I would argue a state that’s talking about how we hope social enterprises, charity more potent and more effective, not just in doing what and voluntary groups will step into this space as the it’s currently doing, but in liberating the energies state relinquishes control, wouldn’t it be much promised by the Big Society. I think that’s quite an clearer to think about outcomes. For example, we exciting future. would like to reduce the number of children who go to school too hungry to learn. We would like to Nick Seddon: Rob, thank you very much indeed. reduce the numbers of elderly people who do not [applause] have support at home in the evening. And just be very clear. And then move the Big Society very Nick Seddon: Do people have questions? I’ll take rapidly around the kind of society that we would all them in a clutch and then farm them out to speakers. like to see, and then look at the means of equipping So hands up. Yes, this gentleman here, the gentleman ourselves financially etc. there and the lady there, the next one up. Rob Brown: I don’t think that’s just a good idea. I David Weeks: I wonder if I could ask – David Weeks, would suggest that’s absolutely key to making this Community Resilience. Is it a new idea or is it an old whole approach work. I think it’s only if you are going idea but in new clothes? to reconcile the democratic objectives that the electorate reach through the democratic process with Nick Seddon: Thank you. This gentleman down here then empowering people at the front line to interact to at the front. achieve those outcomes. You’ve got to have absolute clarity about what those outcomes are in the first place Rafael Behr: Hi, I’m Rafael Behr from The Observer. and a view about what is the relation between the The conversation has been almost entirely about the citizen and the state that’s going to achieve them. So I provision of public services, but it strikes me that an think that, if I can use a hard and nasty word in this important Conservative critique of the state is that it’s environment, but that is the means of control in this been the employer of last resorts in a lot of regions. This empowered relationship. obviously is important with regards to the broader economic strategy, the fiscal strategy and the question Nick Seddon: Thank you. Michael, do you want to of whether the state is crowding out employment. So I come back on any one of those three questions? was wondering – really a question for everyone – where are the jobs coming from in the Big Society? Michael Smyth: Well Rob and I come from private sector backgrounds and therefore a world where at Nick Seddon: Thank you very much Rafael. And the least rhetorically pretty much everything gets lady further back. measured and there’s that tired American business school maxim that what gets – Carmel McConnell: Thank you. I’m Carmel McConnell from Magic Breakfast. We provide food Audience: We can’t hear you. and community innovation support to the poorest communities. My question is this: have we reached Michael Smyth: Apologies. Plainly in the private the stage now when we will talk about the social sector pretty much everything gets measured and it improvement that will come from the Big Society, for may be a new experience for government to measure example dealing with the half a million children who outcomes in this kind of context. As regards the arrive at school too hungry to learn? Because I think reference to where the jobs are coming from, well one of the things in the defining phase is for us to that’s plainly one for government, but I guess the come up with very clear social improvement claim is if there’s an increased dynamic atmosphere outcomes, and I agree with what’s been said by Rob about the place that that will help employment ratio. about moving the state into a supply side state. And Speaking for myself it seems to me, as I said earlier, how does the panel see that that can happen? that much of what’s being canvassed as most characteristic of the Big Society movement such as Nick Seddon: Thank you very much indeed. So let’s the free schools movement is going to have to be start with those, shall we? So we have the question underpinned by mobilised flying squads of about new or old, the question about employment and government officials. It may be possible for Toby

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Young in West London to establish a free school by Roberta Blackman-Woods: I think the first one. I himself with a number of very articulate and think what I was saying is actually it’s a concept that in well-heeled friends, but plainly if the free school some way or another has been around for a very long movement is to gain traction across the nation it’s time. But what I think the Government in a way going to require a lot of Civil Service support I would helpfully has picked up on is the idea that people want have thought. more control and more say over the services that they receive. And they perhaps also want them to be Nick Seddon: Thank you Michael. Stephen? delivered differently. And, in a way, that touches on the second question because I think a real test for the Stephen Bubb: Can I answer an interesting question Big Society will be whether it does deliver alternative on the jobs and employment front with two employment, observations. I think it’s been very interesting the particularly in some change that happened in the third sector over the last But what I think the really decade or so where now the sector as a whole, social Government in a way disadvantaged enterprise charities etc, are employing 1.5 million helpfully has picked up on is areas. Will social people. And that’s not very well known because when the idea that people want enterprises really we think of our sector we think of smaller take off or in fact organisations. We often think of voluntary more control and more say will we end up with organisations. Actually it’s a big source of over the services that they just quite poor employment. But what’s particularly interesting about receive. And they perhaps private sector that employment though is you’ve got paid staff and also want them to be delivery? And I just you’ve got volunteers. And I think one of the don’t think we know attractions of our sector is that there are – I think delivered differently. that yet. But there is there are more interesting forms of work that go on in definitely potential our sector in terms of the division between there but, you know, people are going to have to be volunteering and paid staff. I think one of the things trained and given a completely different skill set than that’s happening in our sector is how we use and they have at the moment. manage volunteers in a much more professional way And just briefly to touch on the third question, I which leads them into jobs or into part-time work and think one of the things that worries me about where training and the like. And I think that’s one of the we are with this whole agenda at the moment is that advantages actually I see of the sector’s growth. the Government hasn’t set out key objectives of what And I think the final point I’d make is you they want the Big Society to deliver beyond a smaller mention about crowding out. I’d just like to make – I state, and we really need to press them on that. think this is an important one because Phillip Blond bases a part of his case for a Big Society on how the Nick Seddon: Thank you. We started slightly late so state has crowded out volunteers and individual I’m just going to take another very quick round of initiative. And there questions but can I just ask people to ask those is absolutely no questions very quickly. I’m going to take three or four It’s been very interesting the evidence for this or five and hope that you will speak quickly. Yes, the change that happened in claim. In fact there gentleman down here and then the gentleman here, the the third sector over the last are a number of two ladies there and the gentleman right at the back. academic studies decade or so where now the that have shown the Martin Le Jeune: Martin Le Jeune from Open Road. sector as a whole, social welfare state did not I’m surprised that the panel have any kind of enterprise charities etc, are crowd out ambiguity about the Big Society and the relationship employing 1.5 million volunteering with the state. The proposition must be surely that if initiative. the Big Society works, the state will get smaller, not people. Volunteering only if you’re a proponent of it, not because it’s initiative and giving inevitable, but because Big Society proponents must changed, so traditional thoughts of volunteering etc believe that it’s better. I’m also a bit surprised, had declined but actually in its place other forms of Michael in particular, by your statement that volunteering came about. So there’s no evidence the voluntary action in local communities requires flying welfare state crowds out activity. squads of civil servants. That seems to me to underestimate the willingness of people to take Nick Seddon: Thank you Stephen. And Roberta, control of their own lives. since you spoke we’ve now come on quite a grand tour of different themes, and each of those questions Nick Seddon: Thank you. I’m going to keep these seems to me to be relevant. Is it new or old was questions. Go ahead. something that Stephen was also tinkering with as an idea. I’d love to take another very quick fire around of Peter Lawrence: My name is Peter Lawrence, questions but I don’t know if there are any of those formerly of Buckinghamshire County Council. that you’d particularly like to come back on. Michael mentioned enhanced activity and I came here

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searching for verbs which were saying what – would Stephen Bubb: Yes, I was going to take up this sort of do what. And I’ve got half a dozen jotted down – ‘size-ist’ thing that goes around. [laughter] Nick Seddon: Can you go for three instead? [laughter] Stephen Bubb: You know, the state must get smaller. Well yes, of course the state will get smaller if more Peter Lawrence: Giving or giving back. Contributing. third sector organisations are delivering services so Supporting. Leading. Volunteering. Encouraging. there will be less people employed. But I certainly Embrace. Guiding. Now if we were making a don’t believe the state should get smaller in terms of definition, which of those would – what better ones its responsibility to fund the welfare state and welfare could you suggest to include in the definition? And provision. I do not believe that that should diminish, possibly the definition needs to have some motivating and one of our arguments has been very clearly over component such as patriotism or generosity. I don’t the last few months that the cuts that are being made know – others. to our sector are disproportionate and are wrong. So I don’t think it should get smaller, and I don’t think it Nick Seddon: Peter, thank you very much indeed. should get smaller in its role as a democratic, strategic Two ladies in the middle here. –

Jane Fletcher: Hello, Jane Fletcher from TimeBank, Nick Seddon: But the money has run out. a national volunteering charity. Volunteering lies somewhere in amongst this definition of Big Society, Stephen Bubb: Well – you interrupted my train of and do you think that the Government realises that thought. Naughty boy. volunteers need management and training, and that [laughter] you can’t really very easily always just point a person at a task and hope for the best? There are also Nick Seddon: Very naughty, and I’m going to keep questions about quality control here and taking it the interruption going. Michael, management and slightly to an extreme endpoint, my personal fear and training. nightmare is having to go to a volunteer dentist. [laughter] Michael Smyth: Excellent point and the legal pro bono sector is fundamentally underpinned by very Megan Griffith Gray: Megan Griffith Gray from high quality training offered by many voluntary sector NCVO. I think Rob’s vision of a world where players, because it’s all very well letting loose communities can commission the services they need hundreds of hot shot City lawyers in advice centres from a variety of providers is appealing, but we know during the week, but it would be quite wrong – it that resilience for many smaller and medium sized would risk a firm’s malpractice policy – to do that voluntary organisations is a problem with very low without those people having received intensive levels of reserves. And we know that those training. Currently they’re getting it, but if there is organisations can only lever in the extra resources plainly going to be a step change in this kind of world, that Michael talked about in partnership with private then plainly that’s an issue that’s going to be sector if they have some kind of core funding. So what discovered. And I’m glad with Martin that my is the role of the state, does the panel think, in doing metaphor of the flying squads has proved to be so this? And I think it’s problematic to look to memorable to him. I was responding to the question philanthropists to fill that gap. – and I set it in the context of the free schools movement – I personally, as, I hope, a reasonably Nick Seddon: Brilliant, thank you. And there was sophisticated citizen, wouldn’t have an idea as to how one question right at the back, the gentleman with to establish a free school and I guess I would need the glasses. help in that regard. And some of that help may have to come from Whitehall. James Magowan: Thank you. James Magowan from Tomorrow’s People. Our CEO often says that we’re a Nick Seddon: Rob, your point was kind of if the Big not-for-loss organisation as opposed to a not-for-profit, Society works then the state will shrink. That was your and I suppose I’m interested in the idea of what concept really of the bold state within a demand side Stephen said around the idea of borrowing, well, business model. I wonder if you’ve got a comment on getting access to capital, and what that means in terms that. And then also on the mechanics of how of does it mean will we be borrowing money off people commissioning works for small organisations. and therefore will we need to repay it? And how will this change the complexion of the third sector? Rob Brown: OK, well can I work back from the role of the state and just pick up on this point – and a good Nick Seddon: Brilliant. Thank you. I wonder whether question. The state has to be – or not, Stephen, you’d like to come back on the question if the Big Society works then the state will Nick Seddon: Rob, just put the microphone close shrink surely. to you.

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Rob Brown: The state has to be a partner in these very frank discussion – I mean as a society we haven’t activities. I mean its role is to support the setting up of had. And I set out some of the things. To what extent the school, to provide the advice, to work in do we want the state to be a funder, a commissioner, a partnership with the voluntary sector and society in provider, a quality controller of services, and indeed doing that. I don’t see any sign of the state reducing to we want the state to have a mixture of these? And in the taxation that it’s going to take. After all it has all a sense do we know where the Big Society agenda is that public money and it’s responsible for it. So it’s going in terms of its objectives for social still a major player in this world. And I think that’s my improvement? And how will we know if it’s got there? point about the smaller state – actually calling it the What measures are being put in place? And indeed bold state, not a smaller state. This might be smaller how are we going to get from where we are now to in terms of actual numbers, but it’s a more powerful where we want to be? and a more effective state in many ways in liberating And clearly the Big Society Bank is part of that the energies of the people and the activities around it. but it’s only part of it. It’s quite a small level of resources So I think it’s a mistake to go ‘size-ist’ in all this. I given the huge task that is in place of changing how we think it’s a different state, would be my answer. deliver all of our public services and the control that So in terms of engaging with the community, I local communities think they have over this. So I think think this is what you actually see happening in local we’re at the beginning – the beginning of an interesting government. They are setting up – some of the leading journey and we very much want to keep interacting edge ones – those sort of capacities and facilities that with government and all of you to see how this is going can outreach into the community and start to build up to work out really in the future. the sort of social capital capabilities of the communities and sectors out there, seeing that as Nick Seddon: Thank you very much indeed. Well this their core role rather than the direct management of is the end of the beginning. services themselves. And it’s the way to go, but that to [laughter] me is the dedicated function of the future state. Nick Seddon: I have run over. We started slightly Nick Seddon: Thank you. Roberta, I’m going to leave late. Evelyn Waugh said that punctuality is the virtue the last words to you and do a very, very quick of the bored. It certainly was an incredibly interesting summary before you do – because I suppose you set session so please can we thank our speakers. out that you’re conducting a review at the moment of [applause] the whole idea and kind of how all this moves. And I think that we’ve travelled through a whole series of Delivering the Big Society very interesting points and questions in the last 50 minutes or so. You talked about the continuity Andrew Haldenby: Right, welcome everybody for our between – across – governments, a left-wing critique second session, Delivering the Big Society. My name is of the state and of statutory services, but also a Andrew Haldenby. I’m the Director of Reform. I have critique of the way that the current government is rolled up my sleeves because now we are getting down managing the change. We’ve kind of looked at the to the nitty gritty of how we’re actually going to do elasticity of the idea and the idea that everything is to this, and what we’re going to discuss in this session is play for. We’ve also, I think, quite clearly got a very simply: how are we going to create a more diverse consensus across the panel that the small state/Big public sector and bigger social capital in this country? Society binary is not particularly helpful and that Just those two things. That’s what we heard about in there needs to be a bit more on the role of the state as the first session, and that’s what we’re going to discuss a partner or as some kind of enabler both with civil today in this session. society and with communities and with citizens and What we have is a panel, an exceptionally strong also with the businesses that are commissioned. And panel – three people who are actually, as far as I’m then Rob has sort of laid out this extremely interesting concerned, delivering the Big Society in practice, and idea of the society remaking the state and a kind of two people who are amongst the nation’s leading rethink of the role and function of the state on the commentators on Big Society issues. In order, demand side, so much more about empowering Bernard Jenkin MP, Chairman of the Public communities and managing the sort of strategic Administration Select Committee, so therefore the direction and defining outcomes and what’s wanted. key parliamentary committee which keeps under So I just wanted to really offer that to you and see review quality of government and quality of public what you thought. services and has just started an inquiry on the Big Society, so we will hear it straight from the horse’s Roberta Blackman-Woods: Right, well I’m going to mouth from Bernard. Thank you. start by answering the gentleman at the front, his Patrick Butler is Editor of Society, Health and question, because I think the verbs are ‘enabling’ and Education Policy at The Guardian. He’s one of the ‘partnering’ and I do think that what we’re seeing is, nation’s leading commentators on social issues and as I started off saying, a renegotiation of the has been taking a particular interest, as has Reform, relationship between the state and the individual and in the cuts and reform programme of the new communities. I think what we haven’t had really is a government. Ali Parsa is Managing Partner at Circle,

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which is a health company selling to patients in both Government must instruct us in exactly what it is and the public and private sectors but based what we’re meant to do, and b) the Government must fundamentally on the idea that employees should own then fund it so that it can all happen. the companies that they work for. And that idea of [applause] employee ownership has become one of the key themes of the Big Society debate, so Ali we’re thrilled Bernard Jenkin: I mean that seems to be an that you’re here. antithesis of what the Big Society is about and I’m Clive Barton is Corporate Affairs Director of going to ask a rather tactless question now. How many Serco plc, a FTSE100 company, again delivering people in this room are funded directly or indirectly services both into the public and the private sectors. by the state? Because it’s a sad fact that people in the He has been with the company for 11 years but also public sector have far more time to go to conferences straddles the sectors because he’s active in a charity like this than people in the private sector. called Pilotlight, and the purpose of that charity is to [laughter] connect senior business people with charities who need to grow and develop. So Clive, we will hear about Bernard Jenkin: And indeed it’s just been remarked these things. And finally, Andrew Wates is a Director to me that a chief executive of a local authority said it’s of The Wates Group, which is a major construction actually quite easy to cut public spending in local and services company operating in the UK and authorities. We just told them to stop going to so overseas. He has been with the company since, many conferences. according to the biography, 1964, but as well as his day Of course this is about Sorry about that. job he is a trustee and patron of numerous charities. [laughter] So, I mean this is an outstanding panel. I’m just smaller state. It has to be going to go in the order that I’ve told the speakers. I’m about smaller state. And Bernard Jenkin: going to hold you all to five minutes to begin with and what did we see over the last But what we’re I shall, you know, wave my hand and shout after four 13 years? What did we see doing on the Public and a half minutes so that you know, and we’re going Administration to kick off with Bernard Jenkin. over the last 60 years? The Select Committee, state taking on more and we are the Bernard Jenkin: Well, thank you very much indeed, more responsibility. committee that Andrew, for this opportunity to have a discussion, and looks at the process I listened with great interest to the first session. We of government and we want to make sure that the are in danger of making this all much too complicated. Civil Service is fit for purpose, that Whitehall Whether this is an old idea or a new idea – and I departments function effectively. We’re not the Public subscribe to the fact it’s actually a very old idea. Let Accounts Committee. We don’t do the money, we do me just read you – Edmund Burke wrote of the little the process, and that government departments talk to platoons between the individual and the state and he each other, that government departments function said: ‘To be attached to the subdivision, to love the effectively for the people that they’re meant to serve. little platoon we belong to in society is the first And we’re currently doing two inquiries principle, the germ as it were, of public affections.’ actually. One is on good governance and Civil Service And that’s timeless. It’s a recognition of part of the reform – what is the Civil Service actually for in the human condition. And we need to ground what we’re modern age. And the other is about the Big Society. doing in reality. And I think we’re going to try and avoid getting Of course this is about smaller state. It has to be bogged down in the theology and the definitions. You about smaller state. And what did we see over the last can have that from Oliver Letwin later. He does that 13 years? What did we see over the last 60 years? The very well. What we want to concentrate it on – you state taking on more and more responsibility, know, when a civil servant comes in at 9.00am – and accumulating more and more control over more and we have this new policy, this new impetus, to try and more of the resources, so that we finished up at the shift back into communities and into the private beginning of this Parliament with the state controlling sector and on to the charitable sector some of the 53 per cent of the national income, but paradoxically things that have been taken from them by the state. only levying 34 per cent of the national income in tax, And please forgive me but this idea that the so we’ve got a massive deficit. larger and larger state does not crowd out And has all this expenditure and all this spontaneous social and commercial activity, I mean micro-management from the centre – the long how can anybody not understand that that is the case? screwdrivers from the Treasury – has this created a I mean, purely from an economic point of view the happy and equal and contented and crime-free and more resources purloined by the state means that social problem-free society? No it has not. And the there’s less to be deployed independently. But one thing we surely have now tested to destruction is practically, I mean I see in my own constituency, I do the idea that central government can solve all the remember the occasion when on a housing estate they problems. And I really think it’s rather a paradox to finally occupied the local authority-owned pub which hear people coming here to talk about what we mean had gone bust and said they wanted it as a community by the Big Society and then demanding a) that the centre. And the first, the instinct of the council was

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not to say that’s fantastic, they’ve found some local Big Society offered a golden future for organisations leadership, they’ve got some community leaders, you like his – social enterprises, voluntarism. By know, there’s some spontaneous leadership activity Christmas David Robinson had declared that Big and they’ve got some impetus and entrepreneurial Society was David Cameron’s “big Hurricane Katrina flow. Their immediate reaction was to evict the moment”. Not a good sign coming from the man who community leaders from the pub and set up a local has been declared the godfather of social organising in housing office in the pub, ie another outpost of the this country. local authority rather than a new focus for community So what happened? What went wrong? And I activity. Well, we had to see that one off, but that is the want to argue that there was a failure of strategy, a problem. That is how the state crowds out failure of leadership, and a failure of ideology. One, spontaneous activity. But what we’ve got to look at in local government the Civil Service – and I’ve got to round this off very settlement. This is quickly, I appreciate… I want to argue that there the biggest factor was a failure of strategy, a – in my opinion the Andrew Haldenby: You do. failure of leadership, and a biggest influencing failure of ideology. factor on Big Society Bernard Jenkin: The Civil Service historically had – the frontloading three key functions. One is policy advice to Ministers, of the cuts to local the second is management of public services, and the government on the depth and scale that gave local third is the relationships with third party government little or no time to think strategically organisations and arm’s-length bodies. But what about how to reshape the services, about how to, I we’re requiring now is a fourth skill from the Civil suppose, shrink the state, if you like, shrink the local Service and a fourth skill from the public service. And state. In the race to hit the bottom line and to meet the we know of the very few exceptional individuals in the legal budget requirements I think it was inevitable public service who can go into communities and that charities – who are providers on the whole of spontaneously get things going, but these are the skills what we call non-core services, non-statutory services, that we now need for the Big Society. the extended state – were going to be the worst hit. And finally I’ll just say this: we know that the Big And I don’t think Eric Pickles saw this, or if he did, he Society works in the leafy suburbs and the shires. The didn’t care. If you look at The Guardian’s 50 Cuts problem is the desert in the areas of social project – which we published last Friday and is still deprivation, the areas of much less activity. And that online – you’ll see exactly which services are being hit is the real challenge which I think David Cameron is by that frontloading of cuts. Many of them are Big setting out for us and which we need to set for Society exemplars. ourselves. And I think the Labour Party really Secondly, no leadership. Now, we have understands that as well. Thank you very much. leadership of a sort in that David Cameron will devote [applause] his Party conference speech, or large parts of it, to the Big Society, but what do we have in practice? Well, we Andrew Haldenby: Thank you. Straight on to have a failure to intervene when it became clear that Patrick Butler. the Big Society was being shot to bits on the ground. We have an obsession with localism that meant that Patrick Butler: Thanks, Andrew. When I talk about Ministers would not intervene because that is not Big Society I often find myself returning to Lord Wei’s what the state does anymore. We have Ministers, the rather mystical description of Big Society. He said: sight of Ministers hand wringing on the sidelines as ‘There will always be a part of Big Society that will Big Society exemplars went bust. If you look at remain mysterious, Supporting People which provides homelessness and yet exciting, services and supported housing for vulnerable people, The problem is the desert rather like life across the country Supporting People providers have in the areas of social itself.’ been suffering cuts – cuts of up to 40 per cent. That’s deprivation, the areas of [laughter] in Labour councils, and that’s in Lib Dem councils, and that’s in Tory councils. And Ministers say from much less activity. Patrick Butler: the sidelines, this is terrible. Supporting People is a Well, what’s fantastic social programme. It’s a form of early mysterious, but possibly not exciting, is how Big intervention that stops greater spending further down Society has gone from what was 12 months ago a great the line. But what do they do? They’re the bosses. new political idea into something that’s become a What have they done? Nothing. toxic brand. How did that happen in the space of 12 Three, I think there’s been some bad politics months? Rewind to 12 months ago, the legendary here. When the Coalition was elected I sensed that in charity Chief Executive David Robinson of much of the voluntary sector this Government was Community Links – not far from here, based in pushing at an open door. Now for years I’ve spoken to Newham – stood alongside David Cameron in the people in the voluntary sector who moan about being garden at Number 10 at one of the many launches, or oppressed by local government, about not being relaunches, of the Big Society. He believed then that listened to by central government, about being

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marginalised. And here they sensed there was an Andrew Haldenby: Patrick, thank you very much. opportunity. But I don’t think this Government I’m sorry to just check on five minutes, but just so engaged with the voluntary sector. It actually ignored that we’ve got time for questions. So can I then go to what it called the voluntary sector establishment. Clive Barton. I had an extraordinary conversation with a charity director who told me very soon after the Clive Barton: Thank you Andrew, and good morning Government was elected that this Government does everybody. Third speaker, third definition of the Big not see charities as a partner, fundamentally. And I Society, this time from the economist. Pluralism, said, well why not? And he said well, essentially they localism, and voluntarism. And what I want to talk think the charity sector is people like you, Patrick. about a little bit is the first: pluralism. Now, They think they’re people who are lefties who read commentators tend to like their stories nicely The Guardian. packaged. They like them simple and black and So I can see why Ministers didn’t want to engage white. Big Society with people like me and, you know, my ‘comrades’ in good, big the voluntary sector movement – ...real improvement in public government bad; [laughter] services comes when the public sector good, state monopoly is exposed private sector bad; Patrick Butler: But I think this came back to bite to diverse supply and Big Society good, them in a big way. You saw in February Dame big business bad. Elisabeth Hoodless was on Radio 4 and the cover of competition, because it’s not Now one of the The Times. The Times was declaring that this was a the private sector as such things I’d like to do PR disaster, that the message of the Big Society had that makes a difference. It’s in my five minutes got lost or distorted by the notion that there was a diversity of thinking, and it’s is to try to huge crisis in the voluntary sector and charities were introduce a little bit going bust. Big mistake. competition between a into the black and variety of different white a bit of Andrew Haldenby: Can I ask you to speed up. organisations with different well-needed grey. perspectives and different Serco, the Patrick Butler: You want me to speed up? Okay. company I Right, okay, very quickly, no alternatives, puny experiences that drives represent, has been transition funds, no Big Society Bank – or when it innovation and working in the grey comes it’ll be too little too late – refusal to experimentation which leads of public service understand or accept the crucial role of the state. I to lower costs, better quality, delivery for many know that may not go down well here, but years now. Around supporting Big Society and infrastructure is a role of and improved lives. about 70 per cent of the state and I don’t see anyone else in the picture our people have who can do that at this moment. So, I don’t think it worked at some stage or another in the public sector. was a pragmatic approach to the Big Society. I don’t And despite what you may have heard, people don’t think it was a very discriminating approach to the tend to lose a public service vocation just when they Big Society. I think there are plenty of really, really switch employers. We also work with a range of joint good high impact charities out there who are going ventures with government and with social enterprises to go bust, or will and charities. We have a very successful joint venture have to merge or with Guy’s and St Thomas’ Hospital, and indeed In the confusion and the see their services King’s Hospital, to dramatically improve pathology chaos too many good reduced. services. We have a joint venture with Glasgow City charities, and more There has Council. With our Welfare to Work business, where importantly, vulnerable been absolutely no we aim to put long term unemployed people back into attempt to reward jobs, we achieve that with the support and working beneficiaries, are being left or incentivise through more than 70 social enterprises and SMEs. along the way. commissioners to So for us it has always been about working in the grey, support really good not working in the black and white. societies. So, Big Society, opportunity to change the But at the end of the day we are not a mutual, we relationship with the citizens and the state. Good. To are not a social enterprise, we are not a not-for-profit involve citizens in the design of services, to co- – although at six per cent margins our shareholders produce those services, to enhance local sometimes find a bit of an issue with that. But we’re accountability. Now, possibly, all lost. So, it’s what I not. We are what we are. We’re a public sector plc. call the Napoleonic retreat from the extended state. And does that mean that for me the opportunity in the In the confusion and the chaos too many good Big Society is for government to outsource wide-scale charities, and more importantly, vulnerable sets of public service delivery? And actually the beneficiaries, are being left along the way. Thanks. answer is no. [applause] It’s our view – and indeed the view of the CBI – that real improvement in public services comes

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when the state monopoly is exposed to diverse supply But when we take the differences that exist amongst and competition, because it’s not the private sector as that diverse supply base and we start to put them such that makes a difference. It’s diversity of thinking, together, then we can make a very significant and it’s competition between a variety of different difference. And a significant difference to public organisations with different perspectives and service means a significant difference to people’s lives. different experiences that drives innovation and Thank you very much. experimentation which leads to lower costs, better [applause] quality, and improved lives. And so that, if you like, is the first message that I want to leave: it’s about Andrew Haldenby: Thank you. Andrew Wates. diversity of supply and competition. But at the end of the day diversity means Andrew Wates: Thank you, Andrew. Good morning difference, and private sector is different from the everybody. Well you’ll be relieved, there’s no public sector, is different from social enterprise. But definitions here. My part is really very simple today. also there’s something that we all share. We do all I’m just giving you two or three practical examples of share a frustration with big government. We share a how I believe industry has got to move towards filling frustration with silos that can’t quite capture the real some of the gap which has been created by the need on the ground. And we all share a desire to make reduction in public participation. a lasting difference. So that’s something to build on. The first example, I think, is that there’s a great But we do have differences as well. The social opportunity to promote an employer-supported enterprises that we work with have an unmatchable volunteer programme in our companies. Many history and knowledge of the particular issue that they companies have informal arrangements, but there’s deal with. Generally because they’ve been working an opportunity for these to be formalised and then that issue far longer than anybody else, they often expanded. It seems to us to go very much with the have leaders who have direct experience of that issue. grain of what a number of our younger people And that is a critical strength that must not be lost in especially are looking for in their workplace, and that all of this. The private sector has strengths as well there is a growing awareness amongst middle and – primarily scale. We are built to be able to provide senior management that volunteering can be a useful very large-scale delivery of services. We spend untold development tool as well. The formula is very simple: and regrettable millions on SAP finance services, on so many paid days per annum, a limited number of management information systems, case-management unpaid days, sabbatical leave by arrangement. To help systems. This is a scale that is there because we have us achieve this we have accessed a worldwide been asked historically to deliver large-scale change, database of 1.5 million volunteering opportunities. and that is a strength of ours that we can bring. For an annual fee we get access to their website. They We also bring access to funding, our own also offer additional corporate services, including funding, external funding. And as this particular reporting on take-up rates. It will also help us to align government shifts in the direction of payment by volunteering work with our corporate responsibility results, then access of funding, management of cash themes. flow is going to become an increasingly difficult We believe that charities will remain a key challenge for some of the diverse suppliers. deliverer of social support but that their role is likely And finally, dealing with the government to change. They will provide more training and machine we spend some £50 million per annum on supervision of volunteers rather than employing staff bidding for direct. It is for this reason that growing the volunteer government community is so important. I do believe – perhaps not ... it’s easy to see pluralism contracts. It’s an surprisingly – that the core values of family and the Big Society in terms extraordinarily businesses have a particular resonance when it comes of black and white: Big difficult and to these areas. Society good, big business expensive process I attended a recent annual conference of the to go through. Institute for Family Business which we held in York. bad. What I would Now, our view is We visited one of our members who, amongst other encourage you to do is that if you take things, makes Yorkshire Tea. It was an impressive really start to see that there together the set-up led by an inspired management, but what is grey. strengths of the really attracted my attention was at the end of the visit private sector, the when we met nearly 50 charity stallholders who were public sector, the displaying their services in the staff restaurant. Each voluntary sector, mutuals, and put them together, one of them, 50, had been supported by the company then you can actually start to make a significant in some way over the previous 12 months from such difference. simple things as photocopying brochures, through to So, I suppose in summary it’s easy to see providing volunteers again for transport, to direct pluralism and the Big Society in terms of black and grants. It was a great example of localism at work. white: Big Society good, big business bad. What I My third and last example is around the would encourage you to do is really start to see that cultivation and use of social enterprises. By the nature there is grey. Big business, private sector is different. of our particular business we have a supply chain

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through which we deliver buildings to our customers. ago – 200, 300 years ago – when we liberated British Quality, cost, timely delivery, all done safely, are society from serfdom, from the total control of absolutes in our business. As many of you will know landlords and the state and said that we are going to social enterprises are non-profit making and have a create a society 300, 400 years later, or a couple of high proportion of disadvantaged employees, and are hundred years later, where our great, great, great, generally local providers. We do a lot of work in very great, great-grandchildren will live in a place where deprived areas, contracts often lasting over four or 96 per cent of all productive assets are owned either five years or more. This has given us the opportunity by the state or by big financial institutions. What kind to identify, and in some cases create, social of madness is that? But that’s where we are. enterprises to deliver services for us. Very often they Fascinating. Think about this. can continue when we have left the site. It has not So we live now in a society where big business been easy to find the right competencies, but after and big state controls almost everything we do. And nine months we have placed 50 orders worth about £1 that is unique in the western world. If you go to France million, and we are and go to a restaurant and you go to Britain and go to now exploring ways a restaurant, chances are the restaurant here is owned These are some very simple, with the School for by a big chain which is owned by a big corporation, practical examples of where Social which is in turn owned by big financial institutions. industry can help. On their Entrepreneurs to You go to France, it’s probably owned by a family build longevity into who’s been there for tens of years, with a waiter who is own of course they are these relationships in his 40s, 50s, 60s who’s been with the family for 20, insignificant and perhaps so as to avoid 30 years and has a sense of ownership of what they do. only a small step in the right recreating the wheel And ownership matters because it gives control. direction. But if you get a each time. Where is the control in the hands of our civic society These are today? And to me that’s what Big Society is all about. thousand companies – or some very simple, So think about this for a second. And for those even 10,000 companies – to practical examples who say control doesn’t matter, think about what take that small step, it could of where industry we’ve done. If all of us in this room sit down and become a giant leap can help. On their create an organisation, a company, a venture, and we own of course they all do very, very well out of it, and as a result we create forward. are insignificant some economic value, and what happens then in and perhaps only a practice is we take now 50 per cent of that economic small step in the right direction. But if you get a value and we give it to the state in taxes, and we take thousand companies – or even 10,000 companies – almost another, the remainder, and it finds its way in to take that small step, it could become a giant leap financial investments, in savings, in insurance and in forward. Each company is different, but whether our pension, into the hands of financial institutions. you’re a bookmaker or a banker – if there’s a These two, economically speaking, intermediaries of distinction – or a manufacturer, there are, as I hope our money take our money and then in return buy all I’ve illustrated, relatively easy ways for us to play our the institutions in time that we own. part in a Big Society. Thank you. Then you say, well, what’s wrong with that? [applause] What’s wrong with that is Cadbury. Because from time to time the Andrew Haldenby: And lastly, Ali Parsa. short term interest So we live now in a society of those owners will Ali Parsa: Thank you very much. I’m so short I’m not where big business and big be at odds with the sure if anybody can see me behind here. I was going to state controls almost long term interest of change this a little bit and talk about ‘why’ the Big the enterprise in Society, and then come back to how to deliver it, and everything we do. And that is which we all work. do it all in five minutes. unique in the western world. What’s wrong with that is Mid Andrew Haldenby: Okay, good. Staffordshire Hospital where they met all the criteria that the state wanted them to meet, and yet patients Ali Parsa: My fundamental question is this: the crash died in scores. And they did because the doctors and that just happened right now, was that structural, or the nurses who looked after those patients were not in was it incidental? Was there something in the charge of looking after them and keeping their eyes on structure of the way we organise our society that them. I’m not saying those doctors and nurses didn’t inevitably led to the problem we have today? We all make mistakes. They did, and they should’ve been know that the current crash happened because some much more careful. But the truth of the matter is, bankers overtraded the credit book they did not have, that’s wrong. but also because Ministers spent money they did not So that’s why we need to rebalance our society have. Was that structural, or incidental? as the French have done, as the Germans have done. Think about what we’ve done now. Imagine if Where is our mittelständ? It was fascinating when I our forefathers and foremothers sat hundreds of years was listening to Clive and his description of business

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was big business. Where are all the small and the other day who is delivering the Big Society. Why is medium-sized business in this country? Where are that? Because she’s trying to set up a free school. So in they? Where is our mittelständ that is 33 per cent, 40 a moment perhaps I might just ask you to tell a bit of per cent of the German economy? It’s the backbone of that story because it’s very interesting to hear the its economy. That’s what we need to do. particular examples, I think. But just to give you a This crash needs to be used. It should not go to moment. We’ll get there by going to Nick Bosanquet waste. It needs to be used to rebalance the economic and Malcolm Durham, and then the lady in the pink structure of our society. We need the state, absolutely. jacket just in front. We need the big business and big financial institutions, absolutely. But we absolutely need to also Nick Bosanquet: Yes, thanks for the contributions, create a middle ground for our civic society to do that. particularly Ali’s. Shouldn’t we perhaps give the Big And let me just finish by this, that means a Society concept more oomph by merging it with the fundamental change in many of our institutions. open society concept? That’s to say the concept that The Labour Party it’s not the state that delivers value but free, creative needs to start society of individual small groups, new enterprises, Ownership matters because thinking again and link the Big Society, open society theme to the key it gives control. Where is the about who does it theme of innovation. Because Patrick is unfortunately control in the hands of our represent. Is it a mistaken. The state delivers some vital services, but it civic society today? And to party now of the delivers a hell of a lot of obsolete services and suffers public sector some acute provider domination. And the final point me that’s what Big Society workers or is it a about the open society is it’s happening online. is all about. party of the ‘good There’s a lot more communication happening online. society’, as they How can we use that to really give some dynamism to say? The Conservative Party needs to reassess, is it the Big Society? the party of big business, or is it the party of the Big Society? Our trade unions need to start thinking, do Andrew Haldenby: Thank you. Malcolm Durham. they want to be having a chair on the table, a seat on the table, or do they want to own the table? Our Malcolm Durham: Thank you. Speaking as an SME political organisations, our newspapers, we all need who also works in civil society, my issue with to – we, in our own beliefs – we need to start government is not so much its size, and not even what thinking that our society has got a problem. It needs it does, but how it does it. And what I’m looking for is to change itself. It needs to rebalance itself. So Big for the state to do things differently. For every good Society is not a nice name. It’s a necessity of our story that we hear from Andrew and his colleagues country. Thank you so much. and ourselves about how good things are happening [applause] we can hear a bad story about how a hospital is being closed down. And the fact is that you are bigger than Andrew Haldenby: Fantastic. I have to mention us. This isn’t a Big Society to me. It’s an agglomeration that there is a hash tag on the top of the screen as of small societies. And what we need from you will see, and I am told that we are trending on government, as a first step, is something to allow us to Twitter. I don’t know what that means, but it move forward. And please don’t go back and bring me sounds great to me. an ombudsman. [laughter] Please don’t go back The state delivers some vital and announce a Andrew Haldenby: So do please tweet away. services, but it delivers a tsar. Please go back Fantastic contributions on – I mean the delivery of hell of a lot of obsolete and think of the Big Society then is about the use of charity. Patrick something really was concerned about the impacts of policy so far on services and suffers some substantial – a charity. Clive and Andrew explained how leading acute provider domination. council, an businesses are already working with charities who assembly – for the involve them in their work. It is about business. Clive Big Society which I am sure many people in this room talked about the advantages of scale in being able to would be glad to join, that will give it some impetus to deliver excellent public services to many people. Ali take it forward. complemented that by talking about small and medium-sized businesses, particularly those owned Andrew Haldenby: Thank you. Warmly received. by the employees. And it’s about government. And And then just in front, two rows in front, the lady with Bernard talked about a smaller government, but he the pink jacket. also talked about a different kind of government, the kind that we talked about in the first session. So, that Liz Banks: Thank you. Liz Banks from The Social is, you know, just what I wanted to hear. Investment Business and we work with a lot of – Can I open it up? I’m going to pick on one thousands – of small civil society organisations who person, I’m afraid – Pascale – in a moment. Sorry. want to get involved in public service delivery. But I Pascale Scheurer, who is somebody I know who I met wanted to pick up on Clive’s point about pluralism

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and how that would play out, and get some reactions they come from. I think in the case of the Big Society a from the panel because obviously, as he said, there’s lot of innovative new services do come from the an expense that goes with bidding for contracts that a voluntary sector and they come from social lot of small organisations in the sector don’t have the enterprises. And it’s vital that where they can money to do. They don’t have the skill to do it. The demonstrate that impact that we support them and contracts are often very large. They simply don’t have that we invest in them, and we give them space to the scale to deliver them. And then there’s the issue of grow and develop. So that’s important, but I feel that the attractiveness of certain contracts. So I wondered actually the institution that is probably most likely at how the panel saw it playing out when the contracts this point to help and grow and develop and seed-fund are often very large and there are certain contracts to them, is actually the state. do things like rural bus services or very complex health services or complex surgeries that won’t be Andrew Haldenby: Thank you. Bernard on political attractive to anyone from any sector to provide. And leadership. will the state end up doing the rump of unattractive, expensive, difficult services? Bernard Jenkin: I’m sorry to reiterate a point – and it sounds a bit ‘in your face’ if I do it this way – but to say Andrew Haldenby: Thank you. So I’m going to divide yes, the Big Society, we need more openness and this up in the interest of time. So can Ali and Patrick innovation and we need more creativity. Okay. I’m talk about Nick Bosanquet’s question, should the Big waiting for you to tell us what to do. I mean the Society be the same as the open society innovation. charitable sector cannot do that. I mean – you think Can I ask Bernard to talk about the task of political I’m missing the leadership, which is Malcolm Durham’s question. And point. I mean I then can I ask Clive to talk about this question of who The state is the obstacle think we’re not actually is going to deliver, will there be some because when the state going to create more contracts that even perhaps the largest companies starts funding a charity it sort innovation – or don’t want to take up. So can we start with Ali? maybe we will – of semi-nationalises it. It create more Ali Parsa: Very quickly, I completely agree with you. starts setting it targets, it tells innovation by It’s fascinating that the National Science Foundation it what to do, it starts sitting in the other day did a piece of research that said that for prescribing internal policies. conferences and every dollar of research and development that’s spent discussing about it, in a small business they get four times the return than but actually what we a medium-sized business, and 24 times more return need to have is more social entrepreneurs, more than very large businesses. And actually the large activists, more agents of change. And I think that’s businesses who do very well in innovation are the what the Civil Service has got to cotton on to, that this ones who turn themselves into tiny little businesses. is going to be a major function of some government The bit about definition of the Big Society is departments, to become agents of change. really, really important. Look, we share, as human beings, 83 per cent of our DNA with a cockroach. If Audience: What about removing obstacles? you’re almost there, that doesn’t make you there, right? [laughter] Bernard Jenkin: Well, the obstacles are – the state is the obstacle because when the state starts funding a Ali Parsa: So, when my staff come to me and say I’m charity it sort of semi-nationalises it. It starts setting it 80 per cent of the way there I say well done. We’ve targets, it tells it what to do, it starts prescribing done a cockroach. So be very careful how we define it internal policies. And the whole of the governance of because I think too many people are now jumping on that charity can become oriented to keeping a this bandwagon. And the truth of the matter is we bureaucrat in the government department happy in need a definition in here that says actually it is about order to keep the funds flowing and it loses its pluralism, it is about openness, as you said, but it’s entrepreneurial edge. Another example of crowding about enabling our civic society, our people, our out. Obviously charities are very important population, giving control back to our people. contractors for the state, but when the charities take over those contractual roles they are contractors of the Andrew Haldenby: Thank you, and can we make sure state. They become a different kind of charity. that the speakers speak into the microphones because And I suppose I think the political leadership is we had some issues about that. So can I come on to trapped in an oxymoron here, which is – you know, Patrick Butler. it’s like that bit of Life Of Brian where he stands in front of the crowd from the windowsill and says, ‘be Patrick Butler: You mistake me for someone who individual’, and they all say, ‘be individual’. defends the state as the state, as a provider. I’m really [laughter] not bothered about that at all. I’m very pragmatic in these matters. What I’m interested in is really good Bernard Jenkin: And I think this is a problem of high-impact services, and I really don’t mind where political leadership. And it would be so easy for the

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state – or Ministers – to start saying, right, we’re as being closing that gap between the big guys and going this way, we’re going this way, we’re going this the small guys. way. And I can see you shaking your head. I don’t know if you’re shaking your head in agreement or Andrew Haldenby: Thank you. Pascale, would you disagreement, but I think that’s conundrum here. mind – it’s terrible for me to pick on you – but just telling a little bit of the story about your process of Andrew Haldenby: Thank you, and Clive on the setting up a free school. And then I’m going to come to question as to pluralism and whether there are certain John Barnes on the front row for the final question, contractors that will be attracted to the private sector and then we’ll take final comments from the panel. and some not. Pascale Scheurer: Yes, thanks for that. I don’t know Clive Barton: Thank you, Andrew. Yes I’ll answer that what you’d want to know. I live in Hackney, I live on point and also a little bit of what Malcolm suggested Upper Clapton Road which is the ‘murder mile’, now as well. become part of the kind of Stoke Newington nappy valley in a way. Hackney has a real, real lack of Andrew Haldenby: Thank you. primary schools. Just in terms of numbers there aren’t enough primary schools. And we’ve put in – as a Clive Barton: It does seem to me that we do have a parent, I’ve got two small girls who need a school next bit of a structural gap at the moment. I was at the year – and I put in a bid to set up a private school Social Enterprise conference yesterday at the O2 and under the free schools process. Do you want people to by far the biggest question that was being asked – by ask questions or shall I just explain? the people I met, at least – was, you know, I’m a five-person social enterprise, I’m a 10-person social, Andrew Haldenby: Yes. Well, do you want to just let I’m a 30-person social enterprise. How do I scale up? me sort of ask questions. And the question is, do you How do I get to a point where I can take what I really need the help of government? People talked at the want to do in life, which is make a difference, and first session of sort of ‘hit squads’ of Civil Servants. I then make a much bigger difference? And it does mean do you need that support to start this free seem to me that there is a rather large gap, that Ali school? Or do you see this as very much your own mentioned as well, between, if you like, the ‘big’ initiative to be carried through by your own group? guys, be they public or private, and then a very, very large number of diverse entities underneath it. And Pascale Scheurer: I’m not a massive fan of Michael trying to close that gap I think is going to be one of Gove, because I’m an architect. So he’s not a massive the challenges over the next few years. fan of me either. But I do think that the free school My personal view is that one of the ways that movement is – or the free school policy – is an act of we can now do that is to start to commission around maverick genius because I think it does allow different potentially smaller contracts, or to start to use – I groups, a diversity of providers, to set up schools think the jargon is a prime integrator model, where within the academies framework, which of course was you take one entity that has the scale and ask that a Labour policy previous to the Conservatives. So it’s entity then to go out and look for the smaller not necessarily a political party sort of thing. It’s about organisations to build up that supply chain. And as saying – I think very much the debates, which are Andrew has said, even the big companies have very, huge and are raging and still raging now, even almost very large and diverse supply chains. The difficulty is a year later since we started – do we need the state to that at the moment there is no effective and efficient support it? brokerage service for people to find each other. And I Obviously they’ve opened the door for this to again would not suggest that that is necessarily a happen. They’ve sort of created this glitch in the state-run function, but it’s very difficult to find the matrix that allows interesting – potentially interesting small organisations that will fit the needs. And it’s – things to happen. Yes, we do need more schools. very difficult for the small organisations to find the Why were they not provided? Why were the half a big ones that are bidding for the contracts. million primary school places not – you know, around In terms of whether there are any unattractive the UK, lack of those places – not addressed contracts out there, I don’t believe that there is previously? So will the state provide the solutions? necessarily any service that can’t be provided in a Probably not. And I do think that it’s a local issue that different way as long as you make the commissioning should be delivered locally, but it should be delivered framework correct around it. You know, in this in partnership with existing schools. The other country we have very significantly loss-making schools should be made to partner with free schools. railway lines, for example, but they are They should have to do that and it should be a commissioned and they are provided for through a condition of free schools that they should have to subsidy system. So there are usually mechanisms – partner in a ‘co-opetition’ model with other schools. contractual mechanisms, economic mechanisms – So cooperating to deliver different types of services, that will allow even unattractive, financially particularly in inner city places like Hackney where unattractive opportunities to take place. So I don’t the proximity does work pretty well and the pressures see that as necessarily a barrier. I see a bigger barrier on schools are so high, and I think with local

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businesses as well. That can happen. Will it happen? people out there banking on you. That’s why we I don’t know. supported you to keep on going. Thank you. [applause] Andrew Haldenby: Thank you very much. I just wanted to come to you as a sort of real-life example, Andrew Haldenby: Thank you. A very brief point which is quite valuable. from Bernard Jenkin. [applause] Bernard Jenkin: Well, every year the Civil Service has Andrew Haldenby: Good, now, we’re up against a major internal conference – called Civil Service Live, time which inevitably happens. So I’m not going to it’s now called. And the Prime Minister addressing that take any further questions, particularly because I conference made it clear he wanted to turn government know the Minister has to get away. So can I just ask on its head as part of this Big Society programme – that the panel if they have any further comments that is decentralisation, they’d like to make? Andrew would like to and I localism, openness think Ali would like to. What you’re doing is not and transparency, about cuts. It’s about and of course the Big Andrew Wates: Only very briefly really which is the rebalancing our society. Society, the state thing that struck me is that what we’ve got is a really Don’t let this crash go to becoming an good vision of what I think government wants to do. enabling state rather And that vision does now need a strategy for delivery, waste by making it about ‘I than a doing state. and that is the real challenge. The idea of some sort of need to balance the books’. And I want to know council or whatever it may be – I mean that’s just one It’s not about that. It’s about in our inquiry what solution. But what I would urge is that we think when rebalancing the economic that means. that strategy is I am actually developed – which structure of our society. – I warn Oliver of The thing that struck me is is going to have to this – I am in the that what we’ve got is a be at some stage; process of writing to every Permanent Secretary really good vision of what I they’re going to saying: what does this mean for your department? think government wants to have to articulate Surely this means a big cultural change in your that strategy – that department. How are you implementing that do. And that vision does we think customer, cultural change? What is the plan? How are you now need a strategy for we think end user, doing the training? How are you weeding out the delivery, and that is the real Because that’s people who won’t change? Because the danger is that challenge. actually where this Whitehall regards this Big Society thing as yet is eventually going another sort of minor political cloud that is drifting to bite. And so the overhead, and if selection of your end user and your customer seem to everybody keeps me to be a crucial first step. The danger is that Whitehall their head down it regards this Big Society will disappear and Andrew Haldenby: Thank you. Ali. thing as yet another sort of life can carry on as minor political cloud that is usual. Ali Parsa: I just want to take advantage of the fact that Corporate Oliver just arrived, and then to repeat to him what I drifting overhead, and if change is a very, said in a very brief theme. We live in a society where everybody keeps their head very big challenge. 90 plus per cent of all our productive assets is either down it will disappear and Most corporate owned by the state or by the financial institutions, in life can carry on as usual. change the final analysis. No other western society lives like programmes fail that. We don’t have the mittelständ that the Germans because there isn’t have. We don’t have the small and medium-sized enough leadership and there isn’t enough family businesses that the French have. What you’re understanding of how it’s got to be communicated doing is not about cuts. It’s about rebalancing our right down the chain of command to the front line. society. Don’t let this crash go to waste by making it And I think that’s a huge challenge for the Cabinet about ‘I need to balance the books’. It’s not about that. Office to make sure it happens. It’s about rebalancing the economic structure of our society, making it a third, a third, a third, where the Andrew Haldenby: Thank you. So with the exception society plays a third role, where the state plays a third of Bernard, who made those terrible remarks about the role, and certainly big financial institutions and big value of conferences, can we please thank our panel. business play a role. Stick with it please, Oliver. Don’t [applause] let the naysayers say no because when you want to change a society there are always those who have Andrew Haldenby: Can I ask our panel to step down vested interests who will shout loudest. But as we just and Oliver Letwin to step up. saw the example with the free school, there are a lot of

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Keynote speech by Rt Hon Oliver with at least one of the parts of the Labour Party. And it’s my hope that over time what we are trying to Letwin MP, Minister for achieve in this domain will become as much a matter Government Policy of national consensus as what we sought to achieve in the ‘80s has now become. Andrew Haldenby: Right, so we’ll go then to our There’s no mainstream political party that keynote speech. I’m clearly thrilled that Oliver wants to undo the change from the state trying to run Letwin, the Minister for Government Policy, is able the nationalised industries and the huge section of to deliver that keynote speech for us. The Cabinet British industrial capacity that was taken for granted Office where he sits has done most to develop the Big up until ‘79. That is now a shift in consensus, and I Society idea – and I mean Oliver, you’ll forgive me hope we can achieve a similar shift in consensus here for saying you are one of the perhaps rare politicians and that this will not be seen as a political whose interests span, as it were, the philosophical battleground but simply as a change of the centre and the political and the practical. And it seems to point of British politics. And that in the end is always me that the Big Society idea has got all of those in democratic politics what matters. The question you dimensions. So I think we’re all absolutely thrilled have to ask is not who is saying what, or even in the that you are able to be here. long term who is doing what, but where is the centre, To sum up the conference so far, I would say because that will determine what is done over a long two things really. There has been a debate about period. We’re trying to shift the centre. whether the Big Society means a smaller state, some I want to tell you a little tale just to illustrate people arguing that inevitably it does and there are what kind of a shift we’re trying to achieve, because I fiscal pressures that make that the case, other people think it’s very easy in the welter of particulars to get arguing that it’s not a question of smaller, it’s just a lost and to fail to see the underlying point which was question of better – don’t be ‘size-ist’ about this. And coming out in many of the remarks that were made in then, in that previous session there was – you will the panel. But I think the story I want to tell you have heard it – in terms of the delivery of the Big encapsulates it in a way that I personally find more Society there was a focus both on charities, memorable than any abstract formulation. I don’t businesses including for-profit businesses, and then know – I think looking around actually there are one the ownership of those businesses. So that said, or two people here who do know – but I don’t know we’re thrilled you’re here, and let me invite you to how many people here know a Conservative peeress give your speech. who used to be the mistress of one of the Cambridge [applause] colleges, called Pauline Perry, Baroness Perry. But she, some years back – or many years back – found Oliver Letwin: Thank you. Well, thank you very much herself in the extremely odd position of being either Andrew. I was actually having a quite pleasant time the principal of, or teacher at, a small, rural college in listening to the previous panel until Bernard gave Saskatchewan. notice that he was effectively going to call on me to Again, I don’t know how many people here – it come and explain what all the permanent secretaries happens I spent a certain part of my life in had said. And it sounds to me like you were having a Saskatchewan. I don’t know how many people here very interesting and very apposite discussion. have, but it’s a million square miles and most of it’s I want to sketch something of the strategy that empty. And it starts at the Canadian border and it Andrew Wates was talking about. I don’t on the whole proceeds to the Arctic. And it’s very cold in winter, not sort of believe that government is best run as a in the way in which we’re used to cold in England. magazine. I think it’s best run as a government. And They would regard our coldest day as their, you know, therefore we don’t spend terribly much time trying to height of warmth, record heat. And it’s snowy – not in expose strategies and so on. I think on the whole these the way we regard snow. The snow in the cold snap in things will be judged by what happens on the ground January would be prominent in Saskatchewan rather than by what politicians have said they thought newspapers as the least snow that they’ve had for a might happen. But it is useful in an audience like this century. The snow in Saskatchewan is 12 or 15 foot to explain how we see the whole thing working. high on some occasions, and people walk around with And I want to step back, sort of to the beginning, icicles hanging off their moustaches if they’re stupid because this is a set of thoughts that go back some enough to use moustaches. years and which were most developed in the last four And Pauline was 200 miles north of Regina. or five years before the last election – interestingly in Regina is a very small city indeed and it’s the capital of parallel both by Conservatives and by Liberal Saskatchewan, and 200 miles north is a hell of a long Democrats, not always knowing what each other were way in the snow. And she managed to make her way doing. But when we came to negotiate the programme into the only bar in town. And she was standing there for government we discovered that we had a very talking to a couple of locals and she said – a very similar cast of mind. Though of course the phrase ‘The English thing to say – ‘But why don’t they do Big Society’ is a particularly Conservative phrase, something about connecting this place to Regina? You many of the ideas were being formulated similarly by can’t get through on the roads.’ And the people down Liberal Democrats. And while we’re at it, as a matter the end of the bar, who were – well you can imagine of fact, some of the ideas here are common ground

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what they looked and sounded like – one of them the relationship between the place that the money turned to her and said: ‘Mrs, round here them’s us.’ comes from and the way in which it gets to the person That is the transformation we are trying to that it was destined to help. And I want to go through achieve. There is a sense in which the institutional each of those three things in turn, briefly. and political and legal apparatus eventually creates a First, the question of decentralisation and cultural truth. And the institutional and political and empowerment. We are taking a huge range of legal apparatus of the United Kingdom, and in different steps in different domains, all of which have particular now of England, is more centralised than the same direction. Andrew and his colleagues wrote a any other western European democracy. And that is completely wrong-headed piece recently in which they a very, very long history. It’s not a partisan remark complained that we were doing different things in about the most recent government. It was relation to different services and different areas of our accentuated to some degree under the most recent national life. Factually they are completely correct. government but it had been going on a very, very We are. Instead of complaining they should have long time. And it has gradually shifted the culture, applauded because you’d have to be some kind of and there’s an enormous tendency to think that lunatic to think that in order to achieve a general ‘them’s them’, and that ‘us’ doesn’t have any power direction when applied to many different things you – that ‘we’ are disempowered locally. would do the same thing in each case. And I think that’s had all sorts of ricochet effects There’s a most wonderful tale of – this comes on all sorts of attitudes. One of the things it does of from some Persian mythology – of a border guard course is to create extremely low propensity to bother who sees the man going across the border with a to vote in local elections because people say, what’s donkey day after day after day after day. It seems to be the point – have said for many years – what’s the a very similar donkey. Eventually he loses patience point. Someone up there will make all the decisions. and he says to the guy as he’s coming across the Down here it doesn’t matter. border in the morning: ‘Every day you seem to come But it’s done much more than that. It has given across the border with, as far as I can see, the same people, in many cases, an extreme sense of frustration donkey.’ The man says, ‘Sure it’s the same donkey. I’m and disempowerment. I can’t tell how many times – trying to be consistent.’ And, you know, there is a and any other politician of any colour will have had purposelessness to trying to have the same donkey all the same experience the time. What you want is to achieve the same broad on doorstep after effect in many different ways. So we’re doing many And the programme we are doorstep – that I’ve different things in many different areas but they all following is a programme of heard someone say: tend in the same direction. decentralisation and of ‘Doesn’t matter And a part of what we’re doing therefore is to re-empowerment. And what what we think or re-empower local governments. I resist the singular what we do. It use of that term. Local government is not an entity. goes with that is a doesn’t make any In fact that’s an incredibly centralist statist view, programme of liberalisation, difference. They just which – the language always tells us many secrets of opening things up. And never listen to us.’ about how people are really thinking, and for many, what goes with that is a very And what that many years ‘central’ government consulted ‘local’ means is, first – government. Great, but actually local governments, different attitude to the although this is if they were individual governments, could not be relationship between the inarticulate consulted as a local government because they would place that the money comes – ‘Somebody else have different views about their own places. And we from and the way in which it runs the show, not are trying to hand back power to local governments me,’ and secondly, ‘I to make them governments again, not just be pawns gets to the person that it can’t make them do of the central state. was destined to help. what I want.’ Well And that’s in many, many different ways. Some of course the one of them are very, very profound. Some of them are flows from the other. If somebody else is running the very immediate. One of the most profound is the show you won’t be able to make them do what you conveying to local government of the universal power want because they’re going to be running the show. of competence. So the legislation is being changed so And the only way you can make them do anything is that a local government can do anything that you or I by collectively across the country changing the can do. Amazing fact about our country: at the government at the centre, and of course that isn’t moment, they can’t. At the moment, in order to do going to follow your particular predilections about something, unlike you or me, they don’t just have to what happens in the Nether Wallop. find out what is unlawful. You and I can’t murder our So this sense of disempowerment flows from the neighbour, nor can local government. A local centralisation. And the programme we are following is government cannot murder us. Good. Tick. But you or a programme of decentralisation and of re- I can go out and found a company, we can make a empowerment. And what goes with that is a deal, we can set up a social enterprise, we can do all programme of liberalisation, of opening things up. sorts of things because nobody has passed a law And what goes with that is a very different attitude to against it. That’s called a free democracy.

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Local governments can’t. They’re not allowed to do real control over what is built in the place they live in. that. At the moment they have to go and find out And as a result, incidentally, we have impeded whether they have vires, whether they have powers, massively economic development in our country legal powers, specifically to do what it is they’re because what happens when people are disempowered contemplating doing. And what they actually do is to is that they seek to provide obstacles so that somebody go and ask the chief lawyer, who has a lot of lawyers else doesn’t do something nasty to them. under the chief lawyer, all of whom are suffering from So basically we have created through our system stress so they may not be available in the office of planning – which isn’t a system of planning but of because they’re back home recovering from stress. development control – a zone of open warfare where And so some months later a piece of paper arrives – I the locals seek to get the best possible machine guns parody, but not much – on the chief executive’s desk, in the form of representatives, elected representatives, explaining why paragraph 13 of clause 16 of the act of and campaigns and tweets and anything else they can such and such does or does not arguably empower think of – to repel invaders who are the people coming them and they’d better go and ask council to find out in to build things. Whereas, as you can see from the whether they really do have the power because other countries I’ve mentioned and many others otherwise they might be judicially… besides, once the locals are actually able to determine If you think this is just a sort of make-believe, the shape and nature of what is built they will take a then a) you aren’t a councillor and b) you haven’t sat completely different attitude to development because with councillors they see it as something that’s under their control and trying to work out which they actually want to see happen for their own And the fact is that what is what they do. This children. And there is going with that a whole series of sustainable, what is is the constraint incentives that we are building in to make sure that sustained, what changes a under which they can also build their own community centres and community, is when people they’ve been their own village shops and so on when they take suffering. That is these things in their own hands and have develop relationships. being swept away, development. and they will have So, I’ve given you two examples of a welter of the power to do anything that hasn’t been prohibited examples at two different levels: that of the capacity, by law. It’s a pretty important change. It will ricochet the powers that we’re giving to enormously in a thousand different ways. And there are many important local governments, and also, right down at other such profound changes which, if I had the next the neighbourhood level, the sort of radical way in hour and a half, I would happily go through, and which we’re empowering ‘the neighbourhood’. And which if Eric Pickles were here he’d go through for of course when people come together in a hour after hour. He loves nothing better. neighbourhood to fashion the local plan, which will And then we’re also making some immediate be the document that actually governs planning in changes to empower. And some of those immediate their areas if they want it to be so, they will talk to changes will have very profound effects too – very one another. specific but very profound effects. And some of those And the last point I want to make on the go way below the level of a particular local empowerment theme is that in the end this is not government in the way in which many people think of about laws and political institutions and theories, or it – the Mayor of London or the GLA, or a county even about bricks and mortar and grass and sky. In council or something, right down at the level of the the end it’s about people and it’s about the parish, or the town, or the neighbourhood forum. In relationships that people have with one another. In the most unseen of the revolutions that we are the length and breadth of Britain, for decade after conducting we are handing the power in the Localism decade, well-intentioned politician after well- Bill to every neighbourhood in our country to take intentioned politician, and well-intentioned control of the planning of its own area. Nothing could bureaucrat after well-intentioned bureaucrat, have be more important. engaged in so-called regeneration projects. And most There’s nothing in my experience as a democratic of them have left after a few years an inheritance of politician that people care about more, than what is precisely nothing because they have been focused on built around them and what the shape and feel of the the concrete and on the physical, and not on the place that they live in is like other than literally their emotional and the spiritual and the relationships. own health and the relationships in their own families. And the fact is that what is sustainable, what is It’s very, very high on people’s agenda. And you can tell sustained, what changes a community, is when that because if there is a big planning issue you don’t people develop relationships. And when people start get five people arriving on a rainy evening to debate talking to each other – because they have the power with two of the usual suspects. You get a huge to do this – about how they want to plan their proportion of the total local population turning up. And community, they will start talking to each other what happens when they turn up is they express their about many other things besides and they will start frustrations because at the moment they have no real to form affiliations and understandings of one control at all, astonishingly. Unlike France, or the another which change the nature of the society in Netherlands, or Belgium, or Germany, they have no which they are, on a day-by-day basis, living.

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And, you know, the way that I interact with my There are times when it makes sense for the taxpayer’s neighbours in my own village in Thorncombe is money to be used by the central state in a highly different because we got together and formed a specific way. The Ministry of Defence is an extremely community shop. And we go to it and we volunteer in it good example. We have no plans to equip our enemies and we work in it. But we also built it and we paid for it. with vouchers to enable them to choose which of our It’s ours. And it feels like ours. It’s incidentally the best militaries they get attacked by. village shop in England, and it provides you – and this [laughter] brings me to the next point I’m going to make in a moment – provides you with services you can’t get in Oliver Letwin: That is not part of our plan, and for shops that are not provided on this basis. We’ll do your very good reasons. So there are things which it makes laundry for you if you’re a villager. We’ll pay you out perfectly good sense for the taxpayer to pay for and cash. We’ll let you pay for your electricity and phone perfectly good sense for central government to specify bills. We’ll buy you literally anything you want. You just and manage. And come in and put it down on the suggestion sheet and then you have on the next week it’ll be there for you. What should be the aim of your hands a And we know you, and you know us, because we central government in management task. are you, and you are us, because we’re serving at the relation to the good use, the It’s difficult, and it counter and you very often will help us serve you at proper use, of taxpayers’ has its own rewards the counter because you’ve been serving at the and challenges, but counter another day. And it’s a very different feel. And money is to achieve the ends it’s in a limited one lady came into the shop a few months ago and she for which the taxpayer is sphere. said to me, ‘You know, in the last six months, having paying the money. At the lived here for 30 years, I’ve come to know more people opposite extreme in this village than I’ve known in the previous 29 there are many, years.’ Because we came together about one thing, many, many cases in which any rational, other things have flowed. And that will happen too in dispassionate analysis would suggest that there isn’t the empowerment. any necessary connection between the fact that the So that’s the first great theme, the first great taxpayer is funding something and the idea that the way of shifting from them to us is to give us power central government should wholly specify and locally. The second is to create openness where micro-manage it. What should be the aim of central things are currently closed – to liberalise, to create government in relation to the good use, the proper an open texture, to give people the ability to provide use, of taxpayers’ money is to achieve the ends for a multitude of different things which are there for which the taxpayer is paying the money. If it’s the purposes which the state, on behalf of the schooling, it’s to achieve good schools. If it’s health, taxpayer, determines things should be there for. We it’s to achieve good healthcare. If it’s policing, it’s to heard a poignant example of that with the free school achieve good policing, and so on and so forth. that was described a few minutes ago, but there are And the elderly person who is in care is not thousands of other respects in which we are trying to going to be impressed by being told that the system do the same thing. is being run in this way or that way because of And we’re trying – if you sort of get back to the somebody’s theoretical logic. What they want to essence of it – we’re trying by one means and another know is whether the taxpayer’s money which is being in many different domains to get to the point where used to achieve their care is being used well enough the logic which used to sloppily and wrongly for many, so they’re getting good care for it. And that should be many years be used ceases to be used, and ceases to the concern of central government, to ensure that apply. And the logic was if the taxpayer pays, then the there is a framework in place where we have the central government must, on behalf of the taxpayer, greatest possible chance of delivering the best dictate and control and specify and run and provide possible services on the basis of the money which the and monopolise. taxpayer is paying. Now I slightly exaggerate for effect. There were And now you have to ask yourself a question cases in which one way or another, to some degree or which is a matter of judgement and not a matter other, that logic was interrupted by practical realities which you can know in advance on the basis of and other concerns. But broadly what I’m describing, absolute empirical evidence. You have to ask yourself if you came to Britain as an outsider and looked into the question: in many fields is it the case that the the way we do things in England today – as a matter of people who are most likely to be able to judge the fact also Scotland and Wales but I’m responsible only outcome as good or bad are people sitting around a for part of the administration of England – if you desk in Whitehall? Or are they the people who are looked at England you would say that the logic I’m receiving the service? And our instinct is it’s more describing broadly applied. Where the taxpayer – as likely more often that the people receiving the service of a year ago – where the taxpayer paid it was will be better at judging whether it’s a good service generally the case that the state would direct and than other people. micro-manage and control and specify. And we don’t And then you have to ask the question: what is see that that connection has any logical validity. most likely to produce innovation and brilliance in

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finding new ways of delivering better services for the It’s creating open textures. It’s allowing people to take same amounts of money, or as at present, in some cases part and making them accountable. And just to give reducing amounts of money or even increasing you one example in the hardest cases – so, you know, amounts of money? What is the best way of ensuring we’ve looked at the kinds of case in which direct that there’s a lot of innovation so that the person who is contestability doesn’t work in the obvious sense able to judge – namely the person receiving the service because of what is described by The Economist as – judges that they’re getting the best possible service market failure or what we might describe as the for the money involved? Is innovation most likely to be nature of human predicament. Drug addicts. The generated by having a monopoly which is run from a most terrible thing that can happen to a human – one desk in Whitehall? Or is it most likely to be generated of the most terrible things that can happen to a human by allowing a wide range of differing providers to being – is to get caught in the vortex of hard drug provide and ensuring that they are accountable to the dependency. Anybody here who’s sat with people people that they’re serving and that what they are doing who’ve been in that is contestable so that other people are able to provide it condition and have if the person for whom it’s being provided doesn’t judge But if you ask the question gone through that that it’s a service as good as they could get from dispassionately and condition will know somebody else who could provide it? intuitively, is an open texture the depth of the Now, you can take many views about this, and more likely to produce problem that I’m you could spend your entire life studying it. And, you describing. There’s know, they did. They did do that behind the Iron better results in the long run nothing which has Curtain. 40 years or so ago I was told at a dinner by through innovation and more effect on our Milton Friedman, of blessed memory, that he had accountability and level of criminality. been invited at that time – remember how the world contestability, my instinct is There’s nothing has changed – to a grand dinner in Beijing. And he which has more had been sitting next to the Chinese Minister of – our instinct is – effect on social Supply – I suspect, I don’t know, I suspect a role that overwhelmingly yes. breakdown than has now extinguished. And the Chinese Minister of drug dependency in Supply through the interpreter asked Milton who is in our country. And for years and years and years charge of supply in the United States. And Milton governments have tried to do something about it with paused and looked at the duck crackling and tried to almost no effect whatsoever. And there are huge work out how to explain that this was not a question ideological warfares between differing people who which had an answer. And eventually he said the have different views about what is the best way to lift Chicago somebody out of that appalling condition. And the Commodity government has set up agencies and had strategies In many fields is it the case Exchange. And and micro-managed results – with no discernible that the people who are there was a sort of effect whatsoever. most likely to be able to great silence. And We are determined to change that. And we’re judge the outcome as good then the question determined to lift people in this country out of drug was repeated on dependency. Are we doing this by specifying how it or bad are people sitting the grounds that he will be done? No. Are we doing it by setting up a new around a desk in Whitehall? must not have had government agency which will do it? No. We have Or are they the people who the correct changed our perspective. We’re going to do something are receiving the service? translation. which is so blindingly obvious when I say it you will And the point not be able to believe that nobody previously thought And our instinct is it’s more is that if you start it was the obvious way to do it. We’re going to pay for likely more often that the with the the result. We don’t care how it’s done, barring doing people receiving the service presupposition anything which is improper or unlawful. We don’t will be better at judging that the only want to enter into the ideological debate. My personal people who can suspicion is there are lots of ways you can do it, some whether it’s a good service ever do anything will succeed in some hands and some in others, and so than other people. are central forth. We’re not going to enter into that. We’re simply government, then going to pay for the result. you will come to the conclusion that the only people You get the person involved out of drug who can ever do anything are central government. But dependency as objectively measured – pretty tough if you ask the question dispassionately and intuitively, discipline, this – objectively measured they are not on is an open texture more likely to produce better drugs, they are in work, they’ve been off drugs and in results in the long run through innovation and work for months and months, they have not been accountability and contestability, my instinct is – our convicted of a crime. These are tough things. Much, instinct is – overwhelmingly yes. That is by and large much tougher than all sorts of people wandering more likely to work better. around saying they have wonderful remedies. If you So the second strand of our strategy alongside want to participate in our drug rehab programmes the empowerment, is liberalisation. It’s opening up. you have to have the confidence of your conviction

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that you know how to get people out of drugs. So you’re sitting with your neighbours, you have the What Bernard was saying is absolutely right. ability to make something happen, you want to create This is not: ‘oh we’re going to take charge and now your community centre, you want to refurbish the could you please tell us what to do?’ There will not be youth centre, you want to take over the youth centre contracts. There will not be prescriptions. There will that the council is running that nobody’s going to. You be a payment for the result. I know when I’ve said this don’t have to ask can I do it, because you have the – if there’s anyone in the room who’s involved in this power to do it. You don’t have to go and negotiate with area, probably a week or so from now you will think I somebody, because there’s a liberalised framework didn’t really say that, or if I really said it I didn’t really within which the money is available for people who mean it. But I did really say it and I do really mean it. want to use it if they can achieve the results that It’s a huge shift, and it’s in an area where you can’t they’re seeking to achieve in an accountable way. And have normal contestabilities and accountabilities there’s a group, an ecosystem, out there of local because the person who is drug dependent cannot be providers and community groups and all the rest of it expected to engage as a fully informed customer, that will come and help you do it and do it for you. choosing amongst people for a settled result. But you Under your control, to your specifications in the way can make the provider nevertheless accountable in the you want, the way the people on the ground want it to sense of paying for the result and not, therefore, have be done. And that is a fundamentally different central government telling them how to do it. country. Finally, alongside the empowerment and the Now the last thing I want to say very briefly is open textures, the liberalisation, there is the this – I apologise for going on so long but this was an question of the fostering of what was brilliantly unrivalled opportunity to tell you about the strategy. described by one of the panellists as the rebalancing The last thing I want to say is this. There was a period away from a society and an economy dominated by when there was a great question which was constantly the public and private sectors, to an economy and a being asked of people like me by journalists and society in which the public and private sectors go others, which was: okay, so you have been preaching alongside what is mistakenly described as the third this gospel – which incidentally went entirely sector, the oldest sector. And of course, the route to unreported for three or four years before the election this third goal is the application of the strategies of – but now you have come to government and you have the first and second. It’s by empowering at local level inherited the largest fiscal deficit in the world, and you and by liberalising the provision of service that we are cutting public spending in order to try to get to the open a vast range of opportunity to an untold point where we are able to survive as an economy and number of now-existing but small-scale, now- as a country, and whatever dreams you had, these existing and large-scale, and hitherto and currently lovely visions of this empowerment and liberalisation non-existing bodies, groups, individuals, to and rebalancing must now surely give way in the face participate, to form, to act, because there are of the harsh reality of fiscal arithmetic. frameworks within which they can act and people This is of course total junk. On the contrary, locally have the power to support them in acting. though there was an abundant reason, an And we are creating an entirely new domain overwhelming reason, for moving in the directions – not of course creating an entirely new sector. The that I have described, even if we had inherited as we sector is rich. There are vast numbers of people should have done, a fiscal surplus from a government around our country doing things brilliantly for that was not incontinent and extravagant and themselves and for others who are unsung and had ludicrously wasteful, even if we had been in that been there for many, many years. And there is a huge happy position as that government was in ‘97, actually ecosystem out there, but it could be vastly bigger. it would’ve made abundant sense to do what we are And we are creating the circumstances in which it doing. But it makes even more sense to do it now, will be vastly bigger, in which it will play a role which because if I’m right that what I am describing will give is equal in weight to the other roles played by the people a vastly greater potential to receive vastly other sectors in our economy. And this is of course better services and to do vastly more of what they mutually reinforcing. want for themselves, then we will get a much bigger When the ‘them’ becomes ‘us’, not just in the bang for the buck. And when there are fewer bucks to sense of empowerment, not just in the sense of the go around that’s even more important than it is when liberation, but also in the sense that actually the there are more bucks. community groups, the local groups, the independent Now interestingly, I discern – you can never providers, the not-for-profits, the social enterprises quite tell in politics and you don’t know which of the out there doing things, not doing things in a columns to read in which newspapers to find out what dependency way that Bernard was describing by people will be thinking in six months, or a year, or two looking to mother to tell them how, but doing it the years from now, but I have a little pocket book way they want to achieve the result for which they are analysis of the people I read to try to find out what paid by the taxpayer. Under those circumstances the other people will be writing a year or two from now, community groups themselves, the textured and my sense is actually that the argument is on the ecosystem of the voluntary sector, feeds back because slide. And what was the argument, that you can’t it creates a greater sense of empowerment. combine our programme of reform – modernisation

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and liberalisation and empowerment and so on, the flourish in the way in which we need them to flourish. Big Society programme – with a programme of deficit And of course some of that regulatory framework is reductions, has now begun to shift to, oh, you’re only necessary, but some of it is frankly way beyond the doing this as a way of achieving the cuts. And that too bounds of common sense. And it has created all sorts is junk. of mythologies which are even more damaging than We set it out, painfully, in pretty exhaustive the rules themselves. details in a whole series of green papers before the And I think most of the attack on, you know, election, as actually did the Liberals. We put it in our lack of insurance, or difficulty of insurance actually manifesto, as did they. It is encoded in the programme arises from the fact that people have got into what has for government. It has nothing to do with the fiscal been called a sort of health and safety mentality. You programme in the sense that, as I say, it will be well know, one thinks of the story of the coppers who worth doing anyway. It is not there because of the chased the villain up the spire – I believe it’s actually cuts. Nor is it contradictory with the cuts. It is parallel an accurate story – up the spire of a church, and then and it is necessary, and it is more necessary because of it comes to lunchtime and the copper says to the the necessity for fiscal austerity. And therefore the sergeant, ‘What do I do?’ and the sergeant says to the Government does not have two opposing agendas or copper, ‘You’d better go and buy a pizza because it one agenda posing as a cover for the other. What it has might be against his human rights if you didn’t give is two parallel and mutually reinforcing and him lunch.’ And the copper says to the sergeant, ‘But sustainable agendas in one coherent whole. And that’s hold on, is it part of our health and safety regime for what I call a strategy. Thank you. me to go up the spire?’ [applause] And, you know, that illustrates the lack of common sense, and we need to overcome that. That’s Andrew Haldenby: There is still some certain our problem; we’re trying to deal with it. My sense is Whitehall central control in the Big Society. I’ve just that the insurance industry is out there and is capable received this text message: ‘Once the Minister has of providing all sorts of insurances, and if we remove finished his address, please can you ask Andrew to some of the un-commonsensical things I suspect that keep the Q&A to five minutes max, two questions, the industry will step up to the plate and people’s because of another appointment.’ So we will do that. perception of risk will alter somewhat. So Oliver was able to be here for the end of the last The last thing I would like to say is actually as a session and has given us an absolute overview, so I nation we need to be prepared to take more risks. We think that we will respect that. So I’m going to ask actually need to recognise that very often curtailing Nick Starling here, and just to go to this side of the risk curtails opportunity to a greater degree than is room, the lady with her hand up at the back. So we’ll proportional to the risk that we’ve reduced. And, you start with Nick Starling. know, that’s a recalibration that’s really very important if this vision is to be realised. Nick Starling: Hi, Nick Starling from the Association of British Insurers, and I apologise if this question Andrew Haldenby: Thank you, and the final question. seems a bit granular after the vision we’ve had there. I get the sense that there are enablers here and there Maeve McGoldrick: Maeve McGoldrick from are blockers. So there are people who are going to Community Links. Somebody recently said to me the enable your vision, and there are people who are Big Society is a little bit like the Big Issue. It’s a great blocking it. We get a slight sense that the people that I idea but you never really buy it. And I thought about represent come in the latter category. I’ve heard talk that for some time and actually, I disagree. And I of Big Society insurance. There’s a sort of sense that if think most of the third sector do buy it, and we do you’re volunteering for something the risk is somehow think it’s a great idea. But we don’t think it’s a new different. I’d just be interested to know – and we are idea and we have been doing it for quite some time. keen to get involved – how do you think organisations We think that it is cost-effective, but it’s not cost-free. like mine should come into this, engage on that? Have And it comes back to the last point that you made that you got concerns about the approach we’re taking that we do strongly believe that that infrastructure needs are going to block rather than enable what you’re to be in place to allow people to be empowered, to trying to achieve? make these decisions to come together and put ideas into action. And we are particularly concerned about Oliver Letwin: Well I think it’s a very good question, that transition period between the Big Society ideas and it leads me to an answer that you may not have and the cuts that are coming into place, and how we expected. I think the main problem is not you, but us, can refer funding from the government to the private in the sense that the governments of the UK over a sector. But that transition period is absolutely long period have built up a quite astonishing array of fundamental to the infrastructure remaining. constraints on action through regulation and requirements which have made it extraordinarily Andrew Haldenby: Thank you. difficult for voluntary and community bodies and social enterprises, and indeed while we’re at it, small, Oliver Letwin: Well, I agree with that. It would’ve private sector start-up companies and so on to been much easier to achieve the transformation that

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we seek if we had had lots of money around, frankly. Financing the Big Society Because there isn’t, there is a transitional problem. I think in the medium term the new opportunities will Patrick Nolan: Well, thank you. Sorry for the sort of much more than counterbalance the loss of existing the rush here but we are against time and, as you funding streams. But in the short term of course the know, time waits for no man so we do need to push prospect of new opportunities doesn’t make up for the on. So thank you for coming back in for the session loss of existing funding streams. I completely accept which I think is actually where a lot of the rubber will that. And that’s not a feature of the reform hit the road. I was just discussing with the panellists programme or the ambitions. It’s a feature of fiscal before some of the earlier sessions and remarks by consolidation, of cuts. people like Sir Stephen Bubb about how to actually We have tried to help people through that finance the Big Society. And the question that was transition in a number of ways, most obviously and asked of Oliver Letwin before, Big Society might be evidently the transition fund, which I’m glad to say cost effective but it’s not cost free. So we keep coming seems to be doing a considerable amount of good. But back to this issue of finance and so this is an incredibly there is a whole series of other measures that we’ve important issue to be discussing. tried to take to help people through. And just to give So I’m thrilled to be able to be here with you. I’m you one tiny example of it of some importance, the Patrick Nolan from Reform. And we’ve got an Citizens Advice Bureau, which I regard as an excellent panel who I’ve instructed to be quite enormously important part of the fabric of Big Society practical. So we’re hopefully going through quite a lot – indeed of any functioning society in Britain, given of practical insights under this incredibly difficult the difficulties that people have navigating their way issue of financing. We’re going to start with David through our society if they’re vulnerable people – we Hutchison who is the Chief Executive Officer of Social were extremely keen to ensure that the financial Finance. He joined Social Finance in May 2009 after a advice that the Citizens Advice Bureau give – 25-year career at Dresdner Kleinwort. And so he incredibly important, given our economic brings an incredible investment banking background circumstances today – did not come to an end. And perspective on this, and as many of you will know therefore we talked about it and we managed to find a Social Finance is really a pioneering organisation that considerable sum of money to add to that pot just in aims to develop financial products that can marry order to enable the Citizens Advice Bureau to go on investors and social entrepreneurs’ interests. So it’s doing that. actually about bringing the different sectors together. And that’s just an example amongst many We’re then followed by Chris Cummings from where we tried to make sure that institutions which TheCityUK. Chris is the Chief Executive there and he are sustainable and functioning and doing an has been there since June 2010. I should also thank incredibly good job can continue to do so, continue at TheCityUK again for their generous support for this least to keep a core base going during tough times so event. And Chris has had a number of other roles that they can then take advantage of the new representing the financial sector and TheCityUK is opportunities that are going to arise. It isn’t perfect. It also an important institution. It’s an independent isn’t smooth. But we are at least trying very hard to membership body that represents the financial and make sure that the transition doesn’t make the related professional services industry. And I’m sure medium term more difficult to achieve. it’s been an incredibly fascinating time since he joined. And so I’m sure it will continue to be so. Andrew Haldenby: Oliver, you’ve given us an hour of Then following that we’ve got Michele Giddens your time, which is much more than we expected, so who is the Executive Director of Bridges Ventures. thank you so much. And I, speaking personally, think And Michele is the Founder and Executive Director of that you have laid out not only a strategy, but your Bridges Ventures, as I’ve mentioned, and she focuses own personal vision of this idea in a way which is quite on strategy, investor relations, public relations and new to me, which does take, I think, my social assessment impact. But she also brings a wealth understanding on of this idea and how you want to of experience internationally. She’s also worked with build the Big Society. And I’m sure I speak for the the International Finance Corporation, which was the audience when I say that we’re thrilled and indeed private sector financing arm of the World Bank somewhat honoured that you should want to do that Group. So I think there is going to be some really here. So, thank you very much indeed. interesting insights here as well. [applause] So if I could just pass over to my panel now who I’ve asked to each speak for five minutes. And then And off he goes. So, we’ve crashed through the we’ll follow with a couple of rounds of questions. timetable but we’ll break for 15 minutes and come Thank you. back – break for 15 minutes for coffee and come back after that. David Hutchison: Thank you, Patrick. Social Finance is a not-for-profit organisation with a charitable purpose. We were established in 2007, over three years ago, to bring together a group of individuals with expertise in finance, public policy

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and the social sector to explore whether there were from the Ministry of Justice. This allows us to pay a alternative ways of financing individuals and return to those people who enabled us to finance the organisations driving social change. Our mission is initial interventions to reduce reoffending. therefore to transform the resources available to The Social Impact Bond is bold in its ambition those delivering better futures for those most in but as a result may open up exciting opportunities. need in our society. In a sense therefore we are one First and foremost, financial and social returns are of the groups in the trenches looking at different directly aligned which has huge potential to open up ways of financing some of the activity behind Big new pools of capital. In the 25 years I’ve spent with the Society. The cuts certainly aren’t helping, but in one City of London, I met a number of people who have way they are opening up the opportunities. People been very intrigued by my move, but the Social Impact have to do things differently which leaves scope for Bond has played a singular role in changing their innovation. perception that it is possible to invest for social The original stimulus for our work was the progress and earn a financial return at the same time. perception that the sector was fundamentally These are not in some sense mutually exclusive. They constrained by the way it was financed. Even in can be combined. Building their confidence in the better times organisations delivering crucial structures we are working with and the new ways of frontline services were struggling to grow, in part working is hugely important to opening up a big because their potential pool of capital. access to finance For the voluntary sector if we actually deliver Even in better times was too unreliable. this outcome, more resources and greater certainty of organisations delivering It reflects a those resources over a number of years will support crucial frontline services broader the growth for stronger organisations. Greater were struggling to grow, in recognition that resources to support what works provides a stimulus grant finance, for innovation and best practice and better outcomes. part because their access to while The focus on a common set of outcomes supports finance was too unreliable. tremendously collaboration between service providers. But the important, is in compelling feature of this is that it’s flexible funding limited supply and sadly falls far short of what is that enables delivery organisations to meet very necessary to meet society’s needs. specific local needs and often complex needs because We are looking at ways of finding wider pools it’s focused on outcomes not specific outputs. of capital to drive social change and to structure it in Interest in social investment is growing. We such a way that the capital can be repaid and estimate that if we were to mobilise five per cent of therefore reused providing resources at greater scale the trust and foundations assets in this country, five and on a more sustainable basis. That’s what we per cent of the ISA flows and only half a per cent of mean by social investment. Sometimes there are institutional assets we could mobilise over £10 existing assets and cash flows embedded in the billion. There’s a lot to do and we need to make sure activities of voluntary sector organisations that we the recent consultation with the charities on the way can work with to enable us to raise different forms of in which they are allowed and thinking about finance. Very often the property asset is under investing their endowments produces a more flexible utilised. Sometimes those driving social activity or regime. There is room for tax incentives. The VCC in need of support can be better connected with the and the IS regimes are very interesting and have infrastructure and resources that already exist, or made a big step forward in recent weeks to support there is a need to work with organisations to work smaller businesses in the UK. Very few of the social through a new way of working particularly in these organisations I work with have share capital. We more straightened times. This is very much the need to find a sister development to enhance the thrust of what we are doing in the area of financial investment opportunities there. inclusion and we hope to do more in the area of And we are delighted there seems to be the affordable housing and property. determination to create a Big Society Bank which, in In other cases, and the Social Impact Bond is my view, will boost the ability of the social sector to the case in point, what is needed is a thoroughgoing deal with social issues by developing a range of rethink of the way in which the voluntary sector is successful and effective intermediaries that support rewarded both financially and for the social and the investment and the skills flow to social economic value that they deliver. The example here entrepreneurs to enable them to build their business. is the work we are doing at Peterborough Prison It will support the development of dedicated funds where we have negotiated a contract with the and financing innovations which will radically Ministry of Justice, under which we have access to transform the confidence with which a social work with prisoners both pre and post release. If, entrepreneur can plan for the future. And it will help using the interventions that we are paying for, we sponsor the development of the investor market, and reduce the observed rate of reoffending – and, particularly investment vehicles which provide a again, measurement is key, as Oliver Letwin much wider range of investors the opportunity to tap referred to – and we deliver a material change on into social investment. reduction of the rate of recidivism, we get payments But finally I should shine a light on the social

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entrepreneur. We can create as many structures as we commitment to being good neighbours they would like, but in all the work we’re doing we’re reaching for often say to me, well, actually what do you mean? that ambitious individual who understands the needs What’s the definition that you are using? And I think of the community in which he is operating who is as an industry we’ve struggled with definitional looking for help. And I hope we are part of providing a problems. But, actually the second one, and one that very practical solution to those individuals as they was the hardest to fix, was disclosure. They simply seek to drive change. Thank you. didn’t want to talk about the work that they do up and [applause] down the high street because that’s how they’ve always run their business. And so I think the challenge Chris Cummings: Good afternoon, ladies and for financial and professional services is to be a little gentlemen. I’m delighted to have the opportunity to more up front in talking about the Big Society role address this conference on this particular subject. And that they have and in how they’ve actually managed to thank you so much to Reform for firstly hosting the make a contribution to the UK’s social good. event and secondly Now the three things that financial services can providing us with have, in abundance, to actually help finance the Big We can create as many this opportunity at Society distinct from the comments that David structures as we like, but in TheCityUK. For mentioned earlier – the three things that financial all the work we’re doing those people who services can have and can bring into play. The first one we’re reaching for that haven’t heard or is financial support. As an industry not only can we come across provide interesting and socially useful innovation to ambitious individual who TheCityUK before, help finance some of the more interesting parts of the understands the needs of we were established Big Society challenge, but also the second thing that the community in which he as the organisation we can bring is people: a workforce just shy of 2 is operating who is looking to promote the UK’s million who are spread across the country, people financial and with business skills, people with practical experience, for help. And I hope we are professional and people with a strong commitment to their part of providing a very services. A little over community. practical solution to those a million people There was a comment a little earlier that individuals as they seek to work in financial whenever we talk about the Big Society villagers in services, and about Surrey spring to mind. Let me tell you, as somebody drive change. 900,000 work in the from Yorkshire, that actually the notion that the Big associated Society is rooted in what happens in the southeast – I professional services that cluster around them. won’t use the phrase ‘offensive’. I’ll use the phrase And so my challenge today is to think big for the ‘misguided’ because the north and northeast have Big Society. We were accused a little earlier of being very strong community associations and affiliations. ‘size-ist’ on the panel. And so when I talk about big I’m And in a moment or not talking about monolith. I’m talking about two I will mention diversity, a rich ecosystem. Because of that 2 million I think the challenge for the building society jobs, two-thirds of them are actually outside of the financial and professional movement. M25. So financial services is a national asset, a services is to be a little more So the third national employer, indeed a sector that’s capable of up front in talking about the thing that we’re able doing that one thing that I think Oliver Letwin was to provide – the first referring to earlier which is operating at the grassroots Big Society role that they one is financial level of every community because we’re based on have and in how they’ve support, the second every high street around the country. actually managed to make a one is people. The And I think it’s this diversity of approach that contribution to the UK’s third one is our local generates a huge opportunity for the proper financing focus. The fact that of the Big Society. Those who know tell me that the social good. we are that national FSA flock currently encompasses around 10,000 employer with real regulated businesses. Over 80 per cent of those – and jobs on every single high street around the country. So not a lot of people know this, as Michael Cain I think the financial services community, setting aside apparently never said – over 80 per cent of those are the interesting, innovative financial resourcing actually SMEs. Those are small businesses scattered techniques that we can bring, actually provides those around the country doing work in every high street. two other great things that are needed for the Big And as somebody who has spent seven years Society: people and local endeavour. representing the SME community in financial Let me give you an example of a couple of things services, let me tell you about two of the problems I I mean. And the first one, as a student of history and had in getting credit for those smaller institutions. also being from the north, the first one I would like to The first one was disclosure, and the second was talk about is the building society movement. There definition. Whenever we would ask them to talk to us really couldn’t be a better definition of Big Society either about their corporate responsibility projects or than the building society movement: local groups of the work that they were doing to finance their motivated individuals who wanted to show leadership

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in their communities by acting for the common good. public but ‘them’ the politicians. I thought that’s such So the debate we had this morning about is Big a positive move. And I will be writing to Oliver later to Society a new idea or an old idea, I’d simply advise thank him for that and perhaps to point out that in the people to consult the history of our own sector. Government’s desire to remove regulatory barriers Because I think whether it’s building societies, from the SME market they might think about providence or extending that into financial services as well, because mutuals, we have a that’s the traditional ‘but’. So I think the financial strong and The third area that I would just like to talk about services community, setting outstanding is the value of the work that I’ve been involved with in aside the interesting, contribution to terms of the UK Social Investment Forum and Penny make to this. Shepherd. And I’ve seen how the industry has moved innovative financial The second over the course of the last five to ten years in resourcing techniques that example I’ve used promoting social investment as a normal everyday we can bring, actually is the work that I activity. The work I was engaged with, we started with provides those two other was involved with ‘it’s okay to become a little ethical’ as part of an in a previous investment strategy through to social philanthropic. great things that are needed organisation – a And I think that is a good arc, and certainly the for the Big Society: people previous life – industry can do more to guide people along that. and local endeavour. where we were so So my answers today to how do we finance the committed to Big Society. The first one is not to look to ‘them’ but to making a contribution we tried to put financial start with ‘us’. And actually I think ‘us’ is a great advisers into the branch of every high street charity. position to start because we have 1.2 million of ‘us’. Oliver Letwin mentioned financial advice a moment ‘Us’ are on every high street around the country. And ago when he talked about Citizens Advice Bureau. My actually ‘us’ probably have a better sense of our own experience of that project was that it wasn’t financial moral compass than a regulator or government ever advice. It was actually debt advice. And the hole we can. I think it’s terrific thatReform are holding this were trying to plug was actually helping people cope event, and I’m deeply impressed by the work of David with debt but then actually start to rebuild their and Michele. And I’m delighted now to be able to financial and personal balance sheets. hand over to Michele for her presentation. Thank you. Now there is a ‘but’, unfortunately, with both of [applause] those case studies that I would like to mention. The first ‘but’ around the building society movement is Michele Giddens: Thank you very much, Chris. And that it is today practically impossible to start a new thank you very much to Reform for inviting me to be building society in the UK because of the capital here. And hello to everybody. It’s always a good idea I requirements now imposed on organisations and think to start with the bad news and then move on to entities that would like to start a new building society. the good news. So that’s the way I’m going to structure The second ‘but’ is my experience in trying to put my remarks. financial advisors into that particular charity. We So starting with the bad news – and you know it came across three issues. The first one was regulation. already – the Big Society idea comes in the aftermath Because the people we wanted to put in the charity of enormous financial crisis at a time of little growth were qualified and regulated individuals there was a and with a definite need, whoever you talk to, for long debate about would they be giving regulated government cuts. So in fact I think that raises two advice or not. We were just trying to do something to massive policy questions. One is where can growth be help the people on the high street, the people who found now in the country. And the second is how can actually couldn’t afford or wouldn’t think to get we continue to meet the pressing social and financial advice because it was for other people. environmental challenges that are, in fact, more The second problem we came across was the pressing perhaps than they’ve ever been. How are we Financial Ombudsman Service who said even if you’re going to do that? And there’s been a lot of talk here offering advice, even though we know you’re not today on how are we going to afford to meet those charging for it and even though we know that this is continually pressing social and environmental needs. being done with the best of intent, because you’re I’d like to pose a question here today which is regulated individuals, if somebody makes a complaint could those two be linked, the search for growth and we’ll have to investigate it. the search for the ways to afford, the ways to And that led me to the third problem which was continue to meet those pressing social and having sorted out the regulatory issues, having then environmental needs? Now I think, and we at engaged in dialogue with the ombudsman, it was the Bridges think, that part of the answer to that is that professional indemnity community who said, well the Big Society cannot only be about volunteers. It actually even though you’ve squared away those two, can’t even only be about voluntary sector we still think as your PI provider this might carry risk organisations or civil society. And I’m really and so we’ll want to charge you for it. delighted to follow Chris in his remarks because we And so my heart warmed when Oliver Letwin talked believe that it has to integrally include the private about the problem not being ‘us’ the industry, ‘us’ the sector and the financial sector if it’s going to work.

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And that is going to be part of the absolute key to the social enterprises. And we also have a fund which is question: how can we afford to achieve all of this? for sustainable property, so it invests in buildings in I’ll just use my own organisation as a bit of an regeneration areas and buildings showing example of this and then move on, if I may, to the environmental leadership. good news which I see in the next 10 years. So Bridges What can we learn from our own experience in Ventures is part of a nascent social investment sector terms of policy? Well number one, Bridges Ventures in this country that really has been growing up over, came about because the Government put some not only the last year, but particularly the last 10 matching investment into our first fund. Did they do years. What Bridges, ourselves, what we do, we’ve got that by having a brilliant idea and putting out a tender three types of funds. We’ve got one fund which Chris and seeing who would apply? No, they responded to will like because it’s the private sector and the voluntary sector who were all about SMEs and running a task force who had the idea of such a fund. ...part of the answer to that it’s specifically – in And the government responded to that and they used is that the Big Society fact we’ve got two of their money to capitalise it. Their £20 million they put cannot only be about them – but they’re into our first fund has turned into so far £150 million. volunteers. It can’t even only called our venture So about £130 million of private sector money funds. We have a brought into social investments through that initial be about voluntary sector fund one and a fund £20 million. So I think again a very good use of organisations or civil two all dedicated to taxpayer money. society. And I’m really investing in By the way we’re also repaying you, the delighted to follow Chris in entrepreneurial taxpayers, at the moment. Our first fund is almost SMEs in this completely repaid and still has 14 companies in the his remarks because we country and portfolio. So the Exchequer should do well over time believe that it has to particularly in out of that investment. So that’s an example of ways integrally include the private impact themes. And that government can engage and can catalyse this kind sector and the financial the impact themes of investment. But the key to it was they responded to that those funds this emerging social investment sector as opposed to sector if it’s going to work. focus on are the from a central point in government deciding exactly most underserved how to plan that social investment sector. parts of the country, which by the way are going to So what’s the good news? I’ve started with the need this more than ever in the face of the cuts and bad news. You all know it. What’s the good news? also having had the recession that we’ve had because Number one, the good news is that Bridges Ventures some of the poorest parts of the country as we know is just one in a nascent but growing social investment are some of the hardest hits. sector. David’s organisation is another great example So we invest in the poorest 25 per cent of the of a pioneering and innovative organisation there. country. We also invest in businesses that are Others – Big Issue was mentioned today in an interested and can add something in the areas of interesting link to Big Society. Big Issue has an education and skills, health and well-being, and the investment fund which does a similar kind of environment. So in our portfolios of those funds you’ll investment for social enterprises to our own. I think see, for example, in health and well-being we’ve Impetus is here. Impetus is focused on taking created the most affordable gym chain in the country, primarily philanthropic money and investing it in the making health and fitness available to people who way that a venture investor would, really looking for couldn’t previously afford to be members of a gym. the growth of the civil society organisation, really In the environment you’ll see us doing waste providing lots of hands-on help just as we would to recycling, waste to energy – really exciting sexy stuff help voluntary sector or charity organisations grow. but very important stuff. You’ll see us in education So the really good news is that the last 10 years and skills, investing in vocational training companies have seen the birth – at least a resurgence –of a social and in companies offering apprenticeships to young investment sector in this country. The second piece of people. These are all for-profit SMEs and they have a good news is that we’re able to raise money. Our first role to play in meeting pressing social and fund we had to have government money. Our second environmental problems. And what’s interesting, at fund is entirely private sector investors. And it is least for us, about that is that in fact as they meet endowments and it is individuals who believe in what those problems they also find growth. And that’s a we’re doing, but it’s also pension funds and it’s also way in which we’re able to link those two challenges. banks. So we do see the private sector investors Just to complete the other funds we have, we starting to show more interest in investment that can have also a fund I think very relevant today which is have a positive social and environment impact. for investing in growth social entrepreneurs. So that’s That comes from two sides. It comes from the where profit maximisation is not the main goal. They very socially driven side, sometimes now called might be community interest companies. They might impact investment, and a real increase of interest in be trading charities. So we’ve been able – and I think impact investment around the world. It also it’s interesting that we have been able – to raise a fund fortunately comes through the mainstream as Chris that would put quasi-equity, equity-like capital, into mentioned: an increasing interest within investment

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bodies about the environment, social and governance something which helps to answer our pressing social issues in investment, ESG, which I’ve seen a massive and environmental needs. Thank you. uplift in focus on in the last, even as short as three to five years I would say. And I’m delighted to hear that Patrick Nolan: Thank you. the financial sector is going to continue to be [applause] interested. Thank you, Chris. We’re looking forward to continuing to talk to the financial sector about that. Patrick Nolan: Thank you to the panellists. I think So next 10 years, personally – and I’m not the three very interesting presentations which I have to only one who would say it – I think we will see the say were all remarkably upbeat as well. I think decade of social investment and the decade of social probably the most upbeat we’ve had so far, which is entrepreneurship in this country. What’s needed to very reassuring. David talked about opportunities and help continue and to make that prophecy a reality? he gave the example of Peterborough Prison. Chris Well number one, no one’s mentioned it yet, the Big was also quite positive talking about the building Society Bank. I do think that the Big Society Bank can society movement. I was particularly interested in play a huge role. From my own personal experience of your points, Chris, around the regulations and how going round – and it’s me that has to go and raise this that would make it almost impossible now for a money – going and talking to the investment similar sort of movement to take place now because community and continuously at the beginning having we do have the sort of extra consumer financial to convince them just because I want to achieve stability. And Michele talked about some of the funds positive social and environmental goals doesn’t mean that she works with and some of the positive signs that I will lose all your money. Having others in the we’re seeing from pension funds and investors, and sector giving the same message and building a track also the potential role for the Big Society Bank. record, and then ultimately having a Big Society Bank So I think there’s a lot to discuss there. So that can do two things – well many things but I’ll talk we’ve probably got about 10 minutes of questions so about two. One, raise the profile of social investment. I’ll take a cluster if I can. So we’ve got just there, one And two, also link sources of capital to entrepreneurs and then Patrick. that might be like us beginning Bridges or David beginning Social Finance and help to make the link Audience: Thank you. Implicit in what you’re saying between those social finance entrepreneurs and the with financing the Big Society is this money is going to sources of capital. be spent somewhere. Do you have any guidelines or So I think the Big Society Bank and getting the have you developed any rules yourselves about when Big Society Bank right is very important in this it’s right for somebody to accept payment for services, question about how we’re going to afford all of this in which sectors or which roles that would be, and in Big Society, certainly the social investment side of it. I which areas perhaps it’s more right to be a volunteer? think the issue of getting endowments to invest – and David touched upon it – we have a huge amount of Patrick Nolan: Thank you. And then Patrick Butler. money in endowments in this country. I think most people don’t think Patrick Butler: I’d like to ask the panel about how of charitable much money they think will be available from the ... talking to the investment foundations as just funding sources you suggest over the next few years community and continuously a sort of investment for charity. There was a report the other day I read at the beginning having to pot that gives away where Lord Wei, Nat Wei, the Big Society advisor, convince them just because a bit of its money. suggested that over time – and I’m not quite sure But that is what what the timescale was – private money would I want to achieve positive they are these days, compensate for state funding cuts to charity. State social and environmental and I think shifting funding cuts to charity over the next four years are goals doesn’t mean that I will them to be real estimated to be between £3 billion and £5 billion. I lose all your money. leaders and was wondering how much money is under your pioneers in social management at the moment. How much money do investment is you think would be under your management in four needed. And then I think continuing to nurture and years’ time? And will it be anywhere near £3bn? support the pension funds and their interest in the social and environmental dimensions of investment is Patrick Nolan: Okay, and if I could add one question very important. to that. Imagine that you were talking to a provider or So ending with the good news. We’ve got so someone who is looking for you to invest in their many challenges, but social entrepreneurs are rising service, what would be the one line of advice you’d to the fore and so is a social finance sector that can give them? So if I could get you, all three, to think support them and capitalise them. So certainly we at about those questions. So maybe Michele then we’ll Bridges Ventures look at the next ten years with quite just work back this way. So the guidelines, where to a lot of optimism and would love to see a picture in you invest, how much money do you think will be which social enterprises in our world, social available, and what would be that one piece of advice enterprises and SMEs, all can flourish while doing you’d give?

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Michele Giddens: Okay, great. So in terms of our Patrick Nolan: Okay. Now Chris? guidelines I’ve listed for us particularly that we focus on education and skills, health and well-being, Chris Cummings: Thank you. We don’t have environment and under-served areas, and also on frameworks and guidelines so I’m going to leave that social enterprises. I’m sure David will talk more about question to the experts. In terms of how much is – one of the options in terms of thinking about going to be available in the next few years, can I financing particularly when it’s related to provision of come at the question from perhaps a different angle? public services is whether there is the opportunity to One of my roles at TheCityUK is to champion the charge for those services or not. And in David’s UK’s competitiveness around the world. You’ll have example of Peterborough Prison it’s a way to change read last week that London once again topped the the way that you finance so that you finance on results international poll of the best place to do business if rather than by payment for services. you’re a financial services organisation. We’re So when we look at companies or social globally pre-eminent. And we’ve maintained that enterprises that are working with government in position over the last few decades – few hundred providing public services or voluntary sector years – through innovation and through being the organisations that are doing that – or indeed offering place to come and do business based on some things services that are not paid for by government – one of such as rule of law and openness to foreign the key questions is: is this something that it’s investment. appropriate or possible for government to pay for? If And actually I look at the sector, whether it’s it’s not, then one way of looking at it is: is it possible to social investment, the creation of the Big Society look at a payment by results approach? So I’ll let Bank, the work of my two colleagues on the panel, David take up more on that. and the thing that strikes me is how internationally How much will be available for us in the next 10 interesting that is. How actually other parts of the years? I mean for us, Bridges Ventures, we’ve got £150 world are now looking at what’s going on in the UK million under management. I guess the social and are wanting to take lessons from that. So I think investment sector, David, I don’t know if you know a we shouldn’t be too parochial about this. We figure for this but I know if you even looked at kind of shouldn’t be too Pollyanna about it either. But I CDFI sector etc we’re talking about sort of between think we’d be missing a trick if we didn’t recognise £0.5 billion and a bit more – that kind of quantum. that what’s going on in our country at the moment For Bridges Ventures we seek to double what we have and the debates under management in the next few years. we’re having, But I think certainly the £3 billion gap is a very, ... if we can make a success they’re being very pressing concern, so I don’t claim – and what I’m of this then I do think we will followed very talking about, social investment, it does work where be creating jobs and growth closely. And if we there can be payment by results or there can be in the UK, attracting can make a success payment for services. There are lots of charities that of this then I do provide incredibly important work and they are investments from around the think we will be dependent on grants and they will always be world... creating jobs and dependent on grants. And that is not an area that growth in the UK, social investment can help with. So part of that gap attracting investments from around the world which has got to be made up by individuals and others will fuel the work of Michele and David and many engaged in philanthropy. That is not part of what I others. would be able to be an expert in. And what would be So I think actually when I think of the work our advice? that we’ve got to do, this is definitively part of our armoury. This is the kind of thing that can make all Patrick Nolan: The one line advice for a social of the difference actually. So we move the entrepreneur who is coming to you to encourage you conversation along, we move the debate along. And to make an investment in them? we have to take that international view. In terms of the one line piece of advice I’m Michele Giddens: Oh, sure. Gosh one line of advice. going to be really boring and say make sure you’ve Essentially it’s really think carefully about where you got a robust business case because unless we’re going want to be in three years and what resources are to be saying that actually this is a gift or a gift in aid, needed. I think so many social enterprises as well as if it’s going to be a social investment then a other voluntary sector organisations have to get by on quantification of the return is absolutely necessary. a shoestring. And it’s so difficult for them to scale And that should be expressed as part of either an because they don’t even have the funds available to individual’s portfolio planning or it should be build up the kind of central resources and human expressed in terms of organisational return and how resources that they need to scale. What we can invest that fits in. But that comes from having a solid, in is that, but what’s needed for us to do that is a very robust business case. And I’d strongly advise people clear plan of where you want to go and what resources to use the resources of the business angels and the are needed. mentoring services that are around to put those cases together.

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Patrick Nolan: Thank you. And David? Can big ideas succeed in politics? David Hutchison: Just taking the first question, Nick Seddon: Well, ladies and gentlemen, we are I’m not sure I fully understood it but if it was a running behind, as those of you that have been here question about is it appropriate effectively to pay a all morning know. We had a ministerial talk for about return for those financing certain services, I think an hour. So what I’m proposing to do is to go from the real question is what is that service. If I look at it 12.00 until 12.30 and delay your lunch slightly. Sorry, from our responsibility raising money from that clock up there is deceiving, 13.30. investors, the biggest challenge I have is to make So we’ve had a really great and robust session on sure on the ground the enterprise manages market solutions to the social problems just now and authentically to a double bottom line and ultimately Jesse has just popped open the champagne with this delivers the impact that is valued by society and by sort of moment where we’ve been told that we’re the investor. And that is something you have to live. going to have a decade of social investment and It’s not something you can hardwire into contracts, entrepreneurship, which indeed would be exciting. measure by KPIs. It has to be thought about every Now we move to big ideas, and Bernard Jenkin time a pound is spent. And I think if you look at it referred to this earlier as the theology, which he said that way, how your enterprise is financed is some that Oliver Letwin would talk about and perhaps kind of secondary thing. The more important thing Oliver Letwin then becomes sort of high priest of this is that enterprise is financed so that it can grow and theology. He’s not God. That’s Gus O’Donnell. be sustained. [laughter] In terms of Patrick’s question about how much money under management, I gave some estimates of Nick Seddon: But he certainly espoused it very, very what the market could be. We’re a long way from powerfully. The Brits aren’t naturally lovers of that. And don’t forget that’s capital not revenue and I ideology or the Mitterrand style Grand Projet. It think the numbers you were giving us, Patrick, were doesn’t tend to be the way that we do things. And yet revenue numbers. I’m hopeful that we will see this we’re definitely dealing in the idea of the Big Society market scaling by 10s, 20s, 30 millions a year over with a big idea. And I was very interested that Ali of the next 18 months. But I think it’s going to go the Circle said to Letwin ‘stick to your guns’ because of hundreds of millions but it will probably take three course the other way in which you come into to five years. interaction with principles is the Marx version. I don’t I don’t apologise. I think that in some ways mean Karl, I mean Groucho who said: ‘These are my what I hope is that those who are paying for principles. If you don’t like them, I have others.’ outcomes are getting much better value for the [laughter] money they’re spending. And we’re actually also, because we’re creating more reliable capital of the Nick Seddon: And what we’re really talking about market, making the organisations delivering the here is the principle or a set of principles that you stick change much more effective and stronger to that becomes policies and that work their way into organisations. So I don’t think you can simply practice. In Jesse’s book he cites the left-of-centre measure that progress in headline numbers. progressive academic David Marquand, who says: And in terms of the last line of advice, well, what ‘Intellectuals may not command many divisions but I would say to anyone that I’m trying to work with is: they draw the maps by which the divisions march.’ what is your impact? How do you measure it? Who For somebody like Bernard Jenkin who mentioned out there values it? And, as importantly, who could the ‘little platoons’ that should surely be the way of you collaborate with to deliver that impact at even thinking. So what we have now for the next half-hour greater scale? The biggest tension I find in the work I is a discussion between two of the leading thinkers do is between impact and scale, and I haven’t resolved about thinking. it but we need to work hard to do that together. The first person that’s going to speak is Matthew Taylor, who is the Chief Executive of the Royal Society Patrick Nolan: Great thank you. Well we really are of Arts and has been since 2006. Matthew was over time. It’s terrible to run out of time like this but previously the Chief Advisor on political strategy to I would like to thank the panellists for what was a the Prime Minster, to Tony Blair, and also the fascinating discussion. I was particularly struck by Director of the leading think tank, the IPPR, between Chris’s point that this is actually internationally very 1999 and 2003. So Matthew is going to start us off interesting. And this is a big issue. A lot of countries with a five minute exposition on big ideas, and Jesse is are grappling with this – the financing of education, going to respond or at least provide his thoughts all sorts of things. So this really is important to think which may be a response or may just be a parallel. about. So thank you all very much. Thank you. Jesse is the MP for Hereford and South [applause] Herefordshire. He sits on the Treasury Select Committee and on the All Party Parliamentary Group for Employee Ownership. He has spent six years at Barclays so understands the sort of corporate world, and is a prolific author, probably most notably

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Compassionate Conservatism which was published a consumerism, individualism – fundamentally few years ago and the book that was published last changed the way in which social democracy had to year, The Big Society: The New Anatomy of the New think about its task. It was incredibly influential. As a Politics. And then hopefully for the time remaining, brand, it was crap. 20 minutes or so, we will have a free ranging Now I think the Big Society has now landed discussion of the audience. So Matthew, would you firmly in this territory. I’m an enormous fan of the Big like to launch us off? Do you want to come up here? Society conceptually. Indeed, the first annual lecture I gave as CEO of the RSA was precisely about this. I Matthew Taylor: Yes, sure. called for a shift from a government-centric to a [applause] citizen-centric way of thinking about social change. But as one of your earlier speakers has said – and I’ve Matthew Taylor: Well, thank you. Can I just comment watched this happening and wanted to stop it and on the last session because I just think there was a tried in some little pathetic way to stop it myself – the very interesting confusion which was – I don’t know brand has now become toxic. I think the point has who asked the question – which was how much of the gone past now where this is a brand which is useful to £3 billion gap will social finance fill. That seems to me us. I think it’s become a brand which actually makes to be based on a category error because the £3 billion things less rather than more credible when you talk gap is a £3 billion gap in terms of activities that have about them. And I say that with no pleasure at all. been funded, not organisations that are being funded. Why has this happened? Very briefly, I think it’s The activities aren’t being funded, and given that happened because the message itself has been social finance overwhelmingly depends upon the underwhelming. There’s been a lack of conceptual public sector paying for activities which are moved clarity. Economists often say about a theory ‘it’s not into the social finance sector, social finance has no good enough to be wrong’. And I think that’s true of the capacity to fill that gap at all. Big Society. It’s never been good enough to be wrong. What social finance may have the capacity to do It’s never been clear enough how you would know is to take over some of the activities which are being whether or not it had succeeded. I know this is a funded out beyond that £3 billion. So I think it’s just government which wants to have fewer targets, and I important to make a distinction between activities have all sympathy for having fewer targets. But the fact that are funded and then who provides those the Big Society isn’t attached to any kind of sense of activities. If the activities aren’t being funded it how we would know whether or not it had succeeded as doesn’t matter what sector it is. It doesn’t matter what a project seems to you’re called. It doesn’t matter what your aspirations me to be are. As our panel just made clear, you’re unlikely to be ...the brand has now become problematic. There able to get your proposition off the ground because toxic. I think the point has is no kind of you simply will not have a business plan. gone past now where this is criterion which we Now, big ideas, Big Society – or as my mother might apply to it. used to call it, ‘society’. I think it’s important to a brand which is useful to us. I think distinguish between whether a big idea works and I think it’s become a brand secondly it’s been whether it’s seen to work. And Cool Britannia, for which actually makes things problematic example, was a hopeless idea of a brand because, as less rather than more because it has not anyone under the age of kind of 50 (which now really demonstrably excludes me) knows, the second you call something credible when you talk about influenced the cool it is by definition uncool, especially if it’s called them. whole of Whitehall. cool by politicians. So Cool Britannia described I think this is partly something which was real, which was Britain’s rise in to do with the terrible under-powering of Number 10 the creative industries, but it was an appalling brand, which is now changing. I remember a Number 10 and so it crashed and burnt. But what it was policy unit meeting last autumn and explaining to describing was still true, is still true: the Third Way. them there would come a point when they realised Interesting. I’m sorry if you’ve read this in my they had to fight – fight the Treasury, fight the comments in the programme but there was once a poll departments – not in a kind of Brown/Blair way, God taken at a Labour Party conference on what the Third help us, but actually you need pluralism in Way was and most members of the public thought it government. Number 10 has one set of interests, the was a chocolate bar. Treasury has a set of interests, Parliament has a set of [laughter] interests. And Number 10 has to be aggressive. It has to fight for what the Prime Minister wants. It has to To which John Prescott pithily replied: ‘That’s funny, fight for Middle England. It has to fight for re-election, I always thought it was a fudge.’ because the Treasury only cares about money and [laughter] departments only care about their stakeholders. And I’m afraid David Cameron has been massively under The Third Way was a really important idea. It was weighted in terms of Number 10. He’s changing that Anthony Giddens’ understanding of the way in which now but that’s been one of the problems. Other the changes in the world – globalisation, departments don’t take it seriously. Cabinet Ministers

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laugh behind their hands at it. It’s very difficult to see of interpretation. And I just want to focus on a couple how it’s influenced policy in quite substantial of things and then work my way through to a response departments. to Matthew on that. How has the Big Society influenced DWP, for The first is, I think it’s really important to example? Absolutely not at all. DWP is creating distinguish between a political programme, a set of massive contracts for huge multinationals and then policies called the Big Society, largely located in the supply chains where less and less money gets to the Cabinet Office talking about volunteerism and – the closer you are to the bottom, the less value you’ll philanthropy and mutuals, and what you might call a get, is the basic structure of that. And that’s a very philosophy – dread word in this country – a set of efficient programme and I hope it works, but it’s not ideas that provides the keel or the star by which you Big Society. I can’t really see, unless you’re incredibly sail or whatever the dominant metaphor you prefer contrived, how Big Society is really influencing NHS for the direction of government. And I certainly think reforms. All sorts of other areas. I even think it’s quite that one might very reasonably ask the question of marginal in education apart from free schools. So it whether or not the Government has won the doesn’t seem to be influential across the rest of propaganda war on the Big Society as a description of government. a series of policies. So what do I say in conclusion as I finish my five And of course once you make this distinction it minutes? I say this: that with some regret I think it’s then becomes clear that actually there’s a variety of about time, if I was a political strategist – I used to be different policies a political strategist. I used to advise Tony Blair on which you could political strategy so you can see how well I did there. I actually think that as a plausibly argue [laughter] philosophy the Big Society were a way of has been deeply, massively realising this overall But if I was once again a political strategist my notes influential over the philosophical, as it to David Cameron who I admire enormously as a were, aspiration. person would be instruction: stop using this phrase. Government. For example, you Ban it from any kind of political messaging for the could take the view next two years. But what we should aim to do is in that if localism was important, which I think it is in 2013 or 2014 we should relaunch it, but we will this Big Society philosophy, that what really mattered relaunch it by saying here it is, it has happened. Here to you was local authorities, in which case you’d be is the evidence that there is something changing in massively enfranchising your local authorities in society. And at that point you might get some education. That would be directly contrary to the credibility back. But it’s time to stop talking about it current thrust of education policy, but it could be until you are able to make it more concrete and make arguably part of a Big Society type view. So there isn’t it more credible. Because every day that passes I’m a necessary connection between the idea and the afraid the brand is getting less and less powerful. policy implementation that’s being chosen at the [applause] particular moment. And one of the effects of that is that it disables Nick Seddon: Thank you, Matthew. Jesse you’re up. this little propaganda battle that’s been taking place which we may be in danger of falling victim to. Jesse Norman: Right, thank you. Just see if I can Because if you believe the kind of Ed Miliband view of balance this glass up there. Hi, can you hear me okay? the world – and of course Ed is extremely confused on Good. Okay right, so thank you very much indeed for this topic because if you read his speech in the Labour that. Ladies and gentlemen, may I just say given that Party conference last year he talks about the you’ve been waiting so long for what is an undoubted, importance of a good society. And he’s absolutely I won’t say low point, but it may not be the right about that. The trouble is that his conception of culmination or climax you’ve been hoping for, that good society is the conception of a Big Society with the with George Galloway, I salute your courage and your word ‘Big’ crossed out and the word ‘Good’ written on indefatigability. in crayon instead. But if you take the kind of Miliband [laughter] view of this at the moment, the Big Society is really only about voluntarism and philanthropy and, guess Jesse Norman: I’m not interested in the programme what, there’s no money. So there have to be cuts in that ends with an idea rather than starting with one. government spending. So it looks like voluntarism It’s an interesting way – and philanthropy plus cuts equals a contradiction, so [laughter] the Big Society is a contradiction. That’s, I think, a hopelessly mistaken view. Audience: That’s the Conservative tradition. If the Big Society is a philosophy, if it’s a direction, then actually it completely escapes that Jesse Norman: If they ever get there at all. No, I worry. And I would argue, contrary to Matthew, and would agree with that. The thing that’s so interesting of course you may think that as Mandy Rice-Davies about the phrase ‘the Big Society’, as you may have said of Stephen Ward, he would say this wouldn’t he, discovered, ladies and gentlemen, is its infinite variety in the case of John Profumo, but I actually think that

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as a philosophy the Big Society has been deeply, that there’s a genuine philosophy for government massively influential over the Government. So I here and it’s been rather influential. would absolutely contest the suggestion it hasn’t Now on the criteria for success, of course I have influenced policy. a slightly different view to Matthew which is I don’t, in Let’s take the DWP, for example, which is a sense, want this to go away – for the government to undoubtedly a mixed bag. In terms of large companies stop talking about this for three years. I want them to – and I know this organisation, we’re being sponsored stop talking about it for 15 years because if you think today by Serco and PA so of course I exempt both of this is a genuine change or sea change in the way in them from this criticism – but of course you might which a philosophy of government is, as it were, take the view that there were large companies taking developed and enacted, then it’s really over a two or government contracts. That would be one incarnation three decade period that you can start to see the of the Big Society. A more radical incarnation of the difference. Are there criteria that you could use? Well Big Society, the welfare system, might be akin to, I think, as J L Austin famously said about whether a might take an approach that was more directly particular linguistic view of his changed anything, he empowering of individuals. So, for example, it might said: ‘How much has it changed? Well roughly take the view in some special needs areas that actually everything.’ And so I think if this is succeeding you what you really need to do with disability living will see improvements in our dire performance on all allowance type things is give the individuals the kinds of social indicators. And you will also see an money and let them get on with the solution. That improvement in our economic performance. would be a very radical step. Now can we benchmark that? No. But do we So there are proper differences of opinion. But know the difference between a well functioning obviously in DWP what you have seen is this society and a poorly functioning society? Absolutely extraordinary clarification of the welfare, the benefits, yes. And if you doubt that just read The Spirit Level system that seems to be forthcoming. And that is, I which has a wondrously effective set of comparisons think, a direct recognition of a conception of a human of societies. You can absolutely see which ones seem being as a) a bundle of capabilities – in other words to be doing well and which are doing badly. That’s not something that should be controlled by the tax allied to an argument about equality, but the point and benefits system in this very top down centralised we’ll stop at is actually we really can see some societies way. It should be essentially enfranchised, supported. as succeeding and they’re succeeding much better And also a human being not as a merely economic than others. entity but as a – So do we have criteria? No. Is that a problem? I [mobile rings] don’t really think so personally. It might be a problem if all you worried about was the political programme, but Jesse Norman: I don’t know whose phone that is but I’ve argued that we shouldn’t be thinking about politics. could they turn it off? But not just as a – We should really be thinking about a much bigger philosophy of government. Thank you very much. Audience: They ring every time they agree with you. [applause] [laughter] Nick Seddon: Thank you, Jesse. We’re clearly not Jesse Norman: That’s possibly true. In which case doing very well with Conservative MPs today. Bernard take the call. Jenkin abused our conferences and Jesse Norman has [laughter] abused our sponsors so I’m – [laughter] Jesse Norman: What I was going to say was the other point of view of course is the DWP on this Jesse Norman: If you think that’s abuse, believe me, conception doesn’t really see people just as economic I’ve hardly started. automata. It sees them as creatures of habit. And that’s why Iain Duncan Smith has been trying to Nick Seddon: So onwards and upwards. move people on Jobseeker’s Allowance into work Questions? Yes, the gentleman here. I’ll take them in programmes that are unpaid because he’s trying to a clutch as well. get them back into the habit of work. So there’s a lot of deep change in the conception of a human being Bruce Finch: So a question to the panel is this. I’ve which you can see, I would argue, even in DWP. You worked for 15 years in the public sector – can see it, of course, in the education area. If you believe in human capabilities, the pupil premium Nick Seddon: Sorry, what’s your name? looks like an obvious move. Free schools, setting up new capacity, new institutions – that’s very Burkean. Bruce Finch: My name’s Bruce Finch. The idea of academies or autonomy for existing institutions, that obviously fits into the same picture. Nick Seddon: Thanks, Bruce. And you can make the same argument, I would go through, in several areas of government. Happy to Bruce Finch: So I’ve worked for 15 years in the public talk about that if you would like. So I would argue sector running multimillion pound programmes and

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giving advice up to Cabinet level. And I’ve worked in Nick Seddon: Brilliant, thank you. And then one last industry advising multimillion pound companies quick one here. across the globe. And in that time period I’ve also worked with an inner city school taking it from a school Tim Stone: Sorry, Tim Stone. I was just struck by how in special measures to one of the best schools in the we haven’t heard much about the electorate or – country by contextual of value added and raised thousands of pounds for faith-based charities. So I’m Nick Seddon: Quick question. not trying to get any credibility here but all I’m saying is – and I’m sure people in this room have done far better Tim Stone: The consumer in all of this. So could we things than that – but in that time I’ve been smeared by have the panel’s views on how we mobilise them in somebody who worked for Patrick who had an issue support of all of this? with faith-based schools, and I’ve had to deal with Matthew Elliott of the Taxpayers’ Alliance objecting to Nick Seddon: The consumer and the electorate. So, the amount of money that we were spending. thank you. So we’ve got a question about – surely when it happens that will prove it. Solzhenitsyn said Jesse Norman: We’re dying for a lack of question. when it happens to you you’ll know it’s true. So the Is there any chance of a question? same kind of thing here which I suppose goes to Matthew really. And I’ll farm one out for Jesse to Bruce Finch: So the point is this. The point is this. think about as well which is the idea of actually I don’t think it will be – and the question to the panel devolving pay. And we’ll come to the other two. Sorry is: every day in the country people do voluntary of devolving the levy and spend. So, Matthew, do you activity like the ones I’ve outlined, and they have to want to start off? go through massive bureaucracy, whether it’s CRB checks or funding challenges, or all the rest of it. Do Matthew Taylor: I don’t understand what you’re the panel agree that it will be the outcomes that asking me. people see on the ground when it’s easier to [laughter] volunteer, when it’s easier to engage with the state and when it’s easier to get better outcomes for the Nick Seddon: When the idea works in practice – things that you’re trying to do which will sell the Big Society and not any brand? Matthew Taylor: Yes.

Nick Seddon: Thank you. And Andrew had a Nick Seddon: That will disprove your disbelief in question? the idea.

Andrew Haldenby: Yes, just to summarise for Matthew Taylor: That’s an assertion though, isn’t it? Matthew Taylor. What Oliver Letwin said about Which seems slightly empty of content as an assertion, actual implementation in policy was three things. In you know. Well yes, if it happens, it will be true. A more the Localism Bill they’re changing the responsibility interesting question for local government so that they will be able to do is why do we think it anything that isn’t forbidden rather than the other I think the reality is that is likely to happen. way round, and that also they will be centralising when the state pulls back And I don’t think planning decisions so the local communities will something will fill its place. that there is have much better control over planning. These are anything yet which just the examples that he used. Then he went on to However it will much more the Coalition has say that the whole range of decentralising policies likely fill its place in middle produced which across government which produce a new ‘ecosystem’, class well-heeled areas than implies that in to use his word, which would just greatly support the in working class areas. anything like a amount of voluntary activity that would go on. So I robust way that just put that to you as what he would say if he was actions A, B and C here. lead to outcomes D, E and F, where actions A, B and C are government policy and outcomes D, E and F are Nick Seddon: Brilliant, thank you. John and this levels of volunteering, philanthropy or community gentleman here. mobilisation. There is no evidence base at all. Now what there is de facto is a hope that if the John Barnes: Yep. He who pays the piper actually state pulls back something will fill its place. And I calls the tune and we have had Treasury dominated think the reality is that when the state pulls back government for the last 30 years and getting something will fill its place. However it will much increasingly so. You don’t want to re-empower the more likely fill its place in middle class well-heeled Prime Minster, what you need to do is radically areas than in working class areas. I think that’s change the system of local government finance overwhelming evidence. The one thing we absolutely because without that you will not actually break up know about volunteering apart from the fact that it the monolithic state. has remained unchanged for about 20 years in terms

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of its level is that there is a very steep social gradient And another example I would give is that I think the in relation to all forms of civic engagement. critical issue for me and where the greatest possibility So the first thing we know is that the thing that of Big Society is, is that it lies on the fundamental will happen will happen extremely unevenly, and the reconceptualising of public services no longer as second thing we know is it will be patchy because delivery mechanisms but as co-productions where the that’s how community organisations work. They’re value lies jointly. It’s joint creation by citizens, like – I don’t know anything about gardening but they consumers and services. And if you ask me do I think flower. They flower, they’re beautiful and then they the Coalition’s public service agenda is an agenda die. And they can sometimes die for years and they which leads to more co-production, I’m really not sure flower again. That’s the way that it is. So yes, if I see it, at all. I don’t see co-production as being a powerful it will happen. But as a kind of boring policy wonk I’m theme in most areas of public service delivery. And I kind of used to arguments that say we can think that is a mistake actually. demonstrate that actions A lead to outcomes B, and there is no such argument in existence at the moment. Nick Seddon: Jesse?

Nick Seddon: Do you also want to then come back on Jesse Norman: Cor, okay, where to begin? So many the question of the coherence of the idea through the interesting questions. I think – departments Andrew –? Nick Seddon: Just begin maybe on the one about the Matthew Taylor: Yes, I think Jesse is absolutely right – in what he says, which is that you can make an argument for almost any action being a Big Society Jesse Norman: No no, thanks very much – action. And it kind of reminds me of someone I heard [laughter] the other day, a football coach – I coach a kids’ football team – and he said, ‘The problem with this Audience: He was being rhetorical. team is the three Ts.’ And the kids said, ‘What’s that?’ and he said, ‘It’s the defence, the midfield and the Jesse Norman: Where do I begin? Okay. I think one attack.’ of the things we know, we know one way of knowing [laughter] whether we succeed here would be whether or not the social gradient had actually flattened and whether Matthew Taylor: And, you know, if you want to kind volunteering had become less patchy. That’s true. It is of find a way, a contrivance for saying this is the Big very interesting that – again, I think we’re slightly Society, you can kind of find a way of doing it. My own giving the Government a little too little credit. I mean, view would be, as just look at the last Budget in terms of philanthropy. Jesse slightly Collecting tins are now exempted from Gift Aid. Guess And I think when you get implied, I would what? You can give an enormous amount of money genuine shifts in localism – want to see local potentially through bequests. 10 per cent of anyone’s in a country like France or government bequest – for inheritance tax purposes – can go whatever – you will see that – elected local through into local charities and straight off the top of government –given tax. The Treasury thinks that’s going to cost £300 cities really are able to stand much more million. I think it’s going to cost a lot more than that. up to central government. Is authority at a local I’m amazed that they’ve given that flexibility. That’s anybody going to be able to level and more extraordinary. stand up to government in freedom to raise So I think actually – and again I don’t want money. That’s to make the mistake, as we’ve discussed, of just this new way of working? genuine localism identifying the Big Society as voluntarism and because that’s philanthropy because it’s a tiny part of what the creating – and I think this is a Burkean measure – it’s overall picture is. But on those I think actually creating an alternative power base. government is doing rather well. Now in extremely Now I don’t think that localism as the difficult circumstances – and of course you could Government will make does actually create an say they need to be because the circumstances are alternate. I think it disperses power in all sorts of so tough – and actually of course the voluntary side ways, but does it have enough power to challenge is harder because the legislative thicket is that central government? No. I think if you look at the much thicker. form of the deal, it’s very clever. Lots of dispersal, but On the local government side I absolutely share still central government is massively more powerful your view. And Matthew is exactly right. At the risk of than anybody else in our polity. And I think when you – do you say ‘of course I couldn’t disagree more’ in the get genuine shifts in localism – in a country like classic Rory Bremner way, or do you say ‘of course I France or whatever – you will see that cities really are perfectly agree’? Either will get you into trouble, but I able to stand up to central government. Is anybody think Matthew is absolutely right about that. We’ve going to be able to stand up to government in this new got to enfranchise local government more than we are way of working? I don’t think so. at the moment. Let’s not forget local government is

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the original institution of government. Okay, so Nick Seddon: Matthew, do you want to come back central government: somewhere between Henry II to that? and Thomas Cromwell. Local government: King Alfred. Okay, very important. King Alfred. Original Matthew Taylor: Yes, I think just one point I meant to institution of government. And it’s 90 per cent of the make earlier, and it fascinates me at the moment, way in which 90 per cent of the people interact with which is there’s something incredibly interesting any kind of government at all. So absolutely. And, by happening in the corporate sector at the moment. the way, politicians of all political stripes have We’re seeing some incredible leadership, whether it’s progressively disempowered it over the last Indra Nooyi at PepsiCo or Ian Cheshire at Kingfisher. generation and a half. The CEO of Unilever wrote in the Financial Times a So yes, and within that, cities absolutely. But I few weeks ago: if you want to invest in a short term, I think actually the Government’s quite friendly don’t want your money. We’re a company for the long towards that kind of stuff in general. The real term. Aviva. There seems to be a real shift happening, question is whether or not the media allows it to be and I think it’s incredibly exciting, Jesse. friendly or whether or not everything is going to be taken back to the Prime Minister instantly on the Jesse Norman: I agree. front page of The Sun newspaper every time something goes wrong. So David Cameron to his Matthew Taylor: One of the things I think is credit has resisted that. You will recall we’ve had one disappointing, actually, about the Coalition is that it or two occasions where people have tried to pin has not asked business to step up to the plate more things directly on the Prime Minster and he’s said aggressively. And instead what we get is the kind of listen, actually this is not a central government thing. hideous sight of Martin Sorrell last week saying that This is not a thing for me. We’ve got people who are he’s leaving one country that has ruined itself through doing a job and we’ve got to return to cabinet aggressive corporate tax cutting to come to Britain government. To me this fits into the same picture. which is pursuing a policy of aggressive corporate tax So I think that’s right. I’m not quite as – I’m a cutting. Presumably Martin Sorrell is going to hop deep critic of the Treasury, as you may know if you’ve around the world as countries bankrupt themselves read any of my stuff, in particular Big Society, through aggressive corporate tax cuts. available on Amazon and any good bookshop but – [laughter] [laughter] Jesse Norman: The lily pad technique where each Jesse Norman: But – and indeed I had the pad in question sinks just as you leave office. opportunity and the joy of cross-examining the Chief Secretary of the Treasury on Tuesday on this topic and Matthew Taylor: I couldn’t kind of – why do people I managed to quote Philip Stephens’ article in the not spot the irony of him leaving Ireland, which is Financial Times and said, ‘Is it true, as Mr Stephens bankrupt because it’s pursued a policy aimed at him. suggests, that the Treasury has gone from being a But the Prime Minister did make a speech about Big Rolls Royce to being a Trabant in large part under Society in the corporate sector. Unfortunately he your leadership?’– a question he wasn’t particularly made it on the day that we lost the World Cup bid so it happy with, although there’s a degree of truth in it. So didn’t get a great deal of coverage. But I think there’s I think, oddly enough, George Osborne funnily is in something very, very interesting going on. Actually I part a friend of that view. George does not want the increasingly believe that the real future, if you’re a Treasury to be running programmes. He would be progressive – and Jesse and I are both progressive intrinsically, I think, inimical to the idea of the despite our different traditions – the real action in the Treasury running the tax credit system. He wants the future is going to be in the space between global civil Treasury to be minding the books and being more society and global corporation because that’s where I intelligent about economic policy and not allowing think the most interesting kind of changes in attitudes government to egg itself into an orgy of overspending. are taking place. And I think national governments He’d like a return to that kind of approach. are in danger of kind of being left out of that and being Electorate and consumer. I don’t have much to too conservative with a small ‘c’ in relation to a say about this. I think we’ve had a little too much different kind of model of capitalism actually which I consumerism over the last few years. I’d quite like to think needs to be part of this Big Society story, Jesse, ignore the consumer for a while frankly. That may and I know you agree. sound like it’s not a punchy thing to say at a time when our consumption is falling through the floor. Jesse Norman: Tragically, I couldn’t agree more. [laughter] Nick Seddon: Public services as well? Jesse Norman: I would say two things. I mean I draw Jesse Norman: No, but I don’t regard citizens as a distinction between real capitalism and fake consumers. I think the whole point about co- capitalism. Fake capitalism is what we’ve had over the production is to have a richer conception of what a last few years, okay? So people getting rewarded for person is when they interact with a public service. being around when there was some money going,

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okay? And government essentially helping to reward pension funds, the thought was going to be, would them in the way it cues its own priorities, in the way only index ride and they’d own 60 per cent of all it sets monetary and fiscal policy. And that’s over, shares and they were very long term investors and right? We’re moving through a period of real they weren’t interested in just taking a quick buck and capitalism: a day’s work for a day’s pay. If you take a so they couldn’t get out of their stocks anyway. So that risk, if you put your body and soul into something, was all going to be good. Actually that hasn’t then you take value and reward out of it. That’s what happened. What’s happened is the we’ve got to be going for. And that’s why from the internationalisation of markets – long term right I’m deeply critical of a lot of the excesses of the shareholdings have gone down and they have very City of London where I used to work. I’ve got some inadequate bases of trust with their managers. Cue familiarity with it. But from the right; this is not Cadbury. What happens to Cadbury? I mean Cadbury socialism in disguise. is up for sale and within literally two weeks 30 per And I would say that there has been some cent of its shares are owned by the arbs. Oh that game, really interesting leadership in the corporate sector. fair enough. It happens. Game over. I absolutely agree with you on that. Nick Seddon: Jesse, I’m going to have to – We’re moving through a What is fascinating period of real capitalism: has been the Jesse Norman: So I’ll just leave that with a double a day’s work for a day’s pay. parallel failures, failure which I hope is of some interest to you. If you take a risk, if you put two-fold. One is an absolute lack of Matthew Taylor: You made the point – and this is a your body and soul into leadership in the really important thing – if I had to pinpoint one of the something, then you take financial sector, a moments when Labour really lost a massive value and reward out of it. staggering inability opportunity was when Tony Blair announced that That’s what we’ve got to be of anyone to Labour was going to abolish child poverty. And that articulate anything was a massive mistake. What he should have said is we, going for. like the sentiments as a country, are going to abolish child poverty. I will be that would say: do part of this, but we are all involved in this. This is a you know what, forget the phrase ‘sorry’ but we national objective and something we should be deeply personally, as a matter of our practice, are going to proud of as a country – and mobilise the whole country. take seriously this festering social sore that we have And the problem is there’s a danger with Big Society as at the moment of anger over the last few years and well that it’s not being articulated as something which the reallocation of value. And the second thing I is a mobilisation of the whole society including, by the would say about that is that there’s been a colossal way, business. And the gauntlet is thrown down to parallel failure of corporate governance. business. Instead what it looks like is something which Now it’s amazing to me that actually managers government is doing to people. I’m afraid when the have done, in some respects, very interesting things Government does things to people, however well of stepping out of their traditional boxes and intentioned it is, it tends to go pear shaped. thinking creatively about long term investment and social engagement within the corporate sector. But Nick Seddon: Okay, 30 second comment on that. they have not been paralleled by any competent Sorry to – we just can’t – Can I just ask you both a sort organic structural corporate governance. And if you of pointed question really on exactly that point. So think they have, look at the board of RBS which has what you’re saying, Matthew, is that the notion of the squandered taxpayers’ money on a value Big Society will not mobilise the march of the little unimagined. Or look at the board of Lloyds Bank platoons. And Jesse, you think that the Big Society as which allowed itself to be bullied into an action that a notion will mobilise? removed 97 per cent of its own shareholder value. I mean for goodness sake, let’s get some reality into Jesse Norman: Certainly not. this. And the situation is not improved by the way in which international capital markets have developed Nick Seddon: It will not mobilise the march of the because the old line used to be, well, of course, the little platoons? pension funds and the long term investors – Jesse Norman: If you put the question to me with Nick Seddon: We’re supposed to be on big ideas. five minutes after our time. I tell you: not. The Big Society is not about mobilising anything. War Jesse Norman: Hold on, we’ll keep it on big ideas. metaphors are entirely inappropriate. If you think society is an enterprise that has a purpose you are on Matthew Taylor: It’s a pretty big idea. the road to totalitarianism. Chapter five of the book if you’re interested, but mobilisation is the wrong idea. Jesse Norman: I think this is about as big as it gets. We need to be more organic about the kind of We’re talking about the future of pension fund leadership we expect from institutions and the kind of capitalism. Now the point is this: in the old days way in which we prime and cue them.

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Nick Seddon: Thank you both very much. We’ve overrun considerably, which is entirely my fault. I just wanted to ask – we were talking really about the possibility of this being an idea that we’re still talking about in 15 years’ time or we come back to in 15 years’ time. I was just interested in a show of hands from everybody in the audience. In 15 years’ time are we going to be talking about the Big Society? All in favour? [laughter]

Nick Seddon: A couple.

Matthew Taylor: Oops.

Nick Seddon: But not that many. Two hands up here. OK, not massively positive. OK.

Audience: You may be underestimating the number of people who are actually asleep. [laughter]

Nick Seddon: I must draw things to a close. And I’m not going to try and round everything up. Other than to say I think we’ve had a fantastic discussion or a series of discussions this morning that have talked through – with Oliver Letwin of course – talked through the kind of big defining thoughts, the ideas behind. We’ve just been discussing again and returning to the ideas of the relationship between principles and policy and practice I’m afraid when the and how it will all Government does things to work out. High people, however well points included intentioned it is, it tends to each of the sessions because there were go pear shaped. such good points made in each, and although there was controversy about exact mechanisms or exact deliverables or the way that things worked through, I think that in each one there was a sense of this being workable. So I’m just going to say a couple of final things. One is there is a BlackBerry outside so if anybody owns that BlackBerry then please go and collect it. The other is to say please stay in our network and keep feeding into our work and give us feedback from today. And carry on talking to us and continuing this dialogue because we will certainly be thinking about it ongoing as an element of policy. And thank you so much to our sponsors – Circle and TheCityUK and PA Consulting and Serco – for making today possible. And to Clifford Chance for hosting it in these wonderful surroundings and for the lunch, which I can assure you is delicious, which follows. So thank you immediately to Jesse and to Matthew for a very entertaining and engaging discussion. [applause]

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