Question proposed, That the clause stand part of the Bill.

Clause 3 allows the Government to fund the NCS Trust out of money approved by Parliament. NCS is a Government-funded programme. It was piloted in-house by the Cabinet Office before the NCS Trust was set up to grow it, funded by a grant made under the Charities Act 2006. The Majority of the Government’s controls have been in the grant agreements, re-negotiated each year with the trust. As NCS grows and becomes a more permanent feature of society, the Government need to establish a new legal relationship with the trust.

As a public body, the trust will receive grant in aid funding, which is the normal way such bodies are funded by the Government. All the necessary Government controls and parliamentary oversight will have been agreed, allowing for a more straightforward and arm’s length grant agreement. In this case, the royal charter will set out the trust’s constitution and the Bill sets out many of the conditions to which it must adhere, such as producing an annual report each year. There will be no need to re-draft these elements each time a grant is renewed. The Government and Parliament’s financial relationship with the trust will be simpler, more transparent and much more secure.

Clause 3 is a crucial part of the Bill. NCS will continue to be a publicly funded body charged with delivering the Government’s commitment to provide a place on NCS for every young person who wants one. Clearly, the clause does not bind future Governments to any maximum or minimum amount of funding for NCS, but an essential component of the Bill is to give the Secretary of State the power to fund the trust.

We welcome the fact the Government have chosen to put funding into an organisation that is providing such benefits to young people. That would be welcome at any time, but it is particularly welcome at a time of austerity, when we are seeing funding for youth services and activities across civil society, let alone the public sector, fall in ways that have made it difficult for many of those organisations to continue providing a service.

There has been criticism in some quarters about the amount of money going to NCS, relative to the cuts elsewhere. I will not repeat those comments, because the right thing to do is welcome the fact that the Government are funding NCS to a level that will allow it to do what it sets out to achieve. That is undoubtedly a benefit to young people and we wholly welcome it.

However, a recent National Audit Office report raised concerns about the funding for NCS, which I am sure the Minister is looking at. In the context of the Clause, I would welcome hearing the Minister put on the record his approach to some of the challenges raised by the NAO. That is important, because every penny of public money that is spent anywhere must be fully scrutinised so that we are confident that it is delivering the maximum value, and not just to taxpayers but to the young people and others who will benefit from these services.

The NAO report was published a few days before Second Reading and the Government did not have an opportunity to respond to it before then, so I would welcome a statement from the Minister on whether the Government will provide a full response. The report states:

“The NCS has cost more per participant than was anticipated and needs to reduce by 29%, to remain within the Spending Review limit.”

What steps is the Minister taking with the trust to ensure that spending comes down to the level it should be at, and when will that happen? What assurances do we have that the quality of the programme will not fall if costs need to be cut by nearly a third? Young people signing up for this programme need assurances about what they are going to receive. Given the NAO’s concerns, young people might have some doubts in their minds about what might be made available to them.

Minister, you may wish to respond to those comments now, but they could equally apply to clause 4, as I have been advised by the Clerk. Would you like to respond to the questions now or wait until clause 4?

As the hon. Member for Croydon North has raised them, I should probably respond now.

Okay.

I thank the hon. Gentleman for his comments and for mentioning the NAO report. He is right that we did not have time to discuss it in any detail on Second Reading. It is a welcome report that did not raise any issues of which I was not already aware. Over the past couple of years we have looked in detail at how the NCS Trust is carrying out its functions. It is right that the NAO raised and confirmed those issues with us. We were already some way down the road to making the necessary changes to ensure that some of those concerns are dealt with. Indeed, one of the reasons for the Bill is to address some of those NAO concerns, because the Bill and the charter will create a new legal framework for the NCS Trust, ensuring that there is proper Government oversight of the trust’s governance and accountability to Parliament for how it performs. The Bill feeds a much stronger accountability process into the system. We obviously want to make NCS the best it can possibly be, and the Bill plays an important part in that.

I believe that the scheme has already shown great promise, but this is a critical time. Will the Minister give assurances that setting up the royal charter will enable us not only to reach the target of 360,000 students, but to lower the cost, which will be essential if the sums are to work?

One issue raised by the NAO report was that of targets. I have been looking at those over the past year to ensure that we are not, as the NAO said, focused only on targets. We will make an announcement about them in due course, because we have been working to amend them for some time. The Bill will help us to reach the targets and ensure that NCS provides the quality and quantity of places that the Government and taxpayers want with the money they provide.

The trust is constantly looking at value for money, because obviously it must provide a high-quality, safe programme. That requires a long-term commitment on funding to allow the NCS Trust and its delivery partners to plan properly and to invest in development of the programme. Value for money is a priority, which is why the trust will have to report on it specifically every year. The requirement will be a clear mandate in the legislation, and I am sure we will discuss that in more detail today.

We will certainly be working with the NCS Trust as it goes through the re-contracting process in 2018. The contracts in place now were primarily signed in early 2014—certainly before I was a Minister with that responsibility. That process is under way and the new contracts will be signed in 2018. We will ensure that we get the best possible value for the programme. The long-term budgets for NCS have a requirement that the cost per place must come down, and to that end the NCS Trust is looking at and testing innovation and delivery within the system.

The hon. Member for Croydon North briefly mentioned commissioning. I will try, also briefly, to deal with that. We do not want to be prescriptive. The Bill is concerned with the outcomes of the trust and its providers, but not so much the inputs. For example, it would not be appropriate to put into statute the particular ways in which the trust must work with its providers. It must report on a range of different performance measures that take both quality and quantity into account. It reports on the number of participants who take part each year, the number who have a disability, the number of hours spent volunteering, the quality of the programme, the extent to which participants from different backgrounds have worked together in those programmes, and the extent to which they get value for money.

I hope that the hon. Gentleman is reassured by my comments on how we will deal with the NAO report. We will certainly make a formal response in due course.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4