Local Government Finance (England) Special Grant Report (No. 57)

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Mr. Tony Baldry (Banbury): No one would oppose the grants, but I have two concerns. First, ``pump priming'' in Whitehall parlance usually means that a grant is not permanent. It has been introduced because Ministers wish to change local government behaviour and it will be withdrawn once they feel that they have done that. The question for local authorities is what happens to the programmes, that the grant had supported. Does the money get translated into their standard spending assessment once the grant has been withdrawn?

Secondly, regarding transparency, local government finance is complicated enough as it is. Councillors are getting confused about what they are expected to do. In education, they are starting to see more money go directly to schools. In a county such as mine—Oxfordshire—they would have preferred it if such funds had gone directly into the standard spending assessment, because they would have been transparent and because the SSA regime is well known. That approach would be better than providing additional grants.

The Government's approach is slightly disingenuous. Ministers are criticised for making less than generous increases in the social services SSA, but they deflect such criticisms by saying, ``Yes, but look at the money that we have given through other specific grants.'' I suspect that most local authorities would welcome having a larger, more transparent and straightforward increase in their social services SSA. Of course the money is welcome, but we do not welcome the idea that such money may disappear a short way down the line—local authorities would be expected to maintain the relevant programmes, although the source of funding would not be clear. Local authorities and councils would prefer it if funding were available through the SSA and they were responsible for the delivery of outcomes. There is a tendency for increasing sums of money that go to local authorities to be ring-fenced. That is not healthy for local democracy and it makes it increasingly difficult to maintain the long-term provision of services locally.

5.26 pm

Mr. Denham: I have something kind and something unkind to say about the hon. Member for Banbury (Mr. Baldry), and I shall begin with the unkind remark. He talked about his dislike of ring-fenced money. The idea that local government had untrammelled powers to spend money as it wanted when the previous Government were in office involves a novel version of the history of that period—I was a local government councillor during nearly all that time. However, I should give the hon. Gentleman some credit—he understands the concept of pump priming. It involves the investment of additional money over a period in order to reorient or to build up services so that they become part of mainstream provision.

The hon. Gentleman's understanding contrasts with that of the hon. Member for Sutton and Cheam, who said in his opening remarks that he supported the idea of pump priming, but went on to say that the approach was outrageous and that the money that went into pump priming could be used instead to cover, for example, the cost of the working time directive or the provision of new computer systems. The point about ring-fenced grants, especially those that are used for pump priming, is to achieve specific objectives. We have not, in many cases, specified the political form that services should take, but the use of the money should result in clear outcomes. The hon. Member for Meriden, who is the Opposition spokesman, appeared to support the idea of pump priming and to understand our approach.

Earlier, I gave the figures for the partnership grant, but I should provide some additional figures. The prevention grant was £20 million for 1999–2000, and it will be £30 million in 2000–01 and £50 million in 2001–02. The carers grant was £20 million last year, and it will be £50 million in 2000–01 and £70 million in 2001–02. The hon. Member for Sutton and Cheam decried such figures as inadequate, but he should notice that the grants have risen each year.

The hon. Member for Meriden asked whether I should care to speculate on the outcome of the spending review. Discretion suggests that I had better not. All Committee members recognise the value that has been placed on new initiatives such as the carers grant. We should secure proper provision for carers. However, we must await the outcome of the spending review, which is not too far away, to learn how the budgets will be deployed.

On the wider financial position, a recurrent theme throughout our discussion has been the idea that social services spending is being cut, either because the partnership grant is a pump-priming grant or because of the vagaries of the SSA system. Between 1996–97 and 1997–98, the Government's first year, the increase in provision grants and SSA was 4.5 per cent. In the following year, when we had fuller responsibility for the budget, the increase was 5.7 per cent. and in 1999–2000 it was 6.3 per cent.

It is interesting to look at the overall expenditure on personal social services over the same period, because it is sometimes argued that SSAs are a smoke-and- mirrors exercise and one needs to look at what is happening. The increase from 1997–98 to 1998–99 was 7.2 per cent. and from 1998–99 to 1999–2000 it was 7 per cent. I have also heard the sort of tale that the Committee has been told this afternoon, but the figures do not back it up.

In Solihull, which I believe is the hon. Lady's local authority, the personal services SSA will increase by 5.5 per cent as part of the 2000–01 settlement, compared with an average national increase of 5.1 per cent. The main reason for the increase in the Solihull SSA by more than the national average is the growth in the number of people over 65, to whom the hon. Lady rightly referred as a group of people who will require more support in the future. If what is happening at the local level is different, that may be the responsibility of the Conservative local council.

Mrs. Spelman: I want to place it on the record that the Secretary of State for Education wrote a threatening letter to the local authority, saying that, unless the 6 per cent. was spent on education, grants would be withdrawn. That forced the local authority to make cuts elsewhere.

Mr. Denham: That was an interesting insight from the hon. Lady, but I think that the SSA treatment was reasonable in the circumstances, being an increase of more than the national average.

The hon. Member for Sutton and Cheam raised a number of points. I have already said that I do not grasp the concept of pump priming. He referred to the carers grant provision that local authorities may spend up to 10 per cent. of the total grant on breaks provided direct, on their own assessment, by voluntary organisations. Local authorities will have to take responsibility for ensuring that voluntary organisations have the appropriate expertise and skills to carry out risk assessment and that appropriate breaks are made available. A service level agreement will have to be put in place, as well as decision-making protocols. We have tried to build appropriate safeguards into the system in opening up this important provision to groups of people who may be missed. The hon. Gentleman rightly said that in the present system people could be missed, and we must not allow that to happen.

The hon. Member for Meriden asked about assessment costs. They would be paid from the baseline social services funding, rather than out of the social services grant itself.

The hon. Lady asked me to give an example of a partnership grant. There are many examples. One example is a local authority that used part of its partnership grant to fund increased social work capacity during peak periods of demand in acute hospitals, so that there was that presence at evenings and weekends. That enabled resources to be better targeted on promoting independence for individuals. The estimate is that last winter that freed up 160 beds over the millennium period.

The hon. Member for Meriden and for Sutton and Cheam referred to the importance of organising discharge services properly. There are many examples of good practice, not all of which are funded through the partnership grant: rapid response teams and discharge teams, and systems under which social services are alerted, as soon as an elderly person is taken into hospital, that a discharge is likely to take place in a week or two weeks' time and that services will need to be organised. Such practices are not yet uniform across the system.

Mr. Burstow: I agree that good practice must be spread. However, given the example that the Minister cited of a new service in hospitals and better co-ordination between the health and social services to manage discharge, surely that service will need on-going funding if it is to continue to operate. Once the partnership grant comes to an end, how will the service be funded?

Mr. Denham: The hon. Gentleman fails to understand that increased resources for social services create space within which proven practice and innovation can be incorporated in mainstream services and enable new approaches to be developed which can then be built into mainstream planning. It would be a mistake to believe that the only way to improve a service is to add something on top.

It is taken as read by Labour Members that we must not only put new resources into the health service and social care but change the way in which they are organised. We must modernise the way in which services are delivered. That sometimes means changing the way in which current resources are delivered. If additional pump-priming funds are available, it is much easier to develop a new service and to create the space in which new money coming in. The existing services can then be re-shaped to provide a more efficient service. There are many examples of good practice where the same amount of money produces a better service, simply because things are better organised.

I spoke earlier about the new flexibility provided by the Health Act 1999. That is based on the premise that, by pooling funds, or having integrated provision, a sum of money can produce a better service than if the funds are deployed separately. The hon. Gentleman seems to have difficulty in understanding that concept, but it is central to what we are doing.

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