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Session 1999-2000
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Delegated Legislation Committee Debates

Local Government Finance Special Grant Report on 1999-2000 Special Grant for Unaccompanied Asylum-Seeking Children

Sixth Standing Committee on Delegated Legislation

Thursday 23 March 2000

[Mr. Humfrey Malins in the Chair]

Local Government Finance Special Grant Report on 1999-2000 Special Grant for Unaccompanied Asylum-Seeking Children

9.55 am

The Minister of State, Department of Health (Mr. John Hutton): I beg to move,

    That the Committee has considered the Local Government Finance Special Grant Report on 1999-2000 Special Grant for Unaccompanied Asylum-Seeking Children.

All of us will be aware of the large numbers of asylum seekers coming into the country. On the whole, the interest has concentrated on adults and families, but there is also a significant number of unaccompanied asylum-seeking children. At present, it falls to local authority social services departments to care for those unaccompanied asylum-seeking children in the same way as they would care for other children in need. The increasing numbers of such children are putting increasing pressure on many local authorities. The purpose of our debate is to discuss the funding that we are providing through central Government to help local authorities to meet the costs that they have incurred in the current financial year.

At the beginning of this financial year, there were about 2,500 unaccompanied asylum-seeking children in England. The number now stands at more than 5,000 and is increasing. At present, about 55,000 children are looked after by local authorities. While 5,000 represents only a fairly small proportion of the total population that is looked after, the unaccompanied asylum-seeking children represent a significant proportion in several authorities—even as much as 50 per cent.

We recognise the financial pressures that that creates for local authorities. As a result, this year we are making available more than £52 million to help them meet their costs. Most of the unaccompanied asylum-seeking children are 16 or 17 years of age. At least 80 per cent. of them probably fall into that category. For those young people, we are meeting local authorities' costs up to £200 per week or, for the 12 authorities that care for the largest number of unaccompanied children, we will meet costs of up to £300 a week. The reason for that differential is that those authorities with the largest burden of unaccompanied children face the toughest strains on their budgets and we therefore consider it appropriate to provide additional help to them.

For the unaccompanied asylum-seeking children under the age of 16, the care options are more costly. We are meeting claims of up to £400 or £500 per week for the 12 authorities with the largest burden of unaccompanied children. The Committee will be aware that we have made special grant arrangements to help with the costs of unaccompanied asylum-seeking children for several years. Last year, we introduced the £200 and £400 rates. They were calculated as the actual costs of caring for unaccompanied children of 16 and 17 years of age and those who were under 16 years, which local authorities put forward for the previous year, 1997-98.

The general feedback that we received from the 1998-99 grant on those rates was that they were generally adequate and, for that reason, we maintained them for 1999-2000. When considering this year's grant, however, we became aware that, for several authorities, the much greater numbers of unaccompanied children meant that their costs were significantly higher and, for that reason, we introduced the higher claim rates for those authorities with the largest numbers.

The combination of the extra numbers and the higher rates means that we are making available a much larger sum than we did last year. In 1998-99, we paid out a little over of £20 million in relation to the care costs of unaccompanied asylum-seeking children. For this year, we have made available more than £52 million. How did we calculate that sum? Initially, we asked local authorities to make their claims, on the basis of the above rates, by 29 February 2000. In the end—as the special grant report makes clear, and to be helpful to local authorities—we are allowing any claims that were made by 10 March. The sum of more than £52 million is calculated to meet the claims of all local authorities on the basis of either the rates of £200 and £400 or those of £300 and £500, as long as the claims were received by 10 March.

What about the future? We know that the current arrangement for the grant is not ideal. We find it difficult to assess the number of unaccompanied asylum-seeking children, and how much they cost. Local authorities find it difficult to cope when they do not know until late in the year the level of grant that they will receive. There are more significant problems because, quite apart from the financial issues, some local authorities are struggling to find suitable placements for the large numbers of unaccompanied asylum-seeking children for whom they are responsible. For example, we are aware that Kent county council is now responsible for about 1,000 unaccompanied children, and the council has difficulties in finding suitable placements for them. There are associated difficulties in finding placements for the rest of the children that they look after. We need to look again at the arrangements for the grant, and more generally at the arrangements for caring for those young people, to ensure that we have the best arrangements to meet their needs and to enable local authorities to deliver their services for children generally.

10 am

Mr. Philip Hammond (Runnymede and Weybridge): The arrangements for supporting asylum-seeking adults and families are changing, in accordance with the provisions in the Immigration and Asylum Act 1999. That reflects the step-change that has occurred in the burdens that are placed on local authorities and a perhaps belated understanding that economic migrants—as opposed to genuine asylum seekers—are deterred by introducing tighter controls and faster processing, and by reducing the incentives of paying benefits to those seeking asylum and allowing them to earn while their cases are processed.

For children, the system has remained unchanged. As the Minister said, all children in need are covered by the Protection of Children Act 1999. Children will continue to receive the support and protection of local authorities, although I detected in the Minister's remarks the suggestion that that system might be reviewed. It would be useful to the Committee if the Minister threw more light on the direction of the Government's thinking. I am sure that he understands the potential for resentment and local tensions that the system creates. That system is generous and open-handed, and is entirely appropriate for dealing with genuine, unaccompanied refugee children who find themselves alone in a strange land. However, if it is abused by those making huge profits trafficking in human misery by bringing economic migrants into the country, there is the danger of a backlash in the communities that suffer as a consequence.

Unfortunately, children are not exempt from the attentions of those who have turned the misery of economic migrants into a business. I am sure that the Minister will agree that we need him and his Home Office colleagues to be vigilant in ensuring that our continued generous treatment of unaccompanied asylum-seeking children—dealing with them exactly as if they were children of local families in need—is not abused in the way that our overall asylum system is clearly being abused. That abuse has led to localised heavy burdens and to local resentments.

As long as local authorities are responsible for bearing those costs and looking after those children, the Government must reimburse them. The report proposes the making of grant payments—which are, in some cases, inadequate compensation for local authorities—to defray at least part of the costs that they have incurred. We support those payments and wish them to be made as quickly as possible. That is why we do not oppose the report. However, I wish to draw to the attention of the Committee problems that local authorities face, and put several questions to the Minister.

The principal area of concern relates to the amounts of money paid. The Minister referred to Kent county council, which bears by far and away the largest burden. In 1999-2000, it will have spent some £18.15 million on looking after unaccompanied asylum-seeking children. Of that sum, about £3.06 million will be unreclaimable expenditure, including administrative expenses. How were the grant sums determined?

Has independent work been commissioned to establish the real costs that local authorities face when they seek to ensure that they are properly reimbursed for their work? That work should not place a burden on local taxpayers or result in local reduction of services.

The Minister told us that the 12 authorities with the largest number of child weeks will receive a higher level of grant, and I understand the logic of that. I question whether enough work has been done to relate the payments to be made directly to the costs incurred, which will vary with geographical location as well as the intensity of the problem.

I draw the Minister's attention to the slightly different explanation that the Minister of State, Home Office, the hon. Member for Hornsey and Wood Green (Mrs. Roche), gave on Monday to a Committee considering grant payments for adult asylum seekers in families. She said that the payments were higher in Scotland because there were fewer asylum seekers there, and thus authorities did not achieve the same economies of scale as other authorities. That is the opposite of suggesting that we pay higher grant levels to the 12 authorities with the largest numbers of unaccompanied asylum-seeking children.

What happens to unaccompanied children whose application for asylum has been processed, but who are found not to have a right to stay in the United Kingdom? The grant is not payable for children whose legal right to stay has ended, but I assume that local authorities' duty to protect and accommodate them under the Children Act 1989 would continue none the less. There might be a gap; local authorities might continue to provide help, but the Government might not reimburse them for it.

We urge the reimbursement of all costs incurred by local authorities in looking after unaccompanied asylum-seeking children. We support the measure to ensure that help gets to local authorities as quickly as possible, but I hope that I have drawn the Committee's attention to the fact that the help is not extensive enough to cover all the unaccompanied asylum-seeking, or formerly asylum-seeking, children for whom local authorities are obliged to provide. In some cases, the sums are inadequate to reimburse local authorities for their costs.

It is right for us to treat vulnerable children differently from adults and families, but such generosity is sometimes abused. We must ensure that our generous treatment of those children does not become a burden on local taxpayers or lead to reductions in local services. That would put a tremendous strain on the tolerance that is being shown by communities such as Kent, where services are regularly strained. I am sure that the Minister shares my fears that if financial burdens become intolerable in those areas and services are cut, tolerance will snap. The Government must ensure that authorities are insulated from the problem and are fully reimbursed for the costs that they incur.

10.8 am

 
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