Local Government Finance (England) Special Grant Reports (Nos. 102 and 104)

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Jacqui Smith: I hope that I will be able to respond to most of the points that hon. Members have made, and I shall start with those made by the hon. Member for East Worthing and Shoreham. As I think that I stated in the performance fund debate last week, star

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ratings do not affect the amount allocated to different authorities. In relation to the performance fund, star ratings affected the freedom and flexibility to spend that amount. They have not affected the children's fund this year but, as we discussed last week, next year they will determine authorities' flexibility when it comes to spending that fund and how that spending is monitored. The level of monitoring will be based on the quality of a council's services.

Under the star rating system, social services inspectors will monitor all zero-star and one-star councils for progress made, by judging that progress against the main objectives of the programme and by taking into account all the available evidence from indicators, inspections and twice-yearly monitoring. On the other hand, three-star councils will have full responsibility for development and approval of local schemes to address the quality protects priorities.

Tim Loughton: I agree that the star rating system does not affect the amount of money handed out. However, the Minister just said that a council with a zero star or one star will undergo a lot of monitoring, and that such authorities must jump through many hoops and comply with a great deal. When considering the distribution of the money, was any account taken of the extra costs incurred by authorities that do not have three stars and which have to comply with monitoring? That is the real question.

Jacqui Smith: We discussed the funding of monitoring and assessment in relation to the performance fund. The monitoring process for zero-star and one-star councils has been set out. Three-star councils earn the flexibility to have removed from them the dead hand of Government, as some Opposition Members see it. We are not talking about additional monitoring. As I said in my introductory remarks, we are reducing across the board the amount of monitoring and form filling needed for the management action plans, and for some of the other plans that we expect from local authorities.

Tim Loughton: That is not the same as what the Minister said earlier. The phrase that she used was ''lighter touch regulation'' or ''lighter touch monitoring''. That is different from full-scale monitoring, however scaled down it may be. If there is no differentiation between the level of monitoring and the level of compliance required for that monitoring, what is the difference between being a three-star authority and a zero-star authority?

Jacqui Smith: The hon. Gentleman misunderstands me. I argued, as I did last Thursday, that we are reducing bureaucracy and the planning burden for all authorities by reducing the number of plans that they must produce and, in this case, the need to produce management action plans. We also go further by differentiating monitoring and inspection on the basis of the quality of the authority. We expect there to be less monitoring and less explicit consideration of the outcomes for three-star authorities, because they have proved themselves more able to deliver objectives than have zero-star or one-star authorities. I believe that

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people understand the responsibility of the Government and the inspectorate to ensure that zero-star or one-star authorities deliver in a way that they had not proved themselves able to do, which was why they were rated zero-star and one-star.

Several hon. Members raised the issue of unaccompanied asylum-seeking children. Such children are not funded through this route, but by a special Home Office grant that is claimed for each unaccompanied asylum-seeking child. Therefore, the formula did not include a specific factor for asylum-seeking children, although the circular highlighted the issue and asked councils to set out in their MAPs how they ensured good-quality services for unaccompanied asylum-seeking children. The responsibility for asylum and, in this case, funding rests with the Home Office, but the welfare of asylum-seeking children often rests with social services departments. The assessment of those needs is based on the framework for the assessment of children.

Tim Loughton: On that point, I draw the Minister's attention again to the example of my local authority in West Sussex, and to the additional costs of about £1 million that I quoted. The full amount refunded through the Home Office is nowhere near the actual cost to local authorities for looking after children who arrive through Gatwick airport or elsewhere. The Home Office does not make up for that shortfall, so it must come out of the general pool of money under discussion. The money is not fully compensated.

Jacqui Smith: The hon. Gentleman has made his call for more funds from the Home Office, and I am sure that it has heard it.

Mr. Wilshire: Will the Minister give way?

Jacqui Smith: The hon. Gentleman spoke at some length, and we have only until 6 pm, but if he insists, I shall give way.

Mr. Wilshire: There are one or two points that I could have covered but did not. Instead of simply saying that authorities should take the matter up with the Home Office if it does not provide enough money, will the Minister reflect on the fact that the Home Office figure is based on a general assessment of the cost of keeping someone in care in this country and that it overlooks the fact that that costs far more in south-east England? It is therefore no surprise that we are underfunded.

Jacqui Smith: I did not say that authorities should take it up with the Home Office and that there is not enough money. I outlined where the money comes from to support unaccompanied asylum-seeking children. I hate to get party political in a Committee such as this, but when I hear representatives from Conservative-controlled county councils such as Kent bemoan the shortfall in their funding for vulnerable children, I have to ask why they have not put more pressure on Conservative Members of Parliament to vote for the increases in social services budgets. Conservative Members cannot stand—[Interruption.]

The Chairman: Order. Hon. Members must allow the Minister to speak.

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Jacqui Smith: Conservative Members cannot stand up and whinge at length about the money available for their authorities.

Tim Loughton: Yes we can.

Jacqui Smith: Well, they can, but not with any justification. When it comes to voting on the increases that my right hon. Friend the Chancellor has made available to social services, the Conservatives go through the ''No'' Lobby. To use the hon. Gentlemen's phraseology, that is disingenuous at best and political hypocrisy at worst.

I want to move on. There has been much discussion about the SSA formula, and the hon. Member for East Worthing and Shoreham seemed to get bogged down in the question of whether an authority was in inner or outer London. The SSA formula is not based the category of authority. It is more sophisticated, but to simplify the presentation, we present the authorities in that way. Several hon. Members asked about the evaluation of the management action plans. Two MAPs were formally sent back for resubmission, and the social services inspectorate asked some other authorities to fill in gaps and clarify what they meant. That is appropriate, because we are talking not about punishing local authorities, but about ensuring that they have plans in place to show that they will make the best use of the money before they spend it.

Hon. Members also asked about the co-ordination with other Government initiatives. The policy complements three other important programmes: sure start, the children's fund and Connexions. It is important that the delivery of those programmes is co-ordinated locally, and we have set up a quality protects reference group at Government level, with members from the key Government Departments including the Department for Education and Skills, the Treasury and the social exclusion unit, to co-ordinate the work. We will develop that further with the children's national service framework, which will bring together services for children and their development.

Several hon. Members also asked about the future of the grant and the issue of ring fencing. In my introduction, I outlined how we have listened to local government concerns that too much local authority money is ring-fenced. The hon. Member for Spelthorne (Mr. Wilshire) accused us of ring-fencing by stealth, but we have always said that the quality protects grant is ring-fenced. We are now saying that, from 2004, the quality protects money will not be ring-fenced, but included in mainstream budgets. That also meets the concerns expressed by the hon. Member for Cheadle.

There was some confusion from the hon. Member for East Worthing and Shoreham, who appeared to want to ask for the money to be ring-fenced and then approved of the call from the hon. Member for Spelthorne to end to ring fencing. We are confident that the purpose of ring fencing—to promote improvement and develop new services—has been delivered during the past five years, and it is now appropriate that the quality protects grant is included in all the other resources going to local authorities for

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expenditure on children, and that we mainstream that activity.

Tim Loughton: To clear up any confusion, I should point out that I am as much against ring fencing as my hon. Friend the Member for Spelthorne is. I want a guarantee from the Minister that when we reach 2004, the quality protects money will not simply fizzle out, but will be retained in a freer form with its full value. More children will be dealt with, because of adoption support services and everything else that must be funded as part of that. Will the Minister guarantee that the money will not be ring-fenced, but will be available to the local authorities that have set up the various services and that have an ongoing responsibility to an increasing number of children?

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