| Special Grant Report (No. 125) (HC No. 776) on the Preserved Rights and (No. 124) (HC No. 777) on the Delayed Discharges and (No. 123) (HC No. 778) on the Social Services (High Performers) (No. 2) Grant for 2003-04 |
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Mr. Burstow: I, too, welcome the Minister to his new role. I know from colleagues that he has served on several Statutory Instrument Committees. He comes across as a very thoughtful Minister who listens to the debate, which is to be welcomed. I hope that he continues to do so in our debates today on these three orders. The Minister referred to the fact that year 1 of the grant was based only on estimates. Will he say a little more about that, not least because it is hard to fathom how it could have been based simply on estimates, given that the Department for Work and Pensions was paying real money to real people? I presume that there were records, so the Department had the names and knew who the people were. Surely it was not just an estimate but a real revenue flow going to real people? Will the Minister explain how flow became an estimate? It would be useful to know precisely how many people local authorities reported to the Department as part of the submission process to enable the grants to be paid for 2003–04, because the change in the level of resources being allocated from year 1 to year 2 is fairly substantial—a reduction of more than £100 million. Put crudely, that appears to suggest that 11,000 fewer people will need the funding this year compared with last year. It would be useful to know whether that is what is happening, or whether there is a more general funding issue to be considered. Last year, when the grant was first paid, the Local Government Association and Members on both sides of the Committee welcomed the change and the abolition of preserved rates. However, the LGA expressed concerns about the level of the grant and the way in which it had been allocated throughout the country, which left some local authorities with a gap between what they were responsible for paying and what they received by way of grant to cover it. Will the current audit exercise deal with that gap, and will those figures be published so that we can objectively measure whether local authorities were crying wolf or whether they had a legitimate beef with the Department about the way in which the moneys were allocated last year? The Minister referred to the concern, which drove this reform, about the increasing number of people who had to make third-party top-ups to their fees to sustain their continuing residence in particular care homes? Has that change resulted in the ending of all those third-party top-ups or are they still taking place? Will the Department's audit take that into account? It is undoubtedly welcome that the Department has decided that this grant should come with no strings attached. My colleagues and I strongly believe that the Government should allow greater flexibility and freedom for local authorities, but we are worried about the change from one year to another. A substantial reduction in the grant may not produce any real freedom for local authorities, which are confronted with tough budget choices about how to spend their available resources. Column Number: 009 If, as happened last year, some local authorities receive an inadequate settlement under this preserved rights grant, it will not be enough to provide the necessary services to support those individuals, either in the care setting they were in last year or wherever they are now. We know from the recent increased coverage that the care sector still strongly believes that local authorities are failing to invest sufficiently in their sector to cover fee increases. That has some bearing on the this debate. Finally, will the grants be allocated purely on a crude head count or will the formula take into account the different levels of fees that local authorities will have to pay? We welcome the grant because it reflects a change in policy—the end of preserved rights—for which we argued. We are concerned that the so-called freedom that the measure will give to local authorities will turn out to be illusory once we consider the detail. Local authorities will still have a clear obligation to fund roughly the same number of people but with fewer resources to deliver the services.
5.7 pmMr. John Redwood (Wokingham): I find this a very odd proposal: it is a special grant for no special purpose. I can understand a special grant for a special purpose that has to be ring-fenced and properly audited. I can understand giving local authorities much more freedom by giving them a generous general settlement so that they can meet both their statutory obligations and their preferred policies, with money left over. This proposal is an odd hybrid. I share the current fashion on the Opposition Benches of believing that local authorities should have more rather than less freedom to spend both the money that is sent to them from this House and the money that they collect themselves. I see Labour Members smiling. They may also know that, when I was the Minister for Local Government and Inner Cities, I followed that view as far as I could under the general policy of the day. I have always held that view, as the record will confirm. Mr. Derek Foster (Bishop Auckland): Some of us were smiling because we remember the Baroness Thatcher saying all too clearly and as early as 1979 that she would devolve power to local government, yet right throughout her tenure, local government was centralised. Some of us have continued that criticism of some things that our own Government have been doing. I live for the day when a Government will do what they say they believe and devolve power to local government. Mr. Redwood: In this cross-party spirit of amity, I agree that some things were less than perfect, even under Baroness Thatcher. Since then, with the advent of this Government, things have got even worse for local government. This Government were elected on a sensible prospectus for local government freedom. I did a modest amount as Local Government Minister with that in mind, but limits were imposed by national and Treasury policy. It would have been welcome if the Government had followed through their rhetoric, but we see again today that they have not got there in Column Number: 010 the way that we would like, because the hybrid system does not do the job.In the few cases in which one can make a strong case for a special grant, one would be looking for something such as preserved rights—a national policy that gave rights to certain elderly and frail people. It was decided rightly that when policy changed to increase local devolution, those rights were preserved. One could make a case for a special grant in that transitional and special circumstance, but it would have to be ring-fenced and targeted so that the money had to be spent on the individual people. Alternatively, one could note that the Government have just conducted an expensive and long-winded review of local authority finance, told the House that they have all the right formulas and considerations in the general grant system and come to their judgment of Solomon on how much local authorities should get. As such, one could make a good case for saying that that funding should have been taken care of in that settlement. However, this Committee must meet today, some months after the financial year has begun, to cobble together some extra money, which we learn must be backdated because it did not get to the local authorities when they needed it from April onwards. For some unknown reason that the Minister has not explained to us—he will obviously try to dream up a reason now—his predecessor got himself into the position of having to have a special grant for no special purpose. We do not have audit or ring- fence controls on the grant, and we have not given enough money in the general settlement. Mr. Burstow: Will the right hon. Gentleman tell us whether, during his time in office, any special grant was considered and approved before the beginning of the financial year? Mr. Redwood: I do not recall such a difficult case as this, in which the money was for certain, clearly specified people. In such a case, I would have wanted to get the grant out as quickly as possible in the financial year to reassure those frail and elderly people with the preserved rights and to give local authorities the assurances that they need for budget planning. I hope that the Minister will explain a little of his predecessor's thinking. It is not fair to blame him for all the sins of the current Administration, as he is still fresh with the pleasures of new office and he can still blame his predecessor for almost everything that is going on in his part of the Department. He should enjoy that for as long as he can, because it will not be long before we hold him personally responsible for the whole lot under his control. Will he explain why the Government want a hybrid? Why can they not make up their mind whether to have genuine, auditable, ring-fenced, reassuring special grant for elderly and frail people or to trust local authorities and incorporate all the money into the general settlement? It is a large sum of money—£500 million—but why could it not be incorporated? Column Number: 011 Mr. Paul Stinchcombe (Wellingborough): Does the right hon. Gentleman agree that the sum is slightly bigger than the Minister anticipates? I notice that there is a typographical error at the top of the grant allocation columns, so that it is not pounds that are being allocated, but millions of pounds. If that were right, Birmingham would be getting £10 million million. Mr. Redwood: The hon. Gentleman is right. I was about to make that point, and I am delighted that he has got there already. I trust that some new proposal will be introduced to correct that problem, because there will undoubtedly be a few heart attacks in the Treasury. I dare say that the Minister will be hearing shortly from the Chancellor of the Exchequer. He is known to the Conservatives as the Chancellor of tax and waste, but it would be ludicrous to allocate that sum of money to local government. I am grateful to the hon. Member for Wellingborough (Mr. Stinchcombe) for enlightening the Committee. In conclusion, I hope that the Minister will give us some reassurances. First, will he confirm that no elderly person will be put under pressure to go into a cheaper home, and that there will not be an outbreak of cheapskating by local authorities trying to take advantage of their new freedom, because the Minister has opted for a grant with no protection? Secondly, will he assure us that in subsequent years the money will be made available earlier to local authorities, as they need the money from the beginning of the financial year to make their payments? Thirdly, will he explain how one can have a special grant with no special purpose?
5.14 pm
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| ©Parliamentary copyright 2003 | Prepared 14 July 2003 |
