Memorandum from Stockton-on-Tees Borough
Council (SPP 44)
1. STOCKTON-ON-TEES
BOROUGH COUNCIL
The Council was established as a Unitary Authority
in 1996, and is located in the North East of England within the
Tees Valley region.
Stockton-on-Tees is ranked as the 98th most
deprived council area out of 354 in England. The population
of the Borough is currently 190,200 and is projected to increase
to a total of 221,100 in 2031. Fourteen of the Boroughs thirty
wards (where 45% of the population reside), fall within the worst
20% of deprived wards nationally. Unemployment in the Borough
is 5.1%, compared to a national average of 3.8%.
The Council is a recipient of Supporting People
Grant but, due to the damping effects of the pace of change inherent
in the Supporting People Grant Distribution Formula, has been
consistently under-funded by grant compared to the needs in the
borough identified by the formula.
SUMMARY
— The council received Supporting People
grant for 2008-09 of £3.2 million against needs
identified through the formula of £8.7 million—a
funding gap of some £5.5 million in year, which is broadly
replicated year on year.(Table attached at Annex 1)
— Other authorities are being paid substantially
more than their needs identified by the formula.
— Whilst the formula allows for a redistribution
of funds, at the current rate of grant it will take us many years
to grow to the correct funding level (approximately 14 yrs)
and longer for others to reduce to their correct funding levels
(up to 25 years)
— In the meantime, we have Supporting People
needs in the borough that we are unable to address due to lack
of funds.
— There is concern that Supporting People
Grant will pass into Area Based Grant rules (general use, rather
than being earmarked for SP use) before re-distribution of funds
to match our needs.
— The council would hope for an acceleration
of grant to more closely match needs to allow achievement of our
Supporting People Strategy and improve the quality of life of
our most vulnerable people.
2. This position has arisen as follows. The
activities now grouped under "Supporting People" were
previously funded under a range of services—housing services,
benefits and social care and health services. Initial levels of
Supporting People Grant were determined by authorities completing
a costing exercise, based on existing service provision. Grant
levels so arrived at were known as "legacy funding".
The exercise was distorted by some authorities including services
formerly funded under other regimes and, or, inflating costs.
Robson Rhodes recognised in an independent report, for ODPM in
2004, that this led to artificially high levels of legacy funding
in some authorities due to their taking an "opportunistic"
approach, resulting in not all legacy funding being in line with
the intention and proper application of Supporting People objectives.
The Office of the Deputy Prime Minister sought to better meet
the needs of Supporting People authorities by introducing the
Supporting People Distribution Formula in 2006-07, which identified
required funding levels based on various indicators of need. The
formula showed that some authorities were greatly under-funded
by comparison to needs identified by the formula, while others
were greatly over-funded. The formula sought to address this through
re-distribution of funds, by reducing over-funded authorities
grant by approximately 5% per annum, while increasing under-funded
authorities grant by approximately 7% per annum, and leaving grant
levels for the majority of authorities unaffected. However, the
pace of change through this mechanism is so slow as to take up
to 14 years for under-funded authorities to reach funding
levels, and up to 24 years for over-funded authorities to
converge with their much lower needs as identified by the formula.
Over this period Stockton would miss out on some £40 million
in grant (Tables attached at Annex 2).
3. The Council has requested an acceleration
of funding, through the Department of Communities and Local Government,
to meet identified needs on a shorter timescale than the indicative
14 years and can utilise any extra funding as provided. Funding
at the levels identified by the formula would enhance the independence
and quality of life of vulnerable members of society that are
not best placed to help themselves, through allowing the council
to implement new areas of the Stockton Supporting People strategy
that currently cannot be funded. Stockton currently loses £2.7 million
of Revenue Support Grant though damping via redistribution of
grant, in contributing to the grant floor mechanism (and £9 million
in total over the current Comprehensive Spending Review period).
At the request of the Department of Communities
and Local Government the council provided information for Baroness
Andrews on 19 September 2008 on our approach to Supporting
People, in the form of answers to specific questions raised by
CLG and by provision of our Supporting People Strategy document.
4. Implications for Stockton of the removal
of the ringfence are as follows. Since we first raised this issue
with ODPM in February 2006 and latterly CLG, the level of
national Supporting People funding is being scaled back over the
period of 2008-09 to 2010-11 and the intention to transfer
Supporting People Grant into Area Based Grant has arisen. A pilot
scheme was recently undertaken involving 15 authorities,
including over-funded and under-funded authorities, which was
aimed at determining future arrangements for Supporting People.
None of the participating authorities was an extreme outlier under-funded
authority such as Stockton BC.In essence, Area Based Grant removes
ring-fencing rules relating to specific grants, allowing them
to be used as seen fit by the receiving authority, and the Council
is concerned that any surplus Supporting People funds (ie funds
above formula-identified needs) will be utilised by authorities
under wider ABG rules, and so will not be available for redistribution
to remedy the position of extreme outlier authorities such as
ourselves. Accordingly, we are concerned that without accelerated
redistribution before transfer of funding under Area Based Grant
rules, that the funding levels to meet Stockton's identified needs
will never be reached. We also fear that new funding arrangements
under Area Based Grant will be adopted without ever addressing
the funding gap between needs levels identified by the formula
and actual grant paid, so perpetuating under-funding in the borough
and frustrating achievement of the Council's Supporting People
Strategy, which would also frustrate the "Independence and
Opportunity: Our strategy for Supporting People" key theme
"keeping people that need services at the heart of the programme".
5. We would request that this is considered
under the opportunities offered by change in the funding mechanism
for innovation and improvement in housing support services. We
would hope that the current funding gap between needs levels identified
by the formula and grant paid could be resolved before any move
to ABG and, or, the end of the formula. (As we understand the
future of the Supporting People Distribution Formula is also uncertain
beyond the current Comprehensive Spending Review period, as advised
by civil servants and minuted at a meeting of the Supporting People
Regional Improvement Group on 22 May 2008). The opportunity
should be taken to address the ringfenced grant shortfall through
redistribution before ABG conditions become applicable as not
to do so increases the prospect of funds earmarked for the national
Supporting People initiative leaching away into other areas of
expenditure, while Supporting People strategies, which would clearly
improve support services, remain un-addressed through a shortage
of funds in some authorities. If this is not achievable, we would
request that this is addressed as part of the Comprehensive Spending
Review referred to in the 2009 Budget.
It would be unsatisfactory if the needs of extreme
outlier authorities identified by SPDF remained seriously under-funded
before changing funding regimes as the potential of Supporting
People strategies would not be realised and the opportunity to
enhance quality of lives would be foregone, to the continuing
detriment of our vulnerable people.
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