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Memorandum
from (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 Stockton-on-Tees
is ranked as the 98th most deprived council area
out of 354 in 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 2008/9 of £3.2M against needs identified through the formula of £8.7M. - a funding gap of some £5.5M 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 2006/7, 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
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. 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
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.
Annex 1
2008/2009
i) Grant "shortfall" £ 5526148
ii) Change 194% - refers to un-damped grant compared to the previous years actual grant .
2009/2010
i) Grant "shortfall" £5191115
ii) Change 171% - refers to un-damped grant compared to the previous years actual grant.
2010/11
i) Grant "shortfall" £4,806,142
ii) Change 149% - refers to un-damped grant compared to the previous years actual grant. Annex 2 The table below shows the number of years and funds lost, for each of the six local authorities with the greatest grant and needs gap, until they reach their undamped grant level, based on current information:
Against this background of excessive needs and resources gaps and slow pace of change, there are authorities at the opposite end of the scale that have historically been greatly over-funded. In the current formula the maximum decrease is 5%. Under current arrangements it may take up to 26 years for funding to reduce to the formula level i.e. almost twice as long for funding to reduce formula levels, than for funding to increase to formula levels.
Over that time, authorities at the over-funding extreme of the formula could receive surplus funds of up to £446 million (with one authority alone receiving £191million) in excess of their identified needs
May 2009
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