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Baroness Gardner of Parkes: I shall not comment on the wording of the amendment; I intend to speak on the principle raised by the noble Lord. On many occasions when Bills have been discussed in this House I have spoken on the issue of how the burden falls by chance on one authority or another. It is sometimes related to whichever ethnic minority has friends or relatives living in a certain place. As the Committee knows, Earls Court was originally "Little Poland" and then "Kangaroo Valley" and so on. It seems that when the first person arrives, everyone else follows. I remember the noble Lord, Lord Hylton, supporting me when I said that it was almost a national responsibility.
As I understand it, at present unaccompanied children are the greatest expense for local authorities. The education and social service costs and special counselling are quite a worry. I support the point made by the noble Lord, Lord McIntosh, that it is important to discuss the issue with local authorities and agree on a basis which is fair. It is impossible for people to set a council tax rate without knowing what new burden might fall on them.
Lord Jenkin of Roding: I wish to express my thanks and those of other noble Lords to my honourable friend Mr. Curry who met some of us this morning to discuss the issue. My noble friend Lady Gardner mentioned Kangaroo Valley. It reminds me of another more historical migration. People often ask why so many Irishmen are to be found in the London area of Kentish Town round to Kilburn. The answer is that it was as far as they could carry a suitcase from Euston or Paddington. That is where they stopped.
There are concentrations of people in areas and the noble Lord, Lord McIntosh, is right that costs fall on relatively few local authorities quite disproportionately. A number of consequences flow from that and Mr. Curry was helpful in explaining and discussing the problems. The matter cannot be dealt with by one-off payments. The collective memory of Whitehall remains hung up on the jumbo jet full of refugees from Skopje in the former Yugoslavia. It arrived at Stansted Airport some years ago and the leader of the Uttlesford District Council said firmly to Her Majesty's Government that his council could do absolutely nothing. It is a small rural district and it could not look after the people without help. That was an extremely effective tactic and the council received a substantial one-off special grant for that purpose.
In London we are dealing with a regular process which has gone on year after year and the result of the legislation will be to impose additional costs on the local authority. The first point I make to my noble friend is that special grants are not the right way to deal with the problem. They must be specific grants which form a regular part of the system whereby central government support the expenses of local government. Happily, my noble and right honourable friends have recognised that in relation to the Children Act. The announcement by my right honourable friend Mr. Lilley in January has already recognised that there is to be a specific grant to local authorities which incur costs under the Children Act.
The trouble is that, as so far drawn up, that proposal does not give a great deal of help. The grant is cash-limited to £3 million, while the local authorities believe that their expenditure (I do not differ from the figure given by the noble Lord, Lord McIntosh) may well amount to £50 million or more. Secondly, the grant is subject to a very substantial threshold.
I should perhaps declare an interest, along with the noble Lord, Lord Graham of Edmonton. We are joint presidents of the Association of London Government. That body has estimated that for the local authorities in London that are specifically affected, that may mean a
threshold of £1 million of expenditure before the specific grant comes in. As was said, only 80 per cent. of the expenditure above that threshold will be reimbursed. So, while one must not be ungrateful for small mercies, it is perfectly fair to point out to my noble friends that this a very small mercy indeed.The central point, made quite forcefully by my noble friend Lady Gardner of Parkes, is that this is a matter of national policy. I spoke at Second Reading, and I support the major provisions of the Bill. I was very interested in the remarks made a moment ago by the noble Earl, Lord Russell, in relation to his party's view on the matter; we shall no doubt see that carefully spelt out in the party's manifesto when it comes to fight the election, and I wish it good luck. As I said, I support the Bill. But as a result of national policy, additional expenditure will be faced by local authorities. It will be incurred as a result of the Children Act, the Housing Act and the National Health Service and Community Care Act; and other provisions may also be relevant. That being the case, it is up to national government to use part of the savings that they are making under the change in social security legislation to see that disproportionate costs--to use the words of the noble Lord, Lord McIntosh, whose misgivings I share--do not fall onto the shoulders of local council taxpayers in relatively few local authority areas.
It is important to have some of these points on the record. Mr. Curry told us this morning that the Government are now ready to come forward with specific proposals, but they wish to discuss them with the local authorities first. I am advised that appointments are being sought for next week so that the local authority associations can meet Ministers. We must understand the difficulties that Ministers have had in this respect. After all, this is a policy being promoted, perfectly properly, by the Home Office and the Department of Social Security. The additional costs will fall on the Department of the Environment in relation to housing, and on the Department of Health under the National Health Service and Community Care Bill which will be a consideration in relation to its public expenditure allocation. So I can well understand that my right honourable friend the Chief Secretary has had quite a difficult job to try to juggle, as it were, all the different departmental budgets. It may well mean switching some costs from one department to another.
If the figure of £50 million is anywhere near right--and it may well be of that sort of order; indeed, the first few months of the effect of the social security regulations suggest that that is not in any way an exaggeration--and the Department of Social Security is saving £200 million (the figure given to us), the Government ought to be pretty pleased with their £150 million and not leave any part of the balance to fall on the shoulders of local council taxpayers in those relatively few London authorities and possibly one or two outside London, in Kent and so on, to bear the burden.
The thresholds should therefore be purely nominal. The figure of 80 per cent. should in fact be 100 per cent.; or if insisted that some amount should fall, it should be a very small percentage indeed. I hope that
when my noble friends discuss these issues with the local authorities next week, they will listen very carefully to what the local authorities have to say. Those who are in full support of the policy would find it very difficult to defend higher council tax payments in a few boroughs such as Hammersmith and Fulham, Hounslow, Camden, and, I am told, Croydon. The noble Lord, Lord McIntosh, mentions Haringey. I am told that that is not one of the "big ones" at the moment, but it could well be. It would be difficult to defend the idea that they should pay extra as a result of what is essentially a piece of national policy brought to bear through this legislation.My noble friend will not be free to respond very fully this evening. However, I hope that the concerns expressed in all parts of the Committee will impress upon my noble friends and their right honourable friends the need to meet this requirement fully and in that way to win the support of people in local authority areas for the overall policy of the Bill.
6.45 p.m.
Lord Avebury: The noble Lord, Lord Jenkin, underlined how ill considered this legislation is. He remarked on the figure of £50 million, which is not even in the Explanatory and Financial Memorandum. He talked of discussions to be held with the local authority associations next week to try to resolve the question as to what is to be done as between the Government and the local authorities. It is extraordinary that we are three-quarters of the way through the Committee stage and we still do not know the answers to those questions. Nor can the Minister, who replied to the previous amendment but one, tell us exactly what happened at every stage in the process. He says these are choices that have to made on the spot. The particular example we were then discussing was of an asylum applicant family that had been successful in gaining emergency housing under the homeless provisions but was to be deprived of entitlement on the day when the Secretary of State made the decision that the application was not well founded. From that point onwards until the date of the appeal, the applicant was not entitled to any benefit.
The Minister said that this question would be dependent on the choice of the parties. First, he said that the asylum applicant himself had a role to play in the decision--as if someone with absolutely no resources was in a position to make any choice whatsoever. However, as the noble Lord, Lord Jenkin, just underlined, the local authority will have to make some very important choices. As I understand it, it has an option of allowing the family to remain in the accommodation, notwithstanding the fact that they would be disentitled under the homeless provisions; in some way, extra-statutorily, the local authority may allow the family to remain in the accommodation and to continue to pay for the cost of the accommodation so as not to have to incur the additional, or larger, costs of taking the children into care or fostering them with another family. The Minister assured the Committee that, if it is decided to take the children into care, the
local authority will be reimbursed as to 80 per cent. of the cost (not of the additional cost, but the total cost) that will be incurred thereby.
That raises a further question; namely, local authorities then have an incentive to have such children taken into care or have them fostered, since they will then receive 80 per cent. of the money back from the Government; whereas, if they continue to leave such families in homeless accommodation, they will not receive the 80 per cent. Perhaps the Minister will correct me if I am wrong. It is important to have this spelt out. As I say, the fact that so many of these matters have to be dealt with across the Floor of the House by means of assurances from the Minister indicates that the Bill should not have come before us in this form. These points should have been properly spelt out and we should have been able to know exactly what the financial effects were before we agreed to this clause.
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