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4.17 pm

Baroness Andrews: My Lords, I am grateful for the contribution of both noble Baronesses and will try to answer as many questions as possible.

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I reiterate what I said at the beginning of the Statement: we are committed to stable and predictable funding. A 39 per cent increase in real terms over the past 10 years is a serious undertaking, which has had to drive the many improvements that the noble Baroness, Lady Scott, mentioned. I pay tribute to the hard work of local authorities. We have seen that they have achieved efficiencies and improved the quality of services.

I start with the issues raised by the noble Baroness, Lady Hanham. The Government are fully committed to meeting the net additional costs of new burdens. For example, over the past two years we have put in an extra £250 million for concessionary fares. We have said that licensing fees will be set at a level to recover the justifiable costs of local authority functions under the Licensing Act 2003. We have established an independent fees panel to consider the legitimate costs; the panel will report to the Secretary of State shortly, and we would not want to pre-empt that. The DTI is fully committed to funding the additional costs of the WEEE directive and has already transferred an additional £12.3 million into the 2006-07 RSG settlement. We are working with the LGA to agree what further costs are being incurred and whether funding beyond this period is required before full producer responsibility is implemented.

The noble Baroness mentioned smoke-free places. Health Ministers have made clear their commitment to ensuring that authorities are funded for their enforcement role. The Department of Health is discussing costs with the LGA and reasserting those commitments. We will be making an announcement on that shortly. The noble Baroness talked about increases of 5 per cent in council tax. One of the virtues of a two-year settlement is that one can look back. Indeed, not every local authority raised their council tax by 5 per cent last year and we do not expect that to happen this year.

The noble Baroness mentioned the possibility that Northern Ireland will be used as a precedent for whatever changes Sir Michael Lyons proposes in his report. I have said in this House at least twice that Northern Ireland does not offer us a precedent, because it is starting from a different base and has a different system.

The noble Baroness then asked about pensioners. I take her point about vulnerable people and council tax. One of the things that she and I agree on is that we must try to make sure that the 40 per cent of pensioners who do not claim their council tax benefit do so. That is why we are putting great emphasis on automaticity of benefit, which is where we would like to be. In the mean time, the Pension Service is doing a great deal of work to make sure that people are picked up, but it has some way to go. In that context, although I cannot answer her question about individual bills, I can say that the Government are spending £10.5 billion more on pensioners in 2006-07 than we would have done if we had stuck with the 1997 policies.

The noble Baroness, Lady Hanham, raised the question of the Olympics and the role of the London council tax payer. As she will know, the Government

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and the mayor have agreed that what the London council tax payer will contribute to the Games can be changed only with the agreement of the mayor and the London Assembly. That is where we stand on that. Discussions to determine how additional costs are to be funded are ongoing, and the Secretary of State for Culture, Media and Sport will report to Parliament when a resolution has been reached.

The noble Baroness asked about the publication of the Lyons report. Lyons is and always has been central to our ambition for the improvement of local authority services. There is no question but that what Sir Michael comes up with will be fed into CSR07. The review is a report to Ministers; Sir Michael will report by the end of the year and, at that point, Ministers will take the decision about publication.

The noble Baroness also asked about the landfill tax. I am afraid that I do not have that figure in my enormous briefing, but I shall write to her about it.

The noble Baroness concluded by talking about the shift into social care. There is no question but that this is an area where we are fully aware of the pressures of demography. In partnership with the Local Government Association, we have set up three area working parties to look into the demands and pressures on the system and into how, in the context of CSR07, we can prepare to develop our polices in respect of them. As she said, we will have an opportunity next week to discuss that at some length.

The noble Baroness, Lady Scott of Needham Market, started by talking about the LGA document Meeting the Challenges Ahead. We are very pleased that the LGA is engaged in the process of making its case for CSR07. There is no doubt that we are having a serious dialogue with the Local Government Association; we have done so with local authorities through the Central and Local Government Information Partnership for many years. Three areas of work are being developed at the moment: social care, waste and pay. That is how we want to take the process forward. There is no question but that it is a serious dialogue and that the 39 per cent cash figure that we often discuss in this House is real. I know that we reiterate it, but that does not make it any less real.

We are a bit puzzled by the 14 per cent figure, because it is difficult to compare the situation in 1996 with now—in 1996, we did not have a hypothecated education tax or a dedicated schools budget, for example. But the noble Baroness is wrong to say that there is no extra money going into different services. For example, we made specific grants totalling £1.6 billion for adult social care. Huge amounts of money are going in through specific grants, and the Local Government Association has not mentioned that in its paper. There are some other peculiarities about the way in which some of the assessments have been made.

I can tell the noble Baroness that no decisions have been taken on capping principles yet. A crude universal capping is certainly not our policy. But, as I say, no decisions on principles have been taken.

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The noble Baroness referred to the pressures on social services. Social care grants have increased by 2.7 per cent this year. In our discussions with local authorities, this is a serious area. It is extremely important that we are sensible and straight about what we understand are the pressures in the system and how they can best be met. The local government White Paper, with the new local area agreements, represents a way forward in effective joint working, which can bring all sorts of energies and synergies between health and social services. That is our ambition on that.

On landfill, the Local Government Association made a strong case on waste, in that it is clearly a pressure in the system. The amount of household waste over the past couple of years has decreased. Enormous strides have been made in recycling by local authorities. We are conscious that this is a challenge, and we want to work with local authorities to help to meet that challenge in the future.

I was glad that the noble Baroness, Lady Scott, referred to improvement targets. It is important to put on record the extraordinary things that local authorities have achieved over the past few years. We commend them and support them in that.

4.26 pm

Lord Smith of Leigh: My Lords, I declare an interest as the leader of a local council. I thank my noble friend for the Statement she repeated. As she said, there are no surprises in it; it is based very much on the Statement given last year. Is she aware that stability of funding has both advantages and disadvantages? The advantage is in predictability. I suppose that in some ways we had predictability under the previous Government’s financial settlements—we could always predict we would have less money year on year and would have to make significant cuts in spending.

The disadvantages are that the provisions cannot take account of the pressures that noble Lords have already stated. Many of these pressures are demand-led. They are not based on simply wanting to grow services. For example, in my own authority I am looking at the budget monetary statement for a meeting this week. Since the beginning of term we have placed two additional children in looked-after care, which will cost my authority £130,000 just in the current year, and costs of over £100,000 per pupil per year—significant amounts of money. We require this mature debate. It should be the beginning of a debate between local authorities and government on how we are going to cope with the pressures on us so that we can provide the services that people need.

On the consultation, I am sure that my noble friend is aware that we also need to be consulted about the damping mechanism. Last year we assessed the needs of local authorities and then proceeded to damp that down because we did not want significant movements of money. I hope that we can also get that into the debate.

Baroness Andrews: My Lords, I am very grateful to my noble friend for that contribution. He speaks with enormous experience. He is right; you cannot predict

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in a forward-looking settlement whether you are going to have two extra children or three extra adults with learning disabilities, or whatever it is. It is a great credit to the medical profession that such young people are living longer and so on, but we have to base our estimates on the best information we have. That is why we have used the 2003 projections, underpinned by notions of trends based on the 2004 figures. In the next settlement we will have an opportunity to bring those figures up to date and to look at the formula. On that basis the response to stable funding is more positive and the benefits outweigh the difficulties that it may seem to create sometimes.

Lord Rix: My Lords, the Minister touched on the question of social care in her response. According to the Local Government Association, 80 per cent of local authorities have tightened their eligibility criteria, and 70 per cent will now provide services only for those who are judged to have either critical or substantial need. Therefore, people with a learning disability with parents—many of whom are over 70 years of age—and those with a moderate learning disability will miss out. Mencap has had letters from all over the country from parents expressing their grave concern. Can the Minister hazard an educated guess on how much extra in percentage terms will go into social care to meet the extra demand resulting from demographic changes?

Baroness Andrews: My Lords, as I said, all local authorities with social care responsibilities will get an increase this year of 2.7 per cent. Within that, we have programmes such as Supporting People, which heavily target vulnerable people, including people with learning disability. As the noble Lord has raised a specific point, I would prefer to write to him to give him additional detail.

Viscount Tenby: My Lords, perhaps I could tease out a little more from the Minister on the subject raised by my noble friend Lord Rix. As it happens, we are having Second Reading of the Mental Health Bill this afternoon. Of course, the people involved in those services are supported by the NHS; but the people to whom my noble friend specifically referred, those with learning disabilities, are not. They are funded either in residential homes through county councils or in supported living. Even the most efficient county councils are now completely strapped for cash, so it is very difficult to get adequate support for all those vulnerable people. Would the Minister kindly take that point on board when she discusses the matter with her friends in the Government?

Baroness Andrews: Yes, I will, my Lords. It is worth reflecting that the changes in the formula that we introduced to bring the statistical base up to date revealed huge changes in the population—the sort of people and families to whom both noble Lords referred. We introduced the damping mechanism, to use a technicality, to ensure that there were not huge and unfair variations in what was available. As I said, we will have an opportunity to consider that formula flow again. We are very conscious that this is a

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challenge to local authorities because the needs of those young people are expensive but deserve to be met.

Lord Greaves: My Lords, last year, the Government introduced a system throughout the country in which people over 60 got free bus travel within their districts or boroughs, which was obviously very welcome. The additional money that that cost district or borough councils was, as I understand it, provided through the revenue support grant. Earlier this year, the Chancellor announced that the scheme would be extended to the whole of England, which will obviously cost more money.

Has that been taken account of in the revenue support grant settlement? How does that fit with the Government’s recent announcement that they have not yet decided whether the new system will be administered nationally or locally and, if it is administered locally, whether it will be funded nationally or locally? Does the settlement as set out here include the extra costs for passes for people over 60, which will now be usable across the whole country rather than simply in their own districts?

Baroness Andrews: Yes, my Lords, to the best of my understanding. We have made available a further £250 million to fund the extension of the scheme that we announced recently. No decisions have yet been taken on how it will be delivered. The Department for Transport has set up a working group with stakeholders to consider the best framework, but it is for local authorities to come forward with their best and most affordable proposals to ensure that the scheme works, consistent with their responsibilities, and reaches the people whom we want it to reach.

Baroness Carnegy of Lour: My Lords, that was a very interesting reply. Can the Minister explain how, if the Government have not decided how this wonderful scheme is to be delivered, they know how much it will cost?

Baroness Andrews: We know, my Lords, because it is a national scheme. The previous scheme involved local buses in local areas providing concessionary schemes. This is a national scheme, which means that people can move out of areas using local buses. It is actually quite complicated. The best judgment was that it was important to get everyone from across the country around the table to see how this would work best in practice. It is not that we are trying to delay the scheme: we have a very strict timetable for it.

Baroness Byford: My Lords, will the Minister tell us a little more about the consultation? She said quite rightly that there is further consultation on this. I want to focus on two issues. The first, to which other noble Lords have referred, is the whole question of the population growing older. Obviously, more care will be needed in the longer term, unless we are lucky enough to live very healthy lives and not need that sort of care. My first question is therefore whether the responsibilities will fall to the social services rather than to the health service. Clearly, in the past, quite a lot of elderly people have had longer stays in hospital.

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If the responsibilities will fall to the social services, will the money that would have gone to the hospitals be freed up for local government? What happens to that money?

My second question relates to the provision of services in rural areas. The Minister will know very well that I regularly ask this question in the House. In very sparsely populated rural areas, it costs a lot more money to deliver services for children, old people or whomever. I have a particular example. Schools in inner cities receive more money per child to educate each child, but a county such as Lincolnshire, which has an enormous influx of migrant workers who are there permanently, clearly has needs that will be nearly as great as those of some inner-city schools as a result of having many more cultures to teach across the board. I wonder whether that will also be part of the equation. My husband is a governor of an inner-city school in Leicester, which receives more money per capita because of its multi-cultural needs and the resulting extra demands on teaching staff. I am sorry that those examples are slightly specific, but I would be grateful for clarification.

Baroness Andrews: My Lords, we have no intention of robbing the NHS budget to pay for social care because that budget has a very important job to do. It obviously works alongside the social care budget. One thinks, for example, of the delayed discharge of patients and the number of people leaving hospital and entering residential or intermediate care, which is a great improvement on recent years, and of the money that social care puts into supporting people in their own homes. These are separate budgets. The important point to make is that we understand the full implications of an ageing society and the numbers of those over 85, not only those over 65. We plan properly not only to meet our acute needs, but to put programmes in place that will prevent people becoming acutely ill and having to go into hospital. These things must be seen as seamless, which is one reason why, in the local government White Paper, we put such emphasis on better and stronger local area agreements. Through such agreements, partners can place statutory duties on local strategic partnerships so that they can work together effectively.

On the rural issue, the grant distribution formula takes relative circumstances into account when calculating a grant, so sparsity—rural proofing—is taken into account in that way. As I said earlier, however, there will be an opportunity in the coming year for a further review of that formula before we make the next three-year settlement. SPARSE, the group that represents the most sparsely populated rural authorities, is very welcome to contribute to that.

On the point about the children of migrant workers coming into schools, that is a matter for each school’s dedicated grant. One reason for having a ring-fenced grant for schools is to enable them to have money that takes their circumstances into account.

Baroness Maddock: My Lords, I apologise for not being here at the beginning of the Statement. I declare an interest as a county councillor in Northumberland, which is also a very sparsely populated area. The

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Minister has said that there was a 2.7 per cent increase in the social care budget. I concur with the noble Baroness, Lady Byford, that that is a real problem in rural areas. The amount of money paid to people who give social care does not compensate for the large distances that some of them have to travel. I hope that that will be looked at very carefully in the review. Sometimes it is almost impossible to get people to do the job in rural areas, so we certainly need more incentive.

The noble Baroness talked about the 2.7 per cent increase in the social care grant. She also talked about the Supporting People programme. I had assumed that these were different budgets. If they are not, some of that increase is for the Supporting People budget. At paragraph 19 of the Statement, the Minister in another place said that he was,

Is the noble Baroness satisfied that these savings in careful management are not made through not providing the same level of care as before? My mother lives in sheltered accommodation. Since Supporting People, her level of care is nothing like it was previously. Although this is not necessarily to do with the Statement, I am concerned that people are now so risk-averse that wardens are being told that they cannot give some of the services which were provided for elderly people in sheltered accommodation because we are terrified of them being sued. That is also an important point.

Baroness Andrews: My Lords, a large number of issues and elements go into formulas used for assessing the needs of older people, not just age and so on. For example, recently we surveyed 17 local authorities, some of which I am sure were rural authorities, where transport costs are more expensive and where it is always more difficult to recruit people.

Supporting People is a separate budget, and I am sorry to have confused that. Following consultation on Supporting People, we want to take forward how we can distribute future funding based on need. We are still working through how we can do that. The specific instance that the noble Baroness raised about the failure of Supporting People is of interest. Perhaps she will write to me, because I am interested in the relationship between the various services that clearly are supposed to be providing a seamless service.

Lord Greaves: My Lords, I am sorry that I forgot to remind the House that I am an elected councillor.

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