Select Committee on Economic Affairs Minutes of Evidence


Examination of Witnesses (Questions 439 - 459)

TUESDAY 11 DECEMBER 2007

Sir Simon Milton, Councillor Colin Barrow, Mr Andrew Blake-Herbert, Mr Mick Gallagher and Ms Tracy Turner

  Q439  Chairman: Good afternoon, welcome to this Committee and to our inquiry on the economic impacts of immigration. I wonder if I could start by reminding you and reminding ourselves that we need to speak up, speak clearly and relatively slowly, and then we get an accurate record of what everybody has said. Also, I wonder if you could briefly introduce yourselves so that we have that on the record, as to who has come to give evidence. I do not know whether you want to make an opening statement or whether we can go straight on with the questions. If I may say so, it is not necessary that all five of you answer every question, unless you feel it necessary; we want to get the flavour of what you have got to say in the most effective way we can. Would you like to quickly introduce yourselves and then we will get on with the questions.

  Mr Blake-Herbert: I am Andrew Blake-Herbert. I am the Director of Finance and Property from Slough Borough Council.

  Councillor Barrow: I am Colin Barrow, Deputy Leader of Westminster City Council.

  Sir Simon Milton: I am Simon Milton. I am Chairman of the Local Government Association. I also happen to be leader of Westminster City Council, but I will do my best to let my colleague field the Westminster questions.

  Ms Turner: I am Tracy Turner. I am Director for Communities at Uttlesford District Council, but I am here representing the SOLACE (Society of Local Authority Chief Executives and Senior Managers) Migrant Workers Group.

  Mr Gallagher: I am Mick Gallagher, Chief Executive of Boston Borough Council.

  Q440  Chairman: Fine. A number of London councils have said that they have lost out unfairly in financial terms, due to the recent revisions by the Office of National Statistics to estimates of the number of migrants in their areas. Can you say what is wrong with these revised estimates and whether any councils have benefited rather than suffered from them?

  Sir Simon Milton: The overall view in London is that London's population has been under-estimated. The population estimates were reduced by the Office of National Statistics by 110,000 overall, which does not accord with the views of London councils and what they are experiencing on the ground. The evidence is variable across the capital city and those who have certainly recorded adverse impacts include Waltham Forest, Barking, Dagenham, Newham, Croydon, Westminster (which you will hear about), but some councils have actually recorded increases and gains from the revisions, and those include Hounslow, Lewisham, Sutton and Southwark. However, because of changes in the formula grant system which the Government has just announced, all of those population gains by those boroughs have been eradicated because they are all going to be on the funding floor for other reasons. So they have made no gain at all from the recognition that their population has increased.

  Councillor Barrow: The evidence of the Office of National Statistics is being questioned by a whole range of voices—the Audit Commission, the Statistics Commission, the Governor of the Bank of England, all suggesting that these estimates significantly under-estimate the scale of international migration particularly. I can talk at length about the problems with individual survey mechanisms, but suffice it to say at this stage that there are two classes of people who live in quite substantial numbers in Westminster whom the government statistics either do not recognise for the purposes of funding or do not recognise at all. Those are the people who say to the nice lady with the clipboard that they do not intend to stay here for longer than 12 months; those people are not counted for the purposes of funding local authorities. The other group of people, much more difficult to measure, are people who are illegal immigrants, and we know from Home Office information that there are very substantial numbers of those. It is Westminster's experience that very substantial numbers of those people are attracted to a major centre of population with a very substantial grey and indeed black economy in which they can work and live in some way. So we believe that these particular egregious errors in the counting have a disproportionate impact on London, have a disproportionate impact on large centres of population and have a disproportionate impact on Westminster in particular.

  Q441  Chairman: Can I just follow that up? Are those classes of people who are not counted the explanation as to why the numbers are different, or are they over and above the numbers?

  Sir Simon Milton: Over and above.

  Q442  Chairman: They are over and above the numbers that are different.

  Councillor Barrow: To assist you, the numbers in question in Westminster, we believe—because we commissioned independent research to look at this—are 13,000 people staying for less than 12 months and 11,000 illegal immigrants. This is an independent ethnographic survey; about 10% of Westminster's population.

  Q443  Chairman: That would be over and above your share of the 100,000.

  Councillor Barrow: Yes.

  Q444  Chairman: How much is your share of the 100,000?

  Councillor Barrow: We cannot be precise about that, but it could easily be 10%.

  Q445  Lord Skidelsky: What are the costs of the illegal, the anonymous, the people who you do not know are there, for which an additional grant might be justified?

  Councillor Barrow: There is one obvious category, which is that they all generate waste; it is impossible to live in any area without generating a proportionate part of that. 13% of the students in our schools are definitely refugees, they are in the refugee category, so while those are not in the numbers that I have just referred to because they are, by the nature of counting, legal, there will be a correlation between the number of refugees coming to this part of the world and the number of short term and illegal migrants coming to this part of the world. We do not have responsibility for housing, except in extreme circumstances such as those of asylum seekers, where there is a substantial funding gap. Of course, the impact on the rest of the public sector is much greater than it is on local authorities—these people use A&E, for example, or come to the attention of the police in the appropriate proportions.

  Sir Simon Milton: Local authority budgets are fixed and so we have to manage with what we have got, so we do not have figures to answer your question where I can give you a precise breakdown of the costs because we just absorb those costs and spread what we have much more thinly. There is no doubt that there is additional cost and if additional money was there it would go towards making services better for everybody.

  Q446  Lord Lawson of Blaby: Whilst we are on the subject of statistics it is widely agreed by everybody that the statistics are a complete mess. The Office of National Statistics, as you know, told us that the local councils actually have quite a lot of useful immigration data which, if it could be put together, would help to get an accurate statistical picture, but because different councils use different methods there is nothing they can do about it. First of all, do you have this extra information? Is the ONS right that they cannot take it on board because of the different methods you use and, if they are right about that, what are you, and in particular what is the Local Government Association, doing to put all the statistics on a comparable basis so that they can be made use of?

  Sir Simon Milton: That was a slightly disingenuous answer you had, if I may say so. It is certainly true that councils hold administrative data such as electoral registers; however, the reason councils invest in finding more information for their localities is in order to plan services for their localities more effectively, not to be part of some national count. If that were to be required we would clearly have to do that differently, but actually the wealth of administrative data, which is what we are talking about, is not necessarily held at the local level but at the national level—I am talking about things like the national pupils census, national insurance number registrations, housing benefit records. All of these things are held nationally: there are currently, I am told, legal impediments to the information being shared more widely, but if you were to aggregate the national and the local administrative data, you would start to build a much richer picture of what was going on at a local level. None of those administrative records are in and of themselves adequate proxies for population count, but aggregated together, as I say, you do get a clearer picture which allows you to cross-reference against the ONS national counts and to see whether they make sense or not.

  Mr Blake-Herbert: As an example for one of those, the Office for National Statistics refuse to use child benefit data because they say it is an under-count of the number of children living in an area. But actually the Office for National Statistics currently estimate there are less children living in Slough than the number of children receiving child benefit in Slough. So if some of those national data sources could be used as part of a quality assurance exercise around figures, that would certainly give local authorities far more feeling in terms of how accurate and how robust the figures were.

  Q447  Lord MacGregor of Pulham Market: The Local Government Association recently urged the Government to set up a £250 million a year migration contingency fund to deal with the effects of the pressures on public services. Presumably that was based on some idea of cost to the local authorities? Is that correct and, if not, what was it based on? Could I also ask you to say whether there is any difference between rural and urban areas? It is striking on the map that was provided by the Local Government Association that in East Anglia and Lincolnshire there is a very high proportion of immigrants, and I would be interested in Mr Gallagher's response on that last part.

  Sir Simon Milton: The £250 million was based on an estimate by local authorities, if you like, a best but conservative guess as to the additional cost. We do not have an accurate figure, for the reason I explained to Lord Skidelsky, which is that we simply have to manage the demand within our fixed budgets and we do not ask people their nationality; we actually record people's ethnicity for the purposes of ensuring fairness not their nationality. We therefore do not have that information. The figure was actually 1% of the revenue support grant that comes to local authorities, so our view was that our population was certainly undercounted by 1%, and that would be a fair sum of money to put forward as a fund which councils that were experiencing particular pressures which were not captured by the figures could make bids for. The problem with statistics is two-fold. It is both the quantum—are we measuring accurately how many people are coming into the country?—and that is something you could probably do something about. But more specifically following that, it is the distribution—where do they go once they are here? You will hear from Boston about the huge surge of population they have had which is not being measured effectively but which I think would make them justified in saying that they need some additional grant to meet their needs.

  Q448  Lord MacGregor of Pulham Market: Your map gives some indication of where the difficulty is.

  Sir Simon Milton: It does, yes.

  Mr Gallagher: To follow that point up, we have experienced what we consider to be a significant growth that has been completely under-represented. Going back to the statistics issue, we have tried to use some reliable statistical indicators to measure the growth and we have used GP registrations, for example, which we feel is a particularly reliable indicator because most people register with a new GP when they settle in a community. Our latest figures on GP representations are 79,000 as opposed to an officially recorded population total of 58,300 in Boston, so we could be up to 20,000 more people living and working in Boston as a result of the growth. Another reliable indicator that we have been using as well is to look at the numbers of children in schools, particularly children speaking English as a second language, and in some of our primary schools the figures are as high as 50% of children with English as a second language, a lot average around about 35%, and they are now consistent statistics over a period of time. That suggests that, although some people move on, there is a hard core of probably 15,000 to 20,000 people in Boston now. To echo what Sir Simon has said, to try and determine what the cost of that is in financial terms is extremely difficult, other than using crude measures basically. If you say that Boston's population has grown roughly by a quarter to a third and then you use the Government's funding formula for its Revenue Support Grant, we can do a fairly crude calculation of how much more resource we would need to address an increase of between 25 and 33%. That would be a significant amount of money for Boston, but done very crudely, so you have to treat that with a degree of caution because it is very, very difficult to actually know who you have got living in the community at any one time, where they are and the kind of services that they are accessing.

  Mr Blake-Herbert: Could I just add a slightly different angle to that? It is not just about the costs of new migrants, it is also about the formula and how that works for local authorities. For example, as Sir Simon mentioned, it is about the allocation once they arrive in the country and where people go to, and it can be migration from Putney or from Poland in terms of that impact. For example, at the last census Slough was the ninth fastest-growing population in the country. Based on the current formula used by the Office for National Statistics, it has gone to being the second fastest-declining population in the country. Based on everything we see, all of our data sources and all of our knowledge, that is a nonsense—the population is continuing to grow as we see in everything that we are doing in providing support. But because the population is supposedly falling, we are actually losing money. That is one of the key issues.

  Q449  Lord Best: Can you say what differences there are with the latest wave of A8 migrants compared with their predecessors and what public services, in particular, have seen greater demand as a result of the recent waves of immigrants, probably not the Portuguese in your communities, but the A8 elsewhere.

  Sir Simon Milton: The predominant age group of A8s coming over is 18 to 34. The main service impacts have been on language provision and, interestingly, the Government wants us to spend less on translation and interpretation at the same time as reducing funding for English language classes—so I am not sure how that works—also housing and, in particular, the cost to councils of inspecting HMOs (houses in multiple occupation) which is where most A8 migrants start when they come to this country, though they may move on. We have real concerns about very poor quality housing being used to house workers, whether it be in caravans and mobile homes or in buildings where they are crammed in hostel-style, sleeping in shifts in the same room, in the same beds. That requires, for health and safety purposes, councils to be quite proactive in investigating what is going on. After that, there is a range of other services which are impacted, including obviously the turnover in schools which you have heard about. Child protection is one that you do not immediately expect, but where children are brought over and there are child protection issues it is very expensive because there is no record or history of the child and the family in this country; you have to go to their country of origin, through their social services system, to access the kind of information you need. So even though the numbers may not be great, the costs per case are very high and then there are issues to do with health services which you have also heard.

  Councillor Barrow: If I may add a small point—this is a probably an area with which Lord Best will be familiar—there is a considerable degree of competition for rented housing accommodation, in which pool the city council also fishes for its own social housing provision, so it makes it much more expensive—it is an indirect effect, not a direct cost. There are specific costs: in Westminster's case, for parental care costs for unaccompanied asylum seeker children we see around £1 million; we see £1 million for destitute asylum seekers; we see translation costs that are very high—120 first languages spoken in schools, as Sir Simon has mentioned. If we were to follow capitation, then we would receive formula grant of an additional £18 million. I have given you three examples which are £3 million and then there might be some more in the form of these indirect costs in relation to housing. So it is not an implausible number that Westminster alone might justifiably claim 6 or 7% cent of the £250 million fund. The second point to make about A8s in particular is that fewer come with their families than previous groups of migrants; that puts pressure on housing but relieves the pressure on the other family-based services.

  Mr Gallagher: Can I make a point of clarification on the question that you asked because there is a slightly different experience in Boston. Initially it was the Portuguese community that started to take jobs in the agricultural industry about five years ago, but they have been displaced by A8s now in a significant way, and there is anecdotal evidence to suggest that there are raised tensions now within the settled Portuguese community because they were displaced from accommodation and from their jobs when people from the A8 countries accepted the minimum wage and indeed, in some cases, below the minimum wage levels and effectively took their jobs. We are experiencing an increased settlement of people from the A8 countries and, even though they are young, they are now settling in the community. We have had many children born recently as well to people who are now staying within the community. So although it is a younger age group they are staying and they are having families; you can see the evidence of that with the increase in schools population as well.

  Ms Turner: One of the other effects is that because they are predominantly young, highly skilled, independent people they have a different pattern of usage of council services; for instance, for county councils, they are a heavy user of library services, particularly internet provision and reading materials but less so for other county services. The other side of the education provision is that new migration is actually keeping the small village schools going in areas where the roll was falling off to a point where the school was unstable, but is now able to continue. It has pros and cons.

  Mr Blake-Herbert: If I can pick up one or two points there from Slough's perspective, one is about schools and migrants coming in. They are coming here and they are coming here to make a difference. In fact, for the second year running now, we have had the tenth best GCSE results in the country and that is despite, from the September intakes, having over 60 Somali and 90 Polish children each year for the last three years taking up places. As part of that, the secondary schools can refuse to take children without an assessment. A lot of the children who are arriving are coming without academic records, so one of the things we have found we have had to put in place is an assessment centre. Every child whose first language is not English goes through the assessment centre for a week and comes out at the other end of it with an academic record to enable the secondary school to take the children in, to be able to stream them and enable them to provide the right support so that they do not disrupt the rest of the class when they go in. That has been a key part, but falls as a cost to the council to provide. The second part, just picking up on one of the earlier comments, is about houses in multiple occupation. In terms of our funding, we are funded to pick up and look at houses in multiple occupation that are three storeys or higher. That is what we are funded to do and support, and in Slough in the last 18 months we have had over 1050 two-storey HMO's set up, what are in effect three bedroom semi-detached homes, becoming houses in multiple occupation. To get together a team to be able to go through and be able to inspect those and register them, to protect in terms of health and safety and well-being, both the individuals in them and the surrounding properties, will take a considerable sum.

  Q450  Lord Kingsdown: Do you have any evidence of negative impacts from recent immigration on pre-existing migrant groups and ethnic minorities? You said something a little earlier about the Portuguese community and a problem there.

  Mr Gallagher: Yes, we have experienced that to some extent. A lot of it is anecdotal evidence, but clearly there was a displacement of the Portuguese community when people arrived from the A8 countries and there have been some raised tensions on a minor scale within the local community about that.

  Councillor Barrow: If I could add just a small point, we have a very diverse community as it is and so the impact is always going to be much smaller in Westminster because in a way that is what people expect of the centre of town. So the racial divisions that might arise out of that sort of thing or the impact on existing communities that might arise, will not arise. The only thing is, if we are sitting here saying that we do not quite understand the impact of migration, then there are going to be certain elements in the community that are not going to understand it either, deliberately or accidentally, and so if public sector services are rationed in any respect, there will be people who will blame the wrong people for doing that. That is a danger of which there is considerable anecdotal but not very much hard evidence.

  Sir Simon Milton: I would only say that actually we should look on the positive side of this and recognise that this country has absorbed a scale of immigration that we have never seen before, and there have not been widespread problems between communities, we have somehow managed pretty well and I think that is something we should be proud of. Of course there are localised hotspots, but on the whole I think this country has done pretty well coping with what we have had.

  Mr Gallagher: Could I add to that by saying that I fully support that point, that we concentrate on problems and issues but there are benefits and opportunities to a community like Boston that was not a very ethnically diverse community and now the diversity has significantly grown, and the benefits that that is bringing to the community. We have people now who, once they have arrived to work in the agricultural industry, are now moving out of that; we are having new businesses set up and people are making a real contribution to the economy. We need to keep in mind that whilst there are great pressures on local authorities in trying to deal with this, there are many benefits and opportunities to develop communities like Boston that have not previously enjoyed those levels of diversity.

  Chairman: I have no guarantee what questions my colleagues will ask, but some of the questions I see in front of me look as if they have been partially answered already. I have no doubt my colleagues will ask them in a way to get more information if there is any, but you do not need to repeat what you have already said. Lord Skidelsky.

  Q451  Lord Skidelsky: Some of these points have been dealt with, but it is again a question of the impact of the costs of migration, the cost to local authorities of community cohesion and you have really answered that. I would like to ask about a specific cost for information; are local councils funded to provide English language training for what I think of as a typical A8 migrant, 18 to 34, single, no children? What English language training is being provided, what are the responsibilities of local authorities in that respect and is there a private sector provision, are they charged, are they subsidised? I do not know.

  Mr Blake-Herbert: In terms of migrants arriving in the country they are not entitled to any benefits or any support for a minimum of 12 months, until they have worked here and demonstrated they have worked here in that way. So local authorities are not funded to support English language teaching of any nature. In fact the funding for that comes down through the Learning and Skills Council, as it was, as part of that process. But there is a responsibility on local authorities to provide and support the communities that live within its boundaries and to do that in the right way. Picking up on some of the impacts of recent migration, in Slough we have seen impacts on the lowest skilled parts of our communities in terms of employment rates, both in Pakistani males and Indian females. One of the things Slough Council does is support a number of local groups that provide skills training in the English language as part of that. But when there is a lack of funding available—and councillors have to make very tough decisions about the budgets—it is not areas such as child protection which they look at cutting, because they cannot; it is the other parts of the budget, the non-statutory parts, which have to be looked at and have to be looked at very carefully. So when the statistics are inaccurate and when they are not keeping pace with the real numbers on the ground and therefore the funding that is coming through is not coming through at a sufficient level, or in Slough's case is actually being cut year on year, it means members have got very hard decisions to make about those services which can then impact on community cohesion. It is well-recognised by community cohesion experts that when varying communities appear to be fighting for limited resources and there appears to be preferential treatment, cohesion issues can arise.

  Ms Turner: One of the other issues is that migration is now affecting rural district councils that have not previously seen anything like this at all and do not have the black and minority ethnic diversity that has certainly been seen in a lot of the established city centres. Those districts are now finding it very, very useful to work with other public sector partners within their local strategic partnerships and it is through those partnerships that they are really addressing some of the information needs and service needs in a multi-agency forum, in a joined-up way as much as they can, sharing information, really getting to grips with issues like English language provision and public service provision et cetera. One of the interesting partners which some of the councils are pulling into these discussions are trade unions who can access funds themselves to supplement business English within local firms.

  Q452  Lord Skidelsky: I do not feel I have had an answer to my specific question. If I am a Polish migrant and I want to learn English, do I have to pay or do I get it provided free by whatever group is funded to do so?

  Sir Simon Milton: It is a mixed pattern. There are some subsidised courses but they are being cut back, so the answer to your question is that you are very likely to have to pay.

  Mr Blake-Herbert: Certainly within the first 12 months you are not entitled, within the first 12 months of arrival you would have to pay for those courses.

  Mr Gallagher: In Boston, for example, it is the FE college that provides those courses, but they are having their subsidy cut. So to echo what my colleagues have said, that is either met by the individual or by the employers, and some employers are very good at meeting those costs but others are not, and in fact some employers are not very good at even persuading people to take English language courses at the local college as well. So there are negative impacts either way there. Learning the language is the fast track to the integration process, but some people are actually being deprived of the opportunity to learn the language and then the college is struggling to provide courses because the subsidies are being cut.

  Q453  Lord Griffiths of Fforestfach: I feel I am getting a picture which is emerging, but there are two different aspects and I do not quite understand how they match. On the one hand Councillor Barrow said, for example, that in terms of the quality of public services there is anecdotal but not hard evidence of inadequate services. Mr Gallagher has said that immigration is being managed well, but on the other hand you are saying there is a lack of funding which must, I take it, affect the quality of services and overall, if you look at the polls on immigration, clearly people would like to see less immigration, and Mr Gallagher again mentioned that in some schools 50% of the pupils were made up of immigrants. My question is, if you look at a particular area like, let us say, primary schools or secondary schools, what is your feeling about the quality of the service provided to existing non-immigrants in the community? I think to myself, if I had a child of seven I would have expected when the child was one or two that the child would go to a school of a certain size and so on and have a certain kind of education; now I am living in East Anglia and suddenly there is an inflow—I cannot believe somehow that I would not be agitated about that.

  Sir Simon Milton: What happens in primary schools—and colleagues from authorities can confirm this—is that what schools seek to do is to put in place additional support for children who do not speak English in order not to disadvantage indigenous children. You can argue this on two levels: you can either say that that takes resource which is part of their school budget which would otherwise have been spent on provision or activities for indigenous children and therefore they are losing out, or you could say that even though that extra support is in the classroom it still cannot help but divert the attention of the teacher from teaching the whole class scenario, which is what schools are set out to do. We believe there must be some impact even though schools are dedicating parts of their budget to hiring additional support staff in order to not disadvantage the mainstream, if I can use that generalisation. Does that answer your question, sir?

  Lord Skidelsky: It does.

  Q454  Chairman: It is certainly an answer to the question. Is there anybody who wants to add anything to that?

  Councillor Barrow: Just to say that somebody to assist somebody who comes from Bangladesh to adapt to a school and teach that child to speak English is going to be probably a different person from the person who is going to help the Polish child who is sitting next door to adapt. It is theoretically impossible and what tends to happen—what happens to my son actually—is that the whole provision just declines a bit in order to make sure that everybody can come along with whatever is being provided.

  Q455  Lord Macdonald of Tradeston: I would just like to ask about the proportion of migrants in the workforce employed by local councils and in what lines of work those migrants are concentrated, and how that has impacted on your provision of public services. Presumably it has helped keep the wage rates down in the sense that you have got plenty of workers volunteering who might not have been there before. A second question, really for Sir Simon and Councillor Barrow; Westminster is noted for its efficiency and indeed celebrated for the fairly low council tax that people pay. In a relatively wealthy borough like that, why not just put up the council tax and solve some of that £18 million problem you have?

  Sir Simon Milton: We will deal with Westminster's council tax at the end. Let us try and get some non-contentious answers first. Do you want to start, Andrew?

  Mr Blake-Herbert: Just picking up on that first part, I guess my starting point for that is, what is your definition of a migrant, is it first generation, is it about the recent accession eight or wider? Certainly in terms of the workforce for Slough, we have a workforce that matches our community; we have the most diverse community outside of London, some 37% at the last census, and across all of the tiers within the council we genuinely have a workforce that represents the community that we are supporting, and that is needed as part of making sure we are providing the right type of people, the right type of services to the communities that live within our borough.

  Q456  Lord Macdonald of Tradeston: I have talked to key workers in Slough who say they actually live in Wales and travel in because they cannot find accommodation in Slough itself.

  Mr Blake-Herbert: They certainly do. We do have people who travel as far as that to come in and work in the borough.

  Sir Simon Milton: Across the public services as a whole, the biggest area where migrants have made a contribution to the workforce is in social care and health and the experience is that they tend to come in at fairly low level jobs and as they acquire English language skills they then progress to higher paid jobs within those sectors. In different parts of the public service you do get interesting little hot spots and so, for example in London, you will find a very large percentage of Antipodeans working in the planning service because they happen to have qualifications which are applicable in this country and they are handling planning applications all over London. Social care and health are the main categories, however, and remember that we do not categorise the workforce by nationality, we only count ethnicity.

  Mr Gallagher: I would simply echo what my colleagues have said, it is mostly in health and social care.

  Q457  Lord Macdonald of Tradeston: In general, it has helped keep the wage bill down I suspect?

  Mr Gallagher: Within the public sector?

  Q458  Lord Macdonald of Tradeston: Yes.

  Mr Gallagher: No, I would not say that.

  Sir Simon Milton: Public sector wages are set through national bargaining.

  Q459  Lord Best: But public services are subcontracted quite often.

  Sir Simon Milton: Some are, yes.

  Councillor Barrow: Our waste contractor is Veolia and approximately 16% of the people working on the Westminster waste contract are from A8 countries.


 
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