Examination of Witnesses (Questions 300
- 319)
FRIDAY 27 FEBRUARY 2009
Professor David Bell, Professor David King and Professor
Kim Swales
Q300 Lord Sewel:
There are internal university allocations.
Professor King: All I am saying is if we just
had a very simple formula that said it is going to be based entirely
on income per head and the number of pensioners, some regions
of Scotland would be saying they should get more than they do
at the moment.
Q301 Lord Forsyth of Drumlean:
Is it a bad thing? You have at the momentand as a Committee
we are not meant to be looking at this stuff but just to follow
the argument without straying from our terms of referencepeople
in the north-east of England who argue that they are hard done
by. I have no idea whether they are hard done by or not. There
are people in the Midlands and elsewhere. If you set up a body,
which is not by the way taking decisions about the overall budgets
and allocation of resources, what they are doing is assessing
what the relative need is, and if they produce some kind of unbelievably
complicated formula which enables people in the North East or
London to argue we are not getting enough or whatever, why is
that a bad thing?
Professor Swales: The idea that somehow this
is an objective measure, that somehow this body has decided how
public expenditure should be divided up, because those needs will
then determine what proportion of a certain amount of public expenditure
goes to Scotland and these other areas. If you are saying that
this is being done in some objective way you are presumably saying
this is in some sense a non-political way.
Lord Forsyth of Drumlean: No, I am not.
I am saying if Scotland ends up getting 11 per cent as opposed
to 10 per cent of the total or Scotland gets 8 per cent and Wales
gets a bit more or whatever, and England has obviously got the
largest share, I thought your argument was that by setting up
this body, the English regions will start trying to apply this
formula to argue that their share is not sufficient. If you break
that down that will turn into the Department of Health or the
CLG being asked why are they not doing the same. I can see that
it is inconvenient but I do not see that it is a bad thing because
it makes the whole thing more transparent, does it not?
Q302 Lord Rowe-Beddoe:
I think it does because one of the great problems with this is
that there is not perceived to be the transparency that there
ought to be. What would you do, what Lord Forsyth has suggested
there?
Professor Bell: Since devolution happened it
seems to me that the argument of the postcode lottery has become
a much, much more prevalent argument, and so people compare differences
in provision of services, in different parts of UK and perhaps
complain about the variation, but they do not have any understanding
of why these might have arisen. They might have arisen to do with
efficiency of delivery as well as amounts of expenditure allocated.
The trouble with a very complex formula is that it is not very
transparent. It is quite difficult to understand, but it seemsand
I think David agrees with methat it is necessary to have
quite a complex formula because needs are complex.
Professor King: I am just thinking about these
different regions of England saying "under the formula we
would get more than we get at the moment." Of course an implication
of that is that probably they will try to influence this independent
needs assessment body, and that might be quite useful because
until you mentioned that a minute ago I had always assumed this
body is going to find the Scots, the Irish, the Welsh and the
English coming along saying we think the formula should be tweaked
in our benefit. We are then going to have people coming from the
North East saying that there should be more for areas which are
depressed and that have lost their ship-building industries, and
they will come under a lot of pressure from other people which
might make it easier to resist a sustained assault from one of
the four constituent countries of the United Kingdom. I think
it might be easier to run this body if they come under lots of
pressure from lots of different people, rather than just four.
Q303 Lord Rowe-Beddoe:
That is not the situation; the position is very clear we have
heard about this asymmetric settlement, that is a fact, that is
what exists, so we should not be moving that debate forward, in
my opinion. What we are suggesting here, is that England should
determine what it is going to do with the constituent parts of
England that is England's opportunity rather than problem. At
the moment all we can determine is what we can do for Scotland,
Wales and Northern Ireland. I do not think we should be pushing
this debate into what England does.
Professor King: I fully agree with that. What
England is going to do should be entirely up to England. I am
just saying that if the different regions of England start applying
the formula to them and arguing that they are not getting their
fair share, it is up to the English to handle that but they might
in time also try to influence the formula. That is all I am saying.
Q304 Lord Forsyth of Drumlean:
If constitutionally something happens whereby they are given the
opportunity to influence.
Professor King: Supposing I am running Region
X
Q305 Lord Sewel:
Nobody is running Region X, that is the point!
Professor King: I accept that but I am running
a large authority in Region X. I could say under this formula
the local authorities in this region would get, implicitly, more
money than they get at the moment and I am going to put pressure
on Westminster for that to happen. That is perfectly reasonable.
However, I might also want to go and put pressure on this independent
grants body because I could then say "if I pressurise them
to change and tweak their formula, then my region would be entitled
to even more money", and there would be a lot more pressure
but also a lot more transparency. I am not in any way saying that
is wrong. I am just saying it is one of the implications which
is going to happen because there will be a lot more people working
out what they would get. Just to take one example, this body when
it is assessing needs might be concerned with the problems of
island authorities, and it might say that Scotland has a lot more
island authorities than England has, and that is one of the factors
that affects Scotland's needs. However, the island authorities
in Scotland might well be pushing for them to increase the allowance
for island authorities and put pressure on Scotland to give them
a larger share of the cake.
Q306 Lord Sewel:
We have been talking about need but slipped into the difference
in service provision, Professor Bell, is efficiency and there
is also effectiveness. How do those criteria muddy the waters
in terms of the basis of allocation?
Professor Bell: I think that is interesting
in that one of the developments that I have witnessed and made
a small contribution to (because I am interested in social care)
has been the development of different policies in different parts
of the UK, in Wales, Northern Ireland, Scotland and England, which
are much more distinctive than they were pre-devolution. There
has been quite an extensive dialogue between the different parts
of the UK about issues like efficiency, like effectiveness of
service delivery and so on, which seem to me to be a very healthy
outcome of devolution, with the ability to drive policies in different
ways. Incidentally, here the asymmetric devolution issue is very
important because Wales just does not have the powers to do what
Scotland was able to do in respect of change.
Q307 Lord Sewel:
Hopefully one would wish to reward efficiency and penalise inefficiency,
so that is a real problem.
Professor Bell: That is a real problem with
needs assessment.
Q308 Chairman:
It is bad enough as it is.
Professor King: Is not the reward for efficiency
better services though?
Chairman: One would have to deem it so.
Q309 Lord Forsyth of Drumlean:
I am not sure I agree with you, Professor Bell, when you say it
is a consequence of devolution that there was the ability to have
differences in policy. We did not have a national curriculum in
Scotland; we did not do all kinds of things. We did separate things,
for example, in the Health Service where we had matching funding
for hospices. I remember being beaten up by Virginia Bottomley
for doing it because there was pressure on her to do the same.
I do not think it is a consequence of devolution, but I think
one of the difficultiesor perhaps you are meant to be answering
the questionsdo you not think one of the difficulties of
not having something that everybody can point to and say this
is a fair system of funding is that if you do innovate in ways
which are attractive, if Herceptin is available in Scotland but
not in England, or if your tuition fees are not up-front, or you
do not pay prescription charges, or if you are elderly you will
get care delivered by the Health Service, is that then creates
enormous resentments which have a political effect which make
the tweaking of the formula politically harder to achieve. You
must be aware of this in the south. People like Simon Heffer and
so on write articles that blow all my fuses, but there is undoubtedly
a bandwagon being established, and it is very difficult to deal
with that if you cannot say hang on a second, this body, which
I do not think would be a ground-making body, would be a body
which would assess need and make representations and would come
to a conclusion about how the cake should be divided up. It would
then be for Parliament and everyone else to say. Do you not think
that having something that everybody can point to and say that
is fair (we do not agree with every aspect of it) would take a
lot of the heat out of this debate?
Professor Bell: It depends how damaging you
think this debate is, it seems potentially to be very damaging,
but the objective body would take some heat out of it certainly.
Q310 Lord Forsyth of Drumlean:
If you are not a Unionist no doubt you see it as a wedge?
Professor Bell: There would still be differences
whether caused by efficiency differences or by policy choices.
I am not sure I agree with you that pre-devolution there was quite
the latitude to change things that there has been post-devolution.
It may be just a matter of degree. For example, the ability to
change the free personal care thing was the ability to legislate
on charging effectively.
Q311 Lord Forsyth of Drumlean:
Which you could have done?
Professor Bell: Prior to?
Lord Forsyth of Drumlean: Another quite
radical example of differences is in the south they took the decision
to close down alland I have forgotten what the politically
correct term iswhat we used to call mental hospitals and
transfer people into care in the community, where we took a decision
in Scotland not to go down the same route with the same speed.
That is another example of Barnett because we did not get the
consequentials and we had to argue for that. There was freedom
to do that. What of course was going on under the old system is
that it had to be agreed collectively, so the Secretary of State,
and, broadly speaking, you were given that. If you then had collective
agreement you were able to argue on the funding. Where the change
has occurred is that you do not have that opportunity to have
a dialogue and if you have different parties there may be people
who are determined to oppose it because it is not from their party.
That is the negative side of it.
Q312 Chairman:
Is an independent body not one of those things where you have
got to end up in a situation where everybody is equally dissatisfied
with its result, nobody is grossly dissatisfied but everybody
is slightly dissatisfied so everybody can say, "We do not
like it but ... "? If you get to that stage it seems to me
that you will make the most enormous progress.
Professor Bell: You will not eliminate the Simon
Heffers but you may tone them down.
Q313 Chairman:
You could try.
Professor King: There is another practical lesson.
When I spent a year on secondment at the Department of the Environment,
apart from introducing the poll tax Mrs Thatcher wanted the needs
assessment formula simplified and argued that there were too many
indicators in it. You have a group of people in a room acting
like this. "How do we get rid of indicators, what happens
if we take that one out, it does not make much difference, right
we will get rid of that one. What happens if we take this one
out?" It makes a lot of difference to three authorities,
right, but could we help those three authorities if we attached
more weight to this one? Without being unduly cynical, there was
clearly an aim to reduce the number of indicators because that
was what was being asked of us but simultaneously to change the
allocation as little as possible. I suspect that this independent
body would find some objective needs but within the margins of
error they would try to change as little as possible from the
current allocation.
Q314 Chairman:
That is probably a good thing.
Professor King: It might be a good thing but
this is just another aspect of the objectivity which would be
at the margin, summed up as "let us try not to rock the boat
too much".
Lord Forsyth of Drumlean: I am sure it
was not the case with Mrs Thatcher! Generally speaking, where
politicians wish to change the basis of the formula it is because
they wish to see the money going to areas which are politically
sensitive as far as they are concerned. That has been going on
for years in local government, as you know.
Chairman: That is a bit too cynical!
There are fairness arguments.
Q315 Lord Forsyth of Drumlean:
No, but I am saying there is a tendency for politicians to want
to change the formula because they feel, perhaps entirely rightly,
that not enough is going to areas of the country where they may
have very strong political representation and where they are under
pressure from their colleagues.
Professor King: Or marginal constituencies.
Lord Forsyth of Drumlean: Indeed.
Chairman: I suspect that when we get
to Cardiff what you will be told in Cardiff is that there is a
basic unfairness in the way this has operated because the Welsh
should have had more from the beginning. It is not a question
of trying to get resources down into the politically sensitive
areas.
Lord Rowe-Beddoe: They have done a very
bad job of putting across public relations, it is totally misunderstood.
Chairman: People like Michael Forsyth
ran rings round the Welsh Secretaries.
Q316 Lord Forsyth of Drumlean:
That is the other aspect of the way it worked, is that when William
Hague was Secretary of State, he and I would unofficially talk
to each other to find out what lines the Treasury was taking to
attack us and we would support each other and we operated as a
pair.
Professor King: I would add that there certainly
were occasions when it was suggested that the formula could be
tweaked to help areas X, Y and Z, and although that is widely
argued to happen, and I do not dispute that it does happen, there
is a limit on that because how can you alter it to help areas
X, Y and Z which you want to help when, if you give them more
money you are going to hurt other areas, and do you want to hurt
all other areas. It was always difficult to help the areas that
you particularly wanted to help without either hurting some areas
you did not particularly want to hurt and without helping some
other areas you did not particularly want to help. Especially
in England where there are lot more local authorities, it is harder
to do that than it might have been in Scotland.
Q317 Lord Sewel:
I want to ask a really very practical problem, if there is a move
towards needs-based assessment, do we have the data?
Professor Bell: Well, I could quote health as
an example and there are sets of indicators that you can get on
disease from the Census on need. The complaint is that they are
always out-of-date. In terms of health status, yes, there probably
are data available. In terms of cost delivery, which may not be
of particular interest to this body because they will concentrate
on need per se, systems are quite different. The Department of
Health and what is called the ISD Information System Division
in Edinburgh produce completely different sets of health statistics
for Scotland and England, and presumably the same is true in Wales.
Local authorities similarly produce their own statistics and the
ONS is not responsible for local authority statistics and health
statistics in the same way, for example, that it is responsible
for employment or unemployment statistics, so the areas of the
public sector that we would really be looking at are not areas
that are necessarily fully covered, although there would be indicators
of need that probably could be broadly comparable, but not in
great detail.
Q318 Lord Sewel:
Are there any particular areas of difficulty?
Professor Bell: I would say social care is an
example because the systems are different.
Professor King: There is a problem that you
have issues where you might want to give more money to areas which
have a lot of children with mental problems or learning difficulties,
but who tells you how many such children there are? You cannot
ask the local authorities because they say, "90 per cent
of our children have these problems, we need a lot of money."
Some of the things you want to take account of, you cannot actually
get direct statistics on those and you have to use some proxy
by saying there are more children with learning difficulties in
areas with a lot of unemployment, or something like that, so sometimes
the data you want are data you cannot get and you can only estimate
those things.
Q319 Lord Forsyth of Drumlean:
I thought the Government was setting up a national database with
every child in England?
Professor King: It could be but there are other
issues such as older people needing care at home, who is going
to decide who needs care at home? If it is up to the recipient
countries they will decide all their older people need care at
home.
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