Local Government Finance (England) Special Grant Report (No. 89) (HC 415) on Children's Services (Quality Protects) Special Grant Report for 2000-01 and 2001-02

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Sir Paul Beresford: I was not intending to speak, but I was ever so slightly goaded by the Minister. I will not ask any questions because my hon. Friend the Member for East Worthing and Shoreham has asked all the possible questions and a few more besides. Perhaps, in what I say, I will be at odds with some of my hon. Friends, although not at odds with Labour Members who have worked in local government.

I am especially bothered that this sort of grant is ring-fenced. Even if it is not top-sliced—although grants often are—it effectively comes from the total pool that will be available for social services in local authorities. The Minister referred to the local government White Paper, and I suspect that this sort of grant will take over control so that, although we can still call local government ''local'', the ''government'' is being whittled away. That is a form of dictatorship.

Almost everyone working in local authority social services throughout the country is concerned for children and interested in adoption and fostering when funding allows, and wants to make progress. I remember allocating enormous funds and new ideas and techniques when I was in local authority, which was some time ago. The progress made was spectacular, and the benefit to children also spectacular, but that was based on a local decision. We were elected as local councillors to make that local decision.

When one considers the large grant being given to Surrey, which that county will be delighted with—I am sure that it could justify a grant considerably greater than that—one has to reflect on the fact that the standard spending assessment is tilted in such a way that the county has to squeeze its social services budget. Now it is being dictated that the county must spend one type of funding in a certain way and, regardless of the fact that the local authority has a local understanding of local needs, it cannot make decisions on that matter.

In addition, hundreds of targets must be met, with auditors to help local authorities meet and assess them. Local authorities must look to panels to come up with the action plans to apply for the grants. They must then provide all the details, which go to the Department of Health, where people earn considerable sums producing facts and figures and decisions on the action plans. By dictatorship, those people may also take the funding back again.

The system takes away any real democracy. The democracy is there when local councillors are voted in, but when they sit on their social services committees they must form an action plan that is cleared by central Government. Local government is no longer government. Although I support the money being invested, the dictatorship is wrong.

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Mr. Wilshire: I rise with trepidation, as my hon. Friend the Member for Mole Valley said that my hon. Friend the Member for East Worthing and Shoreham had asked all the possible questions. Presumably, that leaves me to ask the impossible ones. I will do my best to oblige.

I was goaded not by the Minister's comments but by being confronted by a document that relates to ring fencing. Only last week, on the Floor of the House, we were told with a flourish of trumpets that the penny had finally dropped with the Government and that they had decided that ring fencing was not a good idea. We were told that the future lay in flexibility and local decision making. I agree with my hon. Friend the Member for Mole Valley about dictatorship and local choice. I was looking forward to a new future, but I find that I am confronted by this piece of legislation, which makes a mockery of what the Government said were their aims.

The obvious starting point is paragraph 3(b), which says that the Secretary of State may determine

    ''in the case of the Quality Protects Grant, the amounts which he proposes to pay''.

Other hon. Members have made the point about criteria, and I agree with them. If the Secretary of State is given the power to set the amount, I would have thought that we might be told the criteria.

Paragraph 3(c) makes matters worse by saying that the Secretary of State may decide

    ''the manner in which the amounts of the grants will be calculated''.

I thought that I might find the criteria in further paragraphs, but, look as I might, I could not. Before we decide whether to approve the measure, will the Minister tell us about the criteria? Local councils, of whatever political persuasion, will want to know, and hon. Members have a right to know, too.

Thus far, all we know is that the basis of at least one calculation will be based on SSA, which is so complicated and discredited that even the Government have realised that it must be replaced. To use a system that is discredited and needs replacing as a means of calculation is guaranteed to be unfair. Surrey is my county, too. The way in which SSA hit Surrey was notorious, unfair and grossly distorted. It has resulted in social services being underfunded. On that basis, I assume that however much Surrey has applied for, it will be less than it should be getting.

Paragraph 5(1) states:

    ''the following purpose for which special grants are to be paid: To provide support for local authorities towards their expenditure''.

Does that mean 100 per cent. towards their expenditure, or 50 per cent.? Will those projects be 100 per cent. funded or only partially funded?

The hon. Member for Cheadle mentioned Westminster city council. I am curious why we should find ourselves being asked to approve a report that goes only up to 31 March. There must be an explanation. It should be placed on the record.

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I turn to annex A. I realise that the differing amounts being paid to authorities is largely the result of variations in the size of authority, but I wonder to what extent it may conceal the effort, or lack of it, of the councils. Are the figures purely a reflection of the size of the authorities and their efforts? Are the Government checking whether all authorities are trying as hard as they might and therefore claiming as much as they should? If such a mechanism is in place, what steps is the Minister taking to ensure that those councils that are not trying as hard are encouraged to do better? I have no objection to the money being made available—indeed, I applaud the Government's efforts and intentions—but I would like to know that all councils are being pressed by the Government to take maximum advantage of it. I would be interested to know how the £1,914,648 listed for Surrey in annex A is made up. I suspect that the Minister cannot give me an immediate answer, and I would welcome a letter.

Paragraph 3 of annex C is headed ''Use of grant monies''. It says that the money can be used only in the current financial year. I can understand why such provisions are made, but I worry when they are completely inflexible. Circumstances could arise that made a spillover of expenditure not only inevitable but in the best interests of children and of local government—and of achieving the Government's objectives. The Minister may like to consider putting a provision into the report that gave the Secretary of State the power in exceptional circumstances to allow expenditure to spill over into a further year, rather than the money being lost. I am reminded that it was said on the Floor of the House that flexibility in such matters is one of the Government's goals. I commend that approach to the Minister.

A later section of annex C is headed ''Other conditions''. At paragraph 9, it says what will happen if something is no longer used or is disposed of. It says that the money to be recovered will be the ''full market value'', which will be ''determined'' by the Secretary of State. I worry what criterion the Secretary of State will use to determine the full market value. I would have expected it to be determined by the market, not by the Secretary of State. If it is his assessment of what it is worth, the report should say so. An arbitrary diktat—''this is what I, the Secretary of State, believe it is worth, and the local authority will therefore pay it''—without any way to appeal is potentially unfair. Again, I would welcome the Minister's comments.

Annex D throws up an interesting query. Paragraph 2 states:

    ''The amount of the grant payable to an authority shall be an amount equal to the relevant expenditure by that authority during the relevant period.''

I am sure that that is right, but does that mean that there is an open-ended commitment to allow local government to spend as much as it likes during the relevant period, or is there a limit? Is the grant limited, or can local authorities simply clock up ever more expenditure for which the Government will pay, provided that it falls within the rules and within the

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relevant period? That is an interesting question, to which councils would probably like to know the answer.

On the last page, paragraph 7 of annex F states:

    ''Where any amount of grant has been paid other than in respect of the authority's relevant expenditure...such amount or amounts...shall be repaid''.

That lacks flexibility. Again, I see what the Government are worried about, and I agree that a council should not be able to rip them off. However, if the Government do the wrong calculation, the overpayment could be their fault. If the criteria are a bit of a mystery because the Government do not say what they are, local authorities will find it difficult to know whether they are doing the correct calculation. How are they supposed to know if the criteria are a high state secret? If councils do not make the mistake and commit themselves to expenditure in the belief that it is genuinely incurred under the rules, it would be grossly unreasonable for the Government to demand the money back. If the Government make the mistake, they should carry the can for the overspending.

The converse is the case in paragraph 8, which states that

    ''the Secretary of State may require...repayment''

where there is an inaccuracy. Local authorities that are at fault in those circumstances should pay a penalty, particularly where they deliberately, rather than accidentally, claim and receive too much. They must give it back. Just as the Government should forgo overpayments that are their fault, a council that claims too much should at least repay the money with interest so that the taxpayer receives some recompense for its use of central Government funds.

My hon. Friend the Member for Mole Valley said that all the possible questions had been asked, but I hope that mine are not too impossible and I look forward to receiving some answers.

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