Local Government Finance (England) Special Grant Report (No.92) (HC877) on Special Grants for Asylum Seekers Support (Adults and Families of Asylum Seekers) for 1999-2000 and Local Government Finance (England) Special Grant Report (No.99) (HC878) on Special Grants for Unaccompanied Asylum-Seeking Children for 2002-2003

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Beverley Hughes: I think that the right hon. Gentleman knows the answer to that question. In coming to the Committee with the report after audited accounts have satisfied the authorities, we are satisfied that Haringey has paid £9.8 million to asylum-seeking adults and families. Therefore, if the additional money sought today were not forthcoming, we would have to revert to the scaling down provided for in the previous special grant report, which would affect all local authorities.

The issue is whether we are satisfied that Haringey has paid the amount of money in question. That has been through due process, and we are satisfied. It has spent the money on asylum-seeking adults and families, and the commitment of Parliament was to reimburse local authorities for that expenditure. The Immigration and Asylum Act 1999 clearly gave the Home Office the power to reimburse local authorities for costs incurred in supporting asylum-seeking adults and families. Since 6 December—the last date that the grant report pertains to—we do not need a special grant report to do that, so the expenditure has come through differently.

Mr. James Paice (South-East Cambridgeshire): I want to press the Minister on the point about Haringey. It is all very well for her to say that the Government have audited the figures and to state that the figure claimed is correct. The fact is that Haringey furnished the Government with wholly inadequate figures in the first place. I ask her to reconsider the

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suggestion that that is Haringey's responsibility. The Government are now in the embarrassing position of coming to the Committee this afternoon to ask for more money, solely because—with the exception of the small amount in Northamptonshire—of the inadequacy of Haringey's internal arrangements. What action have the Government taken over Haringey council's failure to be able properly to advise the Government about the figures that were going to be questioned? Has the Minister asked the district auditor to examine Haringey's internal auditing systems? How could the Government be so seriously misled about, as my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) said, an amount that is more than 50 per cent. of the accurate figure?

Beverley Hughes: The hon. Gentleman is raising issues that may be important, but they are not a matter for me in my ministerial role. They belong to a different Minister in a different Department. As to the effectiveness and probity with which local authorities audit their accounts and manage their expenditure, it is public knowledge that Haringey council went through a period of difficulties and that these were dealt with very effectively by the then Department for the Environment, Transport and the Regions. I can assure the Committee that the sum spent by Haringey that we finally accepted has been subject to independent audit by the district auditor in the normal way. That is why, if we are to maintain our commitment to reimburse authorities for expenditure on supporting asylum-seeking adults and families, we have to come back to the Committee to ensure that we have authorisation for the finances to pay the outstanding authorities.

Sir Paul Beresford (Mole Valley): My right hon. Friend the Member for Bromley and Chislehurst asked what would happen if the Committee declined to provide the funds. The Minister replied that matters would revert to what they were before, and that therefore funds would be taken away from all local authorities. Surely they would be taken away from one local authority—perhaps Northamptonshire as well—but not all of them, or is she tarring them all with the Haringey brush?

Beverley Hughes: I am not tarring any authority with any brush. I am explaining, as I think that the hon. Gentleman knows, the provisions that were in the original special grant report. If the claims from local authorities exceed the total amount that the Committee awards under the special grant arrangement, there is a formula for scaling down for all local authorities so the ceiling is not breached. If the ceiling were not extended today, that would have an impact on every local authority through that scaling-down process.

Mrs. Gillan: The Minister is most gracious in giving way so generously. I hope that she understands that there is a certain amount of alarm among Opposition Members. I am sure that there may be a small amount of alarm among Government Members as well, though they keep it well hidden.

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I am very worried about the chain of accountability. If I understood the Minister correctly, if Haringey gets its figures wrong by £5.4 million, it is a matter for Haringey. The fact that its figures are wrong does not mean that it is subject to castigation or penalty of any description; that is the responsibility of another Minister. However, the Home Office picks up the bill. Where is the accountability? There is no direct link to the local authority that has committed the ''crime'' and we have no guarantee that it will not happen again, or that the authority is being audited correctly. We do not know what caused the problem in the first place or whether there was an element of fraud. I cannot understand how we can make the link or how we can possibly scrutinise such expenditure satisfactorily.

Beverley Hughes: The hon. Lady raises several points that I have already addressed. I have assured her and Opposition Members that the final sum—albeit that it was more than Haringey's original estimate—was audited in the normal way, independently, by the district auditor. There is no question of Haringey spending any of the £9.8 million on anything other than the proper purpose of supporting asylum-seeking adults and families.

If the hon. Lady is saying that an individual authority should be penalised if its original estimate is lower than the actual expenditure, she will fail to fulfil the promise of Parliament, made at the time of the special grant report No. 55, that the expenditure would be met in full. I am sure that—unlike for her and, perhaps, her colleagues—the most important priority for Government Members is that money that is spent by local authorities in supporting adults and children of families who are seeking asylum will be reimbursed in full by the Government. That is what the debate on this special grant report is about.

Haringey's final figure has been validated through all the normal processes. The hon. Member for Chesham and Amersham must accept that that is what it spent. If she accepts that, and if she wants to maintain the commitment that we gave to local authorities, she must accept that we must reimburse the additional amounts.

Mrs. Gillan: I have no way of checking the amount that Haringey spent. Of course, if the audited accounts are up to scratch, I acknowledge that that must be the case. However, there must have been a system failure and someone must have been responsible for so grossly underestimating the amount, given the magnitude of the difference between the actual expenditure and the budgeted amount. Can the Minister assure us that this will not happen again? What internal disciplinary action has been taken by the council?

Beverley Hughes: The hon. Lady well knows that those matters are not for me or for the Committee. We must be assured that the amounts to be reimbursed are proper, that they have been audited properly and that the money has been spent on the purpose for which it was intended. It is not for us, as Members, to check the figures. We cannot do that; we must rely on proper systems. In this instance, the proper systems have been mobilised through the auditing procedure. The money has been spent on the purpose for which it was

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intended and, in accordance with the agreed principles, the amount must be paid to Haringey.

If there no other comments about that special grant report, I shall speak about special grant report No. 99.

Sir Paul Beresford: I am sorry that the Minister is moving on so quickly. She said very briefly that Northamptonshire was a fraud investigation. Will she clarify that and tell us whether there was a fraud, how much money was involved and what the difference was between the original claim and the current claim?

The Chairman: Order. Before the Minister replies, I should like to help the Committee. Our debate relates to the two reports that we are discussing together, which set out the determination that the Home Secretary has made concerning special grants to be paid to certain local authorities. Those grants are in support of local authorities' expenditure in connection with their legal obligations to provide accommodation and services for two categories of people; asylum-seeking adults and their families between 1 April and 5 December 1999, which is covered by report No. 92, and unaccompanied asylum-seeking children between 1 April 2002 and the day before the Nationality, Immigration and Asylum Bill is passed, which is covered by report No. 99, which I believe the Minister may be coming to.

The debate should focus on the determination of the Home Secretary rather than seek to ascertain from the Minister matters which I, from the Chair, believe lie rightly with another Department. I hope that hon. Members will direct their attention to the reports relating to the determination of the Home Secretary.

Mr. Paice: On a point of order, Sir Nicholas. Would you clarify for the Committee precisely what you have just said? That is not intended to sound impertinent, but we are being asked this afternoon to approve a report that will allow £6 million of public money to be spent. Is it in order to ask the Government why, and not just how, that money will be spent? If that is in order, is it also in order to ask why the figure in a previous report, which has been supplemented by the report before us, was incorrect? There seems to be a link. The Government produced an order some times ago and provided a figure, which the Committee at that time approved. However, the Government have returned today, saying, ''Sorry, we got that wrong. This is a different figure and it is £6 million higher.'' Is it not in order to ask why?

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