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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Mrs. Gillan: The differentials in those numbers and between those grades are the exact subject that I asked about. There is inconsistency between the uplift on the grade A band, to use the vernacular, and the B and C bands. Also, I would have expected an economy of scale, with lower costs for larger numbers. I do not understand how there can be such excessive costs for larger numbers. In most other matters, larger numbers often mean that savings can be made.

Beverley Hughes: We recognise the fact that, in the previous year, the uplift was based on the figures for the authorities that cared for larger numbers of children. There is no particular uplift for the authorities that cared for smaller numbers, but this year we are increasing the figure for those authorities in recognition of that fact.

I do not agree with the hon. Lady on economies of scale; we are not talking about tins of beans, but about children with specific needs. Although there may be some potential for economies of scale in terms of overheads, the additional costs to local authorities in caring for large numbers of children rise significantly. The placement and infrastructure costs must relate to each child. We cannot always simply bunch a group of children with a social worker, because they may all need a social worker. Therefore, we cannot always achieve the economies of scale that might be met if we were not dealing with needy children.

Mr. Paice: This was an area on which I intended to question the Minister in my speech.

Mrs. Gillan: Sorry.

Mr. Paice: Not at all; my hon. Friend was right to raise it. The Minister is fumbling for an explanation. As my hon. Friend said, her figures show a difference of £80 per person per week between the amounts paid, depending on the numbers involved. If a local authority has charge of 100 youngsters over 16, the payment is £220, but it rises to £300 if there are 101 youngsters. I do not understand how the Government can explain that extra £80 per person, so I hope that the Minister will have another go at explaining it.

My hon. Friend made a point about economies of scale. I cannot see why crossing a threshold of 100 should make such a dramatic difference to the cost. If the difference had been something like 5 per cent., we might have understood it, but £80 added to £220 is a

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huge leap. I do not understand the principle of a threshold of 100 and why there is such a quantum leap in payment.

Beverley Hughes: The threshold of 100 does not represent a fine line between the potential distributions of unaccompanied asylum-seeking children. In other words, I cannot tell the hon. Gentleman that there will be an authority with 100 children and another authority that has 101. My understanding is that authorities will either be well under or well over the figure. [Interruption.] It is a valid point. I do not think that the argument about economies of scale apply if an authority is catering for a lot more than 100 children. In fact, the reverse is true. The logistics and demands will be complex and significant when placing very large numbers of 16 and 17-year-old people in an area with finite resources in terms of suitable accommodation; all areas will be in that situation.

Local authorities such as Kent—representatives of which I met this week—would be able to tell the hon. Member for South-East Cambridgeshire (Mr. Paice) that the unit costs for children under and over 16 are close to the actual costs when large numbers of children are being cared for. That is another point that he needs to be aware of. Local authorities will receive the lower figure; either the unit cost multiplied by the number of children in their care or the figure that they have actually spent. Some authorities spend somewhat less than others and make lower claims and, if that is the case, that is the amount that they are paid.

Mr. Pound: I am trying to resist the temptation to be London-centric—[Interruption.] If there is no such word, I withdraw it. I assure the Minister that she is absolutely right and that it is completely spurious to raise any argument about economies of scale in the context of finite housing and education. If we looked for economies of scale, we would be talking about asylum concentration centres outside London. That idea may be discussed in another place. Would that any borough in London had less than 100 such children. The Minister is right to say that there are either far less or far more than 100.

Beverley Hughes: I shall make two further points about the issues raised by Opposition Members. First, we recognise that the arrangements outlined in the report are not ideal, which is why we are changing the arrangements in the Nationality, Immigration and Asylum Bill that is passing through Parliament. It is sometimes difficult to assess how many children there are and how much it costs to look after them.

This is the best system that we have at the moment. It is a continuation of what has existed in previous years, but it is ending. The proposed figures are our best estimate, working with local authorities, of the costs that have to be met by local authorities caring for children in different age groups, and for different numbers of children. There is some flexibility, even within that arrangement, to address the issues that local authorities face. If they make a claim and are reimbursed in relation to the formula, they can offset spending in one area against spending in another, so long as they meet the overall criteria in relation to the sum that they have asked for across the board in relation to all the groups of children.

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Mrs. Gillan: I am still not entirely clear; I would appreciate the Minister's clarification of one point about the finances. Despite her assurance and that of the hon. Member for Ealing, North (Mr. Pound) that nobody ever gets close to the 100 barrier, if I were a local authority with 100 children in my care, I would be paid £220 a week if they were all over 16. If I suddenly found myself with 101, I would receive £300 a week for each of them. I therefore would have an incentive to exceed 100 in order to increase the payment for all of the children. Would she clarify that point?

The second point is that we are dealing with humans; unaccompanied children. How can we say with any certainty what those children's ages will be? According to the way in which the documents are drafted, when we suddenly find out that we think that they are 16, hey presto, overnight we drop the amount by £275 a week. That aspect of the statutory instrument is callous and difficult to deal with.

The Chairman: Order. Before I call on the Minister to reply, I point out interventions are getting a little long. I have to advise the Committee that the Minister has now been speaking for some 50 minutes and that the debate must conclude at 6 o'clock.

Sir Paul Beresford: On a point of order, Mr. Chairman. Would it be in order, in the light of the discussion, for us to reconsider whether we could have the two—

The Chairman: Order. The answer to that is no.

Beverley Hughes: In relation to the first point of the hon. Member for Chesham and Amersham, I do not believe that any local authority would be so irresponsible as to do what she was suggesting—or what we could be forgiven for thinking she was suggesting—and, because of a differential in the unit cost being proposed under the special grant report, go around touting for unaccompanied asylum-seeking children in order to get another £80 a head—[Interruption.] £80 was the example cited for 16 to 17-year-olds. It is sometimes difficult to establish the age of an asylum-seeking child, or even whether he or she is a minor. Local authorities have established procedures to go through in that regard.

What we are discussing is not directly age—although it comes down to what we think is a child's age—but the level of care under the Children Act 1989 that each child receives. Much larger costs are involved in the care of a fully looked after child accommodated by the local authority under section 20 than in the provision of accommodation and a lower level of support for older young people.

I have acknowledged that although the amounts have covered local authorities' costs, the arrangements for reaching a conclusion on the amount of grant for any local authority are not ideal. There are also significant problems for some local authorities in trying to find suitable placements for the large numbers of children in their care, so we have set up a joint working committee, with representatives of local authorities, to review whether the current arrangements are the best means of supporting such highly vulnerable children. We may decide that the

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current model offers the best means of meeting our obligations, but we are also exploring alternative models through which local government can continue to provide support. The review is due to conclude in the autumn, with a view to implementing recommendations when the Bill receives royal assent.

In order to allow other hon. Members to contribute to the debate, I shall now conclude my remarks on the special grant report, which, I understand, Sir Nicholas, I will move formally later.

The Chairman: Yes, there will be two decisions to be made by the Committee, which will be reached separately.

5.26 pm

Mr. Paice: I feel like a bit-player in this afternoon's performance.

I want to start with the special grant report No. 92, with which the Minister also dealt first. We entirely understand the principle behind the report and have no intention of opposing the idea of reimbursing local authorities for their expenditure in supporting asylum seekers, which is perfectly right. It puts right the problems that arose from special grant report No. 55 as a result of the scaling down arrangements.

I feel that the Minister was rather cursory in her dismissal of the problems that arose in Haringey. Of course we understand the history behind what happened and what took place, but the fact is that it must have caused her some embarrassment to have to come back to the House for more money, largely because of incompetence in Haringey. I would expect her to have some regret about that, as well as an understanding of what actions may have been taken by other Departments to ensure that it does not happen again.

I want to take the Minister on a stage because the report is based on the sum of £140 per week per adult and £240 for a family. I should like the Minister to compare those figures with the answers that her Department gave recently about the cost of keeping asylum seekers at Oakington, where the cost is £1,620 a week. Oakington used to be in my constituency, so I know the facilities reasonably well. I readily accept that there would be extra costs there, which would not be met by a local authority, but the difference seems to be dramatic. Can the Minister explain a little further why there is such a dramatic difference in the figures, between £140 for a single adult via a local authority and £1,620 when that adult is housed at Oakington, bearing in mind that that does not include the cost of any of the legal processes or other associated costs?

Will the Minister then take that matter another step forward and compare the figures to whatever budgeted figures the Government have for the new arrangements in the accommodation centres that are to be introduced through the Nationality, Immigration and Asylum Bill, to which the reports refer? The House has a right, via this Committee, to know the comparisons between the figures, how the Government explain the vast differences and what the actual cost per adult will be of the new accommodation centres—the running costs, let alone the huge capital costs.

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I turn to special grant report No. 99, which deals with children. We on this side fully understand the situation in Kent. For obvious reasons, we have very good relations and contacts with its local authority and understand the costs. We are not disputing the fact that Kent's costs are huge. I think that the Minister either intentionally or unintentionally slightly misunderstood the points that my hon. Friend the Member for Chesham and Amersham and I raised on that matter. The issue is not whether the figures are justifiable, but why there should be such a huge difference per capita between an authority with a large number of unaccompanied children and one with a very small number. They all need the costs of accommodation, either brought in or provided; they all need a share of a social worker, with the administrative costs that go with that.

I still do not understand why there is that huge differential. It is not that we do not understand that vast costs are involved or that we think that the £220 or £300 or £575 or any particular figure is right or wrong. We are simply trying to understand why the Government believe there is such a huge differentiation. It might be helpful, in trying to explain the differences in the figures, if the Minister could quote some actual figures, comparing, say, the actual cost per child in Kent or one of the London boroughs with that in an authority that has much lower numbers to cope with, such as mine in Cambridgeshire.

I was very pleased that the Minister referred to a move to quarterly payments. I was going to ask what consideration she had given to giving some money to local authorities in advance rather than at the end of the year. Quarterly payments will make a significant difference to cash flow, so are to be welcomed. I suggest that in the case of authorities with very large numbers, she look further at what more can be done to help with their cashflow problems.

Finally, I have a question about annex B, paragraph 3, which states:

    ''The grant does not include payments in respect of persons who have no legal right to remain in the country, after their claim for asylum has been finally determined or abandoned.''

I know that you will quickly rule me out of order, Sir Nicholas, and justifiably, if I embark on the Government's overall immigration and asylum policy. However, from figures that the Government have openly published, we know that the number of removals of people whose asylum applications have been completed and rejected is extremely low. I do not have the precise figure for removals of children to hand, but who is paying for children who, in the words of the report,

    ''have no legal right to remain in the country''?

Is that purely down to the local authority and, therefore, effectively, to the council taxpayer in that authority? If it is, it seems somewhat unjust that the Home Office is responsible for removals and dealing with people whose applications and appeals have been properly processed and rejected. The Government are acting, but local authorities are paying the bill. It is a genuine issue of concern and I hope that the Minister can explain the answer. I do not know what the

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Government do with a child whose application is rejected. Something has to be done, but who is picking up the bill, where is the child going and what happens to them? There is clearly an anomaly in annex B of the report.

I have no intention of dividing the Committee, despite the comments from my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) because both reports are obviously a sensible way to correct serious errors, which the Minister has belittled, and properly pay local authorities for the care of children until the Nationality, Immigration and Asylum Bill has passed into law when, as she rightly says, a new arrangement will be made. I have posed a number of genuine questions to the Minister and I hope that she will be able to answer them in due course.

5.36 pm

 
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