Local Government Finance (England) Special Grant Report (No.101) (HC 942), on Personal Social Services Performance Grant for 2002-2003

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Angela Eagle (Wallasey): Does the hon. Lady recognise that these sums of money are extra to the mainstream funding, to which they add flexibility? She mentioned large percentage increases in funding for all local authorities. Will she have the grace to admit that this is because of the Government's significant extra funding?

Mrs. Calton: Yes, I recognise that the amounts are significant. However, I also argue that it is not transparent how the various sums were arrived at.

Mr. Skinner: Like Short money.

Mrs. Calton: I am too much of a newcomer to understand what Short money is.

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Mr. Skinner: It is a block grant that the Liberals take very quickly every year.

Mrs. Calton: Thank you, but no doubt others do, too.

Surely the rewards are a basic entitlement. Anyone working in this country should be entitled to the equipment that they need to do their job, as well as education, training, personal development, and a fit working environment. How will the Department ensure that the cash payments for individuals and teams will not produce the same divisive reactions in social services as cash rewards have in schools? What is the smallest amount that anyone will be offered? The Liberal Democrats are opposed to one-off ring-fenced grants, as are the Government, as I understand it. The star rating system is not entirely credible. Until the Government come clean on how they arrived at the figures, the system cannot be regarded as a legitimate use of public funds.

11.8 am

Mr. David Wilshire (Spelthorne): I, too, welcome you to the Chair, Mrs. Adams. I see that I have the challenge of making a speech without exciting the hon. Member for Bolsover (Mr. Skinner), if that is possible.

I have six queries, although it may be five if the Minister can answer one of them shortly. My first question is about statistics. The only statistics provided in the order are gross figures for grant by authority. My own social services authority, Surrey, is the fifth largest recipient of funds. I would like to be able to say whether that is good, bad or indifferent. I would be the first person to thank the Government if they had been generous to Surrey. Unfortunately, I do not know. I shall let the Minister answer when she replies to the debate. She may have to write to us all.

In addition to knowing the gross amount per authority, we should be able to make a comparison between Surrey's £800,000 and the Isles of Scilly's £1,600. It could be that the Isles of Scilly are receiving more per head than Surrey, but we do not know. It would be useful if we knew how much the distribution represented per head of population, per elderly person in the area, and per existing client. I am not wholly persuaded that the latter would be as useful as I first thought, but I mention it because it might help us to decide whether the distribution was fair. The hon. Member for Cheadle (Mrs. Calton) mentioned the mechanism, but we also need to know the impact on the people concerned, whatever mechanism is used. I would be grateful if the Minister could publish those other statistics to put the gross amount into context.

My second point concerns freedom. The Minister made some play of the fact that the proposals would give freedom to three-star authorities. I am keen to believe that the Government will hand local authorities the freedom to choose for themselves. That has to be right, because it involves handing power to local government. However, the star rating system is, to put it mildly, controversial.

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Surrey feels very bruised that it is a one-star authority. Discussions on that are continuing, and I do not wish to broaden the debate. I do not even wish to judge whether Surrey is right to be concerned about its status. However, the Minister could help us with a general concern. We are considering a grant that focuses on the elderly in the community. The way in which the money is freed up for use is on the basis of the star rating system. Incidentally, I abhor formulas, but all Governments use them. The star rating system in this case includes children's services, but it will be used to apply a distribution scheme to services for the elderly.

People outside Surrey have an image of what sort of place it is, but there are some curiosities about the child population in the area. For example, it is a little known fact that the percentage of children who have special educational needs and who are statemented is higher than almost anywhere else in the country. That would surprise most people, but that figure-and other factors, such as the response of social services to children in care-provides Surrey's star rating, which is used to determine allocation for the elderly. That cannot be right.

The Government must be able to devise a better star-rating system that focuses exclusively on the type of service for which the grant is provided. We should rate social service authorities exclusively on their provision of care for the elderly, and then decide their grant and how much freedom they may have. That is a general argument for how to approach grant distribution in the future. Will the Government keep the method of distribution under review? When they come to perform the exercise next year, I hope that they can be persuaded to find a different way of awarding the star ratings that will focus more carefully on the type of service for which moneys are provided.

My third point concerns ring fencing. We have accepted that freedom is right, but ring fencing money is the exact opposite of the freedom to which we are committed. If local authorities may spend the money only on intermediate care, they will have no freedom at all. Why use local government to provide intermediate care for the elderly, but allow it no freedom to decide how to spend the money? No freedom at all. Why use local government to provide intermediate care for the elderly, but allow it no freedom in how to spend the money? It might as well be done within the NHS: it would be much simpler, with no need for rating systems or orders to control a quasi-independent body.

The Government should make up their minds whether they are in favour of freedom or ring fencing. If the latter, they should launch a proper debate. If ever more social service spending is to be ring fenced, the Government might as well move social services into the NHS and take complete control over them. That would be the logical outcome of the argument. I could understand it if they decided to stay with the current system without launching a huge debate on moving social services elsewhere—a fundamental policy matter. Priorities have to be decided and a review of local government functions may not be at the top of

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anyone's priorities. If that is the Government's choice, between now and next year's allocation of the £100 million, someone has to decide whether that amount is best ring fenced again for intermediate care. It might no longer be the most pressing priority in comparison with other social services. Will someone have the courage to say, on reflection, that the ring-fenced amount should be placed elsewhere? Will the Government be flexible before they commit themselves to a distribution of £100 million to intermediate care? If not, I hope that they will reconsider their position, because people of all political persuasions might recognise other priorities as more important.

The Minister may be able to help me with my fourth concern. I heard her utter the dreaded initials SSA as part of the fair distribution. She has not leapt to her feet to correct me, so I shall work on the premise that the SSA is relevant. She is nodding, so I am grateful. The order sets out to provide a fair distribution to authorities, but if the SSA is relevant in any way, Surrey is getting a lousy deal by definition. The application of SSA to a county such as Surrey is daft in the extreme.

It amounts to a total distortion. If we want to provide intermediate care to the elderly, it should be distributed according to the life expectancy of elderly people in the relevant area. It seems obvious to me that the longer one lives, the more likely is the need for intermediate care. For whatever reason, people in Surrey live longer than others. The average life expectancy in Surrey is high—[Interruption.] Some members of the Committee might wish that the life expectancy of the hon. Member for Spelthorne were not as high, but I am used to jibes of that sort, so I often get my own jibes in first on such occasions. It would be logical to assume that people who live longer will need more intermediate care leading to a higher SSA—but it does not. It takes nothing like enough account of how long people live. NHS distribution of funds is based on the premise that the age at which people die affects the distribution of investment. That applies in respect of disease, but the SSA does not adequately reflect the demands of the elderly on social services. The funds are not being distributed fairly.

Another problem stems from the application of SSA. The money given to Surrey will be worth much less than £800,000 given to people in the north of England because the cost of service provision, the cost of living, of employing staff, of accommodation—the cost of everything, really—is so much higher in Surrey than elsewhere. If the £800,000 is based on SSA, Surrey is getting a raw deal; it will not be able to deliver what the Minister wants, as it will cost too much. It will be locked for ever in a no-star or one-star arrangement and be put upon by the Department, which will say, ''You have got to do this, you have got to do that.''

Mrs. Calton: I completely agree with the hon. Gentleman's analysis. I have to hand the cost per person per week of residential and nursing care for 2000-01, broken down by local authority, which shows

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that the cost in Surrey is not particularly high. It is £395 for residential care and £366 for nursing care. Can the hon. Gentleman explain that?

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