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

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Mr. Wilshire: I do not know what dictionary the Minister uses, but in my dictionary, the words ''incentive'' and ''penalty'' do not have the same meaning.

Jacqui Smith: Obviously, I must use a different dictionary. I was talking about putting in place a system of incentives; the hon. Gentleman belongs to a party that never put funding into the sort of services that were necessary to get people out of hospital in time.

Tim Loughton: We did not have a problem then.

Angela Eagle: Bed blocking was a great problem in my area when I was first elected to the House in 1992. The problem is not completely solved, but the situation has improved significantly because of the intermediate care that the local authority put in place in partnership with the health authority. The health authority was not even speaking to the social services department when I was first elected. Does my hon. Friend agree that that improvement is a result of the Government's focus on extra funding?

Jacqui Smith: My hon. Friend is right, and the figures bear her out. The hon. Member for East Worthing and Shoreham is wrong. The numbers of delayed discharges are better than they were in 1997.

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Tim Loughton: They are not.

Jacqui Smith: I am afraid that they are.

The hon. Gentleman referred to the details of our plans for further tackling delayed discharge. He may like to read my evidence to the Select Committee on Health, in which I covered some of the issues that he has raised today. I assure him that we continue to meet stakeholders to talk about how the system will work, and we will publish a consultation document. I was unclear what point he was making about the length of delays, especially as the situation is already improving as a result of the trend in extra investment. As of March, a smaller proportion of people wait a long time. Our investment is working, but we need to reform the system to ensure that it continues to work.

The hon. Gentleman also mentioned the costs of delayed discharge. Again, he will see from the evidence that I gave to the Select Committee on Health that I carefully outlined the complexity of determining a single cost to the health service of a delayed discharge. However, I also recognised, as we all do, that an old person who is in hospital when they should not be is a cost not only to the system as a whole, but more importantly to themselves. That is why the Government are determined to tackle the problem, why we have already made progress, and why we will continue to do so.

The hon. Gentleman also asked about the 55 per cent. carry over. That carry over is 55 per cent. of unspent, not unallocated, money. We want to encourage councils not to delay the start of schemes.

Tim Loughton: My example was a social services department that committed spending to provide new intermediate beds but, for some reason, the contractors did not provide them. The department was clearly going to spend the money, but the spend was delayed beyond the next financial year. In other words, the difference between spent and allocated money is paying for people to provide a facility, as opposed to earmarking money for something on which it will definitely be spent, but not necessarily within that financial year.

Jacqui Smith: I think that I have covered that point. I can assure the hon. Gentleman, if this is what he is looking for, that the 55 per cent. carry over, which is a considerable carry over from one year to the next, is to provide the flexibility to ensure that we deliver the schemes, and have time to ensure that the spending on the reward element of the scheme is also in place.

On capital expenditure, the Secretary of State may consider a decision by a council that wanted to change the use of, or to sell and reinvest, the capital resource on which it had spent its performance fund, but that would depend on the merits of the case.

My hon. Friend the Member for Wimbledon (Roger Casale) referred to Merton when he congratulated the Government. In a helpfully non-partisan way, he recognised the challenge. I could go through the numbers of all authorities that are three stars or zero stars and those that are Conservative or Labour, and I would have a pretty strong case if I did. My hon.

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Friend was right to focus on what we all need to do to improve social services departments. I recognise what he said about Merton. I understand that it is working very hard. I understand the effect on staff when we determine that an authority is zero starred, but in the vast majority of cases, even in zero-star authorities, staff are working extremely hard and are striving for improvement. The Government's job is to support them and challenge them to continue that improvement.

The Audit Commission has already demonstrated that the Government's approach—previously with special measures and now with star ratings—particularly the way that we determine zero-star councils and the action that we take on them has had success in turning authorities around. That is what we want to see. My hon. Friend also rightly pointed out the work of local health partners and the sort of innovations that are happening locally. That, along with the partnership that will be needed to deliver those new services, is precisely what the fund aims to achieve.

I have responded to the point that the hon. Member for Cheadle made about three stars. As I outlined at the beginning, we are keen to put in place incentives for local authorities to improve their star rating. Star ratings are based on an evaluation of performance indicators, an examination of inspection evidence and of the other reviews that are going on throughout the year and an informed decision by social services inspectors. Once authorities have proved that they can deliver outcomes across adults' and children's services, they deserve the flexibility to make those decisions at a local level. That is why three-star authorities can spend on any social services.

The hon. Lady mentioned the date of 31 August for the approval of schemes. While that is the legal backstop in the special grant report, local authorities have had information about their allocations under this grant since last autumn. We expect to have cleared with the social services inspectorate those that need to be cleared by 25 July. There is nothing to stop authorities going full steam ahead on these schemes now.

I have already commented on some of the conflict in the hon. Lady's position on ring fencing. This year the Government have managed to reduce the number of plans that we expect from social services departments from nine to two. We have already announced the end to ring fencing for some grants and, as my hon. Friend the Member for Wallasey (Angela Eagle) pointed out, the significant increases in grant are more a function of the significant increases in investment into social services departments than of the extent of ring fencing.

The hon. Member for Cheadle also raised the point about the allocation basis for the building care capacity grant, the £300 million that has led us to successfully reduce the level of delayed discharges. I understood that we had sent the information to the Library when we answered the parliamentary question on 18 March, but I now understand that the Library only had annex A and not annex B, which contained the methodology. To be honest, I do not know whether

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we did not send it or the Library did not receive it. As soon as her office notified us that it was not in the Library, we provided it to her. I apologise that the information was not in available in the form that she needed. It clearly spells out, as I have done in correspondence to quite a few hon. Members, the basis on which the allocation was made.

Mrs. Calton: Neither the Library nor I received it. So the mistake was made twice.

Jacqui Smith: On the methodology of allocation for this particular grant, as I spelt out in my introductory speech, 45 per cent. is based on the elderly residential SSA distribution formula, 45 per cent. on the elderly domiciliary and 10 per cent. on the other adults formula. The hon. Member for Spelthorne effectively made an early submission to the Government's review of SSA formulas, which will be carried out in time for 2003-04. As an aside, I suspect and evidence suggests that people live longer in certain areas because they are better off. It is therefore right to determine the allocation of resources on the basis of deprivation and health inequalities. We will continue to base health and social services spending accordingly.

Mr. Wilshire: That is outrageous. Is the Minister really saying that the Government do not want to help people who are better off? If people live longer—surely it does not matter why—they will make greater demands on the NHS. I thought that the Government believed in an NHS free at the point of delivery for all, so why should my constituents be penalised through a mixture of sour grapes and envy?

Jacqui Smith: The Government do believe in an NHS free at the point of delivery, but let me tell the hon. Gentleman what is outrageous—that people's life expectancy and health is determined so much by their background and income and often by where they live. The Government are determined to tackle that problem. To be honest with the hon. Gentleman, Surrey has already benefited from increased investment in social services funding. The hon. Gentleman complains that not enough money is being invested in the Government's delayed discharge policy: that is a bit rich from someone who voted against extra investment for social services. He cannot have it both ways: he cannot bleat about his constituency requiring extra money and vote against allocating the funds necessary to deliver it.

Mrs. Calton: The Minister mentioned deprivation. None of us would disagree—[Hon. Members: ''The hon. Member for Spelthorne does.''] about its importance or that it should be taken into account. However, deprivation is not always estimated accurately, particularly at the level of entire wards, or local authorities. Will there be postcode analysis, or are we going to carry on using the current deprivation statistics? Current statistics show that in Stockport deprivation is concentrated in four or five wards, but in fact more than half the deprivation is outside those wards.

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