Our decision to introduce a ring-fenced special transitional grant of £539 million in 1993–94, and to announce that and the grant for the following two years in advance of the general local government settlement, has been widely welcomed.
The sums that my right hon. Friend has won for the implementation of community care by local authorities are very welcome. Does she agree that, at a time of difficult choices in public expenditure, it is most welcome that priority is being given to community care? This is a long-awaited feature of Government reform.
I thank my hon. Friend. Certainly, very difficult decisions must be made about public expenditure, but we believe that it is right to fund care in the community fairly. That is a long-standing policy. We introduced the legislation; we have introduced the regulation; now, we are fairly funding it. It is now up to local authorities and health authorities to make care in the community the success that all intend it to be.
Does the Secretary of State believe that those funds will be safe after the Chancellor's statement on Thursday? It is possible that he will remove the money that has been made available through her good offices, by way of the back door. In reality, no extra funds may be available for community care.
I have made it clear that we have maintained our commitment to fund care in the community fairly, and I am sure that the hon. Gentleman will recognise that, when all the consequences of the autumn statement are understood. It is now up to local authorities to accept a responsibility that they have long sought and to ensure that when they provide services the users of those services, rather than their own narrow or partisan interests, are at the forefront of their minds.
I am happy to reassure my hon. Friend on that point. Drug and alcohol rehabilitation units are carrying out excellent work. A substantial sum is involved and detailed discussions have taken place with the providers of drug and alcohol care to ensure that all the proper regulations are in place.
I can reassure my hon. Friend that there is a direction on choice. There is also a requirement that a substantial amount of the money must be used in the independent sector—the voluntary and private sectors—and that agreements with health authorities must be in place. I believe that, given all those safeguards, no anxiety need be felt on behalf of drug and alcohol misusers, but the Under-Secretary of State—my hon. Friend the Member for Suffolk, South (Mr. Yeo)—is engaging in further discussions to ensure that all aspects are fully considered.
Apart from the £300 million shortfall identified by local authorities, do not the funding formula and the requirement for 75 per cent. of the money to be spent on independent provision demonstrate that the Government have completely abandoned one of the fundamental principles of the community care reforms—the avoidance of unnecessary institutional care? Is it not apparent that they are being prevented from developing a proper community care policy by irrelevant free market dogma? Is not their treatment of the private care sector in marked contrast to their complete ditching of previous commitments to protect drug and alcohol projects?
I am afraid that the hon. Gentleman has misunderstood the position. On the day that I announced the ring-fenced money, my understanding was that, only the day before, the hon. Gentleman had said that no news on money would be available until at least the end of October or the beginning of November. We have fairly discharged that responsibility.
As ever, the hon. Gentleman, who is sponsored by the National Union of Public Employees, thinks always of the public sector providers and not of the voluntary and private sectors. We have made it clear that money must be spent by the independent providers if we are to safeguard choice. Choice always means very little to the Labour party. [Interruption.] If the hon. Gentleman cares to listen, I am able to inform him, and others, that after consultations with local authorities we are amending the requirement relating to the percentage to be provided by the independent sector. That will now be 85 per cent. of the transfer element, but the additional 35 per cent. over and above social security money will be distributed normally and can be used in the way that local authorities choose.
Does my right hon. Friend recall the pleas made by the Social Services Select Committee, many organisations and hon. Members on both sides of the House that the transfer of funds from social security to community care should be both adequate and ring-fenced? I thank my right hon. Friend for accepting both those pleas. Is not a high proportion of the income support provided by social security already spent in the private sector? Does it not make sense, therefore, that the vast majority of the funds to be transferred should similarly be used in the private sector?
As ever, my hon. Friend is extremely well informed and authoritative on these issues. The Select Committee took the view over many years that the money should be ring-fenced. We gave an undertaking not only that it would be available and be seen to be fair but that it would be transparent. Local authorities are now in a good position to take forward that policy.
My hon. Friend is also absolutely right about income support. At present, it is spent entirely in the voluntary and private sectors. That is why today's announcement is important: that 85 per cent. of the money that comes over from social security will be spent in the independent sector. However, the 35 per cent., over and above, will be spent in the way that the local authority wishes.
I think that the Labour party has singularly failed to understand the significance of what I am saying. The announcement means that a lesser, not a greater, percentage of the total amount for community care is to be spent in the independent sector. It is only the transferred money, not the 35 per cent. additional money, that is involved. I suggest that the Labour party should try to understand the policy a little better.
The Secretary of State has just made a statement. She has not answered the question. Her statement has changed completely from the previous position. The amount of money announced by the Secretary of State on 2 October has changed from a 75 per cent. allocation to the private sector to 85 per cent.—a very significant change in the amount that will now be available to other sectors of care. Will she confirm that, in the intervening six weeks, something has happened to change her mind? Can she tell the House what has changed her mind and why the sum has changed?
I am only too happy to tell the hon. Gentleman. We have been consulting local authorities and have listened to their comments. Unlike the Labour party, which is in the pockets of NUPE, we listen to and work with local authorities. What I am trying to explain, in the most elementary way that I am able to do, is that the upshot of this announcement is that the amount to be spent in the independent sector overall will fall from 75 per cent. to 64 per cent. It is 85 per cent. of the transferred money from social security, not the 35 per cent. of extra money, that is coming through. We listen. We work in partnership. We treat local authorities fairly. Community care will be a great success.
I recognise the substantial sums of money that have been transferred to local government to deal with community care, but does my right hon. Friend accept the increasing reports from the professions that responsibility for mentally ill people should lie primarily with the medical profession and not with social services? Will she assure me and the House that there will be sufficient resources in local government to allow it, as the authority primarily responsible for social care and community care, to provide medical care to deal with mentally ill people?
My hon. Friend and I do not always see eye to eye on every issue, but we very much see eye to eye on the priority to be given to mentally ill people. That is why it is so important. It is one of the key areas in "The Health of the Nation". It is a targeted area not only in community care but in "The Health of the Nation". We have introduced the mental illness specific grant, which last year rose to £30 million. Above all, we have now established a task force in the NHS, led by David King, to ensure that we have a genuinely seamless service. It is no good people leaving long-term institutions without a long-term programme of care. Like my hon. Friend, I am absolutely determined to see that the standard of care for mentally ill people improves and is consistent throughout the service.