Standard Spending Assessment (Somerset)

Part of the debate – in Westminster Hall at 12:30 pm on 9 January 2002.

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Photo of David Heath David Heath Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry) 12:30, 9 January 2002

I am grateful for the opportunity to speak about the standard spending assessment for Somerset. This seems to be a dreary ritual that we must go through each year. I seem to have been making precisely the same arguments for more than 17 years and I know that the Minister shares my background in local government, so he has probably been making the same arguments, on both sides of the fence, for an equal period. The sad fact is that, until the apportionment of local government finance is right, or at least approximately right, we must continue to make the case for the areas that we represent, and I certainly make no apology for speaking for Somerset.

It is good to see in the Chamber a full house of my colleagues who represent Somerset constituencies: my hon. Friend Mr. Laws, Mr. Heathcoat-Amory and the hon. Members for Taunton (Mr. Flook) and for Bridgwater (Mr. Liddell-Grainger). I hope that our arguments are the same, because we are speaking for the communities that we represent.

I am familiar with the recitals that we must make on these occasions, and I shall not dwell on the structural problems with the present formula, because we are all familiar with them. Somerset is a rural county in the south-west and its local authority shares with many others the difficulty that additional costs in the county are not properly met by the formula—for example, the cost of providing a large number of small schools in a rural county, the cost of transport and the cost of providing for a dispersed population. We have more minor roads per person in the county than almost any other authority.

As the Minister and I are familiar with local government, let us not dwell on the more formulaic versions of this debate. I assure him that I am not about to wave shrouds or bleeding stumps at him, and I ask him to do me the favour of not insulting the intelligence of Somerset people by saying that everything in the formula is perfect and that Somerset has a good deal. We all know that that is not so.

I want to raise key matters, including social services, education, the Somerset levels and the problem of flooding and the cost of flood defence. I shall then refer briefly to district councils and the effect of council tax on those living in the county.

I start with social services, which cause enormous concern in Somerset. I was lucky to secure an Adjournment debate on 16 October 2001 when I drew attention to what is reasonably described as a crisis in the provision of long-term care in the county. I know that Somerset is not alone in experiencing that problem, but I also know that it is a matter of considerable concern to the director of social services and his staff and to many people who have relatives in long-term care or who require those services themselves. Care homes throughout the county have been closed, with devastating effects on people. Many businesses that provide care home facilities are precarious to the point of going under and there are real difficulties in providing domiciliary care to the standard required because of recruitment problems.

During my Adjournment debate, I received assurances from Ministers that were largely couched in the view that significant extra money was to be provided by the Government to help relieve what was recognised to be a serious situation for social services. They implied that it would make a significant difference to Somerset, which is, according to reputation and history, one of the best social services authorities. Independent assessments from the inspectorate and the Audit Commission have proved that the care provided by Somerset is of a high order; it was also one of the pioneers of effective co-operation between health authorities and the private sector.

The promise of cash has turned out to be illusory. There has been an increase of an extra £3 million in the base budget, but against that an almost equivalent loss has occurred—some £2.6 million—in the form of specific grants.

I shall draw the Minister's attention to three main points. The first concerns what are termed preserved rights, which relate to the income support that was available to residents before 1993 and is supposed to have been provided for in the settlement. The difficulty is that the figure has been calculated on the basis of the case load in December 2000 and multiplied by a factor based on the iniquitous area cost adjustment. That has resulted in a substantial shortfall between what is provided for by the formula and what is needed for dealing with real people in real communities who need real help. A figure need not be plucked out of the air because we have evidence, from information provided by the Benefits Agency, of how many people should receive the preserved rights money. The agency's figures, which are up to date and genuine, tell us that Somerset's allocation should be £6.3 million. However, under the formula that the Government have chosen to use, the figure is £5.5 million, which creates a shortfall of £800,000.

The second issue relates to residential allowances, which is the money that should be transferred to the county council to meet the cost of care packages when residential care allowances stop at the end of the financial year. In a 2001 paper from the Department of Health, the Government state that, if the formula is based on equity, Somerset should receive £1.29 million to meet the costs of that new responsibility. Instead, however, the Govt have used a formula based on the extraordinary machinations of the SSA and the area cost adjustment, which means that Somerset will be allocated only £850,000, creating a shortfall of £440,000. Perhaps the reason for the shortfall is that Somerset makes heavy use of independent sector placements. For heaven's sake, that is what the Government asked local authorities to do. It is part of the great partnership between the public and private sectors that the Government advocate. Somerset puts that policy into action and does what the Government want it to do even before they have thought of it, but it is penalised as a result, which cannot be right.

Promoting independence grants are the third element within social services. Recurrent expenditure should be continued because of winter pressures and because partnership and prevention grants are being put together. It has, however, been reduced for the inelegantly named winter PIGs—promoting independence grants for winter months—and the result is a shortfall of £1.4 million. The money that the Government claim to provide for social services with one hand is being taken away with the other, to the detriment of social services in Somerset and the dismay of people who rely on those services. The big question is why the Government do not use the actual cost of services for their calculation. Given that the services are available and that they are provided from their sources, why are they not used in the formulation?