News

(see below for news analysis of the government's strategy for young people)

The large increase in personal social services spending for 2002-3 has been widely welcomed. Jonathan Pearce makes sense of the pluses and minuses.

Roll up. Roll up. The local government finance circus is coming to town. Featuring local government secretary Stephen Byers as the ringmaster and minister Nick Raynsford as the local government lion-tamer, it’s the time of year when audiences across the country are amazed as figures tumble over each other and statistics jump through hoops of burning fire.

New acts in the big top this year include Conservative shadow local government secretary Theresa May walking the high wire and strongman Don Foster, Liberal Democratic spokesperson for social justice.

In his ringmaster’s role last week, Byers announced the local government financial settlement for 2002-3, handing out goodies for everyone.

The total support from government grant and business rates would rise by £3.3 billion to £47.3 billion - an increase of 7.4 per cent on the previous year, more than three times the underlying rate of inflation. But "the extra funding must drive forward change," he added.

More specifically, authorities with education and social services responsibilities will receive an increase of at least 4 per cent, but no more than 7 per cent.

For personal social services, the gross total standard spending (TSS) works out as £11.169 billion (excluding £40.7 million in capital grants) - an increase of £684 million or 6.5 per cent on this year. Out of that, the social services standard spending assessment (TSS minus the ring-fenced grants) is £9.231 billion (an increase of £470 million or 5.4 per cent).

But beneath the grease and the showpaint, there lies a different story. Despite welcoming the overall increase in funding, Local Government Association leaders have expressed serious concerns: "It is clear that the allocation has not altered from that outlined in the 2000 spending review, despite the significant and highly publicised pressure that services for the elderly and children are under," says LGA chairperson Sir Jeremy Beecham.

The adherence to the spending review stands in stark contrast to the £1 billion for the NHS, while next year’s £200 million bed-blocking grant for councils will barely scratch the surface of the problem.

The first thing to say about the local government financial settlement is that it is Byzantine, involving as it does statistical formulae, council tax and business rate estimates, and a whole host of regional adjustments and damping factors.

Fortunately, this is the last year of the current system, because the department of transport, local government and the regions has promised a new methodology from next year which will be "transparent, fair and just".

But while lion-tamer Raynsford admits the scheme is "complex, difficult and perceived to be unfair", he uses the forthcoming local government white paper as his protective chair - everything will be better, just you wait. Ring-fencing will be reduced and it’s "important we get to the bottom of this increased pressure in social services", he says.

Foster says the "totally impenetrable mechanism" has to change, while May claims: "The complexity is very useful for central government. If no-one understands the figures, then central government can blame local government."

However, despite May’s claim that "the figures are fiddled", this year’s settlement is one of the most generous in recent history.

But it hides a massive increase in the use of ring-fenced expenditure since 1997 - tripling from 4.5 to around 15 per cent of total local government spending.

Within the social services standard spending assessment (SSA), the picture is even more dramatic - specific grants have risen by 117 per cent on the current year to £1.938bn, comprising 17 per cent of the total social services provision.

There are several specific grants, including the £614 million preserved rights grant reflecting councils’ new responsibility for funding the care of people who entered residential care before April 1993, and an increase in the children’s services grant from £291.8 million to £452 million, covering the full-year effects of the care leavers transfer and including an additional £13.5 million care leavers’ benefits transfer.

While money for defined initiatives is always welcome, ring-fencing goes against the government’s stated aim of freeing up local government. Through specifying how money must be spent, local discretion is fettered. Raynsford describes the ring-fencing trend as a supertanker that is slow to turn around and believes this settlement will be seen as "the high watermark of ring-fencing".

But government has had five years to lean on the helm, says Foster. Supertanker or not, the Labour administration - in contrast to its Conservative predecessor - has used ring-fencing to kick-start and maintain key initiatives, but now both central and local government have got used to the money and find the habit hard to kick.

Although government wants to reduce ring-fencing - a move backed by the LGA - social services authorities approve of it, according to LGA director of local government and finance Neil Kinghan.

Ring-fencing aside, setting SSAs has been affected by government data collection, including the calculation of the "area cost adjustment" - the scaling factor applied to London and south east councils to reflect their higher costs (mostly pay) - which is derived from data supplied by the Office for National Statistics.

Because of an oversight in July in the compilation of the ONS’s new earnings survey - it omitted the salaries of 350 high-earning financial, business and media executives - many London councils were set to lose out due to the figures showing a fall in the capital’s salaries.

The DTLR raised doubts, but it took until November for the ONS to spot the mistake, prompting a last-minute ACA re-adjustment.

What London councils gained, the provincial metropolitan ones lost, including a £1 million cut for Wigan council, £3 million for Birmingham - to name but two. Many such councils have made budgetary decisions based on the July figures and will now have to balance their budgets.

A similar problem applies to the floors and ceilings system for damping grant changes. In short, to ensure that all education and social services departments can receive at least a 4 per cent increase, a ceiling of 7 per cent has to be introduced. Thirty-two authorities benefit from the floor, while 11 have their funds restricted by the ceiling.

However, those in the middle can suffer because their SSAs are scaled down to pay for the floor. As a result, the government has added an extra £41 million. But the LGA says that another £31 million would have paid for such a scheme in full, without the necessity to impose ceilings on authorities which need a higher than average grant because of an increase in demand for services.

Which all comes down to the same thing - lack of funding for social services. The local government white paper due before Christmas promises a bright new system of transparency, fairness and justice, but whether it can deliver those ideals without extra investment and a genuine attempt to tackle the pressures is open to question.

The alternatives seem few and far between. The Liberal Democrats plan to publish their own white paper, but the Conservatives have just embarked on a policy review and so have no proposals to put forward at the moment - that’s why May is on the high wire trying to perform a balancing act between the needs of central and local government. Meanwhile, her general point stands: "People in government - at whatever level - are attacking each other over something people don’t understand."

But a less complex system could mean a more unfair one. As Foster says: "Even with a new system - any system - there will be winners and losers." In other words, the circus will be back next year.

Specific grants (£million) 1,938        

Promoting independence grant  155

Preserved rights grant 614

Residential allowance grant 93

Children’s services grant 452

Building care capacity 200

Mental health grant 154.5

Carers grant 85

Training support programme 57.5

Performance fund 50

Deferred payment grant 30

Aids support grant 16.5

Teenage pregnancy local implementation 16

Care Direct 10

Young people’s substance misuse grant 4.5

Secure accommodation 0.014

Source: Local Authority Social Services Letter (2001)13

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The children and young people's unit has launched its vision of what childhood should be. But how will the effectiveness of its aspirations be measured, asks Anabel Unity Sale.

The government's children and young people's unit launched its consultation paper on its strategy in England last month. The document is the unit's first step towards developing an overall strategy for young people aged up to 19 that cuts across all government departments.

It contains the government's commitment to start "with a vision for children and young people, rather than setting out with a discussion of services". It is out for consultation until February, with a final version to be published next summer.

The document's strategy is a nine-point series of "aspirations", "visions" and "dreams" (see below). Even Althea Efunshile, the director of the children and young people's unit, admitted at the consultation paper's launch that the strategy might appear a bit sentimental. "The strategy will set out a vision for how childhood should be. Perhaps that sounds a bit kitsch but it is what we are trying to achieve."

The document insists that the strategy "will represent far more than aspirations on paper". But how will its broad aims be measured?

National Children's Bureau chief executive Paul Ennals's answer is to ask the children. He praises the paper's focus on trying to obtain answers to difficult questions: "This is not as easy as measuring something you can count."

Despite this, Maddy Halliday, director of UK development at the Mental Health Foundation, believes the document's vision, aims and outcomes are confusing and sometimes overlap. "We agree with its sentiment and its overall spirit, but when you read the paper it is not that clear," she says.

In response to the suggestion that the 32-page document is too general, Caroline Abrahams, director of public policy at children's charity NCH and a member of the unit's external advisers group, says it was a conscious decision: "It is deliberately very broad and top-line strategic because you have to start somewhere, and whatever else is going on fits into it at an appropriate level later."

One suggestion made in the document is the publication of a regular state of the nation's children and young people report. Such a report would help England to look at its situation in an international context, according to Kathy Evans, head of social policy at the Children's Society.

The unit's strategy looks at the general needs of children rather than the specific needs of more vulnerable groups. But the general approach has its critics. Barnardo's policy and practice officer Libby Fry cites asylum seeker children and travellers as just two groups not covered. "We hope the consultation will lead to the interests of these, and other vulnerable children, coming more to the forefront," she adds.

Halliday says the needs of young people with mental health problems need to have a greater emphasis too. She would like the final strategy to "recognise that mental health well-being is one of the foundations for a young person's development through life".

The strategy's ambitions are clear. It wants the agencies delivering services for children and young people to fit their service around the user and not the other way around.

But will the sector be capable of such change? Evans insists it is down to everyone to make the rhetoric a reality. "A document won't do it on its own or even a well-intentioned children and young people's unit won't," she warns. "What is required is the mass ownership of the strategy's principles and outcomes."

Building a Strategy for Children and Young People from www.cypu.gov.uk

The vision behind the strategy:

- The opportunity to grow up in a loving environment.

- Real opportunities to achieve full potential.

- Opportunities to experience the benefits of living in a multi-cultural society.

- Prospect of living in a safe and secure environment.

- Chances to contribute to local community.

- Appreciate community, sport, art, music and so on.

- Support in transition from birth to adulthood.

- Excellent joined-up services.

- End child poverty and social exclusion.