news analysis of the annual cash round for social services and the government`s vision for childhood

(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

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

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

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

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

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

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

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


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

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

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

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

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.

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