Seventh Standing Committee on Delegated Legislation
Tuesday 9 March 1999
[Mr. Joe Benton in the Chair]
Local Government Finance (Wales)
Special Grant Report (No. 2) (Wales) 1999
10.30 am
The Parliamentary Under-Secretary of State for Health (Mr. John Hutton): I beg to move,
That the Committee has considered the Local Government Finance (Wales) Special Grant Report (No. 2) (Wales) 1999.
The Chairman: With this it will be convenient to consider the Local Government Finance (Scotland) Special Grant Report (No. 1/1999) and the Local Government Finance (England) Special Grant Report (No. 38).
Mr. Hutton: These reports, made under section 88B of the Local Government Finance Act 1988 and section 108A of the Local Government Finance Act 1992 as it relates to Scotland, specify determinations concerning special grants which the Government propose to pay to certain local authorities in England, Scotland and Wales. The grant reports have been submitted by my right hon. Friend the Secretary of State for Health, and my right hon. Friends the Secretaries of State for Scotland and for Wales. They set out the agreements for the grants in respect to the costs to local authorities from 1 April 1998 to 31 March 1999 of supporting asylum seekers.
Hon. Members will know that asylum seekers who claim asylum at the point of arrival in this country are entitled to social security benefits which cover their needs for housing, food and other necessities unless and until their application for asylum is rejected, at which point benefits are withdrawn. Those who claim asylum after entering the country are not entitled to those benefits. Local authorities are responsible, under the provisions of the National Assistance Act 1948 and the Children Act 1989 in England and Wales, and the Social Work (Scotland) Act 1968 and the Children (Scotland) Act 1995, for supporting those asylum seekers not entitled to social security benefits.
Hon. Members will also know that we are committed to a radical reform of the current arrangements for immigration and asylum. We inherited a shambles from the previous Governemt. The system was protracted and labyrinthine, and the support grants to local authorities for the work that they were doing to support asylum seekers were inadequate and unfair. We set out our proposlas to modernise the system in the Home Office White Paper, ``Fairer, Faster and Firmer—A Modern Approach to Immigration and Asylum'', and my right hon. Friend the Home Secretary recently introduced legislation to this House which will improve the efficiency of immigration control; simplify and speed up the appeals system; regulate immigration advisers and tackle those who act unscrupulously; strengthen immigration controls; and give new powers to marriage registrars. In addition, we will introduce new, unified arrangements for asylum seekers in genuine need. We intend to deal with asylum applications quickly and fairly, so that genuine asylum seekers receive the protection to which they are entitled, and those who seek to abuse the asylum process are given no opportunity to play the system by pursuing appeals with no chance of success.
It is in that context that hon. Members should consider the grant reports before us today. We have made significant improvements to the grant regime. In doing so, we have consulted closely representatives of local government and the voluntary sector. The reports represent a step on the way to our goal of a modern asylum system.
Our improvements to the grant system have been strongly supported by local authorities. In the past year, there has been a substantial increase in the number of asylum seekers arriving in Britain. In 1997-98, we received 32,000 applications for asylum. In 1998-99, the Home Office estimates that the number could be as high as 53,000. The great majority of asylum seekers come to London. On 19 February, 14,579 adults were being accommodated by London local authorities, as were 9,475 families and nearly 2,000 unaccompanied asylum-seeking children. In addition, there are significant numbers of asylum seekers in south-east England due to the location of the channel ports and Gatwick airport.
Large numbers of asylum seekers in London and the south-east place a major demand on local authority social services as well as on housing and other services. It is not right that the cost should fall on local council tax payers or that local services for local people should suffer, as, I am sad to say, was the position under the previous Administration. My right hon. Friend the Home Secretary has therefore brought forward proposals in the Immigration and Asylum Bill to ensure a more even distribution of asylum seekers. In the meantime, we intend to make special grants that will substantially alleviate the burden on local authorities that accommodate asylum seekers. In doing so, we shall make significant improvements to the terms of the special grants.
In previous years there have been separate grant reports for adults, families and unaccompanied children in England. Because we have simplified the grants this year, there is just one grant report, but it contains different terms for each category of asylum seeker. The grant will enable local authorities to claim funds up to the equivalent of £165 per person per week in the current year in respect of adults accommodated under the National Assistance Act 1948 in England and Wales and the Social Work (Scotland) Act 1968 in Scotland. That represents an increase of 18 per cent. on last year's grant of £140 per person per week and will more accurately reflect the cost of accommodation, particularly for authorities in London and the south-east. The £165 maximum can be made up of costs for accommodation and board and set the authorities' administrative costs.
Under section 17 of the Children Act 1989 and section 22 of the Children (Scotland) Act 1995 local authorities have a general duty to safeguard the welfare of children in their area who are in need and, so far as is consistent with that duty, to promote the upbringing of such children by their families by providing an appropriate range and level of services.
In respect of families with children, the purpose of the grant is to reimburse local authorities for the additional expenditure that they incur in the current year as a result of supporting asylum-seeking families. In previous years the English grant has been subject to a threshold that meant that local authorities could claim no grant at all until they had spent a sum equivalent to a 1 per cent. increase in their band D council tax. If they passed that arbitrary and arcane threshold, they could claim only 80p for each pound of cost that they incurred above that limit.
I am glad to be able to inform the Committee that we have abolished that threshold. English local authorities will in future be able to claim up to £230 a week for each family that they accommodate. Authorities in inner London will be able to claim up to £240 a week for each family accommodated before 23 November 1998. That is the date on which we agreed in principle the terms of the grants with colleagues in the local government representative bodies.
The third category of asylum seeker covered by the special grant is unaccompanied children. In England there has been a large increase in the number of unaccompanied children and minors seeking asylum, the majority of whom become resident in London. A year ago there were fewer than 600 children in this category. On 19 February there were 1,926. Under part III of the Children Act 1989, local authorities have a responsibility to provide services for children within their area who are deemed to be in need. Therefore, if an unaccompanied asylum-seeking child is in need, an authority has the same duty as it would have for any other child. In the past this grant was also subject to a threshold: an authority had to spend the equivalent of 5 per cent. of its children's standard spending assessment before it qualified to receive any grant, and then the grant was cash-limited. Under the improved terms of this year's grant we have, as for families, removed that unfair threshold and the tight cash limit, which would have been unsustainable, given the large number of unaccompanied minors who have come to this country this year.
This year English local authorities will be able to claim up to £400 per week for each child aged 15 or younger and up to £200 per week for each 16 to 17-year-old. The different rates reflect the fact that children and young teenagers are likely to need residential or foster care, while older teenagers can live in supported lodgings and with greater independence.
In Wales there are relatively few asylum seekers—around 50 adults and a handful of families and unaccompanied children. They are, in the main, accommodated in Cardiff, Swansea and Newport. Grant will be available to local authorities on the same terms as in England, at an estimated cost of £250,000.
In Scotland, the situation is rather different. That is because, as in Wales, numbers are much smaller than in England, and different legislation is in place. Nevertheless, The special grant report for asylum seeker assistance in Scotland is broadly in line with the English special report. It takes account of the smaller numbers and it has been agreed with the Convention of Scottish Local Authorities.
Taken together, those elements of this year's special grant represent a settlement that is a great deal fairer to local authorities, and to council tax payers, who will feel with greater confidence that the burden of caring for asylum seekers will not force local authorities to transfer resources away from local services. The removal of the thresholds means that any local authority that provides support for asylum seekers will be able to claim for that support and, even allowing for the substantial increase in the number of asylum seekers, we will spend up to £30 million more than we would have spent under the grant regime that we inherited from the previous Government.
Committee members will not be surprised to learn that we expect local authorities to live within the fair and realistic terms of the grant. We have, therefore, imposed a cost ceiling of £208.2 million for England, although first indications are that the actual sum claimed will fall comfortably within that figure. The ceiling for Scotland has been set at £1.5 million, reflecting the smaller numbers involved, and that for Wales will be £450,000. If the total amount claimed rises above those ceilings, we will reduce the payment to each authority proportionately. We also expect English local authorities to work with the Home Office to set up voluntary arrangements for the more even distribution of newly arrived asylum seekers around the country. We welcome the co-operation that we have received from the Local Government Association and the Association of London Government on this important initiative.
Finally, the grant report is for this year only, and the arrangements will change when the Home Office assumes responsibility for adults and families next year. A year ago my hon. Friend the Minister of State, Home Office, said that we would listen to representations about asylum seekers' grants, We have worked in partnership with local government to meet its concerns and to deal with the substantial increase in the number of asylum seekers who are entering the country. We have improved and simplified the grant formula. In particular, we have removed the unnecessary and unreasonable thresholds and cash limits that our predecessors imposed. I commend the special grant reports to the Commitee.
10.42 am
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