REPORT OF THE LEADER OF THE COUNCIL
TO
CABINET
22 AUGUST 2000
PURPOSE: TO OUTLINE THE DETAIL AND IMPLICATIONS OF THE
COMPREHENSIVE SPENDING REVIEW 2000
RECOMMENDATIONS
Introduction
The Chancellor of the Exchequer announced the outcome of the Spending
Review 2000 to the House of Commons on Tuesday, 18th July. Details of the
Government’s new three year spending plans are set out in the White Paper,
“Prudent for a purpose: building opportunity and security for all” (Cm4807), also
published on 18th July.
DETAIL FROM SPENDING REVIEW
1.
IMPLICATIONS FOR
SALFORD
Local Government Finance
Key Issues
(a)
Local Public Service Agreements (PSAs) extending the Public Service Agreement (PSA)
approach to local services.
·
A national level Local Government PSA will pull
together the Government’s key targets agreed
between the Treasury and Departments that
local authorities will help to deliver.
·
The Government will also work with local
authorities and the LGA to pilot Local Public
Service Agreements (Local PSAs), which will
help to achieve key Government and local
priorities.
Authorities that meet the more stretching
performance targets agreed in local PSAs will gain
access to a new Performance Reward Fund and
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Salford has not been
approached for the first
phase
increased freedoms.
· A pilot with around 20 authorities will be run
for 2001-02, ahead of a planned wider roll-out
in 2002-03. Prospectus for Pilot Authorities
published 28th July.
(b)
A new Neighbourhood Renewal Fund was
announced. As part of the local government
settlement, it will provide money for authorities
covering the most deprived areas, and is worth:
£100m in 2001/02; £300m in 2002/03; and
£400m in 2003/04.
The cross-departmental review of Government
intervention in deprived areas also concluded that
core public services such as schools and the police
should become the main weapons against
deprivation. Government departments will be
setting specific targets on narrowing the gap
between the most deprived areas and the rest of
the country and review its funding allocation
accordingly.
Pilot to relax a range of
planning, operational and
financial restrictions if
LAs can demonstrate it
will promote improved
performance.
This will target the 44
most deprived LAs in the
2000 Index of
Deprivation due to be
published shortly. The
last draft ranked Salford
as 26th nationally and 7th
in the North West. We
need to see the Index to
confirm this.
The report of our Area
Regeneration Task Group
will inform our agenda.
There is to be a review of existing programmes,
such as the Single Regeneration Budget and the
New Deal for Communities to ensure their role is
complementary to the refocused main services.
Start up funding for the new Local Strategic
Partnerships is to be met from the New Deal for
Communities budget.
(c)
Local Government On-Line
Additional resources are being provided over the
next three years to ensure that local government
will make its contribution to the Government’s
target of 100% electronic service delivery by
2005. This, along with over £1b already spent
annually by local authorities on IT, will allow local
government to develop on-line delivery of priority
local services.
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The sums to be made
available nationally are
£25m 2001-02, £135m
2002-03 and £190m
2003-04. This may allow
the Council to attract
resources to help the
implementation of the
Information Society
project but as yet
allocation methods have
not been agreed.
(d)
2.
New spending plans provide for real increases in
Standard Spending Assessments of 5.6% in
2001/02, 5.7% in 2002/03 and 6.0% in 2003/04.
Education
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The increases are
welcome but the increase
in 2001-02 is skewed by a
9% increase in police
funding. In addition the
education increases are
likely to be “earmarked”
for education. The Social
Services increase for
2001-02 at 4.8% appears
low when considering the
added pressures.
Individual LAs will have
different increases
because of number of
client groups and data
changes. A recent
exercise by SIGOMA
indicates increases for
Salford - before data
changes - of 3.75%,
5.54% and 6.12% over the
three years. The
increases in the first two
years are skewed by
higher education
increases - which are
likely to be earmarked.
So pressures may tell on
other services.
To take account of
recent trends, Salford’s
increases could be
reduced by between
0.75% and 1.5% due to
data changes.
Key Issues
·
·
The 2000 Spending Review adds over £10b to
spending on education and training in England by
2003/04; and
We will need to be able
to fully passport the SSA
allocation to schools.
a 33% real increase in spending is projected for
UK education between 1996/97 and 2003/04.
The UK annual average growth between
2000/01 and 2003/04 is 5.4%
The following initiatives were included in the
White Paper:
·
·
·
·
increasing direct payments to schools by
£250m to £550m;
expanding Sure Start to reach one third of all
poor children;
expanding catch-up programmes for children
who are falling behind in primary schools;
extending the literacy and numeracy strategy
to secondary schools and so boosting
attainment at Key Stage 3 (age 14);
·
extending the renewal of the schools estate
and boosting pupils’ access to computers;
·
encouraging more young people to stay on in
post-compulsory education;
increasing participation, broadening access and
maintaining high rates of retention in higher
education; and
introducing a major drive to help adults
overcome poor literacy and numeracy.
·
·
The following education targets were set:
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Average £70,000 to each
secondary school and
£20,000 to each primary
school per annum.
Invitation received to bid
for Round 3 for Salford.
Area to be selected.
Further report to
Cabinet required.
Key Stage 3 support will
assist in addressing
problems of attainment in
the secondary schools.
Unclear whether
measures under this point
to allocation via more
grant regimes. If so,
would mean added
bureaucracy for schools.
The OFSTED Post 16
inspection in Salford is
due out soon. This will
3.
·
85% of 14 year olds to be proficient in literacy,
numeracy and IT by 2007;
·
majority of young people to enter higher
education by 2010;
·
60% of 21 year olds to have A-levels by 2004;
·
extra 80,000 more 16 to 18 year olds in
education by 2004;
·
500,000 more computers in schools by 2004.
Transport
Further details of the increased provision for
transport is expected was announced by the
Deputy Prime Minister on 20th July alongside the
national 10 year transport plan.
Key Issues
4.
focus our Lifelong
Learning Partnership on
retention in the City.
Many leave the HE sector
to take up employment
before the end of their
course. We are already
piloting Education
Maintenance Grants in
Salford this year which
should assist retention.
·
spending will rise from £4.9bn in 2000 to £6bn
next year, to £7.4bn the year after and £9.1bn
in 2003/04;
·
rural transport will receive £95m a year.
Social Care and Health
Further details of the increased provision for
social care and health is expected to be announced
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The announcement
indicated £180m would go
to the road and rail
network. The extra
money will make
improvements including
repairs to local roads.
This will come through
our LTP (Local Transport
Plan) settlement.
However, £250m has
been allocated in GM to
fund Metrolink extension.
It is unclear what impact
that will have on any local
LTP settlements for
other improvements in
the future. Any
increased LTP settlement
for local roads
improvements would only
allow us to improve our
principal route network,
not side streets.
by the Secretary of State for Health next week,
alongside the NHS National Plan.
Key Issues
·
NHS spending will increase by the already
announced £13bn;
·
Social Services funding “has been increased
significantly;”
·
funding for the Food Standards Agency will
increase by an average annual 6% in real terms;
·
further details of health spending will be
published in the national health plan.
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It is difficult to say how
much real increase there
will be or whether the
increase will be taken up
through movement of
finances between LAs and
the DSS. For example,
the NHS plan proposes
some transfers of
funding responsibility
from the DSS to LA
Social Services
Department, in particular
the “Reserved Right
Scheme” (i.e. anyone who
was in a residential care
home prior to 1993
continues to have fees
met by the DSS) which
will be ended. Those on
preserved rights will
become our responsibility
in 2002. We also
anticipate other changes
in the paying for
residential and nursing
care which will impact on
current charging
systems.
5.
Housing and Regeneration, etc.
A more detailed breakdown of the £1.6bn per year
for social housing was announced on Monday,
24th July.
Key Issues
·
·
·
Extra £1.6bn a year by 2003/04 compared to
2000/01 for tackling the backlog in investment
in Council housing and to provide more housing
for those in need. As a £400m increase was
already planned for 2001/02 this represents a
net increase of £1.2bn over the two years
2002/03 and 2003/04;
a new Community Housing Taskforce to be set
up to drive forward a new stock transfer
process that will also aim to empower tenants
and regenerated communities;
the White Paper stated the Government’s aim
that “half a million homes will be brought up to
a decent standard by 2004 - tackling over a
third of the social housing units in a poor
condition, with all social housing reaching a
decent standard by 2010;”
To bring Council housing
up to decent standards
by 2004. This national
target is dependant upon
an estimated large scale
transfer programme of
600,000 dwellings. The
main increase will fund
the major repairs
allowance from 2001-02
onwards via the HRA
subsidy system anis
welcomed. This is
intended to enable
authorities to maintain
stock in its present
condition and will provide
an average of £530 per
annum per dwelling (to be
maintained in real terms
in future years.
The Major Repairs
Allowance is to be
created from existing
funding allocated to the
Basic Credit Approvals
(BCAs) pot which funds
HIP programmes. This
reduction in BCA
allocation will impact on
HIP resources to tackle
public sector backlog
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repairs/improvements
and private sector
renewal. (We have
planned to increase the
proportion of HIP
allocated to private
sector renewal).
Modernisation of pre1919 terraced stock is no
longer cost effective due
to low valuations because
it no longer provides
standards which people
aspire to. This issue will
require urban
regeneration funds to
convert/demolish/replace
housing lost.
For HRA subsidy,
Government plans assume
continued withdrawal of
subsidy
·
Regional Development Agencies will receive an
extra £500m a year;
There will be a
programme of funding in
2002-03 and 2003-04 to
fund arms length housing
management and will only
be available to those
authorities who have set
them up, are progressing
business plans and can
demonstrate excellent
performance.
This equates to a 42%
increase in RDA
allocations from £1.2bn
to £1.7bn per annum.
There has been no
indication yet as to what
the money will be
allocated to, nor has
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·
6.
The Government will guarantee funding for the
European share of Objective 1, 2 and 3
projects within departmental allocations.
Crime
A more detailed announcement was made on
Wednesday, 19th July by Home Secretary Jack
Straw, covering details on resources for the police.
Key Issues
·
·
7.
The Home Office budget will increase from
£8.2bn in 2000 to £10.6bn in 2003/04;
money spent tackling drug use will grow 10% a
year, reaching £966m by 2004.
Social Security
there been a financial
split between the regions.
It is anticipated that
match funding will still
need to be found through
regeneration
programmes.
This outlined additional
funding for 4,000 police
recruits, new police
radios, a national DNA
database and local crime
reduction partnerships.
It is expected that
competitive bidding under
the Crime and Disorder
Act will continue.
Key Issues
·
8.
The New Deal for young unemployed will be
made permanent;
·
the Chancellor predicted anti-benefit fraud
measures will save £1bn a year;
·
By 2004 £60m will have been spent on
encouraging an additional one million people to
become volunteers.
Other Cross-Departmental Reviews
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This has implications for
the City Pride Community
Environmental Initiative
which offers a 12 month
placement rather than a
6 month placement
offered on the basic
Government scheme. The
enhancement of the City
Pride scheme is funded
through short term SRB
initiatives giving us a
sustainability issue.
A series of 15 cross-departmental reviews were
included in the White Paper as well as the ones on
Local Government finance and Government
intervention in deprived areas. The outcomes of
these included the following:
·
·
·
·
·
·
the establishment of Local Strategic
Partnerships (LSPs) as part of Community
Planning, to bring together service providers at
local level; underpinned by a Market Towns
Initiative for rural towns;
a major expansion of the Sure Start
programme - doubling the number of
programmes from 250 to at least 500 by 2004,
to reach one third of all poor children under
four years old;
a Children’s Fund to tackle child poverty, worth
£450m over three years, with a strong
emphasis on voluntary sector delivery, along
with an integrated delivery strategy for the
new Connexions service, to ensure that young
people at risk make the transition safely and
successfully from childhood to adulthood;
an Employment Opportunities Fund, worth
£875m in 2001/02 and increasing to £1.4b by
2003/04 to enhance the New Deal and extend
the ONE service, helping people to move from
welfare to work;
new investment in local Crime and Disorder
Partnerships; with a new, better integrated
strategy to reduce delays and inefficiencies
across the Criminal Justice System;
a National Treatment Agency for drug
abusers, underpinned by a pooled treatment
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The North West
Development Agency will
have a key role in this and
we need to assess the
impact on the Salford
Partnership. More
detailed guidance on this
will be due in the Autumn.
We have been invited for
Round 3. We need to
consider further areas to
cover the future rounds.
We need more detail on
this to assess the
implications to the City
and to be clear on how
this affects the
Connexions service as the
Children’s Fund is
targeted on the 13-19
year age group.
This may have
implications for our One
Stop service we are
planning under SRB 5.
We need more details to
assess the implications of
this.
budget;
·
a strategy to bring out a step change in
volunteering, with involvement of the new
Experience Corps in pilots for Care Direct, a
new gateway to care and support for older
people;
·
a new strategic role for the e-Envoy,
overseeing new investment in electronic service
delivery in Government.
CONCLUSIONS
There is a great deal of detail to come out of the announcements under the
Comprehensive Spending Review which we will need to assess before the full
implications of the review are known. Some of the increased allocations may be
due to movement of funds between Departments, others may be real increases.
Further reports to Cabinet will be prepared as the detail comes out from
Government.
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