§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
2.18 am§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)I rise under Standing Order No. 1 to raise the subject of cuts in capital provision for residential homes in the Borders region. At this late hour, my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and myself wish to detain the House to discuss this important subject which affects the local authorities in our respective and joined constituencies.
Local authorities such as the Borders regional council require Scottish Office approval before incurring liability for capital expenditure. That system of financial planning has been in operation since 1977 and under that scheme local authorities submit, as no doubt the House knows, five-year capital plans for approval. Allocations under the scheme are usually sanctioned each January and at that time provisional allocations are issued to cover the two following years.
I understand that a limited flexibility is built into that system, which has been in operation since 1977. For example, I am aware that councils may carry forward up to 10 per cent. of capital allocation underspent in any given year. I understand, too, that they can always realise assets that they own, or vary programmes within their overall capital allocation by up to a factor of 10 per cent. That system is well known and understood by councillors and officials in the Borders region.
The principal complaint of my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale and myself—and our main reason for raising the subject—is that earlier this year the Government, unilaterally and without warning, cut the Borders region's capital allocation under the social work heading for 1986–87 from £550,000 to £350,000—a reduction of about 36 per cent. To date, the Government have refused to reconsider that decision.
Of course, we understand that provisional allocations are sometimes varied—they are usually varied upwards —but the Minister must agree that 36 per cent. is an unusual if not unprecedented cut in a capital allocation.
The Borders regional council, operating under the assumption that £550,000 of capital would be at its disposal in the current fiscal year, set out a programme stretching over a number of years and totalling £3.3 million to replace four outdated homes for the elderly. The phasing of that programme deliberately sought to take full account of the Government's financial constraints. The council's plans set out to replace the existing Victorian mansions, which we all realise are unsuitable as modern residential accommodation for elderly people, one at a time—not one every year or anything more ambitious. A proposal to replace them at a faster rate could easily be justified in terms of need, but that would be impossible to contemplate under the Government's strict financial regime.
The council proposes to rebuild and replace the Peelwalls home in Ayton, Berwickshire, and to build a new home in Jedburgh to accommodate residents from the Milfield home in Jedburgh and from Romany house in Yetholm. It also proposes to rebuild Wellwood in Selkirk in my right hon. Friend's constituency.
827 There are compelling reasons for replacing those homes as a matter of urgency. First, the majority of bedrooms accommodate up to three or four beds in each room. Secondly, the lack of proximity to toilet facilities requires residents to resort to commodes during the night, causing a great deal of embarrassment to themselves and inconvenience to those with whom they share rooms. The only privacy that can be found in the existing premises is behind the locked door of a toilet. The fact that most existing buildings are multi-level premises means that residents who are old and infirm have to negotiate steps which are a hazard to frail elderly people.
Residents are looked after by a band of dedicated staff, but they are extremely restricted by the stifling physical constraints and the council takes the view—with which I agree that going for a more modest capital programme, which would be restricted to improving existing buildings would be futile and, in the long term, a waste of public funds. The existing disadvantages can be remedied effectively only by new buildings, custom-built to the new designs and standards that provide a pleasant environment and allow the elderly to be looked after more sympathetically. A striking example of what can be achieved can be seen at the council's new Waverley home at Galashiels.
The planned replacements would provide single room accommodation for every resident, which would allow social relationships to be established at will in the common lounges and sitting rooms, while maintaining independence and privacy in each bedroom. It is striking to note how residents can respond much more positively when they are allowed to do as much for themselves as they are able and want to do. The quality of life for those elderly people can become infinitely higher.
In addition to the new opportunities open to residents in the new custom-designed homes, the kitchens would provide meals on wheels for old people living in their own homes within a wide catchment area and a more extensive warden service as well as day-care facilities. Not only are old people's homes at stake, but new centres and public facilities to serve a community wider than that of the residents.
The plans were at an advanced and detailed stage. They have been knocked on the head. The best that can be said is that there is continuing uncertainty as a direct result of the cut announced by the Government earlier this year. The cut in the Borders region social work provision was the biggest cut in Scotland, except for Tayside, which suffered a cut of 39 per cent.
All these difficulties are compounded by the fact that the Borders region social work allocation for future years shows that the region will be forced to abandon its homes replacement programme. If that happens it will be a tragedy. Many elderly residents will be condemned to end their days without any basic dignity or privacy. They will be denied the accommodation that will give them the chance to retain independence within a residential home for as long as they are physically able.
The Minister will argue that the Borders region has done relatively well. The figures that he will advance to justify that claim were drawn from a straight population count. He must recognise that social work programmes are not provided for the general public, but for target groups. In the Borders region the budget is almost exclusively used to provide for the needs of the elderly. The Borders region has a high proportion of elderly people compared with 828 other regions. That is not reflected in section 94 capital allocations. If capital allocations were drawn within a range of factors, including population, but not exclusively population, the region would merit a larger allocation. The current plans envisage that one home should be rebuilt every three years. That is not an ambitious target. To deny the region the capital resources to carry out that programme is politically perverse.
The Minister has to realise that for a small, extremely responsible and prudent authority such as the Borders region, a cut of this magnitude makes total nonsense of any concept of long-term planning. The whole system of capital allocations requires urgent review. More notice must be given of changes of this magnitude in provisional plans. There is scope for more flexibility within the capital budget allocated to local authorities. The Government must take a more relaxed view about what might be borrowed. That is long overdue.
Will the Minister consider a further application during this financial year? A sum of £90,000 to £100.000 this year would keep the original capital plans on course. If he cannot give that assurance tonight, will he make a clear commitment that he will instruct his Department to devise a scheme of finance, by the autumn of this year, for guidelines for the fiscal years 1987–88 and 1988–89 that will enable the homes to be replaced, even if that takes longer than originally planned? Nothing else will do.
§ The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay)I am glad to have the opportunity to reply to the points which the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) has raised on behalf of the senior citizens of his constituency and the Borders regional council which is responsible for their care.
I should apologise for keeping the hon. Gentleman until this time of night, but his hon. Friend the Member for Orkney and Shetland (Mr. Wallace) had just as much a part to play in keeping us here until this time. The redeeming feature is that I had to stay anyway, so that makes it easier for me to answer an Adjournment debate at this hour.
I welcome the opportunity because it enables me to explain the Government's policy on capital allocations to local authorities and the methods used to determine these allocations generally and in the particular case of the Borders. It seems to me that in his understandable concern about the problems currently besetting the regional council's social work building programme the hon. Member may not have fully appreciated the detailed considerations upon which its capital allocation for 1986–87 was decided. As a consequence he has laid the blame for these difficulties entirely at the door of the Government. I hope to show, in the time available to me, that that is not the true position.
Before I put all the facts before the House, let me first set the wider scene. The Government's consistent and continuing policy is that recovery of the economy should be led by investment in the private sector. Our overall economic strategy therefore embodies a firm commitment to the control of public expenditure. This in turn means that provision for local authority capital expenditure must be contained within the level of resources which the Government consider it appropriate for local authorities to consume. It is nevertheless our stated aim, so far as 829 resources permit, to issue capital allocations which allow authorities to proceed with those projects to which they attach a priority. That is the approach we adopted in deciding the allocations for 1986–87. Of course, it is the approach we adopt in all matters of public spending, not just social work. I can hardly let this evening pass without mentioning the considerable amount of capital which has been given to the Borders health board in order to build a brand new hospital. I was pleased to go and lay the foundation stone to show that Conservative Governments do care and that they put capital expenditure into health and social work.
It would perhaps promote a better general understanding of how decisions are made and the great care that is taken to ensure fair treatment for all authorities and all programmes if I were to explain briefly the various steps which lead to the issues of final allocations. Capital allocations for each programme in local authorities' financial plans are issued in January or February of each year, when authorities are given a final allocation giving formal consent to capital expenditure in the forthcoming financial year and provisional allocations for the two years thereafter.
Towards the end of his contribution, the hon. Member for Roxburgh and Berwickshire was suggesting that we should look further ahead than the immediate financial year and the two years thereafter. If we did more than that we would have to do similar for the whole Government programme. One could not have part of the programme rolling for five years and have the main part of the programme, the total amount of capital available which is laid down by the Treasury in discussion with Ministers, rolling for only three years.
As I have already indicated, the allocations were not plucked out of the air. They were the result of a most careful scrutiny of all authorities' financial plans and a detailed assessment of their relative needs, as distinct from desires, for new and improved buildings. It was recognised that needs varied from one region to another by virtue of factors other than the purely demographic, as has long been acknowledged in the arrangements for the distribution of rate support grant. One such factor is the state and extent of the provision already present on the ground by reference to the building stock survey, while others include the varying approaches of authorities to programme planning ad their past performance in the use of the resources made available to them. That is an important factor to which I shall return.
All these factors having been taken into account authority by authority, it was decided that the final allocation to the Borders region social work captial programme for 1986–87 should be £350,000. This was significantly less than the final allocation of £695,000 for 1985–86 and the provisional allocation of £550,000, which was given for 1986–87, which had been notified to the Borders regional authority in February 1985. Other authorities were, likewise, faced with substantial reductions on their provisional allocations.
It is fair to point out, however, that the allocations made to the smaller authorities have tended to vary from year to year by more than the average and that the Borders have over the piece been treated very favourably in relation to their share of the total Scottish population. Even the reduced allocation was higher than would have 830 been the case if it had been based solely on population. The reason for that was the higher than average elderly population in the region, which has 2.5 per cent. of the Scottish population over 75 years as against 2 per cent. of the Scottish population of all ages. I can assure the hon. Member that his suggestion, if I heard him aright, that the disproportionate number of elderly people in the Borders was not taken into account is untrue. That factor is taken into account. Indeed, the Borders regional council, in comparison to other areas in Scotland, have been reasonably favourably treated.
Provisional allocations for 1986–87 at cash prices were first issued to local authorities as far back as 26 January 1984 and revised provisional allocations were notified on 15 February 1985. Provisional allocations for 1987–88 were also issued at the same time. In July 1985 local authorities were asked to prepare their financial plans for 1986–87 and later years on the basis of the provisional allocations and to submit the plans to my office, and for other expenditure, to the Scottish Office in general, by 31 October 1985. It is not until the plans are received and studied in depth that sufficient hard information is available for the purpose of fixing the final allocations. Final allocations for 1986–87, this financial year, were eventually issued on 13 February of this year.
As a result of decisions taken in the 1985 public expenditure survey, the amount available for final allocation to authorities as capital consents in this area was £14–77 million. Allocations may be enhanced by any capital receipts raised. Of course, local authorities can keep the capital receipts. It was clear from the declared levels of legal commitments of around £10 million shown in financial plans that most authorities were going to have limited scope for developing their programmes in 1986–87. I appreciate that many authorities, including Borders regional council, consider that their allocations fall some way short of their aspirations. If, everyone had the resources to match his ambitions it would be a happy world, but that is not the world of reality. In reaching our decisions for 1986–87 we had to work strictly within the overall level of resources available. If one budget receives more resources than another, it does so at the expense of other budgets or at the expense of an increase in the total amount spent by the public sector. I know that many seem to think that the promise that they make in one instance can be separated from the promise that they make in another, and that no one is allowed to calculate total expenditure. Again, that is not the real world. The total spent has to be taken out of the amount of capital that is available within the overall economy. As I have said, we believe that it is important that as much investment as possible in our economy goes into the productive private sector, and that the demands of the state sector, which in many ways can be infinite, are kept strictly under control in terms of what the taxpayer and the economy can afford.
There is a second factor to which I have already referred when talking about taking into account past performance in the use of resources made available. In each of the three years from 1983–84 to 1985–86, the Borders regional council has been unable to make full use of the resources allocated to its social work programme. Authorities are allowed to transfer up to 10 per cent. of their allocation from one programme to another within the non-housing block, and the record shows that over the three years in question the Borders regional council exercised this discretion to the full to transfer a total of £177,500 out of 831 its social work building programme and into its education, water and sewerage programmes. In the light of this information, hon. Members may consider that the cut in the allocation for 1986–87 was perhaps rather less unreasonable and unpredictable than they have been led to believe. Over the preceding three years, in the light of the allocations given by my office to the Borders for social work capital expenditure, the regional council itself decided that £177,500 should be transferred from that programme to other programmes.
In its financial plan for the five years from 1986–87, the regional council has stated that its policy is to maintain elderly people in the community for as long as possible by providing a variety of domiciliary and day-care services. Further provision of residential accommodation for the elderly on any appreciable scale is not envisaged, but the capital programme anticipates the need to modify existing buildings, taking into account their age and condition, and to replace existing residential accommodation with suitable buildings only where necessary. These buildings will incorporate day care facilities. I am in broad agreement with that policy. Indeed, on many occasions I have visited the Borders and I have been impressed with the work carried out by the Borders regional council. There is a plaque in one of the homes which states that I opened the home. My name appears on a plaque on the foundation stone marking the beginnings of a hospital. I look forward to being invited to the opening of that hospital in my capacity as Minister after the next election.
In line with the Government's aim of allowing authorities, as far as possible, to proceed with priority projects, the regional council's capital allocation for 1986–87 was pitched at a level which would cover all legally committed expenditure and would allow completion of Deanfield old people's home in Hawick and a start to be made on either a new home for the elderly in Eyemouth which is urgently needed to replace the outmoded and inadequate Peelwalls home in Ayton, Berwickshire, or a new day centre at Coldstream. Completion of the Hawick project, involving expenditure of £198,000 in 1986–87, was scheduled for June 1986.
It is worth stating that the total capital value of the Hawick project which will be spread over several financial years, amounts to almost £1 million. That shows that the project is substantial. Had that project maintained its schedule, work on another project would have been able to go ahead as planned. However, in the event, work on Deanfield was substantially set back by the failure of the main contractor. The effect of this is the inevitable carry forward of commitment into the current financial year and, unfortunately, a probable increase in the 1986–87 expenditure on the Deanfield project to more than £415,000. I must make it clear, however, that this difficulty was not known to my Department when the council's final allocation was being considered and there is therefore no provision for it in the allocation. Indeed, the authority did not inform my Department of the problem and position of Deanfield old people's home until some weeks after the allocation had been issued.
Officials of the Scottish Education Department's social work services group met representatives of the council on 17 April to discuss the problem. At the meeting, the council's representatives stressed the difficulties of managing a small building programme in the face of the major upset posed by the contractor's liquidation, and estimated that additional allocation of around £100,000 832 would be needed to help meet the extra commitment carried forward to 1986–87. My officials, while they sympathised with the council's predicament, had no option but to explain that there was no possibility of the present allocation being increased meantime. That is a view with which I wholly agree.
I must tell the hon. Member for Roxburgh and Berwickshire that there is no possibility that the present allocation can be increased meantime, despite the problem which I fully understand about Deanficld and the additional expenditure. All resources available for capital allocation in 1986–87 were issued in February, and, unless there were to be considerable underspending by some authorities, no increase in allocation can be made during the year. It is unlikely that there will such underspending —certainly not of the order that would be necessary to release the amount of money required to come to the aid of the Borders regional council. There is not much hope from that source.
The Government have advised the council to continue to plan its expenditure within its present allocation, enhanced by any capital receipts applied to the social work programme. That means that the council can keep the proceeds of any capital receipts and use them. In this case, I suggest that it can use them to help with the problem in the social work programme. It can also take advantage of the flexibility arrangements afforded by the capital control scheme. They include the carrying forward of underspend from the previous year; anticipation of capital consent from the following year; and interprogramme transfer of capital consent from the current year. During the past three years, Borders regional council has used that facility to take £177,500 out of the social work capital budget and put it into other budgets. So it is well aware of the procedure and, from the experience of the past three years, is well able to carry it out. The council must examine some of its other programmes to see whether it can take some money from them and, by the interprogramme transfer method, move that money into the social work budget.
My calculations suggest that if the council took maximum advantage of all those mechanisms, it could make available sufficient resources in this financial year, 1986–87, to meet the increased Deanfield commitment and other non-specified legally committed expenditure. Unfortunately, it does not offer a solution to the problem of a delay in the start of work on the Peelwalls project, which I understand the authority has identified as a priority. I fully understand that point. Having considered that project and the scheme at Coldstream, I appreciate why the council has given priority to the Peelwalls project. I appreciate, equally, that it would not have been an easy decision. No decision about priorities is easy.
The day centre is nearer fruition, and makes provision for the elderly in a locality which has two new sheltered housing complexes and a generally high proportion of old people in the population. However, it could be slotted into the building programme at any time. I understand the need for Peelwalls to be replaced. It is a Georgian mansion three quarters of a mile from the village of Ayton, which I remember well from my student days. It is not suitable for the purpose. As the hon. Gentleman said, there is multiple occupancy of rooms, it has no lifts, there are inadequate and inaccessible toilets and it has an unsatisfactory kitchen.
The problem has occurred because of the wholly unforeseen circumstances of Deanfield, not because of the 833 capital allocation. Even in its reduced, final form, the capital allocation was sufficient to go ahead with Deanfield and to allow the project at Peelwalls to progress. The council has now put forward to the social work services group a detailed case for special treatment against the possibility, however remote, that supplementary 834 allocations may be possible later in the year. The information provided will be taken into account in determining—
The Question having been proposed after Ten o'clock on Monday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twelve minutes to Three o'clock am.