HC Deb 01 March 1978 vol 945 cc253-4W
Mr. Raison

asked the Secretary of State for Social Services what would be the estimated effect on employment per additional or reduced £100 million expenditure on the local authority personal social services.

Mr. Moyle

The answer depends on whether the expenditure is capital or current, on the time scale involved—bearing in mind that £100 million represents about 10 per cent. of the present total annual expenditure on the personal social services in England—and on the decisions of individual local authorities.

As far as capital is concerned, it is estimated that an additional annual expenditure of £10 million would create jobs for about 650 people in the construction industry for the period involved. The effect of such investment on the need for additional current expenditure, and therefore on employment rather than redeployment within the personal social services, would depend upon how far the capital was used to create new facilities or to change existing facilities.

The effects on employment of additional current expenditure would also depend on the type of service on which extra staff were engaged. By way of illustration, total current expenditure on the personal social services in England in 1975–76 was £886 million—of which about 72 per cent. was attributable to total staff costs—and is estimated to have risen to £940 million in 1977–78—both figures at November 1977 prices—capital expenditure in the two years 1975–76 and 1976–77 was £200 million—also at November 1977 prices—the overall staff total—whole-time equivalent—rose by about 6,600 between September 1975 and September 1977. There would also be a secondary effect, which cannot be estimated, on employment in those industries which equip and supply the personal social services.

By and large the same considerations apply, in reverse, if a reduction in expenditure were involved. There would, however, be objections on service policy grounds, and the time scale would have to take into account the need to avoid redundancies wherever possible.