Pensioners Lose Out In Spending

Cash destined for pensioners is being used to plug a black hole in spending on Scotland’s most vulnerable children, it was revealed last night. A new report obtained by The Herald shows councils are squeezing budgets for the elderly and other vulnerable adults to help meet a shortfall of more than £160m a year for their core social work services for children. The report, written by Professor Arthur Midwinter, the country’s most respected expert in local government finance, has infuriated the Scottish Executive.

It shows that councils were spending 63% more on core, statutory functions such as day care, fostering and secure accommodation for troubled youngsters than they got from the executive in central grants for the services.

However, local governments on average spent just 5.5% more than they got from the executive on social work as a whole, suggesting cross-subsidies from services for the old to those for the young.

Prof Midwinter, speaking last night, said: “Councils have got more discretion on what they spend on the elderly than what they must provide for children. So they have been spending less on the elderly and more on children. In cases like residential care for children, they have little scope for deciding how they spent their money.”

The big crunch for councils, his report reveals, is coming in the huge bills they are facing to keep children in care, either in foster homes, residential homes or secure units.

The Scottish Executive gives councils £143.4m a year for community and residential care. Local authorities spend £268.2m, a funding gap of £124.8m or 87%.

Prof Midwinter said demands for improved service from the executive were putting a huge strain on the system. In his report, he said: “There is little point in ministers flagging up ‘ways’ to improve service if they fail to provide the ‘means’.” He projects that the overall gap between grant-aided expenditure for children’s social work services will grow from £160.6m in 2006-07 to more than £207m by 2010-11. His report raises specific concerns about the future of First Minister Jack McConnell’s much-acclaimed drive to help the children of drug addicts.

But not all local authorities are raiding budgets for the elderly. Edinburgh, for example, packages its children’s social work services together with education. The city’s council recently warned it may have to close primaries to meet its bills for children’s services.

Prof Midwinter drew up his report for the Association of Directors of Social Work (ADSW).

David Crawford, the body’s president, said ASDW was “gravely concerned” by the report’s findings. He said: “It means that services such as fostering and residential care are only funded by moving money from other areas of local authority responsibility, such as older people services.”

A spokesman for Cosla, the body that represents councils, said: “ADSW have a legitimate interest in ensuring that there is adequate funding for vulnerable children. We now have a copy of the report they commissioned and we will discuss it with them and with ministers. However these discussions will be in, and will remain, private.”

A spokeswoman for the executive dismissed Prof Midwinter’s report as “based on incomplete data and therefore misleading”. She said he had failed to take account of a raft of additional funding for specific schemes. She stressed that councils don’t get all their funding from the executive and that they must pay for part of services from locally raised council tax. However, she added that ministers had been giving much more to to councils overall: “There has been a record level of funding since 1999, an increase of 55% or £3bn.”

Prof Midwinter reacted angrily to the executive response. He said: “They are playing politics with the lives of vulnerable children and I think that is disgraceful.”