Vol. 388 No. 3
asked the Minister for Labour if his attention has been drawn to the fact that the level of payment of 53 per cent materials grant under the social employment scheme has been reduced to 42 per cent; if he has any plans to restore it to the 53 per cent level; and if he will make a statement on the matter.
15.
asked the Minister for Labour if he is satisfied that local authorities are in a position to continue with social employment schemes in their areas because of recent adjustments in the materials grant.
I propose to take Questions Nos. 11 and 15 together.
The reduction in relation to the maximum rate payable under the social employment scheme for materials and supervision applies only to public sector projects and is applicable to new projects commencing after 1 January 1989. I have no proposals to restore the rate of payment to its former level.
I am satisfied from the average level of grant claimed that the reduction will not adversely after local authority participation in the scheme.
The savings made will go towards maintaining the numbers participating in the scheme at the highest possible level.
I deliberately refrained from reducing the rate of grant payable to voluntary bodies sponsoring social employment scheme projects as I am aware of the difficulties being experienced by many of these bodies in raising funds for their activities.
Would the Minister agree that the reduction will be a disincentive to local authorities to continue with much needed social employment schemes in local authority areas, especially in view of the shortage of finance already being experienced?
I do not believe it will. There is still a great demand for places in the scheme. This year the FAS budget will be £43 million and the SES Exchequer allocation will be over £40 million. The claims history for public sector bodies shows that while they could claim up to 53 per cent, the actual amount paid was 45 per cent on average. This is why I believed it could be reduced. Originally the numbers participating through the local authorities were very high. The up-to-date analysis of the scheme shows that the apportionment of participation between public sector and voluntary bodies is as follows: public sector bodies, 45 per cent; voluntary bodies 55 per cent. It was the other way around. I do not believe it will create too much difficulty. For the information of the House, the breakdown now will be 30 per cent for materials and 12 per cent for supervision costs. The breakdown of the voluntary sector grant is 15 per cent for materials and 13 per cent for supervision. The balance is still in favour of the local authorities.
The Minister is aware that the local authorities will have to reduce the number of people employed in social employment schemes otherwise they will have to recoup the money elsewhere. Will it mean additional money on the rates?
I do not think it will. If I believed that I would not have made the changes. I based it on the two cases stated. The claims were 45 per cent. We have done a major study of the social employment scheme and while it has some disincentives, I do not think this is one of them. We have made some changes in the budget regarding the social employment scheme and I hope to make more. It is a very useful scheme and I am very glad we can continue it at the same level in the local authorities. I do not believe this will be a disincentive to them. The demand continues to be extremely high for social employment places. This slight reduction and a few other changes in the scheme will allow more numbers to participate.
We have been discussing this in our own local authority this week. The manager will have to find money elsewhere, otherwise we will have to reduce the number of people we employ. The money will have to come from somewhere and the most obvious solution is to impose a further burden on the ratepayer.
We are having statements rather than questions.
