24^th July 2008

Dear

Additional funding secured for support to asylum seekers

I am writing to bring you up to date on our long campaign to secure additional funding to meet the costs incurred by local authorities of support for unaccompanied asylum seeking children (UASC) and asylum seeking children leaving care.

This has been a continuing priority for the LGA and we have made joint representations with London Councils in submissions and meetings with the ministers responsible. We met on 22 April to discuss the latest shortfalls with Liam Byrne MP, the Home Office Minister responsible for UASC funding, and Kevin Brennan MP, the Department for Children, Schools and Families Minister responsible for UASC leaving care. Since then meetings have been held at official levels and a further offer has been made by the Home Office and DCSF.

UASC funding for 2006/07

Local authorities apply to the Home Office for funding to meet the costs of supporting UASC. Grants are calculated on the basis of maximum weekly rates for under 16s and for 16 and 17 year olds. The grant awarded may not meet the costs incurred by a local authority and so local authorities may apply for an additional `special circumstances' grant to meet some, or all, of this funding gap. For 2006/07, even with the additional special circumstances funding, local authorities were left with a gap of £10 million.

Home Office justified the gap by making the case that some authorities have seen significant falls in the number of asylum seekers they support but their expenditure has not fallen at the same pace. This can be counted by factors such as continuing contract commitments for accommodation or staff. We have negotiated a better package with the Home Office that recognises this cost lag and gives authorities 2 years to manage a wind down in indirect costs such as administration and contracting, with 50% of the saving expected in year 1. Costs that can be directly attributed to the care of an individual, such as for accommodation, will be met in full subject to audit.

Nationally, this will mean an additional £6 million is available in 2006/07 and £9 million in 2007/08. Appended to this letter is a list of the additional allocations for 2006/07, which local authorities will receive automatically, and this supersedes your previous settlement letter from the Home Office. 2007/08 allocations will be dependent on your bids and with an additional £9 million available, shortfalls should be minimised.

UASC leaving care

Our negotiations for UASC leaving care are focussed on 2007/08, as this is the year currently not settled by the DCSF. This will be the final year that the DCSF manages the grant before it transfers to the Home Office, which will remove some of the ambiguity caused by splitting resources across two departments. We have had long-standing unmet expenditure since the Hillingdon Judgement in 2003 and I am pleased to report that we have finally achieved a breakthrough. The DCSF argued consistently that some of our estimated £25 million shortfall is met through funding added to the Revenue Support Grant (RSG) after the Hillingdon Judgment but they have now accepted that this does not cover all of the costs and we have secured an additional £16 million for 2007/08. There will be an opportunity for you to bid for this extra resource and the allocations will then be capped at £16 million using a calculation based on RSG allocations. Until authorities bid, we do not know for sure what allocations will be but some authorities did provide cost information to support our negotiations and, with heavy caveats, we would estimate they will receive the allocations below.

Future funding and UASC reform

We must now move forward and find a sustainable way of providing high-level support to asylum seeking children that offers value for money. The LGA believes that the UASC reform programme is a sensible model that will identify a small number of Specialist Authorities that will then be appropriately funded to provide these services. Brian Kinney, Director of the UASC Reform Programme, will be in touch with local authorities shortly to set out how we move the programme forward and I would encourage you to engage with this process, particularly those local authorities with large numbers of asylum seekers. It is in all of our interests to have a better working model in place as soon as possible.

In summary, we have secured an additional £31 million in total for funding to meet costs incurred by local authorities to support asylum seekers. This is a real breakthrough and reflects a significant success for one of our key lobbying campaigns but we must now engage with the UASC reform programme if we are to avoid shortfalls in the future. Your authority will shortly receive information from the Home Office about how to access the additional funding and Emma Jenkins (020 7664 3046, [email address]) can help if you would like more detail about how this will effect your authority.

Yours sincerely

John Ransford

Deputy Chief Executive

Additional special circumstances allocations for 2006/07

From the office of the Deputy Chief Executive

Direct line Tel 020 7664 3276 E-mail [email address]

Local Government House, Smith Square, London SW1P 3HZ DX 119450 Clerkenwell 3

Chief Executive: Paul Coen http://www.lga.gov.uk