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Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
It is a great pleasure to conduct this debate under your excellent chairmanship, Mr Bailey, particularly as I hear you are going to Hull on Monday with the Industry and Parliament Trust, which is a great organisation. It shows that you are a man of discernment and great taste, and you will have a good time in the city of culture—and I would not dare to ingratiate myself with you at the start of the debate!
Adult social care in England presents the biggest domestic political challenge of our time, and that includes how to fund it, how to ensure it is more closely integrated with health and how to ensure that the system is sustainable in an ageing society where demand is bound to continue to rise. In the past week alone, while Parliament has been in recess, Age UK has said that the system is moving from crisis to collapse. A report by Oxford University and the London School of Hygiene and Tropical Medicine concluded that problems in adult social care are behind an unprecedented increase in mortality. If we look at the statistics we see that mortality has gone up, but the normal infant mortality measure is not the cause, nor is the mortality rate of babies born after 28 weeks, which is a big factor. However, the adult mortality rate has gone up by 5.7%, and the report says that is due to problems in adult social care in England.
The debate today is about one strand of the enormous challenge, and it is very much focused on the short term: how local authorities will be able to maintain, let alone improve, services over the next few years. In relation to the debate about the long term, I was Health Secretary 10 years ago, and I was heavily engaged in the internal debate within the Brown Government about the need to devise a completely new and substantial stream of funding for adult social care. My right hon. Friend the Member for Leigh (Andy Burnham) became Health Secretary after me. He managed to reach a consensus with the Conservatives and the Liberal Democrats that was disgracefully scuppered by Andrew Lansley during the 2010 general election campaign. That attempt to find new money was disparagingly referred to by the then Conservative Opposition as a “death tax”, complete with pictures of tombstones on their election posters. It may have helped them to dislodge Labour, but it did not help them to solve the problem.
The Dilnot inquiry subsequently made a number of suggestions, including the eminently reasonable one that people like me who are working beyond state pension age should pay national insurance. That was quickly dubbed the “granny tax”. Between the death tax and the granny tax, the national debate on how we find the means to tackle this crisis has rarely managed to rise above the glib and the facile.
I applaud the recent cross-party attempt to convince the Prime Minister of the need to find a new cross-party consensus. Perhaps the Chancellor is even now working on the final details of a great and imaginative scheme that can attract all-party support for a national solution to a huge and growing problem. His autumn statement was an enormous disappointment. While he may mistakenly believe that the biggest crisis he faces is how to defuse the considerable row over business rates, he needs to understand that the interlinked issue of adult social care—interlinked for reasons I will come on to— overshadows everything in his in-tray and in the Cabinet’s in-tray.
It is traditional in debates of this kind for somebody to say that the problems are not all about money. I have no doubt that the Minister is preparing himself to fulfil that role in this debate, but I am afraid that in respect of adult social care, it actually is all about money. According to the Institute for Fiscal Studies, direct funding to local authorities will have fallen by 80% by 2020. I repeat: 80%. Adult social care is not ring-fenced. Some £4.6 billion was slashed from those budgets in the last Parliament, with the result that we spend less on social care now than we did in 2010. Those are House of Commons Library figures obtained yesterday. It is less in cash terms, which is even less in real terms, and all parties agree that the problem is mainly caused by underfunding.
In written evidence submitted to the adult social care inquiry last year, the King’s Fund said that
“the fundamental cause of the problems in adult social care is inadequate funding.”
We can talk about innovative ideas and methods that councils across the country are employing, including my council in Hull—they are doing brilliant things to try to deal with some of the wider issues—but the basic fundamental problem comes down to cash and funding. Indeed, the scale of the problem is such that in evidence to the same inquiry, the chief executive of NHS England, Simon Stevens, said that were any extra money to become available from anywhere it should go not to the NHS—his own organisation, which he was representing—but to social care. That was a remarkable and unprecedented act of self-denial in respect of access to public funds.
Pending the Budget and the outcome of further deliberations by the Government on the issue, the solution that this Administration have pursued with the most vigour is simply to pass the buck to local authorities. Let us for the sake of this debate accept the premise that local authorities are best placed to deal with the issue and that the adult social care precept may be the new funding stream that has proved so elusive. Even if we accept all that, the first point that the Government must surely acknowledge is that the amount raised does not begin to match the scale of the problem. The precept in 2016-17 raised £382 million, which is less than 3% of council spending on adult social care. However, it would have been a very welcome 3% increase, were it not for the fact that implementation of the national living wage cost those same councils an estimated £612 million, wiping out the additional money and leaving councils with a deficit on this issue alone of £230 million.
Melanie Onn (Great Grimsby) (Lab)
There are some 850,000 people living with dementia in the UK, and their care is usually more expensive than standard elderly care. We have seen £160 million taken out of adult social care budgets between 2010 and 2016. When it comes to the adult social care precept at the local authority level, does my right hon. Friend agree that it is destined to create a postcode lottery and impact further on the services that people expect to receive in times of great difficulty?
Alan Johnson
My hon. Friend is absolutely right about that, and I will talk about the widening inequalities in a second. She was also right to refer to dementia sufferers. Too often in this debate—I am perhaps guilty of this, as well—we deal with dry statistics, percentages and precepts, when at the end of it there are people who are very vulnerable and need care, above all dementia sufferers. We have to tackle that and ensure that the inequality gap does not get wider. I will come on to that in a second.
Sir Hugo Swire (East Devon) (Con)
I am following very closely what the right hon. Gentleman is saying and am finding myself in agreement with much of it. In the time left, will he also address the issue of the hidden cost of care? These are the carers who are looking after elderly relations and who have sometimes lost childhoods looking after disabled mothers. A huge army of hidden carers are providing free social care. When we look at the model, we should not forget those people.
Alan Johnson
The right hon. Gentleman is absolutely correct about that. I said at the beginning of my remarks that this is a wide debate, but I have chosen to focus on one strand: funding through council tax. I have met not only elderly people caring for similarly elderly people, and not only women trying to care for elderly parents at the same time sometimes as bringing up a child, but, most poignantly, children who care for their parents. They remained hidden to the extent that even schools did not know they had such responsibilities, and there was no obligation on schools to find out, so the right hon. Gentleman is absolutely right that the problem is far reaching. For Government it is a difficult problem to resolve, although I do not doubt their determination to try to resolve it. I am just pointing out that if we were to accept that the way to do it is by local precept on local councils—devolving the issue down to local level—the Government would have to accept that the route they have designed is woefully inadequate.
In addition to the fact that the national living wage costs councils £612 million against the £382 million that the precept at 2% raised last year, a combination of the Care Act 2014, case law in respect of deprivation of liberty safeguards and the proposed Department for Work and Pensions cap on housing benefit—if the Government are unwise enough to go ahead with that, they will create all kinds of problems that will come to councils through adult social care—has created and will create additional unfunded social care costs.
However, as my hon. Friend the Member for Great Grimsby (Melanie Onn) alluded to, the biggest problem with relying on the precept and the retention of business rates—the Government’s other new idea—is that it is grossly unfair and will widen existing inequalities, leaving those with the greatest need less able to raise the extra money that they need. Far from doing something to close the equality gap that the Prime Minister rightly made her mission in her first utterance in that role, it will exacerbate the problem and lead to Government-inflicted inequalities. The King’s Fund points out that the 10 most affluent areas will raise almost two and a half times more from this precept than the 10 most deprived will. If it was more money instead of less, it would be welcome. The fact is that all local authorities, wherever they are in the country, will be worse off overall from cuts to local authority funding, but through the precept and rates retention some will be worse off than others.
Allow me, if I may, Mr Bailey, ahead of your visit to Hull, to be parochial and talk about the city that I represent. Hull has 27% of its population living with a long-term health condition. It is a brilliant city, but not a wealthy one. Not many people have the £25,000 that, according to the Government, allows them—this is another controversial issue—to self-fund. Only 7% of the population is able to self-fund in Hull against the national average of 45%. There is, therefore, a huge and growing demand for adult social care services.
Hull City Council will struggle to produce any meaningful resources from the social care precept because 80% of our housing stock is in the two lowest bands. The net result—this is a neat little comparison—is that in Kingston upon Hull the increase in the precept to 3% will bring in £8.01 per person, but in Kingston upon Thames, which I have nothing against—it is a wonderful place—will raise £15.27 per person. There are even starker anomalies, incidentally, but that is a neat comparison. Kingston upon Hull, which has higher levels of deprivation, a greater need for social care and a lower council tax base, finds itself getting almost half as much as Kingston upon Thames. Because of the Government's failure to properly account for deprivation over the next three years, Kingston upon Thames will have £2.3 million more to spend on adult social care while Hull will have £2.2 million less.
Hull has, like all local authorities, been battling to protect its services through a vicious series of funding cuts, losing £115 million of core funding with a further £33 million of cuts to face by 2020. It has lost £18 million from its social care budget since 2010, with the need to cut a similar amount over the next three years. Overall, a combination of the financial pressures on Hull City Council, the clinical commissioning group and secondary health care—those are all combined in the interface of how we deal with these problems—means that we have a spiral of decline, as the CCG is unable to support community services and is pulling back funding at the interface of health and social care. That then impacts on the ability of the local authority to respond swiftly and robustly to a sudden and unexpected need for high-cost social care, such as somebody experiencing a stroke and awaiting discharge from hospital.
An increase in delayed discharges places an additional burden on the acute trust, which goes deeper into crisis and has to admit people later and discharge them earlier, often discharging them inappropriately and pushing the burden of funding support for vulnerable people back to the CCG and the local authority. The vicious circle then begins all over again, becoming more and more problematic and presenting even greater risks to individuals.
Sir Hugo Swire
On this issue of keeping people in hospital, in some parts of the country the local authority is slow to find them beds because it is then its responsibility financially, but does the right hon. Gentleman not agree that all the evidence shows it is far better to keep people out of hospital, because of muscle wastage and suchlike, and to get them back home as quickly as possible?
Alan Johnson
There can be no dispute about that from anywhere. All the evidence says that that is the case. “Bed-blocking” is a terrible term, but it was around when I first came into this place 20 years ago. We thought we had resolved the situation, but it is becoming more and more acute. Keeping people in hospital is a problem because it is not good for the individual, never mind about the effects on healthcare services, the NHS and adult social care. It is not good for the individual to be placed in that situation. I might add that lots of charities and voluntary sector organisations do a great job in helping to deal with that problem. They depend for their existence on a bit of match funding from local authorities, sometimes £10,000 a year, which they are no longer able to get since that has had to be cut because of cuts to local authority funding, so that has had an impact even on the voluntary sector.
In November the Public Accounts Committee concluded that the Department for Communities and Local Government does not have sufficient understanding of the extent to which revenue pressures are affecting local authority finances. That has certainly been our experience in Hull, although we have tried to assist the Secretary of State by highlighting the anomalies that the precept creates. The Secretary of State wrote to the leader of Hull City Council, Steve Brady, on 19 July last year, shortly after he had taken over at DCLG. It was a lovely letter thanking Steve Brady for a letter to his predecessor about devolution in Yorkshire. The leader of Hull City Council’s letter also mentioned the problems being caused by the tax precept for adult social care. The Secretary of State said he understood and wrote:
“ I would be pleased to meet you in due course to discuss this further. My office will be in touch to arrange...a suitable time”
in the coming weeks. Hull City Council waited 13 weeks and then got a response that was not even from the principal private secretary in the Department. A correspondence clerk wrote to say that the Secretary of State no longer had any time in his diary: he was unable to commit to any meeting whatever and unable to commit to the meeting that he himself had suggested, unsolicited, in a letter to the leader of Hull City Council. That is at worst arrogant; at best, discourteous. Perhaps the Minister can suggest to his boss that he clear an hour—even half an hour—in his diary for the commitment that he himself suggested. His failure to do so has led to the suspicion that he is not really interested in gaining the sufficiency of understanding that the PAC alluded to in its report.
The problems in Hull and other cities represented by Members here today remain as acute as they were in July, and the local government funding settlement published late on Monday evening will do nothing to resolve them. The better care fund gives some weighting to local need, but nowhere near enough, with rising demand and reduced funding producing a £30 million funding gap for Hull by 2020, and a further £40 million to come if 100% business rates retention kicks in without some form of adjustment to account for deprivation. Again, places such as Hull with tightly drawn city boundaries—none of the suburbs are part of the Hull City Council area—will do worse from business rates retention than more prosperous areas.
Having failed in our quest to inform the Secretary of State of the effects of his policy on cities such as Hull, the three local MPs wrote to the Chancellor ahead of the autumn statement, seeking his assistance to ensure sufficient funding for adult social care. The reply came from the Minister who is here today, and it was full of reassuring statistics about the money we would be receiving. The only problem is that his figures were wrong by a factor of 45%. The 3% precept will raise around £2.1 million in Hull, not the £3.5 million the Minister claimed. Yes, we will receive £1.46 million from the new adult social care grant, but we will receive a corresponding cut in the new homes bonus of £0.8l million, so that £1.46 million is reduced to £0.65 million. In addition, although it is true that Hull will get £1.88 million from the better care fund, like all local authorities we were hoping to see that money front-loaded, not back-loaded. The £6.5 million we are due to receive in 2018-19 is badly needed now.
The cuts being made to local authority funding are what I would call reckless. Even in this new world of alternative facts, the Government cannot spin draconian cuts into extra funding. Instead of engaging in this kind of smoke-and-mirrors attempt to suggest that all is well, the Minister needs to understand, and then acknowledge, the real funding position for councils such as Hull and other local authorities whose Members are waiting to speak in this debate.
This is not a battle among local authorities; it is a battle by local authorities to achieve a proper understanding by the Government of the crisis they face. The Government must take levels of deprivation and the ability to raise finance from local tax receipts fully into account when considering the future fair funding model for local government. They must set out their plans for the promised land of rates retention in 2020, which may help in the south where, as we have been hearing, rateable values are high, but is a huge issue for local authorities in the north. It would also be handy if the Government sorted out their promised review of rateable values before passing that substantial buck to local authorities, as they plan to do in three years’ time. More urgently, they need to front-load the better care fund, so that services do not collapse before a fairer funding model is in place.
Local authority funding of adult social care on the current basis is unsustainable, but, in the absence of fresh thinking, it is all we have, and the people who rely on adult social care cannot wait any longer for the urgent help they need. The debate can get lost in dry statistics, but in reality it is about the elderly woman who is stuck in a hospital bed because there is no satisfactory provision in her community. It is about the disabled man unable to receive the help he needs to have a bath, the care home that closes and the dementia care that vanishes. It is about many of the things that make our society civilised—things that are diminishing daily, on this Government’s watch.
Sir Hugo Swire (East Devon) (Con)
I am grateful to the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) for instigating this debate. It will be one of many, and I am pleased that there is some kind of consensus emerging.
At the outset, we should do two things. First, we should be careful in using the word “crisis”—it is an overused word in government—but in this case we do have something approaching a crisis. Secondly, although we should try to take the politics out of this, and I will argue why, I am not a deficit denier and we need to acknowledge the severe financial restrictions under which we are still operating. When we won the election and formed the coalition Government in 2010, the coffers were empty. To imagine that we can print and spend more money is irresponsible and would get us back exactly to where we started seven years ago.
The issue is nothing new. The Blair and Brown Governments failed to address it; successive Conservative Governments have failed to address it. This crisis has long been coming and it is now here. In a sense, I am sorry to see the Minister in his place. A Communities and Local Government Minister should not be involved in this at all, and this should not be a local government matter.
When we talk about additional funding, we are discussing three strains. The first is the precept, which is a problem for us in Devon just as it is in the constituency of the right hon. Gentleman, because we have a relatively low income and high needs. The second strain is business rate retention. Will my hon. Friend the Minister refresh our minds on where we are on business rates retention? The Secretary of State has said that 100% rates retention will mean £12.5 billion a year more to local authorities. Have the Government decided that that is the policy, or is it going to be 100% retention of any new business rates to encourage local authorities to grow business? There is a fundamental difference.
The third strain is the forthcoming Budget. I see that the financial figures are better than were expected, which gives the Chancellor some wriggle room. I would submit that social care is the one area where he could usefully spend money to avert the crisis we are discussing.
Any of those measures are by definition temporary, because they provide only a sticking plaster. A Minister from the Department for Communities and Local Government should not be here answering the debate. The model is completely ridiculous and outdated—I would go so far as to say that the model of healthcare through the NHS and social care is now outdated and needs a radical rethink.
There should be a seamless passage of care from cradle to grave. It seems utterly ridiculous to have a system whereby the NHS is funded by national taxation and social care is funded by local authorities. That model is completely crazy. It has emerged and grown up. We are in the position where, up and down the country, there are examples of hospitals retaining people beyond the date that they should be there, because as soon as they walk out the door they become a cost to the local authority. Where is the incentive for the local authority to provide an early care package for those people? The victims of that situation are at the mercy of the Government and need urgent help.
I am not going to rehearse the statistics from my part of the world, other than to say that we have a higher than average elderly population of over 85s, which is growing faster than the national average. I am trying to sell Ministers the idea of using Devon as a template for getting this right. Places such as Sidmouth in my constituency are demographically 20 years ahead of the rest of the country, so if we get it right in Sidmouth, we are going to get it right everywhere else.
I am enjoying the freedom of returning to the Back Benches—I can speak without fear or favour and make wild spending commitments without having to stand at the Dispatch Box to justify or defend them. I have the freedom to look at these things based on the knowledge I have accumulated as the local MP since 2001 in an area where social care funding is a major problem. The right hon. Gentleman alluded to the cross-party group under the leadership of the right hon. Member for North Norfolk (Norman Lamb)—I suppose it is his leadership, although the group has pretty flat management—to whom we should pay tribute because he has been at the forefront of discussions about social care. I am part of that group, which has been to see the Prime Minister.
I know all the arguments about what has gone on before 2010. Much of that is regrettable, but we should now look this in a radical way. This is about not just social care, but the whole NHS. Bevan himself, when he got the first invoices for the NHS—I think it was to do with penicillin or antibiotics—said, “This is not what I had in mind at all,” yet we have allowed the whole thing to grow enormously. We have to be realistic about what kind of care the state should provide from cradle to grave and how it should be paid for. We must be braver than we have been in the past. Politicians of all hues and shades need to face up to the fact that this is about not just social care but care, health, accident and emergency and GPs—we need to look at the whole thing.
I am interested that the right hon. Gentleman did not allude to cultural changes. I like to think of myself as his benefactor, as I put money in his pocket by buying his books—and very good they are too. I recommend that those who have not read them do so, and buy them rather than go to the library—cheapskates!—because the publishing industry needs our support. In those books, the right hon. Gentleman eruditely paints a picture of an extraordinary upbringing in Notting Hill in London. He was actually the original member of the Notting Hill set and set the bar for them—what an excellent group of people they all turned out to be, with some exceptions. But I bet—he did not say this, but he will correct me if I am wrong—that in the Notting Hill he grew up in, elderly people were more often than not cared for by their families, and were not left alone in their homes or put into institutions.
The majority of carers in this country are women caring for men. We have already talked about the hidden carers, such as the elderly lady looking after an infirm husband, not getting enough help or respite—respite for carers is another issue. We talked earlier about the child who is having their childhood stolen from them because they are not able to attend after-school events as they have to rush home to care for a disabled or a needful member of their family. All that is true, but we have to recognise the fact that, because couples are now on the whole in work, they are less able to care for vulnerable parents and relations than they were in the past. Perhaps we need to look at that more carefully. Perhaps we need to plan more carefully to make it easier for people to add on what used to be called granny flats, and try to encourage more people, through either fiscal incentives or behavioural change, to care for people at home. We have to decide where the family stops and where the state steps in. It cannot all be left to the state.
All those things need to be looked at. The more outrageous and controversial the suggestions that are made, the better, because that gets people out of their boxes and makes them think about how we are going to deal with this problem. Hon. Members are shaking their heads in disbelief, but this problem is not going to go away; it is going to get worse as the population becomes more elderly. We have finite resources, so we need to see how best to allocate them. At the end of the day, this is a prosperous country, and a prosperous country should be judged by how it looks after its elderly and vulnerable people. At the moment, we are not doing it well enough.
Others wish to speak, so I will say three things in summary. First, I call, as I have done in Parliament previously, for the £1.5 billion of funds for the better care fund to be brought forward, because currently it will not be available until 2019. We need that money now. Secondly, we need transitional funding to facilitate the change in the healthcare model in East Devon. Thirdly, as I have said, we need a cross-party review of the NHS and social care services.
I have a local councillor standing for re-election in my part of the world who believes that money grows on trees. Her stock answer to everything is, “Scrap Trident, tax corporations, tax the rich.” It is not terribly intellectual. We have to be rather smarter than that. If the Chancellor has some wriggle room in his Budget—he is looking at the many priorities and hard-pressed areas that come across his desk, from the NHS to local government finance and the military—he owes it to this country to put social care at the top to provide some relief. That is not the long-term answer, but we have a short-term problem, and I am looking to him to help us solve it.
Diana Johnson (Kingston upon Hull North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bailey. I congratulate my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) on his eloquent speech, in which he set out the key issues that we are here to address. The right hon. Member for East Devon (Sir Hugo Swire) is right that we live in a prosperous country. As politicians, we know that politics is about choices, but I think the choices being made at the moment about social care are wrong, so we need to revisit the Government’s decisions and put pressure on them to think again. I want to spend a few minutes talking about the human cost of the financial pressures that my council is facing and the impact that is having on individuals, care staff and the care sector in general. I want to emphasise some of the points that my right hon. Friend the Member for Kingston upon Hull West and Hessle made about the demographic make-up of Hull and what has happened to our funding since 2010.
We are the third most deprived local authority area in the country, and the cuts since 2010 will equate to £548 per head by 2020. By then, an estimated £40 million will have been cut from Hull’s social care budget, and its central grant will have been reduced by 55%. I am going to be political here—the right hon. Member for East Devon said we should take out the politics, but I am going to say this. The most recent analysis shows that Labour councils have faced cuts five times higher than Tory councils, but even those figures do not tell us the whole story. From now until 2020, the council expects that the cost of its social care services will increase by £25 million. Even with the social care precept, the better care fund and the adult social care grant, we will not be able to cover that. As my right hon. Friend the Member for Kingston upon Hull West and Hessle said, Hull City Council is doing its very best in those difficult circumstances. It is being innovative and trying to integrate social care with health as much as it can, but the council’s financial situation means that individual men and women in the city of Hull are not getting the care that they deserve.
I want to tell hon. Members about a constituent, Joyce Hensby. Mrs Hensby has a range of medical conditions, which mean that she relies on carers to come into her home. For example, every morning she needs a 30-minute visit from a carer to get her out of bed, shower and dress her, and make her breakfast. The staff who do that are hard-working and dedicated, but unfortunately they are working in an impossible situation.
Joyce’s care is funded by Hull City Council and provided by a private company, Direct Health. In June last year the Care Quality Commission judged Direct Health’s service as requiring improvement. The CQC said that the provider did not have sufficient numbers of suitably qualified, competent, skilled and experienced staff, or the appropriate systems in place to ensure that people received the services agreed. Some care co-ordinators were being forced to do two jobs at once, and some care packages were being given back to Hull City Council because there were insufficient staff.
Staff told Mrs Hensby that they were paid by the minute and that if they could not provide evidence that they were fully occupied for the full half hour they were meant to care for her, their pay was docked. The CQC expressed severe concerns during its inspection about that pay-by-the-minute system. Furthermore, some staff work 16-hour days, from 7 am to 11 pm, and many were asked to opt out of the working time directive on starting with Direct Health. The provider does not fund staff’s transport costs, and sometimes carers spend large parts of the day rushing between appointments but not getting paid for that.
As we might expect, Mrs Hensby likes consistent care with people she knows and trusts. She does not want strangers helping her every day with some of the most intimate and personal of care. Staff turnover, however, is extremely high because of the pressure on them and their low wages. In the past three months alone she has lost five carers with whom she had built a good relationship. Every day my constituent Mrs Hensby is left worried about who will be coming through the front door to help her. That is the reality of what the crisis in local council funding looks like day to day in many homes in Hull.
Shortly after the Government made their living wage announcement, I visited a residential care home in Hull. That announcement is to be welcomed, but the owners of the home told me they were worried about its future financial viability, although they have run it for many years, they have loyal and long-serving staff and the home has glowing reviews. The council in Hull pays £416.55 a week for an older person in residential care. The majority of people in Hull’s care homes are not self-funders—as my right hon. Friend said, only 7% in the city are self-funders, compared with 45% nationally—which means that the care homes rely on the amount of money that Hull City Council pays. The homes cannot generate extra income for themselves.
It is worth pointing out that the cost of booking into a Travelodge in Hull is £456.75 a week, although that obviously comes without any of the support that is provided in a residential care home. The social care precept, however, does not even make up for the costs of the new national living wage policy. In Hull that 1% increase in council tax will raise only £2.1 million a year, whereas the living wage costs for adult social care in Hull are £3.5 million a year. Quality private care providers are under enormous pressure to provide a good service, which is what they want to provide, but they have to do so with a very limited income, and on top of that they now have to meet new obligations such as the living wage. We will see many more care home providers—the good ones, such as the one I visited—saying that they simply cannot continue, that it is not possible.
It would be remiss of me not to comment on Surrey. To recap, Surrey County Council is the 150th most deprived local authority area in England, and Hull the third most deprived. Surrey County Council leader David Hodge commented:
“I believe we have a duty to look after people…We cut £450m already, we squeezed every efficiency and we can do no more. I am sick and tired of politicians not telling the truth. Surrey people have the right to know and I’m not going to lie.”
That, obviously, was in relation to social care. Those comments resonate for hundreds of councils up and down the land and in more deprived parts of the country even more than they do in Surrey, because the pressures in places such as Hull are even more severe. Yet when council officers in Hull did the right thing, told the truth and raised the issue, as my right hon. Friend the Member for Kingston upon Hull West and Hessle said, it seemed to fall on deaf ears. Sadly, they do not have a direct line to Tory special advisers, as Surrey obviously did. The plight of our vulnerable residents is going unrecognised by the Government, perhaps because they are not in the stockbroker belt and are not so immediately obvious to the Ministers making decisions in Parliament.
Many years ago Neil Kinnock warned about playing politics with people’s jobs. Failing to fund social care is playing politics with people’s lives. New academic research shows that cuts in social care and the problems in the NHS led to 30,000 excess deaths in 2015. The Minister needs to reflect on that, and I urge him to consider it. He should also listen to some of the suggestions being made, because it is not as if there are no proposals for how to plug this gap. For example, Unison has pointed out that although business rate receipts for central Government have gone up, the Government have not allocated that extra money to councils. In 2017-18 additional receipts will amount to £6.6 billion. If the Government gave only £1.8 billion of that unallocated money to councils such as Hull, it would go some way towards relieving the pressures in social care.
Now is the time for a radical rethink of social care. In 1948 the view was that we needed to set up a national health service that we all contributed to and that we could all access. We now need a national health and care service to be set up and paid for from general taxation to stop the existing postcode lottery and to ensure that people such as those who fought in the second world war and helped to build the country back up after 1945 get the kind of care that we all want them to receive in our communities.
Huw Merriman (Bexhill and Battle) (Con)
I thank the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) for giving us the opportunity to discuss, on a cross-party basis, the need for reform and the challenges faced by our local authorities. I hope I can be forgiven for being a little more parochial in the time available to me than my right hon. Friend the Member for East Devon (Sir Hugo Swire) was. I want to talk about our challenges in East Sussex, but I will then touch on what the Government are doing and, ultimately, on the need for reform. That need is not only about looking at government but about encouraging reform and ideas at a local level, because the challenges are local. That is where I will focus the main part of my contribution.
To set the scene, we in East Sussex feel ourselves to be in a challenging situation, because those who make the decisions in London look south, see Surrey on the map—Surrey has already been mentioned—and perhaps think that things cannot be too bad in that direction, so money should go west or north. Further south than Surrey, however, is East Sussex. We are a relatively poor county with poor infrastructure, so our ability to create business opportunities is limited. Understandably, because we are on the south coast, we have also become a haven for retirement.
The Surrey scenario is real for us. It is extraordinary how, when I knock on doors in my constituency and speak to retired people, they tell me their stories about moving further south from Croydon, Caterham or wherever. That is fantastic, and those people add to our diversity, but the proportion of over-65s in my constituency is 28% of the total population, compared with a national average of 17%.
People will work and live in Surrey, perhaps in bigger properties, and then sell and downsize, but they will not pay the same amount of council tax in East Sussex. As they get older and into their advanced years, they will obviously need the services of East Sussex. Under the current model, the working age population of East Sussex largely has to fund those services. I agree with my right hon. Friend the Member for East Devon that there is a need to look at the model that requires us to fund social care locally but the NHS nationally, which does not make any sense at all.
Unfortunately, we also have a relatively poor working age population. I recall that, a year or so ago, I was given figures and told, “Congratulations—your constituency is in the top 10 for wage increases when it comes to the living wage.” That really means that 33% of my constituents are on the living wage and work in poorer areas, which is a challenge. I also make that point about the push for new money, which really means a push towards taxing those who are currently working. How will we get people who are currently working to save for their own good care if we tax them to the nines and they cannot afford to save?
Alan Johnson
The hon. Gentleman makes an important point. We need to fund social care from a separate source, not just normal taxation. Two ideas came up. The idea of taking money out of people’s inheritances was labelled the death tax. I made the point that I should be paying national insurance. I am 66 years of age and I am still working. Why did I stop paying national insurance at 65? As Dilnot said, that and other ideas need to be explored. We agree that this is not just an argument about sticking taxes up. We must look for a new funding stream, which has been so elusive.
Huw Merriman
I absolutely agree. As my right hon. Friend the Member for East Devon mentioned, we should look not just at reform of social care in isolation but at all the other related parts. We should ask ourselves whether we are overspending in certain parts, whether we can recycle in other areas, and whether people need to make fairer contributions, particularly as they get older. We could also throw into that pot contributions by retired people who have no issue at all with their income and have paid for their assets, yet are still entitled to free bus passes and other universal benefits. This is not Government policy, but I can say it because I am a Back Bencher: perhaps the time has come to look again at whether we can afford that when we cannot afford to look after people in social care.
Kate Green (Stretford and Urmston) (Lab)
I was not in the Chamber for the beginning of the debate, for which I apologise, so I am particularly grateful to the hon. Gentleman for giving way. He alluded to local experiences, and the demographics and wealth in East Sussex. There is also a disparity between north and south in how wealth is held in housing assets. There is an interesting opportunity for the Government to look at how the excessive housing wealth that is held in London and the south-east could be released in a fair way to ensure that constituents in my part of the country are not disadvantaged.
Kate Green
And constituents in the south-west. There are areas where housing wealth is low and therefore not a good source to pay for social care, but there are other areas where it is very high. I own a flat in central London, and that ought to be used to pay for my social care.
Huw Merriman
I very much take the hon. Lady’s points. I certainly do not advocate a mansion tax, and I do not believe that my right hon. Friend the Member for East Devon was calling for one either. There is an argument that, if social care continues to be funded locally, there needs to be an additional stamp duty so that, if an asset in Surrey is sold and downsizing occurs, the money actually follows someone into the county. That should not be required, because it does not really make sense for social care to be funded locally, but if it remains locally funded, I agree that we have to start thinking radically about how we spread the money around.
I recognise that the Government have acknowledged that there is a challenge in the system. That is the first step. The right hon. Member for Kingston upon Hull West and Hessle mentioned the concept “all is well”. We will hear from the Minister, but I constantly hear the Government acknowledge that there is a challenge and a requirement for reform. We need additional funds between now and reform so we can get through this stage, but reform is ultimately the answer. I believe the Government recognise the challenge, so I have great confidence that we will overcome it.
I also recognise that £3.5 billion of extra funding will be put in through the social care precept and the improved better care fund by 2019-20. I hear the point that some of that is backdated and will not come on stream until later, but the Government have listened to that point to a certain degree and allowed councils to increase the social care precept levy to 3%. My county is doing that. The levy will be 3% this year and 3% the following year, but of course it will then go down to zero, which is why reform will be needed at that point. The transfer of the new homes bonus from the district level to the county level has also buffered my county council against some of the increase in costs.
I welcome what the Government are doing and the tone that they have adopted, but ultimately we need reform. I absolutely believe that we need to look at the entire system, including financial services. For example, we talked about property. I believe that there is a problem with equity release, which people cannot get from their high street banks because they just do not offer that service. Anyone who wishes to tap into their property’s value to pay for their care in older age has to go via an insurance company, which is incredibly difficult. I have discussed that with the banks. They have a concern about their bills for recent mis-selling fiascos—they shy away from explaining what equity release means for people in their older age because they were sued so successfully for previous mis-selling scandals. We need financial services reform, too.
We must also look to the future. Why do we not have care individual savings accounts for people—perhaps for people of my age—who should be saving, in the same way that we have help to buy ISAs? We need to look more along those lines. We must be absolutely honest and open that an asset will be sold in totality to pay for care. I regard my house as the asset that I will use for that. I doubt very much that my children will ever see a penny from it. We need to have that conversation with the public, who I believe are ahead of us in this game. Ultimately, people who care for their relatives should be able to inherit, but people who do not should not expect to inherit, because the state will have to pay for that care and the cost will have to be recovered. We need to start talking in that language.
We must also look at reform of the care home sector. Of the 35 care homes in my constituency that were reviewed by the CQC, 29 were less than good. That is an absolute disgrace. The issue with care homes largely is that they are in old buildings with fire hazards, there are not enough staff to look after people and strangers still share rooms. There must be incentives in the system so that new care homes are built, which is why I recently called for care homes to be delivered by local government. Some people took that as a call for renationalisation of the sector, but I did not mean that; rather, when putting planning applications through, local government should require developers to build care homes in the same way that they require schools and GP surgeries to be built. If we put such incentives in the system, we will have the funding in place and the old buildings will be sold. Planning consent requirements should be lowered for the care home sector, which would lead to new buildings.
Local ideas are often the best ideas. The council house sale reform in the ’80s, which Opposition Members may not have agreed with, was a local idea. We have merged the two budgets in the East Sussex Better Together funding programme. We are taking a lot of money out of the primary care system—40% of the budget will come out of hospitals and go into social care. East Sussex is one of the three pioneers that recognise that this is one problem, so there needs to be one fund and one programme. That can be done locally and is being led locally by East Sussex. Rather than talking purely about the challenges, I will finish by talking optimistically. Answers and solutions are being found and delivered locally, and I very much hope they succeed.
Mr Adrian Bailey (in the Chair)
We now come to the Front-Bench wind-up speeches. Will the Front Benchers between them leave a couple of minutes at the end for Alan Johnson to reply to the debate? I call Neil Gray.
Neil Gray (Airdrie and Shotts) (SNP)
It is a pleasure to sum up for the Scottish National party in this debate, which is crucial for all our constituents. I congratulate the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) on securing the debate and his erudite contribution, which others have remarked upon.
The right hon. Gentleman was right to say at the outset that this is a domestic political challenge of our time. Alongside the cuts to social security, this issue must be the one that is felt most by the people we represent in their day-to-day lives. In that vein, I am slightly disappointed that there is not a better turnout for the debate, although I understand that events happening tomorrow in Stoke and Cumbria might preclude people from being here today.
The right hon. Gentleman cited the cuts applied in England, whereas in Scotland adult social care spending increased by 29% from £2.3 billion in 2006-07 to £2.97 billion in 2014-15. He also highlighted the disparity in funding in different areas of England, understandably focusing on Hull. He did not mention, though the hon. Member for Kingston upon Hull North (Diana Johnson) did, the special deal given to Surrey. We should reflect on how Surrey and Hull have been treated, with them appearing to get different treatment.
The right hon. Member for East Devon (Sir Hugo Swire) was right to acknowledge in his contribution the critical role played by carers—especially kinship carers—who provide phenomenal service and save Government across these isles billions of pounds. He was honest enough to say that the situation is approaching a crisis in England, but he went on to blame financial pressures from 2010 for the crisis faced now. I remind him respectfully that austerity is a political choice. In spite of wholesale cuts to Scotland’s budget, although we still have challenges we are nowhere near the crisis point that England is at now.
In the right hon. Gentleman’s criticism of the health and social care model as he sees it in England, he appeared to be advocating the integrated joint health and social care boards model that has now been legislated for in Scotland. I would encourage him to look at what has been done there and the results that that has reaped.
The hon. Member for Kingston upon Hull North highlighted the fact that Labour councils face five times the level of cuts of Conservative councils and the difficulties faced as a result in her city. She rightly cited the personal story of Joyce Hensby to highlight the wider issues. Mrs Hensby’s needs are not unique, and Ministers must do better to provide for her and people like her across England.
The hon. Member for Bexhill and Battle (Huw Merriman) reflected on his area’s challenges, which will not be unique but are not being addressed. He was not afraid to consider ideas that will undoubtedly be unpopular in some quarters of his constituency. That is why I commend him, although I cannot necessarily agree with what he had to say. He also talked about equity release in property but not about those people who do not have access to that. I encourage him to look at the free personal care model north of the border.
Social care across the UK faces challenges. There is no doubt that changing demographics and an ageing population across the country mean new challenges for Governments to ensure that services are fit for purpose. Others have reflected on what is happening in their areas and I will do the same. The Scottish National party Government have been facing up to these challenges and have legislated for new integrated joint health and social care boards, which are now established. Partly as a result of local authorities and health boards working together, we have seen a drop in instances of delayed discharge, which is a major issue in acute care performance and in ensuring the best possible rehabilitation scenario for patients.
Taken together with other initiatives and investments, standard delayed discharge of more than two weeks has dropped by 43% in Scotland. As a result, A&E waiting times are also worth looking at: the four-hour target is hit in 92% of cases in Scotland, 79% in England, 76% in Northern Ireland and 65% in Wales. As part of the Scottish Government’s 2016-17 draft budget, we have allocated a further £250 million to health and social care partnerships to protect and grow social care services and deliver our shared priorities, including paying the real living wage to adult careworkers.
In spite of the cuts to Scotland’s budget, the SNP has increased funding for adult social care. As a result, the average time received for home care is 11.3 hours a week, compared with 5.6 hours in 2000. Through integration of health and social care and continued progress to self-directed support, more people are choosing what their support is and how it is delivered. In line with our vision, the proportion of adult social care expenditure in community settings has increased from 46% in 2006-07 to 52% in 2014-15.
The SNP Government will continue to shift the balance of care by increasing in every year of the next Parliament the share of NHS budget dedicated to mental health and primary community and social care. The protection of our social care services is vital, and we have taken action to do that. As highlighted in the Fraser of Allander Institute report of September last year and the Audit Scotland report on local government, social work spend in Scotland increased in the period from 2010 through to 2015, rising from £3.2 billion to £3.3 billion.
Challenges are faced by health and social care services across these isles. Despite what I have said about the much better picture north of the border, clearly Scotland is not immune to the challenges faced elsewhere. However, the SNP Scottish Government have taken a different path and made different choices. We still have some way to travel, but I am confident that the UK Government have much to learn from the SNP Government up the road.
Jim McMahon (Oldham West and Royton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bailey. I congratulate my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) on securing this critical debate. There is a crisis, but we should be honest and say that it is a crisis of indifference. There are pleas from those who need care but cannot get it, pleas from families who see their relatives denied care that they ought to be receiving and pleas from local authorities that are in the hellish situation of trying their best to teem and lade a diminishing resource when pressure on their budget is going up all the time. We have also seen pressure and pleas in this place, but the Government seem determined to ignore the scale of a crisis of their own making.
It is a crisis of the Government’s making. I resent the idea that just because people are living longer and happen to have health conditions that need additional support, they are tagged as being the problem. People who have worked all their lives and contributed to our society have been let down by the Government when they needed them most. The Government labelled them as the problem instead of reflecting the fact that we want people to live a decent life in old age. If that is the measure of the type of society that we want, we ought to step up and treat people in the right way.
Liz McInnes (Heywood and Middleton) (Lab)
As well as there being a crisis of indifference, does my hon. Friend agree that the situation was entirely predictable? It was well known that the elderly population was going to increase, and no action has been taken to address the problem.
Jim McMahon
My hon. Friend is right. The reports, reviews and commissions that have looked into this issue have laid out clearly the scale of the problem. It has been made clear that the problem is bad today but will get worse year on year unless action is taken. Cross-party attempts have been made to resolve the issue, only to be undermined by the Conservative party, which wants to use it to wave the flag and scream at the Labour party with accusations of a death tax and a granny tax. We have heard about all that during the debate. The situation today is that the Conservatives are in Government, and it is the Government’s responsibility to come forward with a solution.
Suggestions can come forward from the Opposition—we have heard some today—and from local government, social care providers and charities. We have heard about that, but ultimately it is the Government’s responsibility. In many ways I pity the Minister. I would not like to be in a situation where my own party’s Prime Minister was completely clueless on the scale of the problem and the Chancellor of the Exchequer seemed completely careless about the scale of the problem. The Minister’s own Secretary of State seems to show little interest in the brief he has been given, investing little time in it and leaving it, with all due respect, to junior Ministers to come and take the brunt of the problem.
The truth is that the Treasury will not release the amount of money that is needed. What happens as a result? Further pressure is pushed on to departmental budgets, but because the DCLG has no more money it pushes it back on to local authorities. The result—besides the fact that we do not even touch the sides in dealing with the scale of the problem—will be that council tax will have increased by 25% by the end of this Parliament. In human terms that will mean that people living in towns such as Oldham, Hull or Rochdale will notice their council tax bills increasing by 25%; but the fact that those towns historically have a low council tax and business rates base will constrain their ability to generate the total amount of money needed to provide care.
Vernon Coaker
I agree very much with my hon. Friend’s points. Does he agree that people in constituencies such as mine, in Nottinghamshire, feel as if they are in a parallel universe? They tell us that there is not enough care, and people are stuck in hospital or unable to get the support they need. Everyone says there is a crisis, but as we shall no doubt hear from the Minister, the Government just say, “We recognise that there is a problem, and we are doing this and this about it”. In reality, there is a crisis on the ground, and the Government need to recognise it and respond to it.
Jim McMahon
That is right. I had the pleasure of facing the Minister across the Committee Room during consideration of the Local Government Finance Bill, where we debated that at length. I asked him clearly whether he believed there was a social care crisis, and his response was crystal clear: he did not believe that there was. That goes completely against the professional advice of people working in the sector, the 1.2 million people who need care but are denied it, and the advice of the Local Government Association, which represents its member authorities across political parties—the point is not a party political one at all. The Minister seems to want to hunker down and pretend there is not a problem on that scale.
Jim McMahon
I need to make progress, with all due respect, so that the Minister can give a meaningful response to the debate.
Even with the 25% council tax increase, which will obviously put pressure on low-income families, particularly in areas with a low tax base, there will still be a £2.6 billion adult social care funding gap. The money will not even pay for a national insurance contributions increase, local authorities’ obligations under the apprenticeship levy requirements, or the national living wage. That is before we get to the point of tackling the poor quality of care provision in the private home care market in particular.
That is the scale of a problem that could have been avoided, and the cruelty of the situation we are in. I do not say that we could create a perfect system. We need to accept that although we will evolve a system far better than today’s, we have lost critical time for the reforms that are needed. In any transitional phase between systems there must be adequate resources in place to deal with the transition and, effectively, double-running of the system. People already in the system must be paid for, and new entrants to it must also be paid for, perhaps in a different way, to ensure that they will be looked after following the transition to the new way of working. That could be a 10, 15 or 20-year programme, and there is no appetite from the Government to look even beyond this Parliament, let alone so far ahead.
The total deficit in public service provision, at local level, is now running at £5.8 billion. That is the amount that councils need to fulfil their statutory obligations and provide basic public services. I do not agree at all that it is not a question of choices—it absolutely is. The corporation tax cuts cost us £5 billion, which could have been used either to offset the £2.6 billion adult social care deficit or even to make sure that councils could provide the 700 services that central Government require of them at local level.
Councils are being put in a difficult position. They will be expected to put up council tax by 25% at a time when the universal services that people can see, and that they believe they pay their council tax solely for, are being withdrawn—altogether, in some cases. The public will rightly ask, “What am I paying my council tax for? The park isn’t being maintained any more. The streets aren’t being cleaned any more.” In fact, most people believe they pay council tax only to get their wheelie bins emptied—and that happens less often than it used to, so where is the money going? The relationship between the taxes people pay and what they get in return is critical for democracy and for holding decision makers to account, and that link is being eroded. The truth is that a social care system reliant on 1991 property values is not a base on which to build a social care and health system for the future. It is not progressive and does not reflect people’s ability to pay, based on the income they earn. Of course, people in poorer areas ultimately pay more.
An offer has been made but not taken up yet, though it should be, to put party politics to one side. It is about choices, and we shall hold the Government to account where they make choices in favour of adult social care. There is a broad consensus across the political parties about the solution—about changing the system and ensuring that those who need adult social care can get it.
Sir Hugo Swire
Will the hon. Gentleman give way, so that I can correct him factually?
Sir Hugo Swire
The hon. Gentleman said an offer had been made for a cross-party group but not taken up. That is wrong. A cross-party group has been to see the Prime Minister, and we are in talks.
Jim McMahon
There is a world of difference between a cross-party delegation having an audience with the Prime Minister, who ignored what was said in that meeting, and a reach-out from the shadow Minister to the Minister in the Local Government Finance Bill Committee to say that we should work together.
There are two issues, one of which is public service delivery, responsibility for which sits with local authorities, social care providers and health providers. Fundamentally, however, it will come down to brass tacks—where is the money? In the Opposition, that question is the responsibility of the shadow Communities and Local Government team; and in the Government it is the responsibility of the DCLG. There has been an offer to work in a cross-party way to find a solution.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
indicated dissent.
Jim McMahon
The Minister shakes his head, but he should read Hansard or pay attention in sittings of the Local Government Finance Bill Committee, where I made that offer. The cost of doing nothing is delayed discharge and more than 1 million people not receiving the care they deserve, but also the Government letting down people who have worked all their lives and contributed to society, and who deserve better than the lot they are given.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
I congratulate the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) on securing this important debate. I know he has championed the issue of adult social care for some time. Social care funding clearly matters deeply to many Members from across the House, as we have seen today. That is not surprising, as it is a big and complex challenge.
As the right hon. Gentleman put it when he was Secretary of State for Health:
“We have no magic bullet to load and fire to solve this problem...there is no quick fix here.”
He was right. We are all living longer—which is a good thing. I do not agree with the assertion by the hon. Member for Oldham West and Royton (Jim McMahon) that any blame is levelled at anyone who is getting older and deserves good quality social care. This debate is precisely about the fact that we face the challenge of an ageing population, and need to provide for those people as they get older.
Mr Jones
I will make progress first.
Last year councils spent more than £14 billion on adult social care, including more than £300 million more than they had budgeted for. It is a significant and growing cost pressure, and, despite what some have said today, it is one that the Government are seeking to relieve. We have added to the package that was put in place at the spending review—a package of nearly £3.5 billion of additional funding for adult social care by 2019-20—by providing councils with access to almost £900 million of additional funding over the next two years. That includes a dedicated £240 million adult social care support grant in 2017-18, together with allocations from the improved better care fund and the additional council tax flexibility that we have given to local authorities, which will provide up to a further £208 million to spend on adult social care in 2017-18 and £444 million in 2018-19.
There has been some objection to the social care precept on the grounds that central Government should pay for adult social care, but it is important to consider where funding comes from; whether raised at a local or national level, in the end it is all taxpayers’ money. The social care precept means that council tax payers’ money is spent in their areas on supporting vulnerable members of their community. As the right hon. Member for Kingston upon Hull West and Hessle touched on, some councils will be able to raise more than others, which is why the improved better care fund, which will be worth £1.5 billion by 2019-20, will take into account councils’ ability to raise funding through the precept, so in that sense nobody loses out.
However, more money is not the only answer. The right hon. Gentleman predicted that I was going to say that, but it is important to point out that there are discrepancies between outcomes in different areas that cannot be explained solely by funding or demographics. All areas are facing significant challenges, but some are still performing better, driving innovation and putting in place the best practice approaches that have been proven to be effective. More funding is required, and it is being provided.
We have also seen greater improvements in ways of working. One example is in Northumberland, where £5 million has been saved through joined-up working, which has reduced the demand for residential care by some 12%. The better care fund is already supporting that, with £5.3 billion of funding pooled between local authorities and clinical commissioning groups last year. However, we want to make sure that local authorities learn from the best performers and the best providers, and we will therefore soon publish an integration and better care fund policy framework to support that.
I will deal now with numerous points raised by hon. Members. The right hon. Member for Kingston upon Hull West and Hessle mentioned the national living wage, which is extremely important. It has been mentioned many times in the debate that we need to attract more people into the caring profession, and the national living wage will certainly do that, but as the right hon. Gentleman pointed out, it has to be paid for. The Local Government Association estimates that the national living wage increase will cost £49 million in 2017-18, with the adult social care precept, which it has been suggested on a number of occasions may not cover that cost, actually raising up to £1.23 billion this year. We can see that the actual precept that has been given to local authorities is significant.
Mr Jones
No, I will make some more progress and deal with these points before I give way to the hon. Gentleman.
The right hon. Member for Kingston upon Hull West and Hessle also had concerns about the varying council tax bases across the country, which is an extremely pertinent point. That is why we have profiled the improved better care fund’s distribution—which is £105 million this year, £825 million the following year and £1.5 billion the year after that—based on an area’s ability to raise additional funding through council tax. I hope he is reassured by that. Taking into account his point about the short term, we have put in place the additional adult social care support grant of £240 million this year to give additional support to local authorities, bearing in mind that the improved better care fund is back-loaded, as the right hon. Gentleman said.
The right hon. Gentleman made another point about Hull and the implementation of 100% business rates retention. An assertion was made and, I think, a figure put on the amount that would be available to Hull under that system. At the moment, no allocations have been made and no baseline funding has been set. We have been clear throughout the process of setting 100% of business rates retention that we would take into account a local area’s ability to raise business rates. We certainly recognise that redistribution will need to be part of the new system, to ensure that just because one area does not raise as much in business rates as another it is not left behind.
The right hon. Gentleman also mentioned the difference in funding between Kingston upon Hull and Kingston upon Thames. I will deal with that issue head-on, because for 2017-18, putting together the potential 3% increase under the adult social care precept, the adult social care support grant and the improved better care fund, Kingston upon Hull will actually get £6.86 million from those sources, while Kingston upon Thames will get only £4.88 million from the same sources. I hope that deals with some of his concerns about how funding is being distributed.
My right hon. Friend the Member for East Devon (Sir Hugo Swire) almost said that my presence at this debate was an outdated model—I hope that Mrs Jones does not take the same view in due course—but I know he did not mean it personally. He made some important points, including about unpaid carers. The Department of Health is leading on the development of a new national carers strategy that focuses on raising awareness of caring and on helping carers to ensure that they have the right support. He also mentioned the business rates retention system and the additional £12.5 billion of business rates that will go to local authorities. We have been clear from the outset of that process that that will be fiscally neutral, with additional responsibilities therefore going to local government in that sense. We are in the process of determining what those additional responsibilities will be, and we are consulting on a number of things at the moment. However, we have ruled out devolving attendance allowance to local authorities.
The hon. Member for Kingston upon Hull North (Diana Johnson) mentioned skills in the care sector, which is an extremely important point. The Department for Health is doing a significant amount of work to try to improve skills in that regard, and I think the national living wage will also help. The hon. Lady also mentioned a particular incident in her constituency relating to the national living wage. We are absolutely clear that the national living wage should be paid to people working for whatever company on the basis of the hours that they work. If there is any abuse going on, I encourage the hon. Lady to contact Her Majesty’s Revenue and Customs.
The hon. Lady also mentioned the allocation of funding in relation to deprived areas. I hope it reassures her that the average spending power per dwelling for the 10 most deprived local authorities is around 21% more than for the 10 least deprived local authority areas this year.
Alan Johnson
He already is, so just in case I lose my two minutes, I have a question for the Minister. He has a letter from the chief executive of Hull City Council, Matt Jukes. I have mentioned the disgraceful behaviour of the Secretary of State not committing himself to a meeting that he himself had suggested. Will the Minister commit to having that meeting, at which we can look at the latest round of figures? The first ones were not too good; we will have a stab at this one. That is the short-term problem, but will the Minister also say something about the long-term issue, which my hon. Friend the Member for Oldham West and Royton (Jim McMahon) raised from the Labour Front Bench, and which Government Members have also raised? This must surely be a short-term issue, with a vision of something better for the longer term.
Mr Jones
I will have that meeting to deal with the points that the right hon. Gentleman mentioned. I say finally that the Prime Minister was absolutely clear last week about the need to find a long-term, sustainable solution to this. The Cabinet Office is driving that work across Government, with my and other relevant Departments, to find that sustainable solution. Local authorities have a duty to care for our most vulnerable people, but we also have a moral duty—
Motion lapsed (Standing Order No. 10(6)).