Budget Resolutions

Baroness Keeley Excerpts

Thursday 9th March 2017 Commons Chamber

[Sajid Javid]

I am pleased that my hon. Friend asks that question as it allows me to say more on this issue. First, I can confirm that the £2 billion is all new money; it is new grant from central Government. Secondly, I can confirm that it will be added to every local authority’s baseline over the next three years as that money is distributed. My hon. Friend also rightly asked about how it will be allocated. The vast majority of the money will be allocated using the improved better care formula that already exists and is transparent and open, which will mean that account can be taken of not just the needs of every local authority but of their ability to raise money through council taxes. A small portion—10%—will be allocated using the existing relative needs formula, and the purpose of that is to make sure that every local authority in the country that has responsibility for adult social care is able to access new funding.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

The Secretary of State tells us that the vast majority of the money will be allocated via the better care fund. We know that the settlement before Christmas caused problems and that a third of councils lost out, including mine which lost out because of the adult social care bill. Will he say how the rest of the money will be allocated?

[Sajid Javid]

I thought I had just made that clear, but I will repeat it and be a little more specific: 90% will be allocated using the improved better care fund formula and 10% will be allocated using the relative needs formula. These are two existing formulae already in place and, as I said, further details will be published this afternoon, with the allocations and a description of those formulae. I hope that is helpful to the hon. Lady.

We also need to make sure that councils deliver the best possible local care services. There are many excellent examples of best practice around the country, but there is a big difference between the best-performing and worst-performing areas. There is clearly room for improvement across the sector, so alongside the additional funding announced in the Budget my right hon. Friend the Health Secretary and I will shortly announce measures to help ensure that those areas facing the greatest challenges can make rapid improvement.



Looking at health more widely, we are already committed to a £10 billion annual increase in NHS funding by 2020. This Budget goes further still: there is £325 million to allow the first NHS sustainability and transformation plans to go ahead, meaning more efficient and more effective healthcare for local people; and there is another £100 million to fund improvements in accident and emergency departments for next winter, including better on-site triage and GP facilities. That is enough to fund up to 100 new triage projects, taking some of the strain off our A&E departments.

--- Later in debate ---

[Barbara Keeley (Worsley and Eccles South) (Lab)]

We have heard a wide range of speeches this afternoon, including from the hon. Members for Kirkcaldy and Cowdenbeath (Roger Mullin), for Richmond (Yorks) (Rishi Sunak), for Esher and Walton (Mr Raab), for Harrow East (Bob Blackman) and for Peterborough (Mr Jackson), and from the right hon. Member for North Norfolk (Norman Lamb), who is no longer here. We also heard excellent speeches from my hon. Friends the Members for Wallasey (Ms Eagle), for Croydon North (Mr Reed), for Bristol East (Kerry McCarthy), for Ilford North (Wes Streeting), for West Bromwich West (Mr Bailey), for Feltham and Heston (Seema Malhotra) and for Cardiff South and Penarth (Stephen Doughty) and from my right hon. Friend the Member for Leicester East (Keith Vaz).

I shall mainly talk about social care, but I want to mention the absence of any Budget help for the 1950s-born women struggling without their state pensions owing to the 1995 and 2011 Pensions Acts. Their demonstration and lobbying here yesterday were wonderful. I am also sad that the Chancellor could not find £10 million for the children’s funeral fund, which was campaigned for so ably by my hon. Friend the Member for Swansea East (Carolyn Harris). Despite cuts from central Government, my local authority has recently announced that it will waive fees for child burials, but all the weight of that should not be put on councils.

I had hoped that this Budget would finally announce a Government funding commitment to start to put the social care sector on a stable footing. The Chancellor said that everyone should be able to

“enjoy security and dignity in old age.”—[Official Report, 8 March 2017; Vol. 622, c. 820.]

However, despite his rhetoric, it is clear that his Budget did not match up to that aim. As we have heard, the King’s Fund has put the current funding gap for social care at around £2 billion. Yesterday, the Chancellor announced additional funding of £2 billion over three years, of which only £1 billion will be available this year. That is half of what is needed to deal with the immediate crisis. The Care and Support Alliance commented that that the funding will

“keep the wolf from the door”

but no more. There has been much discussion about the future and what will happen to that extra funding, but we must bear it in mind that post-Budget figures for adult social care show a 2.1% cut between 2016-17 and 2019-20, showing that funding is still being cut in this Parliament.

Along with council leaders, social care providers and health leaders, the Opposition have been warning this Government for many months about the perilous state of the social care sector. Indeed, the King’s Fund recently said that adult social care is

“rapidly becoming little more than a threadbare safety net for the poorest and most needy older and disabled people.”

Last week, the care company Mitie offloaded its two homecare businesses for £2, which is a clear demonstration of the fragility of the current care market. That company, which had provided care and support to 10,000 people and employed 6,000 staff, was reduced to being worth only £2. It has taken until now for the Government to heed the many warnings, and they were wrong to wait so long to act, just as they were wrong to cut local government budgets by around 40% since 2010, which has led to cuts of £5.5 billion from adult social care budgets by the end of this financial year.

[Ms Angela Eagle]

Does my hon. Friend also recognise that the cuts to benefits, particularly to housing benefit, will have a huge effect on extra care? Large numbers of people are very happy, well looked after and protected in those arrangements, but they cannot pay for them if housing benefit goes. Moving those people into nursing care will cost far more a week. That is another ticking time bomb.

[Barbara Keeley]

My hon. Friend is right about extra care housing.

The Chancellor was wrong not to make any extra funding available for social care in the autumn statement. Instead, Ministers chose to continue putting the burden of funding social care on councils and council tax payers. The local government finance settlement compounded the mess by recycling money from the new homes bonus to create the adult social care grant. That rather inept settlement made a third of councils worse off, including my own Salford City Council, which loses an extra £2 million from budgets this year.

One council that did not lose out from the settlement was Surrey County Council, which will gain £9 million extra from the adult social care grant. Perhaps that should not surprise us, given that the settlement was made when Surrey was in the middle of a long, drawn out and clearly highly successful lobby of Ministers to get more funding for just that council’s social care.

Last night, Surrey County Council released many documents and texts revealing the extraordinary level of access that that one council enjoyed with Ministers and their advisers. My local authority recently asked for a meeting with the Secretary of State for Communities and Local Government to discuss our difficult financial situation and the loss of funding for social care. We were given a 30-minute meeting with one of the Under-Secretaries of State. However, the leader of Surrey County Council was given meetings with the Secretary of State on 12 October, 19 October and 9 January. There were a number of further meetings with the Secretary of State to discuss Surrey County Council’s funding situation involving the Chancellor, the Secretary of State for Health and other Surrey MPs. There was also a substantial stream of letters, emails and texts, some of which may make surprising reading. Some frustration was expressed about the Communities Secretary, with one Surrey MP saying:

“Sajid led me to understand before Christmas that he would be trying very hard…to help Surrey out with the worst of its (Government-dictated) financial dilemma.”

And he said that if the Secretary of State was

“imprudent enough not to have £40m hidden under the Department sofa for just this sort of emergency/problem”

and if all the Secretary of State’s local government money really is allocated, he

“still has the option of adjusting all other Council settlements down very slightly in order to accommodate the £31m needed for Surrey—and I think he should be encouraged to do this.”

In January that Surrey MP wrote that he was

“losing hope re getting help from Government this time, we still need to kick up such a fuss that Ministers and Civil Servants really do remember at the very least ‘they will need to treat us better next time.’”

I think that refers to the new funding formula. All this about a council that the Chancellor himself told in a letter in December:

“Surrey’s core spending power in 2016/17 decreased by 1% compared to an average reduction of 2% for shire counties as a whole”.

And the Chancellor said that over the lifetime of this Parliament

“Surrey’s spending power is forecast to increase by 1.5% compared to a flat cash settlement for local government as a whole”.

It seems that Ministers were not ready to listen to most council leaders, care providers, local authorities and their own regulator about the fragile state of social care funding, but it is clear from all the correspondence—I recommend that hon. Members read that correspondence, as it is very interesting—that relying on council tax and business rates to fund social care will never give us the fair and stable funding system that we need.

As I said earlier, there will still be cuts of 2.1% to social care up to 2019-20, so what we have in this Budget is a sticking plaster or a stopgap announcement that will not give older and vulnerable people the “security and dignity” in old age that the Chancellor claims. And it will not enable us to deal with the continuing demographic challenges that we face. The number of people aged 75 and over is projected to nearly double by 2039. That ought to be something to celebrate, but instead the Government have created fear and uncertainty for older people by failing to address the health and care challenges raised by those demographic changes. The Chancellor said that the Government intend to produce a Green Paper in the autumn on long-term funding options, and there has been some discussion of that in this debate, but given that we have already had the Barker review and the Dilnot commission, there are fears that the Government could be kicking this issue, once again, into the long grass.

I hope that the Government are not doing that, because cuts to social care budgets hit not only people who need care, but the 6.5 million unpaid family carers. Carers UK tells us that an estimated 1.6 million people currently provide 50 hours or more of care per week, which is an increase of a third since 2001. Some 2 million people have given up work at some point to care for loved ones, and 3 million carers have had to reduce their working hours. That is not good for their finances, with many falling into poverty as time goes on.

As people live longer with disabilities and long-term health conditions, more of us will find ourselves having to take on a caring role. Sadly, this Budget offered nothing to carers, just as it offered nothing to women born in the 1950s and nothing to families who were bereaved after losing children. There was nothing in it for carers, no extra support and no sign that this Government value the important work that they do. I say to the Minister that £120 million would deliver a three-hour respite break each week for 40,000 carers who are providing full-time care; instead, as we know, the Government have chosen to prioritise cuts to inheritance tax and corporation tax, and to ignore the increased burden on unpaid family carers.

The Government have also failed to recognise that the social care crisis is not just about older people. The Chancellor talked about the impact that the £2 billion over three years will have on delayed discharges, but, as councils have reminded us this week, other groups of people need social care, including those with learning disabilities. About a third of councils’ annual social care spending—some £5 billion—goes on supporting adults with learning disabilities. Surrey MPs must now understand that fact, after all the correspondence from their council leader, who spent a lot of time trying to make clear to them what an issue that was for councils.

We had an excellent debate in Westminster Hall earlier in the week on social care in Liverpool, when we heard that Liverpool had lost almost 60% of its grant since 2010 and that that will reach cuts of 68% by 2020. Cuts to social care there have meant that funding for care packages had to be cut, so whereas 14,000 people were receiving one now only 9,000 are—5,000 people are no longer getting a care package. Surrey, which has had so much attention, did not have cuts at that level; its cuts were only 28%. Indeed, social care spending in Surrey has increased from £273 million to £367 million.

I want to make an observation about the new allocations for the £2 billion that the Government have announced. I observe—that is all I can do, because the figures have only just arrived—that the allocations are £1 billion for year one, two thirds of a billion for year two, and one third of a billion for year three. In that, Surrey’s allocation goes up in year two; it is one of only six councils on the whole list that gets a bigger allocation out of a smaller amount of money. I do not know, and it is impossible to see here in the Chamber, what the formula is, but that position is very worrying.

Disturbingly, this important matter of funding social care has been tarnished by the offering of sweetheart deals and the making of gentlemen’s agreements. It seems, from reading the correspondence, that all of that was done to escape the political heat for some right hon. and hon. Members facing the reality of what cuts to council funding have done to social care in their local authority area. That is what this is all about: threats of what will happen to constituencies and areas if the cuts go on.

Social care should not ever be consigned to becoming a threadbare safety net. We also should not have a Communities Secretary who can hold more than seven meetings with Surrey County Council or Surrey MPs to discuss their funding, yet who will not meet a cross-party delegation from Salford City Council and has no time in his diary to meet the leader of Hull City Council. I hope the Communities Secretary will start to listen to councils other than Surrey County Council, whose leader emphasised in letters that we have seen that it has the largest Conservative group in the country. He should also listen to leaders from Hull, Croydon, Salford, Manchester, Liverpool, Durham and Newcastle. He needs to understand from them what is needed throughout the country to save social care from crisis.

[The Financial Secretary to the Treasury (Jane Ellison)]

We certainly have covered a lot of ground in today’s debate; indeed, we have strayed internationally, as well as covering an awful lot of domestic policy. Before I address some of the key themes, I wish to stress again the central point made by my right hon. Friend the Secretary of State for Communities and Local Government when he opened the debate. Our ability to provide public services is entirely dependent on our ability to pay for them. Indeed, the right hon. Member for Leicester East (Keith Vaz) said in his speech that before we talk about spending, it is important to talk about how we would raise the money. That is the last thing we have heard from the Opposition today.

Key to this debate is the fact that if we do not live within our means, deal with the deficit and get debt falling, we simply will not be able to continue to fund the public services that we all care about on both sides of the House; of course, the generations to follow will then suffer. We have seen how debt has been left for others to deal with, which is why at the heart of the Budget and our economic policy is our continued resolve to restore the public finances to health, increase our economic resilience and secure our public services for the future. At the heart of our aims is the work to bring down the deficit. We have made great strides, and in doing so we have been able to bring what we spend and what we raise further into line. That is how we can afford public services.

We have already cut the deficit by almost two thirds, but the work is not done. We are also on course to get debt falling as a share of GDP by 2018-19. We are, though, the first to acknowledge that there is no quick fix, no silver bullet and, contrary to assertions by Opposition Members, no magic money tree. That is why we are sticking to the spending plans we have set out and why we are taking a systematic look at how we can become ever smarter in how we spend taxpayers’ money, including by conducting an efficiency review that aims to get more value for money and to save £3.5 billion. As my right hon. Friend the Secretary of State said earlier, we are looking forward to benefiting from the insight and expertise that Sir Michael Barber can bring to bear on the process.

We all have to acknowledge that this work is part of a longer-term challenge. There are many pressures on services in advanced economies around the world, and if we do not grapple with the issue of how we pay for things, we just cannot tackle them. We heard quite a lot from the shadow Minister, the hon. Member for Worsley and Eccles South (Barbara Keeley), about social care. We made a significant announcement in the Budget statement about a £2 billion injection of extra cash—[Interruption.] Opposition Members say from a sedentary position that it is not enough; I return to my previous point: we have heard so much from them about where they would spend more, but we have heard absolutely nothing about how they would pay for it. They have a few gimmicky ideas, to which I shall come—I am going to address one of them head on—but their answer really is the magic money tree. We have made new money available, and further details have been announced today about how it will be allocated. That is real money made available very quickly—£1 billion is being made available for the new financial year starting in just a few weeks—and it is really important that we do that.

Nevertheless, we acknowledge that there is a longer-term challenge. As I said, all advanced economies face pressures as populations become older and the rise in complex and chronic conditions continues. As well as offering some kind words about me relating to my previous role, the right hon. Member for Leicester East rightly drew our attention to the Government’s work on prevention. I shall not be drawn into talking about that too much—as a former public health Minister, I could talk on that for some time—but I remind him of the national diabetes prevention fund and the related work, and the £16 billion a year from the public health budget that we give to local government.[Official Report, 13 March 2017, Vol. 623, c. 1-2MC.] All Members have acknowledged what the sugar levy and other work are doing to turn the sugar tide.

I also draw the right hon. Gentleman’s attention to page 35 of the Budget book—our consultation on the damage that white cider can do. We are consulting on the alcohol by volume duty rates because we have heard from many charities, particularly those working with the homeless, about the impact of the abuse of white cider, in particular, on the health of homeless people and many young drinkers and the increase that it provokes in the frequency of visits to A&E.

[Barbara Keeley]

Surely the key point is that we are almost abandoning prevention. Some 1.2 million older people live every single day with unmet care needs. There is no prevention when a frail older person who needs care does not get it, and this money goes nowhere to helping with that.

[Jane Ellison]

I disagree with the hon. Lady about prevention. We can do a lot on prevention, particularly with older people. With this new money, we can have more care packages. For example, falls prevention, which is delivered in the community or at home, is one of the most valuable ways to keep people out of accident and emergency. But we are not in any way downplaying the challenges of dealing with these pressures. We are not burying our heads in the sand. It is a matter not just of common sense but of responsible government that we must face up to the question of how to secure our social care system for the long term. He is not in his place, but the right hon. Member for North Norfolk (Norman Lamb), my former colleague in the Department of Health, talked about that, and there are areas of great agreement across the House about some of those challenges. That is why we announced that we will publish a Green Paper by the end of the year in which we will set out our proposals to put spending on a sustainable footing.

The hon. Member for Worsley and Eccles South said from the Opposition Front Bench that this was about the long grass. I will not embarrass her by reading out the very long list of times that the last Labour Government attempted to grapple with this issue over 13 years.

[Barbara Keeley]

rose—

[Jane Ellison]

No, I am not going to take another intervention—I will take the same time that the hon. Lady took.

The list is very long. Labour said in its 1997 manifesto that it would tackle this issue; there was a royal commission in 1999, a Green Paper in 2005 and the Wanless review; it was said that the issue would be resolved by the 2007 comprehensive spending review, and there was another Green Paper in 2009—13 wasted years. I am afraid that Opposition Members provoked me to embarrass them. Their long grass was very long indeed.

We are injecting not just new money into social care but an extra £425 million into the NHS to help A&E departments triage patients more effectively and to support local NHS organisations as they reform and improve for the long term the way services are provided to patients. By putting more money into social care and those specific parts of the NHS—triage and capital for A&E—we are addressing some of the very issues that Simon Stevens has talked about recently as immediate challenges of dealing with pressures in the system.

My hon. Friend the Member for Harrow East (Bob Blackman) asked about STPs. The investment that we set out will make a real difference by supporting regions with the strongest plans that are ready now to deliver their long-term visions. We will revisit STPs in the autumn to see whether there are further areas with strong cases for investment, but the NHS obviously also has a part to play in looking at how it can, for example, dispose of unused land and reinvest that money. I give my hon. Friend that assurance.

Let me talk a little about education and skills. We have already taken action to fundamentally reform and improve school education, with the result—this is never acknowledged by the Opposition—that 1.8 million more children are in good and outstanding schools compared with 2010. The simple fact is that vastly more children are getting a good or outstanding education. In this Budget, we further galvanised our schools with £320 million of investment in new schools and £216 million for the maintenance of existing schools.

My right hon. Friend the Secretary of State for Communities and Local Government spoke compellingly about the sweeping reforms that we have introduced to put technical skills at the heart of our education system. I sense great cross-party consensus that that has been an undervalued part of our education system. That will give young adults a chance to develop new talents that will stand them and, of course, our country and economy in good stead as we work towards the high-skill, high-wage and hi-tech economy that will help us to be competitive in a global marketplace.

I have spoken about the importance of controlling our public finances, investing carefully in our public services and ensuring that our spending is sustainable. Alongside that, I want to make a few remarks about the importance of ensuring that our tax system is sustainable. We cannot talk about one side without talking about the other. The flipside of how we invest in public services is how we fund them. Let me address two issues.

First, a number of hon. Members have mentioned business rates. It is right that we update them to reflect today’s property values, but we recognise that this has meant a sudden jump for some. I thank my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) for his excellent speech. I am familiar with some of the pubs in his beautiful constituency. He mentioned the importance of supporting pubs. That was part of the £435 million package of support that the Chancellor outlined yesterday. He has been working on that with the Secretary of State for Communities and Local Government to help businesses manage the steepest increases following the business rates revaluation.

Secondly, there has been much discussion in this debate of the changes we have made to national insurance contributions, and I will respond directly to some of the points made. Let us be clear that the contributory benefits funded by national insurance contributions are very different from employment rights. Much of this debate and the public discourse has criss-crossed between those two important, but distinct, subjects. National insurance pays into a fund that pays out to the NHS and contributory benefits—principally the state pension, but also parental pay. We have announced that we are looking carefully at maternity and paternity rights.