My Lords, I am not sure that is the way to think about these problems. We need to recognise that, as well as the income disparity, there is the cost disparity. Admittedly, living in a great capital city comes at a price. We want to level up some of the areas that have been left behind. That does not mean we want a reduction in income in places such as London. We need to ensure that we lift all boats—that is the philosophy behind levelling up.
My Lords, financial inclusion is very important in particular areas, and it is important in addressing it to bind together different departments. That is why there is a new levelling-up task force under the leadership of Andy Haldane that brings together the Department for Levelling Up, Housing and Communities and the Cabinet Office, precisely because we need that Whitehall join-up.
The Government are providing many mechanisms to support rural areas. I point to the community energy projects, through the rural community energy fund, which is a £10 million fund to support community-run projects in England that benefit the transition to net zero. Net zero is half the story; adaptation to the consequences of climate change is equally important, and the Government are committing £2.8 billion in a six-year capital investment plan to reduce flood and coastal erosion risk.
My Lords, I express many congratulations to my noble friend Lady Lister on this debate. Events test a country and this pandemic has revealed that we need to be far more resilient both as a society and as an economy. Resilience means the state and its services being capable of protecting people who are not self-made or self-sufficient, but we will not build that resilient, more equal society unless it is underpinned by a prosperous, resilient economy.
Successive UK Governments have sought to build a resilient economy by supporting high-growth, technology-led enterprise. My efforts were in 1998, with my White Paper Building the Knowledge Driven Economy, and then after I returned to the Government in 2008. Since then, the best expression of policy has been Greg Clark’s industrial strategy, with its focus on decarbonisation and clean growth, AI, the future of mobility and the benefits to health and ageing of bioscience and genomics. I regret the Government’s recent decision to jettison this strategy.
The simple point that I want to make today in my short contribution is this: technological change is not like the weather. It does not just happen around us. It can be supported and shaped through an innovation system that draws on public and private funding, major international research partnerships, helpful government regulation and the fostering by the Government of supply chains, individual entrepreneurship and business growth.
This was achieved in the recent development of the Covid vaccine, which was born out of necessity in a time of national crisis. The Government staffed up and invested in a portfolio of high-risk technology ventures through a taskforce led by a venture capitalist. It was based on substantial public funding of research, invention by Oxford University, nimble, accelerated regulation by the Government, manufacture by the private sector and then distribution by our own NHS. The successful vaccine rollout is the result.
One thing this was not was a model of pure capitalism. It demonstrated the power of public procurement and co-ordination across the board, inside government and across the public and private sectors. We should adapt this model, where government has a role, to similar market opportunities arising from the profound transitions under way, of digitalisation, AI and clean energy. Those transitions and the associated technological change will almost certainly require around 75% of the country’s workforce to be retrained and reskilled during the coming decade. Government should identify where it can act to ensure that innovation, investment and production—the whole supply chain—cohere in the United Kingdom and be willing to take some risks in doing this and to act at scale.
However, if we want the whole country to benefit, we need a clear focus on the geographical dimension. The Government talk about levelling up; they do not seem to realise that you cannot level up from the top down. Local foundations of growth and inclusiveness need local powers, people and money. I say just this: it requires coherence. My fear is that, with their short attention span, we will see instead a series of politically influenced, disjointed interventions by the Government that will fail to convince markets and investors and will not bring the deep and durable economic change the country needs. I hope that I am wrong, but where the Government have ideas, they need scaling. Where a policy is working, it needs continuity. The Government, as well as the Labour Party in its own thinking, have to approach this with vision and vigour, and to do so consistently.
My Lords, isn’t it nice not to be talking about ourselves? I remind the House that my interests include involvement with a number of performing arts organisations, including the Royal Shakespeare Company and the Roundhouse Trust. I mention that because despite the portmanteau title of today's section of the debate, the gracious Speech in fact has nothing explicitly to say about culture, and certainly not about the arts. When the noble Lord, Lord McNally, introduced the debate, he omitted to mention that culture was even part of today’s debate. Go figure. This is no surprise because I cannot recall when a gracious Speech ever did say anything explicitly about culture.
It is not surprising but it is revealing. In this country we have tended to have an ambivalent attitude to our cultural life and heritage, sometimes congratulating ourselves heartily on the success of our artists, our tourist attractions, our theatre, our historic buildings and our vibrant museums and galleries and, at other times, we appear to view art, artists and cultural endeavour as variously marginal, frequently ridiculous, an unjustified drain on the public purse and not a proper job. Having worked my whole life in the performing arts, I know well how dispiriting indifference can feel to those for whom making a career in what we now call the cultural industries means years of demanding training followed by mostly under-remunerated employment in a fiercely competitive market, in order, not only to provide pleasure and entertainment for other people but often also to contribute valuable work in education, health, prisons, as mentioned earlier, and elsewhere. Glamorous it mostly ain't.
I want to salute our artists, everyone from Oscar and Turner prize winners through to those about to graduate from our colleges and conservatoires. We need them and they do us proud. Just because the gracious Speech says nothing about culture, it certainly does not mean that there is nothing to say; in fact, just now there is rather a lot to say, but the speakers’ list is long, and we are all aiming to be brief, so, hedgehog-like, I have just one big point.
From the moment when the coalition Government took office in 2010, it was clear that the public sector was in for a rough ride. To be fair, things would probably have been pretty tough if my party had been re-elected, but not because the UK economy had been uniquely mismanaged, as we are repeatedly told from the Benches opposite, but because the world economy had suffered a traumatic shock from which, as we can see all too clearly today, it is still struggling to recover. In these circumstances, no sector in receipt of public funds could expect to escape unscathed. The cultural sector certainly had no such expectations, and in the wake of a challenging spending round in 2010, Arts Council England undertook, very scrupulously, the painful task of reorganising its portfolio of support, along the way reducing or withdrawing funds to many successful organisations. Local authorities followed suit, faced with their own budget restrictions, and the net result, now that the impact of these decisions is kicking in, is serious damage to the provision of arts and culture right across the country. I could list all the losses suffered but I will not. I hope that the noble Earl, Lord Clancarty, may do some of that for me. However, I will say this: it is easy to take things apart but much more difficult to build them up again. To quote the song:
“Don't it always seem to go,
That you don't know what you've got
‘Til it's gone”.
At the time of the election, this Government, in the person of the Secretary of State for Culture, Media and Sport, Mr Jeremy Hunt, told the arts sector that, despite the inevitability of reduced government funding, help was at hand. He had a plan and it was called philanthropy. The then bright-eyed and bushy tailed Mr Hunt—tail a bit straggly now and eye a bit dull—was convinced that, given a little encouragement, huge new resources could be released from the private sector to fill the gap. Does that sound familiar? Some of us, veterans of many years spent developing the delicately balanced mixed economy which keeps our cultural sector lively, were a little sceptical, but nobody wanted to rain on his parade, except, as it turns out, his right honourable colleague the Chancellor of the Exchequer. In this year's rather accident-prone Budget, Mr Osborne chose to introduce a cap on charitable donations so that there is now an active disincentive on major donors to give. Many cultural institutions already rely heavily on such donors, including perhaps some of those who do the good work mentioned by the noble Baroness, Lady Stedman-Scott. Worse, the Chancellor, supported, to my great surprise and dismay, by Polly Toynbee but by few others, carelessly implied, in his attempts to justify this curious bit of double-think, that giving generously to charity is just a form of tax avoidance. That was at best inept. I could put it more pungently as, in fact, the director of the National Theatre, Nicholas Hytner, put it when he referred to major donors in a recent article in the Guardian. He wrote:
“It is frankly slanderous to suggest that any of them are involved in tax avoidance. It is also ridiculous. To qualify for tax relief of £2,500, a higher-rate (40%) taxpayer … would be down £7,500. Call me a financial illiterate, but I can't see what's been avoided here—and many wealthy philanthropists give millions away each year”.
He went on to say:
“Unsurprisingly, a number of donors are having to reconsider what they hoped to be able to give”.
I am reliably informed that this damaging effect of the Chancellor's extraordinary decision is spreading.
Those who give generously to charities, including the arts, doubtless do so for a variety of reasons, but of all the many motives that may be in play I am quite sure that securing a tax benefit is rarely, if ever, the main one because, as Nick Hytner points out, there is little such benefit to these individuals who have, over the years, helped to make possible the creation of some of our finest buildings and our most innovative creative programmes. It is preposterous, and demeaning, to brand as tax avoiders people such as Dame Vivien Duffield or the Sainsbury family, or the one I know best, Sir Torquil Norman, who not only persuaded many generous people to contribute to his brilliant reinvention of the Roundhouse in North London as a creative centre for young people but also put millions of his own money into the project. He and others like him have done nothing at all to deserve the slur that has been cast upon them. Who could blame them if they chose to take their bats and balls home, although I suspect that they will try to find another way forward being, in the main, resilient and thoughtful people.
The Government are entitled to look at every option for maximising tax revenue, and should do so, but on this occasion they appear to have scored a notable own goal, discouraging the very people whose support they can least afford to lose. Like Hamlet, they have shot an arrow over the house and hurt their brothers. When the Minister replies perhaps he can say what the Government intend to do to right this wrong.
My Lords, this is the first occasion for more than a year that I have spoken in your Lordships’ House, because in March last year I was taken seriously ill. Thanks to excellent medical care from Wigan Infirmary and particularly the Christie Hospital in Manchester I am back and in reasonably good health. I have always taken an interest in health in your Lordships’ House because of my role as a local authority leader. I declare that interest as well as my vice-presidency of the LGA. Of course, my own experiences have reinforced my belief in the need for good healthcare. This was my first time in hospital since I had my tonsils out at the age of four, and the passion I feel now for the NHS was reinforced by the experience.
I was pleased that the Queen’s Speech had something in it about social care; I thought that at last we were tackling the issue. Of course, when the details came out we saw what was involved in the proposal—a draft Bill on eligibility. We know that it is necessary, but given the scale of the problems and the financial crisis in social care, it is woefully inadequate. I hope that the coalition will not hide behind this approach and try to dodge the issue of long-term funding in healthcare.
The current system of social care is not fit for purpose. As the noble Baroness, Lady Tyler, said, its operation is incoherent and a mystery to many people. Clients and families do not understand the system, what they are entitled to and why there are so many unacceptable variations between different areas. For one in 10 people who need social care, it has a catastrophic financial impact. We need to make sure that we do something about that. The fears that people have about growing old are something that we ought to tackle in a proper manner.
Clearly, the financial squeeze on local authorities is the main problem. The increase in the budget for social care that we have seen over the past decade has lagged well behind the increase in the whole NHS budget. This increase meant that more went to people with physical and learning disabilities—and quite right, too. However, there has been a 6% increase in the number of old people over the period. Therefore, the amount of money available for the care of the elderly has reduced in real terms. As other speakers said, the number of those aged 85 and over has increased by 25%, with associated costs because people have much more complex needs at that age.
Given demand pressures, it has been extrapolated that by 2024, all of local authority budgets will go on care. Clearly, 12 years ahead is a long time for Ministers to think; their timescale is much shorter. However, I hope that your Lordships’ House will still be in operation at that time. We cannot avoid facing up to this financial pressure. Local authorities faced grant reductions of some 25% to 30%. The LGA reckoned that in the past year about £1 billion was taken out of social care budgets. The symptoms of this financial pressure are all around us. We remember the collapse not long ago of the Southern Cross care homes. The fact that local authorities have again not increased the fees they pay to care homes has created huge financial pressures there. The noble Baroness, Lady Tyler, mentioned the home care system. When I got into local government, it was there as a backstop to give support for people to stay in their homes. Now the criteria and the allocated time levels have been reduced and it is inadequate to support many local clients in their own homes.
The greatest danger of the squeeze on social care is its impact on the NHS. If you look at the NHS, you can see an increase in the number of emergency admissions for older people. It is 12% and rising since 2005, but for people over 85, the increase has been 48%. Because people are unable to get proper care support, the length of stay in hospital is increasing. On the acute ward where I was, I observed a patient who was kept there simply because he was unable to feed himself properly. Therefore he was kept on an acute ward—with all its costs—because he could not manage at home.
Over the past decade we made considerable progress with the problem of bed blocking. We are now tipping the other way. My observation was that people are beginning to block beds because the NHS is facing its own financial crisis. Although the settlement in the comprehensive spending review has flat-lined, because of this inexorable rise in the elderly population, the NHS must find productivity savings of some £5 billion a year. Unless we get social care right, the NHS will not be able to achieve those savings. The inadequacy of the treatment of old people already in hospital was revealed by the recent Care Quality Commission report about the poor quality of care that many old people get in the NHS. It will get worse as an increased burden is put on it by the inability of local authorities and others in the social care field to do it.
We cannot continue to patch up this failing system. We have to make radical change. Many noble Lords have mentioned Dilnot and so I will not go into that. More resources are necessary but that is not sufficient to deal with the problem. We have to look at the problem in a different light and in different ways. I have been a councillor for a fair number of years and we have all talked about the need to integrate health and social care. We talk about it, but it has never happened properly. Only 5% of budgets are properly pooled across the NHS and local authorities. We need to do much more about that. We also need much more innovative approaches if we are to deal with the crisis before us.
Integration with health budgets needs to be done. We could have a single pot of health and social care budgets sent to a locality based upon assessment of need, which would not simply be age-related—although that would clearly be an important factor—but also related to the needs of the population. We need a much more joined-up approach in the way we deliver services. I suggest that the NHS needs to engage with local authorities much more in the community budget pilots, which look at innovative ways of delivering. If we want to avoid that meltdown in social care, we all as politicians, whether at national or local level, need to work together to find a solution. It is urgent and cannot go into the long grass.
My Lords, I thank my noble friend Lady Tyler for raising a very interesting and important question. I attended the seminar held about six weeks ago in Portcullis House at which Sir Gus O’Donnell spoke about the work that the Office for National Statistics is doing on measuring well-being. I am interested in this topic because, as an economist, I have always been aware of the shortcomings of GDP measurement and of how much more there is to life than just the goods and services on which monetary value can be placed. Yet there is the difficulty of developing any proxy that tries to measure these other things in life. I remember the early days of cost-benefit analysis, when we had the Roskill report on the third London airport and the lengthy deliberation over what value one would place on a Norman church. The value that was put on it in the study was the value that the parochial church council had placed on it for insurance value, but the council admitted that that was the value that it felt it could afford to put on the church rather than any real valuation.
There are very real difficulties here, and there is the conundrum that many of us have pondered over for a very long time. I was an assistant lecturer at the LSE with the noble Lord, Lord Layard, in the 1960s when the Roskill report was being deliberated over. I remember even then, at the time when GDP was going forward on a fairly regular basis, there was the conundrum of why it was that if we were all getting so much richer, we were not feeling happier. This is a fundamental question that the noble Lord, Lord Layard, has been asking for some time.
I wanted to speak in this debate because I want to share with the House my experiences over the past six months when I have been leading an inquiry looking at the role of further education colleges within their communities. It fits into the scenario of the Government giving further education colleges greater flexibility over decisions about how they should spend their budgets. I was sponsored in this inquiry by the National Institute for Adult and Community Education, the AoC and the 157 Group of colleges. My remit was to look at the role that further education colleges do and can play within their communities and the added public value that their leadership can bring to those communities. It led me to do a lot of reading, a lot of visiting, a lot of talking and a lot of thinking about this subject.
My visits were perhaps disproportionately to very good colleges classed as outstanding by Ofsted. What hit me more than anything else was how brilliantly some of our colleges are reaching out to their communities and working with them in all kinds of different ways, not only in spreading the message of learning and skills but giving to those communities the self-confidence and the self-esteem that give them a much greater sense of community and, from that sense of community, a greater sense of well-being.
I would like to give three illustrations of the sorts of activities that I experienced. I visited a community hub in Bolton where the college worked alongside the local authority, using an old primary school in an area that was acknowledged to be disadvantaged. It had been going for some 20 years, and it provided the community with anything and everything from cookery classes and knitting groups through to adult literacy and numeracy. It also ran a youth group that had attached to it a boxing club and a cycle club. It served old and young alike. Graduates from the community hub had gone on to other college courses—access courses, A-levels and degrees in social work—and a lot of them had come back, stayed within the community and worked as community leaders and at the hub itself helping to bring others in. They were the activists and community leaders there; they instilled a sense of community and pride within the neighbourhood. It was this hub that organised street parties for the royal wedding. The cycle club had a sponsored ride from Land’s End to John O’Groats, raising money for a local charity. The boxing club was winning trophies all across the north-west, and they were extremely proud of it. The hub was very much the centre of the community, organising it and giving it a considerable sense of pride.
Another college that I visited did a great deal of youth work. It linked up with local youth clubs, the local police and youth offending teams. It provided for those young people facilities where they could meet, sports activities such as football and basketball, in addition to things like motorcycle maintenance classes. It brought in young people to use the college facilities so that they might get used to the idea of coming into college. Having seen the facilities and the classes that were being run, they might be induced to sign up for some of them. They turned from being NEETs—those not in employment, education or training—into being in training and very often going on to further qualifications. Again, it was an obvious linking up.
At another college, the principal discovered that the local PCT was having great difficulty in meeting its young people’s well-being and health targets. He said, “Well, why don’t you come and work from within the college?”. This was set up and the PCT within two weeks had hit the yearly targets which it had failed to meet for the previous two or three years. It now provides within the college a well-being centre for young people. It is a win-win situation, because the PCT has hit its targets; teenage pregnancies are noticeably down within the community; and college attendance rates are noticeably up. In addition to that, the nurse function within the college is now paid for by the PCT, which provides the staff for the well-being centre.
I found all this extremely encouraging. It seemed to me that there were three elements in this success. One was leadership, another was partnership, and the third was vision. The college leadership provided the catalyst for those partnerships to be formed, and the partnerships led to greater involvement in the community. Social energy is unleashed. As a result of this activity, I found myself reading over the summer the work of the Royal College of Arts on social productivity. It seemed to me that this activity displayed precisely what the college was describing. By involving people in these activities, you could unleash social activity which gave people the confidence and self-esteem which led to well-being. I coined the term—and this is the title that I gave to my report—“dynamic nucleus”: colleges could be like the centre of a Catherine wheel, as a catalyst, sparking off through partnership all kinds of other activities. These activities can add considerably to social well-being.