Local Government Funding

Baroness Keeley Excerpts

Wednesday 3rd February 2016 Westminster Hall

[Liz Kendall]

My hon. Friend is absolutely right. Even with the social care precept, the King’s Fund says that the gap in the funding required for social care will be about £3.5 billion by the end of the Parliament once the costs of increasing the national minimum wage in the social care sector are taken into account. And as my hon. Friend says, the social care precept could actually end up disadvantaging deprived areas and further widening inequalities, because the councils with the greatest need for publicly funded social care tend to have the lowest tax bases.

Leicester City Council and, indeed, Southwark Council will be able to raise only about £6.50 per head of population from the 2% social care precept, whereas Richmond upon Thames will be able to raise almost £15 per head. How can that be fair when Leicester, Southwark and other councils like that have a greater need for publicly funded adult social care than better-off parts of the country? In total, Leicester faces increased costs for adult social care of £21 million by 2020, but according to the Institute for Fiscal Studies, which has modelled this—I would be happy to give this information to all hon. Members—the council will be able to raise only about £7.5 million. That is only one third of what is needed. Where will the extra money for vulnerable elderly and disabled people come from?

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

My hon. Friend is making an excellent case. Does she, like me, wonder how the Minister will square the fact that adult social care has lost £4.6 billion since 2010 with the fact that the £3.5 billion that is being talked about will come in at a maximum of £400 million a year, as she is so carefully pointing out, and the fact that the better care funding will be only £1.5 billion by 2019-20? What we have is a gap that is widening by £700 million a year and money that is so risky, back-loaded and late.

[Liz Kendall]

My hon. Friend is absolutely right. Once again, we see the difference in the funding deal that social care gets compared with the NHS, where the money is more front-loaded. The social care funding is back-loaded, and what are councils supposed to do in the meantime?

These cuts to services are morally reprehensible and economically illiterate. They will leave elderly and disabled people without the help that they need. They will push families to breaking point and force even more people to give up their work so that they can look after elderly or disabled relatives because they cannot get the support that they need. That will deprive the economy of their skills and increase the benefits bill, and all of that will pile further pressure on an already struggling NHS, which will cost the taxpayer more.

We now have the second highest ever number of delayed discharges from hospital since data were first collected. One third of those are due to a lack of social care. In the last year alone, there has been a staggering 65% increase in delayed discharges due to a lack of care in the home. That makes sense for no one. The Government must urgently rethink their immediate support for council care services in the upcoming Budget, to ensure that people get the support that they need, and they must grasp the nettle of the long-term reforms that we desperately need to truly join up the NHS and social care, so that we finally have a single budget for these local services that people depend on and we stop the farce of continuing to rob Peter to pay Paul, pushing the costs up for everyone.

--- Later in debate ---

[Sir Edward Leigh]

Yes, it widens the gap. We are asking the Minister not for more money but for fairer funding between rural and urban areas, which is precisely the point that my hon. Friend makes.

I have worked alongside Lincolnshire County Council and West Lindsey District Council for decades, and they are not spendthrifts. They count every penny, but they are being penalised for having saved so much in the past. They know the needs of our people far more than anyone in Whitehall does. We have already given up much of our invaluable network of local libraries, and got rid of our magistrates courts and our police stations. Are we going to get rid of our fire stations now? How much more does Whitehall really expect that rural England can take?

Closing the gap between the Government grant to the urban dweller and to the rural inhabitant by just 5% over five years would make a huge difference to service provision in rural areas. In Lincolnshire, it would mean an extra £13,130,000 per annum at the end of a five-year period. Right now, good, hard-working people in rural areas are subsidising much better provision of services to people in urban areas, and that has to change.

[Barbara Keeley]

Does the hon. Gentleman think it is a good idea to keep robbing Peter to pay Paul, as my hon. Friend the Member for Leicester West (Liz Kendall) said in her speech? As she laid out so well, adult social care has been cut by 31% across the urban councils that the hon. Gentleman is talking about. It is really necessary to cut funding for those councils more to bring fairness to the councils he is talking about?