Barnett Formula

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 17th December 2013 Grand Committee

[Baroness Bakewell of Hardington Mandeville (LD)]

Like my noble friend Lord Shipley, I believe that the Barnett formula is fundamentally unfair and I will relate this to adult social care. As we have heard, this is an out-of-date formula for allocating resources across the UK.

The Local Government Association estimates that allocating funding on a needs-based formula would potentially increase public spending in England by £4.1 billion. This would make a huge difference to services currently stretched to their limit. There would be a decrease in Scotland and Northern Ireland. Government figures already show Scotland as overfunded. In a recent report, the Treasury said that since 1998,

“public spending per person in Scotland has been around 10 per cent higher than the UK”.

In the current climate, this is simply unsustainable.

This unfairness is understood by most people in England. In 2012, the Future of England survey indicated that 52% of those surveyed felt that Scotland received more than its fair share of funding; this was up from 24% in 2002. What implications does this have for the adult social care system, which in England is underfunded? Over the past three years, budgets have reduced by 20%. There is a growing gap between the demand for social care and the resources invested in it. The Government are not providing councils with enough funding to deliver the care people need. An additional £400 million a year is needed to maintain the same level of service, excluding inflation.

In Somerset, a secondary school which covers an area of 600 square miles transports children to and from their homes, an expensive and large logistical exercise. Delivering dignified and appropriate care to their elderly relatives in the same area is much more challenging when often the assessment is for only 20 minutes of care and the drive to the next client is 30 minutes away. The solution is to reshape local health and social care systems and invest in community-based services. These will alleviate pressure on the acute sector. The Government have acknowledged this with the Care Bill and duties on councils to provide or arrange services that prevent, delay or reduce needs.

Reforms require proper resourcing. If the funding arrangements across the UK were fairer, more could be invested in the English social care system and preventive community care services, with reduced spending on expensive A&E acute services. People will rightly see the current distribution as unfair and look at comparisons in local services received north and south of the border. The English and Scottish social care systems are different. There is different legislation, and there are different entitlements and progress on integrating health and social care. Scotland is the only part of the United Kingdom to introduce free personal care where the full costs are covered by the state. In England, the plan is to cap costs. That is a major difference. In effect, English taxpayers, through the Barnett formula, are subsidising a level of care to which they themselves do not have access.

I am pleased that we have had the opportunity today to debate this issue and I agree with my noble friend Lord Shipley that it is right that the Barnett arrangements, agreed as a temporary measure in 1979, should be reviewed. Very few people consider 34 years as temporary. To question Barnett is not to question the future of Scotland in our union. Instead, this debate is about the question of basic fairness across the UK. I therefore call on the Government to set out their plans for making a constitutional settlement fair for all.