Local Authority Grants: Impact of Cuts

Baroness Hanham Excerpts

Thursday 9th December 2010 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, this has been an extraordinarily interesting couple of hours. I was just thinking to myself as I was sitting here that I was sorry that I was not Freddy Howe, because we could perhaps have done a two-headed job on this. I am going to have to try to stand in on those aspects of the debate concerning health as well as deal with local government.

I shall start from where noble Lords would expect me to start. Everything that we are talking about today takes place against a background of a very difficult economic situation. I am not going to level cheap shots about that; I have done that several times, but I will not today. We have to accept that, whichever Government had come in, there would have had to have been immediate reductions in expenditure. I know that if the Labour Party had got in, it would immediately have had to make, and had expected to make, reductions of anything up to £50 billion at once. We know that that is in the Treasury reports.

Where we are starting from, probably, is how you deal with that deficit and where you lay the main difficulties. I have to say to noble Lords opposite that if local government does not bear it, somebody else is going to have to. We are all in this now—someone said that we are in this together—to try to sort out the best way out that we can. This Government believe that the best way of dealing not only with the deficit but with the future way of managing services and taking people’s lives forward is to bring in what we are calling “localism”, which is to devolve absolutely everything that we can from the centre to the local. Many people have said it before—many Governments have said it, and I am going to say it again—but this time it will happen. When noble Lords see the decentralisation and localism Bill, they will understand that everything—the decisions that affect all our lives—will go from the centre and be dealt with by the local. Local authorities will work with local social enterprise, local and voluntary organisations, other local public bodies and the health service to put their services into place and to have access to all the money that would have been at the centre—certainly in terms of local government money. This is a huge transference of funds and responsibilities.

To many of the questions that I have been asked today, which will be in Hansard for people to look at, the answer is: do not look back to central government for the answers because they will not be there. They will have to come from local government, from relationships with local government and the working from there on how the money will be spent and under what conditions. That is a big responsibility that is being handed down.

We started with the thoughtful and measured introduction by the noble Baroness, Lady Thornton, on adult social care and the future of health services. The issues of PCTs and GP fundholding take me back; we have all been here before. I start with adult social care. The £1 billion is not ring-fenced but is down and intended to be used for adult social care. Everybody appreciates that there are huge problems building up: demography, the elderly and the need for all the services, which the noble Baroness pointed out. The expectation is that money will be passed round social care from the health service and spent accordingly. A health Bill is due, where I am sure some of the matters that the noble Baroness raised will come up.

On the question of GP commissioning and what they will have to do, shadow GP commissioning will be set up to look into most of the systems and matters that the noble Baroness raised. PCTs are already developing good commissioning practice, on which they will capitalise. I read the other day that GP commissioner pilots are being set up that will work out what they have to do. Shadow bodies will be introduced as soon as possible to help test the new system. We are allowing three years to consult on the reforms and put them into practice, which means that there will be time to ensure that any problems in the system—the relationship that the GPs will take the responsibility for—can be ironed out. The White Paper will include all these.

The noble Baroness and other noble Lords raised the eligibility criteria for various aspects of services, some of which are as important—such as home cleaning—but perhaps less recognised than others. Support for day centres, residential care and care in the home will all be in the hands of the local authorities. I know that they already have to make decisions on criteria but they will also make the decisions that follow up on that. Inevitably, we are now looking not just to the reduction to funds going forward. Everybody has been working under considerable constraints for some time. So quite a lot of the changes that people have been talking about and the restrictions have been around for longer than this Government.

I am grateful to my noble friend Lord Bates for his stringent and stirring words in defence of the budget reductions. He said much of what I would want to say. We have to make the reductions but there are better ways of doing things. There are opportunities that will come out of this. The noble Lord, Lord Adebowale, asked about social enterprises. The noble Earl, Lord Listowel, asked what co-operation and what other means of looking at services—such as social enterprises— would be used. This is all again part and parcel of managing a budget and being sure that you get reductions and efficiencies of service and that you use everybody’s skills. Social enterprises are a fabulous way of dealing with the social services requirements and the needs of people. We expect to see more of those over the next few years.

The noble Baroness, Lady Sherlock, talked about the cuts to adult social care. With the extra £1 billion, we think that there should not be cuts. Local councils do not solely rely on government grants. They have council tax as well. The noble Lord opposite was a bit withering about reserves. Some councils have reserves and would be able to use some of those.

While the settlement is clearly challenging, we do not think that there should be a huge impact on adult social care given the £1 billion in the local government settlement and another £1 billion earmarked through the NHS budget for spending from next year onwards. With a strong focus on efficiency and co-operative working with others, we believe that adult social care should continue to be a top priority of local authorities.

The noble Lord, Lord Tope, referred to front loading, as did other speakers. I know that there has been a lot of concern about the front loading of the grant reductions. That is a matter for the spending announcement which will be made in the next few weeks. If front loading occurs, it is because we need to deal with the deficit as soon as we can and get that under control. If we can cope with that, it will make everything much easier as we go forward.

Noble Lords asked many questions in their excellent speeches. I accept immediately that reductions in social care and health services constitute a sensitive area for many people. Many noble Lords are involved in the services and in voluntary organisations and I understand their anxieties. Some of the questions can be answered at this stage and some cannot. I have been asked to give assurances. The best that I can do in that regard is to look carefully at the questions that have been asked and ensure that proper replies are given to them.

Noble Lords discussed whether philanthropy could be the answer to some of these problems. The right reverend Prelate the Bishop of Ripon and Leeds mentioned that. He is very concerned about children and young people and the need for organisations to do more for them. Everybody wants to be able to do more but under the circumstances people may have to rationalise what they are doing and try to ensure that they provide as good a service as they can.

One recognises immediately what the noble Lord, Lord Lipsey, and others have said about the patchiness of services and the low standards of care at home. However, these sort of questions have been raised over a number of years and it is disappointing that they have still not been addressed. I do not think that maintaining standards, and people’s view of standards, should be totally governed by finance. Everybody has a part to play in ensuring that the resources that we have are used to good effect and that people looking after older or elderly people do so to the best of their ability. As to the state of residential care in old people’s homes, I agree that some homes offer better care than others.

The noble Baroness, Lady Barker, has a lot of experience and I listen to her very carefully when she speaks. I understand that more details about the £100 million in transformational funding will be available. It is £100 million over 2010-11 and 2011-12, so it is £100 million over the two years. She asked about the capacity and willingness of GPs to commission social care. Our understanding is that GPs are going to be told that this is what is expected of them. They are going to be required to commission and provide the services that everybody needs. That, again, will have to be tested out under the transitional arrangements.

The noble Baroness, Lady Wilkins, asked whether we could meet to discuss portability and I would be happy to arrange for that to happen. I know that matter is being looked at and so we will arrange to do that. The noble Baroness also asked about DLA removal. There are currently two mismatched systems for assessing the needs of disabled people and I think the measures are being looked at. The two systems do carry the potential for duplication and so that needs to be assessed.

A number of questions were asked about modelling of what is going to happen as a result of the reductions. I do not think there will be central modelling, but I will of course take back the concern that some care should be taken to see what the effects are on the services and the way they are run.

It has been an extremely interesting debate and has raised a whole host of issues, some of which I have dealt with, some of which I have not; some I hope I have dealt with adequately in some way. Nonetheless, the debate was well brought and I am glad we have had it. Two people were mentioned. One is George, who we need to know about; the other is the elderly gentleman with COPD mentioned by the noble Baroness, Lady Thornton, who I believe will be looked after properly.