Local Government Finance Settlement

Baroness Pinnock Excerpts

Thursday 15th December 2016 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, I thank the noble Lord, Lord Bourne of Aberystwyth, for repeating the Statement made in the other place earlier today.

This is a settlement that will leave the people of England paying higher taxes and getting worse public services for their money. It will not pay for a single extra carer this winter. With a current crisis in social care and care budgets stretched to breaking point, we have heard nothing from the noble Lord that will give any comfort to those who need good-quality care or to their anxious loved ones.

The Association of Directors of Adult Social Services was already raising the alarm this summer, but the response from the Government was to refuse to accept that adult social care was underfunded. Even now, have we really seen anything that leads one to believe that the Government are serious about dealing with the crisis in adult social care? We have seen £4.6 billion axed from social care budgets since 2010; 1.2 million people not getting the care they need, according to Age UK; and the service at tipping point, according to the Care Quality Commission. In addition, as the noble Lord, Lord Porter, the Conservative chairman of the Local Government Association, has made clear:

“Services supporting our elderly and vulnerable are at breaking point now”.

So what do we have? We have blame put on councils, a fair funding review and an increase in council tax. Can the noble Lord confirm how much new money is available to tackle this winter’s social care crisis? Will he also confirm that the further increase in council tax next year will not plug the funding gap for next year either? Does he regret that before the 2010 general election senior figures in his party chose to kill off cross-party talks on how to fund social care going forward? Then there was the Dilnot commission, whose recommendations have been shelved until at least 2020.

Why should we have any confidence that the noble Lord and his party are serious this time about sorting out social care funding? Can he tell us more about the fair funding review? What is the timetable for it? This is, after all, an immediate crisis and we have elderly and vulnerable people who need action now—they cannot wait for the review.

Will the review also address the worsening postcode lottery for social care and other services? In the most deprived areas of the country, social care spending fell by £65 per person as councils were hit particularly hard by government funding cuts, but it rose by £28 per person in the least deprived areas. And will not the social care precept only further entrench inequality? Blackpool, one of the most deprived unitary authorities in the country, faces a 31% reduction in spending between 2011 and 2019, while Wokingham, one of the least deprived areas, faces a fall of just 4% over the same period. When will the Government address that injustice?

I pay tribute to local authorities, councillors and local authority staff up and down the country who are doing their best to plug the funding gap to cope with huge rising demand for care and increasing costs. In 2014 alone, councils diverted £900 million from other services to maintain adult social care services.

Since the Prime Minister came to office, there has been much talk of help for those who are just about managing their finances, However, that seems to have gone out of the window today. The fact is that we need deeds as well as words. The Prime Minister has decided to put up council tax in every part of England again. She told us:

“If you’re from an ordinary working class family, life is much harder than many people in Downing Street realise”.

I think we can all agree with that statement. She also said:

“You have your own home, but you worry about … the cost of living”,

the state of your area and the services you rely on, and you worry whether you can pay the tax bill at the end of each month. Today, the Prime Minister, the Secretary of State and the noble Lord have decided to make things just a bit harder for those hard-working families. On top of council tax rises this year, there will be a 3% rise in 2017-18 and another increase in 2018-19—a 17% rise in council tax compared with 2015, all decided in Downing Street.

The Conservative Party, which once claimed to be in favour of low taxes, is putting up taxes every year until the next election. If you are a band B council tax payer in Blackpool, this will take twice as much as a proportion of your income as it will if you are a band B council tax payer in Wokingham. For some, it will mean the support they had hoped would be there for an elderly relative will not be, while for others visible public services such as street cleaning will be cut ever closer to the bone. There will be even fewer youth centres and more libraries will close.

Can the noble Lord say more about the proposals to, as he says, encourage more effective local planning by making positive decisions on planning applications and housing growth? I have to say to him that it is not councils being slow in approving housing planning applications that is the problem—that is just political dogma from the Conservative Party. We need to deal with the problem of land-banking by developers that just sit on land with planning applications but do not build the houses. What we need is real, urgent action so that the homes that we need are built quickly to deal with the housing crisis. What we have seen here today is too little, too late, with needs unmet, hopes dashed and social care in crisis, and complete and abject failure on the part of the Government to get a grip on the situation. It is not good enough.

In conclusion, I apologise that I did not at the start make my usual declaration of interests as a local councillor in Lewisham and a vice-president of the LGA.

[Baroness Pinnock (LD)]

My Lords, I declare my interests as a local councillor in the Metropolitan Borough of Kirklees and as a vice-president of the Local Government Association.

I am rather relieved today that I am not on the Government’s Christmas present list. The Government’s Christmas presents are ones you pay for with your money, not theirs. A clearer, more transparent picture of today’s Statement is this: the Government, in the four-year deal to local authorities, are slashing the grant they give to local government by 56% over the planned period. This, of course, has a disproportionate impact on those councils that, because of need, rely more heavily on government grants to provide the services that the Government demand of them. The effect so far has been that council spending has, for the majority of councils, fallen like a stone. Some spend 44% less on all services, excluding schools, than they did six years ago. An average metropolitan council serving 400,000 people spent £377 million in 2010 and £257 million this year, according to an analysis of figures by the ONS. The consequence is that hard-pressed councils have even had to cut services to vulnerable adults and children. A crisis has ensued. Care homes are closing down and the impact on the NHS is there for all to see. The Government’s response in this time of good will is to give local authorities their own money and label it a social care grant. The funding has been taken from the new homes bonus and redistributed. No doubt there will be winners and losers, and it will be no surprise to me if the winners are those who need it least.

The Government have given local authorities not one but two presents this year. The second present is to allow councils to collect and raise the Government’s social care tax—so those who are just about managing will be even more hard pressed. Worse still, this largesse from the Government does not do any more than apply a sticking plaster to the gaping wound that is social care, while the patient is bleeding to death. Local figures tell the story better than the national ones. In Kirklees Council there is already a funding gap of £12 million in adult social care because of rising demand. The social care tax of 3% will provide £3.3 million of extra funding, but there will still be significant cuts to be made in social care services.

The new homes bonus reallocation provides no new funding; it is just reallocating and relabelling the same money. What is given is also taken away. Existing new homes bonus funding is being used to prop up libraries, parks and road repairs. These services will now be even worse off, so outlook is bleak for many councils, and there is not much seasonal good will there.

Does the Minister believe that the scale of the crisis in social care requires more than two years of a 3% tax rise to meet existing needs? If not, how does he anticipate plugging the remaining gap? Will he discuss with his colleagues the potential to bring forward increases to the better care fund which are planned for 2020, so that the integration of health and social care can be accelerated? Can he explain how those families that are just about managing will manage the 6% rise in council tax imposed by the Government? Does he expect all local authorities to survive intact under the burden of these pressures?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock, for their contributions. I will try to answer the questions that they have asked. First, as I have indicated, councils and councillors perform an incredible job with great success—their approval ratings make other levels of government envious of the extraordinary work that they do. I must take issue with the basic thesis that the Government have not answered the call for additional needed money for adult social care. This is additional needed money for adult social care, as I was at pains to announce today, recognising the problem with £900 million additional funding over two years. It is more than the 3% precept: it is £240 million in the next year specifically earmarked for social care spending and that will be allocated according to the fair funding formula for those in the greatest need. That is something that we should welcome.

In addition, I was at pains to point out that the fair funding review that is going forward will help in this direction. I indicated that my right honourable friend the Secretary of State will be making a report back to the House next year, and that will no doubt be reflected in your Lordships’ House too. Meanwhile, now that we have announced additional money, the health and social care integration that is going on and that will be completed by 2020 has in excess of £6 billion to help with health and social care integration, which is key to dealing with this problem. As I indicated, this is not just about money. Clearly, money is central, but it is not the only factor. I repeat that there are authorities across the political divide performing much better than others. We are available to provide information to authorities on the best-performing authorities, so that that information is more widely available.

We recognise the issue that needs to be addressed, and I think we are addressing it. We have consulted on the changes in the new homes bonus, which were referred to. This is not something that has happened out of the blue—it was consulted upon. It is sharpening the incentives; it is not stopping the new homes bonus but introducing a floor at 0.4%. It is scaling down the legacy changes, but authorities will continue to benefit from this. Meanwhile, the savings have been specifically channelled into helping to address the problem in the area correctly identified by the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock, as needing attention. I would have thought that that was to be welcomed. I think this provides cheer to the sector, in recognising that we are addressing the urgency of the situation with additional money in the way that I have expressed.