Local Government Funding

Dan Poulter Excerpts

Tuesday 15th January 2019 Westminster Hall

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

It is a pleasure to serve under your chairmanship, Mr Walker, and to speak in this debate. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing it. She made some excellent points, particularly about the challenges that local government faces in prioritising public health spending. In respect of any contributions relating to health, I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests: I am a practising NHS doctor and a member of the Royal College of Psychiatrists.

It is undoubtedly the case that when austerity began almost a decade ago there was a need, in view of the economic situation that the country faced, for some belt-tightening and efficiency savings in local government and elsewhere in the public sector. We all have to accept that that was inevitable at the time, but nobody envisaged that the period of belt-tightening would last almost a decade. During that period we have seen an unprecedented squeeze on NHS and local government finances.

The Government talk about devolving powers to local authorities, but it is very difficult to give local authorities the responsibility to deliver more services without adequately funding those services and those that local authorities are already delivering. There is talk of improved integration between health and social care, and between the NHS and local authorities, but in fact we have seen a retrenchment of the delivery of services by many local authorities. As their budgets are squeezed, they have not had the money available to better join up and integrate services with the NHS. Patients have suffered as a result, particularly those with long-term conditions and disabilities, at both ends of the age spectrum.

I will talk briefly about some issues that are important to all Members, including the challenges that local authorities face in delivering improved care for people who are homeless or street homeless, which is a growing problem throughout the country, including in Suffolk and Ipswich; the challenges faced by addiction services; and the challenges faced by social care. The Government are rightly talking a good game on homelessness—they want to do more—but street homelessness is continuing to rise. The failure to tackle it is a result of both a lack of joined-up thinking and a lack of funding in the right places.

In particular, funding for addiction services has been squeezed. Many people who are street homeless have challenges with drug and alcohol dependence, but the funding to help them address those problems is simply not there. In addiction services, access to and funding for certain medications is being severely squeezed. Housing pressures, particularly in urban areas, mean that long-term solutions to tackle street homelessness are not there. The welcome changes that the Government put into place have failed to manifest in any meaningful change, and street homelessness continues to rise.

At the same time we see addiction services cut off completely from NHS care and working in a silo. There is a complete failure of joined-up thinking. I know that the Minister is scrolling through his iPad, but he would do well to listen to this point, because there is a failure and a lack of integration between what is happening in the NHS and mental healthcare and addiction services. There is a silo mentality in commissioning; local authorities commission addiction services and mental healthcare is commissioned by the NHS. That was a failure of the Health and Social Care Act 2012, and I urge the Minister to look at that if he wants to meaningfully improve care for people with addiction problems and begin to tackle the problems that a lot of street homeless people face.

Finally, on the issue of social care, we have an ageing population with multiple medical comorbidities—some 3 million people in England now have three or more medical comorbidities. That is a huge financial challenge not only for the NHS, but for social care. In spite of that growing challenge, at the other end of the age spectrum, thanks to improvements in modern healthcare, children with what would have been considered terminal illnesses often now live into their teenage years and sometimes into adulthood. Because of those twin challenges, the social care system faces unprecedented financial demands in delivering better care, yet funding for social care has been reduced by billions of pounds over the past few years.

Without that funding, the integration that the Government speak about will simply not happen. There will not be integration of health and social care. Money will continue to be diverted into acute services. One-off spending on winter pressures is all very well, but it does very little to address the chronic financial and human challenge that this country faces in improving and joining up better care for people with long-term conditions.

Welcome soundbites from the Government are all very well, but we need to see delivery on the ground. We need legislative levers to help drive better integration and we need the funding to back it up. Without the money, local government will be unable to deliver improved care, let alone continue to deliver the care that it does at the moment. I urge the Minister to look at the local government funding settlement, at the legislative levers and at what more can be done to support local authorities to raise additional money at a local level to help fund important local services.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing this incredibly important debate. The range of topics covered by Members’ speeches illustrates the breadth and importance of what local government does, and I thank all Members for their very valuable contributions. I pay tribute to the work of local government and local councillors up and down the country.

I join the shadow Minister, the hon. Member for Oldham West and Royton (Jim McMahon), in paying tribute to parliamentarians’ faith in their communities and their interaction with local government. I gently chide him and say that not just Labour parliamentarians have pride in their communities; Conservative Members have considerable pride. Conservative councillors up and down the country represent communities with great passion and dedication, as we have seen in every local election in recent times.

My vision is for local government and a set of councils that drive economic growth, help the most vulnerable in our society and build strong communities. If Members allow, I will take those areas in turn, and deal with as many of the points raised as possible. I apologise in advance if I cannot cover every single question, but I will be more than happy to follow up in person or by letter to anyone whose point was not answered.

We heard a lot about cuts and funding. I agree with the hon. Member for Birmingham, Edgbaston that local government has faced a challenging set of circumstances over the past few years. We do not need to replay all the arguments for why, but the task that this Government faced in bringing public finances back under control was considerable. Local government played a very large part in doing that. It has done a commendable job in those circumstances and I pay tribute to the work of local government, parties and councillors of all stripes in delivering high-quality public services in a difficult financial climate.

As we turn to the future, I believe things are looking up. In the settlement just published for local government for the next financial year, core spending power—the overall metric that looks at all the different income streams and grants available to local government—is forecast to increase almost 3% in cash terms. That represents a real-terms increase for local government and the highest year-on-year cash increase in some time. I know that is welcomed as a step in the right direction.

Beyond cash, local governments play a key role, as we heard, in supporting local economic growth. In the long term, that is the only way to ensure the vibrancy of our local communities and to raise the vital funds we need to fund our public services. The hon. Member for Blackley and Broughton (Graham Stringer) said that local government should have the ability to raise its own funds; business rates retention is one such opportunity.

I am delighted that Birmingham in particular is in the fortunate position of keeping 100% of business rates growth that it generates; many local councils up and down the country want that. The hon. Lady asked whether we would and should pilot new forms of business rates retention; I am pleased to say that is exactly what this Government are doing. In the next year, 15 pilot areas covering 122 local authorities will benefit from being a 75% business rate retention area, generating in aggregate for the country £2.5 billion in incremental funds for local councils, to reward their effort to drive growth.

The hon. Member for Stroud (Dr Drew) asked about the future of the system. I am pleased to say that the whole country should enjoy 75% business rates retention for 2021. That system is being designed—not in secret, as seemed to be alleged, but transparently with the sector—through a system design working group. The consultation is out and I urge anyone with an interest to contribute to the design of that new system.

One of the most undeniably crucial roles that local government continues to play is helping the most vulnerable in our society. Local authorities support the elderly, the disabled and our children in need. We owe councils an enormous debt of gratitude for the incredible work they do in this area. We heard many passionate speeches about their role. This Government are backing local authorities to carry out those vital duties. As we heard last year, the Budget provided an additional £2 billion for social care and committed a further £1 billion of extra funding for local services.

The integration between social care and the NHS was raised by the hon. Member for Crewe and Nantwich (Laura Smith) and my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter). They are absolutely right to do that. I am pleased to say that we are taking very positive steps in that direction. The better care fund, which pulls together funds from the NHS, local government and social care, is working. Ninety three per cent. of local areas believe that the better care fund has improved integrated working between the NHS and social care. We are seeing that in the numbers: social care has freed up more than 1,000 beds a day since the February 2017—a 43% reduction in social care-related delayed transfers of care. I hope hon. Members agree that we are making progress in this vital area.

We heard about the changing demographics in places such as Essex from my right hon. Friend the Member for Witham (Priti Patel) and my hon. Friend the Member for Chelmsford (Vicky Ford). It is absolutely right that in the long term, as we look to a new funding mechanism for local government, capturing those kinds of rapidly changing demographics is something we must get right. We heard from many Members about the pressures on social care. I am determined to work with the sector to find a formula that reflects accurately and transparently what local councils face on the ground, so that all local councils of all stripes can ensure they are funded fairly.

On children’s social care, I want particularly to point out the incredible work that Essex has done. My hon. Friend the Member for Chelmsford put it excellently: we should focus on outcomes, not just the amount of money we pour in. Her council is a shining example of one that does that in children’s social care, displaying innovation, as we heard from my right hon. Friend the Member for Witham. I am pleased to have spent time with Essex County Council. Many councils can and do learn a lot from how Essex has brought down the number of children in need, through a focus on early intervention and prevention.

The hon. Members for Birmingham, Edgbaston, for York Central (Rachael Maskell), for Leigh (Jo Platt) and for Brighton, Kemptown (Lloyd Russell-Moyle) and others talked about the importance of prevention. I could not agree more with that sentiment. I am a passionate believer that councils can play a valuable role in ensuring that children do not end up in care, and that we can get to problems before they happen. My focus since getting this job has been on the troubled families programme. I am pleased to tell hon. Members that we have been working very hard to robustly understand the value that that programme brings and delivers on the ground in Members’ communities. We will shortly make more announcements about that, and I want to work with all colleagues across the House.

[Dr Poulter]

On delayed discharges from care, the Minister is right to say that progress has been made, but the challenge is that many local authorities can no longer co-operate with the NHS in the way they could before, by having embedded social workers in NHS organisations to prevent hospital admissions in the first place. That is a very big challenge, and it is driving up hospital admissions. Although the money may go to the acute sector, it will not prevent people from getting there in the first place. The Minister needs to look at that.

[Rishi Sunak]

Obviously, I defer to my hon. Friend’s knowledge of the NHS, but I thank him for raising the point and I will make sure we discuss that with colleagues in the Department of Health and Social Care as we design the iterations of the better care fund and related joint working practices.

Prevention is incredibly important. The troubled families programme is back with almost £1 billion of money over this cycle; it works with families facing very difficult circumstances, doing all the work we heard about from hon. Members. I hope they will join me in Parliament to make a strong case for investment in this type of programme for this type of service as we approach the spending review, to demonstrate to everybody what a valuable role those kinds of services and local government can play.

Local authorities build strong communities by being cohesive. They have been backed with a £100 million fund to ease local pressures resulting from migration. They do that by being connected, and they are being backed with a £420 million fund to ensure that the roads that our constituents use will transport them safely and quickly to where they need to go. They also need houses for all their constituents, as we have heard. That is why we have lifted the housing revenue account borrowing cap and are investing almost £1 billion in tackling rough sleeping.

It a pleasure to champion local government here in Westminster. It is a role that I relish, and I look forward to working with all hon. Members as we approach the spending review, to make a compelling case for why local government deserves funding to making such valuable change on the ground, whether that is driving local growth, caring for the most vulnerable in our society or building strong communities. Local authorities up and down the country do an amazing job and they deserve our support.