Budget Resolutions

Debate between James Berry and Norman Lamb

Thursday 9th March 2017 Commons Chamber

[Norman Lamb (North Norfolk) (LD)]

Madam Deputy Speaker, I should like to make an apology straightaway. I alerted Mr Speaker earlier to the fact that I have a long-standing engagement at the University of East Anglia this evening, and I hope that it will be okay with the Front Benchers if I miss the end of the debate.

I agreed with an awful lot of what the hon. Member for Ilford North (Wes Streeting) said, other than his assertion that it was the role of the Labour party to confront the issues set out in the Budget. I shall focus on the aspects of the Budget that relate to social care and to the health service, and I want to make it clear that the £1 billion announced for social care for the next financial year is wholly inadequate to meet the needs of the social care system and the people who rely on it.

The Health Foundation has estimated that the gap in social care is in the region of £2 billion a year. That is partly due to the increase in the national minimum wage, which will cost the social care system about £900 million in the next financial year. That means that there will be no real-terms increase in the amount available to the system.

As the Care Quality Commission recently confirmed, the social care system is close to tipping point—that comes not from politicians, but from the regulator. Many providers are now considering whether to withdraw from this country’s publicly funded social care market, while other providers are at risk of going out of business. It is alarming that there is little investment, if any, in new social care facilities in the north of England because the finances simply do not stack up. The only parts of the country in which investment in new social care facilities makes sense is where providers can cross-subsidise from wealthy self-funders, who are paying for the provision of care to those who rely on the state.

We are witnessing an increasing and simply unacceptable divide across our country in the quality of social care. It is estimated that the care needs of more than a million older people are not being met, either wholly or in part, as a result of the reduction in the availability of publicly funded social care. That is disastrous for those people, but it is also stupid, because it inevitably means that in the next financial year—from April—more older people will end up in hospital unnecessarily because there is no care package available to keep them in good health at home. More people in hospital unnecessarily means more pressure on the NHS. We have seen considerable increases in the income of acute NHS hospitals over the past five or six years, but demand has increased even more due to the inadequacies of the social care system. We are lurching from one crisis to another, and there must be a better approach.

The Government say that there will be a Green Paper to address the funding of social care, but it was in 1999 that the previous Labour Government set up a royal commission to look into social care, so the issue has been pushed into the long grass for far too long. The coalition Government actually went out and sought the advice of a leading expert, Andrew Dilnot. We consulted on his advice, and then implemented through the Care Act 2014 a cap on care costs, which would have introduced greater fairness into the funding of social care. The Conservative party’s manifesto contained a commitment to introduce a cap on care costs, but it abandoned that commitment within weeks of its re-election, just as it is now abandoning the commitment not to increase tax. The Government said that the cap would be delayed until 2020, but no one believes that it will be introduced then and it has quite clearly been abandoned. A Green Paper—a discussion document—is not what is needed; we need a greater sense of urgency.

We were told about a £325 million boost for capital spending in the NHS, but capital spending has been cut in this financial year by £1.2 billion, which has been raided to fund the clearing of deficits. However, we were told that only between six and 10 pioneer sustainability and transformation plan areas will benefit from that £325 million, meaning that the rest of the country will see no increase at all in capital investment. The Health Service Journal indicates that there is likely to be another raid on capital budgets in the next financial year, making the situation even worse for the rest of the country. During the referendum campaign, those advocating Brexit argued that leaving would give this country £350 million a week to spend on the NHS. Instead of £350 million a week, the Budget offers this country £2.7 million a week in capital funding—a wholly inadequate figure. Provider deficits across the country stood at £886 million at the end of quarter 3, after the injection of £1.8 billion to clear the deficits from last year. The Institute for Government confirmed today that 90% of hospitals in this country face deficits, which are now endemic across the system.

The Budget is inadequate for social care and disastrous for the NHS. There will be a 1% increase in NHS funding in 2017-18, but that compares with an increase in demand of about 4%. In the next financial year, there will be a reduction in real-terms spend per head in the NHS. Wherever we are on the political spectrum, this makes absolutely no sense at all. At a time when demand is rising rapidly, it is nonsensical to reduce spending per head on healthcare in this country, and it amounts to a reduction in the proportion of national income that we are choosing to spend on health and social care.

[James Berry (Kingston and Surbiton) (Con)]

The right hon. Gentleman brings a lot of experience from his time in office. Before the Budget, his party was advocating £2 billion of immediate spending on adult social care and £2 billion of immediate spending on the NHS. The sum of £4 billion is a lot of money. I have no doubt that he has arguments for why that amount is needed, but will he enlighten the House as to how the money would be raised?

[Norman Lamb]

Our spring conference is approaching and we will be coming up with proposals.