Local Government and Social Care Funding

James Brokenshire Excerpts

Wednesday 24th April 2019 Commons Chamber

[The Secretary of State for Housing, Communities and Local Government (James Brokenshire)]

Let me begin my speech in the same way as the hon. Member for Denton and Reddish (Andrew Gwynne), and underline the House’s complete condemnation of the appalling terrorist attacks in Sri Lanka and also in Northern Ireland.

The timing of the attack in Sri Lanka at Easter, when people were murdered at prayer, was utterly shocking, and has—rightly—been utterly condemned throughout the House. Our thoughts are firmly with the Sri Lankan community in the United Kingdom, and we send our prayers and condolences in the knowledge that so many people will have lost loved ones. Let me also say, as a former Northern Ireland Secretary, that the brutal murder of Lyra McKee was utterly shocking and disgusting, and that our thoughts and prayers are very firmly with her loved ones, her family and all who cared for her. What an incredible individual she was. At this time, as her funeral is under way, I know that the House will wish to send its thoughts, prayers and condolences to all who love her and all who care for her.

Let me now turn to the subject of today’s debate. Our local authorities and the people who serve them are delivering essential services and changing lives, and it is right that we help them to succeed. I pay tribute to all who work in our local councils up and down the country for the work that they do and the difference that they make to the lives of so many. As Secretary of State, I have made clear my support for local government, and my wish to enable councils to deliver benefits to the people whom they serve. I commend and support those councils, and I look forward to finding new ways in which services can be delivered most effectively, in the spirit of devolution, closer to the point at which they are received.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Let me say gently to the Secretary of State that what he has just said will be taken as weasel words in Harrow, in the context of a 97% reduction in revenue support grant. Can he offer any assurance that he has persuaded the Chancellor of the Exchequer, in the coming comprehensive spending review, to invest in local government health and social care?

[James Brokenshire]

Let me point out to the hon. Gentleman that this year we have given our local authorities access to £46.4 billion, a cash increase of 2.8% and a real-terms increase in funding. The settlement includes extra funds for local services, with a strong focus on support for some of our most vulnerable groups. It is part of a four-year settlement that has been accepted by 97% of local authorities, and gives so many areas access to substantially more funding than the least deprived. The average spending power per dwelling for the 10% most deprived authorities in 2019-20 is about 22% more than that for the least deprived.

[Alex Chalk (Cheltenham) (Con)]

Does my right hon. Friend agree that as part of the process of increasing the funding that is available, we should increase the practice of business rates retention as a way of incentivising local innovation and enterprise? In places like Cheltenham, it provides an incentive to build out things like our cyber-park, which will create a pipeline of local businesses providing income that can be spent on vital public services.

[James Brokenshire]

My hon. Friend makes the point very effectively about the innovation that we see in local authorities and he rightly underlines the work in his own community. Local authorities have campaigned for more flexibility and control over the money they raise, including the ability to create a more self-sufficient sector funded from their own resources. That includes the move to 75% business rate retention, with the benefits that that brings.

[Joseph Johnson (Orpington) (Con)]

I wonder whether my right hon. Friend will consider changing the funding system to reward efficiency. As he knows, councils such as Bromley, which is near his Bexley authority, are historically low-cost authorities that have achieved enormous efficiencies over the years, yet they are asked again and again to make further efficiencies. Does he agree that it is time to adjust their baselines to reflect the historical efficiencies they have achieved?

[James Brokenshire]

I know that Bromley does incredible work for its local community. It has innovation, efficiency and real quality at the heart of its efforts. Equally, my hon. Friend raises an ongoing issue in respect of our fair funding review—the review of relative needs and resources. As we reflect on the submissions we have received to date in respect of how that balance is struck, we will certainly give careful consideration to a range of factors to ensure that the funds are applied in the appropriate way to recognise the relative needs and resources of individual authorities.

[Richard Burden (Birmingham, Northfield) (Lab)]

Does the Secretary of State not recognise that in the case of Birmingham, cumulative cuts of £775 million over a 12-year period are simply not sustainable for a city that has 42% of its children growing up in poverty? Whether or not he accepts that, will he at least do something about the historical underfunding? He will know that the formula for Birmingham was changed to recognise historical underfunding in 2016-17, but because that was not backdated to correct underfunding in the previous two years, Birmingham has been short-changed by £100 million. Will he at least put that right?

[James Brokenshire]

I say gently to the hon. Gentleman that Birmingham is one of the authorities with the highest funding per capita. Equally, I am looking carefully at the representations that he and other Birmingham MPs have made to me. The ongoing strike action in Birmingham, with the non-collection of rubbish and the impact that that is having on communities, clearly has not helped. I therefore urge him to support the council in dealing with the challenges caused by the industrial strife that is being felt very firmly in Birmingham, with all the manifestations that that is creating.

[Emma Hardy]

Hull City Council has seen a reduction in its funding of 37.8% since 2010. That is having an impact on children with special educational needs and disabilities. Historically, no account has been taken of the number of children with SEND in an area and the amount of funding that it receives for the higher needs block. If the Government are serious about reviewing the way that local authorities are funded, surely that should be something they take into account.

[James Brokenshire]

I am working closely with the Secretary of State for Education as we look towards the next spending review. I will come on to the support that is being provided for adults’ and children’s social care, as well as how we are investing further on a number of other fronts. Therefore, we have recognised and reflected on a number of the pressures that we have seen. Clearly, in the further review of relative needs and resources, and as we look towards the next spending review, I will look at the data and the evidence very closely and carefully.

[Toby Perkins]

Will the Secretary of State give way?

[James Brokenshire]

I will give way one last time and then I will make some progress.

[Toby Perkins]

I am grateful. One thing that has been missing from the debate so far in terms of social care is that the vast majority of domestic visits are carried out by employees of private sector companies, as opposed to employees of local authorities, because most of these services have been outsourced. Huge numbers of those companies are going bust. It surely shows the Secretary of State that the system is unsustainable when 100 care homes have gone bust in the last couple of years.

[James Brokenshire]

The Minister for Care, who is sitting on the Bench next to me, says that the number of providers is going up. I can assure the hon. Gentleman about the steps that we are taking in conjunction with the Department of Health and Social Care; the assurances; the quality work that colleagues across Government support and strengthen; and the arrangements that we put in place to step in when there are failures in the market and a failure of supply in relation to a particular provider. When we look at a number of these examples, we can see the work that has gone in to make sure that they are dealt with effectively.

It is about the quality of service. When we look at the broader issues of social care, which many Members across the House have rightly touched on, the focus is on the delivery of care and the delivery of outcomes. Simply spending money is not the answer in terms of delivering the high-quality care and the outcomes that some of the most vulnerable in our society need.

[Robert Neill (Bromley and Chislehurst) (Con)]

My right hon. Friend is right to talk about the quality of care. Does he recognise that Bromley, his next-door neighbour, provides an example of a willingness to participate in close joint working between the health sector and social services? Given that one of the greatest pressures is the growing cost for top-tier authorities of caring for the elderly, will he ensure that the new funding review and the new arrangements enthuse and support authorities that, like Bromley, are prepared to do joint working?

[James Brokenshire]

Interestingly, the hon. Member for Denton and Reddish tried to suggest that there was not good joined-up working, but my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) rightly highlights some of the good practice that is taking place in the further integration of health and social care. Indeed, the £240 million of funding that has been committed through this year’s settlement was very firmly aimed at ensuring that those pressures were taken off the NHS. I pay great tribute to the work that local authorities up and down the country have been engaged in, particularly around things like delayed transfers of care, where there has been a 45% reduction since the high point fairly recently. That demonstrates very clearly how we are making a difference.

[James Morris (Halesowen and Rowley Regis) (Con)]

Will my right hon. Friend give way on that point?

--- Later in debate ---

[James Brokenshire]

I will give way one last time, then I will make some more progress.

[James Morris]

On the delayed discharge of care, we recognise that ultimately there needs to be more integration between health and social care, and more money. The point that my right hon. Friend makes has a lot of impact, because where we have put money into social care and there has been good structural working between local authorities and the health service, we have seen a radical reduction in the delayed discharge of care. It is not all about money; it is about innovative joint working.

[James Brokenshire]

I totally agree with my hon. Friend. Joint working has been done on delayed discharges of care. It is about ensuring that there is good practice and sharing that more broadly. We are doing that equally in children’s social care, where the Department for Education is providing funding to ensure that that is better adopted. It is about good practice and looking at the outcomes. The simple binary approach that the Opposition take is, I think, mistaken.

Another issue on which the hon. Member for Denton and Reddish was fulsome was that of council tax. I want to remind Labour Members that it was the Labour Government who made ordinary families pay the price for their failures, with band D council tax more than doubling under Labour and families paying an extra £750. Even now, Labour wants to abolish the council tax referendum limit, which prevents excessive rises in council tax. It is all very well for the hon. Gentleman to suggest that he is on the side of ordinary hard-working families, but that is not what we saw from Labour in government and it is not what we are seeing now. The real price of Labour is that it always costs you more. This is not just about the cost of a Labour Government; it is also about what people are paying now. Households in Labour-controlled areas have to pay higher council tax to make up for incompetent collection. In the worst-hit areas, Labour councils have unpaid council tax bills of up to £100 million, which is the equivalent of £439 for every household. The 10 councils with the worst collection rates in England are all Labour-run.

[Maria Caulfield (Lewes) (Con)]

It is true that Labour is promising £500 billion of extra spending, but what it is not telling ordinary hard-working families is that that will mean an increase in income tax and a doubling of national insurance, council tax and VAT. Those are not my words, but those of a former Labour shadow Chancellor.

[James Brokenshire]

The interesting thing about some of our earlier exchanges was the acknowledgement that the last Labour Government, going into the 2010 election, did not guarantee to protect local government. We have had to make difficult choices and confront difficult issues to put the public finances back on an even keel, and that has not been easy. I pay tribute to the innovation that councils have been engaged in up and down the country to help us to put this right. It is telling that there was no acknowledgement of that in the hon. Gentleman’s opening remarks.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

The Minister is saying that the Tory Government want to spend on things that work. I can tell him that what works is the troubled families programme, which is due to end next year. Will he take this opportunity to commit to the House to doing everything he can to keep that programme running after 2020?

[James Brokenshire]

I am glad that the hon. Lady has mentioned the troubled families programme, because I will be talking about that in greater detail later in my speech. I have been hugely impressed by the outcomes of the programme, which, as she rightly points out, is making a difference in people’s lives. I strongly believe that the troubled families programme has now shown an evidence base for how it is profoundly doing that. It is doing what has rightly been described across the House as pulling together services to create a person-centric approach, and breaking down some of the silos and barriers. I am a huge champion of the troubled families programme.

[Laura Smith (Crewe and Nantwich) (Lab)]

So far, the Secretary of State has blamed striking workers and councils up and down the country. The one group that is not being blamed is his rotten Government: the responsibility for this crisis lies firmly at his door. When will he stop blaming everybody else and take some responsibility for the crisis in this country?

[James Brokenshire]

The hon. Lady must equally reflect on the fact that the Labour Opposition voted against a real-terms increase in the core spending available to local authorities this year. That included the additional funding for health and for adult and children’s social care. We recognised the pressures and made the right judgments in respect of the pressures that councils explained to us. The Opposition may wax lyrical about funding pressures, but their own councils are not even helping themselves.

The Opposition have some front to claim to be the champions of local government and localism. I took the time to read the shadow Secretary of State’s recent speech to Labour’s local government conference this year, and it contained some big and bold claims. It is just a shame that they were not backed up by reality. He said that Labour was the party of devolution. I must congratulate him on his selective memory. If I remember correctly, it was his party that, after 13 years, left the UK one of the most centralised countries in Europe. It took the Conservatives in government to roll back the era of centrally imposed targets and the tick-box culture imposed by the Labour party, and it is this Government who have put the public finances back on track and cleared up the mess we inherited from Labour.

[Toby Perkins]

I am sure the Secretary of State would not want people watching this debate to be misled by what he has just said about police funding. He knows as well as all of us that the reason Labour voted against the spending plans for the police was that we were proposing far greater spending on the police. That is why Labour Members voted against what we saw as his derisory offer to our desperately under-resourced police services.

[James Brokenshire]

We have given significant investment to the police. Indeed, the Chancellor has made further commitments on some of the most acute pressures that we know are being experienced. I was actually talking about the local government settlement, rather than the police settlement, which was dealt with separately. However, we made a commitment to providing additional resources, and we are backing the police to deal with the issues of crime.

[Robert Neill]

I am glad that my right hon. Friend is reminding Labour Members of Labour’s record. Someone had to come in and pick up the pieces in 2010. Might he also like to remind them that it was Labour that introduced compulsory capping on council tax levels, reducing the discretion of local authorities? That was then abolished by the Conservative-led coalition. It was Labour that introduced central planning through the directly imposed regional spatial strategies, overriding the wishes of local communities, and it was Labour that enforced compulsory unitary councils in areas that did not want them. One of those decisions was reversed by the Conservative Government in favour of the bottom-up approach brought in by this Government. Labour posing as the party of devolution has more front than Harrods, as my old grandma used to say.

[James Brokenshire]

My hon. Friend makes his point in his inimitable style.

We have promoted a greater sense of devolution, and this comes back to my point about trusting communities, councils and people at the grassroots to get on and deliver for their communities. It is this Government who have given local authorities the tools and resources they need to do their vital work, and it is Conservative councils that are providing value for money and delivering quality services for their residents while keeping council tax lower than in Labour and Liberal Democrat council areas. This includes doing the right thing on recycling, with Conservative councils recycling, reusing or composting around 49% of their waste, compared with 36% under Labour councils. This is about local delivery, which is what much of the current campaign and the votes in the forthcoming local council elections will be about.

[Rachael Maskell]

One area in which the Secretary of State and the Government have failed to invest since 2010 is staff. The Government may offer warm words, but a 21% real-terms pay decrease for some of the worst paid workers is completely unacceptable. How is the Secretary of State going to address that issue?

[James Brokenshire]

I hope the hon. Lady will have noticed that, according to the latest figures, real wages are actually going up. I remind her of the fact that pay restraint across the public sector was a consequence of the mess that we inherited from the last Labour Government. I know that this has been difficult; it has been really tough and incredibly hard. Equally, we are determined to maintain the strong economic path for our economy and to ensure that our public finances are now back in the right space and not left in the fashion that the last Labour Government left them in. I am mindful of the essential role our local authorities play in helping the most vulnerable in our society, and I recognise the growth in demand in adult and children’s social care and the pressure that that brings.

[Mr Betts]

I am interested in the exchanges across the Chamber about which party has been the best, or perhaps worst, at the devolution of council funding. It was actually the Thatcher Government who introduced the capping of rates—it continued with council tax—taking away councils’ freedom to set their own business rates. Is it not the reality that neither the previous Labour Government, nor the coalition Government nor this Government have done anything fundamentally to increase the freedom of councils to raise their own funding at a local level? I hope that the Secretary of State will address that when we finally see his devolution framework.

[James Brokenshire]

I look forward to engaging with the hon. Gentleman and the Housing, Communities and Local Government Committee on issues relating to the devolution of business rates and so many other things. I profoundly believe in the merits and benefits of decisions being taken more locally and of local government having a sustainable position.

I am conscious of the number of Members who want to participate in this debate, so I will now make some progress.

Coming back to social care, £650 million out of the more than £1 billion of extra funding committed to councils at last year’s Budget will be going towards adult and children’s social care in 2019-20. Of that, £240 million has been allocated to ease pressures on the NHS, which comes on top of the £240 million announced in October to address winter pressures. The remaining £410 million can be spent on either adult or children’s social care where necessary to take the pressure off the NHS, meeting the request from local authorities for greater flexibility. Taken with the adult social care precept and the improved better care fund, the Government will have given councils access to £10 billion of dedicated funding, which can be used for adult social care in the three-year period from 2017-18 to 2019-20.

When it comes to protecting our children, we are investing £84 million over the next five years to expand three of our most successful children’s social care innovation programme projects. The projects will keep more children at home safely in up to 20 local authorities, but in the long run our work will ensure that our health and care systems are better integrated. That will be our most powerful tool in ensuring we have a sustainable approach in the years to come.

Returning to troubled families, which the hon. Member for Erith and Thamesmead (Teresa Pearce) rightly highlighted, I believe that our programme is helping local authorities to support families with complex needs and to improve outcomes for individuals. The programme has been a catalyst for local services, transforming how they work together, making them more integrated and cost-efficient, and reducing dependency and demand on expensive services. The results speak for themselves. The latest national programme evaluation shows that, when compared with a similar group, targeted intervention saw the number of children going into care down by a third, the number of adults going to prison down by a quarter, juveniles in custody down by a third, and 10% fewer people claiming jobseeker’s allowance. While I recognise that there is more to do, the results are a tribute to the tireless efforts of family workers, local authorities and their many partners in our public services and the voluntary sector. This is about so much more than the financial boost that someone can get from a regular wage. It is also about the pride and the dignity that comes with someone being able to take control of their own life.

The future of this country is not about an ever-growing collection of handouts and entitlements, but about growing prosperity and independence, and that equally applies to local government. This Government are working to build a more confident, self-sufficient and reinvigorated local government. With the end of the current multi-year deal in sight, we clearly need to take a longer view of how we fund councils as we move to a stronger, sustainable and smarter system of local government. This year’s preparations for increased business rate retention, a new approach to distributing funding between local authorities, and the upcoming spending review will also be pivotal. Important work is also under way with authorities and the wider sector to better understand service costs pressures.

For years, councils have asked us for more control over the money raised, and we are giving it to them through our plans to increase business rate retention to 75%. In the process, we will provide local authorities with powerful incentives to grow, and authorities estimate that they will retain around £2.5 billion in business rate growth in 2019-20 under the current system—a significant revenue stream on top of the core settlement funding. In addition to more control, councils want and need to see a clearer link between the allocation of resources and local circumstances, and our new fairer funding formula will ensure a more transparent link between local needs and resources and the funding that councils get.

I pay tribute to the leadership and creativity of our councils, which deliver high-quality services for their residents and efficiencies for the taxpayer. We are determined to give them the freedoms and flexibilities they need so that local government can continue to flourish and deliver vital services to meet the challenges and opportunities that lie ahead. As voters go to the polls at the local elections, this Conservative Government are providing a real-terms increase in spending power for local government and giving councils the freedoms to deliver for their local communities, and hard-working Conservative councillors are providing value for money for hard-working families and the quality services that their residents deserve.

[Several hon. Members rose—]