Local Government and Social Care Funding

Debate between James Cartlidge and Norman Lamb

Wednesday 24th April 2019 Commons Chamber

[James Cartlidge (South Suffolk) (Con)]

It is a pleasure to follow the right hon. Member for Exeter (Mr Bradshaw). He spoke about a blueprint; I have read that report and I remain unconvinced that it absolutely nails down who would pay and how much, which is of course the toughest part of these decisions. None the less, it is a very good proposal and I respect that.

Like the Labour Front-Bench spokesman, the hon. Member for Denton and Reddish (Andrew Gwynne), the right hon. Gentleman referred to cuts in local government funding since 2010. I hate to labour the point—it is a political point—but we cannot avoid asking ourselves why those cuts were necessary. The motion mentions sustainability, as does the Independent Group’s amendment, or what we might call the TIG amendment. But the cause of our problem was unsustainability in the public finances and the economy, with a huge growth in all kinds of borrowing, including private borrowing, mortgage borrowing and public borrowing prior to the crash, and public spending commitments based on unsustainable tax income from, for example, city bonuses. That was never going to be sustained. It was always going to end in a big crash, and—guess what?—it would always fall to us to step in and fix the problem.

Labour MPs may deny that. I asked the hon. Member for Denton and Reddish whether Labour’s 2010 manifesto protected local government. As he did not answer, let me remind the House what the manifesto said:

“Labour believes we should protect frontline spending on childcare, schools, the NHS and policing, and reform our public services to put people in control.”

Note the absence of local government funding. It goes on to say—this is the key line:

“We recognise that investing more in priority areas will mean cutting back in others.”

In other words, if an area of spending was not protected, it would get a right old shellacking, which is what happened under us. We did the same thing. We had priority Departments that we protected, but at a time when the deficit is very high, if we protect some Departments—which is perfectly justified, as we did with the NHS—others will take a disproportionate hit. That would have happened under Labour. I honestly do not say that for the purpose of political point scoring. It is to underline the reality that there is no parallel universe where there would not have been a significant hit to the grant given from central Government to local authorities after 2010.

[Norman Lamb]

To go back to trying to find solutions to the problem that we face, the hon. Gentleman mentioned the joint Select Committee report. Does he agree that we need a new funding stream, as the Select Committees suggest, and that the best way to achieve a sustainable solution is to work cross-party, as the Select Committees did, to come up with a solution? Even if they do not have all the detail yet, that is clearly the right way to achieve a sustainable settlement.

[James Cartlidge]

That is a good point, and I will come to that. I make what is essentially a political point about Labour’s manifesto because we have to get into our heads the idea that there will never again be a time when local authorities do not have to make difficult decisions and look for efficiencies and innovation. The idea that there will always be a cavalry that can come over the hill and, with the wave of a magic wand, summon up central Government funding—which, by the way, does not grow on trees, but also has to come from taxpayers—is wrong.

Colleagues are right to mention good examples of best practice and innovation. In my constituency, I have two district councils and two wards of West Suffolk. West Suffolk is a newly merged council of St Edmundsbury Borough Council and Forest Heath District Council, and savings have been made through that process. Babergh district is entirely contained within South Suffolk. It is not a merged district council. There was a referendum on whether Babergh should merge with Mid Suffolk. Babergh voted to remain independent from Mid Suffolk, but they merged their back offices, and there have been huge efforts to achieve savings and efficiencies. Babergh has left its head office in Hadleigh in my constituency and is now based in Ipswich, outside the district, which has been unpopular but has saved money. It has set up a joint venture to renovate and restore its old headquarters and make them a commercial asset. The point is that those sorts of changes by district councils will always be required.

Suffolk County Council has seen huge innovation in relation to social care, as my hon. Friend the Member for Bury St Edmunds (Jo Churchill), who is on the Front Bench but cannot speak in the debate, will know. Councillor Beccy Hopfensperger has done great work as the cabinet member for social care in Suffolk. Through the use of technology, the council is saving money, driving down costs and improving care. For example, sensory apps are being used, so that families can know whether their loved one who is able to stay at home is moving around and mobile—in short, that he or she is well. Such technological innovations can help to reduce the cost of care and deliver better care.

On the broader question that the right hon. Member for North Norfolk (Norman Lamb) raised about the sustainable funding of social care, I feel passionately about this issue. The biggest issue in British politics begins with b, and it is not Brexit by a long chalk; it is Beveridge. The welfare settlement we have in this country covers the whole of the state pension, the NHS, social care and every aspect of the contract that we all thought we had entered into, but the system is not remotely sustainable. If we look at the Office for Budget Responsibility’s forecasts for just NHS spending 50 years from now, we see that it estimates we will be spending the same again in real terms as we do on the NHS now because of changing technology, demand and so on, so we have a huge challenge ahead of us.

On the specific point about paying for social care, I recently had a constituency surgery at which an elderly lady came to see me because her husband has a very difficult condition and she wanted to know what support was available to her. She felt she was in that category of my constituents who are neither so poor that they receive lots of help nor wealthy enough to be able to afford to fund a good lifestyle. I asked her, “What about your house? Do you have housing assets?” She said, “Yes. We have a house worth about £700,000, with no mortgage.” However, in her eyes, she has no money.

This issue of housing and assets is always going to be the most controversial point, as we discovered to our cost at the last general election. The residential housing assets of those aged over 65 is worth between £1 trillion and £1.4 trillion, depending on which estimate we look at, and that is a staggering sum. We have to accept that at the core of this issue—and this is the reason why it is so controversial—those entering the workplace today will not have occupational pensions and will not build up such a level of housing equity. That is highly unlikely because, in my view, we will not see such a period of high house price inflation again; it is not sustainable. We are reaching a point where those paying into the system are seriously questioning whether they will get the same benefit as those who retire today.

This intergenerational issue is no one’s fault; no one designed it that way. In fact, the welfare system I have mentioned, the Beveridge system, was built with the very best of intentions for a post-war country. However, the thing we need—and I will conclude with this key point—is honesty. That was said by my hon. Friend the Member for Lewes (Maria Caulfield), who is a nurse, and I greatly respect the expertise she brings to this issue. In this populist, Trumpian era, the one thing that will make this work is all of us being open and transparent about the tough choices we are going to have to make. No one is going to have a free option. There is no free option: every option available is going to cost.

I happen to think that the best option will involve some use of housing equity, perhaps with a choice for people to pay through an alternative method if they do not want to bind themselves into that. In relation to those entering the working population, I think we should look at the success of auto-enrolment. How many people here have had emails from constituents complaining about the rise in pension contributions from their salary from auto-enrolment? I have not had a single email because people believe it is a contribution from which they will benefit. It is not like the old, pay-as-you-go system, and I think we could link the social contributions of the young generation through a premium to such a system, as the Select Committees have suggested.

It will be very difficult to come up with a solution for social care. It may take consensus, or it may take a future Government with a large majority being pretty tough and disciplined. It will take one or the other, not what we have at the moment. However, we can make a start, and we have to be open and transparent about the fact that there is no easy option, but there can be an option through which we get much better care for the next generation.