Local Authority Grants: Impact of Cuts

Lord Adebowale Excerpts

Thursday 9th December 2010 Lords Chamber

[Lord Adebowale]

My Lords, I thank the noble Baroness, Lady Thornton, for her debate. It is timely, and, sadly, it is a subject that we will return to often in the next five years. Even without knowing the local government settlement and the contents of the localism Bill, it is important for us to understand what is happening on the ground and the impact that this is having on individuals who are not in this House.

While listening to the noble Lord, Lord Bates, I was a little alarmed. While I understand his explanation for the cuts, my concern is that the challenge for government is not just to make cuts. If we wanted to get the Budget back into balance, there are much faster and more brutal ways of doing it than what is currently happening. The real challenge for government is to make the cuts—if we have to make them—in a way that retains public services and fairness. I did not hear enough about that. I wanted to invite him to sit down with many of us in the not-for-profit sector to look at how we might transform and deliver services. That is the critical issue. To talk about pain to others, when we ourselves are not in pain, is simply not good enough.

The noble Lord, Lord Shipley, and others mentioned Total Place and community budgeting, and I should note that from Turning Point’s perspective—I declare my interest as chief executive of that organisation—I have yet to find Total Place budgeting having an impact on service redesign or delivery. It is important that we understand the difference between theory and practice.

I want to talk about an individual, because only by understanding what happens to individuals can we understand the impact of some of the things that we debate so eloquently in this House. I want to talk about George. That is not his real name, and I have been asked not to identify the local authority that provides the services to him—which in itself tells you something. George is severely autistic. He lives in a residential centre. He attends a day centre for a few hours a day and has done so for several years. He has a good relationship with the people at the day centre, and attending it is vital to his routine and well-being. He and his residential service were recently told that the day centre that he attends is reducing its staff numbers and will no longer be able to provide the support that he needs. The local authority suggested that his residential service provide the staff to accompany him, but it does not have sufficient funding to do so.

George was given three weeks’ notice that he would no longer be able to attend the centre, and the effect on him has been, frankly, devastating. As a direct result of that disruption, his behaviour has become problematic—so problematic that his support staff have been forced to administer medication. The money saved by cutting staff at the day centre will be negligible, particularly when the same local authority will almost certainly need to provide additional funding to support him in other ways, including the costs incurred by providing expensive medication to modify his behaviour. It is also possible that he may have to be hospitalised. We know from work done by the Nuffield Centre that hospitalisation drives up social care costs rather than reduces them.

Examples such as George, of which there are many thousands, throw doubt on the Government's contention that we are all in this together, because George is not. Local authorities are facing cuts to capital funding of the equivalent of 45 per cent in the CSR period, compared with 29 per cent over the public sector as a whole, according to the Local Government Association's figures. Local authorities are having to make cuts now. They have started to make cuts, as exemplified by George, and, from next October, people such as George will no longer be eligible for the mobility component of the disability living allowance—which, again, while saving a relatively small amount of money for local authorities, will remove a vital source of freedom and independence for individuals such as George, thus driving up the expense.

Cuts to social care are already happening. As we have heard, the Local Government Association has warned that from 2011, many local authorities will raise eligibility criteria. We know from work done by the Audit Commission, of which I am the last remaining member—take a good look; a member of an endangered species stands before you—that local authorities have three default behaviours when faced with cuts. The first is to increase eligibility criteria; the second is to make cuts. The last thing they do is transform services. The kind of cuts that most local authorities will have to make will simply not respond to that default behaviour, and it will cost us. Through my work as chief executive of Turning Point, I have seen local authorities form many innovative social enterprises that provide effective and often preventive services, which also get cut at times such as these. There is a resistance to innovation in many local authorities that goes unchallenged, so it is not just for central government; there is a challenge for local government as well. Many short-sighted decisions operate on a false economy, causing greater harm and cost in the long term.

There is another way. Some local authorities are going much deeper by restructuring services quickly and providing innovative ways in which to engage individuals and their communities in the redesign and delivery of services. Unfortunately, there are not enough of them, and the speed of the cuts is outpacing their ability to make changes. I ask the Government three things. First, what modelling have they done on the likely impact of cuts and raising eligibility criteria on social care and health spending? Secondly, what incentives can be put in place to encourage local authorities to innovate and work in partnership with the not-for-profit sector and the private sector in service redesign, rather than slash and burn? Thirdly, what monitoring do the Government intend to put in place to inform us all of the impact of cuts on the vulnerable, in order to ensure fairness?