Local Authority Grants: Impact of Cuts

Lord Lipsey Excerpts

Thursday 9th December 2010 Lords Chamber

[Lord Lipsey]

My Lords, I shall confine my remarks to what I might regard as my special subject, which is social care of the elderly. As a society, we have walked into a black hole. The black hole was originally caused essentially by demographics—the increasing number of elderly people—and by the fact that older people are not living in good health for longer, as the period of ill health at the end of life is at best constant and is perhaps getting worse.

The symptoms of the black hole into which we have walked—the black hole being the gap between service provision and need—are legion. The symptoms include, for example, the virtual elimination of local authority help for those with moderate or medium care needs simply in order that local authorities can keep those with the greatest care needs going. The symptoms are also to be found in the patchy and often very low standards of residential care at home. I hear tales of carers turning up hours late, with breakfast being served at lunchtime or lunch being served at breakfast time—a very fine “Panorama” programme exposed some of that—often because flexible services that meet people’s needs cannot be provided as cheaply as a service in which people rush around doing what they can when they can fit it in.

Another symptom can be found in the appallingly low wages paid to people who work in the social care sector, which unfortunately means that people do not have the right incentives to improve their skills. Another can be found in the state of residential homes that have a large number of local authority clients because of the continual downward pressure on the fees that local authorities will pay for people in those homes—often made up, incidentally, by charging more for people who have to pay for themselves.

In one part of the kingdom—in Scotland—the Scottish Government have decided to dig that hole very much deeper by providing free care to everybody. The result is that the real cost of care has doubled in real terms in five years. The governing party in Scotland has decided not to say what it will to do about that until after the next Scottish elections, because the policy will have to be abandoned.

One consequence of that black hole is that our old people are suffering—I use that word advisedly—at a time of their life when their suffering should be minimised. Another consequence—I know that the Treasury is the only department that matters in many of these things—is that we will incur far greater costs in future. The long-term result of not providing low-level care to people to enable to them to stay in their homes will be that they will stagger on until the moment at which, at much greater cost, they have to be admitted to residential care, where they will need to remain at huge public expense for the remainder of their lives. That is not only a bad policy for older people but a short-sighted policy on the part of Government.

Faced with that black hole, the Government produced an extra £2 billion for social care in the comprehensive spending review. Anything extra is not unwelcome in the present situation, but I have the gravest reservations about whether that extra money will mean much, given that £1 billion of it is to come from the National Health Service. I hope that that will come about, but I have noticed, for example, that consultant surgeons are terribly good at explaining why they need the money to do operations tomorrow and why money cannot be made available for social care that might stretch months into the future. Money does not always end up where it is intended, particularly given that we will have a frozen NHS budget in the years ahead. The scramble for cash and the use of the power of individuals and institutions within the health service to get cash will be most intense. Who will ensure that social services get their £1 billion share?

As for the extra money for local authorities, that is smoke and mirrors. The Government say that they will slash local government expenditure to a degree unimaginable in previous experience. They aim to do that because they can see easily that they cannot cut their expenditure, so they look to somebody else to make the cuts. Their chosen victims are local authorities, which to my mind have been amazingly calm in the circumstances. Given this great slashing, although the Government say that there will be an extra £1 billion, there will not be an extra £1 billion at all. Instead, the social services budget will be slashed by £1 billion less than would have been the case. That really is, I would almost say, Gordon Brown arithmetic at its worst—although I would not like to offend my own side in any way. None of us can tell whether an extra £1 billion is being given to local government for social care, because none of us knows what would have been given to local government without the apparent extra £1 billion. That is smoke and mirrors.

My third point, which has already been raised by the noble Lord, Lord Low, concerns the letter from David Behan, who is the director-general of social care. David Behan is a very good man who cares deeply about these things—so I do not know whether he drafted the letter—but, honestly, to describe the settlement as highly positive is really to bend words. What should we regard as slightly negative? Would spending need to be eliminated altogether and our old people thrown onto the streets to fare as best they could? I think that a little more honesty would have been genuinely welcome. Another feature of his letter that I want to highlight is the suggestion that significant efficiency savings would be needed. It is not easy to make efficiency savings in social services, because you cannot bathe people more quickly, hoist them more quickly or force food into their mouths more quickly without spoiling those services. To a very large extent, significant efficiency savings cannot be made in social care services, so the effect—unless the Government have a change of heart—on our services over the years to come will be quite frightful.