Lord Warner
Main Page: Lord Warner (Crossbench - Life peer)Local Government Finance Bill
Lord Warner Excerpts
Lord Warner
My Lords, I do not usually speak in local government finance debates, and I feel slightly as if I may have intruded into a private party, but I spent six years in local government as a chief officer and I well remember the annual scraps over setting budgets and a rate, as it was then.
I will speak briefly about the risks of unintended consequences from the Bill and the way that it is being rushed through on a tight implementation timetable. I very much agree with my noble friends Lord McKenzie and Lord Smith of Leigh about the Bill’s likely institutionalisation of unfairness. It is unfairness that I want to talk a little about. My particular concern is the possible consequences of the Bill’s proposed changes for the challenging problem for local authorities of funding adult social care with the inadequate resources that they have. The uncertainties and volatilities raised by several speeches in this debate only increase my concerns.
I briefly remind the House of the parlous state of adult social care funding, which consumes a growing proportion of local government expenditure. It is this serious situation that requires us to be extremely careful that, in adjusting the rules on non-domestic rates and making some of the other changes in the Bill, we do not make a bad situation even worse—possibly without realising that we are doing so.
It is clear from the Minister’s opening remarks that these changes to the rules have not been straightforward and that there is still a lot of detail to be worked out. At present, according to the Local Government Association, councils allocate more than 40% of their budgets to funding care services for vulnerable, elderly and disabled people. The current care funding bill to the taxpayer is around £14.5 billion a year but, with an ageing population, the adult social care bill is rising extremely rapidly, eating into discretionary services that local authorities have often provided. The latest LGA estimate is that this £14.5 billion bill will rise to £26.7 billion a year in less than 20 years. Councils have already raised their eligibility thresholds for services so significantly that eight out of 10 councils that provide social care services now do so only for those with substantial or critical needs. Increasingly, councils are unable to meet the true cost of care of those placed in residential care and funded by the state. The funding of social care is in crisis, while the Government continue to dither over a better funding system, yet we are introducing a Bill that may destabilise that system further.
I will not make a speech today about social care funding or the merits of the Dilnot commission report. I declare my interest as a member of that commission. I raise the social care funding crisis because of my anxiety that the provisions in the Bill could inadvertently worsen the situation for some councils. This is where things start to get somewhat technical. We are certainly in territory that is not a subject for a Second Reading speech and may, in any case, be well without my technical competence. Therefore, I will try to keep it simple.
It is clear from the Minister’s opening remarks that the complexity is considerable around local retention of non-domestic rates and how this interacts with the revenue support grant and the various levy and pooling arrangements. Without going into the mysteries of these computational arrangements, after those processes have been completed, somewhere along the way a figure emerges for local councils to spend individually. It is at that point that we must be concerned because we cannot tell what the mysteries of those computational arrangements are at the moment. We are creating a set of serious uncertainties among many of the councils for which social care accounts for a huge proportion of their budgets.
Given some of the timetables being considered under this Bill, it is possible that some of these councils will find themselves, very late in the day, unable to know in advance what they have got to juggle with in terms of their budgets for social care or whether, at the last moment, they are going to have to adjust many of their eligibility criteria for services and how they are going to fund the residential providers of care for vulnerable elderly and disabled people.
I want to pose a few questions for the Minister to think about, not necessarily today but certainly before Committee stage. Will she tell us whether she accepts that there is a risk that provisions in this Bill will adversely affect an individual council’s ability to fund adult social care beyond the day one protection, especially if business growth is not forthcoming in those councils which are trying to implement the Government’s policy in this area? What real-world road-testing of the new scheme has been or will be undertaken to check these possible inadvertent, adverse consequences? What is the Local Government Association’s assessment of the impact of the changes in this Bill on the ability of councils to fund adult social care?
Will the Minister write to me and other interested noble Lords before Committee stage setting out in detail the arrangements that will be in place to ensure that a council’s ability to fund adult social care will be in no way jeopardised as a result of these changes? Even better, will she spring a surprise on us and say that the 50% of business rate retention at the national level will be used by the Government to improve the funding of adult social care? I agree that that would be an unexpected bonus but I am always open to surprises.
We need to understand what this Bill will or could do for this important area of services for vulnerable people. For my part, I would want to consider her responses before deciding whether to put down amendments to safeguard levels of social care funding in council budgets after discussion with interested parties.
Baroness Hanham
There is a nod from the Box. I shall have to let the noble Lord know. I said the scheme would be implemented in 2013. My noble friend Lord Attlee will retrieve that information and I will pass it on.
The noble Lord, Lord Tope, who I thank for his basically supportive speech, asked when the draft regulations for the council tax support would be published and whether we would have an opportunity to see them. The Government will publish those draft regulations for the pensioner and default schemes in July. These key regulations will be needed by local authorities and IT suppliers, which is why we published on 17 May the statements of intent on both pensioner protections and the default scheme. As I said earlier, that information is there and should be available to local authorities.
Indeed, I know of at least one local authority which has already constructed its scheme on council tax discounts on the basis of what it knows already and it is ready to announce it. So it can be done. It is not something that anyone needs to hide behind.
I am grateful that practically everyone has supported the principle of TIF. There is no doubt that with TIF 1 councils are free to put up projects and take them forward. TIF 2 is limited because of the general financial situation at the moment; we will not be able to spend a huge amount of money on it at present. However, it is there and, if it goes well, further consideration will be given to it. As noble Lords know, TIF 2 is confined basically to the core cities putting forward good projects. That is already happening and we know that there are projects which can be developed quite quickly.
My friend the noble Earl, Lord Lytton—I call him my friend because he was very nice last time and I hope that we will get the same this time—has raised with me the question of parish councils, the contributions that they make and the fact that they do not get support from the business rate. I will come back to that because I am sure it will come up in Committee. With regard to valuations and the revaluation, as the noble Earl knows, there is no intention to re-evaluate the council tax base at the moment. On the appeals process for current appeals, we are working with the Valuation Tribunal and the Ministry of Justice to establish the mix of expertise that may be necessary to hear these appeals and ensure that they are not held up.
On impact assessments, as I said earlier, we have published a statement of intent so that there is enough information available, particularly on the equality impact assessment. We are satisfied that the work is now well under way. The amendments made on Report in the Commons are intended to make it clear that there are no legal barriers to preparing for and carrying out consultation prior to Royal Assent. A number of noble Lords referred to the complexity of the scheme. It is only fair to say that the current scheme is blindingly complex, but it is anticipated that the new one will be less so once the situation is understood and we get through the legislation.
I touched on the 100% of business rate not being held by local government, and I am sure that it is something we will discuss.
I was asked about places that struggle to attract economic growth; it was a point made by the noble Lord, Lord Smith of Leigh. Part of that will be addressed by the system of tariffs and top-ups. The base, as noble Lords have said, will be that of 2010, but it will be supported by tariffs that take funding away from local authorities with more than the base and given to those with less. There is a level playing field when all this starts, and those tariffs and top-ups will be raised by RPI.
The noble Lord, Lord Best, asked whether local authorities will be able get guidance on how to support the universal credit taper. I am pleased to confirm that the department has already published guidance on the key considerations that local authorities will need to take into account in designing a scheme that supports work incentives and the objectives of universal credit, so that is under way.
I turn now to the noble Lord, Lord Wigley, with regard to the Welsh clauses. The amendments to the Bill moved in the other place were tabled at the request of the Welsh Assembly. As we understand the process—the noble Lord may differ from me on this—the legislative consent Motion can be tabled only after the amendments have been passed and the new clauses have been laid, and they must be considered by the Assembly before the Bill completes its passage through the House. I think that the procedural arrangements sound all right but if, having thought about it, the noble Lord still does not feel they do, perhaps he will let me know as soon as possible.
The noble Lord, Lord Warner, raised the question of adult social care. I cannot answer that specifically, but as he and the House knows, adult social care is at the front of everyone’s mind. The issue is not confined to local government because it covers a number of departments. A White Paper is being completed at the moment. I think that there will be other venues in which to discuss adult social care, and in a way I hope that it does not trip up in this Bill because, while it is part of local government finance, it is not the major financial implication for local government.
Lord Warner
I think the Minister is trying to avoid dealing with the issue that I was trying to raise. I do not expect this Bill to solve the problems of social care funding. What I was asking for was some modelling to be done to see whether this Bill would actually make the situation worse, before the Government come forward with their plans. We do not know when they are going to come forward with their plans. What I wanted to pursue—and indeed will pursue in Committee—is whether the Government know if implementing the provisions in this Bill will actually make the funding of social care worse. That is my point, and I think we need an answer to it.
Baroness Hanham
We will come back to that issue in Committee, I have no doubt. My noble friend Lord Attlee and I are looking forward very much to the next stages, and I thank all noble Lords for their contributions today.