Local Government Finance Bill

Lord Warner Excerpts

Thursday 5th July 2012 Grand Committee

Moved by

[Lord Warner]

56: Clause 2, page 2, line 21, at end insert—
“( ) In making any change to revenue support grant arising from introduction of any part of this Act, the Secretary of State will ensure that no council with responsibilities for adult social care services is required to reduce their funding of those services in real terms until legislation has been introduced that provides a comprehensive and sustainable solution for the funding of those services.”

[Lord Warner]

My Lords, this amendment is in my name and that of the noble Lord, Lord Best. I tabled this amendment to probe the Government further because of the unsatisfactory response to my questions that I received at Second Reading. It is to the issues that I raised then concerning the parlous state of funding for adult social care that I wish to return this afternoon with this amendment. I do so because of the implications for that situation of this Bill. While it gives more local discretion to local authorities, it takes further resources away from local government overall when many authorities are in dire straits over the funding of adult social care, which in some authorities can account for 60% of their expenditure.

The desperate situation that has arisen over the funding of adult social care arises to a great extent because the Government have totally failed to come forward with any response to the funding proposals made a year ago in the report of the Dilnot commission, of which I acknowledge I was a member, or indeed with any alternative proposals if they did not like what the commission suggested. The signals that they have consistently given out are that they will not produce any clear funding reform proposals when they publish their White Paper and draft Bill on adult social care, which the Whitehall rumour mill suggests may be next week. Any light that the Minister can throw this afternoon on what the Government’s policy is on funding adult social care would be more than welcome. I wish to encourage some indiscretion on the part of the Minister.

The amendment is intended to prevent a bad situation getting worse. It will have no impact whatever if the Government get their act together and come forward with proposals that can be implemented to place the funding of adult social care on a sound and sustainable basis. Much of that soundness and sustainability would come from service users paying more if they had the resources to do so, as the Dilnot commission proposed, so this is not simply a matter of ratcheting up public expenditure. The amendment would prevent making any changes to the revenue support grant arising from measures in the Bill for those local authorities with responsibilities for adult social care if that would mean a real-terms decrease in funding to those services before the Government have introduced legislation that provides a comprehensive and sustainable solution for funding those adult social care services.

The solution to whether the amendment has real impact is totally in the hands of the Government. All it does is give them a pause for thought before services for the poorest, vulnerable, elderly and disabled people and their carers are reduced further. Let me briefly say why this pause is necessary. I am relying to some extent on figures produced from a parliamentary Answer on local government expenditure provided by the Minister’s own department. I have to say that the information was not provided in the most helpful format, which is hardly surprising given the story that the data tell. However, with the help of the Library I have managed to explore the data in a way that is reasonably intelligible.

The data establish the rapid decrease in adult social care expenditure by local authorities under this Government, even though service demand is going up rapidly because of demography and local authorities are doing their utmost to protect adult social care services by cutting other services. I pay tribute to them, across the political spectrum, for their political courage on this issue.

The data show that at constant 2011 prices, local authority expenditure on adult social care went up from £15.46 billion to £16.4 billion between 2008-09 and 2009-10. Noble Lords will recognise that 2009-10 was the expenditure for the last year of the previous Government. It then fell back to £15.54 billion in 2010-11, declining again in 2011-12 by another £0.5 billion, although there are some technical changes that slightly confuse the picture. The evidence available to me and other noble Lords who are close to local government suggests that expenditure will fall again significantly in real terms in the current year.

There is the very real possibility that expenditure on adult social care will be some £2 billion less in real terms when the Bill takes effect next year compared with 2009-10, despite the best efforts of local government to make amends and try to cope with that set of problems. The knock-on effect of this for the NHS is considerable. When I was a Minister, the Department of Health formula was that for every pound you cut from adult social care, you spent £1.30 on the NHS. You can do the arithmetic for the implications of all this for the NHS as well as for users of adult social care services.

--- Later in debate ---

[Baroness Hollis of Heigham]

I have not put them to the Labour Party Front Bench.

[Lord Warner]

It might just help the Committee to say that there are plenty of suggestions around, which the Government are well aware of, that enable you to implement the Dilnot proposals without any increase in public expenditure. What you are required to do, though, is reprioritise, which the Government are unwilling to do, as far as I can see. Starters for 10 would be not just the creative proposal of my noble friend but means-testing generous winter fuel payments, free TV licences and bus passes for people who are higher rate taxpayers. Plenty of proposals have been put forward for using inheritance tax to pay for that. All these proposals could be put into play if the Government were prepared to enter objectively into a discussion with the Labour Front Bench in the other place, with whom they are having so-called cross-party talks, but very little creativity seems to be coming from the government side.

[Lord Beecham]

My Lords, I am not empowered to commit the Labour Party to a particular policy stance on this, although I find some of the arguments and options advanced by my noble friends quite interesting. What I do know is that the Conservative Front Bench walked away from joint-party discussions two and a half years ago, have done nothing so far about Dilnot and, by all the auguries that we are hearing, do not propose to do very much about it. We will see in due course, if and when we get some proposals that may come before the Recess.

In what has been a long—perhaps inordinately long—municipal career, my most rewarding period was when I served as chairman of the social services committee of my council for four years in the 1970s. We managed to transform the provision of social services, at that time including children’s social services, since hived off—in my view, perhaps rather unfortunately —in a way that would now be impossible, given the financial situation. This is therefore a matter that is very close to my heart and, of course, to the hearts of many others.

It is disturbing that, as we have heard from my noble friend Lord Warner and the noble Lord, Lord Best, the financial situation is deteriorating really quite rapidly in the face of substantially rising demand, produced in part by demographic change, and in part by the advance of medicine and care. Younger people with physical and learning disabilities are living longer and elderly people are living longer, and we must be glad of that but, as we have heard, it imposes considerable pressures on services and budgets. We have heard some of the data on that this afternoon.

It is often assumed that we are talking largely about the older population. That is not the case because younger people with learning disabilities are growing fastest in terms of numbers and in terms of the costs that have to be met to care for them. The Local Government Association’s projections are that the percentage of expenditure on younger people will rise substantially—indeed, more than for the elderly. The cost of care for that particular group is expected to rise by 42% by the end of this decade. As the noble Lord, Lord Best, has pointed out, that ultimately could lead to virtually the entirety of local authority budgets being devoted to adult social care of all kinds. In any event, the LGA estimates that if current demand, which is likely to develop, were to be met in full, funding for all other services would drop in cash terms, assuming a level playing field, by 66% or 80% over that period, so we are talking about a very large potential gap. The consequences of some of the savings that have been referred to by my noble friend and the noble Lord, Lord Best, are rather worrying. The financial pressures on providers of residential care are causing considerable difficulties.

--- Later in debate ---

[Baroness Hanham]

My Lords, the problem of adult social care does not rest with the local authorities alone. The noble Lord, Lord Beecham, has already pointed out that there is a similar responsibility on the National Health Service. If this problem had been capable of being resolved, it would have been by now. I recognise the noble Lord’s frustration coming to this Bill as a result of his work on the Dilnot commission, and I understand it fully. However, everybody here will be aware of the ongoing discussions every time you turn on the radio or television. There was another discussion last night on “Newsnight” on these serious problems, which are, at the moment, more or less intractable. The last thing I want to do is to try a light touch on this. I appreciate fully that this is a very serious matter, but so do the Government. The Government are wrestling with this, like previous Governments did. If the noble Lord was dealing with social services in 1970 and was then leader of a council, he and I at both stages were dealing with having to reduce expenditure and increase and toughen criteria.

This has long been a problem and it has gradually got worse because of the demographics and the general increase in costs. We are now against the background of an enormous deficit—which was not the responsibility of this Government but which we are having to deal with—which is not helping the situation either. As I said at Second Reading when the noble Lord, Lord Warner, brought this up, the Government—as he and others know—are committed to publishing a White Paper shortly that goes across both departments. I confirm that my department is in regular touch with the Department of Health about it. The White Paper will set out the plans to transform care and support. I recognise very clearly that this is beginning to absorb an enormous amount of public funding.

Clearly, the battle is to decide whether any personal contributions have to be made or whether there are other routes. If you are forcing people to sell their houses, you are in very difficult territory. I understand the reason the noble Lord, Lord Warner, brought this up. I am not going to accept the amendments for the reason that this is not solely a part of local government and it is certainly not a part of what we are discussing at the moment. I only add that the Government have already allocated an additional £7.2 billion over four years to adult social care, so we are not pulling back on our commitment to it. We are very much committed. We now have to wait for the White Paper. I very much hope that the noble Lord will not return to this at a further stage.

[Lord Warner]

Well, my Lords, that was all very interesting from the Minister. I suppose I thank her for it. I am not sure that I was very convinced by any of it. To get it on the record, this Government set up the Dilnot commission. They encouraged us to produce a report within 12 months, which we dutifully did. It is now 12 months since we reported, and there has not been a peep out of the Government about what they want to do. I do not mind if they do not like it, but they might have had the decency to suggest another approach that they would like. However, what we have had is silence and all the signals—from the cross-party talks and elsewhere—are that what we will get next week is a White Paper and a draft Bill that will be extraordinarily silent on the subject of money. I am a very patient sort of chap. I am very happy to wait until I see this document and what the arguments are and to consider it over the Summer Recess. I do not approach that with any great optimism. I am happy to withdraw the amendment on this particular occasion but I do not give any assurances to the Minister that I will not come back to this on Report, refreshed after the Summer Recess.

Amendment 56 withdrawn.