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.
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