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Council Tax: Social Care Precept - Question

– in the House of Lords at 3:06 pm on 20th April 2016.

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Photo of Baroness Barker Baroness Barker Liberal Democrat Lords Spokesperson (Voluntary Sector) 3:06 pm, 20th April 2016

To ask Her Majesty’s Government how much revenue they estimate will be generated in 2016–17 by local authorities using their power to increase council tax to offset the cost of social care.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

My Lords, on 31 March 2016 the department published national statistics on council tax levels in England for 2016-17. This reported local authorities’ estimates that they would receive a total of £381.8 million in receipts for the adult social care precept in that financial year. One hundred and forty-four of 152 eligible councils chose to set the precept of up to 2%. The precept will raise up to £2 billion by 2019-20.

Photo of Baroness Barker Baroness Barker Liberal Democrat Lords Spokesperson (Voluntary Sector)

I thank the Minister for that Answer. This policy already favours those local authorities which have higher-value properties. Eight councils have decided not to raise the precept, so the Chancellor’s projection that this policy will generate an extra £2 billion between now and 2020 is already unravelling. Will the Government increase the better care fund for this financial year so that people in poor communities will not lose services and end up having to turn to the NHS?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

My Lords, the Government recognise that the local government settlement is challenging. Consistent with our approach to give local authorities more control over their own destiny, we are giving important new flexibilities which reflect concerns that councils have shared with us. We recognise that some councils with a low council tax base in the poorer communities will not benefit as much. That is why the better care fund, which the noble Baroness has mentioned, on top of the adult social care precept, will provide £1.5 billion by 2020. With this, importantly, average spending power per dwelling for the 10% most deprived authorities is around 23% higher than in the least deprived authorities.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Housing), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

My Lords, I declare my local government interests. In Newcastle, which is suffering a cumulative loss from government cuts and cost pressures, not least in relation to social care amounting to £332 million, a 2% social care precept will raise £1.7 million. The welcome increase in the national minimum wage, which is not of course the same as the national living wage, will cost £4.5 million a year, such that over the next three years there will be a shortfall of £9.5 million. Given that the 2% increase benefits councils in better-off areas, with more people in the higher tax bands and less need for supporting social care, when will the Government recognise that it is necessary to ensure that the funding of social care ought to reflect both need and the relative yield of local taxation?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

My Lords, I have already addressed the important question of proportionality, which the noble Baroness raised. The Government have put in place a total package of £3.5 billion which will be available by 2019-20. That package is greater than the local authority associations’ £2.9 billion estimate, set out in their spending review submission.

Photo of Baroness Shephard of Northwold Baroness Shephard of Northwold Conservative

My Lords, my noble friend described the situation for local authorities as challenging, which indeed it is. What encouragement are the Government giving at local level to social services and health departments to merge their services? My noble friend will know that an extremely successful initiative along these lines has been going for at least a decade in Torquay. I feel, and I think that many Members of this House with great local experience will agree, that encouragement for such a merger would help to make the best of scarce resources.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

My noble friend is right that councils have worked very hard over the past five years to deliver a better deal for local taxpayers, and that the important thing is to keep council tax down while satisfaction with local public services must be maintained. However, further savings can be made when councils account for one-quarter of all public spending. There is much that can be done that is appropriate in terms of merging services, as my noble friend has said.

Photo of Baroness Armstrong of Hill Top Baroness Armstrong of Hill Top Labour

My Lords, will the Minister reconsider dealing with this simply with a national perspective? Following Parliamentary Questions that I have tabled, if he looks at the north-east as a whole, he will see that not only is it that not a single local authority would raise through the 2% precept enough to cover the minimum wage for the number of people who are publicly dependent for social care, but the better care fund will not be anything like sufficient to supplement the 2%. We have incredibly unequal and unfair distribution across the country. Will he commit to ensuring that the Government address this issue urgently so that vulnerable people are not put at risk by this global policy that does not address separate need, particularly in the north-east?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

My Lords, I think I have already made it clear that the Government are taking action. For example, local council tax support is also available to help the vulnerable, and £3.7 billion was provided for that support in each of the last three years. I should also say that, looking particularly at certain groups such as the disabled, we have provided £500 million. That will be available by 2019-20 over those years for the disabled facilities grant, which is more than double what is spent at the moment.

Photo of Baroness Thornhill Baroness Thornhill Liberal Democrat Lords Spokesperson (Communities and Local Government)

There is concern across the House about the crisis in social care. The spending review stated that the Government have,

“a preferred option for savings of at least £800 million”— from the new homes bonus—

“which can be used for social care”.

Will the Minister provide reassurance that if such savings are not met, that will not impact on the already promised £1.5 billion for social care by 2019-20? Or is it perhaps time that the Government let local authorities make their own decisions about spending in their own areas, and that we got rid of caps and referenda so that local authorities could raise the money for their own needs?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

We have consistently made it clear that we believe it is right to devolve responsibility down to the local level, to allow people to make their own decisions and for authorities to decide themselves what their needs are. That is a very important point for devolvement.

Photo of Baroness Buscombe Baroness Buscombe Conservative

Will my noble friend accept that care delivered to the home relies to a large extent on the private sector, and that more and more companies in the private sector that have been delivering this care are now finding it completely unviable to continue? In that case, as the noble Baroness who asked the Question in the first place has suggested, it will create much more pressure on the already very stretched NHS.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip)

My noble friend makes an important point. It is true that we are very aware of the increased need over the coming years, not just the next five but the next 20 or 30, to look after our older people. One of the issues is to aim to allow people to live independently and a lot of resources are going into helping with that, which takes some of the pressure off the NHS.