Health and Social Care Budgets — [Mr Adrian Bailey in the Chair]

Part of the debate – in Westminster Hall at 10:02 am on 14th March 2017.

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Photo of Kevin Hollinrake Kevin Hollinrake Conservative, Thirsk and Malton 10:02 am, 14th March 2017

I congratulate Meg Hillier on securing this important debate. I would like to touch on three different elements of adult social care: the short, medium and long-term aspects of funding. In the short term, the Government have allowed revenue raising of nearly £14 billion since 2010; most recently, there was the £2 billion in the Budget. That was very welcome and has had an immediate impact on my constituency. North Yorkshire will see an extra £18 million over three years. While I very much appreciate that response to the various different submissions that have been made, I think that most people, including the Chancellor, accept that it does not provide a long-term solution.

The medium-term solution would be to look at business rates retention, which is coming down the line for 2020. A lot more money will be coming into the system, with £12.5 billion to local authorities. What bang for their buck the Government want for that, we do not quite know. The reality is that more money will be coming in, but the point has been made that the current distribution of local authority funding is not fit for purpose. There is no correlation between the need in local authorities and the amount of funding that goes in. It is based on an old formula—regression—and we need it to be based on cost drivers, which are around such things as age and deprivation.

We often fight the battle here between rural authorities and metropolitan authorities, but the battle we should be fighting is about the fact that the lion’s share of funding goes to London authorities. If we add up all the different elements, including the revenue support grant, business rates and council tax, total spending power in London is on average 40% higher than any other authority. Often those London authorities have lower need, younger populations and wealthier populations. There is no correlation, and I think we all want to see a fair system. I have nothing against London—it is a fantastic place—but I want a fair deal for North Yorkshire.

The other issue with business rates retention is the quantum. Will it grow to meet the need as need grows? The need is growing exponentially, and we need a longer-term solution. We have hugely increasing demand, and there needs to be correlation between need and the money coming in. In business, we always used to say when we came to such problems, “Ideas are ten a penny. We need a proven solution that is sustainable and scalable.” On our Select Committee visit to Germany, we saw that sustainable, scalable solution, which was delivered with cross-party agreement. I absolutely agree with the calls for us to tackle the issue on a cross-party basis.