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31 Jan 2007 : Column 300

So the worries that we expressed proved to be well-founded. I would be grateful if the Minister told us whether the Government will make good on the guarantees given at the Dispatch box.

Mr. Neil Turner (Wigan) (Lab): My point relates back to the concessionary bus travel scheme, and the elements of it that the hon. Gentleman said had been imposed on local governments by the Government. Is he saying that the Conservative position is not to fund those schemes—in other words, to scrap them altogether——or is it to put more money into them, so that the council tax payer does not pay for them? If it is the latter, is he giving a commitment that a future Conservative Government would fund local government more heavily than this Government do?

Mr. Pickles: The hon. Gentleman is trying to pin me into a corner, but if he wants to succeed in doing that, he will have to be a lot more subtle about it. If he is advocating putting schemes together and not paying for them, well, that is the system that exists now. We are clear that, if we were in government—and we soon will be a Government, sitting across the Chamber on the Government Benches—when we decided to impose a scheme on local government, we would be mindful that there should be no transfer of costs on to the council tax. We would ensure that, if we passed on a burden, it would be funded, and transparently so.

Mr. Woolas rose—

Mr. Pickles: If the Minister is about to announce that the £43 million mentioned by Elton will go back into local authority coffers, I will gladly give way to him.

Mr. Woolas: Will the hon. Gentleman confirm the policy announced by his party leader at the Local Government Association conference last summer, which is that under a Conservative Government, there would be no ring-fencing of grants to local government? If that is the policy, how can the hon. Gentleman possibly give the commitment that he has just made?

Mr. Pickles: The way in which local authorities deal with money, once it is handed over, will be a matter for them, but they currently have the worst of both worlds. They have been passed burdens, but no money. We propose to pass the money on to them, if we agree a burden, and we propose that they decide whether they could do things cheaper or better. The problem with the Minister is that he wants to control everything but, frankly, can manage nothing.

Mr. Graham Stuart (Beverley and Holderness) (Con): My hon. Friend may have just made my point. Labour Members are so used to a system in which everything is decided from the centre that they cannot release themselves mentally even to imagine what it might be like to allow local accountability, and for the House not to have Ministers making promises that they then do not provide the funding for, leading to greater stealth taxes, which have undermined the Chancellor’s reputation perhaps more than anything else.


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Mr. Pickles: My hon. Friend makes his point with his customary elegance, and I do not seek to enhance his comment in any way, because he made it extremely well. On the request to guarantee the £43 million, we notice that the Minister has not rushed to the Dispatch Box to announce that he will sign the cheque.

The importance of other settlements pales when compared with the importance to local government of next year’s summer spending review, which we touched on earlier. The Local Government Association produced a constructive document outlining the funding crisis facing local government, and it includes the No. 1 problem facing local government, namely the care of the elderly. I have a prejudice on the subject because of my experience as chairman of a social services department. Like many hon. Members present, I have seen at first hand the effects of a local shortage of dementia beds.

The number of people aged 85 and over has been increasing rapidly in recent years by almost 6 per cent. a year, with a growth in dependency and in the complexity of cases. A quarter of over-85s develop dementia, and a third of those need constant care and supervision. Some hon. Members on the Labour Benches seem to find that amusing. If a relative of theirs ever suffers from dementia and they see the deterioration, they may find it in their hearts to be a little more compassionate.

Further demand is generated as the NHS withdraws from service agreements, as the hon. Member for Richmond Park (Susan Kramer) noted. Nearly half of all councils have experienced a reduction in primary care trust funding for joint projects. To manage rising demands and costs, local authorities have increasingly raised the eligibility criteria. That is the most dramatic change that I have seen since I first became involved with the problem over 30 years ago. We have moved to a world where only those elderly people who are unable to perform most or all personal care or domestic routines receive support. Not surprisingly, the growing number of older people with increasingly complex needs is placing local authorities under pressure.

Local authorities have more than doubled their spending on care for older people in the past 10 years, yet Government funding for social care has not kept pace. The Local Government Association estimates that Government funding has increased by just 14 per cent. in real terms since 1997-98. Of course, if the same group of people qualify for nursing care, there has been a 90 per cent. increase in funding for the NHS. The figure demonstrates that social care is the Cinderella service of the Department of Health, as the Under-Secretary of State for Health so rightly said last year.

Mr. Slaughter: The hon. Gentleman makes a powerful case for social care. If, therefore, a council had cut £1.5 million by tightening the criteria, sacked all 166 of its home helps, had no assessment staff and had put up the cost of meals on wheels by 25 per cent. in order to cut council tax by 3 per cent.—50p a week—would he condemn it? That is what Hammersmith and Fulham council is doing.

Mr. Pickles: The hon. Gentleman makes his local point, but it does not diminish my argument that care of the elderly is in deep crisis because changes have occurred in funding and in the elderly population.
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When I became involved in social services many years ago, the kind of people in elderly persons homes were very different in character. We have moved further away from that. I believe the conventional elderly persons residential home will gradually disappear, to be replaced principally by dementia beds and more severe dementia beds.

The hon. Gentleman makes a political point, but we should be trying to achieve some degree of consensus because the problem is the most challenging that the Government and the Opposition face. With good will, I believe we could move towards consensus.

Mr. Mike Hancock (Portsmouth, South) (LD): Will the hon. Gentleman give way?

Mr. Pickles: The hon. Gentleman is noted for his tone of consensus.

Mr. Hancock: I am grateful to the hon. Gentleman, and I apologise for not being present at the beginning of the debate, as I was chairing a Committee. Does he share my view that the long-term care of dementia patients should not be part of the responsibility of local government? What is the Conservative view on that?

Mr. Pickles: I am not sure the hon. Gentleman is right. There are clearly some differences, particularly in respect of intermediate beds, where people spend some time in order to be assessed. The cost, which would normally be paid by social services, is paid by the state. I accept that there are problems with regard to the definition, which we need to consider seriously. However, we could make significant changes if we were more aggressive on joint commissioning, revisited the regulations on the joint registration of homes as between nursing care and social care, dealt with the training of people working in homes, and tried to find different ways of ensuring that when a care package is put together both sides can stick to it. There are lots of practical things that we could do to make a difference.

The hon. Member for Richmond Park talked about her local council, Kingston. I should like to give three examples of what the pull-out of funds from local authorities has meant in practice. Devon county council reports facing a £15 million budget shortfall in 2006. By 2026, there will have been a 73 per cent. increase in those aged over 85, with the cost of caring for somebody of 85-plus being twice the average cost of caring for someone aged 75 to 85. That is placing significant pressure on its budget. The London borough of Harrow has been forced to make a £9 million cut to avoid a financial crisis as a result of increased demand for social care and cost-shifting by the local primary care trust. Wiltshire county council has been forced to introduce a £7 million recovery plan to overcome a deficit in its adult and community services department following reductions in NHS funding.

Care for the elderly is challenging not only financially but emotionally. At times, it can be heart-breaking. Its effects permeate society far beyond the immediate family. The crisis in elderly social care has long been predicted, and its arrival is not in dispute. Any civilised spending review must put it at its very heart the care of the elderly.


31 Jan 2007 : Column 303

Madam Deputy Speaker: Order. I remind all right hon. and hon. Members that Mr. Speaker has imposed a time limit of 10 minutes on all Back-Bench contributions.

4.47 pm

Mr. Eric Illsley (Barnsley, Central) (Lab): In keeping my remarks very brief, I make the same complaint as I made last year. In a three-and-a-half hour debate, the Front Benchers have taken up just over an hour. The wind-ups will probably take another 20 minutes, so almost half the debate has gone in Front-Bench contributions. I keep banging on about that every year, because it demeans our debates. We could do with a much longer period to debate local government finance, which is an important subject.

My first point concerns the second year of damping in relation to social services. The Minister has already said that he is not willing to change his mind on that, but I make no apology for raising it with him again. The SIGOMA group has had several meetings throughout the year with him—I am grateful to him for attending them—and with his colleagues to try to make the point that this represents a substantial amount of money. Year after year, it seems that we cannot get these formulas right. The damping mechanisms or the ceilings and floors mean that some authorities gain and some lose out, while those that really need the money are deprived of it for three or four years until the mechanisms correct the anomalies. I have been in the House for almost 20 years, and every year we have seen some form of adjustment mechanism for the grant.

The figure of £238 million was mentioned in relation to the SIGOMA group. For an authority such as mine, that would equate to about £10 million—a substantial amount of money that would perhaps enable us to adjust our council tax, if not in the same way as Hammersmith. My hon. Friend the Member for Ealing, Acton and Shepherd’s Bush (Mr. Slaughter) will no doubt return to the cuts in services in Hammersmith that he mentioned earlier. People in Barnsley are looking at what is happening in Hammersmith, where they see the reduction in council tax and begin to wonder whether we are again in a situation whereby the money is flowing south.

As has been pointed out, the revenue grant savings made because of the business grant this year—the £1 billion figure—could have been funded equally easily by removing the damping to the tune of £238 million and giving the money to the local authorities that need it.

We are not talking about profligate authorities here. Barnsley is a well run authority, as most metropolitan authorities and, indeed, most authorities in the country are. It is always looking to improve its performance. For example, on Monday this week, Barnsley council hosted a seminar for local authorities from all over the country. At that seminar—this is wizard for a former coal-mining authority—it passed a declaration that in future any council-owned premises in the authority will be heated by wood burning. We have been wood burning now for some time and we have won awards for it. Apparently, we have already met—in fact, we have surpassed—our 2060 targets for environmental cleanliness. The money that Barnsley has saved, thanks to some innovative ideas, has been quite substantial over the past 10 or 12
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years. That is why I say that these are forward-thinking authorities, doing their best to save money and provide good services.

The knock-on effect has already been mentioned by the hon. Member for Brentwood and Ongar (Mr. Pickles) when he spoke about care issues. We have joint partnerships with our primary care trusts in Barnsley. Until the recent reconfiguration we had the biggest PCT in the country, though I am not sure that that is still the case. The Minister mentioned that local authorities and PCTs should be striving to balance their books. My PCT would have balanced its books for this financial year end, but it had to pay a £7 million levy to fund authorities in deficit—namely, Sheffield, which had substantial deficits. Thus £7 million has gone out of the PCT and the partnership funding. If the local authority is at the same time being squeezed on funding that should be made available, especially for social services, we face something of a double whammy in that the money is being squeezed at both ends of the partnership. I repeat the point that Barnsley PCT is still not funded at its target. I think that we are now at 97.5 per cent. and we are being funded less and less in relation to the target every year. Those are the two main points.

I have already alluded to the case of Hammersmith. I will say no more, as I hope that my hon. Friend the Member for Ealing, Acton and Shepherd's Bush will make his points, but it is worth mentioning the continual argument between authorities in the north and authorities in London. Quite a number of London authorities have the same needs and assessments as authorities in the north. The requirements are similar, so there is no easy argument about money going into London, depriving the north. We should stop making statements about money that London needs going to northern authorities—or vice versa. That is not the case; it is obvious that there are needs on both sides. I have not always taken that much notice of the issue, but if London authorities can afford to stage the 2012 Olympics, they cannot be doing too badly.

Rob Marris (Wolverhampton, South-West) (Lab): No, you are going to pay.

Mr. Illsley: I can give a commitment now: we are definitely not going to pay for that, which is well off the agenda. As I said, London authorities had the money to pay for the Olympic games bid, so they cannot be doing too badly.

One issue that affects my area is the building schools for the future programme. We are looking at a huge programme of school rebuilding in my constituency. Every secondary school will be demolished and a number of them will be rebuilt. Every school place at secondary level will be—

Rob Marris: It is being done with wood.

Mr. Illsley: All fuelled by wood! It is a substantial programme and a huge commitment for the local authority. Given recent pressure on available funding, I would like the Minister to confirm that the programme will still go ahead.

Mr. Graham Stuart: I share the hon. Gentleman’s frustration that Sheffield, which is already given more money than its needs assessment dictates, overspends, resulting in £8 million being top sliced from the budget
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for the East Riding of Yorkshire. He contrasted the north with London. Does he also accept a comparison between urban and rural areas? I am delighted that schools will be rebuilt in his constituency, but my area, which bears major costs in sparsely populated parts of the countryside, is not getting the investment in education that it needs. Does he support a better balance between the countryside and urban areas?

Mr. Illsley: I take the hon. Gentleman’s comments on board. He and I lobbied the Yorkshire and the Humber strategic health authority on such issues. I hope that he will have the opportunity later to make those points in detail.

I hope that the Minister can reassure us about the building schools for the future initiative.

The equal pay single status issue has been raised with the Minister on several occasions. Again, it will create huge costs for local authorities the length and breadth of the country. I hope that he will deal with that when he sums up.

I hope that the Minister will also make a commitment to retaining the neighbourhood renewal fund because it has an impact on the other services block. It is important for a metropolitan borough such as mine, where the majority of the funding is spent on education and social services but, in survey after survey, the majority of the people ask why they cannot have clean streets and better services, recycling and so on.

I should like to lobby the Minister on the local authority business growth initiative. My local authority will not qualify for funding from that until perhaps year three. If he removes the damping measures in year two of the initiative, will he do the same in year three, thus ensuring that the funding is still available for local authorities such as mine, which qualify at a later date simply because our rateable income from business properties has not been substantial in the first two years?

4.57 pm

Tom Brake (Carshalton and Wallington) (LD): Just as my hon. Friend the Member for Cheadle (Mark Hunter), who opened the earlier debate for the Liberal Democrats, thanked the police for their hard work and commitment, I shall do the same for those who work in local government—not only because my wife works there. They are more likely to receive brickbats than plaudits, and we should acknowledge that they provide vital services, which make a genuine difference to our quality of life and local environment. Local government has responded year after year to requests for efficiency savings. Indeed, it does that much more effectively than central Government.


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