Sir George speaks for Hampshire
31 Jan 2007
Speaking in the annual debate on grants for local councils, Sir George took issue with the Government for the burdens it had placed on Hampshire, without giving it the resources to discharge them.
Text from Hansard below:

Sir George Young (North-West Hampshire) (Con): It is a pleasure to follow my successor but one as Member of Parliament for Ealing and Acton. I recognise the expertise of the hon. Member for Ealing, Acton and Shepherd’s Bush (Mr. Slaughter) in local government finance and I understand his anger. When he was first elected, the London boroughs of Ealing and of Hammersmith and Fulham were both controlled by the Labour party. After six months of my party being led by my right hon. Friend the Member for Witney (Mr. Cameron), the hon. Gentleman finds that both those local authorities have had a change of control to the Conservatives. As I understand it, the Conservatives locally stood on a manifesto of reducing the council tax. They won, and they are honouring the commitment that they made.
I listened in respectful silence to the Minister as he introduced the debate and described a revenue support grant settlement that seemed more and more remote from the one that I was looking at in Hampshire. I realised that he had lost contact with reality when, in his peroration, he described the settlement as revolutionary and then sat down. It is possible to seek to defend the settlement in the terms that he did, if one looks at it as a snapshot. If, on the other hand, one views it as a movie, as my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) did, and in perspective, it is much more difficult to defend it.

From the point of view of Hampshire, we are in the 2.7 per cent. club, which has several members. As the hon. Member for Carshalton and Wallington (Tom Brake) said, 2.7 per cent. does not begin to cover inflation, let alone the rising costs of, for example, adult social care, about which I shall say more in a moment. That low increase in the formula grant is even more difficult, as it follows a settlement for the current year that amounts to 0.2 per cent. once the one-off grants have been stripped out.

In addition, Hampshire county council’s grant for supporting people has been frozen at just below the level for the current year, so it finds itself between a rock and a hard place: if it puts up the council tax by more than 5 per cent., it gets capped; if it continues to make efficiency savings—as it will—there will still be a gap of £10 million, which the council will have to fill by making some very unpalatable decisions. It is unsustainable for the Government to continue to provide grants such as this one while still expecting rises of below 5 per cent. in council tax, with no effect on services.

The Minister accused Opposition Members of waving shrouds, but I refer him to the report from the Commission for Social Care Inspection that was published in December. It deals with the very difficult decisions that social services departments already have to make. The report was very balanced: it paid tribute to the Government for some of the things that they have done, but it also identified real cause for concern in a number of areas. It found that a third of homes did not meet the required standards for the management of medication or operate safe working practices, and that a substantial number of home care services are failing standards on the recruitment and supervision of staff. It mentions the juggling that local authorities are having to undertake, and the fact that they are having to tighten eligibility criteria. It also notes that there are question marks about the advice and support available to clients and carers excluded from funded care.

The CSCI report highlights five groups of people who give rise for concern: those not using council services but in need of information and support; the carers, relatives and friends who carry the cost of ever tightening eligibility criteria; those who lack choice in respect of services or the people who deliver home care; those whose service standards are unacceptably low,
and those with special complex needs that are not being met. All the evidence is that the problems are going to get worse.
Ministers respond by saying that there has been a39 per cent. real increase in funding for local authorities nationally since 1997-98, but expenditure by local authorities has had to rise by 50 per cent. in that period, in direct response to Government spending plans and to service pressures. As a result, the increase is not as generous as we are told.

The Local Government Association says that funding from the Government for services other than schools and specific grant priorities has increased by only 14 per cent. in real terms. That contrasts with the 90 per cent. increase given to the NHS.

I welcome increased investment in the public services, but one has to compare the very generous treatment given to a service for which the Government have direct responsibility, with the rather miserly funding of services for which local authorities have responsibility. That is especially important in respect of where the two services overlap, which is in social services.

My second point has to do with damping, the mechanism introduced by the Government to prevent sharp adjustments in grant distribution as we move from where we are to where the Government think we ought to be. Is it a floor, or is it quicksand? In Hampshire, £38 million—or 30 per cent.—of our formula grant is at risk as a result of the damping mechanism. The Minister talks about the certainty that multi-year agreements will bring, but that is undermined by the medium-term uncertainty about how the damping mechanism is to unwind.

I was not greatly reassured by the exchange at the start of the debate between the Minister and the right hon. Member for Birkenhead (Mr. Field). It would be helpful if the Minister, when he winds up, will confirm that the grant floor will be a permanent part of the formula grant allocation, and that the £38 million will not be removed.

A moment ago, I mentioned residential care. There was a very good debate in Westminster Hall on17 January on public funding for residential care, about which hon. Members of all parties expressed their concern. It emerged that the pressure on funding means that social services now intervene only when a client reaches a substantial or critical level of need. The Joseph Rowntree Foundation estimates that care homes are underfunded by £1 billion. In the CSCI report, Denise Platt mentioned that primary care trusts and local authorities are increasingly withdrawing from pooled budget arrangements, owing to pressure on funding. Prevention and early intervention are being squeezed out. We need a step change in funding for those services if the quality of care that we all want to see is delivered.
The Minister might care to read what his colleague, the Under-Secretary of State for Health, the hon. Member for Bury, South (Mr. Lewis), said about his aspirations when he wound up the Westminster Hall debate. The hon. Gentleman said:
“The first point is that older people in this country are entitled to be treated with dignity and respect. They are a generation that worked hard to build this country, and a fundamental sign of a civilised society is the way in which it treats older people.”—[ Official Report, Westminster Hall, 17 January 2007; Vol. 455,c. 331WH.]

Can the Minister tell us whether his colleague’s ambition will be realised if we continue down the path of underfunding for social services that I have described? The number of people with learning disabilities is increasing by 2 per cent. a year in Hampshire, and as care packages become more sophisticated their cost is ever higher. The funding formula does not recognise that need.

My final point is about the sustainability of the system by which we pay for local government. The council tax is like an old bridge with a weight restriction. It was designed to carry the pressure of council tax bills of three figures, but not of four, so it is creaking. There is something unsustainable about the regime we are being asked to approve this evening. On each occasion, the Government defer a difficult decision, but the time for drift is coming to an end; it is time that the Government took a grip on local government finance and found a sustainable way of funding it which recognises the responsibilities that fall on local government. I hope that in a year’s time we shall have a different debate—one with a greater degree of realism.

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Copyright Sir George Young Bt. 2015