[Relevant documents: Second report of the Levelling Up, Housing and Communities Committee, Long-term funding of adultsocial care, HC 19; first joint report of the Health and Social Care Committee and the Housing, Communities and LocalGovernment Committee of Session 2017–2019, Long-term funding of adult social care, HC 768; correspondence from the Chair of the Levelling Up, Housing and Communities Committee to theSecretary of State, on the Government’s response to the Committee’s report on the Long-term funding ofadult social care, reported to the House on 20 February 2023; and correspondence from the Minister for Local Government and Building Safety, on the Governmentresponse to the Committee’s report on long-term funding of adult social care, reported to the House on 7March 2023.]
Motion made, and Question proposed,
That, for the year ending with 31 March 2023, for expenditure by the Department for Levelling Up, Housing and Communities:
(1) the resources authorised for current purposes be reduced by £2,074,000 as set out in HC 1133,
(2) the resources authorised for capital purposes be reduced by £2,428,760,000 as so set out, and
(3) the sum authorised for issue out of the Consolidated Fund be reduced by £4,454,598,000.—(Lee Rowley.)
I thank everyone concerned for the opportunity to lead this debate on behalf of the Levelling Up, Housing and Communities Committee. Adult social care is an important issue, which the Committee has come back to on several occasions.
Last year, we produced another report on long-term funding for adult social care. We were happy to receive letters, in the last couple of days, from the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for North East Derbyshire (Lee Rowley), and the Minister for Health and Secondary Care, the hon. Member for Colchester (Will Quince), both saying why they have not yet responded to the report that was produced around nine months ago.
As you know, Mr Speaker, the advice is that Government should respond to Select Committee reports within eight weeks, so eight months seems rather a long time. I know that there have been quite a few changes of Minister during that period, so perhaps that explains some of the delay. If this was just a one-off, it would probably be excusable, but the Select Committee rarely gets a response within months, let alone weeks, of a report being produced, which is a little frustrating when we have put so much effort into them. We have not even had a proper response to the joint report that we produced with the Health and Social Care Committee back in June 2018—almost five years ago, which must get near a record for non-responses to Select Committee reports. The Health and Social Care Committee has also done its own reports into these matters, as have many reputable organisations, such as The King’s Fund.
Given the nature of the debate, I will concentrate on the impact on local government funding. Although social care, as a responsibility, lies with the Department of Health and Social Care, it is ultimately delivered through funding from local councils. I want to concentrate on the challenge that that poses for councils. This is not a new matter and is not without a lot of commitments. Only last year, the right hon. Member for South West Norfolk (Elizabeth Truss) said that she would spend £13 billion raised by the levy on social care. Well, the levy seems to have disappeared into other uses, as has the £13 billion.
Will my hon. Friend reflect on the fact that, when local authority spending on social care is squeezed and the demand goes up, as he describes so well, the work of caring is then passed on to unpaid carers, such as the parents of the people with disabilities he talks about? Last week, the King’s Fund reported that the number of unpaid carers receiving direct support from local authorities fell by 7% from 2020 to 2021. Does he agree that unpaid carers are being failed by this squeeze and the inadequate local authority funding, and that the Government need to do more to improve that and ensure that carers are properly supported?
That is a great point from my hon. Friend. We recognise that that care is generally provided with a lot of love and commitment from people who do it, but very often they will reach breaking point without the additional support from local authorities, such as respite care. Families say to me, “If only I could just have a week where I could go away and relax a bit, knowing the person I am caring for is being looked after, that would make an enormous difference.” Sometimes that does not exist anymore, so that is an important point.
The hon. Gentleman is giving a very clear explanation of local government funding, and I would expect nothing less from the Chair of the Select Committee. However, there is another issue he has not yet covered in his speech, and I am not sure whether he plans to: does he agree that another problem is the other source of income for local government, non-domestic or business rates? I well remember a certain hon. Lady from the Opposition saying in the Select Committee that we are going to get to a position where the non-domestic rates are paying for social care. Is that the right way to utilise business rates?
The hon. Gentleman makes a good point, and he has been through some of those discussions on the Select Committee—I think the County Councils Network also made that point strongly to us—so he is absolutely right. I was not going to go too much into the long-term reforms of local government funding, but as a Committee we have said that there is a real challenge with the reforms of both council tax funding and business rates, and we have produced reports on that. There is not a clear linkage between how much money a council might get in from business or non-domestic rates and how much demand for social care is going up. Demand for social care is going up that much faster and the tax base needs to be adapted to recognise that, so his point is an important one.
To some extent, that demand is being met by tightening the rules on exemptions. More and more people who would have got social care in the past do not get it now. Age UK says it is 1.5 million—an estimate, but probably not an unreasonable one. There is also less prevention work going on, which means that people who have small needs to help them live in their homes do not get those needs addressed until they become serious needs. Then they end up in hospital, which is much more expensive and a much worse outcome for the people concerned. It results in more pressure on the NHS, more cost and a less good service.
On the other hand, there is the pay and conditions for care staff. People doing the same job in care get less money than people in the NHS. That is true of nurses, for example, where we can make direct comparisons. We know that up to half of care staff tend to leave within a year, and many are on zero-hours contracts. There have been repeated requests for a long-term workforce plan. There has rightly been a request for a long-term plan for the health workforce, but we need one for the social care workforce as well. I think that the Chancellor, the right hon. Member for South West Surrey (Jeremy Hunt), when he chaired the Health and Social Care Committee, argued that case very strongly, and quite rightly.
May I start by saying how delightful it is to see you back in your proper place, Madam Deputy Speaker? You are very welcome back.
I congratulate the hon. Member for Sheffield South East (Mr Betts) not only on instigating the debate but on much of what he said. He said that he wished to speak in a non-partisan way, and he approaches the subject as the Chair of the Select Committee, while I approach it as the chair of the all-party parliamentary group on adult social care. I found myself nodding in agreement with significant amounts of what he said, particularly the point about the need for long-term thinking and for a quite radical change in the way that we fund adult social care.
That is not just agreed across the House now, but has been for some decades. The hon. Gentleman went as far back as Gordon Brown. I can go back further: I have identified Tony Blair talking to the Labour conference in the 1990s, saying that social care was one of the big issues that he wanted to address in government. Here we are, a quarter of a century later, and we have got through it with a series of short-term efforts and sticking plasters. Long-term plans have been produced and promised but none of them has ever been put into policy. Throughout that quarter of a century of debate, the one thing that has been agreed is that the social care sector needs long-term funding.
The current Prime Minister and Chancellor have understood the importance of a long-term strategy and funding base for the sustainability of adult social care. Indeed, as the hon. Member for Sheffield South East said, the Chancellor was previously—by happy chance— Chair of the Health and Social Care Committee, and that Committee produced a number of reports setting out the need for an additional £7 billion a year for social care. I note that the hon. Gentleman has just doubled that to £14 billion.
I am sure that the figure will rise, not fall; we have only to look at the demographics of the over-65s. Regardless of the rising number of working-age people who require social care of one form or another, if the same sort of percentage of over-65s end up requiring care, the bill will go up by something like 80% over the next 15 years. It is certainly true that demands on the social care budget will rise rather than fall in the coming years.
Figures are bandied around, but I think that the figure is somewhere between £7 billion and £14 billion. It depends—the right hon. Gentleman is addressing this point properly—on whether we include the rise in demand, the need to have a real review of the workforce and pay, and the eligibility criteria. That is the way in which costs have been dampened in the past. We really need to revisit that whole issue.
The Government have, of course, responded to this issue in successive years, and have found extra central Government funds to pay local government, so we have proceeded from year to year, and although the system has been fragile, it has continued to operate. Of course, the background conditions are getting increasingly difficult. Inflation has an impact on social care providers. A cost of living survey done by social care provider MHA found that 94% of its community schemes had heard members or residents express concerns about the rising costs of living, and 49% of respondents said that the increased costs of transport specifically were a significant issue among their members. There is a danger that rising energy costs will significantly reduce the number of available services and have an immediate impact on discharge from the NHS into the community.
The Association of Directors of Adult Social Services has reported that nearly half of all directors of social care services are not sure that unpaid carers will be able to cope financially with the cost of living crisis, which could lead to further increased demand on paid-for social care services.
The right hon. Member for Uxbridge and South Ruislip (Boris Johnson) said:
“I am announcing now—on the steps of Downing Street—that we will fix the crisis in social care once and for all”.
Not to be outdone, the right hon. Member for Maidenhead (Mrs May) said that her Ministers
“will work to improve social care and will bring forward proposals for consultation.”—[Official Report, 21 June 2017; Vol. 626, c. 35.]
Let us go back a bit further. David Cameron said:
“A commission will be appointed to consider a sustainable long-term structure for the operation of social care.”—[Official Report, 25 May 2010; Vol. 510, c. 31.]
I will not just be party political in this, because Gordon Brown said:
“Alan Johnson and I will…bring…new plans to help people to stay longer in their own homes and provide greater protection against the costs of care.”
The one thing that Prime Ministers have in common over the years is that they all promise to deal with the problems and funding of social care. The other thing that they have in common is that none of them has actually done that, and that is something of concern and it is why we still have the problems today.
Let me put this in the context of local government funding. Local government has had the biggest cuts of any part of the public sector since 2010. The National Audit Office and the Library have produced some interesting figures, which are known to be authoritative. They have said that the cut in core spending power for councils in the decade after 2010 has been 26%. By comparison, the increase in funding for the Department of Health and Social Care has been 14%. So that is 26% down for local government and 14% up for the Department of Health and Social Care. I am not begrudging the extra spending on health, but, clearly, councils also do important work and that is not really reflected in the figures.
The reason for that cut in spending power is that the revenue support grant has fallen by 37% over that similar period. A 25% increase in council tax has helped cover some of that fall. Council tax spending as a percentage of total local government spend—the percentage funded by council tax—has gone up from 41% of local government spend to 60%. In other words, council tax has been going up as the Government grant has fallen, but the totality of spending has fallen as well.
Councils’ spending on social care—social care as a whole, including children’s care—has risen by 8.9% in real terms, but non-care spending by authorities has fallen by 32%. That is the knock-on effect—we must keep reminding ourselves of the consequences of this. Social care spending has now roughly risen from 50% of council spending to 60% over the period. Those are very dramatic changes in how councils spend their money.
Let us look at services such as planning. I know that they are important for the future of our country, for future growth and for regeneration. Spending by councils on planning has fallen by about 50%. That is a staggering fall. There have been similar falls in regeneration and economic development, which will be important for the levelling up agenda.
Let us look now at libraries, buses and street cleaning, which are important services that everyone tends to use in some way. They have all fallen by between 30% and 50%. The real challenge for local democracy—the Minister on the Front Bench has responsibility for local government—is that people are now finding that their council tax is going up by amounts that I have just described, but, if they or their immediate relatives do not use social care, they are seeing all the services that they receive fall. That is a fundamental challenge for local democracy—people pay more and get less. That is not defensible in the medium term, but it has been going on for 10 years now, and something has to give.
We might think, “Well, it’s alright as long as social care is sorted out,” but it is not, is it? Let us just look at the particular problems with social care and social care funding. Before the autumn statement last year, the Local Government Association said that it thought that about £7 billion was the shortfall currently. I appreciate that the Minister will no doubt advise us of all the goodies that were delivered in the settlement for the next financial year, and, clearly, there were some helpful increases of money, but not the £7 billion that local councils were looking for. The problem is that that settlement contains some of the elements of the problems that we have been experiencing for a decade or longer now. First, so much of the funding councils get is short-term. Yes, the better care grants and the social care grants are welcome, but much of it is on a one-off basis. Much of last time’s settlement was on a one-off basis, with the extra money coming in those forms of grants, together with the increases in council tax I mentioned previously.
We know there are two fundamental problems with increases in council tax: first, they raise far more money in the most affluent communities than in the poorest communities, and secondly, they are regressive—not my word, but the Secretary of State’s. I know the Minister has been charged with finding a solution to that problem. Good luck to him—we look forward to his report in due course, and we had an interesting dialogue with him in the Select Committee the other week. We are asking more from people on low incomes with proportionately lower house values, and giving less to the poorest communities through the increases. That is not the best way to fund social care in the longer term.
We know that, although funding has been going up, demand is rising. There are more unhealthy people in our communities, as we all know; we can see the figures for ourselves. Often forgotten, however, is the rising demand from people with disabilities. People with a whole variety of disabilities, both learning and physical, are living longer. Where they might have died in their 30s, they are now very often living into their 50s, to the point where parents who once looked after them can no longer help or support them. Those parents are worried sick about what will happen to their children when they no longer have that parental support available. That demand must also be met and recognised.
There is a question of pay: these are skilled people with a real commitment that should be recognised, and not at a minimum pay level. There should be a system with proper career progression and training, so that people can realise the benefits of their skills and commitments. There is evidence that the care market is broken, that many care providers have gone out of business or struggled over the years and that the level of fees in some areas probably does not reflect their costs.
Then, of course, we have the issue of people having to give up their homes to pay for their care costs. It is a complete lottery. If in the end someone finishes the last years of their life with dementia, much of the value of their home will go to pay for their care. If they finish their life by having a heart attack and dying, they do not pay anything towards their care. That is an unfair system and it needs to be addressed. The Dilnot reforms have been around for some time. They have been nearly started and then not started, and nearly started again and not started; I will refer in a couple of minutes to how we might take things forward.
How might we change things to improve them, then? This debate is not just about making complaints; it is about providing solutions. I accept that, and that is what the Select Committee is trying to do. One suggested solution is, “Well, just amalgamate it—let’s have one big service. Put it all in the NHS and it’ll all be all right.” I think most would say that the NHS has enough challenges at present without taking on another great challenge on top. What we do not need is another mass reorganisation affecting both health and social care, the cost of which would probably be a lot more than the cost of doing things any other way.
We should also remember that most people receiving care receive it not in a hospital or even in a care home, but in their own homes. The link that councils can make between their home service, providing adaptations and the like, and care, is key in that regard. The other thing I would say is that we cannot carry on relying on short-term fixes, with one-off grants here, one-off grants there, and a council tax system that is regressive and not fit for purpose, let alone for long-term funding of social care—or, as the hon. Member for Harrow East (Bob Blackman) said a few minutes ago, business rates, which bear little relation to demand for social care either.
I go back to the 2018 joint report with the Health and Social Care Committee, in which we said two things. We did a lot of work with the focus group on this question and spent a lot of time on weekends away in a hotel in Birmingham. What people said was, “If we knew the money was going to social care, we would happily pay more.” That is what happens in Germany and Japan, two countries that we looked at. We said, “Let’s have a social care premium.” Immediately, it might be said that that is not dissimilar to the Government’s proposed increase in national insurance rates. The difference was that, at the time, we said that we had to target any payments. There will be different ways of doing this, I accept, but there has to be a way of raising extra money for social care that neither comes from the current local government system, nor takes care out of local government.
We said that there should be a social care premium as a percentage of income, but that we would raise the bottom level so that the poorest people would not pay. We would increase the top level in the way that national insurance does not, so that people on the highest incomes would continue to pay, and we would include unearned income and higher-level private pensions, but we would also exclude the under-40s, as they do in Japan. We felt that people under 40 were probably getting the worst of the deal after the financial crash in terms of the impact on their finances. That is how we thought we could raise the funds, and it was agreed by the 22 members of the two Select Committees as a way forward.
What is sometimes missed, and what we also suggested, is that we have to deal with the issue of people’s homes being sold. I have to say to the Government that their arrangements to try to implement Dilnot are complicated and unfair. People may not pay until their assets reach a minimum level, but—and I have never heard a Minister address this point—the Government cap the amount that people pay in such a way that people with lower value houses pay a bigger percentage of their homes than people with the highest value houses.
Someone who has a home worth half a million pounds pays a much smaller percentage than someone who has a home worth £100,000. That is not fair, so our Select Committee said that a percentage should just be taken from everyone’s estate. Then, the people with the most would pay the most, and the measure would not be confined to people who need care. That removes the unfairness of people with dementia paying all or most of the value of their home while those who do not have dementia paying nothing. With a small amount of inheritance tax, or another way of assessing people’s estates, we could raise a lot of money and deal absolutely with the problem of people having to give up most of their home to pay for their care costs. That is certainly worth a look.
We need to find a long-term solution to the problem. It is not going to go away, is it? The number of elderly people will continue to grow; the number of people with learning disabilities will continue, quite rightly, to require more from our services. Councils said that the funding gap was £7 billion last year, but they have also said—the Health and Social Care Committee has addressed this, and other important think-tanks have confirmed it—that if we are to deal with the combination of problems, including the immediate funding gap, the need to address eligibility criteria and bring more people back into the social care system, the challenge to local government finance, and the need for a long-term workforce plan, the gap is probably about £14 billion. That is a big sum of money, and we cannot find it in the existing local government finance system, which cannot cope as it is.
If we carry on as we are, and demand keeps increasing with no improvements to eligibility or workforce pay, there will be a consistent further increase in the pressures on other local government services. There will be bigger cuts to libraries, buses, planning, street cleaning and so on. The public, in the end, will simply not stand for that. I say to the Minister: please, let us just have a bit of long-term thinking and recognise that this is a serious problem that will not go away. Local government funding, as it exists at present, cannot take the strain any longer. We need an alternative source of revenue, we need to keep social care linked in to the rest of local government services, and we need, of course, to develop better contacts with the health service. Money to deal with the problem of people sat in hospital beds when they need to be in social care is welcome, but all that is short-term thinking.
I say to the Minister—and, to be non-partisan, to the Labour Front Benchers—where is our plan for long-term care? Where is our recognition of the funding needs? How will we bring about change? Could we, as the Joint Committee said, just possibly get a bit of cross-party thinking on this for the future? Whatever solution we come up with, we need one that will work for the long term, not just for half a Parliament or for one Parliament.