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Robbing Peter to pay Paul: cash to shore up social care

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Commentary on today’s local government finance settlement

Certain conventions are almost always followed when significant parliamentary announcements are made. Failure to comply with them generally indicates either political skulduggery or some behind-the-scenes crisis.

So it was notable that there was no conformity with normal procedure when Sajid Javid delivered the local government finance settlement today.

The protocol of giving the Opposition the statement in advance in good time to make a considered response was not adhered to, nor was the usual procedure of all related papers being published online as soon as the communities secretary had finished delivering his statement.

Speaker John Bercow was perturbed, describing the failure to assist Labour as “a discourtesy, not only to the Opposition, but to the House” and “a departure from a very long-standing and almost invariably adhered to convention in this place”. So grave was the crime that he had considered spending the session.

LGC is surely not alone in believing this intrigue potentially pointed to a last minute dash to agree the numbers. Could it be that the papers were not given to Labour or ready to be published simply because they were being rewritten up to the last minute?

We already have a fairly clear idea of some of the battles that have recently raged. Local Government Association chair Gary Porter (Con) has said he believes Mr Javid is on councils’ side in the battle to get more resources for social care but some of his cabinet colleagues are hostile. Downing Street slapped down the sector’s hopes of extra resources, with the PM’s official spokeswoman on Monday saying the social care crisis was “to do with management” and variation in local government performance, rather than a lack of money.

One source told LGC that as late as yesterday they had been led to believe there would be a more significant shift of resources away from the new homes bonus towards funding social care. It may well be that the battles continued right to the last minute.

The settlement confirmed councils can levy a social care precept of 3% on council tax bills, one percentage point more than at present. However, the precept will be capped at 6% over the next three years so, as Mr Javid noted, “by 2019-20, hard-working families will be paying less council tax in real terms than they were when we came to power”.

It also shifted £240m from the new homes bonus to social care. The bonus, intended to encourage councils to allow more building, will be paid only on housing growth above a 0.4% growth baseline for each area. Meanwhile, the number of years over which legacy payments are paid will be cut from six to five, then eventually four years.

In the ensuing debate Mr Javid had a notable response to Sarah Wollaston, the Conservative chair of the Commons health committee, when she said that although money would be “brought forward”, the government was not “going far enough” to address demographic pressures.

“I think I am correct in saying that my hon. Friend used the words ‘bring forward spending’,” the secretary of state said. “Today’s announcement on adult social care does more than just bring it forward; it is a real, significant increase in spending of £900m.

“It is, significantly, new money, not just bringing forward spending. I know that she will welcome that clarification.”

LGC has so far failed to understand how Mr Javid can make this claim. The precept money is surely ‘brought forward’; only the new homes bonus cash can be said to be new – and, of course, it is not new money to local government, only reallocated to social care. Many councils – including many in very difficult financial positions – will be losers. A Department for Communities & Local Government paper used the term “recycling” to describe how money was being moved around the system.

Ms Wollaston was unconvinced by Mr Javid’s claim, tweeting that she was “not convinced that local gov settlement is new money, it brings some of it forward but doesn’t grasp seriousness of the shortfall”.

She was not alone. Local Government Association chair Lord Porter described the changes to new homes bonus as offering “not new money but a redistribution of funding already promised to councils”.

Society of Local Authority Chief Executives & Senior Managers president Jo Miller said the government was “robbing Peter to pay Paul”. Sevenoaks DC leader Peter Fleming (Con) agreed, noting in his case he was being robbed to offer more resource to Kent CC leader Paul Carter (Con).

So where does all of this leave us? In a pretty bleak place. Social care will remain hungry for resources; the underlying questions have not been tackled.

A series of sources have told LGC how seriously the social care crisis was being taken at the highest levels of government. However, this has not translated into significant action. Budgets have been juggled unconvincingly.

The headline of the DCLG’s announcement of “continued long-term funding certainty for councils” does sort of ring true – but only if you view it in the context of councils being given the certainty that social care will continue to be grossly underfunded.

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