The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Health. The Statement is as follows:
“Mr Speaker, with permission, I wish to make a Statement on the reform of social care. This coalition Government have from the outset recognised that reform of the care and support system is needed to provide people with more choice and control, and to reduce the insecurity faced by individuals, carers and their families. By 2026, the number of people over 85 years old is projected to double. Age is the principal determinant of need for health and for care services. It is estimated that in 20 years’ time, 1.7 million more people will have a potential care need than do today.
People often do not think about how they might meet those costs in later life. They assume that social care will be provided free for all at the point of need, but since the establishment of the welfare state this has never been the case. Currently people with more than £23,250 in assets, often including their home, face meeting the whole cost of care themselves. The cost of care can vary considerably and it is hard for people to predict what costs they may face. The average 65 year-old today will face lifetime care costs of £35,000. However, as the Commission on the Funding of Care and Support notes, costs are widely distributed: one in four will have no care costs, but one in four will face care costs over £50,000 and one in 10 over £100,000.
The lack of understanding of how the system works and the uncertainty about costs means that it is difficult for people to prepare to meet potential care costs and there are currently few financial products available to help them. This means that paying for care can come as a shock to many families and can have a severe impact on their financial security.
Change is essential. That is why we took immediate action by establishing the Commission on the Funding of Care and Support last July. It was tasked with making recommendations on how to achieve an affordable and sustainable funding system for care and support for all adults in England. In response to its initial advice, we allocated an additional £2 billion a year by 2014-15 in the spending review to support the delivery of social care as a bridge to reform. This represents a total of £7.2 billion extra support for social care over the next four years, including an unprecedented transfer of funds from the NHS to support social care services that will also benefit health.
Since then we have taken forward wider reform. In November last year, we published our vision for adult social care setting out our commitment to a more responsive and personalised care and support system that empowers individuals and communities, including the objective that all those who wish it should have access to a personal social care budget by 2013, and in May, the Law Commission published its report, after three years of work, on how to deliver a modernised statute for adult social care. Making sense of the current confused tangle of legislation to deliver a social care statute will allow individuals, carers, families and local authorities more clearly to understand when care and support will be provided.
Andrew Dilnot’s report comes at the same time as the final report from the palliative care funding review, which I received last week. Tom Hughes-Hallett and Sir Alan Craft have made an excellent start in looking at this complex and challenging issue. We want to see integrated, responsive, high-quality health and care services for those at the end of life. We will now consider the review team's proposals in detail before consulting stakeholders on the way forward later this summer. We will also consider how best to undertake substantial piloting, as recommended in the report, in order to gather information on how best to deliver palliative services.
We are also responding to events at Southern Cross, which have caused concern to residents in Southern Cross care homes and their relatives and families. We welcome the fact that Southern Cross, the landlords and the lenders are working hard to come up with a plan to stabilise the ownership and operation of the care homes. We have also been clear that we would take action to make sure there was proper oversight of the market in social care. That is why, through the Health and Social Care Bill, we are seeking powers to extend to social care the financial regulatory regime we are putting in place in the NHS, if we decide it is needed, as part of wider reform.
A central component of those reforms will be the long-term funding of care and support. Over the past 12 months, Andrew Dilnot, the chair of the Commission on the Funding of Care and Support, together with the noble Lord, Lord Warner, and Dame Jo Williams have engaged extensively with many different stakeholders. They brought fresh insight and impetus to this most challenging area of public policy. We welcome the excellent work of the commission and its final report. I would like to thank Andrew Dilnot, the noble Lord, Lord Warner, and Dame Jo Williams for the work they have undertaken. It is an immensely valuable contribution to meeting the long-term challenge of an ageing population.
The report argues that people are unable to protect themselves against the risk of high care costs, leaving people fearful and uncertain about the future. The commission’s central proposal is therefore a cap on the care costs that people face over their lifetime of between £25,000 and £50,000; it recommends £35,000. Under the commission’s proposals, people who cannot afford to make their personal contribution would continue to receive means-tested support, but it proposes that the threshold for getting state help with residential care costs would rise from £23,250 to £100,000. People would make some contribution to their general living costs in residential care, but this should be limited to between £7,000 and £10,000.
The commission also proposes: standardised national eligibility for care, increasing consistency across the country; universal access to a deferred payments scheme for means-tested contributions; improvements in information and advice; improved assessments for carers and better alignment between social care and the wider care and support system; and to consider changing the means test in domiciliary care to include housing assets. It makes recommendations about how, as a society, we will organise and fund social care. We will now take forward consideration of the commission’s recommendations as a priority.
The commission recognises that implementing its reforms would have significant costs that the Government will need to consider against other funding priorities and calls on constrained resources. In the current public spending environment, we have to consider carefully the additional costs to the taxpayer of the commission’s proposals against other funding priorities. Within the commission’s recommendations, it presents a range of options, including on the level of a cap and the contribution people make to living costs in residential care, which could help us to manage the system and its costs. That is why we intend to engage with stakeholders on these issues, including on the trade-offs involved.
Reform in this area will need to meet a number of tests, including: whether proposals would promote closer integration of health and social care; whether proposals would promote increased personalisation, choice and quality; whether proposals would support greater prevention and early intervention; whether a viable insurance market and a more diverse and responsive care market would be established as a result of the proposals; the level of consensus that additional resources should be targeted on a capped costs scheme for social care; and what a fair and appropriate method of financing the additional costs would be.
The Government have set out a broad agenda for reform in social care. We want to see care that is personalised, that offers people choice in how their care needs are met, that supports carers, that is supported by a diverse and flourishing market of providers and a skilled workforce who can provide care and support with compassion and imagination, and that offers people the assurances they expect of high-quality care and protection against poor standards and abuse. Andrew Dilnot’s report was never intended to address all these questions, but it forms a vital part of that wider agenda.
To take it forward, we will work with stakeholders in the autumn, using Andrew Dilnot’s report as the basis for engagement as a key part of a broader picture. This engagement will look at the fundamental questions for reform in social care: improving quality, developing and assuring the care market, integration with the NHS and wider services, and personalisation. As part of that we want to hear stakeholders’ views on the priorities for action from the commission’s report and how we should assess these proposals, including in relation to other priorities for improvement in the system. As the right honourable Member the Shadow Health Secretary and I have discussed, we will also engage directly with the Official Opposition in order to seek consensus on the future of long-term care funding.
We will then set out our response to the Law Commission and to the Dilnot Commission in the spring, with full proposals for reform of adult social care in a White Paper and a progress report on funding reform. It remains our intention to legislate to this effect at the earliest opportunity. The care of the elderly and vulnerable adults is a key priority for reform under this Government, and I commend this Statement to the House”.
My Lords, that concludes the Statement.
Baroness Thornton
First, my Lords, I thank the Minister for repeating the Statement today. It is difficult to imagine a more important issue for us to consider. Care of the elderly and vulnerable is probably the most difficult and intractable problem facing our society. It is one that we have to resolve; we cannot afford to let it go on and on unresolved. We can all agree about this.
It should be a cause for celebration and pride that one in five of us alive in Britain today will now live to be 100, and that our children can expect to spend one-third of their lives in retirement. Instead, thousands and thousands of us approach old age in fear—fear that we will need care that will not be there or will not be good enough, fear that our savings will be wiped out by an open-ended cost, fear that we cannot protect our families from this cost, and fear of becoming a burden or being left alone. That is why we on these Benches welcome the Dilnot report and the Statement.
These proposals contain many important elements that were in the plans that we set out when we were in government in our care White Paper prior to the general election. I join the Minister in congratulating Mr Andrew Dilnot and his colleagues, my noble friend Lord Warner and Dame Jo Williams on the excellent job that they have done. I know that many of the organisations concerned with this issue—Age UK, the Alzheimer’s Society, Care UK and others—have been very impressed by the way in which the commission has carried out its tasks, but they are now, quite rightly, very keen to ensure that the momentum created by this excellent report is not lost. Many noble Lords will have seen the letter, signed by 32 of these organisations, pleading with us not to pass up this opportunity. I welcome the Minister’s confirmation that detailed and important involvement of stakeholders will continue.
I am very impressed with the way in which all the members of the commission have seen it as their mission to explain to the widest possible audience what lies behind their recommendations and why they have reached the conclusions that they have. I know that my noble friend Lord Warner has been in major media contact since the early hours of this morning; many of us will have been treated to the masterclass from Andrew Dilnot on the “Today” programme.
In response to the report my right honourable friend Ed Miliband, the leader of the Labour Party, has said on behalf of the Labour Party that we would be willing to put aside our party’s pre-election proposals in order to try to find a solution. I invite the Minister to agree with me that it is just as well that politicians sometimes ignore the cynicism and negativity of commentators, such as Mr Nick Robinson of the BBC, who I heard recently, and show an understanding of the importance of reaching a national consensus on these matters. We will all need to show the kind of determination that my right honourable friend the leader of the Labour Party is showing. Will the Minister comment on suggestions in the media, including from members of the Conservative Party, that suggest that the Treasury is already lining up to kill these proposals? I hope that this is not the case and that the tweet today quoting Stephen Dorrell as saying that the Government must show willingness to find the money for Dilnot’s long-term care overhaul is more accurate.
The last thing Britain needs is for Andrew Dilnot’s proposals to be put into the long grass, or even the medium-cut grass. This is a once-in-a-lifetime opportunity that we must address. It is what the Government do with it now that counts. My right honourable friend the leader of the Labour Party has made a big offer to the Prime Minister to put politics aside and to work to see a better long-term system of social care put in place for elderly and disabled people in our country. We on this side are willing to talk to and work with the Government and all other parties to do so, because we know that any system of care must give all of us the long-term confidence to know what will be on offer for us and our families. It requires the Prime Minister to give a lead, because agreeing an affordable and sustainable system involves important parts of government beyond the reach of the Health Secretary. It requires the Prime Minister to give a guarantee that the Government will not kick Mr Dilnot’s recommendations into the long grass, because the system needs urgent and lasting reform. Will the Minister give us that guarantee today? If the Government are serious, we in the Labour Party are serious. If the Government are serious, we need to hear what the plan is going to be as we move forward.
Mr Dilnot recommends a White Paper by December this year, but this already seems to have slipped to the spring. Will the Minister say which is it? Will he also tell the House when we can expect a draft Bill—are the Government aiming for this to be in the next Queen’s Speech? In the absence of the noble Baroness, Lady Campbell of Surbiton, will the Minister confirm that the Government welcome and will take forward recommendation 6 on the portability of care assessments? Will the Government be supporting her Private Member’s Bill on this? Does he agree that cross-party talks are required and that the Prime Minister should give this lead? How and when will this start?
Finally, I know the Minister agrees that there is a need for the House to have an opportunity to have a more thoroughgoing debate about this matter, the report and its recommendations. I hope that we can also join forces in trying to secure that opportunity.
Earl Howe
My Lords, I am most grateful to the noble Baroness for her welcome of both the commission’s report and the Statement that I repeated. I believe that the commission has not only provided us with an excellent report but has instilled a sense of impetus in this agenda. We must not lose that momentum now. She referred to the prospect of cross-party talks, and I can only repeat that the engagement that we seek in the coming weeks and months will fully extend to the Official Opposition. We recognise the value of building a broad coalition of support on an issue as important as this. As she rightly said, there has to be security for the longer term so that we can provide citizens with the understanding and predictability that they rightfully expect of the system.
Reforming adult social care remains a top priority for us, but it is complex. As the Statement indicated, a number of related questions need to be addressed. Andrew Dilnot’s report provides recommendations on only one of these questions: how we pay for care as a country. It is our intention to set out our plans for wider social care reform in a White Paper in the spring. The noble Baroness is right that the timetable has slipped from that which we originally indicated, but that is not for sinister reasons. We think it is important to engage as widely as possible on these recommendations. There are many different views and we need to understand them.
Last week, the Alzheimer’s Society called for an open debate on the Dilnot proposals, with which we agree. As I have said, we are committed to a White Paper in the spring of 2012, which will include our response to the Law Commission’s report on the legal framework for social care, and we will publish a progress report on the funding. We remain committed to legislating at the earliest opportunity to take forward the proposals in the White Paper, although naturally I cannot give the noble Baroness a specific indication on the timing of that. That, however, is our ambition.
The noble Baroness referred to portability. In November, in our vision for adult social care, we made clear that we want the greater portability of assessments, which could help people who use social care to move without unnecessary multiple assessments and uncertainty. We also said that we would consider how to pursue this in the light of the work of the Law Commission and the Commission on Funding of Care and Support. We are considering both reports carefully. It is too early for me to say precisely what reaction we will give to the Bill sponsored by the noble Baroness, Lady Campbell, but we look forward to debating it. I am sure that that Bill will enable us to drill down to some of the more difficult aspects of portability, with which I know that the noble Baroness is all too familiar.
As for a more general debate on these important issues, I well understand the noble Baroness’s wish to have such an opportunity. I will of course relay that desire to my noble friend the Leader of the House. It is not in my hands, and as she knows the available time for general debates of that kind is rather limited at this time of year, but we will see what can be done.
Baroness Oppenheim-Barnes
My Lords, I was extremely pleased to hear this Statement and to hear it in the form that it has come. It must be well over 20 years since I first started writing to various Prime Ministers about the dreadful case of a constituent who had to sell his house—his life savings went into the house—to go into a care home, who said, “This cannot be fair. People who never bothered to save or to put money aside are getting the same treatment I am being charged for”.
On the other hand, and this illustrates the difficulty of the problem, the view of the taxpayers, also expressed to me, was, “Why should we have to support the inheritance of the sons and daughters of these people?”. There were two completely separate points of view that were very difficult to reconcile. As the problem becomes bigger and more urgent all the time, it is extremely brave of the Government to embark at this stage on a Statement that refers to the priority that will be given to this problem, and I welcome that very greatly.
Earl Howe
I thank my noble friend Lady Oppenheim-Barnes for those remarks. The House will know that her experience of these matters goes back many years. She is right; these thorny issues have been with us for a very long time and we have to get a grip on them. There is, as I made clear earlier, a clear imperative to inject certainty and predictability into the system, but there is also a need to strike a balance between the state and the individual. That principle was one that the Dilnot commission articulated—overreliance on the state would be unsustainable and arguably unfair, and overreliance on the individual presents obvious problems of a different sort. It is that balance that we need to identify.
Lord Lipsey
My Lords, as a member of the Royal Commission on the funding of Long-Term Care for the Elderly, which so singularly failed to find any consensus—my fault, no doubt, as I signed the minority report—I welcome the Dilnot report very much as bringing us nearer to the kind of political consensus on this issue that is intrinsic to its final solution.
However, we should not take the proposals in Dilnot as written in stone. There are severe problems of cost and the fact that they do so much more for the very rich members of society and so much less for the middle. Will the Minister—who has rather wisely stretched out the consultation period on this—assure the House now that although Dilnot’s fundamental architecture has a great deal to be said for it, the Government will keep a very open mind on the details throughout the process ahead?
Earl Howe
I am grateful to the noble Lord, Lord Lipsey, and broadly my answer to him is yes. They are clearly a set of well considered recommendations which we think are eminently worthy of serious study as a basis for cross-party consensus. However, I will not be tempted to pin my colours to any mast that the Dilnot commission has erected because it is important that we have this consensus as far as we can generate it, and that will mean looking at the detail and at individual recommendations on their own merits, maybe taking forward some but not others, and maybe looking at a staggered timetable. These are all questions that we have to resolve between us.
Baroness Barker
My Lords, I am in danger of agreeing with the noble Lord, Lord Lipsey, which is something that always worries me, as he knows. I, too, welcome this. After 13 years of the Labour Government trying in various ways to approach this problem we have, with this report, an architecture that is very important, although I agree with the noble Lord, Lord Lipsey, that there a great many technical matters within it that should be open for negotiation.
The report and the extent to which its objectives are achieved rely on two areas: first, a broad political consensus that it is a fair approach to take to the problem; and secondly, as the Minister said, a number of specific technical issues, the main one being that there should be a consistency in the criteria between eligibility for state provision and any insurance-based cover. That is perhaps the biggest single factor in determining whether the entire system will work. What work will be done with stakeholder groups, including carers and older people, and the private insurance business on that specific point? Only by resolving that can we enable individuals to have the security of knowing when the state will pay for their provision and when they as individuals will be expected to contribute.
Earl Howe
My noble friend has highlighted a key issue. We know that it is important to people that access to care services is fair and that resources are used wisely. However, the commission is clear that it believes that local authorities should continue to play a key role in the funding and delivery of social care, so we need to consider carefully how to achieve the right balance between national consistency and local flexibility. That is a very difficult question.
During the coming period of engagement in the autumn, we will want to take views on that matter. I remind my noble friend that in the light of recommendations made in CSCI’s review, called Cutting the Cake Fairly, which I am sure she will remember, the department issued guidance to local authorities on eligibility to support fairer and more transparent and consistent implementation of the criteria. We fully appreciate, however, that the concerns on that front continue; the current eligibility framework is subjective and it is difficult for individuals to understand what they might be entitled to in advance of an assessment. We will consider whether to take forward work on a new assessment framework following discussions with stakeholders.
Lord Myners
My Lords, the Government deserve credit for establishing the commission and choosing Mr Andrew Dilnot to chair it. I welcome the constructive way in which the Minister has summarised how the Government intend to take this forward.
I have two questions arising from the Statement. I shall ask them in the sequence in which they arose from the Minister’s announcement. First, he observed that financial markets have no answer to this problem. That is quite extraordinary. Our colleague, the noble Lord, Lord Turner, in his capacity as chairman of the Financial Services Authority, told us that much of what goes on in the City is socially useless. Here is an area where the financial community in the City could be socially useful, yet it seems to be turning its back on the opportunities to create long-term annuity products appropriate to meeting people’s expenditure requirements in the later period of their life. Will the Minister raise this with the Treasury and the FSA and consider establishing a working group to investigate particularly whether EU legislation on capital requirements for variable annuities is frustrating a market response?
Secondly, the Minister mentioned Southern Cross. There is much concern in the country about Southern Cross and I am grateful for the Minister’s Statement. Will he confirm that no resident of a Southern Cross home will be required to move against their wishes from the home in which they are currently being cared for?
Earl Howe
I am grateful to the noble Lord, Lord Myners. I shall address his questions in the opposite order. We have been clear about the situation at Southern Cross: we hope that a resolution will emerge as a result of the current discussions between Southern Cross, its lenders and its landlords. However, we have been equally clear that the residents of the care homes are our prime concern. It is not possible for me to give an absolute assurance that no resident will be required to move, but I can say that we will ensure that if a resident is required to move, there will, in accordance with best practice, be plenty of time to ensure that suitable alternative accommodation is available. It is a fact of life that care home residents sometimes do have to move, but it is our ambition that no care home resident of Southern Cross should move. I do not intend to sound in the least complacent about this because we have set a clear sense of direction to the parties involved that we hope to see this settlement reached.
The noble Lord, Lord Myners, is right about financial products. I have noted over the past 10 years with some disappointment the dearth of suitable financial products to enable people to save for long-term care. The commission has analysed extremely ably the barriers that currently prevent the establishment of an effective market for financial products and we want to consider how best to promote a more effective market for such products. We will consider the commission’s recommendations carefully, of course. An effective market in this area would be extremely helpful. It may help people to become more aware of the costs that they may face in later life, which in itself would be useful, and to take steps to prepare for these. I will bring the noble Lord’s remarks to the attention of my colleagues in the Treasury in the sense that he indicated.
Lord Newton of Braintree
My Lords, I declare an interest as chairman of the Suffolk Mental Health Partnership NHS Trust and the immediate past chairman of Help the Hospices. I agree with my noble friend Lady Oppenheim-Barnes. Indeed, this has been a running sore throughout my entire political lifetime since I was first elected as an MP in 1974. The right metaphor now might be a ticking time bomb in one of those James Bond films getting quite close to where it actually goes off, or does not quite. This is potentially seriously, socially divisive and difficult, so I hugely welcome both the report and the tone that has been adopted by those on the two Front Benches. It is essential that we should seek political consensus, otherwise there will be big trouble for all of us.
Lastly, and more specifically, I come to my question: does my noble friend accept that there are also health implications in the demographics as well as social care implications? A growing number of people are presenting with mental illness problems—dementia, in particular—at mental health trusts, and indeed in acute trusts in the A&E departments, with a knock-on effect on requests for assistance from mental health trusts and their clinicians. There is a serious need for health resources to be directed towards some aspects of this problem as well as to a solution to social care problems. I hope that my noble friend will take that on board.
Earl Howe
I am grateful to my noble friend and agree with all that he said. The early part of the Statement demonstrates very graphically the demographic aspects of this matter. He is of course right that there are clear health implications in all of this, which is precisely why the work that we are doing in the department lays such emphasis on the need to integrate health and social care commissioning and provision and on the need to place a greater emphasis on prevention both in health and social care. That is also why we have channelled substantial additional funds from the health budget to support social care over the next four years. There is a clear interest for the health service in wishing to see a stable and fair system of social care provision, so I identify absolutely with everything that my noble friend has said.
Lord Lloyd of Berwick
My Lords, the emphasis in the Statement is very much on the care of the elderly, some of whom will be disabled. What I am not clear about is whether the report also covers care of the disabled who are still young, who are currently covered by the Chronically Sick and Disabled Persons Act, which was sponsored by the noble Lord, Lord Morris of Manchester, 40 years ago. Is that also up for grabs, as it were, among the tangle of legislation which is being considered?
Earl Howe
My Lords, this area was not overlooked by the commission. Indeed, the commission has made a specific recommendation as regards the cap on costs, which it believes should be, as a generality, somewhere between £25,000 and £50,000, although it has come down in favour of a £35,000 figure. That figure is lower for those who require long-term care at a much earlier age. The noble and learned Lord is right that this area should not be neglected, and I am sure will not be neglected.
Baroness Pitkeathley
My Lords, does the Minister agree that although the sum of £2 billion mentioned by Andrew Dilnot may strike fear into the heart of the Treasury at a time of financial constraints, it is a puny sum when you compare it with the £119 billion contributed by the main providers of care—the family carers? Therefore, I am sure he agrees that the support offered to family carers in the report is extremely welcome. Will he reconfirm the Government’s commitment to continuing to work with the stakeholder groups, as the Dilnot commission has so admirably done, particularly as the advice and information service for families is developed as we go forward?
Earl Howe
My Lords, I cannot stand here and claim that an additional £2 billion is a trivial amount of money; it clearly is not. That is why it was made clear in the Statement that we need to make some difficult decisions over priorities in public spending. As regards carers, for whom the noble Baroness has done so much in her career, I am sure she will accept from me that we recognise the value and contribution that carers make. We recently published Recognised, Valued and Supported: Next Steps for the Carers Strategy, which announced an additional £400 million over four years for PCTs to pool with local authorities to provide carers’ breaks. In our carers strategy we indicated that assumptions should not be made about who will provide care and to what extent. There has been a 21 per cent increase in the number of carers receiving information. We want to see greater flexibility and portability of assessments for carers. The agenda in this area is proceeding and we shall not forget it amidst the concerns over funding. It is every bit as important as getting the funding system for paid residential long-term care right.
Baroness Shephard of Northwold
My Lords, I, too, welcome the political consensus that is bathing us in its glow this afternoon. Several noble Lords have spoken, and so has my noble friend, of the importance of engaging individuals in taking responsibility for their own care. I am sure that he is very aware of this, but does he realise how important it is for there to be a clear financial framework so that individuals and their families can take decisions concerning their own care? That is the important starting point given in the Dilnot report. It is an indicator—I do not know how the Government will treat it—which provides admirable clarity. Wrestling with the complexities of the different organisations involved will come later. However, I remind my noble friend that those complexities are already struggled with by individuals and their families when making these plans. An espousing of the financial certainties of the report would be a great move towards enabling individuals to take charge of their own futures.
Earl Howe
I am grateful to my noble friend, who has put her finger on an extremely important aspect of the debate. Much of the thrust of our proposals on the NHS revolves around the personalisation agenda, which applies in equal measure to social care. This is about the call to arms that Derek Wanless sounded a few years ago about the need for people to take ownership of their own healthcare if we are to have an affordable and sustainable system over the longer term. That process can be aided and boosted in a number of ways, not only by the rollout of a greater range of financial products but also through mechanisms such as personal budgets, which empower patients inherently, and through telecare, on which this country leads the world in the advances we have made and in the potential that exists for those in receipt of health and social care in their own homes to take ownership of their condition.