Care Bill [HL]

Baroness Pitkeathley Excerpts

Monday 29th July 2013 Lords Chamber

[Lord Warner]

My Lords, the purpose of this amendment is to give us a chance to discuss the funding of social care and the Bill’s provisions before we complete Committee, particularly given the continuing concerns that social care is seriously underfunded and is not in a good position to take on the changes—good changes, I should emphasise—in the Bill. Those concerns have been around for a long time and formed a major part of the evidence presented to the Dilnot committee and the Joint Select Committee on the draft Bill. I declare an interest in that I was a member of both those bodies.

On the whole, most people support the basic architecture of the Dilnot report and the Law Commission’s proposals enshrined in the Bill. They simply do not believe that the funding is in place to implement effectively the Bill’s good intentions. They remain unconvinced by the Government’s assurances on funding. This is hardly surprising, because the Government’s social care funding strategy seems almost designed to confuse. Eric Pickles curries favour with the Chancellor by signing up to swingeing cuts to local authority grants, which inevitably reduces social care funding substantially. Health Secretaries—quite sensibly in my view—then start slipping cheques from the NHS to local government to mitigate, to some extent, the Pickles butchery. Welcome as these cheques may be—but probably not to NHS England—they usually have strings attached and do not make good the shrinking base budget of adult social care, which, I have to mention to my noble friends, has been taking place since before the coalition Government.

First, a little history: the problems of funding adult social care predate the coalition, as the Dilnot commission made clear on pages 14 and 15 of its report. It stated:

“We know that the funding of social care for older people has not kept pace with that of the NHS. In the 15 years from 1994-95 to 2009-10, real spending on adult social care increased by around 70% for older people while, over the same period, real spending in the NHS has risen by almost 110%”.

Before the coalition, pay and prices in social care rose more quickly than general inflation. There was—and continues to be—rising demand as the number of older people and younger adults with care needs increases. Social care budgets rose by about 1% a year in real terms in the three years to 2010, compared with 5% to 6% for the NHS. We in the Dilnot commission showed that in the four years to 2010, demand outstripped expenditure by about 9%. We went on to say that in the future this approach to funding would need to change. However—and this is bad news for the Benches opposite—it has not.

The funding shortfall that the coalition inherited, of approaching £1 billion, has got worse. The LGA has estimated that just to keep up with demographic demand adult social care needs real-terms annual increases of about £0.5 billion a year. To put right the deficit and stop it getting worse, adult social care should start the next financial year, 2014-15, with a base budget at least £2.5 billion higher in real terms than in 2010. The reality is somewhat different.

The latest survey that I have seen from the directors of adult social services states that by next April local councils will have stripped £2.7 billion out of their adult social care budgets since 2010. I have heard Health Ministers say that this is being done by efficiency savings—so that is all right then. In practice, it has been done by denying people services, imposing tougher eligibility criteria and cutting pay and payments to service providers, with their impact on quality. These cuts have been mitigated by transfers the Government are making from the NHS by the start of 2014-15. On the basis of parliamentary Answers given to me, these look to amount to £1.5 billion in total over three years.

To sum up: the Government have not made good from the NHS what they have taken out, and have not protected the base budget against rising demand and inflation—something that the Dilnot commission said was essential if its proposals were to be implemented. My estimate is that adult social care starts 2014-15 with an underfunded base budget of at least £3 billion—some 20% of its budget.

I now turn to whether things get better between April 2014 and 2016, when the main implementation of the Bill’s proposals starts. Before the 2013 spending review, a parliamentary Answer to me suggested that approaching £0.9 billion would be transferred from the NHS to social care in 2014-15. Page 34 of the Government’s Spending Round 2013, suggests that another £200 million would be provided to progress the new pool budget scheme. However local councils still have to make another lot of savings in 2014-15, so it is difficult to see these not wiping out at least half of the transferred NHS largesse.

However, to be fairly generous to the Government, the £3 billion base budget deficit could drop to £2.5 billion by the beginning of 2016, assuming that the Government make the transfers that they promised. It therefore seems to me that, however you cut the figures, there is a pretty big hole in the base budget for adult social care in the year in which the first tranche of the Bill’s reforms begin. I am of course happy for the Government to provide me with chapter and verse in writing on why my figures are wrong.

Let me finish by turning briefly to the cavalry that the Government think is coming over the horizon—their proposal for a £3.8 billion pooled budget for 2015-16 to join up local health and social care services. Everyone in this House will welcome that pooled budget. I particularly welcome it as someone who was involved with the joint finance initiative of Barbara Castle, back in the mid-1970s. In some ways, we have not moved on very far. There is a considerable lack of clarity about this impressive-sounding figure. I therefore have some questions for the Minister.

First, can he say whether the total figure is dependent on the Department of Health making all the efficiency savings cited on page 34 of Spending Round 2013 and is safeguarded from any raiding to meet emergency demands by the NHS? Secondly, does the £2 billion that seems to be being promised to local councils for adult social care include the £335 million promised for the cap in 2015-16, as set out in paragraph 9 of the Government’s very recent document, Caring for Our Future: Consultation on Reforming What and How People Pay for Their Care and Support? Thirdly, will councils be paid the £2 billion at the beginning of the financial year, and how much of that will in practice be offset by the 2.3% reduction in local government spending in 2015-16, as set out in page 37 of the spending review document? This is typical of what we are seeing from the Government. Page 34 gives you some money and page 37 takes another lot away through another government department. It is a bit like the guys who practise conjuring with peas under egg cups. Finally, can the Minister confirm that £1 billion of the £3.8 billion will be paid only if local authorities can demonstrate outcomes? Therefore, in practice, the money may never reach the local level in 2015-16.

In conclusion, as a battle-hardened Whitehall warrior, I have to say that I suspect that the social care chunk of the £3.8 billion will look a lot smaller when we get to 2015-16. In principle, it is a bold and sensible initiative on which the Government are to be congratulated. However, it will not plug the gap in the base budget to which the Dilnot commission drew attention, and which has worsened since we reported. It is possible that the gap could be partially filled by the pooled budget proposal but a lot of question marks remain over how much of that budget will in practice help social care in 2015-16. I have to say to the Government that because of the funding inadequacies there is a real risk that people will be set up to fail with this new legislation. That is why the Government and, I hope, my own Front Bench should support an impartial review of the funding issues, as proposed in my amendment. I beg to move.

[Baroness Pitkeathley]

My Lords, I rise briefly to make two points, the first as a result of my membership of the Joint Committee. Every witness who came before us to give evidence said two things. The first was that this is an excellent Bill for which we have been waiting years. The second was that implementation will be impossible if no more money is put into the system. All our witnesses said that the current proposals for funding are totally inadequate. That is exactly what I feel in my role as a campaigner and spokesperson for carers—and this is my second point. The Bill is all that I could have dreamed of in terms of rights and recognition for carers but will come to nothing if all that results are fewer services that are harder to access, with more pressure being put on carers to do the caring. I am seeing that now in carers’ groups and organisations. They were elated when the Bill was published: now morale is plummeting for fear of what the reality may be.

I join the noble Lord, Lord Warner, in asking the Minister for chapter and verse in his call for a review. We all want the Bill to succeed but we cannot, as responsible legislators, ignore this important issue.

[Lord Lipsey]

My Lords, I should have put my name to this excellent amendment.

It would not be the first time that the OBR has looked at this issue because there is some valuable material in its report on fiscal sustainability in July 2013, to which I will return in a minute. My noble friend concentrated on how serious the problem is now and how serious it will be in 2016. Perhaps I may detain the House for a few minutes to describe the slightly further away prospect because, if we are in problems now, we shall be in crisis unless something major changes within the next eight or 10 years.

The demographic factors have been widely appreciated, most notably in the report from the Select Committee of your Lordships’ House, Ready for Ageing, which indicates that there will be 39% more people aged 85 and over by 2021 compared with 2011, and 101% more—more than double—by 2030. The Select Committee concluded that what will happen is that they will get shoved into hospital, which will be,

“contrary to their wishes, not in their best interests, and more expensive”.

That is not a very good prospect. Moreover, as the OBR has shown, there is the prospect that stays in residential care may get longer and, therefore, cost more. It calculates a variant with a 20% longer stay, which is not implausible. So, just demographically, the situation is very difficult.

However, some less noticed factors all point the same way and add to the pressures. The most prominent factor is workforce issues. Many of your Lordships will have read the excellent report produced last week by the King’s Fund. It projects that by 2025 there will be a shortage in the care sector of 1 million workers—that is 35% of the current workforce. That is assuming that the Government’s immigration policy does not bite even more sharply than we think. You have only to go into a home to see how they are kept going by caring people who have come from overseas and are willing to work for the minimum wage, or near it, to look after our older people for us. Given the Government’s policy, these people will increasingly not be available for this purpose and so wages will inevitably go up. That will be a good thing because these people are terribly underpaid for what they do—it amazes me that the services are as good as they are, not that they occasionally fall short—but the cost to the Government is very sensitive to wages: it is the main expense because around 70% of the costs of an old persons’ home are paid out in wages.

The trite response to that is, “Let productivity increase”. However, in this sector, where one person looks after another, an increase in productivity will invariably lead to a decline in the standards of service. We know this because productivity is going down—it is down 20% over the years 1997-2010—simply because we rightly expect better services for people in the homes. There is no offset available through productivity. Those are the workforce issues.

As to the related fees shortfall, the system works at the moment by local authorities paying rock-bottom prices for the care they buy and self-funders paying rather more. The noble Baroness, Lady Greengross, sees this as an unfair tax but, being an economist, I know about marginal and average costs and I am therefore less shocked than I should be. However, it is a fact that it is taking place. The shortfall in fees over what will be necessary to provide an economic return for these homes would have cost local authorities £540 million in 2008-09, according to the latest published study by Laing and Buisson, to get the fees up to a level where they provide a reasonable return to the homes.

However, it will be much more difficult under the Bill’s scheme, because at the moment self-funders have no idea what the local authorities are paying for the same places that they are enjoying; they are not told. I was glad to hear the Minister confirm that under the Bill, self-funders will be told what the local authority pays. They will have to be told because the amount the local authority pays is what counts towards the cap. Thus a self-funder may be told that while they are paying £700, the local authority is only allowing £400. Your Lordships can imagine what is going to happen. I do not think that many self-funders will say, “Oh, I’ll be delighted to go on paying £700. After all, I may benefit from the cap if I live for a very long time”. They are going to be enraged. It is not a system that can be sustained. I have no doubt that the fees paid by local authorities and the fees paid by self-funders will come closer together, and that will mean increased bills for local authorities.

--- Later in debate ---

[Baroness Wall of New Barnet]

My Lords, I, too, wish to support the amendment presented by the noble Lord, Lord Warner. I want to focus particularly on the first part of the amendment and I support completely the sentiments within that. One of the points made by the noble Baroness, Lady Jolly, was very important. It is important to try not to have the elderly patients in the hospital so that their right to die wherever they want to be is where they are before they have to come in. The context here is not just the money. The noble Lord, Lord Warner, is absolutely right to point out that it is hugely expensive. I think that it is more than £3,000 if an elderly person is in hospital and dies in hospital. It is very much evidenced by the fact that they very often feel quite degraded by the lack of privacy when they die in hospital. By definition, it is not the same as being at home or, even, I would suggest a hospice, where people have very good experiences. The evidence provided by the noble Baroness, Lady Jolly, and the noble Lord, Lord Warner, is absolutely crucial.

I can tell the Committee from first-hand experience that people also say this to us. I declare an interest in Barnet and Chase Farm Hospitals. If I or anyone else in the hospital goes around the wards, the patients tell us that they would love not to be there to die. Certainly, the nursing staff would love them to be in a better, more dignified place to die. It is a hugely important part of any of the social care we are looking at.

[Baroness Pitkeathley]

My Lords, I, too, wish to speak in support of the amendments and to endorse what the noble Baroness, Lady Jolly, said about the recommendations of the Joint Committee. I want to use the opportunity also to consider the needs of family carers as well as those of the person who is dying. I want to emphasise that it is very important that carers are informed about the likely stages at the end of life and that they, too, are able to prepare for the death of a loved one. This includes ensuring that families are well informed when making decisions about where their loved one dies. It has been said by all noble Lords that most people wish to die at home. However, this can put extra pressure on carers, which should be discussed with them by health professionals. These health and care professionals may need further training to ensure that they are identifying and considering the needs of carers at the end of life.

More than 300 carers who have experienced the death of the person they cared for shared their experience as part of this year’s report for Carers Week, which is called Prepare to Care?. Nearly half said that they had not had time to plan about the death. One third of carers stated that they had not given this enough thought and wished that they had planned it better. As one carer said:

“Although you can be aware end of life is coming you have to balance this out with keeping up hope and being positive for the person you care for. Also you just don’t have the time to think ahead. With hindsight I can see that the signs that end of life for the people I was caring for was approaching, but as a carer in that situation at the time I could not see them. I wish the GP had spent some time with me to discuss these things”.

We must bear the carers in mind.

If I may, I would like to say a word about the aftermath for carers of the death of a loved one. Carers often become isolated as result of caring and find it very difficult to maintain social networks and hobbies. When caring comes to an end, so do the carer’s services. The carer is left without any social or emotional support. I never forget the carer who said to me, “I am expected to go from the graveside to the job centre”. Sometimes we expect that of carers. If we could support carers more, I think that more of them would be willing to be part of the team providing end-of-life care and thus gain the advantages which have been so clearly set out by noble Lords.

[Lord Skelmersdale]

My Lords, I failed to speak at Second Reading and I have failed to speak throughout the Committee stage. However, I believe that this amendment is very important, especially, as the noble Baroness, Lady Pitkeathley, said, the introductory subsection thereof. I emphasise that this is not a Second Reading speech. However, if I had spoken at Second Reading, I would have reminded my noble friend Lord Howe on the Front Bench of my long standing view that it will never really work until we have a combined health and social care budget. If we did have it, most of the amendment would be unnecessary.