Residential Care: Cost Cap

Baroness Wheeler Excerpts

Thursday 10th December 2015 Lords Chamber

Moved by

[Baroness Wheeler]

That this House takes note of the quality and viability of the residential care sector in the light of the Government’s decision to delay the implementation of the care cost cap.

[Baroness Wheeler (Lab)]

My Lords, when I was researching for this very important debate, amid all the statistics, press coverage and reports on the cliff-edge financial state of the sector and the impact of the spending review, the one figure that most stood out showing the frightening scale of the crisis in residential care was the Care England figure of £2.16 per hour. This princely sum is the average fee paid by local authorities in England to care home providers to care for residents unable to pay for themselves. Of course, there are other ways of coming up with an average figure across the sector, but I am sure that none of them would produce a very different amount. Care England represents large and smaller scale residential care providers and, as its press release prior to the spending review put it:

“You can’t provide quality care for £2.16 an hour, no matter who you are”.

According to the Public Accounts Committee, local authorities have faced a 37% overall funding cut in real terms since 2010. They have found it impossible to raise residential care fees to try to keep pace with increasing demand and costs. Data from the residential care industry analysers, LaingBuisson, show that 1,500 care beds have been lost in England this year and that councils gave an uplift in baseline fees of just 1.9%—lower than the estimated 2.5% increase needed simply to keep pace with care home cost inflation. Out of the 166 councils providing information, 53 made no uplift in fees, and the remaining councils had either given increases below the standstill band uplifts, or fee revisions within the standstill band.

The residential care sector is home to 425,000 residents in about 18,000 homes across the UK. One in six residents is over 85 years old, an age group set to double by 2035. Care home residents have a prevalence of long-term conditions, particularly dementia, stroke and diabetes-related conditions. Many residents can have up to six comorbidities. Some 70% of residents in the top three care home providers are publicly funded which makes them especially vulnerable to continuing pressure on council budgets. It is clear, therefore, that throughout the sector self-funders of care help to keep homes viable and in operation.

There is no underestimating the blow for people with long-term health conditions, their families and the providers of care that came from the Government’s decision in July to delay implementation of the cap on liability for care costs for four years. Some 35,000 people would have benefited from the cap immediately. The Government's spending review repeated their commitment to introduce the cap in 2019-20, but with no money allocated. Nor was there a commitment to use fully the previously allocated £6 billion funding allocation for the care cap to ease the growing crisis in day-to-day social care services instead.

Prior to the spending review, there was no shortage of press coverage, providers and social care organisations pointing out the dire state of the sector to the Chancellor. There was the precarious financial state of Four Seasons Health Care—Britain’s biggest care home group providing 21,000 beds in 470 homes. It is reported to be on the brink of financial collapse, struggling with debts of £500 million. Last month it closed seven in its words “loss-making and unviable” homes in Northern Ireland. The group has a looming £26 million repayment instalment due, part of £50 million a year it has to pay to service its debts, which it is currently struggling to do.

There were also two separate joint letters to the Chancellor. The first came from the five largest providers—Bupa UK, HC One, Four Seasons, Care UK and Barchester—warning that failure to raise funding would mean that,

“thousands of older people could be left without a home”.

Secondly, a letter from 15 social care and older people’s groups, including Age UK and the Alzheimer’s Society, underlining the urgent need for more central government funding. They predicted a £2.9 billion funding gap across domiciliary and residential social care by 2020 and that,

“up to 50% of the care home market will become financially unviable and care homes will start to close their doors”.

Finally, there was the very timely ResPublica study of the private residential care sector. It warned that the funding gap specifically for older people’s residential care by 2020 would be £1.1 billion, a third of which will be the cost of the national living wage and which could mean the loss of 37,000 beds. The failure and collapse of Southern Cross two years ago affected 31,000 people. Other private providers eventually provided replacement care for them, although not without huge upset and trauma for the people involved, their carers and families.

As ResPublica points out:

“Given the perilous state of the industry, there is no private sector provider with the capacity to take in the residents who would be affected by the loss of other providers’ beds. Consequently … the worst outcome is the most likely: that the vast majority of care home residents will end up on general hospital wards”,

costing the NHS £3 billion a year.

Moreover, while public attention has been on the large-scale providers, we know that 75 % of providers are, in fact, small, local organisations—small group homes run by small teams of owners and staff or, in many of the smaller homes, just by the owners themselves. The Local Government Association estimates that for residential and homecare contracts the national living wage will cost an additional £300 million in the first year, rising to £834 million in the second. Does the Minister acknowledge that small care homes will be the first to go to the wall if the cost of the implementation is not properly funded by central government? We applaud and welcome the introduction of the national living wage—it is vital to the future of social care, but it must be properly funded.

The spending review offers two solutions to all this, under the ironic heading “A sustainable health and social care system”. The first is to allow local authorities the power to raise council tax by up to 2% in their area from next year, to bring in £2 billion a year; the second is a £1.5 billion allocation from the better care fund for councils to access in two years’ time. This, we are assured in the spending review, will be enough for councils to shore up core services, increase residential care fees and pay for the implementation of the national living wage from April next year for 900,000 care workers. But how can this limited additional funding be anywhere near enough to address the scale of the problem facing us? Can the Minister explain to the House how this can possibly make the current failing social care system sustainable?

I am sure that the Minister will come back with a string of figures on the amount of money that has gone into social care, but the fact is that the detailed analysis from the LGA, the King’s Fund, the Nuffield Trust, the private, charitable and voluntary sector providers and the patient and user organisations such as Age UK, Independent Age and Carers UK all show that this is nowhere near enough. Will he undertake to provide detailed analysis of the Chancellor’s sustainability plan for social care? How much of the better care fund allocation is new money into the system, or is it just money shuffled about the system or taken from the NHS?

Earlier this week, the King’s Fund put the amount that could be raised by councils as, at most, only £800 million per year, which underlines that areas in the north, Midlands and inner London with the greatest need for social care will lose out because they will be able to raise too little income for the increase to have any impact. Care England’s response is that the 2% addition, even if raised across all councils, would not even touch the sides of the problem. The charity Independent Age has calculated that a 10% increase would be needed to plug the social care funding gap, which would of course not be locally acceptable.

Meanwhile, Four Seasons remains in a very precarious financial state. This weekend, we saw reports of the devastating consequences for families and their elderly and frail relatives in its Northern Ireland care homes, which are to be shut down with 12 weeks’ notice. Four Seasons is on course to sell 19 homes this year, which will result in their closure, and it has 12 homes under embargo and barred from taking any new residents until the quality of care improves. Can the Minister reassure the House that an impact assessment has been made, that the situation is being closely monitored and that contingency plans are in place in the event of Four Seasons’ financial collapse? Four Seasons is also selling homes to other providers, so what checks and measures are in place to ensure that the care and well-being of residents is the top priority in such sales? Does he acknowledge that this is likely to be part of a growing trend, as the smaller group homes struggle to survive?

This debate is also very much about the quality of care in care homes and the people who are cared for, their families and carers. This is the first debate focusing on the residential care sector that we have had in this House in recent years. I am most grateful that we have such a broad range of experience and insight among the speakers today, which will ensure that the full range of key issues facing the sector can be addressed, particularly the impact of the NHS on the rest of the sector. The ResPublica report makes a very telling comment. It says that,

“the residential care system … has been overlooked as a partner in the integration of care”,

and in developing person-centred care across the NHS and social care. Its report looks to care homes becoming the agents of early intervention and the management of chronic conditions, preventing those conditions escalating and individuals funnelling in to the acute sector, swamping A&E units and local hospitals.

The NHS Five Year Forward View has a number of care home vanguards—the first time that the sector has had specific projects and funding—which reflect some of this thinking on trying to promote enhanced health in care homes. The projects have tight criteria for joint working and integration with the NHS and social care on care planning, residents’ health and the management of frail and elderly patients. In a number of areas, funding has been partly used to pay a higher fee to care homes so that they can focus on improving care standards and paying staff more, with new and extended job roles. This will mean that they are able to provide the care that ensures fewer residents are admitted to hospital or become permanent residents, rather than being able to go back into their homes after a short period of care following hospitalisation.

The recent CQC report on the state of care shows, as usual, the extent of the excellent care that takes place in many care homes across the country by trained, caring, dedicated nursing and care staff, as well as the reality and scale of the challenges that need to be addressed. The CQC’s five tests—that care is safe, efficient, caring, responsive and well-led—have been used for care home inspections since October last year, focusing on homes for residents aged 65 and over. Of the 300 homes inspected, 50 were rated good but 125 were deemed inadequate and 125 required improvement. Almost half of the homes—49%—were in breach of Regulation 18 on staffing, and a third—32%—fell short of Regulation 13, designed to safeguard service users from abuse and improper treatment.

Staff shortages in nursing and care staff, and the needs to attract the leadership and management which a good care home manager provides and make social care an attractive career for young people and people seeking work, underline the importance of the national living wage. The key training gaps identified by the CQC covered the areas of dementia care, safeguarding, mental capacity and deprivation of liberty safeguards which seek to ensure that the care provider does not restrict the liberty of vulnerable residents. Social care is failing dismally to attract new and younger people into the sector. The National Care Forum’s recent survey showed that just over 11.5% of staff employed in its member organisations are under 25, while more than half are aged 45 or older. These are all issues that the national living wage, if properly funded, can begin to address.

As a carer myself, I would like to see residential care integrated much more into the care plan for people with long-term conditions living in the community, with regular respite care planned, dated and available as part of the care pathway—and as part of the medium and longer-term planning for the person being cared for, not seen as a last resort. Carers UK testifies to how hard it is to book respite care in care homes in advance as part of a planned package of support, because the sector has too much focus on responding to emergency care and placements and cannot give a definite yes if you want a short stay on a specific date. The answer is often “Ring us nearer the time”, which of course is no good at all.

I will end with one case study from my experience as a trustee of our local carer support charity, which sums up the current situation faced in many parts of the country. One of our 73 year-old carers had cared for her husband for four years, through stroke, incontinence and then dementia. She needed a hip replacement. He went into residential care near the couple’s home while she had the operation, but when she came out she realised she could not care for him any longer. He stayed in the care home for two years, publicly funded by the council, with our carer regularly able to visit and help with care and feeding. His incontinence problems got worse and he was catheterised, but frequently pulled the catheter off due to his dementia. District nurses could not keep visiting the home, so frequent hospitalisation took place from the care home until it said it could no longer care for his needs. He did not meet the NHS continuing care criteria and stayed in hospital for months while social services looked for a nursing home near to his wife so she could visit. Finally, he is now in a step-down bed in a nursing home, a specially fully-funded intermediate placement bed at full care home costs to free up an NHS bed. The home meets his needs and his wife can visit him regularly, but he cannot stay there and must be moved in the next few weeks to a social service placement within the council’s baseline fee. The search goes on.

Social care is in dire need of a strategic, ambitious, forward-looking strategy and vision like the NHS Five Year Forward View, which has broad cross-party support and support from stakeholders, even if there is concern and scepticism about how the future plan can be delivered in the face of the realities on the ground. Dumping on councils so that they have to raise the money and then take the blame is not a strategy. As this week’s joint letter in the Guardian from the CEOs of the King’s Fund and Nuffield Trust put it, the spending review provisions are:

“another setback for people who need social care … These are sticking plaster solutions and no substitute for adequate funding”,

that social care desperately needs now.

--- Later in debate ---

[Baroness Wheeler]

My Lords, I thank noble Lords for their contribution. I said in my speech that their experience and insight would produce a very thoughtful and thorough debate and a comprehensive picture of both residential care and the wider social care, and that proved to be the case. It is important to develop a clear view of the role we want the residential care sector to play in integrating social care and I hope this debate has helped that, particularly across the care pathway. There were a number of speakers on that theme. We have debated these things a number of times but this is the first time we have focused on residential care and I think that has been very helpful. Many noble Lords stressed that this debate was about people. My example of my local carer was very much in that vein and other noble Lords gave examples of good care in their own experience. That is very valuable and it is well to remember that. CQC underlines that there are many well-led homes that are caring, safe and efficient with trained and dedicated nursing and care staff, but equally it gives the other side of the picture and the problems that we need to address.

I thank the Minister for his thoughtful response. He did not have a chance to reel off some of the statistics I was expecting. I was particularly looking out for his comment on the assessment from the noble Lord, Lord Warner, that we have seen only £70 million of the £6 billion that was to be introduced for the social care cap. I did not hear that but he is going to write to us and that is very welcome. I was a bit disappointed that he was not able to give us some reassurances on the monitoring that is going on of Four Seasons and other care homes. I understand the need for confidentiality but I think we need to be reassured that the Government are keeping it closely under review, particularly the issue of replacement care. On the care cap, I am glad it is still a postponement. The Public Accounts Committee has called for an urgent and clear timetable on implementation and I think the Government ought to take heed of that. In my view the overall debate has shown the clear need for a strategic, ambitious, forward-looking strategy and I am pleased the majority of noble Lords supported that. With those comments, I beg to move my Motion.

Motion agreed.