(7 years, 10 months ago)
Grand CommitteeMy Lords, we tabled Amendment 7 to probe the Government on why, in their new draft regulations, with 25 pages just on the branded medicines proposals, they seek to alter the current arrangements for exempting low-cost presentations from the price-reduction requirements of the statutory scheme. As the Minister will know, the existing regulations specify as an exemption a low reimbursement price of either under £2 an item or low primary care sales to NHS England of less than £450,000 a year. The provision has been there to protect the commercial viability of low-revenue or very low-cost medicines. It therefore seems somewhat counterintuitive to remove this safeguard at a time of such significant uncertainty for the pharmaceutical industry, particularly in the face of what could be a highly disruptive withdrawal from the EU.
Under paragraph 11, the proposed revised regulations give the Secretary of State the power to exempt a manufacturer or supplier where he considers that an exemption is necessary to ensure adequate supplies of medicines for health services purposes. This changes the current arrangements to give the Secretary of State a discretionary power that he may use in certain circumstances, rather than the automatic exemption that currently operates for £2 per item or a £450,000 annual sum. The current provision is important in maintaining adequate supplies to the health service of the medicines in question.
We are concerned about the significant impact that the removal of the current arrangements will have on manufacturers producing the common, low-cost generic branded medicines in question, such as those for hypertension. Although it is not always the case, the producers of such low-cost medicines are often small businesses operating on small margins. If they are not exempted from paying a rebate on those medicines, many will struggle to maintain current low costs, resulting in a consequent rise in costs for those medicines.
It is also important that the regulations accompanying the Bill maintain a specific exemption from the statutory scheme in the case of supply shortages, as currently. Amendment 8 would therefore formally place this duty on the Secretary of State. This is particularly important given the concerns of GPs and other health professionals, who have voiced frustration about having to prescribe “second choice” medicines because their preferred drug is out of stock. Representative bodies have also expressed their concern about the removal of the current exemption.
The amendments do not call for anything new but for some of the current regulations to be maintained and—where the Secretary of State believes that there is a case for it—strengthened. I look forward to hearing from the Minister the Government’s reasons for seeking to change the current regulations. Has any work been undertaken to assess the potential impact on the future availability and cost of the medicines that will be affected, and on future supplies? Is this designed to save costs—and, if so, what is the expected level of savings to the NHS?
Noble Lords may feel that there is a case for debating the long-term place of such exemptions in the regulations, but now is clearly not the time to pull the rug from beneath the producers of low-cost medicines, or medicines at risk of supply shortages. Instead, it is important that the status quo is maintained until such time as the Government can be clear about the consequences and the benefits of any change. I beg to move.
My Lords, I thank the noble Baroness, Lady Wheeler, for raising important issues through these amendments, both of which relate to the operation of the statutory scheme. I will turn to each separately.
Amendment 7 would set an exemption for low-cost presentations, defined in primary legislation as those presentations,
“of less than £2 per unit or with sales to NHS England totalling less than £450,000 per annum”.
This is similar to the exemption that exists in the current statutory scheme for presentations with a reimbursement price of less than £2.
Officials have continued to have constructive discussions with industry representatives and stakeholders throughout the consultation and since publishing the illustrative regulations. Through these discussions, my officials have been listening to views on the illustrative regulations and refining the policy approach for a future statutory scheme. I am sympathetic to the arguments that companies make in relation to these types of low-cost presentations, which could not only lead to direct savings to the NHS when compared to more expensive treatments but incentivise companies to lower prices further to meet the threshold. I reassure the noble Baroness, Lady Wheeler, that as a result of the discussions with industry, my officials are already considering a policy approach for low-price presentations.
However, the Government are not convinced that it is appropriate or desirable to have such an exemption set out in primary legislation. Setting out specific thresholds in primary legislation would be inflexible and would limit the Government’s ability to adjust them to account for the economic circumstances at the time. I can, however, commit that an exemption for low-price presentations will be included as part of the forthcoming consultation on the operation of the scheme, which will take place this year. I hope that this provides the noble Baroness and other noble Lords with the reassurance that the Government will fully consider this and take it forward.
Turning to the second amendment, Amendment 8 would place a legal duty on the Secretary of State to make provisions which “ensure adequate supplies” of those medicines in the statutory scheme. The production and supply of medicines is complex and highly regulated, involving materials and processes that must, rightly, meet rigorous safety and quality standards. These complex factors stretch far beyond those that relate specifically to medicine costs. Difficulties in ensuring supply can arise for a number of reasons including manufacturing problems, supply and demand imbalance and issues related to raw materials and regulatory action as a result of, for example, manufacturing site inspections. It is also important to remember the impact of a globalised pharmaceutical industry, which can mean that factors around the world can directly impact supplies of medicines to the UK.
However, I reassure the Committee that the Government recognise the vital importance of ensuring adequate supplies and actively manage and respond to supply issues on a daily basis. The Government have also carefully considered the supply issues in developing policy and regulation. We consider that in most cases, the ability to increase prices, as provided in the illustrative regulations, is the right way to address short or long-term supply problems, where these circumstances are dependent on UK pricing. We also recognise that there may be exceptions to this approach, which is why we included in the illustrative regulations a provision in Regulation 11 allowing the Secretary of State to exempt companies from price controls in the statutory scheme,
“where he considers that an exemption is necessary to ensure adequate supplies of that presentation for health service purposes”.
I understand and am sympathetic to the intention behind the amendment and concerns relating to the supply of medicines in the statutory scheme. However, given the complexities in the provision and supply of medicines, we believe that exemptions for supply issues are best dealt with by exemption, rather than a comprehensive and broad duty. In responding to both amendments, I hope that I have provided the Committee with the assurance that we recognise the concerns and will address them in both primary legislation and the illustrative regulations. I ask that the noble Baroness withdraw her amendment.
My Lords, I thank the Minister for his response and for the focus that he says that he will give in future to constructive consultation with the industry. There was a feeling that it was not being consulted on these issues, and his reassurances about that are welcome. Obviously, supply in the industry is complex and I will look at what the Minister said. We are concerned about the industry’s fears about the cost of deleting these provisions and we were certainly not advocating putting them into statutory requirements but making sure that the regulations dealt with this issue adequately. For the most part, I thank the Minister for the response, and I beg leave to withdraw the amendment.
My Lords, I hope that the Minister will accept the common-sense amendment of the noble Baroness, Lady Finlay. The amounts of money that the NHS would save on specials may not be in their billions but, as my granny used to say, “Look after the pennies and the pounds will look after themselves”. I am sure that other noble Lords will have heard that from a couple of generations back. It seems crazy if there is no opportunity for the Government to stop this. It sounds like exploitation to me and a fairly simple change to the Bill could stop it in its tracks.
My Lords, we very much support the intention behind this amendment and commend the noble Baroness, Lady Finlay, for her determined and dogged campaigning in highlighting this issue and trying to persuade the Government to recognise the problem. In a Bill designed to close loopholes, this is a particularly important one to address. At the same time, it would obviously save the NHS a substantial amount of money. A BBC investigation six years ago estimated a potential saving of £70 million a year just for England, so it is hard to see why the Government should not want to take urgent action now.
We have heard from the noble Baroness, and from the excellent work undertaken on this issue by the British Association of Dermatologists and other organisations, of the overall costs and substantial savings that could be made on unlicensed medicines. Addressing this issue would be to the benefit of the NHS and the many patients in community and primary care who are denied access to special order medicines because of the way in which the current procurement system operates. The anomaly is that if they were in hospital, they would have stood a good chance of being given the drug.
We have also heard how the current system can result in some suppliers charging hyperinflated costs for specials, particularly when chemists do not buy direct from a specials manufacturer but via a wholesaler which adds its costs to the price. This results in the NHS having to pay the chemist the wholesalers’ rather than the manufacturers’ price, because there is no price tariff on the unlicensed specials. Moreover, prices for specials in the primary care sector are set by reference to the Association of Pharmaceutical Specials Manufacturers, which covers private companies that generally manufacture only smaller and therefore much more expensive quantities of drugs. The whole system, which has one much cheaper and cost-effective system for hospitals and another for community and primary care, surely needs to be urgently addressed.
I ask the Minister whether consideration can be given to the Competition and Markets Authority being asked to investigate suppliers. Why have the Government not looked at and learned from the Scottish system, which takes a whole-market approach in the way that the noble Baroness proposes should operate here? We understand that the Government have proposed a six-month review of the existing and proposed arrangements, but we do not feel that this adequately recognises the urgency and scale of the problem. In the Commons, the Minister, Philip Dunne, acknowledged that the Government have existing powers to address the issue, so why is it not being addressed?
The amendment contains the important provision to require NHS England, as part of its tariff-setting processes, to seek prices from the NHS as well as private manufacturers—the whole market—and we fully support this. If the Minister would at last take the important step of recognising and acknowledging the problem, then work could commence on the procurement process required to bring the new system into effect.
My Lords, I thank the noble Baroness, Lady Finlay, for the work that she has put into investigating this issue, for her amendment and, indeed, the intent behind it, which is to save the NHS money and provide a better bang for our buck. That is something that everyone would support.
I say first that it is the Government’s priority to make sure that we get the best possible results for all NHS patients with the resources we have. That is what the Bill, in its entirety, aims to do. This amendment seeks to save the NHS money on specials by requiring CCGs, hospital trusts and community pharmacies to seek no less than three quotes for non-tariff items, at least one of which should be from an NHS manufacturer and, where possible, to select the cheapest quote. It also requires NHS England to take into account prices of NHS manufacturers when setting reimbursement prices. A special is a medicine manufactured or imported to meet the specific needs of a specific patient. By nature they are bespoke, and therefore they do not have the same economies of scale during manufacture and distribution as licensed medicines. Due to the bespoke nature of specials, the costs associated with manufacturing and distribution will never be as low as the often relatively cheap components that make up the special. I say that by way of background for those who are perhaps not as familiar with the subject as the noble Baroness is.
I turn now to the idea of setting tariff reimbursement prices and including data from NHS manufacturers. In England, reimbursement prices for the most commonly prescribed specials are listed in the drug tariff. Those prices are based on sales and volume data, which the department currently obtains from specials manufacturers under a voluntary arrangement. The new provisions in the Bill would make reimbursement data more widely available and more accurate—which would clearly be a benefit in making sure we get value for money with specials. By setting a reimbursement price, we encourage pharmacy contractors to source products as cheaply as possibly because it allows them to earn a margin, which in turn creates competition in the market and, as a result, lowers reimbursement prices. Since these reimbursement arrangements were introduced in 2011, we have observed that, in England, the average cost for specials listed in the drug tariff decreased by 39% between 2011 and 2016.
In setting that out, I do not disagree with the idea that there are instances of wild variation. Indeed, I ask the noble Baronesses, Lady Finlay and Lady Wheeler, for any examples and evidence that they have. I would be keen to see them, to better understand instances where it has happened.
Basing reimbursement prices on selling prices from more manufacturers than we do now, which the Bill would allow us to do, would make our reimbursement system more robust. For specials, we currently rely on information from those manufacturers that have signed up to our voluntary arrangement. There have been talks with NHS manufacturers to provide information on a voluntary basis. However, we have not been successful so far in securing data from NHS manufacturers that we are able to use. The Bill would enable us to get information from all manufacturers, including NHS manufacturers, for the purpose of reimbursing community pharmacies—that being, of course, one of the main aims of the Bill. Once we receive data from NHS manufacturers, we will be able to assess whether it is appropriate to include it in calculating reimbursement prices. We are actively looking to see whether we can include data as part of our reimbursement price setting, and the Bill will help us to get it. Consequently, we do not need the amendment.
My Lords, this important group of amendments to Clauses 6 and 7 covering England and Wales is intended to reduce the scope of the burdensome information requirements under the Bill by excluding medical technology and supply sectors from its provisions. The Bill itself is inconsistent throughout on how it refers to this key part of the industry, variously referring to the producing of medical supplies, of health service supplies or of health service products. This gives fuel to the widespread assumption that the medical supplies parts of the Bill were a hastily drawn-up afterthought addition to its main purpose.
Our amendments in this group—excluding Amendment 19—remove all references to “health service products” in these clauses and substitute the “health services medicines” reference consistent with the other parts of the Bill applicable to the pharmaceutical industry. Despite extensive questioning and probing of Ministers by noble Lords and in the Commons and today’s explanation from the Minister in our earlier debates we have still to hear any evidence-based justification for these heavy-handed information and disclosure requirements. Both the ABPI and the ABHI have voiced strong concern at the onerous information requirements under the Bill and draft regulations and the potentially huge impact on SMEs across both sectors.
We were encouraged at Second Reading when the noble Lord, Lord Prior, in response to the widespread and deep concerns put forward, told us that,
“the last thing in the world we want to do is to build a bureaucratic edifice … or to gold-plate regulations, information requirements and the like … we are absolutely open to all ideas and suggestions on how we can reduce the regulatory and bureaucratic requirement on companies that supply the NHS”.—[Official Report, 21/12/16; col. 1685.]
Just to remind noble Lords—a point underlined earlier by my noble friend—the Bill currently requires,
“a person who manufactures, distributes or supplies any UK health service products”,
and in England it is applicable to,
“any medicinal products used to any extent for the purposes of the health service continued under”
proposed new Section 264A(1),
“and any other medical supplies, or other related products, required for the purposes of that health service”.
In other words, millions of products and thousands of small, medium, large and very large businesses.
Within Clause 6, information may be required on:
“the price charged or paid by the producer for products … the price charged or paid for delivery or other services in connection with the manufacturing, distribution or supply,”
of those products,
“the discounts or rebates or other payments given or received … in connection with the manufacturing, distribution or supply”,
of those products and,
“the revenue or profits accrued … in connection with the manufacturing, distribution or supply”,
of these products. These are the current draconian provisions and the only response so far to the Government’s insistence that they are open to ideas and suggestions is to promise to consult the medical supplies sector after the legislation has been passed.
We will not go into the issue of the dreaded Section 260 of the 2006 Act, which already contains powers to get price control and information powers over the companies concerned, but we have still to hear a convincing argument as to why it cannot be used as a basis for seeking any further information that is required. We are told that the new provisions clarify, modernise and streamline and now, in the noble Lord’s words, “make the provisions much clearer than they currently are in the 2006 Act”, but Ministers have still to explain exactly how this is the case.
To remind the Committee, the impact assessment makes the astonishing admission that the costs of these provisions have not been quantified for manufacturers, wholesalers and dispensers. Can the Minister tell the Committee whether any further work has been done on this? Surely proposals that stand to impact tens of thousands of businesses should be part of the evidence base before the Government decide to proceed with legislation? It is crucial that the Government accept our amendments and delete the medical supplies industry from the scope of Clauses 6 and 7; only then can they have the meaningful consultations with the industry that should have taken place before the introduction of the Bill. As noble Lords have underlined, it is not acceptable for Ministers to seek to change primary legislation to give the Government new information powers when the details and impact of the new powers will emerge only in future.
Finally, Amendment 19 in this group seeks to address the huge burden that the new information requirements will place on thousands of small businesses across the country. Bearing in mind that the Government have done no work on the potential impact on SMEs, this amendment would at least introduce a threshold limiting the businesses affected to those companies with a total workforce of more than 250 employees or with annual revenues of more than £50 million in each of the preceding three fiscal years prior to the information request. This is based on the EU threshold in relation to procurement. However, given our upcoming withdrawal from the EU, it seems sensible to specify a roughly equivalent amount in pounds. The value of the pound is, of course, currently subject to ongoing fluctuations. If the Government are inclined to act on this amendment, the Minister and his colleagues may wish to give some thought to an exact figure ahead of Report.
The potential impact of the proposed powers on SMEs is significant and could come with a significant unseen cost to domestic businesses and, as a result, to patients. A small firm such as Mediplus, with 55 employees and a turnover of approximately £6.5 million, already has to meet a range of requirements to demonstrate that it is providing value for money. The Bill would increase the time and cost of demonstrating compliance with regulations without any discernible improvement in final outcome. Increasing the bureaucratic burden on SMEs could force firms to consider how they bring products to market, which could have only a negative impact on the NHS and its patients.
The Government have indicated that they would exempt businesses with a turnover of approximately £5 million. The noble Lord will appreciate that, although that sum sounds large, it is very little in comparison with the revenues of the larger pharmaceutical firms which the Bill aims to regulate. The Government’s proposed exemption will still subject a company such as Mediplus to an increased regulatory burden. As noble Lords keep pointing out, all this is completely counterintuitive, given the Government’s supposed commitment to deregulation, and can only risk the viability and innovative streak of very small businesses, which we should be supporting in the current climate. I beg to move.
My Lords, I have added my name to the set of amendments and strongly support what the noble Baroness, Lady Wheeler, said.
The Minister is new to this legislation. He has joined the party a little late on the Bill. I ask him to stand back and look at some of the terminology used in it. It skips lightly through about four different terms: health service medicines, medicinal products, medical supplies and health service products. It zigzags in and out of those terms throughout the Bill. It then gives a set of definitions at the end which, on the most generous interpretation, overlap with each other. So we are imposing new obligations on a whole set of people in and around the NHS and the pharmaceutical industry without being very clear which group of products we are most concerned about. We are taking powers in the Bill to put obligations on all suppliers of those products to keep a lot of information in case the Government should at some point in future call on them to provide it. That does not seem to me a sound basis on which to legislate when we are trying to reduce the regulatory burden on not just small but medium-sized companies. We always talk about the small companies, but Amendment 19 is useful because it involves reducing the burden on medium-sized companies as well.
The impact assessment then adds to the problem by giving no idea of the impact of these provisions on those companies. At least these amendments narrow the focus to where there is an acknowledged problem—medicinal products—which is where the Bill started. If you read the Long Title, it looks as though it started as a Bill about medicines to which someone has tacked on “and related issues”, or similar words. I suspect that the Bill started off trying to deal with a genuine problem but has grown just in case it might be helpful to have some other provisions. Then, to add unnecessary complexity, it has moved around on what products are to be covered to the point where we are putting obligations on a very large number of organisations in case the Government come calling for information.
That is why I shall return to this subject when we come to Amendment 33, which tries, at the very least, to put some obligation on the Secretary of State to show that he has good reason for requiring the information sought in this Bill. That is a debate for another day, but the Minister should look very carefully at whether the Bill has a confusing set of definitions and a use of words that is going to cause a lot of confusion for the world outside.
My Lords, I thank noble Lords for their many amendments in this group. They cover two very important aspects of the Bill and I am grateful for the opportunity to provide further clarification.
I will look first at the issue of small and medium-sized enterprises. As noble Lords will understand, the medicines sector is very diverse, with companies ranging from the largest global enterprises with multiple interests to very small companies that manufacture specials on a bespoke basis. The Government have no intention to put unnecessary burdens on companies, and especially not on SMEs. The information that we would require them to keep, record and provide would not be more than companies are currently required to keep for tax purposes. For routine collections, we know that they are not an excessive burden on companies. We heard the director-general of the British Generic Manufacturers Association say at the evidence session for the Bill in the Commons that:
“Providing those data is not a big issue for the majority of our members because it is run from their invoicing system”.—[Official Report, Commons, Health Service Medical Supplies (Costs) Bill Committee, 8/11/16; col. 7.]
For non-routine collections, the illustrative regulations specifically make provision for SMEs, defined here as companies with a UK turnover of less than £5 million, which can provide information in the form of pre-existing information such as invoices. This is the method by which we currently collect information from pharmacies, and we know that the process places barely any burden on them. We will consult the industry on the definition of an SME and will look also at the different definitions—I am aware that multiple definitions are being used across government. We would rely on the information provisions in the Bill to be able to obtain information to operate any price and cost control schemes. This definition of an SME would make it impossible to obtain information from certain companies and, therefore, it would be much harder effectively to operate our voluntary and statutory schemes. The amendment has the effect, therefore, of limiting applications of pricing controls set out in this Bill to large companies only.
We have considered carefully the application of the statutory scheme to small companies. Our consultation last year proposed that the exemption threshold for the new statutory scheme should be set at £5 million of branded health service medicines sales. This maintains the current statutory scheme arrangement and aligns, as we are trying to do throughout the Bill, with the current PPRS. Most industry responses agreed with this proposal, and the illustrative regulations published to aid discussion of the Bill show how it would be incorporated into the operation of the scheme.
It is also important to note that this bespoke definition is focused on the level of sales rather than company turnover, ensuring that only those businesses that make branded health services medicines sales of more than £5 million a year to the NHS will be included in the schemes. On that basis, any company, including those which fall within the EU definition of an SME, will be included in the scheme only if their sales reach this threshold. Not only does this align with the current PPRS and the Government’s broader aims to support SMEs but this bespoke definition ensures that the focus is kept on sales of branded medicines to the NHS. More details are set out in the illustrative regulations for the statutory scheme that have been published alongside the Bill.
There would, however, as a result of this amendment, be additional impacts to the reimbursement of community pharmacies and GP practices, which is one of the core purposes of the Bill, and to the collection of information. Community pharmacies purchase the medicines they supply against NHS prescriptions. The drug tariff sets out a reimbursement price that they will be paid for the majority of medicines. The Government have voluntary agreements in place with manufacturers and wholesalers of unbranded generic medicines and specials. They provide us with information on their prices and volumes, which informs our reimbursement prices. As a consequence of these arrangements, the Government have been able to reimburse community pharmacies more robustly for the products covered by the arrangement.
If SMEs, whether defined as set out in the amendment or under any other definition, were excluded from the requirement to provide information, then not all manufacturers and wholesalers would be included. Reimbursement would be based on large company data alone, with the risk that the prices being paid by small and medium-sized enterprises would not be reflected in the reimbursement prices, to their disbenefit.
In order for the reimbursement system to work effectively, appropriate data are needed from all parts of the supply chain, both large and small companies. If the prices charged by larger companies were generally lower, and these would be the only prices used to inform reimbursement prices, we would be systematically underfunding community pharmacies. This in turn could drive them to purchase products from the large companies only. The effect of this could be that small companies go out of business leading to less competition.
The third purpose for collection of information is for the Government to be assured that adequate supplies of healthcare products are available and on terms which represent value for money. We recognise that this non-routine provision of information is somewhat different from that associated with reimbursement and running our price and cost control schemes, and this is exactly why we have made provisions for SMEs.
I hope that I have assured noble Lords that the burden on SMEs has been considered carefully. We have provided bespoke definitions for both the price control schemes and the information provisions, in order that requirements are placed only on relevant companies for essential information. Broader definitions would risk both the price control schemes and critically the reimbursement mechanisms failing to work as well as they do now, let alone how they could work in the future.
I turn now to the other effect of the amendment, which is to limit application of the information-gathering powers to medicines and remove medical supplies or other related products from the scope of the clause. In response to the noble Lord, Lord Warner, I will look at the use of language and definitions subsequent to our debate today and provide reassurance that that is being done in the appropriate way and not to create confusion.
The 2006 Act gives the Government powers to control the price of medical supplies, as we have discussed at length, to collect information on medical supplies and to take enforcement action in the event of non-compliance. The Bill changes the 2006 Act in relation to medical supplies by reducing the enforcement penalties from criminal to civil, and aligns medical supplies provisions with those for medicines.
Clause 6 of the Bill brings together in one place all of the information requirements underpinning the provisions within this Bill. Without that information the provisions cannot apply to those companies. Removing medical supplies and other related products from this clause would therefore mean that we would not have the necessary information to put in place and operate a price control scheme if we wanted to and take specific action against instances of unwarranted price rises that come to our attention, although I appreciate that noble Lords have concerns that those two things will never happen in reality. Finally, it would impede our ability to put in place more robust reimbursement arrangements for medical supplies provided by community pharmacies for all the reasons that I touched on in the context of small and medium-sized enterprises. That is very important information to have to ensure that reimbursement happens properly.
It is right and proper for the Government to have effective powers to gather information regarding medical supplies and other related products in order to improve our understanding of the costs across the supply chain and ensure that those are providing value for money and that we are properly reimbursing community pharmacies. The medical supplies industry is made up largely of SMEs, and my comments earlier reflect my very real concern to ensure that we ask only for essential information that does not provide an additional burden on such companies. On that basis, I ask the noble Baroness to withdraw the amendment.
My Lords, I thank the Minister for his response. Quite honestly, at this late stage, I will not go into the debates that we have already had on the issue of inclusion of non-medicines in the scope of the Bill or of the burden on SMEs. But it is hard to see from the Minister’s response how the Government can say that they are open to ideas and suggestions on how they will reduce the regulatory burden on the medical supplies industry and particularly on SMEs. The Minister knows that we remain to be convinced on this whole area. I hope that we can have ongoing discussions on this matter before Report. We will certainly return to this issue, but meanwhile, I beg leave to withdraw the amendment.
(7 years, 11 months ago)
Lords ChamberMy Lords, I too congratulate my noble friend on her usual robust and forthright introduction to this debate, providing a clear strategic overview of the options we face that is firmly rooted in the day-to-day reality for older and disabled people and their carers, and on telling it like it is. Indeed, the Minister knows well how it is because he has acknowledged several times the scale and seriousness of the funding issues faced by social care, and he surely knows that the Government’s remedy for this, of the 2% local authority precept and money in the Better Care Fund starting next year, are nowhere near enough and do not provide the urgent resources and investment that social care needs now.
Before last week’s Autumn Statement, a chorus of health and social care leaders, councils, private and voluntary sector providers, think tanks, staff unions and patient organisations pleaded for urgent action by the Chancellor. The Guardian summarised the cost of what is needed for a “basic” rescue of social care at £1.3 billion, the same sum as the Chancellor actually allocated for roads. A major Statement about the Government’s financial programme, policies and priorities making not one mention of social care was a devastating blow for staff and providers, for the now 1.2 million people needing but not getting basic care and support to help them to stay living independently in their homes or in the community, and for those desperately struggling to pay ever-escalating care home fees.
Today’s debate has provided a clear overview of the current state of social care and the impact of what have now been nearly seven years of substantial cuts to local council budgets. The Minister has himself estimated that the decline in real-terms spending on social care from 2010 to 2015 is 12.8%. We have ranged across concerns about the provision of community support services, domiciliary and residential care and the interface of social care with hospital and primary care—the subject of my recent debate on the now record 1.15 million delayed hospital transfers, at least a third of which are caused by the unavailability of social care support. The noble Baroness, Lady Walmsley, set out the figures for this, underlining the cost of £120 million a year to the NHS compared with the estimate by the National Audit Office of what community care costs would be—namely, £180 million.
We all join with my noble friend Lady Pitkeathley in taking some comfort and solace from the consensus on the urgent need to address the social care funding crisis. The medical profession, together with Conservative, Labour and Liberal Democrat leaders in local government, have warned that the safety of millions of elderly people is at risk and that,
“the vulnerable will increasingly struggle … to meet basic needs such as washing, dressing or getting out of bed”.
We on these Benches strongly support the need for the fundamental long-term reform called for by my noble friend and to join up care services, from home to hospital, with properly integrated health and social care budgets.
In this regard, perhaps I may commend as a contribution to these issues a recent report by the Commission on Care entitled, Towards a New Deal for Care and Carers, which crucially looks at how the social care system is working in England from the point of view of care recipients, particularly older people, patients, carers and women, who we know because of their role as the main providers of paid and unpaid care, have been disproportionately affected. It is increasingly self-funders and unpaid carers who are having to fill the gap between diminishing publicly funded care and the growing care need.
The need for an urgent review cannot be more clearly evidenced than in residential care, as a number of noble Lords have pointed out. The sector is home to 425,000 residents in around 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, in particular dementia, stroke and diabetes-related conditions. Many residents can have up to six co-morbidities. Some 75% of the residents in the top three care home providers are publicly funded. Noble Lords have observed, and Age UK has pointed out, that throughout the sector self-funders of care are getting a raw deal and are helping to keep homes viable and in operation. They are stuck in the middle and unfairly being asked to pay the price for a failing care system. How long can this system of providing residential care survive without going under?
The public focus and concern has been on the precarious financial state of the large-scale providers, but we know that 75% of them are in fact local provider organisations in small group homes being run by just the owners themselves. Care England has estimated that local council fees paid to care home providers average out at about £2.30 an hour and warns that small homes will be the first to go to the wall if extra funding, particularly for the implementation of the national living wage, is not provided.
Does the Minister agree that the current system of funding for residential care needs urgent and thorough review and reform? What plans do the Government have in place in the event of the financial collapse of a large-scale provider? Is he confident that the CQC risk mitigation monitoring of care home balance sheets is a sufficient level of scrutiny and safeguard to avoid a repeat of the disastrous Southern Cross home closures?
On domiciliary care there is clear and compelling evidence that the current system of providing this vital care just is not working. The latest figures in this Sunday’s Observer showed alarmingly that in 48 councils at least one company that provides care for the elderly in their own homes has ceased trading over the last six months. Also in that period, 59 councils have had to find new care arrangements after providers have handed back contracts because they cannot make ends meet on the money that councils are able to pay.
Last month, we saw the home care provider Mitie announcing withdrawal from its home care business, with its CEO, the noble Baroness, Lady McGregor-Smith, a Member of the House of Lords from the Benches opposite, underlining that the prices requested by local authorities for care,
“made it impossible for Mitie to carry on”.
Mitie’s press release quotes the noble Baroness as emphasising that councils and the health service were not to blame for the care crisis because employment costs, including introducing the national living wage, had gone up by a third in the past three years as funding had dropped sharply. She said:
“Care workers should be paid significantly more but someone has got to pay for it. If we are serious about social care in the UK it needs significantly more than the funding that has been suggested”.
On the Dilnot report, I can take the unusual step of answering noble Lords who have questioned the Government’s promises about implementing Dilnot. In last week’s debate on the implications of Brexit, the Minister confirmed that the Government are committed to implementing Dilnot by 2020 and that next year and the year after would see the work on implementation begin and on refreshing the strategy. I look forward to hearing more about this from the Minister.
In last week’s debate, we also had the reminder of the shocking figure of the annual turnover of care staff of 37%, which was one of the most depressing moments, underlining how far we still have to go to attract and retain staff in this vital job, and to make them feel valued as an essential part of the care team. In this regard, I join with other noble Lords in congratulating the noble Baroness, Lady Cavendish, on her excellent maiden speech, in particular on her description of the work of care staff who visit day to day in people’s homes. I can particularly attest to that as a carer of someone with a severe disability who has carers in their homes every day. I thought it was a very apt description.
Finally, I come back to the 6.5 million unpaid carers in the UK who are increasingly having to prop up a care system in crisis and provide more and more carer hours than ever before, much of which should be provided by trained care staff. My noble friend Lady Farrington spoke movingly about this. We are told that supporting carers is a key government priority. The national carer strategy is being revised and updated. The Minister has promised to write to me about this, but unless the strategy addresses the everyday support that carers need to help them care for their loved ones—such as assessments and care plans that result in actual service support, funding for local carer support organisations that build local community advice and help for carers and are there when carers need them, and the regular respite care that is so vital when you are a 24-hour, seven-day-a-week carer—then it will just be fine words. My local council, Surrey, which has previously led the way on carer support services, is having to cut carer support services by 33% over the next three years. A recent FoI request from Revitalise showed 42% of English councils had made cuts to respite care for carers.
This has been a key debate and has underlined the consensus we all still desperately need and which we hope will lead to the Government providing the extra funding that is needed now and into the future. The social care system is complex, difficult to understand and access, especially for the people it needs to be supporting, and is failing across community, residential and domiciliary care, despite the commitment and efforts of providers, staff, volunteers and carers. It needs fundamental and urgent reform, and long-term funding that truly meets the cost of providing good-quality care.
(8 years ago)
Lords ChamberMy Lords, the Minister has told the House that there is strong evidence to suggest that moving from bursaries to nurse student loans will increase the availability of nurses. Can he explain exactly what this evidence is and when he considers that the Government will be in a position to publish an independent assessment of the impact on both current recruitment levels and addressing the serious shortage of qualified nursing? Does he accept that the Government’s move to bursaries is particularly risky in the light of the possible threat to EU qualified nurses?
It is not possible to carry out an independent assessment at the moment, as we will not know the rate of applications to nursing schools until January 2017. The courses have consistently, over many years, been oversubscribed by about 40,000 people so, even if there is a fall-off in the number of young men and women who want to become nurses, a significant number of people would like to go to nursing school but are not able to get in at the moment. I think we will have to wait until January before we can be sure whether the switch from bursaries to loans is having an impact.
(8 years ago)
Lords ChamberMy Lords, the Government are committed to introducing the proposals of the Dilnot commission by the end of this Parliament in 2020, and I understand that during 2017-18, we will bring back those proposals to refresh them, but with a view to phasing in implementation in 2020.
My Lords, the CQC report particularly highlights the crisis in residential care, showing that at a time of growing need the number of care homes in England has fallen by 8% in the past six years. Age UK’s report, published a couple of days earlier, warmed to the plight of self-funder residents in private care homes, who are having to pay higher fees because local authorities cannot afford to pay the actual care costs of the residents whom they support. Is not that the problem that the Dilnot proposals under the Care Act were designed to address, and does not it underline the fact that self-funders are ultimately paying the price for a care system under severe pressure and in desperate need of extra funding and investment?
My Lords, it is interesting with regard to the CQC’s State of Care report that there has been a decline in the number of residential care beds—that is absolutely true. However—and this is an extraordinary statistic—from 2010 to date, the number of domiciliary care agencies has increased from 5,700 to 8,500. The other interesting trend that came out of the CQC report was that, on balance, smaller care homes, nursing homes and domiciliary care agencies tend to perform better than the big ones. That is because they can deliver a degree of personalised care—a sort of home-from-home care—that the bigger concerns cannot. But I totally understand the point that the noble Baroness makes. This sector is under tremendous pressure; we recognise that.
(8 years ago)
Lords Chamber
To ask Her Majesty’s Government what response they have made to the Parliamentary and Health Service Ombudsman’s Report of investigations into unsafe discharge from hospital, published in May.
My Lords, this very shocking report of nine deeply disturbing cases showing what happens to patients when hospital discharge goes wrong was published in May. Since then we have had a plethora of reports from the National Audit Office, the Public Accounts Committee and now, more recently, the CQC itself, which underline the wider context in which these cases cited by the health ombudsman have happened, and the increasingly desperate situation in many hospitals and in social care.
The ombudsman’s report came just over a year after Healthwatch England’s extensive Safely Home report on hospital discharges. This did not cover just nine case examples, but was the result of an extensive, in-depth inquiry led by people experiencing unsafe hospital discharge, with a particular focus on mental health and homelessness. The ombudsman’s cases all involved vulnerable, frail, elderly people, some with dementia, who were either discharged before they were clinically ready to leave hospital; were not properly assessed before discharge, with neither they nor their carers being consulted or even informed about discharge arrangements; and where no care plan was in place for how they might cope at home. Alternatively, patients were kept in hospital much longer than necessary due to poor co-ordination across services, or, in reality, no provision or support being available in the community.
Vulnerable, desperate, homeless and mentally ill people are covered in the Healthwatch inquiry. The failure to consider the full range of their needs before discharge from hospital or a care setting means for the homeless that no support housing or benefits structures are in place to enable patients to recover, leading to what the St Mungo’s charity cites as “revolving door” readmissions to hospital and huge anxiety and suffering for the individuals concerned. As regards mental healthcare, poor communication and co-ordination between different services and lack of desperately needed community support services so often resulted in patients being unnecessarily kept in hospital settings for months.
The National Audit Office report shows that overall the number of delayed hospital transfers has risen by a third in the past two years to 1.15 million, with two-thirds being a result of delays caused by the NHS and one-third caused by problems of non-availability of social care. Age UK’s estimate is that 184,000 nights are lost to the NHS on patients who cannot be cared for at home, or for whom no affordable residential care can be found, costing the NHS £820 million a year, a 70% rise in the last two years. The NAO’s comparable cost figure of care in the community for those patients is about £180 million.
Extended stays in hospitals demoralise older people, cause institutionalisation and dependency and put them at serious risk of losing mobility, muscle strength and the ability to do everyday things, such as bathing and dressing. There is also an increased risk of infection. The fact that there are almost twice as many people in hospital beds unnecessarily as a result of the NHS failing to get its act together rather than through lack of social care provision in the community is particularly striking.
Moreover, the PAC report clearly shows the huge variations and range across the country. In 2015-16, for example, there were 10 bed days lost in Northumbria and nearly 18,000 days in Lincolnshire. Many areas are getting it right under difficult and challenging circumstances. The NHS itself needs to do much, much more to get its own house in order, and that is why national leadership and action are so important. In response to this situation, the PAC’s comments are very telling. It accuses the Department of Health and NHS England of relying too easily on differing local circumstances as a catch-all excuse for not securing improvement in NHS performance. The PAC says:
“Those areas which are doing best are the ones where all the local system owns all of the problem but this practice is all too rare”.
In other words, it is not enough to wring one’s hands over the variability problem.
The Healthwatch report points to guidance aplenty having been issued over the past decade including from NICE, the Department of Health and the recent transition quality standard. However, as it says with all this,
“it is not clear why further individual initiatives will make a difference without something more fundamental changing in the system”.
The crying need for national and local leadership and system-wide ownership, action and change brings us on to the strategic and transformation plans—about which we know little real detail but are told are NHS England’s only show in town. Some 44 “footprints” are to plan for a health service focused on people living with long-term conditions in the community. The Minister has underlined his optimism about the plans, most of which are “genuinely local” and are being drawn up by “collaboration” between hospital trusts, CCGs and local authorities.
The deadline for STPs is now upon us, so can Minister tell us more about how NHS England will be evaluating, assessing and analysing the plans at national level to ensure that they meet the vision set out in the NHS forward view for integrated health and social care? Is he confident that they will focus on better care rather than on just reducing finance? He said earlier this week in response to my Question on carer support that plans,
“will include radically improved out-of-hospital care through stronger integration and improved access to primary care”.—[Official Report, 7/11/16; col. 889.]
From the STPs we know about to date this looks to be funded by cuts to acute services—such as accident and emergency and maternity services—which we know will be difficult to make and will be vigorously opposed both locally and nationally. In this regard, the King’s Fund assessment is worth repeating, namely that STPs,
“will not be credible unless they demonstrate how money and staff”,
for services outside hospital will be found. Does the Minister acknowledge this? Are the Government ensuring that STP outcomes are focused on long-term sustainability rather than on short-term savings and cuts? How are the 44 footprints to be made into a coherent national forward journey?
On social care funding, the latest CQC report must surely have set alarm bells ringing right across government. Drawing on 20,000 inspections of hospitals, care homes, A&Es and mental health services, the CCQ tipping-point warning on the sustainability of adult social care is surely a game changer for the Government. The chief executive David Behan was reported as saying he was more worried than at any time in his 40-year career about council care for the elderly—200,000 more people than five years ago are being denied everyday help with basic tasks of washing and dressing and the number of care home beds is continuing to fall, with council-funded places in care homes falling by 26%. In A&E, there were 1 million more visits than five years ago, with half a million more emergency hospital admissions of people aged over 65.
The CQC is reinforcing what stakeholders, staff, campaigners, social care voluntary organisations, think tanks and patient organisations have been telling the Government at every opportunity, particularly during the passage of the Care Act, ahead of every government financial statement and Budget, and ever since they postponed the Dilnot social care funding proposals until 2019. Yesterday we saw the joint letter to the Chancellor from the Nuffield Trust, the Health Foundation and the King’s Fund pleading for urgent action in the Autumn Statement. Surely the Government must finally acknowledge the extent and the scale of the crisis in social care funding and take the action that is needed now.
We are nearly into 2017, less than two years to go until the promised action on Dilnot agreed under the Care Act is due to commence. I remind the Minister that nearly £6 billion of Government funding was committed to its implementation, the substantial part of which has never been spent on social care. Can the Minister reassure the House that the Government are not trying quietly to abandon Dilnot and most of the rest of the provisions of the Care Act that have ongoing financial costs?
I conclude with raising again the Carers UK Pressure Points report which echoed the ombudsman’s finding that growing demand on the NHS is forcing people to be discharged from hospital too early, often without proper support at home and without proper consultation or notice given to their carers. As a carer myself, and someone who speaks to a lot of other carers as a trustee of our local carer support group, the discharge process can often be the most traumatic experience you face, next to the shock of almost overnight becoming a carer of a person with long-term needs and all the uncertainty and anxiety of how you are going to cope with the huge change in your life and of course, in the person you care for. The Government’s long-awaited updated national carer strategy must surely tackle this crucial issue of improved communications between hospitals and carers head on so that carers are fully involved and get the vital support they need. I hope the Minister will be able to reassure the House that this will be so.
I asked the Minister about the national carers strategy. Could he please write to me on that?
I will certainly do that. I should just say that the theme that comes out of the carers strategy is better communication. When half of carers say that they feel that a hospital admission could have been avoided or that the discharge could have been easier if only there had been better communication, that is clearly a critical area.
(8 years ago)
Lords Chamber
To ask Her Majesty’s Government what is their response to the Carers UK report Pressure Points: carers and the NHS, concerning problems faced by carers in accessing primary and community support services for the people they care for.
My Lords, we recognise that far too many people who could be treated at home or in their communities attend A&E. Sustainability and transformation plans are bringing together commissioners and providers to deliver the five-year forward view locally and will include radically improved out-of-hospital care through stronger integration and improved access to primary care.
My Lords, I thank the Minister for his response. The report identifies major problems for carers accessing primary and community support services for the people they care for, and who therefore have no real option but to take them to A&E. Many of these emergency hospital admissions could have been avoided with adequate social care support at home, better access to a district nurse or essential local support for carers themselves. On carers’ support, councils across the country are having to cut back on vital services. My own council in Surrey has a programme of cuts of 33% over three years. With the CQC’s dire warning that social care is at a tipping point, is it not time for the Government finally to acknowledge this and use the Autumn Statement to provide the increased funding and investment that is urgently needed for carers and the people they care for to get the support they deserve?
My Lords, I acknowledge that there is tremendous pressure in the social care system. Looking back over the last 20 years, not enough support has gone into primary, community and social care relative to what has gone into acute care. The sustainability and transformation plans are designed to bring together social care and healthcare. They are being published intermittently as I speak.
(8 years ago)
Lords ChamberThe noble Baroness is absolutely right. The delay in bringing a new drug to the market can very often be between 12 and 14 years, which is a huge amount of time. Part of the reason for that is indeed the regulatory process. The whole purpose of the Accelerated Access Review is to truncate that time. The report talks about reducing for some drugs the time it takes to bring them to market by up to four years, which would be very considerable progress. In terms of international regulatory bodies, if one takes the EMA in Europe and the FDA in the US, clearly they do work together at one level but probably not closely enough, and I suspect that there is too much duplication in regulation. Certainly, as we leave the European Union, we need to be very careful that we do not have a duplicatory regulatory system in this country.
My Lords, the Minister will know that since 2014 the Government have received nearly £1.5 billion from the branded pharmaceutical sector as part of the PPRS to hold down pharmaceutical costs. Why is not some of that sum being used to fund innovative drugs for breast cancer?
My Lords, I think it is a mistake to regard the PPRS and the savings made in that scheme as a separate pot of money. Any savings generated from the PPRS are funnelled back into the NHS. As for new innovative drugs, the cancer drugs fund has been changed substantially and one should regard it now largely as an incubator fund with the same purpose as the Accelerated Access Review, which is to bring forward new drugs more quickly.
(8 years, 5 months ago)
Lords Chamber
To ask Her Majesty’s Government what additional social care resources they will provide to support the numbers of carers aged over 80, in the light of estimates that half of those are providing over 35 hours caring per week.
My Lords, we recognise the invaluable contribution carers make to society and that many provide long hours of wonderful care. We support wholeheartedly the implementation of the improved rights for carers established by the Care Act 2014, providing just over £186 million of funding to local authorities for these improved rights. We are committed to continuing to improve support for carers through the publication of a new national carers strategy by the end of 2016.
I thank the Minister for his response. Research by Age UK, Carers UK and independent age charities shows that the older the carer, the more hours of care they tend to provide. That, surely, cannot be right. Many carers over 80 are providing as much as 50 hours of care a week, often without any support because they do not meet the new eligibility criteria and councils just do not have the money in their social care budgets. Will the Minister undertake to ensure that the new carers strategy tackles these high and increasing levels of unmet demand? With councils across the country having to cut back on carer support, what specific support and funding will the Government provide to help councils offer real support to carers?
The noble Baroness is absolutely right. Nearly half a million people over 80 are providing more than 35 hours a week of care to their partner or loved one, which is a huge commitment and often has profound implications for their own health and well-being. We are all singing from the same hymn sheet on this and I am sure that the carers strategy coming out at the end of the year will address the particular requirements of that age group. The Government will continue to support carers’ rights. I mentioned the £186 million being given to local authorities to do that.
(8 years, 6 months ago)
Lords ChamberMy Lords, I thank the Minister for reading the response to the UQ on the CQC’s serious concerns about the safety of mental health and learning disability patients at Southern Health Trust. The whole House is deeply shocked by the inadequate and completely ineffective response to the Mazars review’s findings, following the tragic death of Connor Sparrowhawk over two years ago. The CQC’s stark assessment that serious risk to patients in ensuring their safety was still not driving the senior management or board agenda beggars belief in the light of the Mazars review and the CQC’s repeated concerns and warning notices. There are still no robust governance arrangements in place to investigate incidents and there is still a lack of effective arrangements to identify, record or respond to concerns about patient safety raised by patients, their carers, staff and the CQC. A particular concern is the continuing failure to act over important specific safety concerns about ligature risks in acute inpatient mental health and learning disabilities services and, given the terrible cause of Connor’s death, the board’s failure to give urgency to approval of the specific protocol for safe bathing and showering of people with epilepsy. Can the Minister assure the House that these will receive urgent attention by the new chair in his task of building new leadership and direction for the board and in an urgent programme of action for the trust?
Patients and their families need to see robust, urgent action and real accountability. When the Secretary of State responded to December’s UQ on Southern Health, he rightly said that, more than anything, people will,
“want to know that the NHS learns from … tragedies”,—[Official Report, Commons, 10/12/15; col. 1141.]
such as these. That clearly has not happened, so I ask the Minister what guarantees he can give to current patients and their families in the care of Southern Health that they are safe. Where is the accountability, culpability and responsibility? Can the Minister tell the House about the content and timescale of the review of the adequacies of the trust’s leadership that the new chair has been tasked with undertaking? Finally, will he listen to the heartfelt pleas of victims’ families, campaigners and all those who are demanding a full public inquiry into Southern Health and into the broader failure in adequately investigating preventable deaths?
My Lords, I, too, thank the Minister for repeating the Statement. The original Mazars report highlighted two profoundly shocking issues: the tragic and preventable death of Connor Sparrowhawk and the fact that too many unexpected deaths among those of learning disabilities and older people with mental health problems were even being investigated. Why did a full three months elapse after the Mazars report was published—and, indeed, only after a BBC investigation covered it—before Monitor finally appointed an improvement director to go in to work with the trust on urgently needed improvement? Why the delay?
Secondly, despite a series of national reports—we have just heard about the CQC report—warning notices, monitoring and progress meetings, all referred to in the Statement, nothing has been said about the precise changes that have happened or improvements that have taken place in Southern Health Trust. When can we hope to hear about specific and tangible improvements to the care provided by Southern Health Trust to some very vulnerable people?
Thirdly, it is crystal clear that new leadership needs to be in place if the trust is to retain any credibility, particularly among the people and families who use its services. Why have there been different responses to Mid Staffs and Southern Health? Both are about the neglect and death of vulnerable people in NHS care. There have been serious consequences for those in leadership positions in Mid Staffs, but not so at Southern Health. What does that say about the value placed on the lives of people with learning disabilities and older people with mental health problems?
(8 years, 9 months ago)
Lords ChamberMy Lords, it is interesting that in the plans put forward for consultation by Simon Stevens of NHS England they are looking at a levy of 20% on sweetened beverages. In Mexico, they brought in a sugar tax of 10%, which according to a study by the Lancet resulted in a reduction in consumption of some 12%. But it is very difficult to isolate the particular impact of tax when many other measures are being used at the same time.
My Lords, Simon Stevens, the NHS chief executive, recently pointed out that obesity is the new smoking, and that Britain spends more on obesity-related healthcare than on the police, the fire service, prisons and the criminal justice service combined: £6 billion and rising. He has promised to raise the price of sugary drinks sold on NHS premises to staff, patients and visitors as another small step. Cannot the Government take steps to introduce this policy across all government departments and institutions?
My Lords, public procurement certainly has a role to play in tackling obesity. I am sure that that is one of the issues that will be addressed in the forthcoming strategy.