Social Care Funding (EAC Report)

Lord Forsyth of Drumlean Excerpts

Thursday 28th January 2021 Grand Committee

Moved by

[Lord Forsyth of Drumlean]

That the Grand Committee takes note of the Report from the Economic Affairs Committee Social care funding: time to end a national scandal (7th Report, Session 2017-19, HL Paper 392).

[Lord Forsyth of Drumlean (Con) [V]]

My Lords, I am pleased to introduce the Economic Affairs Committee’s report, Social Care Funding: Time to End a National Scandal.

We published our report in July 2019, and yet, 18 months later, we still await the Government’s response. The Government are accountable directly to Parliament. They have a duty and a responsibility to reply to committee reports in a timely way, usually within two months. Some 18 months ago, we said:

“With each delay the level of unmet need in the system increases, the pressure on unpaid carers grows stronger, the supply of care providers diminishes and the strain on the care workforce continues.”


Just 20 days after our report was published, the Prime Minister stood on the steps of Downing Street and said

“we will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve.”

Now, more than ever, urgent government action is required.

Before I explain our conclusions, I would like to thank the committee staff who produced the report: Sam Newhouse, Luke Hussey, Michael Berry, Ben McNamee and Lucy Molloy. Especial thanks go to our special adviser Professor Richard Humphries, whose support was invaluable. I also thank my noble friend Lord Tugendhat, the noble Baroness, Lady Bowles, and the noble Lord, Lord Burns, who leave the committee today under our rotation rules. All of them have made a huge contribution to our deliberations and participated in no fewer than nine inquiries.

I must begin by praising our care workers. They have been on the front line of the pandemic. They have put their own health and safety to one side to care for and protect the most vulnerable among us. Care workers have performed an immeasurable service for our country but clapping alone will not help put in place the major reform that the sector so desperately needs.

In May 2020, I wrote to the Chancellor to press the case that this report deserves renewed attention now that the needs of the sector, and the heroic service and sacrifice of its workforce, have come to the fore of the nation’s priorities. In response, the Chancellor said:

“The Government’s number one priority for adult social care is for everyone who relies on care to get the care they need throughout the COVID-19 pandemic.”


In July 2020, I exchanged letters with the Minister of State for Care in which she assured me that the Government were due to meet shortly to discuss our report and any further reflections on reform. Finally, in October 2020, the Minister, my noble friend Lord Bethell, said that the pandemic had delayed the Government’s work on designing a sustainable social care funding model—words, words, words and broken promises.

Let me be clear. It is quite wrong to suggest that the Government could not have, and cannot, bring forward a plan for social care reform because of the pandemic. The opposite is the case, and I hope my noble friend will not repeat this calumny when he reads out his departmental speech this afternoon. The pandemic has revealed the centrality of social care and the need for no more dithering, no more Green Papers, no more delays; major reform must take place now.

We held a private meeting with care workers, and the stories we heard were truly humbling. We heard of frustration at being described as “just a carer” and that the sector is no longer seen as attractive. We heard from burnt-out workers, who cannot afford to run a car, forced to take multiple train journeys to get to work, working 14- to 15-hour days with take-home pay less than can be obtained for stacking shelves in a supermarket. Social care workers deserve better than this. They should be rewarded and treated as a highly skilled and caring profession. We concluded that career structures, training and the establishment of a professional structure were urgently needed.

Social care is a job-rich sector at a time when, sadly, unemployment is soaring as a consequence of the Covid-19 pandemic. The Resolution Foundation said that it would take an extra 180,000 care workers just to bring the ratio of carers to the over-70s population back to its 2014 peak. That is 180,000 just to get back to where we were in 2014. In our most recent report, on employment and Covid-19, we repeated that the Government should expand the number of care workers by increasing funding to the sector, with stipulations that it should be used to raise wages and improve training and conditions. It is time to turn our hands from applause to actions which give our social care workers the deal they deserve.

We have had enough of excuses for procrastination such as “The Government cannot bring forward plans for reform without cross-party consensus.” Everyone knows there is a consensus in Parliament and the country that we need to commit the resources that are desperately needed to support our most vulnerable citizens, young and old.

In May 2020, when our committee held its annual session with the Chancellor, we pressed him on the problems faced by the care sector. He said that the absence of a consensus over funding is a significant barrier to reform, along with its expense. That translates from Treasury speak to “I don’t want to spend the money.”

Since then, the Government have continued to kick the can down the road. More speeches have been given accepting the need for reform, yet cross-party talks have been delayed, and the proposals the Government have promised have been pushed back again. There was consensus in our cross-party report on a fully costed, long-term solution. The duty now falls upon the Government to bring forward a plan that reflects the cross-party consensus that does exist.

We drew attention to dwindling access to local authority funding, and the increasing pressures that result in the rationing of care to people who are in desperate need. Recent figures from the IFS show that between 2009-10 and 2017-18, per-person spending on social care for the over-65s fell by 31%. Significant investment is needed to buck that trend. We examined various options for how funding social care can be made sustainable. Having done so, we recommended that social care be funded largely from general taxation.

A central theme of our inquiry was the question of fairness. Our report identified three ways in which the present system is unfair: disparities between adult social care and the NHS, between those who fund their own care and those who receive local authority funding, and between different local authorities.

On the first of these, the UK has an ageing population, and many people have complex and difficult social care needs which they must fund themselves. The disparity with the NHS, which is free at the point of use, is striking. Why should support be free for cancer patients but not those suffering from motor neurone disease, for example?

Dementia was cited by several witnesses as an example of this disparity. The costs of caring for dementia can be long-lasting and, in some cases, catastrophic. The Alzheimer’s Society told us that the typical dementia care costs are £100,000, rising to £500,000 in some cases.

Secondly, care homes charge self-funders more in order to make up the inadequate amounts paid by local authorities. The Competition and Markets Authority estimated that self-funders paid 41% higher fees than the local authority rate. Witnesses said this amounted to a cross-subsidy that is unsustainable. We concluded that there is a real danger of a two-tier market emerging, in which care homes are driven to market to self-funders, reducing the availability of places for individuals sponsored by local authorities.

Thirdly, local authorities differ in respect of the cost pressures they face and their ability to raise funds. The result is that a postcode lottery has emerged. These disparities are growing with every day of government inaction. Reports suggest that the Government have been looking at private insurance as a way forward. I am grateful to the Association of British Insurers for the briefing that it sent to colleagues for this debate and which reflects the committee’s conclusions. No country relies primarily on private insurance to fund adult social care costs. It cannot provide the amount of funding required by the social care system, not least because roughly half of public social care funding is spent on people who are of working age; it is not just about the elderly.

Instead, we concluded that social care must be brought closer to the NHS by introducing free personal care. Personal care is about funding the basic activities of daily living: help with washing, bathing, dressing, mobility, eating and drinking. It does not include other, more expansive, activities, such as assistance with housework or shopping. Those in care homes would still pay for their accommodation and assistance with less critical needs. Those receiving care in their own homes would not have to pay accommodation costs, which may encourage care users to seek essential help with personal care early.

As the ABI says in its brief, a universal offer from the state would provide a clearer foundation on which people can plan and make their own provision where they need to top up. If personal care was free, individuals would likely be expected to top up their hotel costs with private funding. An insurance or asset-based top-up market could grow to support this. We concluded that the costs of care should be shared between individuals and the taxpayer. We were told that basic entitlement to publicly funded personal care would cost around £7 billion, if introduced in 2020-21.

We concluded that the Government should adopt a staged approach to providing the additional funding. We said that they should immediately invest in adult social care to restore quality and access to 2009-10 levels, estimated now to cost £10 billion. They should then introduce free personal care over the next five years.

In July 2018, the then Prime Minister announced that NHS funding would be increased by £34 billion over the next five years. This amounted to a spending increase in real terms of £20.5 billion. That increase alone is almost as much as the total spending on social care. It is time Cinderella was taken to the ball.

I have been a Conservative for nearly 50 years. I served in local government for five years, in both Houses of Parliament for 36 years and as a Minister for more than a decade. Of course, during that time, I have supported policies that I was uncomfortable with and promoted others that I regret, but I have never felt the sense of shame that I feel today at our failure to act on the funding of social care and to tackle, in the words of the title of our report, “a national scandal”. I beg to move.

--- Later in debate ---

[Lord Forsyth of Drumlean (Con) [V]]

My Lords, this has been a brilliant debate and I thank everyone for taking part. I am slightly embarrassed by the tributes paid to me—I just chair the committee. It is a fantastic committee; we reached a consensus and we did so by listening to people and acting on the evidence before us. One thing I can guarantee is that this brilliant debate in the House of Lords will not even be acknowledged by our critics, who present us in a quite different light.

A number of key points have been made, drawn from the report, about the importance of raising the standing, status and training of care workers. The noble Baronesses, Lady Kingsmill and Lady Finlay, my noble friends Lady Fookes, Lord Lancaster, Lord Taylor, Lady Eaton and Lord Randall, and the right reverend Prelate the Bishop of Carlisle all made these points. I must say to my noble friend the Minister that the answer is not to issue people with a badge, but to take direct action in order that people are properly rewarded in a proper career structure with proper training.

Points were made about the litany of reports and broken promises and the requirement for action this day by my noble friend Lord Young of Cookham, the noble Baroness, Lady Jolly, and the noble Baroness, Lady Pitkeathley—who has been on to this, as she said, for years and has led the way, describing herself as something of a lone voice. She must be reinforced by the degree of consensus that she has heard today. My noble friend Lady Browning and the noble Baroness, Lady Brinton, pointed to that.

I ask my noble friend the Minister: what did the Prime Minister mean when he said

“we will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve”?

That was in 2019. This is 2021. Saying, “We will bring forward proposals this year”, when we are still in January is not really reassuring, given the urgency and the strength of feeling shown in this debate. I am also grateful that my noble friend Lady Pidding and the noble Baronesses, Lady Hollins and Lady Brinton, all pointed out that this is not just about the elderly; it is about young people of working age, on whom half the budget is spent.

One point that has come out very strongly is that it will be necessary to spend this money. We all know that the reason why this has been delayed and we have had endless Green Papers and so on is that the Treasury simply does not want to spend the money—a point that my noble friend Lord Lansley underscored and which was also raised by the noble Lords, Lord Hunt, Lord Truscott and Lord Campbell. The Minister surely can see that the overwhelming message from this Committee is: “No more delays”.

Something that I think is very important and which came out in our report is that many people are completely unaware of the services that will be available to them until the point that they themselves need care or a relative needs care—it comes as a profound shock. People across the country do not realise how limited the services are, which is one reason why politicians of all parties have been able to get away with not addressing this problem—a problem that hits people and causes enormous stress at the time that they are probably most vulnerable.

There has been a universal cry that local authorities are being asked to do the impossible and do not have the resources. I say to the Minister that sticking plasters brought in for particular situations do not deal with the systemic problem of funding and the pressure that local authorities are under. These points were made by the noble Lords, Lord Razzall and Lord Shipley.

I am grateful to my noble friend but he is pretty lucky that we are having to hold this debate virtually and are not able to intervene to challenge some of the points in his departmental speech. If he seeks consensus then he should look around him: there is consensus in this Committee; I have never known a debate where this was the case with almost every single speech. There were arguments about the odd detail here and there, but only one speech did not praise the report, which came from my noble friend Lord Sarfraz, who said that he was impressed with the proposals coming from the Government—I do not know whether he has inside information or has had a look at what lies ahead. The message from this debate is absolutely clear: no more delays, no more Green Papers, no more proposals. Let us have a White Paper and legislation, and let us move forward and say thank you to those people whom the Minister rightly praised but who need more than the recognition of a badge. They need to be given a proper career, and we need to attract people to that career, which offers prospects for many of our young people who face unemployment as a result of the impact of Covid-19.

Motion agreed.