Health and Social Care

Lord Lipsey Excerpts

Thursday 24th November 2016 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, this is the second Thursday in a month in which the House has focused on the potential downsides of Brexit. Last time we were talking about higher education, and now it is health and social care. There are many other subjects of a similar nature that we could debate. I am tempted to suggest that we run the whole series and at the end of it cock a snook at the popular press by publishing a little account of the debates called “Why the British People Was Wrong”.

I will concentrate my remarks on social care. Of course, the health and social care workforces overlap. There are nurses who work in the health service, nurses who staff nursing homes and nurses who work in the community, although health workforce planning seems to ignore the fact that there is a need for nurses elsewhere. But social care is different from health in one particular regard: most of it is not provided by people who were trained for years and years to do so. Of course, there are very important skills required of people in the social care sector but most—not all—can be acquired in relatively short periods. That makes a big difference to planning.

What will be the impact of Brexit on the social care workforce? We do not know. We do know that nationally 6% of social care workers come from the European Union; that rises to 12% in London. Will they be available in future? Well, that depends on two known unknowns. The first is whether the Government eventually accede to the soft-Brexit option of continuing with free movement of labour. Secondly, and if they do not, is how they decide to prioritise two of their objectives: keeping a healthy social care workforce by letting the workers in—or if they are already here, letting them stay—or keeping the immigration figures down. I fear that we will not get a clue this afternoon as to which of those options the Government will choose.

What we know as a certain fact is that the demand for such workers is going to rise. It will rise simply because of the demographics, as the number of old and very old people rises. We also know that there is much uncatered-for need at the moment. Research published last week by Age UK shows that, since 2010, nearly 400,000 more people aged over 65 are living with some level of unmet need, while the numbers getting care from local authorities in their own homes have fallen by something like 25% over the past four or five years.

I am an economist, so if this were about most industries, it would not cause me tremendous bother. If the supply of labour falls short of demand and need, the straightforward solution is to raise wages. In social care, that would have another great advantage: it would be some recognition of the real contribution that social care workers make. Unfortunately, there is a fatal Catch-22 in the higher wages logic: about half of old people in care homes are paid for by local authorities. Local authorities are also in high degree responsible for the care workers who look after people in their own homes. But consistently, year after year, the Government have forced councils to cut their spending so as not to have to cut their own. Defence’s 2% of GDP is sacrosanct; aid, as the House debated last Friday, must be 0.7% of GDP every year; health spending is protected in real terms. So the whole of the cuts falls on local authorities, and social care is overwhelmingly the biggest thing on which they spend money.

Council spending has been slashed by eye-watering amounts. There have been little handouts here and there, as the Minister will remind us. Councils are now able to increase their precepts by 2% a year to meet their costs although, of course, that greatly favours those areas with a lot of richly expensive residential housing and gives least to those areas which have less expensive residential housing—which of course are the areas where the greatest need for social care provided by the state exists. This is just one of several sticking-plasters being applied to a gaping wound.

Ministers claim that there is not unlimited money, and they are right. But are they using the money they have right? I want to draw the House’s attention to one rather shocking example. Recently, virtually unnoticed by the public, the press and Parliament, the Government increased spending on an area of social care in an expensive way by increasing the nursing care allowance. Now, to a degree, I contradict myself here, because the nursing care allowance—a non-means-tested payment towards the costs of those with substantial nursing needs who self-fund their care—was a recommendation of the minority report of the 1999 royal commission, signed by Lord Joffe and myself. Just as the British people was wrong, we was wrong about that. It has been a great waste of money.

I must also make a confession. If the Government had acted on my advice, I would be worse off, because I found the other day that I was the beneficiary of a handsome cheque paid from my mother’s estate. The money came from the Government and was the backdated value of the new allowance, which rose from £112 a week to £156.25, and covered the period from April to July, when she sadly died. I am not an extremely rich man, but anybody who thinks that I am in the greatest need of government benefits of this kind is really barking up the wrong tree. We are not the top priority. The top priority is those in the bottom half of the income distribution who need this care most and are being deprived of it. We found yesterday in the Autumn Statement that there was little money for the much talked-about JAMs, but there appears to be plenty of money for jammy sods like me. This preposterous propriety comes at a cost—wait for it—of £190 million a year. The Government are now looking at increasing the money still further. I have a great admiration for the Minister, but I am surprised that he can hold his head up in the face of these facts.

To sum up, in social care only two alternatives can be contemplated. One is to ensure that Brexit does not cut the social care workforce by allowing people who come now to come. The other is to fund social care more fully so that providers can afford to pay what it takes to attract the workers they need. Otherwise, and of necessity, we will end up in a position to which we are already heading at a rate of knots—that the welfare state, in so far as it looks after the old and needy, effectively ceases to exist.