Care Bill [HL]

Debate between Lord Lipsey and Lord Warner

Tuesday 16th July 2013 Lords Chamber

[Lord Warner]

I do not think that we said that they should fund the deficit. We said how they should be treated under the architecture of a new system for funding care and support in the future.

[Lord Lipsey]

My Lords, I rise to make two brief points. First, this argument is not really about eligibility criteria but about money. It would be highly desirable to extend eligibility to people with only moderate needs, but we will find it extremely hard simply to cater for people with substantial needs unless the pot of money is substantially expanded. That is the elephant in the room. In all the discussions here, we are describing a marvellous new system, but we have not yet said how it will be paid for.

Secondly, I think that eligibility criteria are, to a degree, a bit of a phantom. We know that there is variation between authorities across the country: some accept people with moderate needs and some accept them with substantial needs. Quite aside from that, there is overwhelming evidence of enormous variety not between local authorities but within local authorities depending on who is assessing you and their state of mind. I quote in support of this a report from the National Care Standards Commission in 2005-06 and an excellent report by the PSSRU last year which tells you what actually goes on when people are being assessed. You might have a social worker who is terribly sympathetic to the older or disabled people she is assessing, and her boss who is, no doubt, sympathetic but who knows what budget he has to meet each month. In those cases, you simply get a wrestling match.

Thirdly, and to me most worryingly, once the cap comes in, people and their families will have a huge economic interest in demonstrating that they have substantial needs because that is when the meter starts ticking for them getting help. The danger is that those with, in some cases, the biggest needs will not be very good at gaming the system. Somebody with autism may be told by their parents to seem as bad as possible so they can get the meter ticking. They are not going to be very skilled at that, but the mums and dads of articulate middle-class people will have a different set of instructions to go on. There will always be a tendency to exaggerate—play up to the full may be a better way of putting it—their needs to get them graded as substantial.

I make these points, not to draw any firm conclusion, not even on the question of whether those with moderate needs should be catered for, but to say that more fundamental thinking has to go into deciding how eligibility criteria should be set and operated. This has not yet been apparent, even in the Government’s improved scheme which is encapsulated in the Bill.

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[Lord Lipsey]

Now for something completely different. These amendments hardly deserve the epithet “probing”—more a light examination by the doctor’s fingers. What they do is, in essence, simple. They substitute for the monetary cap proposed by the Government a cap based on the number of years a person has been receiving care at a substantial level.

The origins of my amendment were in a proposal floated in the minority report to the 1999 royal commission on the funding of long-term care. As I was the author, I remember this quite well. It did not even gain the support of a majority of the minorities, as the noble Lord, Lord Joffe, declined to sign up to it. Nevertheless, it has had a life after death and I think it can claim paternity —the noble Lord, Lord Warner, knows better than I—for the cap proposal in the Dilnot report, because it shares precisely the same objective as the cap: to limit the costs of care to those unlucky enough to require it for a long time as it costs a lot of money. That is the aim of the proposal.

When I first saw the Dilnot proposal, I thought that it was clearly superior to the one in the minority report—everyone would spend the same before the state kicked in. But as time has gone on I have become much less sure of this as two defects of the Dilnot version have become more apparent. The first is that it is extremely complex for local authorities to administer. There have been figures of between £300 million and £500 million floating about for the cost of administration, before money is handed out to people. That is because, to implement the Dilnot report, it is necessary to track each individual from the time the meter starts ticking to see exactly what they are spending on care or, rather worse, to see exactly what a local authority thinks it should be providing in spending on care for each individual—a sort of abstract concept that has to be turned into a concrete figure.

As will be apparent from other amendments I have tabled, I am not even confident that local authorities will have their systems sufficiently sorted to manage it by the proposed start date of April 2016. There is a non-negligible risk that this will prove to be universal benefit mark 2, a scheme that will in practice prove impossible to operate. I hope I am wrong but the fact is that, putting the best face on it, it will cost a lot of money to implement without any of that money going to better care, and not a penny of it going to the people who should be helped. In the Government’s ghastly jargon, it will be money spent on bureaucracy, not front-line services. That is my first query about the Dilnot way of doing things.

My second point is equally worrying. The Dilnot system is terribly difficult for anyone normal to understand. When do you start to get it? How much is assessed as being the cost of the care that you may get from the council? How much have I spent? How much of that counts towards the cap? People may say, “My care costs differ because my condition goes up and down”. All those factors are crucial if people are to know what they spend out of their own pockets. I am sure that better-off people who are in full possession of their faculties will work it out, but we know that 40% of people over 80 have some degree of dementia and are therefore not in full possession. Certainly, those with computer-literate families and sons or daughters who happen to be independent financial advisers will crack it all right. Their claims for substantial care needs will be there on day one in a large pile on the local authority’s desk. They will know every penny that has been spent, but are we confident that everyone else will? Just explaining the system and the process of communication, to which we shall come later, will be jolly difficult. It should be remembered that more than half the people think that the state at the moment pays their entire care costs without deductions. There is a long way to go from there to understanding Dilnot.

By comparison, a time-based system is simplicity itself. You have an assessment, and if it shows that you need substantial care or its equivalent under the new system, the clock starts ticking. Five years later, you no longer have to pay the cost of your care. That is very simple. Five years is what you have to find. In my variant, the council would then pick up the whole cost, not some notional cost, as under the Dilnot cap, and you would simply have to find your hotel costs where applicable. That is simplicity itself and, incidentally, it makes it much easier for you to insure privately. Private insurance companies are going to struggle to know how much their liability will be under the Dilnot system. Under a time-based system, they will know that they have a liability. If you live more than five years the state will pick up the bill and the only bit that they will have to cover is the first five years.

How does that compare in generosity with Dilnot? It will probably be about the same. The Dilnot cap would be reached by someone in residential care rather more quickly than the five years but, on the other hand, as you are going to be paid only in part if you reach the cap, you may not be any better off. I suspect that for those receiving care in their own homes my proposal will prove to be more generous than Dilnot’s £72,000 cap. In most cases, people will take more than five years to reach the £72,000 and it may therefore be slightly more generous to people who live at home, which is no dreadful thing.

Sunny optimist though I am, I do not expect the Minister to go snap on my scheme today. I am not even sure that I do. He and his colleagues had enough trouble getting the Government to sign up to Dilnot, and they will not want to execute any unnecessary U-turns now. However, I suggest that he puts this proposal in his bottom drawer because it may become apparent in six, 12 or 18 months’ time that Dilnot, as encapsulated in the Bill, is simply impossible to administer on any realistic timetable. When that day dawns— I hope it does not—my scheme may come in handy. I beg to move.

[Lord Warner]

My Lords, my noble friend will not be surprised if I gently defend the Dilnot commission’s recommendations on a cap. His final suggestion of putting his proposal in the bottom drawer was actually rather good. I remind the House that as a young civil servant I was once the recipient of a Health Minister’s regular manuscript notes asking me about progress on various matters. They ended up in my bottom drawer because he had usually forgotten about them. Putting this recommendation in the bottom drawer may be the best thing to do.

I think that my noble friend has forgotten the task that the Dilnot commission was set. It was not the case that we just brought a cap out of the ether and projected it on to an unsuspecting world. We were trying to fulfil the task that we were given, which was to make recommendations on how,

“to achieve an affordable and sustainable funding system … for care and support for all adults in England, both in the home and in other settings”.

In particular, we were asked to examine,

“how best to meet the costs of care and support as a partnership between individuals and the state … how people could choose to protect their assets, especially their homes, against the costs”,

and,

“how both now and in the future public funding for the care and support system can be best used to meet care and support needs”.

I suggest that to fulfil those requirements it is probably better to concentrate on money and try to achieve a credible system than to concentrate on time. One of our main purposes was to project the idea that if we could get citizens to be more engaged with the realities of a means-tested adult social care system, they would plan for the future in a better way than at present. Money is the currency in which they would be thinking, to all intents and purposes. That is why we came up with the idea of a cap.

My noble friend is right to ask how well prepared local government is to introduce this system. There are some genuine concerns about that, which we will debate later. However, he is a little pessimistic about our ability to develop, perhaps over a longer period than the Government might like, a taxi-meter system that works for the Dilnot proposals. They are essentially a taxi-meter system. You need to clock up the costs that are being spent over time until you reach the cap. There is a thing called IT; it is not always well used in the public sector but it is possible to take the pain out of all this. We as a commission did not envisage a new pencil-and-paper system that 152 local authorities would reinvent in individual and separate ways. It is a complex system but it is actually not that difficult to manage, once you get into the swing of it.

I say very gently to the Minister and to my noble friend that we sweated blood for about a year to try to get a very large number of people to agree on a way forward. This is not the time to go back to square one and think of another way of doing it.

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[Lord Lipsey]

My Lords, I will speak to the amendments in this group standing in my name but, before I do so, I should like to offer the strongest possible support for the noble Lord, Lord Sharkey, and particularly for the words that he said at the beginning about the information task that we face here. This is not just a question of advising individuals when they go to their councils, although that is important and we have had a debate on that. It is a question of making the whole of our society aware of what is going on against a background of very great ignorance and misinformation. It is crucial that something is done on a real scale to turn that around and that the best communication skills are used in doing so. We have to move from the language that we use in this Chamber as aficionados or geeks studying the detail of the Bill to the general public out there, and that is a hell of a task.

As I said, I will speak to my Amendments 90D, 92ZZB, 92ZZC and 104ZC. Amendments 90D and 92ZZC relate to a topic that we touched on in the debate on the previous amendment—namely, the costs and administrative difficulties for local authorities of introducing the cap in the scheme. The Local Government Association has expanded on the numerics in the briefings for this debate, as has London Councils. I think that the local authorities have a slight tendency to underplay what is going on for fear that the Government will take the whole thing away from them, and they want to be shown as “can do” rather than “can’t do”. When you get into the detail, and look below the politicians in local government at the fine detail of those who have to implement it, you find that it is quite difficult.

The Government have in principle accepted the burdens doctrine, namely that if they make local government do something they will pay for it. They have provided around £335 million to pay for that. None of this extra money is coming now, by the way. The contributions will not start until 2016. Bad though the administrative mess may be, if local government does nothing to prepare for this scheme until 2016 it will certainly fail. Already it is doubtful whether the burdens scheme is really being met. Many of the costings put forward are fingers in the air stuff. The detail has yet to be grappled with. Details crucial to costing the implementation of the scheme, such as the eligibility requirements, are only emerging bit by bit. We do not even know what the government money is supposed to cover. Does it fund in full the cost of additional self-assessments, when the self-funders and people who will potentially benefit from Dilnot queue up for assessments? I really do not think that we know the detail of duties around advice and information, on which we spoke earlier, or on the funding for setting up new deferred payment schemes.

My change is designed to write into the Bill what is in effect the burdens doctrine. Whatever the cost, the Government must pick it up. It is not as if local authorities have got large chunks of money in their pocket at the moment to reach in and pay for all this stuff. They do not. They cannot afford basic care services at the moment, so this is a huge task. There is a huge task, too, in training the local authority workforce to do assessment and implementation on this scale, and indeed in creating the workforce.

These facts lead me to believe—and I am very glad that my noble friend Lord Warner, with whom I agree on nearly everything, agrees—that it was a terrible mistake to bring forward the start of the scheme from 2017 to 2016. We know why it happened, do we not? The Government found that they had a few spare quid in their pocket, and wanted to be able to tell the electorate that Dilnot was nigh, and so without proper consideration of any kind they brought the date forward. It was a U-turn, and my amendment U-turns on the U-turn to get back to the right place where they were to begin with, namely that the scheme will come in in 2017. This would give it a good chance to work.

I turn now to my other amendments in this group. I hope that we might finally get an actual concession from the Minister, instead of words of great sincerity and great sympathy and not much change. My other amendments in this group refer to the setting up of a ministerial advisory group on the cap and the means test. They insist that this group should be consulted in the planned five-year review of how all of this is working. This is not a criticism of the Department of Health. I have been impressed by how effective officials have been in grasping this scheme, particularly as for most of the time that Dilnot was under consideration they probably thought that it was never going to happen. They are a first-class team, but I do not think that they possess a monopoly on wisdom, and indeed they do not think so, either. The Minister just referred to the working parties with the financial services sectors that have been set up to give advice. I applaud that.

I think that there are complexities in all of this that even the most literate advisers have barely grasped. I will come to some of them, for example when we come to the detail of the proposals on the means test. It would be helpful if Ministers had to hand a helpful advisory group comprising academic experts, local authority representatives, representatives of the financial sector and someone from Dilnot. Maybe the noble Lord, Lord Warner, would like to volunteer. A group of that kind would not second-guess Ministers on every detail, but would offer its general advice on how things are progressing and how they may be set right if there are departures from the course on the way forward.

[Lord Warner]

My Lords, I support the comments made by my noble friend Lord Lipsey. There is a case for setting up some sensible monitoring arrangements. This is not just to check up on the Government, but to make sure that this system is working in the way that everybody wants it to. It is a big change, and we are starting from a position which means we have to grasp the nettle, as the noble Lord, Lord Sharkey, said. I strongly support his amendments.

I want to refresh the House’s memory of what we said in the Dilnot commission report. I will briefly detain noble Lords with a quote:

“There is very poor understanding of how the adult social care system currently works and how much it can potentially cost. Many people live under the false impression that social care will be free if they need it. If people are confused over how the system works and the costs that they potentially face, they will not prepare appropriately for the future”.

That setting was why two of our 10 recommendations were that the Government should develop a major new information and advice strategy to help when care needs arise. To encourage people to plan ahead for their later life, we recommended that the Government should invest in an awareness campaign. We deliberately put those responsibilities on the Government. We did not put them on local authorities. We did this because we thought that unless the Government of the day—and this would apply to a Labour Government as much as a coalition Government—took a grip on this awareness campaign and planned the information and advice strategy, we would end up with a badly informed public and a mishmash of different local authority systems up and down the country.

We are not going to make this system work well or deliver the changes in the Bill and in the Dilnot commission report, unless there is investment. In our report we put the price tag of this as being a massive public awareness campaign. The public do not start from a position of being well informed about how they prepare for the future care and support needs that they will have in later life. The only way to start to change that is for the Government to grasp the nettle. I strongly support the proposals of the noble Lord, Lord Sharkey, to put this in the Bill. We should put a clear responsibility on the Secretary of State to run with the ball on this issue and, in effect, to monitor progress, not on a five-year basis but on a regular, annual basis. If we do not do something like this, we will live to regret it. We will see failure of implementation and failure to take the public with us on this major set of changes.

Care Bill [HL]

Debate between Lord Lipsey and Lord Warner

Tuesday 16th July 2013 Lords Chamber

[Lord Lipsey]

This is another piece of arcanery, I am afraid, for the House. It is a genuinely probing amendment.

Not everyone may know what top-ups are, any more than everyone knows what nursing care allowances are. They arise for people who are not paying in full for their own care but want a better standard of care than the local authority is prepared to pay for. There are a quite a lot of these people. There are about 350,000 people in care homes and about 50,000-plus of them get care allowance. If a local authority claims a person’s needs can be met in a home costing £400 a week and the old person or their family prefers one costing £500 a week, they get the means-tested support as if they were in a £400-a-week home and the family finds £100 from their own pockets.

However, there is a strange twist. As long as a third party—usually the old person’s family—is prepared to dip into their pockets for the extra £100, there is no legal problem. They can do so under LAC circular (2004) 20, which derives from the National Assistance Act 1948. But if the old person wants better care, they can top up out of their own pocket only in very limited circumstances. They can do so only if they are subject to the 12-week disregard—which is the period you can be in a care home to see whether you get better and come out—or if they have a deferred payment agreement with the council, when the council may make top-up payments on their behalf. In theory, people cannot top up their own home fees but these can be topped up by other people.

As a historian of the Treasury, I can sort of see how this might come about. The Treasury would not want those whose means-tested contribution is offset by the tariff, as has been discussed, running down their assets to pay for better care, thus throwing more of the burden on the state. However, those in the know say that the restriction is widely ignored, often with the connivance of councils that do not want to get into an argument about whether the accommodation they will provide within their own limits is adequate for the old person. As a result, they allow the old person to chip in for their own care—perhaps he or she puts the money into a son’s bank account, the bank account pays the home and we do not know what goes on.

In parentheses, it is perfectly clear that local authorities know very little about what is going on with top-ups. I refer to the report due to be published by the charity Independent Age tomorrow, which analysed this after doing a freedom of information request on all councils. Out of the councils they asked, only 30 or so can be reckoned to have best practice or a good system for keeping account of top-ups. The rest are either bad or worse.

These mysterious top-ups go on, otherwise the old people would have to move out of the home they are in and into a local authority home. As noble Lords know, if you move old people from the home they are in to another home, what frequently happens, I am afraid, is that they die. This strange top-up mess is more difficult in the post-Dilnot world. Because of the extension of the asset limit for means tests, many more people will be receiving means-tested support, and anyone who is receiving means-tested support cannot do a top-up; that is the law. Many more people will therefore find themselves limited in what they can do if they stick by the law—which, as I say, they often do not.

Secondly, because the deferred payments scheme will be made available to everybody, more people will escape through the loophole in the current regulations that allows those on deferred payments to top up—you can do it if you have a deferred loan from the local authority but you cannot if you do not. The injustice between those who can and do defer and those who do not is made worse—the former can top up but the latter cannot. That will be a growing problem and a huge incentive for people to take out deferred payments, because they can legally top themselves up that way.

Thirdly, and potentially more importantly, let us suppose a person is self-funding and in a home where the fee exceeds what the local authority will pay. They reach the cap, having spent their £72,000. What will happen then? The state will meet that part of the cost of the home that they are in which is equivalent to what they would pay if they were in the home selected and provided by the local authority—their limit. If the home costs more than that—£600 a week not £400—where will the rest of the fees come from? Perhaps their family does not have any money for a top-up or is unwilling to provide it. Who is going to top it up? I am afraid that the crude reality is that some people will persuade the council to pay the higher fee while others will be moved—and, as I have already said, people who are moved will as a result, on average, die considerably younger. That is not a side-effect that Dilnot planned for but it is a side-effect of the way it is going to work out. Nothing much has been said by the Government about what happens if you reach the £72,000 cap and are in a home costing more than the local authority is prepared to pay. Until we get reassurances on that, the reality must be that they will be moved out to another, poorer, home and that this is going to be a tragedy.

The irony is that these are not poor people falling back on the state. They may well have assets and might be very willing to put in a bit extra to ensure that their last years are comfortable, but they are prevented by law—if they obey it—from doing so. Either they decide to opt out of Dilnot and fund their care in full, in which case they will not benefit from the cap and Dilnot, for them, amounts to nothing, or they go through the business of moving to the inferior home and we will have inflicted that disaster on them.

This area has not been much explored but there is a simple way of dealing with it, which is incorporated in this amendment. It is simply to end the ban on residents topping up their own fees. I do not think the cost would be very much but if the Minister has some other way of dealing with it, he should tell the Committee now before we endorse a policy which could lead to the mass eviction of old people from the residential homes in which they have long lived, in sharp contravention of all we are aiming to do in this Bill. I beg to move.

[Lord Warner]

My Lords, I intervene on this to talk very briefly about what the Dilnot commission said on this issue. I will quote just two sentences from page 22 of our final report, which are worth putting on the record. We said very clearly:

“The state-funded care element will be based on a local authority care package, but people will be free to top up from their own resources, should they wish. If someone moved to a different local authority, they would take with them a record of their contributions to date”.

That is a very clear statement of what our policy was. When we were taking evidence, there was not a lot given to us about the extent of top-ups.

If I fast forward to my time on the Joint Select Committee with other Members of this House, the issue of top-ups seemed to have changed quite significantly between the time when the commission reported, having considered all this, and the time that the Joint Select Committee was working on it. There were not good data, other than that many of us have been increasingly learning that the top-up levels have been quite considerable in some homes. There is clearly a problem with the cross-subsidising of people who are state funded from self-funders. The issue is now complex and I do not know how good the Government’s data are on the use of top-ups. We were clear that you could count towards the cap only what the state-funded element of that payment was, which would be determined by what the local authority would pay in its area for the care being provided. If we depart from that principle, we will end up in chaos—and probably end up with a much higher public expenditure bill.

There is an issue here that the Government need to think about, but in principle we should do nothing to stop people topping up if they and their family are prepared to provide for a higher level of care. The present rules were drawn up for a different time and on top-ups, the world has moved on. We need to get this straight before we finish this Bill.