National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) (Amendment) Regulations 2019

Baroness Thornton Excerpts

Monday 10th June 2019 Lords Chamber

Moved by

[Baroness Thornton]

That this House regrets that the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) (Amendment) Regulations 2019, in the rate increase that the National Health Service pays to care homes to cover the costs of services, include an unrealistic “efficiency expectation” of 3.1 per cent that may lead to further shortfalls in social care funding; and further regrets that Her Majesty's Government still do not have a long-term funding package for social care, which is urgently needed to alleviate financial instability in the care home sector (SI 2019/789).

Relevant document: 47th Report from the Secondary Legislation Scrutiny Committee

[Baroness Thornton (Lab)]

My Lords, first, I declare my interests as outlined in the register.

If ever a statutory instrument were crying out to be discussed on the Floor of the House, this one must rate pretty highly for a number of reasons, not least the instability in this sector and the lack of, and disgraceful delay in bringing forward, a long-term strategy for the social care sector. I might do the parliamentary equivalent of a scream if the Minister uses the words “soon” or “imminent” with regard to the strategy.

The somewhat dry words of a statutory instrument, particularly this one, conceal a reality—the lives and security of people for whom we have a responsibility as a society, as family members and in our communities, and this is the reason for my Motion to Regret. Each threat to a care home that houses the oldest and most vulnerable people in our community means, literally, that people will die. They will die when they are moved or they will become ill from the stress of not knowing what the future holds for them or where they might end up living. They wonder whether the people who look after them will be kind and caring.

At the beginning of Carers Week, this seems an appropriate debate. Carers care for their loved ones in their home, but there are also many carers who support their loved ones in residential care when caring at home becomes impossible and too demanding, particularly for older carers.

This instrument increases the rates that the NHS pays to care homes to cover the costs of services that must be carried out by a registered nurse, called the FNC rate. As noble Lords know, accommodation and social care costs are the responsibility of either the local authority and/or the individual, subject to the outcome of a needs assessment and financial assessment.

The 4.7% increase this year is influenced by the outcome of a Supreme Court case on the Welsh FNC rate and by a subsequent review by LaingBuisson. Information about this is helpfully included in appendix 1 of the Secondary Legislation Scrutiny Committee report that goes with this statutory instrument. The rate that has been set includes a 3.1% “efficiency expectation” of nursing home providers. Given the recent reports in the press about financial instability in the care home sector, it begs the question of how realistic that assumption is. These changes took effect on 26 April 2019, rather than 1 April as is usual, and the Department of Health and Social Care published a statement on 5 April saying:

“The findings of the study were delayed, following requests to improve the robustness of the data collected and an increase to the sample size of surveyed nursing homes. With an overall budget of approximately £675m for NHS-funded Nursing Care in 2018-19, any changes to the NHS-funded Nursing Care rates have significant financial consequences for both the NHS and nursing home providers”.


The background to the additional information that the Department of Health and Social Care has provided is that in August 2017 the Supreme Court ruled against the Welsh local health boards on how they had set the FNC rate in Wales. The administration and operation of the Welsh FNC rate is separate from the rate in England. However, the basis for FNC in legislation is very similar in Wales and England, and the judgment of the Supreme Court also impacts on how the Secretary of State for Health and Social Care must set the FNC rate in England.

The Supreme Court judgment set out an expanded definition of what constitutes nursing care by a registered nurse and stated that the FNC rate should pay for the costs of everything within that definition—that is, direct and indirect time on nursing care; paid breaks; time receiving supervision; stand-by time; and time spent on providing, planning, supervising or delegating the provision of other types of care which in all the circumstances ought to be provided by a registered nurse because they are ancillary to, closely connected with, or part and parcel of the nursing care which the nurse has to provide.

That definition is being applied to the FNC rate in the context of the LaingBuisson study, which has shown that FNC costs have continued to increase at a sustained and above-inflation rate since the last full study of FNC in 2016. Since 2016, the pay component of the national tariff has been used to apply inflationary uplifts to the FNC rate, so it is believed to be appropriate to accompany this with an efficiency factor. I fail to see how that is justified.

I thank the department for that explanation. However, I looked in vain for a sign of any upgrading for the care staff who work in care homes. Of course, there is none. Why is that? When do the care staff who carry out such important and personal work get the pay, training and recognition that they deserve? When will the funding for residential care be resolved? How can the NHS long-term plan possibly be delivered if the funding of social care is not also resolved?

The truth is that the UK is running out of care home places and care home operators are collapsing. The Guardian published an article on 6 June detailing concerns about care homes collapsing under financial pressure and the impact that this is having on vulnerable people. The British Geriatrics Society has warned that,

“soon there will not be enough”,

care homes,

“to look after the growing number of vulnerable older people needing specialist care”.

More than 100 care home operators collapsed in 2018, taking the total over five years to more than 400 and sparking warnings that patients in homes that close down could be left with nowhere to go but hospitals, and we know what that means in terms of costs and bed blocking.

Three out of five MPs say that people in their constituencies are suffering because of cuts to social care, with three-quarters saying that there is a crisis in care in England. That is according to a recent poll by the NHS Confederation, which leads Health for Care, a coalition of 15 organisations. In other words, there is a rising demand for social care but the cost of care is rising far more quickly than the money that local authorities pay for it. In some cases that money is being cut and in many others it is not rising at all.

The Association of Directors of Adult Social Services has shown that councils had £700 million of social care cuts planned in 2018-19, despite growing demand. I do not see how that is consistent with the regulations before us today. Major operators to suffer financial difficulty include Four Seasons Health Care, which was put up for sale after rescue talks failed, seven years on from the high-profile collapse of Southern Cross Healthcare. It was reported that a care home which was part of Four Seasons Health Care had left a patient without medication for two days.

These are our most vulnerable members of society and we have a duty to care for and protect them. However, they are being let down by an underfunded sector that is under constant and growing strain. Care England has called for the Government to put more money into social care to avoid a shortage of beds in a sector that provides care and accommodation for more than 400,000 residents. The future of funding for the sector is due to be laid out this year in a much delayed government Green Paper intended to address a £3.5 billion shortfall expected by 2025.

So, with care homes already crumbling under the pressure of an underfunded sector, it becomes a greater concern that the increase in charges may exacerbate the existing situation. There is concern that these charges will leader to further shortfalls in social care funding. Furthermore, these regulations come at a time when there is a lack of clarity surrounding the long-term care plan, which is needed to alleviate financial instability in the care home sector. Can the Minister confirm the impacts that these regulations may have on an already struggling care home sector? How do the Government plan to keep people in appropriate care settings with the recent care home closures, and when will we see an appropriate care plan? I beg to move.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Blackwood of North Oxford) (Con)]

My Lords, I open with an apology for the state of my voice. I shall do my utmost to make myself heard and make it to the end of my speech. If I do not manage to answer all the points made, I shall write not only to the two noble Baronesses who have raised questions but to all those present in the debate, and will place a copy of that letter in the Library.

I would also like to identify myself with the points raised by the noble Baroness, Lady Thornton, regarding Carers Week, and to pay tribute to all those carers in this country who make tremendous sacrifices for those they care for. We should all thank them for the work they do. Our system would not cope without them; we should all be very grateful.

I turn to the questions that have been raised. NHS funded nursing care is of course an incredibly important part of the health and care system, supporting the provision of nursing care in nursing homes. The NHS funded nursing care rate plays the important role of ensuring that neither individuals nor local authorities have to pay for nursing care, which is the responsibility of the NHS. My department is seeking to ensure that nursing home providers are paid a fair rate for employing registered nurses, so that nursing care can be provided to all who need it. On the point that was just raised, it is helpful to know that the average pay for registered nurses in the independent sector has now risen from £23,400 to £29,400, so that is the benchmark we are talking about.

The noble Baroness, Lady Thornton, raised the issue of the nursing care rate for 2019-20, which my department set in regulations in April. This was done, as she said, following the LaingBuisson report into the costs of providing NHS funded nursing care to nursing home providers, after further consideration by my department. Following this work, the rate has increased by 4.7%, which is a significant increase above inflation, as has been recognised. The efficiency expectation, which is regretted in tonight’s Motion, should be seen in the context not only of this above-inflation increase but in the context of the significant increase of 40% which came in 2016-17; that is part of the picture that the efficiency expectation was put in place to address.

It is only right at a time of continued and much-needed investment into nursing home providers—ensuring they are able to employ and retain registered nurses—that the Government and the NHS also expect those providers to deliver as efficient a service as possible and value for money to the taxpayer. The 4.7% increase in the nursing care rate for 2019-20 is a far larger increase than that being seen in the vast majority of prices across the wider public sector and NHS; this is because of the priority that we have set on that rate. For example, the NHS national tariff is increasing the majority of prices in the NHS by 2.7% for 2019-20. The national tariff has also asked most NHS providers to make efficiencies of 3.1% across 2018-19 and 2019-20, and the Government believe that while still getting an above-inflation increase, nursing home providers should be able to do the same.

The LaingBuisson report provided evidence showing that many nursing home providers are already delivering nursing care more efficiently than others, so there is variability in the system. The study shows wide variation in the cost of delivering nursing care, even when factors such as region or provider size are taken into account. Efficient providers surveyed were shown to deliver an hour of NHS funded nursing care for 18% less than others. Additionally, the study showed that nursing home providers are increasing their use of agency nurses, as has been discussed. An hour of agency nursing costs 47% more to providers, and so, obviously, to the NHS. We believe that providers can work to reduce the proportion of their workload covered by agency nurses, as we have required other parts of the NHS to do, in a sustainable way.

There is a need to ensure value for money in important NHS services and to maintain their sustainability. The Government believe that efficiencies can be made in relation to the rate this year—for example, in the use of agency nurses. However, this is still within the context of a significant and above-inflation increase to the nursing care rate. That is why we think that the rate set is achievable.

The noble Baroness, Lady Thornton, also raised the important issue of the need for a long-term funding settlement for social care and financial sustainability for the sector, as she has on more than one occasion in this Chamber. The Government have already given councils access to around £10 billion of additional dedicated funding for social care over this spending review period. This includes a £240 million adult social care winter fund for 2018-19, and again for 2019-20, to help local authorities. It is the biggest injection of funding for winter pressures that councils have ever received. As a result of the measures the Government have taken, funding available for adult social care is increasing by 8% in real terms from 2015-16 to 2019-20. Councils have responded by increasing their spending on social care, so the money has gone where it was supposed to, which is always encouraging.

Local authorities were also able to increase the average fees paid for older people’s residential and nursing care by 6.4% in 2017-18, which we believe brought more stability to the market. When we look into the detail of the figures we see that, while there has been a reduction in the number of care homes, the overall number of social care beds has remained broadly constant over the last nine years, with an increase in nursing beds and care home agencies. As in any market, there will be inevitable entries and exits of care organisations, but we feel that there is some consistency. It is more reassuring than it may appear on the surface.

As we have also discussed, social care funding for future years will be settled in the spending review, where the overall approach to funding of local government will be considered in the round. We are also looking ahead to ensure that the social care system is sustainable in the longer term so that we can continue to deliver as our society ages. This is why the Government have committed to publishing a Green Paper at the earliest opportunity, setting out proposals for reform.

I hope I have answered the majority of the questions raised by the noble Baronesses. If I have failed to respond to anything, I hope they will allow me to write.

[Baroness Thornton]

I thank the Minister for that answer. I am not completely convinced about the stability of the care home sector. I think we have some major problems coming down the line. Of course, like the noble Baroness, Lady Jolly, I welcome an increase in payment for nursing staff, because that is absolutely essential. However, we have to take seriously the issue of social care staff who work in homes or a domiciliary setting. They do not get the attention or esteem they deserve, or the training they need, and they are certainly not paid sufficiently, yet we still expect them to deliver the best possible service. This statutory instrument is not the place where that can be solved, but it amplifies the challenges we face here.

On that basis, I thank the Minister for getting through that answer without completely losing her voice. We heard everything she had to say. I beg leave to withdraw the Motion.

Motion withdrawn.