Health and Care Bill

Baroness Thornton Excerpts

Lords Hansard - Part 2 & Report stage
Monday 7th March 2022 Lords Chamber

The Bill misses an opportunity to strengthen the CQC’s financial management regime for large providers. At present, that regime is light-touch and largely reactive, with limited capacity to monitor providers and scrutinise their accounts. Bolstering the CQC’s capacity would make it more possible for it to intervene proactively, before a provider fails. This is a big and serious issue and there is much to do but I hope that these amendments will provide a much-needed first step.

[Baroness Thornton (Lab)]

My Lords, I am grateful to the noble Baroness, Lady Bennett, for returning us to this issue because I have reflected on the noble Earl’s remarks when we discussed this in Committee. He made an impressive contribution in that it listed many of the safeguards that the Government say are in place to deal with what are clearly very unsatisfactory situations in the care sector, which affect the most vulnerable in our communities.

My question to the noble Earl is: does he really believe that the Government are dealing effectively with the problems that face this sector, which is dysfunctional—I thank the noble Baroness for reminding me that I said that—and places insecurity in the hearts of some of the most vulnerable and eldest members of our communities? If all the things that he listed the previous time we discussed this were working, why would we return to this and say that those safeguards are clearly not working? Asset stripping is clearly still taking place. There are huge dangers to this sector and the noble Baroness has brought this back to the House because of them.

[Earl Howe (Con)]

My Lords, the noble Baroness, Lady Bennett, has brought us back to issues that we debated in Committee and I understand her concern about propriety in the deployment of public funds. I have no problem with the idea that Ministers and public servants should do all they can to ensure that public money is used effectively for the greater good. That is what they are obliged to do anyway. However, I do not feel that this duty is best served by accepting the amendment, even though it has been newly worded.

In my answer in Committee, I described how during the pandemic we learned about the importance of speed and flexibility in the way that we respond to a crisis. I suggest that this amendment would impede the Government’s ability to provide emergency support to critical providers. That does not mean handing out money willy-nilly. Any use of the power will be subject to the usual scrutiny and safeguards around the use of public funds, as set out in Treasury guidance on Managing Public Money and Accounting Officer Assessments.

There is a fundamental problem with the proposition that the noble Baroness has advanced. The amendment refers to “day-to-day operations” but there is no single accepted definition of that term. Any company could find itself excluded from receiving critical funding depending on how its accounts and finances are structured. For example, there are potential scenarios where the Government could ask providers to carry out activities at pace which may involve them in creating unavoidable debts, for which they would need reimbursement. In that situation there would be nothing improper in any government funding being used to repay that debt, but even if there were no such debts involved, the problem remains that any private company would be prevented paying dividends, as it would be logically impossible to disassociate the long-term effects of the assistance from the ability of the company to pay such dividends. I understand the concerns of the noble Baroness about unscrupulous people and fraud, but the amendment as worded is not well conceived.

Turning to Amendments 146 and 147, again, nobody can be comfortable with the idea of rogue investors or unscrupulous care providers. However, I made clear in Committee that the Government are committed to ensuring that we have a sustainable care market. We have already set out a number of planned actions, most notably in the People at the Heart of Care: Adult Social Care Reform White Paper, to achieve this objective. Noble Lords are aware that the adult social care sector is complex, as it contains both the public and the private sector. One thing that the two sectors have in common is the need to maintain not only quality of care but financial stability. To ensure that these businesses provide the care that they are required to, local government and regulators, such as the Care Quality Commission, monitor, regulate and support the sector.

As I mentioned in Committee, the CQC has market oversight responsibility, and in discharging those responsibilities, it performs comprehensive financial sustainability analysis for each provider in the scheme, including some private equity ownership structures. Debt leverage and capital structure are important components of this work, but consideration is also given to current and future trading trajectories, cash headroom and market positioning.

We also have in place the CQC-operated market oversight scheme, which monitors the financial health of the largest and most difficult-to-replace providers in the adult social care sector, ensuring that people’s care is not interrupted due to provider failure, which must be a proper concern. Since its establishment in 2015, there have been no major business failures of care providers that have resulted in the cessation of care.

We have always been clear that fraud is unacceptable. We are acting against those abusing the system; 150,000 ineligible claims have been blocked on the Covid-19 schemes, and £500 million was recovered last year. The HMRC tax protection task force is expected to recover an additional £1 billion of taxpayers’ money. Therefore, even if cash is diverted fraudulently, there is still the ability of the authorities to recover such cash.

I assure the noble Baroness that the Government will continue to keep the measures which I have outlined under review but, at present, we do not believe that the proposed and very prescriptive amendments are either proportionate or necessary. I hope she feels that she can come back to this matter at a future date. With that, I am clear that these amendments should not be accepted.