Adult Social Care

Damian Green Excerpts

Wednesday 8th March 2023 Commons Chamber

[Damian Green (Ashford) (Con)]

May I start by saying how delightful it is to see you back in your proper place, Madam Deputy Speaker? You are very welcome back.

I congratulate the hon. Member for Sheffield South East (Mr Betts) not only on instigating the debate but on much of what he said. He said that he wished to speak in a non-partisan way, and he approaches the subject as the Chair of the Select Committee, while I approach it as the chair of the all-party parliamentary group on adult social care. I found myself nodding in agreement with significant amounts of what he said, particularly the point about the need for long-term thinking and for a quite radical change in the way that we fund adult social care.

That is not just agreed across the House now, but has been for some decades. The hon. Gentleman went as far back as Gordon Brown. I can go back further: I have identified Tony Blair talking to the Labour conference in the 1990s, saying that social care was one of the big issues that he wanted to address in government. Here we are, a quarter of a century later, and we have got through it with a series of short-term efforts and sticking plasters. Long-term plans have been produced and promised but none of them has ever been put into policy. Throughout that quarter of a century of debate, the one thing that has been agreed is that the social care sector needs long-term funding.

The current Prime Minister and Chancellor have understood the importance of a long-term strategy and funding base for the sustainability of adult social care. Indeed, as the hon. Member for Sheffield South East said, the Chancellor was previously—by happy chance— Chair of the Health and Social Care Committee, and that Committee produced a number of reports setting out the need for an additional £7 billion a year for social care. I note that the hon. Gentleman has just doubled that to £14 billion.

I am sure that the figure will rise, not fall; we have only to look at the demographics of the over-65s. Regardless of the rising number of working-age people who require social care of one form or another, if the same sort of percentage of over-65s end up requiring care, the bill will go up by something like 80% over the next 15 years. It is certainly true that demands on the social care budget will rise rather than fall in the coming years.

[Mr Betts]

Figures are bandied around, but I think that the figure is somewhere between £7 billion and £14 billion. It depends—the right hon. Gentleman is addressing this point properly—on whether we include the rise in demand, the need to have a real review of the workforce and pay, and the eligibility criteria. That is the way in which costs have been dampened in the past. We really need to revisit that whole issue.

[Damian Green]

I agree; indeed, I will mention workforce later.

The Government have, of course, responded to this issue in successive years, and have found extra central Government funds to pay local government, so we have proceeded from year to year, and although the system has been fragile, it has continued to operate. Of course, the background conditions are getting increasingly difficult. Inflation has an impact on social care providers. A cost of living survey done by social care provider MHA found that 94% of its community schemes had heard members or residents express concerns about the rising costs of living, and 49% of respondents said that the increased costs of transport specifically were a significant issue among their members. There is a danger that rising energy costs will significantly reduce the number of available services and have an immediate impact on discharge from the NHS into the community.

The Association of Directors of Adult Social Services has reported that nearly half of all directors of social care services are not sure that unpaid carers will be able to cope financially with the cost of living crisis, which could lead to further increased demand on paid-for social care services.

[Sir Greg Knight (East Yorkshire) (Con)]

My right hon. Friend is making an excellent speech. Does he agree that we still grossly undervalue carers?

[Damian Green]

My only caveat is that my right hon. Friend says “we”. In the community, we do not.

[Sir Greg Knight]

As a country.

[Damian Green]

Publicly, as a country, we may well do so. They are a hidden army of people acting well, purely out of generous motives and the desire to help loved ones, which is natural. They do not get enough reward and praise from the general public, even though many of those people are the best members of the general public.

There are other specific measures that the Government could take. I would hope that following April, adult social care providers could be defined as a vulnerable sector as part of the energy bill relief scheme; I think that would be of significant help. The County Councils Network has estimated that with inflation, it could cost councils £3.7 billion extra to keep social care services running. If that figure is anything like accurate, the quality of care will decrease if those providers are not defined as a vulnerable sector.

I will now move on to the central point of the debate, which is funding. The hon. Member for Sheffield South East has very eloquently made the case for what we all know to be true: adult social care is a huge strain. The way in which we currently fund it is something that local councils find unsustainable, and therefore, the system is now kept going through repeated one-off injections of central Government cash. That in itself is not sustainable as a system. Some years ago, I suggested an alternative way of getting the extra money we all need into the system. I will return to that proposal now, because if we step back, the problem is that social care—especially for the elderly, perhaps—is too opaque for those trying to understand it, with no apparent logic as to which conditions receive free NHS treatment and which do not. Moving directly on to the financial point, it is also unfair not to reward a lifetime of prudence. Those who have saved feel that their savings will simply disappear, while those who have not saved receive the same level of care.

There is also the fact—which is not often discussed—that funding social care out of council tax means that local authorities are reluctant to allow too many care homes, or indeed retirement housing, to be built, because they do not want an increasingly elderly population. The ageing population means that something like 50% of some councils’ spending already goes on social care. As the hon. Member for Sheffield South East said, that figure is projected to rise to 60%, and given the demographic trends that I have already mentioned, my fear is that some higher-tier authorities that are funding social care will end up as basically social care providers with a few libraries and a bit of money to spend on potholes, and not much else. A lot of essential council services will be swallowed up by the need for social care, as well as the fact that the problems in social care put extra pressure on the NHS.

We need a radical change to the system in order to meet five objectives. The first is to provide enough money to cope with the increasingly ageing population. The second is fairness across generations, so that today’s working-age taxpayers are not asked to pay for both their own care in the future and the care of the generation above them today. The third is fairness among individuals, ensuring that no one has to sell their own home—has to lose all their assets to pay for care—and ending the dementia lottery that the hon. Member for Sheffield South East mentioned, where one condition is treated on the NHS and another is not. The fourth is increasing the supply of care beds and retirement housing. My fifth point is perhaps slightly ambitious: in an ideal world, we should secure cross-party consensus, with a lot of consultation before we move to a new system, but with the people moving to that system having confidence that Governments of any stripe will keep it going.

The model I take, because we can see it more or less working, is the pension system. The basic state pension has been increased significantly in recent years, taking many pensioners out of poverty, but at the same time, most people save additionally through their working years to provide comfort and security in old age. Auto-enrolment in pensions has been a great cross-party success story, encouraging millions more people to save towards their own security in old age; for an individual who starts saving in their early 20s, the benefits will not come for decades, but they will be huge when they arrive.

Similarly, just as the basic state pension has been improved in recent years, I think we should offer a universal care entitlement, offering a better level of care—both homecare and residential care. For those who need residential care, that would cover the core residential costs. The needs would be assessed locally, but the money would come from central Government, which would take away the pressure on local councils. The state element of that funding should come centrally, rather than locally. Will that involve extra money? Of course it will, but given the annual injections of extra money that the Government put into the system, they have already implicitly admitted that it needs much extra money, so I think this is a necessary increase in public spending. I accept all the pressures and controversies that it will cause, but it seems unavoidable to me.

On top of that, we need to find an acceptable way to allow those with the capacity to improve their own provision to do so. I suggest we should create what I call the care supplement: a new form of insurance designed specifically to fund more expensive care costs in old age, just like the private pension system that tops up the state pensions of millions of people. It would allow people to buy insurance at the level they can afford in order to provide peace of mind. I do not think that the care supplement should be compulsory, as indeed auto-enrolment for pensions is not compulsory, so we would not get into the slightly sterile debate about death taxes and dementia taxes, phrases that both of the main parties have thrown at each other over the years.

People could save for that insurance over many years through their working life, or they could make a one-off payment—possibly using something like equity release from a part of their house value—at a suitable time in their life. I will pause on that point, because too much of the social care debate has devolved into questions about home ownership and whether a person has to sell their home. Under a mass insurance system, nobody would have to lose all of their assets or sell their home; a sliver of the money that is now in free equity in housing owned by the over-65s would cope with this challenge. There is £1.7 trillion in free equity in housing owned by the over-65s, and if a very small percentage of that money were applied to insurance for social care, it would mean that people had peace of mind in old age.

I have been told by successive Ministers that that system would be too complicated, and that we cannot set up an insurance system. All I say in response is this: of course, setting up a new system is complicated and difficult, but we know that the current system is not working. If we carry on doing the same thing, the system will continue to be frail and rickety for years—possibly generations—to come, which is not acceptable. We have to do something radically different. If somebody can come up with a better way of getting some of that wealth to pay for social care, fine, but we have to try something radical.

Funding is one key issue, but since the debate is about adult social care, I will identify four areas in which we need new thinking if we are going to fix social care. The first is the workforce, which has already been mentioned. It needs to be bigger—bigger by more than 100,000—and to achieve that, it needs to be better paid and have a higher status. I would like nurses working in the care system to be on the same Agenda for Change pay scales as those in the NHS, otherwise they will keep moving from the care system to the NHS.

The second area is the voice of care within the new integrated care boards. That change represents a chance to improve the integration of the health and care systems without creating another massive bureaucracy, but I slightly fear that the ICB system is settling down with the voice of care providers not being loud enough at the table. Local authorities are clearly a key player in the system, but so are other providers, and their voice needs to be heard.

My third point is about the use of technology, not only for sharing information between different parts of the system, but for giving those in receipt of care more control over their daily life. We are not exploiting the range of available technology anything like enough to do that and, if we get it right, the prize is that more people will be able to stay in their own home for longer. That is better for them, most importantly, but it is also better for the taxpayer, so it ought to be a high priority. It is particularly important for people living with dementia.

The fourth area is an extension of that notion of people staying in their own homes for longer through the provision of housing. As it happens, in one of the Minister’s previous incarnations, I spoke to him about this issue. We are failing to build anything like enough supported housing for older people, particularly in retirement villages. Taken together, the last two measures I mentioned—technology and the provision of suitable housing—would mean that many people were able to stay in their own home for longer. As I say, that is a double win: it is better for the taxpayer, but most importantly, it is better for people as well. Most people want to live in their own home for as long as they can.

My original idea for a universal care entitlement accompanied by a care supplement would take the burden of social care funding away from local authorities, which is good, and, more importantly, offer certainty and security for the increasing numbers who will need social care in old age. No one would have to sell their house and see their inheritance disappear, everyone would have the chance of receiving better care and fewer people would be left unnecessarily in hospital beds as they wait for social care to be available. I am conscious that none of this is easy and that it will take political courage and possibly political consensus to achieve, but it is absolutely necessary if we are to provide peace of mind and security to frail, elderly people who richly deserve it. I commend these ideas to the Minister.