Care Bill [HL]

Earl Howe Excerpts

Tuesday 16th July 2013 Lords Chamber

[Baroness Wheeler]

My Lords, I do not have a great deal further to add on this issue, given that we fully supported this approach in the earlier debate on our amendment. The noble Lord, Lord Low, and my noble friend Lord Touhig have made their case powerfully for the need for specialist expertise in assessing people with complex care and support needs—for example, deafblind people, people with autism and those with profound and multiple learning difficulties.

As the noble Lord, Lord Low, pointed out, the draft Bill originally provided for the regulations to specify the circumstances in which a person with expertise in a specialised matter must carry out the assessment on behalf of the authority. However, this was altered in the published Bill, with the only requirement being consultation with a specialist. Noble Lords are right to consider this to be a retrograde step and I look forward to the explanation from the Minister on this and an undertaking to reinstate in Clauses 12 and 27 the current approach, as the amendments propose.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, I thank the noble Lords, Lord Low and Lord Touhig, for bringing forward these amendments. I say straight away that I fully support the intention of Amendment 88M, which is to ensure that local authorities engage a suitable expert when carrying out complex assessments. The assessment will remain an integral part of the process of determining a person’s care and support needs and whether these meet the national eligibility criteria. To ensure that this is done correctly, it is essential that the person carrying out the assessment has the right knowledge, skills and competence. We heard from users of care and support during the engagement on the draft Bill about the importance of the assessor having knowledge of the condition that the person may have, whether they are, for example, a frail older person, a person with mental health problems or a person with autism.

Care managers and social workers are trained to carry out assessments. Their skills and experience will allow them to assess people with various conditions such as physical disability. There are, however, certain complex conditions where these skills are not sufficient to allow assessments to be carried out effectively. I am particularly thinking about a person who is deafblind—the example, given by the noble Lord, Lord Low. In those circumstances, most care managers would find it very difficult, if not impossible, to communicate with the person. It takes someone with expertise to carry out an assessment properly and identify the person’s needs and the outcomes they wish to achieve.

I agree with the noble Lords that, in such circumstances, the local authority must engage a person with the relevant expertise to carry out the assessment. That continues to be our policy. I also accept that if the adult’s condition is so complex at the assessment stage as to require the services of an expert in the field to provide advice, then it makes perfect sense for this to be repeated when the plan is to be reviewed. I should like to reassure the Committee that the Bill already has provisions in place to allow this joined-up approach to occur if an adult’s circumstances have changed in a way that affects the care plan. Clause 27(4) states that the local authority must, to the extent it considers appropriate, carry out a fresh needs assessment. In doing so, it would have to follow the requirements of regulations to consult a person with expertise. I hope I have reassured noble Lords of our agreement to the principles that they raise. In the light of what they have said in support of the amendment, I will look again at Clause 12 to ensure that we are giving ourselves the relevant powers to achieve our aims. I hope that the noble Lord, Lord Low, will find that undertaking welcome.

[Baroness Barker]

In Clause 27 it appears that it is only the local authority that has the power to ask for there to be a reassessment, not the individual. Is there a provision somewhere in the Bill that enables an individual to trigger a reassessment, or does that power lie with the local authority alone? If the Minister does not have an answer to hand, perhaps he might write to me.

[Earl Howe]

I shall do my best to answer my noble friend in a moment or two, but I am aware that I did not answer a specific question raised by the noble Lord, Lord Low, as to why we changed the wording in Clause 12(1)(c) of the draft Bill. We widened the scope of the powers following consultation—for example, to add a power to specify when an expert must be consulted —and in widening the powers the wording was slightly amended. We are happy to look at this again in order to make sure that it continues to meet the policy intention. In answer to my noble friend Lady Barker, I would refer her to Clause 27(1)(b), which refers to the right of an individual to request a review.

[Lord Low of Dalston]

My Lords, I am grateful to all those who have spoken in support of these amendments. I am also grateful to the noble Earl for his response. I thought we were going to be in the position where we had to say that we welcomed his support for our principle but we were disappointed that he was not willing to review the legislation to make sure that it put the principle into effect on the same basis as our amendment seeks to achieve. However, lo and behold, the noble Earl, not uncharacteristically, has come more than half way to meet us by saying that he is willing to look at the Bill again just to make sure that the policy intent, which he shares with us, is carried into effect. I welcome that very much. If it would assist the achievement of a consensus on this for us to meet, I would welcome that. I am very conscious of the calls on the Minister’s time as a Bill such as this goes through the House, so it may be that a meeting with officials would suffice. If further dialogue with the department would help to establish that we were fully on the same page on all this, I would welcome that very much. However, for now, with the very full assurances that the Minister has given us, I beg leave to withdraw the amendment.

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We will come later to the consequences of the introduction of Dilnot and the cap. I am concerned about the capacity of local authorities to deal with all the responsibilities being placed on them, not just in terms of funding services and support, but the capacity to carry out the assessments required by this legislation. We will talk later about the impact of self-funders. On commencement day, we can have hundreds of thousands of people needing to be assessed in order to make sure the clock starts towards the £72,000 cap. Alongside that, all the other assessments that are covered by this legislation will need to take place. There is a real worry that local authorities do not have the capacity to do this. I am always tempted to talk about the problems of the Child Support Agency, but when you have a commencement date there is a risk that many more people become eligible to be assessed at that point. There is a real risk that local authorities will not be able to meet the demands placed on them. This is why my noble friend Lord Lipsey is right to raise the issue of consistency of approach and capacity in assessment against the national eligibility criteria which will have to be undertaken by individual local authorities.

[Earl Howe]

My Lords, this has been an excellent and very important debate and I thank all noble Lords who have contributed. I will, if I may, begin by picking up the remarks of the noble Lord, Lord Warner. He put his finger on a number of very important points. The system of locally determined eligibility for care and support has been confusing to people for too long. It has been seen as an unfair system under which different levels of needs are met on the basis of where somebody lives. The changes we are bringing forward will mean that people’s entitlements to care and support will be much clearer and fairer and will reduce variation in access between local authorities.

That is our starting point and, once this legislation comes into effect, local authorities will not be able to reduce eligibility below the level set out in regulations. They will be able to meet other needs which do not meet the national eligibility criteria through the power in Clause 19, but they will be required to follow a consistent approach to determining eligible needs. That is a big step forward. We must not view these national criteria in isolation. The Bill does a great deal for people with lower levels of need, including through provisions on prevention, information and advice. One of the key aims in relation to assessment is to ensure that this is effective in identifying needs and support options for all people, in particular to help those who do not have eligible needs and to prevent deterioration.

Clause 13 provides for regulations which will set out the eligibility criteria according to which local authorities must meet an adult’s needs for care and support or a carer’s needs for support. Amendment 88Q seeks to add this detail to the Bill. I understand why the noble Baroness would like to see the eligibility criteria set out in this way. Some noble Lords have questioned the number of important provisions being introduced through secondary legislation. However, in this case I believe that it is necessary. It is important that we get the eligibility criteria right, otherwise there is a danger that we will put in place a system that is more confusing than the one that we are replacing.

There is advantage in having the flexibility of setting the criteria in regulations; once again the noble Lord, Lord Warner, gave a helpful pointer to this in his remarks. We are not proposing to amend the national eligibility criteria on a regular basis. However, we need the ability to amend the regulations if it is shown that the criteria need to change at some point in the future. Of course, we would consult fully before making any such change.

To help inform debate on this area, and as noble Lords have mentioned, on 28 June we published draft regulations for discussion which set out the proposed national eligibility criteria. I emphasise that these are intended to set a national minimum equivalent to the level operated by the vast majority of local authorities in the current system. As part of the spending round announced recently we have committed to provide funding that will maintain the same level of services when authorities move to the new system in April 2015. This is the beginning of engagement with stakeholders before we formally consult on draft regulations next spring.

Amendment 88T is concerned with parliamentary scrutiny of the eligibility regulations. The power to set the eligibility criteria in regulations is one of the most important in the Bill and is central to the new care and support system. For this reason the Bill requires the regulations to be made under the affirmative procedure. That will ensure that Parliament will consider the regulations before they are introduced and that it will also consider any future changes. As a matter of course the regulations will also be considered by the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments. Therefore we do not believe that the regulations need further scrutiny by a Joint Committee of both Houses.

Amendments 88R and 88S in the name of the noble Lord, Lord Hunt, refer to matters that the Secretary of State should have regard to when making the regulations. Amendment 88R clarifies that the regulations may describe a person’s care and support needs by reference to the effect of needs arising from a physical or mental condition. The well-being principle at Clause 1(2)(a) includes physical and mental health, and this is reflected in the draft regulations. Regulation 2, which sets out the eligibility criteria, explains that needs are eligible needs if they have a significant impact on a person’s well-being and are as a result of a physical or mental impairment or illness. Amendment 88S proposes that a person should be eligible for care and support if they are in receipt of health services. As we debated earlier, a person can expect to receive an integrated service, but the determination of eligibility for care and support must be based on care needs only, rather than what health services a person is receiving.

A number of noble Lords suggested that the eligibility criteria should be set at moderate. As I have already said, this threshold is about establishing a minimum standard, not about taking away councils’ discretion to go further. Local authorities will remain able to meet lower needs locally if they choose to do so. Once again I was grateful to the noble Lord, Lord Warner, for his realistic assessment, and to the noble Lord, Lord Lipsey, for his comments. The eligibility criteria are intended to be equivalent to the level operated by the vast majority of local authorities in the current system. Independent research suggests that it would cost an additional £1.2 billion to set the threshold at moderate for younger disabled people and those with mental health needs, and a further £1.5 billion for older people. The combined total is £2.7 billion, which is a large amount to find in the current financial climate.

The pooled funding that we are proposing is important to factor in here. The noble Baroness, Lady Grey-Thompson, suggested that setting the criteria at moderate would save money. It is important to understand what the pooled funding is designed to do. Once again, the eligibility criteria should be seen as part of the overall system that we are putting in place. The pooled funding that we have announced will support better integration between local authorities in the NHS to improve outcomes for the local population. Part of this funding will be used to support local authorities and the NHS if they need to intervene earlier to prevent people’s health or care needs worsening. That will include many of the people with low or moderate needs.

The noble Lord, Lord Low, suggested that universal services do not have the capacity or resources to meet the aspirations that the Government have set out. As we have debated, the Bill sets out new duties on local authorities to provide universal services such as preventive services. These will also be supported by statutory guidance to make clear the expectations that we are placing on local authorities. Moreover, as I have mentioned, the pooled funding is relevant here. Among other things, that will enable preventive and integrated services, which also benefit the NHS.

The noble Baroness, Lady Grey-Thompson, said that it was not fair that the cap applies only to eligible needs. We will debate the Government’s proposals for the capped cost system in due course. However, access to the cap needs to be consistent in order for the system to be fair. Using national eligibility criteria will ensure that the cap applies on an equivalent basis in every area. The noble Lord, Lord Lipsey, commented that the eligibility criteria will not solve the huge variation within local authority areas due to variable assessments. First, the eligibility assessments will set a minimum threshold, which is important. Some differentiation in local implementation will remain, but as referred to previously, we will require that local authorities appropriately train assessors to ensure that assessments are carried out properly, and we will publish guidance that will help to reduce variation.

My noble friend Lady Jolly asked whether we can ensure that the regulations become more asset-based and that that work involves experts. I can reassure her that the Bill already allows for the individual’s strengths to be taken into account in the assessment. In relation to the draft eligibility regulations I can assure her that we will engage widely with stakeholders to make sure that they deliver our policy.

[Baroness Browning]

As far as the eligibility criteria are concerned there is another indicator, which I have not heard mentioned in this debate, and that is the number of people who challenge their local authority through the courts. Currently—from my own experience of case work, particularly with those on the autistic spectrum and with learning disabilities—many local authorities, when challenged legally on this, will settle before it goes to court. It is difficult to quantify what that number is, and I do not know whether what I am asking my noble friend is practical. However, in monitoring whether the eligibility threshold is correct, particularly for those with low to medium needs, would the Government be prepared to use the number of applications for legal challenge and, if possible, of those who settle out of court before it goes to court? That is a very clear indication of where local authorities refuse because the current eligibility criteria have not been properly constructed. When challenged, they usually pay up pretty quickly.

[Earl Howe]

My noble friend raises an important point, and I will take her suggestion away with me. As I mentioned earlier, however, a great deal of what this Bill will deliver is, so to speak, invisible to the naked eye, because it will ensure that those with lower needs will also be catered for in some way or another. I would like to hope that, for that reason, there will be less scope for challenge. I will write to my noble friend if I can supply her with our further thinking on that important topic.

I hope that what I have said will have reassured the Committee on these important matters. This has been a well informed debate. Our continued approach to engagement and consultation on the draft regulations will obviously allow us to consider many of these issues further, and on that basis I hope that noble Lords will not press their amendments.

[Lord Touhig]

Have the Government looked at the Deloitte economic modelling, which shows that support for moderate needs actually gives a greater return on the money invested? If not, will the Minister undertake to look at it before Report stage, so that we can discuss the savings that could be achieved?

[Earl Howe]

I know that my officials have looked closely at that modelling. I have not yet had an opportunity to look at it but undertake to do so. However, in all such matters a judgment is needed as to how money is best spent. No doubt there are good arguments for the Deloitte point of view, but, as I have already outlined, we think that if one has to spend money of that order, it is better spent in the way that we propose. Nevertheless, this is a debate that we can usefully continue, and I shall be happy to do that between now and Report, and also at Report stage itself.

[Baroness Grey-Thompson]

My Lords, I thank all noble Lords who have taken part in the debate, and also the Minister for his response. My amendment, which is about who is eligible and who is not, addresses the main crux of the Bill. I shall respond to a few points that noble Lords have raised.

I agree with the noble Lord, Lord Warner, when he says that we need to be realistic. However, my view still is that a small amount of support for working-age disabled people or older people—to keep them active, to keep them in their own homes and to support them in the best way—will actually save us money in the long term. Moreover, expectations have been raised about what older people can expect.

There is still a lot of work to do on the draft regulations to encompass the needs of working-age disabled people and older people, and to ensure that we keep the consistency. As things stand, giving someone the ability to have an assessment of the care that they can expect, but no actual support, does not help them; it just raises their expectations in a slightly misleading way. Again, disabled people and older people are paying the price of the economic downturn. Although this is not the right time for it, I would welcome a really honest debate on what the Bill is about. Is it about saving money, or is it about the well-being of certain groups of people? As ever, disabled people and older people seem to be at the bottom of the priority list.

I welcome the fact that the Minister has said that he will go away and look at Deloitte’s economic modelling. I think that we would probably agree to disagree about where that is at the moment, but it would be beneficial to try to find the best way forward in that context.

The noble Baroness, Lady Jolly, raised two very important points, the first of which was about the seamless transition. That is incredibly important. This is about not just who makes it to the support level, but what we do with people who are just outside that category. It is crucial that we get the advice and the signposting and all the support absolutely right, to make sure that people are not falling through the cracks. Her second point was that the regulations are still in draft. The Minister in the other place has offered me the opportunity to continue this discussion on the eligibility criteria, and I very much welcome that, because it is a recognition that the draft regulations can be improved.

It is also important that we have a constructive continued discussion on what the draft regulations mean in reality. There is lots of expertise both inside and outside your Lordships’ Chamber, and we must use those people to get to the best place, and use the time we will have in the summer leading up to the formal consultation. I do not see all this as just a negative discussion. There is much work to be done, but I see that as a huge opportunity to improve the regulations and get them into a much better form for everybody. At this stage, however, I beg leave to withdraw the amendment.

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Finally, the amendment of my noble friend Lord Lipsey makes a strong case in relation to Clause 64 —this deals with a local authority’s powers to enforce debts owed to it—for trying to distinguish between people who deliberately supply fraudulent information on their finances and those who make mistakes or misunderstand what is required of them. The financial assessments for care and support are involved and complex and errors can occur with no intention to be dishonest or defraud. I hope that the Minister has taken note of my noble friend’s arguments and will consider how the Bill can be amended.

[Earl Howe]

My Lords, not for the first time, I find myself in sympathy with the noble Baroness, Lady Pitkeathley, and the concerns she has raised about the Bill’s practical implementation. I am sure it is a shared view across the Committee that people should be supported to remain independent within their own homes for as long as possible. As the Bill recognises, supporting carers and preventing or delaying the need for care and support are both vital to achieving this goal.

On the specific amendments tabled by the noble Baroness, our previous debate shows the value and importance which noble Lords place on carers and the need to support them. I thank the noble Baroness for her recognition of the significant improvement that this Bill will make. I reassure her that the Bill makes it clear that local authorities cannot charge carers for services provided to the person being cared for. Our clear view is that Clause 14(3) puts this matter beyond doubt, and this would include services of an intimate nature provided to the person being cared for.

Local authorities need to retain the flexibility to meet the needs of carers in the most appropriate way. This might include providing services to the adult needing care such as feeding them or taking them to the toilet. Providing these services is necessary to allow carers of people with the greatest needs to take a well earned break from their responsibilities. However, Amendment 89A would create a legal barrier which may hinder the provision of support to carers. For that reason, I do not warm to it.

Amendment 89B would ensure that services provided to carers were provided free of charge by the NHS. Local authorities currently do not usually charge carers, as they recognise the vital work that they do. In some cases, however, local authorities may charge a fee for services provided directly to carers, such as when the local authority arranges a trip for them. We want to continue to give local authorities this flexibility.

The noble Baroness expressed a worry about the scope for different interpretation about who is the beneficiary of a particular service. In most cases, I suggest that it will be clear what is being provided to the adult needing care and support as opposed to the carer. However, statutory guidance will be provided to help to promote national consistency on that point. I hope that that reassurance will provide the noble Baroness with the wherewithal to withdraw the amendment for the time being although I will, of course, reflect further on what she has said.

On Amendments 89BA and 92ZZM, I reassure the noble Lord, Lord Low, that we intend to maintain the existing entitlements to aids, minor adaptations and intermediate care in regulations. Aids and minor adaptations costing up to £1,000 will continue to be provided free and without the need for a financial assessment. We will shortly be consulting on the implementation of our reforms to care and support funding, which will inform the future regulations. In designing the new regulations, we will consider whether we should update the list of services which must be provided free of charge. However, we must bear in mind that further limitations on the ability of local authorities to charge would reduce the resources available to support people with the greatest needs. The draft regulations will be subject to a further public consultation to ensure the final regulations are based on the best available evidence.

As I indicated earlier, we are introducing a fairer system, including a cap on care costs. It is right that people who can afford to do so should continue to contribute a fair amount towards their care costs, and when they do not, Clause 64 allows local authorities to recover these costs as a debt. I understand the desire to protect people who make mistakes or accidentally fail to disclose relevant information. However, I fear that Amendment 104ZB, which would require local authorities to prove intent, would result in complex and expensive legal cases. Intent is not always easy to prove. Local authorities will not be able to charge people more than their due debt and the costs incurred in recovering that debt, and we think it is right that they should be able to do so even if someone has made a genuine mistake. This is not about instituting recriminations but about correcting mistakes. We should surely allow local authorities to take action in such a case if we believe in protecting public money.

[Lord Lipsey]

I am a bit bemused. I cannot see where my amendment states that local authorities have to prove intent, nor do I see in the noble Earl’s argument any reason why the person who makes a mistake should have to pay not only the extra money they have received but the cost to the local authority of retrieving that money. That seems to me a punishment too far.

[Earl Howe]

I had rather assumed, perhaps wrongly, that if, for whatever reason, there has been a discrepancy in the declaration made by a person, it either has to be a genuine error, or something more deliberate, in which case there is intent involved. I am not sure what other explanation there could be. That was why I read into the noble Lord’s amendment what I did.

I think that the ability of a local authority to recover costs ought to act as a disincentive to people to be careless about what they are doing. They should make sure that what they declare is accurate and should be made aware that if they make a mistake, it might prove a little more costly to them than just rectifying the error. This is not about imposing recriminations on people. It is right for local authorities not to be out of pocket when other people out there could be benefiting from the public money that is available.

[Lord Lipsey]

The noble Lord has interpreted my amendment one way; I have interpreted it in another way. It may be that the Bill, either as it is or as amended, is not quite right. Can the noble Lord agree that we have further discussions to see if we can find a way forward that satisfies us both?

[Earl Howe]

I am more than happy to discuss this with the noble Lord and I apologise if I have misunderstood his amendment. I certainly would not wish to do that.

The noble Lord, Lord Low, asked me how equipment and adaptations will be addressed in a personal budget. Those costs that are intended to meet eligible needs will be included in the personal budget, or the independent personal budget, and will count towards the cap. We intend that aids and minor adaptations will be provided free of charge however they are funded, including by way of direct payments.

The noble Baroness, Lady Wheeler, asked me when the regulations under Clause 14 will be published. We intend to publish the draft regulations after the forthcoming consultation on funding reform. This consultation will enable the regulations to be based on the best available evidence. She asked where are the provisions about complaints and redress in relation to charging and, indeed, all of Part 1. Existing complaints provision for adult social care is through regulations. The provisions of the regulations mean that anyone who is dissatisfied with the decision made by the local authority about their assessment or eligibility would be able to complain to the local authority and have that complaint handled by the local authority. The local authority must make its own arrangements for dealing with complaints in accordance with the 2009 regulations.

The Government recognise that the existing framework allows local authorities flexibility in the development of the process for dealing with appeals and challenges. There are options for local authorities to introduce independent elements to the complaints process through a range of formal and informal measures. Each local authority will therefore have a different process and we appreciate that local variation will result in varying user experiences. If a complainant is not satisfied with the response from the local authority, they can refer the case to the independent Local Government Ombudsman.

I hope that those remarks will be helpful and that the noble Baroness, Lady Pitkeathley, will for now be able to withdraw her amendments.

[Lord Warner]

Can the Minister clarify his response to my noble friend’s amendment that there would be statutory guidance? I know that I have been away for a few weeks, but before I left, the Government had turned their back on a statutory code of guidance, as I understood it. Has there been a change of heart in my absence?

[Earl Howe]

My advice is that the guidance that we will issue on this topic will be binding on local authorities. It will not be the type of guidance which merely points to best practice, which local authorities are free to ignore. The last thing I wish to do is to mislead the noble Lord and if I have done so, I apologise in advance and I will clarify that point to him and to the entire Committee.

[Baroness Pitkeathley]

My Lords, I thank all noble Lords who have spoken in what my noble friend Lord Lipsey called this “bits and pieces” group, although charging and access was the theme that linked the amendments. I am naturally disappointed that the Minister cannot accept my amendments, but reassured by his restating his intention so far as carers and charges are concerned, and by the statement that he has now given twice about the guidance being binding on local authorities with regard to charging. I am also grateful for his offer to reflect on my concerns, because I am not entirely certain that we have totally removed what my noble friend Lord Warner called “the scintilla of doubt” which might allow local authorities at some point in the future to charge carers. For the time being, I beg leave to withdraw the amendment.

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[Lord Hunt of Kings Heath]

My Lords, I hesitate to come between my noble friends Lord Warner, Lord Lipsey and Lord Campbell-Savours, and indeed knowing what is good for me I am not intending to do so. I say to my noble friend Lord Campbell-Savours that I understand the point that he is making and I agree that Dilnot is not the answer to many of the really pressing problems that we are talking about.

I want to tempt the noble Earl to say a little bit more on two areas which have been referred to by noble Lords. The first is the complexity for local authorities of what they have to administer. The noble Earl has not really responded in detail on this matter so far. Indeed, it is noticeable that local authorities have not responded. We have received a huge amount of evidence, but not very much from local authorities and the local authority associations. This worries me. I understand why local authorities would be keen to play a prime part in the administration of this new system, but these are genuine concerns about whether there is capacity to make changes of this complexity happen. Nothing would be worse than the new system coming into being and collapsing almost on day one. At the moment, that is my view on what is going to happen. I do not know what the Government intend in terms of testing out the robustness of the system for when it is due to come in. I hope that at some point during our debate the noble Earl will be able to tell us.

Secondly, the next group of amendments deals with the public understanding the complexity of the system being considered, but it seems to me that this issue relates to the point about insurance raised by my noble friend Lord Lipsey. My understanding is that one benefit of full implementation of Dilnot—although I am not sure that the Government have gone down that path—would be that, if the public knew that their liabilities would be capped, there would be likely to be a ready insurance market. A number of us have looked with interest at the comments of the Association of British Insurers and other parts of the insurance industry. I have to say there does not at the moment seem to be much optimism about whether there is going to be a market and whether packages are going to be developed. This may come up in later amendments, but at some point I hope that the noble Earl will give a little more information about the Government’s view of the potential of the insurance market to develop products which the public can understand and will be willing to invest in.

[Earl Howe]

My Lords, as the noble Lord, Lord Lipsey, explained very clearly, these amendments would mean that the capped system counted time rather than costs. I agree that there are advantages to this approach. The Dilnot commission, in considering this option, said that using years instead of costs would be easier to administer and simpler to understand, and I appreciate those arguments. However, the commission also made the case that to adopt this approach would disadvantage those with more intensive care needs, who over a given period of time could spend significantly more on care than those with less intensive needs, so that what we might gain in simplicity we should lose in fairness. I am sure that we all want to see a fair care and support system giving the most support to those in the greatest need. Using time instead of costs would undermine that goal.

We are committed to using notional spend—in other words, the equivalent of what the local authority would pay to meet an adult’s eligible care needs. As with using time, it is in fact relatively simple to administer because it fits in with the current system of needs assessment. It also ensures that people with more intensive needs are not disadvantaged. That is why the Government agree with the Dilnot Commission, which said,

“the only suitable way of deciding when a person has reached the cap is to meter notional spend.”

The noble Lord, Lord Lipsey, pointed to the understandable fear that Dilnot will mean spending money on administration rather than on meeting people’s needs. I accept that times are challenging for councils, but we are committed to funding these reforms. Critically, we are also committed to co-producing the implementation of the reforms to minimise the bureaucracy that accompanies them and maximise the benefits that they bring. The noble Lord suggested that local authorities might not be ready to implement Dilnot in 2016, and the noble Lord, Lord Hunt, also asked about this, and whether we were intending to test the robustness of the system. We shall be coming to the issue of readiness in the next group, but I agree with the noble Lord, Lord Warner, that there is sufficient time to develop what he referred to as a taxi-meter system.

The noble Lord, Lord Campbell-Savours, took us to a point that he has made in this Chamber before about Dilnot, and his view that it is fundamentally unfair. I simply say to him that the vast majority of state support, under the Dilnot system, will be provided to the roughly 40% of older people with the lowest income and the lowest wealth. The cap, and the extended means test, provide the most reassurance to that particular group. Our view is that we need a system that protects people with the greatest lifetime care needs. It is not about protecting people with the greatest wealth.

To clarify the question that the noble Lord, Lord Warner, raised in the previous group of amendments about the guidance under Clause 71, this will indeed be statutory guidance, and it will look and feel like a code of practice. Importantly, it will have the same legal status. However, we do not think that guidance should be subject to parliamentary scrutiny every time it is updated, as with a code of practice Statutory guidance under this Bill will have the same status as the current guidance issued under Section 7 of the Local Authority Social Services Act 1970. I hope that this is helpful.

In a later group of amendments we will come to what local authorities think about the new system and indeed the whole area of financial services. However, I was reassured that the Local Government Association said that it fully supports and welcomes the inclusion of a cap on what an individual will pay. The Association of British Insurers has welcomed the announcement that we have made as a positive step forward in tackling the challenges of an ageing society. Arising out of that is a sector-led review that is working constructively with government to understand how the market will develop and create the right environments for products to succeed. That review will be completed over the summer.

I hope that with those comments the noble Lord, Lord Lipsey, will for now be content to withdraw his amendment. I hope that he found my comments, if not ones that he can agree with immediately, at least ones that he will put into the context of the Bill in, I hope, a manner that he will understand.

[Lord Lipsey]

My Lords, I thank the Minister for his reply, which was a miracle of putting very well the point that has come out of the debate. I thank all those who have participated. We have here a trade-off between simplicity and fairness—it is as simple as that. The Government—unusually, my party might think—have opted for fairness, and my party might not be surprised that in this case I have opted for simplicity. However, the matter will rest. Of course, if this system goes absolutely swimmingly, I shall forget that I asked the Minister to put it in his bottom drawer, but if it all goes wrong I shall tell the world that “I told you so”. With that, I beg leave to withdraw the amendment.

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[Lord Hunt of Kings Heath]

My Lords, my Amendment 90ZA requires the Secretary of State to report to Parliament,

“in advance of this section coming into force with the Government’s assessment of the likely impact of the cap on care costs; and … annually once the section is in effect, with the Government’s assessment of the impact of the cap, in particular its distributional impact across the income spectrum”.

I echo some of the points already made. The operation of the cap ought to be, and continue to be, subject to ministerial oversight. The opportunity to report to Parliament and for us to have an annual debate should not be missed. This links into the amendment of my noble friend Lord Lipsey, Amendment 92ZZB, because it would enable a ministerial advisory group to feed into an annual report on how the scheme is being implemented and whether changes need to be made.

It is important to bear in mind the concern of my noble friend Lord Campbell-Savours that simply operating Dilnot will favour the better off at the expense of the worse off. We must keep an eye on how it impacts on the distributional spectrum in this regard. That is why I have the second part of my amendment.

Like other noble Lords, I agree with Amendment 89E in the name of the noble Lord, Lord Sharkey, and Amendment 90 in the name of the noble Baroness, Lady Greengross. I have learnt over the past few months how complex this issue is, and if noble Lords do not understand the full complexity of the scheme—and I gladly hold my hand up that I have yet to believe that I have full mastery of how it will operate—how can members of the public be expected to understand its full consequences?

In our debate on Clause 2, we discussed the responsibilities of local authorities in providing advice and we debated the need for independent financial advice to be made available. The consequences for a person making the wrong decision on funding could be catastrophic. It is therefore important that advice is readily available, and I agree with those noble Lords who think that it ought to be a national responsibility. Whether I would give it to the current Secretary of State, I am not quite so sure.

I remember how the Government spun this Bill in the Queen’s Speech and the Prime Minister giving the impression that no one would for ever more have to sell their home and that the £72,000 cap was the limit. However, as we have gone through the Bill has become quite clear that neither is the case. I agree with my noble friend Lord Campbell-Savours that the Government have not thought through the implications of what the noble Earl said last week about the issue of transparency.

The point is that most people have to spend more than £72,000 because self-funders do not pay local authority rates. In his sophisticated response last week, the noble Earl suggested that local authorities took advantage of procurement at scale, which is why they were able to get a rate lower than self-funders. That was a remarkable argument. Most people see this as a case where local authorities underpay and that if homes only existed under local authority rates many of them would not be viable. It is therefore not surprising that many homes are on a cliff edge of viability on the one hand and at risk of being put out of business because of CQC inspections on the other. There is no doubt that it is generally thought that self-funders subsidise the people in those homes who are paid for by the local authority.

However, most people do not know that. Only an inside circle is aware of the issue. However, come the new implementation, everyone will know—as the noble Earl said last week, it will be transparent—and people will not put up with it. That is why, first, it is essential that more thought is given to implementation. I am not sure whether my noble friend Lord Lipsey is right to want to delay it by a year, but I am sure that he is right to say to the Government that they need to look carefully at the practicalities of implementation.

Secondly, it is important that self-funders are in future fully aware of the consequences of any decisions they take. At the moment, I and many other noble Lords are not convinced that the public are aware. That is why it is so important that a duty is laid on Ministers to fund, and continue to fund, a national campaign of information and that we come back to our debates on Clause 2 in relation to independent advice being made available.

Thirdly, I hope that the noble Earl will readily accept the amendment of my noble friend Lord Lipsey about the need for a ministerial advisory committee, which could then enable the Secretary of State to report to Parliament annually in relation to the implementation of the Dilnot proposals.

The noble Earl will be aware that, in general—my noble friend Lord Campbell-Savours aside—the Care Bill enjoys support. However, there is a risk of our disagreeing on implementation. If he can reassure us on the readiness of local authorities, on the willingness to provide independent advice and on the willingness to establish some kind of independent mechanism to report on a regular basis, it would provide a great deal of comfort.

[Earl Howe]

My Lords, the clauses on the capped-costs system represent a significant step forward, ending decades of uncertainty, with the introduction of a clear system that fairly shares costs. For the first time, people will be protected from spiralling costs and will no longer have to fear that their home will be sold while they are in a care home. In response to Amendment 90ZA, I can confirm that we published an impact assessment of the reforms which includes the distributional impact by income.

The current system exposes those with little savings or modest housing wealth to the greatest risk of losing everything to pay for their care and support. We will enable people to keep more of their capital and still receive a contribution from the local authority towards their residential care costs. Under new regulations, those with capital assets of less than £118,000 will see the local authority pay a proportion of their residential care costs rather than only those with assets of under £23,250.

As I mentioned earlier, the vast majority of state support will be provided to the 40% of older people with the lowest income and wealth. The cap and extension to means-tested support provides the most reassurance to this group. This is about protecting people with the greatest lifetime care needs and not people with the greatest wealth. The reforms must be sustainable and affordable for the long term, which is why we have accepted the Dilnot commission’s recommendation that the level of the cap should be adjusted annually in line with inflation. It is an approach used in taxes, pensions and benefits, ensuring they remain equally fair year after year.

I turn to amendments 92ZZB, 92ZZC and 104ZC. The noble Lord, Lord Lipsey, shares our aim in drawing up the Care Bill of ensuring the system can respond to changing circumstances. However, that dynamism must be balanced with some certainty about the basis for changes. That is why Clause 16 requires annual adjustments to be made to the cap and to an adult’s accrued costs, so that they keep pace with inflation. Clause 66 provides some certainty that changes are likely to occur only as a result of the annual adjustment or five-yearly review. In reviewing the level of the cap and the means-test threshold, the Government will want to involve a range of experts in assessing how external factors such as demographic change and healthy life expectancy are affecting affordability and the benefits of the capped costs system. A standing independent committee is therefore unnecessary and could suggest that the system is subject to constant change—which may, perversely, result in fewer people planning and preparing on the basis of these reforms.

Amendments 90A, 90B and 90C would require the annual adjustment to be made in line with average care costs. The first point to make is that there is no nationally recognised measure for care costs inflation. Linking the annual adjustment to a care costs inflation measure that has no national benchmark would not give people, or the financial services industry, certainty or confidence in the system. It would of course be possible to develop such a measure, but we feel it is unnecessary, as a robust proxy already exists. Average earnings is one element of the measures used to determine the state pension and therefore represent changes in people’s ability to pay. Earnings is a national statistic certified as compliant with the code of practice for official statistics. In addition, care costs and average earnings are related since labour is a substantial proportion of the cost of care. The latest Laing & Buisson market survey states that,

“in the longer term, fees are inevitably driven by costs … the major cost item is payroll”.

Turning to Amendments 89E, 90 and 104ZD, which is where my noble friend Lord Sharkey began this debate, I fully agree that it is critical that people are made aware of the reforms and what they will mean. The Dilnot commission rightly recommended that there should be an exercise in raising awareness alongside implementation of the reforms. Many people do not realise that they may have to pay for their care and support, which acts as a significant barrier to effective planning and prevention. The Committee will be aware from the debate on Clause 4 that we know that easier access to good quality, trusted information and advice is a critical enabler. The Bill places a duty on local authorities to provide information and advice, including on the capped cost system.

I assure the noble Lord, Lord Campbell-Savours, that we have absolutely no intention to or interest in allowing spin to replace clear and balanced information for the public. In improving awareness and advice, national and local must work together. It will be in the interests of local authorities, the public, government and the financial services industry to make sure that people are aware of the reforms and have access to the right information and advice at the right time so that they can plan and prepare to meet their care and support needs. We will seek views in the forthcoming consultation on the design and technical implementation of the funding reforms, which will include addressing the best way to raise awareness of these reforms nationally and locally.

My noble friend Lord Sharkey made the good point that awareness and understanding of the Dilnot reforms has to be evaluated and measured over time. As with any other policy, we will seek to evaluate the effectiveness of this particular policy, but we believe that to require an annual report in the Bill would incur a potentially high and unnecessary cost. There are other ways of delivering the same aim.

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[Lord Campbell-Savours]

If someone is below the £70,000 figure and funding their own care, why would they bring in the local authority? What business is it of the local authority?

[Earl Howe]

My Lords, potentially, everyone in need of care and support may benefit from these reforms. We want to make it as widely known and as apparent as possible that planning is an important matter, whatever a person’s means. If I have misunderstood the noble Lord’s question, I will review that answer and write to him, but that is the main point.

I come back to the point I made earlier: this is just the beginning and it is why we will shortly be consulting on all these implementation issues. With those comments, I hope that my noble friend will feel able to withdraw his amendment and that other noble Lords will not press theirs.

[Lord Sharkey]

My Lords, I thank all noble Lords who have spoken in favour of a comprehensive, national and centrally funded information and advice campaign under the direct control of the Secretary of State. I am sorry that my noble friend the Minister did not seem entirely convinced by that. I was very puzzled by one thing that the Minister said about the cost of an annual report on how well we were making progress in generating awareness of the terms and implications of Dilnot. I cannot see that the cost could be anything but essentially trivial. I may be wrong about that, but I should be very grateful if the Minister would clarify, perhaps in writing later, why he thinks that the cost would be substantial at all.

I continue to feel that the whole issue of providing information and understanding is much too important to be left to local authorities and for the Secretary of State not to have direct responsibility for it. The task facing any information campaign in this area is enormous. The last survey that I saw showed, for example, that only 17% of UK adults understand what a percentage is—even that may be an overstatement—and Dilnot’s implications are much more complicated than that. We need the best communication with the most money and we need obvious accountability. That means central government and the Secretary of State having responsibility.

Given the opinions expressed around the Chamber today, we may well want to return to this issue on Report. I beg leave to withdraw the amendment.