Social Care Funding

Heidi Alexander Excerpts

Thursday 10th November 2011 Westminster Hall

[Sarah Newton]

My hon. Friend the Member for Congleton (Fiona Bruce) makes her point very passionately, as she always does, in standing up for the family. Of course, it is the family who take full responsibility in most cases for the care of elderly people, but we must remember that the funding of adult social care is also available for adults living with disabilities. Families are the foundation of all care at the moment. I am sure that, with the Government’s support, they will continue to be the core building block of the care system. She is quite right to raise that issue so that we can all show appreciation for the huge army of people who are quietly getting along each day to provide invaluable support to their loved ones.

The commission made a series of key recommendations. I cannot do justice to the report in the time that I have available, but to help our debate, I will summarise them briefly. The major one is to cap the lifetime contribution that an individual needs to make to adult social care costs to £35,000. Not everyone will be able to afford to make a personal contribution, so the commission recommended that means-tested support should continue and that the asset threshold for those in residential care, beyond which no means-tested help is given, should increase from £23,250, as it is today, to £100,000. Those who enter adulthood with a care and support need should immediately be eligible for free state support.

The commission also recommended reconsideration of the existing benefits that support the elderly. People should contribute to their living costs, which the commission estimated as between £7,000 and £10,000 a year. It recommended that the Government should urgently develop a more objective eligibility and assessment framework and that they should encourage people to plan ahead for later life with an awareness campaign, and develop a major new information and advice strategy to help people when the need for care arises. Carers should be supported by improved assessments, which should take place alongside the assessment of the person being cared for. Finally, the Government should review the scope for improving the integration of adult social care and other services, such as NHS services and housing, to deliver better outcomes for individuals and better value for the taxpayer.

The commission’s report was met by a broad coalition of support from a wide range of stakeholders and was warmly welcomed by all political parties. That contrasts with the acrimonious debates on the issue during the general election campaign. Since the report’s publication, the Department of Health has committed to consult on the recommendations and to consider other important recommendations proposed by the Law Commission.

The Government have recognised that they must take urgent action to address the current funding issues. While real spending on the NHS has risen by £25 billion since 2004, spending on social care for older people and adults with disabilities has simply not kept pace. Figures from the Department show that over the past four years, demand has outstripped expenditure by 9%. Since the coalition came to power, it has clearly understood that that balance in expenditure is wrong. Money for the NHS has been redirected to councils so that they can spend more money to support families, elderly people and adults living with disabilities to live independent lives. Additional money has been allocated for a range of support to enable people to remain safely in their own home and for adaptations that prevent accidents and illnesses that lead to people having to spend time in hospitals.

[Heidi Alexander (Lewisham East) (Lab)]

I congratulate the hon. Lady on securing the debate. She is talking about the additional resources that have been given to councils from the NHS budget. Will she reflect on the scale of cuts that local authorities are dealing with when setting their overall budgets? Does she feel compelled to comment on the claim that that is giving with one hand and taking away with the other?

[Sarah Newton]

The hon. Lady makes a fair point. We all understand that local authorities have had to make some major decisions about the allocation of resources and their priorities in serving their communities. I am proud of my council in Cornwall, which did not cut one penny from adult social care funding last year. In fact, this year, that funding could increase by £3 million or £4 million, although the council has not yet finalised its budget. It is very disappointing that some councils—although not all—have not used the money for such important purposes. It is estimated that approximately 7% has been cut from adult social care budgets across the country.

We have begun to see the effects of the withdrawal of the key services that the money should be funding, and which have been designated to prevent health problems among older people. The withdrawal is contributing to a far greater pressure on hospital beds. Delays in the discharge of people from hospitals are significantly higher than they were in the same months last year. Over 75% of delayed transfers for acute care are for people aged 75 and over. Research by Age UK and WRVS will be published in the next month or so, and it will provide evidence of the impact of councils not using the additional funds that they have been given by the Department effectively and of the additional pressures that that has put on hospitals and families.

--- Later in debate ---

[Heidi Alexander (Lewisham East) (Lab)]

I wanted to speak in this debate because I have had two specific personal experiences in the past couple of years that have led me to think that finding a way to fund elderly care in this country is probably one of the biggest challenges that we face. I wish to take a few minutes of Members’ time to share those experiences, which I hope will underline to the Minister the urgency with which the Government need to act.

Before I became a Member of Parliament, I was a councillor in the London borough of Lewisham and can honestly say that the worst meeting I ever had to attend was when the council was reviewing the eligibility criteria for adult social care. At the time, we were looking at whether we could sub-divide the category of “substantial care needs”, which are really serious needs for which people need help. It is about basic human dignity, so it was a difficult thing to consult on at the time. Hundreds of people attended the council meeting and I remember being almost moved to tears by some of the testimony that people gave about the support that they received. I am pleased that, that year, my local authority of Lewisham chose not to do away with funding substantial care needs. It still funds such needs, although in the current economic and financial climate, Lewisham has had to increase considerably the charges for care packages.

I realised at that time that adult social care in this country is woefully underfunded. It constitutes such a large proportion of local authority budgets that, in the present climate of huge cuts to local councils, they are faced with very difficult decisions about how they can fund care provision, while setting a balanced budget elsewhere. I am concerned, as I said in my intervention, that the so-called extra money being diverted from NHS budgets into adult social care is not really extra money at all. When the large cuts to the budgets of local authorities are taken into account, that money is merely being used to prop up what was already being done. For example, from my local authority experience, I know that out of a £270,000 million revenue budget, Lewisham council spends approximately £100 million every year on adult social care. If it has to find £80 million worth of cuts in the next three years, it has to take some very difficult decisions about how to make all that work.

My experience in Lewisham also told me that in this country we do not fund the sort of preventative care that is necessary to avoid having higher care needs later on in life. I urge the Government to consider how we can provide more preventative support, so that we do not have huge outlays further down the line. As people get older, their care needs become a lot more complex. If we can intervene earlier and provide the right sort of support, perhaps we will not have such high expenditure further down the line.

I said that I had two personal experiences that led me to take part in the debate. My other experience is very personal. Last year my nan passed away, after suffering with Alzheimer’s for a number of years. She spent the last years of her life in a care home. My hon. Friend the Member for Luton North (Kelvin Hopkins) spoke earlier about the experience of working-class people and what it means for them to pay for their care. My nan was a working-class woman. She worked very hard all her life and saved hard to buy her own home. She never went on a foreign holiday. She was very frugal with her money. She ended up having to sell her home, which was worth about £140,000, and using the small amount of savings that she had to pay for her care. There is obviously a limit on how much money one has to pay for such services. Her estate was worth in the region of £23,000 at the end of that process, but my family paid more than £100,000 for her care. The local authority picked up the costs of that care towards the end, because all her savings had been used. I think it would break her heart to think that what she had worked hard for all of her life did not get passed on in any significant way to my father, to my aunt, or to her grandchildren.

[Sarah Newton]

The hon. Lady has highlighted another illusion in the system: the illusion of the separation between the so-called self-funders and others. There are very, very few people who end up fully self-funding their care. Most people deplete their resources and end up having to be funded by local authorities. We must not always see the issue in black and white. Of those who self-fund, about half go on to require support from local authorities.

[Heidi Alexander]

The hon. Lady makes a very good point and I agree completely that there is not a clear distinction between self-funders and local authority-funded clients. I reiterate the point made by my hon. Friend the Member for Luton North about how wealth is inherited in our society. My family, perhaps unwisely, have not planned greatly for their retirement. My dad is a self-employed electrician. I think that he was planning to use some of the money that came from the sale of his mother’s house to fund his retirement. He does not in any way begrudge the money that he spent on my nan’s care towards the end of her life. I do not begrudge it. She had fantastic care in a fantastic care home, and that is completely right. However, I know that he feels that the system is perhaps not really fair. He asked me questions about people who play the system, and whether people transfer homes into somebody else’s ownership so that they do not have to pay.

[Kelvin Hopkins]

There is the seven-year rule about tax on gifts. Many of the more acutely aware middle-class people with accountants transfer the ownership of their property long before they die, so that they never have these costs imposed on them.

[Heidi Alexander]

That is precisely the point. Families are asking questions about how this can happen. We need to have a fair system so that people know what to expect to pay for their care in later life, can have some peace of mind about it, and do not think that somebody else, who perhaps has a better knowledge of the system, can play it in a way that means that they do not have to pay out in the same way.

[Barbara Keeley]

My hon. Friend is speaking very well from her own personal experience about an issue that affects the whole country. Last week, one of my constituents questioned why he will have to pay all but £28,000 of the value of his father’s home—which, in Salford, was not a costly home—to pay for nursing care. He thought all along that nursing care should be paid for because it is nursing. He still does not understand it and is very distressed. I wonder if that example, and the example raised by my hon. Friend from her own experience, suggests that we need to get out there with this debate so that people do understand it and so that everybody is in the same place—as has been said, not just middle-class people who can plan, and people who have accountants—and knows what it might cost them and how to go forward and plan for it.

[Heidi Alexander]

I agree completely. I go back to what I said at the start of my contribution, which is that this is one of the biggest challenges we face as a society and as a country. We can talk about the crisis in the eurozone, international terrorism or climate change, but how we plan for the needs of our ageing population is incredibly important. It may not be the sexiest debate out there, but we need to get people talking about it so that they can understand and contribute to how we should legislate on this issue.

In conclusion, I was at the event that the Minister attended earlier, which was organised by the Greater London Forum for Older People. It was a packed Committee room, and I heard the Minister say that this Administration will not be the Government who do not face up to this problem, grasp the nettle and tackle it. I urge him to honour the commitment he made to the pensioners in that room. For far too long, we have not tackled this problem. I fear that it will be placed in the “too difficult” box. We have already heard the hon. Member for Banbury (Tony Baldry) talk about the need to publish the White Paper in the spring. I think the Dilnot commission report talked about a White Paper in December, so I put it to the Minister that perhaps we are already a little behind that timetable. The key issue, as I was discussing earlier with my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley), is to have a Bill in the next Queen’s Speech. Will the Minister commit to that today? If he and the Government were to say that they will legislate on this matter in the next parliamentary session, that would be a sign that the Government take the issue seriously and that we can tackle the problem, which has, for too long, eluded us.

--- Later in debate ---

[Paul Burstow]

I am not seeking to hide or resile from that. What I am trying to do is demonstrate that the picture is not uniform or consistent. I want to quote some further evidence that supports that point of view, but first let me make it clear that of the £900 million that the ADASS survey identified as having been taken out of social care spend, 70p in every pound came not from cuts in front-line services but from service efficiencies and redesign. That very point was made by a number of hon. Members in the debate.

[Heidi Alexander]

The Minister is talking about efficiency savings within adult social care services, but would he accept that as every day goes by, demand for those services is increasing because of the needs within the existing population? May I press him a little more on the point made by my hon. Friend the Member for Leicester West (Liz Kendall)? Does he not think that his colleagues should be making greater protestations about decisions taken within local authorities? Rather than focusing on the bins, as my hon. Friend said, we should be talking about the needs of the elderly population and perhaps giving local authorities a bit more direction. Will the Minister tell us his views on that?

[Paul Burstow]

I do not believe we should micro-manage the decisions of every local authority. We should not dictate to local authorities about how to manage their resources. One message that came from local government before the election, which we, as a coalition, have responded to, was the desire to remove ring fences from budgets to give councils maximum flexibility. Total Place is exactly what that is about. It is about using budgets smartly to meet local needs in the best way to fit the community’s circumstances. In the past, such flexibility was constrained by the number of ring fences.

I have also picked up on some scepticism in the debate about the additional funding that is being provided through the spending review for adult social care via the NHS. There was some question as to whether or not that money was getting through. Of the £648 million for this year, nearly half has already been transferred—we know that from surveys that we have conducted—and agreements are in place to transfer the remainder. As to the reference to the money for carers, that was not part of this social care transfer; it was a separate requirement under the NHS operating framework. I am more than happy to debate that at a later stage, but right now I need to try to cover the main points in this debate.

Both primary care trusts and local authorities are positive about the development of these particular funds. They have seen them as a lever for more joint planning and co-operation. The feedback that we have had to date shows that the money is being spent on what it was intended for—prevention and rehabilitation, re-ablement, early supported hospital discharge schemes and integrated crisis response services. I am saying not that the money is a panacea but that those funds are making a difference in the communities in which they are being used smartly by the NHS and social care organisations. Times are tough and I am not going to pretend otherwise. Although I can present a relatively positive picture nationally, there are areas where cuts to front-line adult social care services are really beginning to bite.

Although some councils have coped with the cuts by tightening their eligibility criteria, it is not fair to suggest that that started in May last year. The trend started back in 2005. The way in which councils define and apply eligibility criteria is not consistent from one borough to the next. We will address those issues of definition as part of the review that we are taking forward in the White Paper.