Social Care Funding

Kelvin Hopkins Excerpts

Thursday 10th November 2011 Westminster Hall

[Neil Carmichael (Stroud) (Con)]

Thank you very much, Mr Robertson, for calling me to speak. It is a great pleasure and honour to speak in a debate such as this, and I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing the debate to bring the issue of social care to our attention. As she said herself, the debate is also extremely timely, because tomorrow, of course, is Remembrance day and it is absolutely right that we remember those who achieved so much for the cause of freedom and for this country during the world wars and indeed afterwards.

I want to echo the point made by the hon. Member for Worsley and Eccles South (Barbara Keeley), who is the chair of the all-party group on social care. She made the point that we need to think very carefully about social care funding and that it is important to take an all-party approach to it, because it will affect many people for an extremely long period. We are talking, obviously, about elderly people, but everybody gets old and this is a long-term policy, with long-term implications.

We have to embed a set of policies—a framework, really—that can last, because one point that keeps coming up when we discuss the funding of social care is that we do not really know how to plan and we do not know, as individuals, what sort of structures will be in place; consequently, many individuals do not plan. The Government have a huge opportunity effectively to create the reasons why people can plan for their retirement and, as they arise, their care needs.

As other speakers have suggested, Dilnot makes it clear—or at least, implicitly clear—in his report that the sort of measures that he is talking about, including the ceilings that would apply before people have to pay for care and so on, will effectively create a situation where people are planning financially for their forthcoming care needs. We need to remind everybody of that when we discuss this issue in increasing detail, as a White Paper and so on arrive on the table.

In my constituency, I visit care homes quite frequently and I have often been asked to meet people who have just celebrated or are about to celebrate their 100th birthday; a huge number of people in my constituency reach that age. When I first started visiting them, it was really quite an honour, because members of my family never get to 100—although, obviously, they are going to.

[Kelvin Hopkins (Luton North) (Lab)]

The hon. Gentleman could be the first.

[Neil Carmichael]

That is very kind. [Interruption.] Hon. Members are all very optimistic.

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[Kelvin Hopkins]

The hon. Gentleman is making an important point. In my constituency, I have been visited by a group of people with young family members who suffer from dementia. A number of people develop dementia when they are quite young.

[Neil Carmichael]

Absolutely. I take the point that young people can also have dementia—that is certainly true—but the point I was making was that young people are caring for people once they return from school. That is a measure of the challenge we face in dealing with the role of carers, so the Government have to think carefully about the structures around carers and about the ability to give these people appropriate support and respite.

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[Kelvin Hopkins (Luton North) (Lab)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Robertson, and it was also a pleasure to hear the speech by the hon. Member for Truro and Falmouth (Sarah Newton). She referred to me, unusually—because I think that I am the only hon. Member here who was born during the second world war, and I survived it, but only just: we were evacuated shortly before a V1 landed on our house and blew it up, but nobody died. Fortunately I was with my grandparents in Leicester at the time. We are concerned about elderly people who fought in that war and now are either in care or being cared for in their own homes.

A headline in The Daily Telegraph of 28 October read, “Misery for millions as elderly care funds cut”. The Telegraph is not a newspaper of the left. It is normally supportive of the Conservative party, and I would hope that that is the basis for some sort of consensus, because we can all agree on this. I do read the Telegraph and find it very useful, and quite a good newspaper at times. I have no particular dislike of it, and it is spot on in that headline.

Importantly, it has been observed on more than one occasion that we do not care enough for our elderly people. Our attitudes to the elderly in Britain are not good, especially compared with those of some minority communities that have come from abroad, which have a kind of reverence for elderly people. Perhaps I would say that, because I am not as young as I was, but I think they value elderly people in a way we do not.

In some circumstances elderly people are regarded as a bit of a nuisance. I have some rather horrifying quotes from Professor David Oliver, who is senior lecturer in elderly care medicine at the university of Reading and secretary of the British Geriatrics Society. He said:

“Not long ago, a senior doctor walked onto my ward, turned to a nurse and laughingly asked: ‘How do you stand working with all these crumblies?’”

That kind of attitude is utterly poisonous. On another occasion a senior doctor said

“he was spending too much of his time ‘market gardening’—ie, looking after cabbages (old people)”.

Those are dreadful things to say, and people who say them should not be around elderly people. We must make sure that the people who look after elderly people have compassion and empathy, and a bit of reverence for people who have spent their lives working in society and contributing. I raise those incidents in a sense to shock us all into realising that in many instances we are not doing right by our elderly people.

That said, I know that there are many people who do wonderful work. I had two local authority care homes in my constituency and I visited them on several occasions. They had devoted staff, whom the residents loved; they thought they were really cared for. The visiting professionals all said that the care homes and what went on in them were first class. They have both been closed down, essentially forced to close by central Government. It is wrong that we should forcibly encourage local authorities to close local authority care homes and send the residents to private care. Some of the people who left may well have gone to Southern Cross homes—some of those that are now being criticised by the Care Quality Commission. We are not doing right by our elderly people, and we must do more.

As to costs, some 12 years ago the royal commission on long term care recommended that all care should be free of charge—free at the point of need, like the national health service. It was not a unanimous recommendation because, I think, the Government of the time, rather mischievously, made sure that one or two members of the commission brought out a minority report opposing free long-term care. Since that time Ministers have time and again said, “Oh, it wasn’t unanimous, therefore, implicitly, we don’t have to do that.” I took a different view, and tabled early-day motions in two successive Parliaments, calling for the Government to implement the recommendation for free long-term care. That did not happen; it was all about cost in the end, but I still believe that is the way forward. The costs involved would be significant, but in the scheme of things not an enormous amount.

I am the chair of the support group in Parliament for the National Pensioners Convention and Andrew Dilnot came along to present his recommendations to us two or three weeks ago. He is quite brilliant, frankly. His analysis and what he has come up with are first class. That should be the minimum default position, which any Government should take. I would like to go further than he went, but I think he is realistic, and, thinking that pushing Government to spend will be hard, wants to find the fulcrum point at which they might accept his idea. What he did was brilliant. The National Pensioners Convention, like me, believes that care should be free at the point of need, like the national health service, but Dilnot has come up with a fine scheme.

The National Insurance Act 1948 recommended that there should be a capital limit, which I think was £8,000 at the time. The minimum amount of capital that people could have was £8,000. If that is indexed forward it comes to a figure of between £250,000 and £300,000, so when Dilnot talks about £100,000 he is way below what would have been the case if we had simply indexed the figure forward. What we have now is disgraceful.

One result of what we have is that working-class people who managed, through saving and struggle, to become owner-occupiers are now having that little bit of equity in the family taken away from them. The wealthy do not have to worry. They have plenty of equity, and to look after granny when she has dementia they can perhaps take a little cash out of their overseas account, so it will not be a problem. However, for working-class people who have bought their home and become the first owner-occupiers in their family—and perhaps all of us would support in principle the idea of owner-occupation, if at all possible—that is being taken away from them. Many people in my constituency bought their council houses. I was not in favour of selling council houses, but it is just those people who now find that their capital has been taken away to use to look after granny. Typically, the grandchildren who would have inherited that equity and gone into owner-occupation will now not be able to do so.

People have come to my surgery and reluctantly admitted that they are keeping granny at home deliberately because they are desperately fearful that if she goes into a care home her house will be sold, the equity will be lost and their children will not be able to get into owner-occupation; there are no council houses to rent and they will be forced into private rented accommodation, and will have a much poorer quality of life as a result. That is the reality—it is actually happening. Those admissions are made reluctantly, because it is not something people want to say. Granny—it is usually granny because women live so much longer than men—may be suffering, and not getting quite the care that she should have, because she is staying at home. In the best of all possible worlds we all want to stay at home for as long as we can, and it is right that we should do so, but even care at home is not up to scratch.

I have examples, as I am sure others do, of care companies that look after elderly people in their own homes. The carers sometimes are not kind and are a bit impatient. The elderly person has to get out of bed when they turn up and go to bed when they turn up, and is sometimes left sitting in a chair all day with stale sandwiches on a plate beside them, not being able to do anything—not even go to the toilet. We are not getting the care even when we have paid-for carers coming in, so a radical change is needed. We must not only pay for care but ensure that it is good care, and that the people who deliver it are caring, compassionate and professionalised.

I spent much of my life before Parliament working as a research officer for the major public services trade union, Unison. In the past, many care home staff would have been Unison members, but the private care homes are not unionised. In my constituency, when one of the care homes I mentioned was privatised—closed down—I had a difficult conversation with the senior officer at the local authority, who eventually, after an hour, said: “We are doing it to cut costs. There will be fewer staff, they will not be in unions, and they will have shorter holidays, lower pay and poorer conditions of work. We can get the costs down.”

[Damian Hinds (East Hampshire) (Con)]

Does the hon. Gentleman agree that it can be difficult to find people who want to be carers, whether in the public or the private sector, at home or in a care home setting? Perhaps we need to find new ways, beyond just unions, of elevating the status of the job as a profession or occupation, in the same way as social workers are now considering creating a college of social work.

[Kelvin Hopkins]

I agree absolutely about elevating the status, but we do that first by having the carers professionally trained, ensuring that we get the right people to begin with, having them properly paid and having staffing at the right level. If someone is looking after too many patients and cannot cope, either in a hospital or a care home, the patients do not get proper care. In most areas of life, as quality improves we want higher productivity, which means a lower level of labour intensity, but in this area we want more people working, with each care person or nurse looking after fewer patients, to ensure that everyone gets the care they need, rather than having one junior nurse looking after a large room full of elderly people and not being able to cope late at night.

In the past couple of weeks we have heard some distressing stories about elderly people in hospitals not getting the care they need. We will all be elderly one day, and some of us might finish up in care because we might not have extensive families to care for us. I do not like the idea of being in pain and suffering at night and not being able to get anyone to help. I am physically fit and doing well at the moment, but we shall all be old one day. People are suffering in that way now, and the only way to deal with it is to ensure that we put in sufficient resource. I think there are people around who want to do these kinds of jobs but they will not do them if they are going to be overworked, undertrained, underpaid, and treated badly by private companies or care managers in hospitals.

[Jane Ellison (Battersea) (Con)]

I am intrigued by what the hon. Gentleman has said about the barriers to entry into this work. I have been following the fortunes and recruitment patterns of a care home close to me in my constituency, which is struggling to get local youngsters to apply. We have talked through all the reasons for that, and the home thinks there are some cultural barriers. The hon. Gentleman made reference earlier to the different attitudes of people from different backgrounds and different parts of the world, and I think there is a cultural barrier to young people entering the workplace and spending their life giving care to older people. We have to admit that and address it.

[Kelvin Hopkins]

Possibly there is such a problem, but most of the care workers in the homes I was talking about were caring mature women. They had a genuine affection for the people they were looking after, which was wonderful to see. The residents liked being there, the care workers doted on them and the professionals who came in were full of admiration for what was going on. We have to replicate those conditions for all of us in one way or another. Perhaps we need to look at ways of recruiting people, but I believe there is compassion in humans and there are people who would do these jobs if they were treated with the appropriate respect and given the support, pay and conditions of employment we would expect. Unison has long been supportive of this kind of thing, campaigning against the privatisation of care and in favour of free long-term care.

Andrew Dilnot has gone a long way in the right direction and I applaud what he has done, but we have a lot more to do beyond what he has said. I hope that some of what I have said has rung a few bells, and that the Minister, and indeed the Opposition, start to take the issue much more seriously, and look after elderly people as they should be looked after.

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[Tony Baldry]

I see the situation rather differently from the hon. Lady. Local authorities such as Oxfordshire are committed to delivering good-quality social care for elderly people. The challenge for them is to ensure that the increasing number of elderly people, often with increasing needs, receive appropriate care, whether at home or in residential care. A tight budget presents them with a significant challenge, but it is a challenge to which they are committed.

I appreciate that the hon. Lady comes from a unitary authority, but for two-tier authorities in shire counties such as mine, social care is now their most significant contribution. Increasingly, schools and education are running themselves, so authorities are going to be judged on the quality and the way in which they deliver social care.

[Kelvin Hopkins]

One thing that concerns me is local accountability. In a sense, the hon. Gentleman is making an argument for more local control, because democratic local accountability means that people in a local care home will have immediate recourse to elected local representatives, rather than having a simple national scheme such as the national health service. Perhaps if the national health service had more local accountability, we might not see some of the things that are happening at the moment.

[Tony Baldry]

I am not entirely sure where the hon. Gentleman is going with that point, so if the House will excuse me, I will not follow him down that particular line.

I do not think there is any lack of local accountability as far as the national health service is concerned. The Oxfordshire joint health overview and scrutiny committee is meeting today and will consider, for example, possible service changes at Horton general hospital in my constituency. The committee will, I am sure, vigorously interrogate the senior management from the Oxford University Hospitals NHS Trust and from the Oxfordshire and Buckinghamshire PCT cluster.

In the debate on social care, we must not underestimate the burden or the toll on carers of the task of looking after elderly people with age-related difficulties. Carers UK has found that carers providing significant amounts of care are twice as likely to suffer from ill health as non-carers. In 2008, a survey of heavy-end carers showed that more than half of those caring were in debt, and nearly three quarters were struggling to pay household bills. A large number of carers, about 1 million, have given up work or reduced their working hours because of caring. The peak age for carers is between 45 and 65, which is often the age at which they would be at the peak of their training, skills and career experience. That can be a cost not only to the carer, but to businesses and employers as they lose key people who have to care for relatives.

We have seen some excellent organisations such as Employers for Carers, which was set up by Carers UK and seeks to bring together numerous employers, generally larger ones, to promote flexibility and workplace support for employees juggling work and care, but that is not always possible for small and medium-sized employers. There is also a cost to the NHS. Sometimes, if we are not careful, there is a trade-off between the quality of social care, the provision of sufficient beds in nursing homes and residential care homes, and the need to prevent delayed discharges and bed blocking in hospitals. We had a debate on that not long ago, to which I contributed. In Oxfordshire, we are grappling with the issue of delayed discharges. If we are not careful, the cost to the NHS of delayed discharges will be significant, particularly at a time when more and more hospital treatments can be offered as elective day treatments. Generally, people are spending less time in hospitals, so delayed discharges add particular cost to the NHS.

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[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.

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[Margot James (Stourbridge) (Con)]

It is a pleasure to serve under your chairmanship, Mr Bone. I must apologise to you and to the Front-Bench spokespeople. Unfortunately, I will not be able to stay to the end of the debate. I apologise, but I have a pressing engagement in my constituency this evening.

I would like to begin by congratulating my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing a Backbench Business debate on such an important topic. Several speakers have alluded to the crisis in care funding at the moment and to the service being chronically underfunded. I want to throw some light on why I think that that has become the case.

Age UK reported earlier this year, in June I think, that spending on adult and social care rose by only 0.1% between 2004 and 2010. Crucially, during that period the numbers of older people needing care expanded significantly, to say nothing of those in other generations who also need care. The number of older people aged over 65 increased by 7.7%, while the number of very elderly—the over-80s—increased by 11.6%. While the care budget for older people was static—rising by 0.1% in real terms, to be precise—the numbers requiring that care have expanded, and that rise is continuing. It is interesting to note that, at the same time, other budgets were rocketing: spending on the NHS increased by 27%, on the police by 20% and on schools by 12%. That is salutary, because we can see how older people’s care has been treated and valued over time. We arrive at the point where—I agree with everyone in the Chamber—it is not enough. Most councils have therefore been under pressure in that area for a considerable length of time, which precedes the public spending review of the past 12 to 18 months. Most have responded to the challenge by tightening the eligibility criteria for the provision of care at home and by making far more use of private providers.

The situation in my borough of Dudley exemplifies the problem. I have visited approximately 10 private care homes in my constituency, and I apply my own inspection criteria—crudely, whether I would have willingly allowed my mother to be cared for in the home. We are fortunate in Dudley—certainly in my part of it, Stourbridge—with the overall quality of our homes, but the fees paid by the local authority for people to be looked after are imposing on the good will of the management and staff in the homes.

The local authority pays roughly £380 per week per resident, but for the past three years there has been no increase in the fees, while those homes have had to contend with rising costs including for fuel, food and even, to a certain extent, staff. So private homes are struggling; if they are small or family-run concerns, the show has been kept on the road with an enormous amount of dedication and hard work. The result is that self-funding residents are often charged significantly more than the local authority-funded residents. I have consulted Age UK, which has consulted lawyers, about whether cross-subsidisation can be proved, because that would be against the law. However, it is difficult to prove, although it strikes me that the discrepancy is so high that some homes must be using the fees of self-funding residents to cross-subsidise the local authority-funded residents.

The care at home situation is just as bad. The proportion of local authorities providing care to people in moderate need fell from 36% in 2004 to 21% in 2010. I do not doubt that the figure is still falling. That must surely be a false economy, because the less care provided to those in moderate need, the greater the speed at which they will develop substantial needs. In some ways, the home care sector is in worse shape than the residential sector. What I mean is that, in my own borough, the transfer from public to private provision appears to have worked less well for older people who need care at home than for those in residential care. Like the hon. Member for Luton North (Kelvin Hopkins), I have received a steady stream of complaints from the recipients of such home care, and the complaints are always the same, even though the providers might be different. There is a constant change in carers and no consistency of personnel, with a great variation in the standards of care provided, as well as in the kindness and compassion.

[Kelvin Hopkins]

I am interested in and sympathise greatly with what the hon. Lady is saying. Recently, I spent a day touring with a district nurse professionally employed in the national health service, and I saw the care and compassion that she gave to all her patients, whether it was re-bandaging or dealing with people suffering from cancer, and so on. The contrast between that professional, publicly employed person and what I hear about some of the private providers with inadequate staff is great.

[Margot James]

I have considerable sympathy with the hon. Gentleman in the context of home care. I find quite a few of my constituents bemoaning the rapid transfer from the local authority staff who used to provide care to the private sector. I am often in favour of bringing in the private sector, but it has to be done carefully and intelligently, and with proper checks and monitoring.

Another point, also made by the hon. Gentleman in his speech, is that carers come at very different times, without any consistency or reliability; they often come too early to help someone get to bed and too late to help them get up in the morning. In too many cases the service is patchy, inconsistent and fundamentally unreliable, and something needs to be done. Perhaps the business model needs to be looked at. It cannot be beyond the wit of an employer to employ more people at certain times of the day. That is probably the only answer, which means that more money might be needed, which I appreciate is a vexed question in the current climate.

I agree with other hon. Members that the Dilnot report is an excellent contribution to the debate, but it has some drawbacks. First, Dilnot has commented—perhaps not in the report but I have certainly heard him in speeches made about the report—that residential care means-testing is the biggest cliff face across the entire gamut of social care policy. Savings of more than £23,250, including the capital tied up in your home—68% of householders aged 65 and over own their homes outright, without a mortgage, so we are talking about a lot of people—disqualify people completely from funding support. No banding, no scaling up or down, only one figure, below which people receive 100% funding support and above which they receive nothing. In response, people have had to sell their homes. We have heard some sad examples, in particular from the hon. Member for Lewisham East (Heidi Alexander), and listening to several contributions I have appreciated the difficulty for people from a working-class background who have struggled and saved and whose assets are small in total. I will make a point about that.

People who are fortunate in their health will not need residential care and will not have to sell their home. For people who need residential care and have no assets and nothing to lose, that is okay as well. However, people who own their own home and need residential care are at a striking disadvantage to others of their age group. That is why I appreciate Dilnot’s broad strategy to cap an individual’s contributions to the care needed and to raise the threshold at which people become eligible for support. More work remains to be done, however, to identify the actual figures deemed fair and affordable for the taxpayer to fund. Raising the threshold to £100,000 is a bold move, but is it affordable? I do not doubt that that conundrum is on the Minister’s plate, and there are more problems with the cap.

[Kelvin Hopkins]

Dilnot pointed out that £100,000 is a crucial point at which the cost starts to take off, and his proposals would cost £1.7 billion a year, which is not a great deal in the scheme of things. After that, it starts to rise more rapidly. A £100,000 threshold would protect many people, such as my hon. Friend the Member for Lewisham East (Heidi Alexander) and her family.

[Margot James]

I thank the hon. Gentleman for his intervention. It is true that a £100,000 threshold would provide protection, and I hope very much that we can afford that element of Dilnot’s proposals. That threshold would provide a huge amount of help and protection for just the sort of cases that he and the hon. Member for Lewisham East mentioned.

Turning to the cap that Dilnot recommends, I believe that it should be rethought. He said that it should be between £25,000 and £50,000, beyond which no one should have to pay. Although my suggestion would introduce some complexity—I accept that that is a disadvantage—we must consider a scale on the cap that is linked to people’s assets. A one-size-fits-all approach, whether it is £50,000 or £25,000, does not reflect the huge variation in house prices throughout the country. The average house price in Dudley borough in my constituency is £145,000, but the average house price in Greater London is £420,000, so for families in my constituency, and perhaps in that of the hon. Member for Luton North, the cap on care represents a third of their assets, whereas for families in London in a house with an average value it represents little more than 10% of that value. That is unfair, and I hope that the Minister and his team will look at ways in which the problem can be overcome.

I am afraid we will to have to ask more of people who have seen the value of their home spiral over the last 25 years. I trust that with better use of resources, and thanks to Dilnot and the Government’s commitment to seek a cross-party solution to the vexed problem, we will no longer have to ask people to sell their home to fund their care. However, if we cap the amount that people must spend on care, we may have to ask them to remortgage part of the value of their home to contribute to the overall cost that Dilnot recommends. I cannot see a magic pot of £1.5 billion in the Government’s credit balance, so we must be realistic in what we ask them to do. Asking people to remortgage part of the value of their home to contribute to their care is not as bad as the current system, which requires so many to have to sell their home and to invest so much of the proceeds, if not all, in residential care costs.

In conclusion, the reaction to Dilnot has not been as favourable among health and social care managers as it has been among those of us, including organisations outside Parliament, who campaign on behalf of older people. They fear that they will have to find money from their cash-strapped adult and social care budgets. As the other main activity outside residential care is home care—I have described a situation that is far from satisfactory, as have other hon. Members—they fear that there will be less money to fund home care if they have to implement the Dilnot report to fund the higher cost of residential care. I share that concern.

What else can be done? I have said that I do not expect the Government magically to conjure up £1.5 billion in the serious and perhaps worsening economic situation. We must find a better way of managing our resources, and that money must probably come from one of the only protected areas of Government spending—the NHS. Hon. Members have mentioned that the Government have diverted £1 billion from the NHS to social care, and that has been well received, but I do not believe that it goes far enough. NHS spending has risen hugely in the past 10 years, and 27% for the six-year period does not cover the half of it. It does not cover the private finance initiative costs, which have been astronomical.

Too many older people in hospital would be better managed in the community. We have heard about bed-blocking, and that occurs in Dudley borough. People are waiting for residential care places, but the funding is not coming through to meet the need. That funding should be reconfigured more substantially in favour of community care. Many experts who know more about the NHS than I do—the King’s Fund, some hospital consultants and so on—recognise that we have too many hospitals. I am not saying that there is an easy answer, and no one wants hospitals on their patch to be closed, least of all me, but there may be a way of utilising that space and resource more effectively. I urge the Minister to discuss that with the Secretary of State to see what can be done. That would be a more fitting tribute to the Dilnot inquiry than trying to implement every detail in his report.

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[John Pugh (Southport) (LD)]

I congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on securing this debate and on introducing it so lucidly. I do not know whether any hon. Members, apart from me, attended an event in the House earlier this week called, “Preparing for Old Age”, and organised by Age Concern and the Prudential. As I went in, I picked up various brochures with rather grim titles such as “What to do when somebody dies”, “Paying for care costs”, “Insuring against ill health” and “Coping with dementia”. I looked in vain for something called, “How to have fun in your 90s”, but there seemed to be nothing about that.

We are fortunate to have a Minister to respond to the debate who has a distinguished record in this area, both when in opposition and as a Minister. My reputation in this area has been somewhat more ignominious. I was in Richmond house for the first time when, as leader of the Liberal Democrat group on Sefton council, I was summoned with other party leaders for a dressing down by the then Minister, Lord Boateng, subsequent to a law case that had gone against Sefton, which was not an uncharacteristic event.

We were taken to court by, I believe, Help the Aged, because we took the view that we could resource care needs only according to the resources that the Government had allowed us. We lost the case, and went to Richmond house to explain our side of the story. We were called into a room and waited patiently until the Minister breezed in, gave us a dressing down, told us how tough the Labour party would be with councils henceforward, and sent us on our way. The interesting point is that the press release hit the streets even before we had left the room, so clearly it had been written considerably prior to the event.

Later, when I became leader of the council, I rationed the number of care homes, which were rather more expensive in the public sector than in the private sector, and found that my Labour opponent—he is now the distinguished deputy leader of Liverpool city council—had gone to the press and engineered a photograph showing a 100-year old resident with a placard saying, “Please do not close my home, Councillor Pugh”. Unfortunately, we did close it, because it had been endowed to the local authority and was unsuited for its purpose. It was costing us twice as much to run, as indeed were some private sector homes then.

Only the other day, Sefton council had a judgment against it when the freezing of care home fees was ruled to be unlawful. It is a balanced council with three parties in the cabinet. The managing director of the solicitors who took the case against Sefton council said,

“There is every reason to believe other councils are doing exactly the same as Sefton.”

Sefton responded by saying that the court was merely critical of some elements of the process. Sefton is a borough with the 13th highest proportion of people aged 65. The bulk of its controllable budget—it has many contracted-out services—is taken up by social services. Sefton unexpectedly had £30 million up-front costs to find by way of savings. It is completely unthinkable that that could be done without eliminating other departments and without affecting social services in some way. Funding social care is a difficult problem. That is what I have learnt.

[Kelvin Hopkins]

We hear constantly about the difficulty of funding. The amounts we are talking about are very small in the overall scheme of things. The £1.7 billion for Dilnot would be less than half a penny on the standard rate of tax—that is the equivalent. Free long-term care for all would be 2p on the standard rate, which is what my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) cut the standard rate by before the election. We are not talking about massive amounts. I have spoken to many groups, and if I ask, “What do you prefer—the fear that you could have your house taken away to pay for granny’s care or paying 2p on the standard rate?” time and again they will all say, “2p on the standard rate”.

[John Pugh]

We all accept that, whatever it may amount to in the round, it is hard for local authorities to meet their care costs within current budget constraints. It is hard for NHS hospitals that suffer because of people who should not be staying there, who they recognise ought to be in care, but it is sometimes cheaper to keep them in the hospital rather than anywhere else, which is not in the hospital’s interest. It is hard for families who have the job of fulfilling caring responsibilities, which can conflict with employment, and it is difficult if they live at some distance from their elderly relatives, as they tend to these days. It is particularly hard for the individuals in need of care and who have increasing costs set against diminishing resources. It will not get any easier for the reasons hon. Members have already rehearsed: an extension of what we might term our declining years; the demographic bulge that we have all spoken about; many carers are taking up their responsibilities at an age at which they are not in, let us say, the first flush of youth; and in terms of social policy we are discovering that neither community nor personalised care are cheap options.

Nevertheless, society has made some significant achievements. Since the great Liberal Government of the early 20th century, the state has underwritten the fundamental problems that used to afflict old age—poverty and infirmity—by providing a safety net. When that reform was introduced, there was the presupposition that families would continue to accept responsibility for elderly members—they usually did—and that people would also look out for themselves to some extent. The old age pension was a mechanism to ensure that they could do that, and people had the opportunity to take still more precautions via provident societies and so on.

However, we have moved on and today we have two central problems. I do not think I have heard other problems apart from these. The fundamental problem that has been cropping up in this debate is that, assuming the system meets basic needs, which I guess it does at the moment, there is the capacity of those needs to become so severe that they can wipe out people’s inheritance, and many people regard that as not in the order of things and not how things should be. There is the other problem, which has not been touched on to the same extent, but I get it in my constituency: a sense of injustice about what might be called the free-rider problem. People have told me that they have saved for their old age, and as a result they feel that they have been penalised, because people who have made no effort to save, or who have blown the money prior to reaching an age when they might need it, get the benefits that the savers are to some extent denied. Those two problems seem to linger around the system.

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[John Pugh]

The hon. Gentleman has usefully illustrated my point. We can argue that the state does not have a duty to preserve a family’s inheritance, notwithstanding the valiant defence of inherited wealth from the hon. Member for Luton North (Kelvin Hopkins). In normal circumstances, that is an unusual stance for him to take.

[Kelvin Hopkins]

I was defending the small amounts of inherited wealth for relatively poor people, not the vast amounts inherited by very wealthy people. I would substantially reduce the threshold for inheritance tax, but my party would not agree.

[John Pugh]

We might dispute the borderline between the wealthy people who do not deserve it and the not so wealthy who do, but we have a system in this country, unlike in Germany, where the family has no legal obligation, and we ought to be alert to that. We have already heard in the debate about how some families, in seeking to preserve their inheritance, actually support their elderly relatives, which sometimes is a laudable and desirable outcome. On the free-rider problem, we can argue that, in allowing a reasonable level of retained capital prior to benefits, there is a reward for people if they show a degree of providence. Those who have more than that and therefore do not benefit to the same extent might regard themselves as not simply provident but fortunate.

I am not certain that Dilnot fully addresses the problem. It is too dramatic to say that people have the choice of dying or destitution, or dying before destitution or whatever. Realistically, the option that most people fear is the reduction of their resources to the level that they become solely dependent on the generosity of the state. It seems to me that that is what Dilnot seeks to avoid or prevent. It attempts to deal with the problem that Members have spoken about, which is the total wipeout of a life’s accumulated family resources. The issue is whether Dilnot’s proposals to cap people’s costs have produced a scheme that is both affordable and socially just. It can be argued whether, if someone is vastly wealthy, the cap ought to apply to the same extent.

Whether Dilnot is affordable is not a question that is easy to answer. Does it depend on front-end costs being picked up by adequate and affordable insurance schemes? It depends on the insurers being willing to offer such products. I have spoken to insurers who would prefer to offer annuities or suchlike arrangements, and who question whether they will be in the market to provide the products that Dilnot requires. The other issue is what counts as front-end costs, because we exempt things such as hotel costs. It may be some appreciable time before people get to Dilnot’s benchmark of £35,000, or, if they take out insurance, premiums may be higher than we currently imagine. Asking whether Dilnot is affordable is like asking how long a piece of string is. As the hon. Member for Stourbridge (Margot James) illuminated in her speech, it depends on where we set the lines.

Certainly, what is more affordable to Government is likely to be less attractive to individuals and their families, or might be more problematic for insurers. However, the one thing that we all accept, if we ever redesign Dilnot, is that there is a genuine need for cross-party consensus to work out what blend of insurance risk Government and individuals can support.

That is another point we must consider, and perhaps we have not quite got there yet. I understand the cynicism about what the Treasury may or may not be prepared to do, but before it works out what it can afford, we need a degree of consensus concerning what the state’s role should be on this issue. We need to know not only about the state’s detailed implementation of the policy, but what the purpose of the state is in this business. We must look at how we intervene, and at how we wish to intervene.

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[Liz Kendall (Leicester West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone, and a pleasure to follow the thoughtful speech by the hon. Member for Meon Valley (George Hollingbery). I agree with many of the points that he made and I will come on to discuss them. I also thank the hon. Member for Truro and Falmouth (Sarah Newton) for securing this debate, and all other hon. Members who have spoken.

I will begin not with how we are going to fund the future system of social care, but with the “crisis in care” that older and disabled people, and their carers and families, are experiencing. Those are not my words but those of the Care and Support Alliance, which is an alliance of 52 major organisations representing older people, disabled people, their carers and families. It is important that we are clear about the state of the current system and the scale of the task we face. It will mean difficult decisions for all political parties.

I will begin with a point that has already been made by several hon. Members. Under the current system, there are substantial levels of unmet need. Although the Association of Directors of Adult Social Services is right to say that that need is difficult to quantify precisely, the King’s Fund has estimated that the unmet need gap in the current system is around £1.2 billion.

Those unmet needs are increasing. To a large extent, that is because of our ageing population. That is a good thing, but it means that more people are living to a very old age with one, two or perhaps three long-term, chronic conditions, such as dementia. We simply have not seen that in the past, and it is happening at a time when budgets for both the NHS and social care are being squeezed and they are not changing sufficiently fast to meet the changing needs of our population.

However, unmet need is also growing, because councils are tightening and restricting their eligibility criteria for services. Eight out of 10 councils now provide services only for people with substantial or critical needs, and as my hon. Friend the Member for Lewisham East (Heidi Alexander) said, those are people with very real and serious care needs, not simple needs. “Substantial” means very serious needs.

Mencap says that 83% of councils are meeting only substantial or critical needs for adults with learning disabilities. That is up from 73% only one year ago. Nine out of 10 councils have increased their charges for both residential and domiciliary care. Many councils are restricting the time allowed for home visits. Help At Home, one of the biggest home help providers in Leicestershire, told me at my surgery last Friday that Leicestershire county council is paying for blocks of 15 minutes of care, down from 30 minutes previously. It told me that if the carers go just over that, the council rounds down the time for which it will pay. That is causing huge problems, first and foremost for older people. In many cases, it is simply impossible to get an older person up, washed, dressed and fed in such a short time. It is also causing a problem for staff who, once unpaid travel times are taken into account, are not even earning the equivalent of the minimum wage in the course of a working week. As a result, Help At Home is losing staff and finding it very difficult to recruit new staff, which the organisation simply has not experienced before.

It is clear that one of the fundamental reasons for tightened eligibility criteria, increased charges, and reductions not only in preventive services but in services such as day care centres is the cuts to local council budgets. The Government say that they are providing £2 billion of additional funding for social care in the course of the spending review period. The Association of Directors of Adult Social Services says that the reality is that social care spending has been cut by £1 billion this year, with even bigger cuts likely next year. Analysis by the House of Commons Library shows that, according to Department for Communities and Local Government figures, there will be a real-terms cut of £1.34 billion to adult social care in the Government’s first two years once inflation is taken into account; £1.3 billion is being cut from social care spending for those over 65.

The figures are based on the assumption that councils receive every single penny of the money that the Government say is being transferred from the NHS to local councils. In many cases, that is happening, but I have been told by several leads for adult social care that they are not getting all the money, and that that applies particularly to money for carers. The reality is that local council budgets are being cut by 27% during the spending review period and that that will have an effect on adult social care, because social care budgets are the biggest discretionary spend for local councils.

The Government say that there is no reason why local councils should end up cutting social care services because of the cuts in council budgets. I just point out that the Government have readily said that councils need extra money to pay for weekly bin collections. I ask hon. Members to reflect on that sense of priorities.

The consequences of the decisions are being felt by older and disabled people, who, as my hon. Friend the Member for Lewisham East also said, have been denied the up-front preventive services and support that could keep them healthy and independent in their own home. Older people, whether that is the old old or people aged 65, like my father, do not want to be reliant on any kind of help. They want to be independent. Our goal is not to be dependent on any kind of help from the state, but to live independently for as long as possible. However, the help and support that people could receive to achieve that independence is not happening. The consequences of the cuts and decisions are being felt by families and carers. Many hon. Members have talked about the pressures on carers, many of whom are at their wits’ end struggling to make ends meet, at grave risk to their own physical and mental health.

Something that has not been mentioned in the debate is the fact that the consequences are also being felt by businesses and the wider economy, as companies lose the skills and experience of carers who are forced out of the labour market because there is not enough affordable, good-quality and flexible social care to allow them to stay in their job. That problem will only get worse as people are required to work longer before they retire, and care longer at the same time.

The consequences are also being felt by taxpayers, as older and disabled people end up using more expensive hospital services when they do not need to. Several hon. Members have rightly said that delayed discharges from hospitals are up by 11% in the latest month for which data are available compared with the same time last year. That is because we are not getting the right system in place, which costs us all more in the long run.

I want to be clear: I firmly believe that we can make far better use of existing resources if we genuinely bring together health, social care services and other services such as housing and shift the focus not only more towards prevention, but much more towards a personalised service. I am grateful that the hon. Member for Meon Valley talked about the Total Place work under the previous Government. We must begin to see all these local budgets as one pot of money that can be used.

Hon. Members will have many good examples from their constituencies of ways in which preventive services have saved money. One example from the time of the previous Government is the partnerships for older people projects, which brought together health and social care around individuals’ needs. Overnight hospital stays for people in the projects were reduced by 47%; accident and emergency attendance was reduced by 29%; and once all the other services such as occupational therapy and physiotherapy were taken into account, £2,166 less per person was spent, so there is huge potential.

Even if we get those big shifts in the way in which services are run, more funding will be needed for the system in future. That is why the Labour party has offered cross-party talks on the proposals set out by the Dilnot commission. As hon. Members have said, there is widespread, although not total, consensus in favour of the commission’s proposals. We are serious about engaging in meaningful talks on the Dilnot proposals as a step towards a better system in future. We have set aside our experiences before the last general election, when very unhelpful comments were made, which wasted an opportunity for cross-party consensus.

If talks are to be serious, meaningful and successful, four key things need to happen. We have written to the Secretary of State setting them out, and I will outline them now. First, all relevant Departments must be engaged in the process. Securing agreement on the funding and implementation of the Dilnot proposals goes far beyond the remit of the Department of Health and the Health Secretary. The engagement of the Treasury is particularly important in the process.

Secondly, we have suggested that there should be an independent chair for cross-party talks, as we believe that that would make a successful outcome more likely. Thirdly, we think that an agreement is far more likely to be reached if there is transparent access for all parties to policy advice and information. We have suggested having an independent secretariat to provide equal access to the negotiating teams as required. Finally, we have requested that the leaders of the three main parties meet to agree a clear timetable for talks, with a view to securing a successful outcome and a joint statement before the publication of the White Paper next spring.

I think that many organisations representing users of social care and carers would agree that such steps are vital. If we are serious about cross-party talks to get all parties to sign up to big future public spending commitments, the talks need to be serious, and they need to have a serious process. I need not say this: such an agreement will be extremely difficult and challenging to reach in our antagonistic and combative political environment.

[Kelvin Hopkins]

I am listening with interest to my hon. Friend, but I am slightly concerned that there might be—if one likes—a conspiracy between the Front Benchers of the different parties to keep down expenditure rather than do what is needed. It might mean the Labour party saying, “We are going to have to spend more,” and raising the revenue to pay for it.

[Liz Kendall]

I am under no illusion about the scale of the funding challenge to meet the needs of our ageing population. Funding the current, unfair and ineffective system of social care will cost £12 billion by 2025. The Dilnot proposals, on top of that, cost more than £3.5 billion. Dilnot is an important step that we want to have genuine talks about, but it will not solve the entire problem that we face about the future of social care. Yes, we can make a big difference by looking at how we join up health, social care, housing and other spending, but there are clear implications for all parties in taking the matter forward, and we all need to be aware of them.

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[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.

[Kelvin Hopkins]

Even squeezing at the margins means that more people will suffer and not get the care that they need. In other fields we spend more freely, relatively, and yet we are squeezing in this area. The Minister said that 70% of the cuts in spending is to deal with inefficiencies, but 30% is real front-line spending, which means that some people are suffering.

[Paul Burstow]

I am trying hard to be reasoned and respond positively to the points that have been made. I am not trying to dismiss things. I am not making a speech that pretends that everything is perfect. I am trying to engage seriously with the real problems that local authorities are having to grapple with. I am also trying to set out that there are different ways of doing things. Some councils are choosing to do things differently and in ways that allow them to protect the quality of the service and the outcomes for the individual. That is the test that is most important to me.

In regard to eligibility, the hon. Member for Worsley and Eccles South asked about portability. It is one of the 76 recommendations in the Law Commission report. In the “Vision for Adult Social Care” that we published last November, I said that we are minded to progress the idea of portability in assessments. There is further debate to be had about how we translate that into portability of outcomes and services, and that is one of the issues that we are considering in the White Paper.

As I have said, we have a mixed picture across the country. It does not bear out the simplistic formula of “less money equals more cuts.” Age UK and WRVS are publishing a report which I will read with interest when it comes out. An illuminating report was published in September by Demos and Scope, which looks at how disabled people have been affected by budget changes in local authorities. We might expect to find that the biggest cuts in front-line services are made by the councils that face the most dramatic cuts in their income, but that is simply not the case. Demos’s report suggests that there is no direct cause and effect. The councils that it applauds for coping the best have not enjoyed the most generous settlements, and they are not concentrated in the most affluent areas. Rural and urban areas and rich and poor areas are found in equal measure at both the top and bottom of the table.

There are tough choices to be made in every town hall as well as in every part of Whitehall and in the national health service, but we need the choices to be smart, too, Places such as Tameside have invested in re-ablement services that help people back to independence after a period of illness and ultimately reduce their care needs. Tameside estimates that that saved it £2.3 million, which it then reinvested. Somerset county council has commissioned a number of projects that use volunteers to help people with low and moderate care needs to run their own groups, form friendship circles and keep in touch with activities available in their local community.

The West Sussex-based Carewise service was recognised by Which? magazine as a model of best practice. It helps older people who pay for their care to plan their futures. Planning, which is all too often absent, has been a theme of the debate. The organisation ensures that people get good financial advice. We are talking about improving services through integration, which is another important theme of the debate as is the use of personal budgets. Those budgets are now being rolled out through the trail-blazer pilots for direct payments for social care, for personal health budgets and for personal budgets in respect of Supporting People. Such changes begin to give the individual the opportunity to have a Total Place approach to the way in which they use resources and allow resources to be used to best effect.

When I went to Knowsley last year to see what was being done on integration, the most powerful aspect of the approach used was the fact that it involved thinking about “the Knowsley pound.” And in Torbay, which I also visited, the approach there was to look at everything through the eyes of “Mrs Smith.” It may not be appropriate in every community to look through the eyes of a “Mrs Smith,” but in Torbay it was thought appropriate. Officials in Knowsley and Torbay made the leap in the approaches that they took to see money not as theirs—to be held within the boundaries of their institutions—but as their community’s money, to be spent wisely on behalf of their community. That is the essential ingredient in delivering effective use of public money in times of austerity.

That brings me to the case for reform. Despite the funding challenges, there are steps that councils are able to take now to improve social care services and I hope that they will take those steps.

I will talk about reform in detail. I have been in the House for 14 years, so I am now entitled at least to have a sense of déjà vu about this debate, like some other Members who have been in the House for a long time. However, I think we are at a different stage in the debate. We are building on the work that has been done—the listening that has happened and the engagement that has taken place—over many years. Indeed, in framing the terms of reference for Andrew Dilnot, we set him the task of looking at everything that had been done in the past 13 years to ensure that we did not just reinvent the wheel and that we learned from what had been heard already. I am keen that we continue to do just that.

I am also keen that in this debate we address a very important issue about understanding, which is the issue about the nasty little secret at the heart of social care. It is a secret that we MPs all share and know about, but seven out of 10 people in this country do not know about it. It is that social care is not free and in fact has never been free. At the moment, we are in a situation where people look at the proposals that Andrew Dilnot has put forward and he is judged not against the standard of the reality of our experience of social care, which has been so well described in this debate, but against a fantasy of social care that is free, just as the NHS is free. All of us in this Chamber and all of us who have an interest in reform in this sector need to ensure that we do not allow that fantasy to get in the way of judging Andrew Dilnot’s proposals fairly.

That is a key part of how we can ensure that we make progress in this area. Indeed, it is key because of the catastrophic costs that people face. Those costs have been touched on by my hon. Friend the Member for Southport (John Pugh), and by the hon. Members for Lewisham East (Heidi Alexander) and for Luton North (Kelvin Hopkins). They talked about the anger that people feel that they have saved, worked, invested in their lives and been thrifty, only to have it all snatched away at the point that they are in need of support from the system. That issue of fairness is part of what we asked Andrew Dilnot to look at.

I want to make two more comments before I sit down for the concluding speech. There has been talk about the cap, about whether it does anything for carers and about changing the way that the system works. I want to make a suggestion that people need to think about. The cap has to be metered. People have to enter the system and then move towards the cap. The way that we design the meter is the way that we incentivise prevention; the way that we design the meter is the way that we build carers in and respect and value what they contribute. I hope that people will think about that in the weeks remaining before we conclude our process of debate and deliberation, leading up to the White Paper next year, because that is one of the ways in which we can redesign the system to be a system that is about supporting what people can do, that is about enabling communities to support people and that is about enabling families to contribute in the way that they want to.

My final comment is that I have found this debate to be very helpful and a useful airing of the issues. I hope we shall continue to debate these issues in Parliament and continue to have the debate in the community. But it is not just an open-ended debate; it has to be a debate that is closed and that comes to conclusions. That is what the White Paper is about. The White Paper is the conclusion of 14 years, as far as I am concerned. It is about how we get to the next stage.

I was asked about legislation. Let me just say that it is well above my pay grade to be the one who announces what will be in the next Queen’s Speech; I probably would not be a Minister for much longer if I were to do that today. However, when the decisions are made we will have looked at this process and the White Paper outcomes, and I hope we will be in a position to legislate at the earliest opportunity. Social care has languished and rested in the “too-difficult-to-do” box for far too long. We are the Government who are committed; we see the urgency and the need. I hope that together we can get the cross-party lead that results in the changes that are long, long overdue.