Care Bill [HL]

Lord Beecham Excerpts

Wednesday 3rd July 2013 Lords Chamber

[Lord Sutherland of Houndwood]

My Lords, the noble Lord, Lord Best, is right in his analysis. He is pointing towards a financial problem that we all know is there and will continue to be there, not least in the current situation, for a number of years to come. The noble Lord, Lord Rix, is right about the consequences of this within the community. I declare an interest as president of Alzheimer’s Scotland and I know that the same applies to its sister body in the rest of the UK. There is a shortage of cash, which means that services are being provided more cheaply or, of greater relevance, are not being provided and are being squeezed. That is the analysis.

I do not think I can vote for the amendment as it stands. What is driving this difficulty is not the profligacy of this Government, previous Governments or local authorities—we can all tighten our belts and are doing so—but the reality of changing demography. My favourite statistic is that since the start of this Committee stage our statistical life expectancy has increased by 27 minutes. We cannot cash that in individually, but that is the reality. That is the driver of the difficult position we are in.

Ministers are often between a rock and hard place, and none more so than now. However, in the light of these facts, the Government have not reviewed the priorities of public expenditure across the board—I hope the Minister will persuade them to do that—and how many things can we afford to do with the population that we have. That means looking at priorities across departments. I do not just mean health and social care. It is inevitable that we will have to do this. The sooner the Government—the previous Government were not good at this—are prepared to say that we must undertake a review of priorities in view of the changing nature of our society, the sooner we will begin to move forward. In the mean time, I am in favour of keeping pressure on the Government by introducing a Bill of this kind because there is no doubt that that will sharpen the appetite of the voters for how change should be devised in the future.

[Lord Beecham]

My Lords, I declare an interest as a vice-president of the Local Government Association and as a member of Newcastle City Council.

Forty years ago, as the newly-appointed chairman of the social services committee in Newcastle, I had to come to terms with the impact of Sir Keith Joseph’s reorganisation of the health service which came into force that year. Among much else, that involved the transfer of responsibility for public health from local government, where it had largely resided for over a century, to the NHS, taking with it paramedical services such as chiropody and bath attendants. The area health authority, as it turned out, was so limited in its resources that, for a period, we as a council felt it necessary to fund the continued provision of those services by the health authority. At the same time, we hugely increased social care provision, doubled the home help service and trebled the number of meals on wheels. I am sad to say that now those services are roughly back to where they were in 1973 as a result of the pressure on the authority’s budget. Now, in a step on which the Government are to be congratulated in principle, public health largely returns to its local government home and the concept of a holistic approach to social care, involving both local government and the NHS, is enshrined in the Bill.

It is unfortunate that the previous Secretary of State, in his shadow capacity, walked out of cross-party talks which the Labour Government had initiated to address the issue of care and its cost, and that it has taken three years to produce the proposals that we are debating. However, it is even more unfortunate that during that time not only has demand risen inexorably, but local authority funding has been severely and deliberately reduced by a greater extent than any other area of government expenditure. It is sad, but not untypical, that the Secretary of State for Communities and Local Government should not only have acquiesced in, but actively promoted, this perverse order of priorities with all it has implied for key services, including those that we are debating in this Committee.

As we have heard, the Local Government Association avers that adult social care budgets have been reduced by £2.6 billion, or 20%, over the past three years, with additional dire impacts on other services, such as leisure and housing, which should contribute to health and well-being and which are threatened with virtual extinction as local authority services by the end of the decade. The noble Lord, Lord Best, reminded us of the London Councils report and its estimate that the cost of the reforms—which, I repeat, we welcome in principle—will amount nationally to an average of £1.5 billion a year over the next four years. Apparently, the greater amounts will be spent in the first and last years of those four. London itself will be facing a bill of at least £877 million as a result of implementing the proposals.

Of course, this, in part, reflects the increasing demand from different client groups. We largely talk of the elderly, but there are other significant groups. The noble Lord, Lord Rix, has reminded us about people with learning disabilities, and there are also people with physical disabilities. These two groups are growing as medical advances have enabled them to live longer. The quality of their life, of course, is the subject of much concern and that imposes additional strains on the budget. It is another example of incremental demand that needs to be met. In addition to that, there are people suffering from mental health problems. The increasing demand so far has manifested itself as between something like 10% and 14% in these different categories. It is clear that inflation and demographic trends alone will push up the cost, as the noble Lord, Lord Best, has indicated, by some £421 million by the beginning of the next spending review period.

There is also a serious question about the amount and timing of the funding designed to assist transition to the new regime, given that this welcome increment was announced in the spending review for 2015-16, but work will have to begin before then if we are to make progress at that time. It would be helpful to know, given that part of the rationale for the changes is that a whole-systems approach is likely to be more cost effective, just what savings the Government anticipate will be made and over what timescale by each of the two principal partners—local government and the health service—and in the case of the latter, by which of its several components.

Given the huge problems currently experienced in A&E—in contrast with the position under the previous Government when 98% of patients were seen within four hours—and the emerging problems that we have read about in the past few days in general practice, how confident can we be that the basic funding projected for both partners is adequate, even before taking into account the scale of change envisaged? How do the Government respond to the comment on the spending review of the Foundation Trust Network, which warns of,

“a further major squeeze on NHS front line services as £4 billion is diverted from the NHS budget to social care”

in 2015-16? It points to fact that trusts,

“are, in many cases, struggling to meet the rapidly rising demand created by an ageing population”.

The concept of pooled budgets is welcome, but given the number of parties to the commissioning process, with local authorities joined by clinical commissioning groups commissioning hospital services and NHS England, currently the national Commissioning Board, commissioning general practice and mental health services, how will this pooling work in practice?

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[Baroness Wall of New Barnet]

I know very little about local government other than that I work with it in the health sector, but I wonder whether, with the pressure that is on all of us with the cuts and the absolute need to reduce things, local authorities have looked at every opportunity. All I know is that since our income in an NHS trust has been looked at more carefully, we have had to have a look at the cost improvement programmes that we can deliver. We had never done that before, but we have delivered so many of those, improving costs by £17 million in the last year.

I am not making a criticism as I have no idea at all, and I know that we can all bemoan the fact that we have less money and all the rest of it, but until we know that we have done everything that we can, and got right down to questioning if we could do things differently, then we perhaps need to look at ourselves as well. Forgive me if you have already done that.

Perhaps I might respond to the question that the noble Lord is asking about what it means to integrate social care and local authority stuff. This is why I worry to death about this amendment. If this part of the legislation does not happen, the whole system will be in much worse straits than it is now. We have an issue about our local authority cutting back on some of the places in nursing homes, which means that we do not have the opportunity to put patients who no longer need to be in a hospital in the place where they ought to be to receive care.

At some stage or other, all of us have got to work together and say, “How do we do this?”. For lots of different reasons, not just the bed space, it is much cheaper for an individual to be in a care home bed than in a hospital bed. If we cannot resolve it between ourselves, and we cannot do it on our own as providers, local authorities cannot do it on their own, and neither can the care sector generally, then I wonder if we are ever going to get there. People perhaps need to start to look at how we might achieve this by being a bit tighter in other things.

[Lord Beecham]

My noble friend is right to draw attention, as many of your Lordships already have, to the need to integrate the provision and to avoid the sort of cost-shunting that can arise if organisations are kept separate. That is the point of the pooled budget: you look not just at the straightforward provision of care by one or other partner, or both partners, but at what will perhaps reduce the need for care in other ways. As I say, other local services such as leisure and adequate housing, in conjunction with the public health agenda, may very well reduce the demand for particularly expensive forms of care, as I am sure we all agree.

Of course, local government’s track record is not uniform, but it is right to say that local government has proved over the years to be the most efficient part of the public sector. There has been a huge improvement programme in local government, recognised by the shortly to be lamented Audit Commission, and others, over the years. The LGA in particular has sought, through a whole series of policies, including the very extensive and successful use of peer review, to engender new approaches and more cost-effective ways of dealing with a range of problems, including those in the social care arena.

I was about to conclude by drawing attention to another figure, which has just emerged today. It is a rather startling figure: £9.8 billion of uncollected VAT—10% of the total take—according to today’s Guardian. That dwarfs the amount that the Government are putting into the new arrangements. Just as local government needs, together with its partners, to engender the utmost efficiency in the mechanisms that it develops to provide services and make them cost-effective, as my noble friend suggests, so on the revenue-raising side central government has a massive obligation to ensure that it collects the taxes—instead of cutting the resources going into HMRC, which is responsible for collecting VAT, by a further 5% in the spending review.

We do not consider the cost of £3.8 billion and the welcome money that the Government are going to provide to be the last word in these matters. There will have to be a continuing process of establishing programmes that are effective and cost-effective. Looking at the totality, there is scope within the system to prioritise this area, providing that the Government take the right decisions—across the piece, not merely on the narrow front of health and social care but considering the implications for other services and functions of government—and collect the money that they are due anyway and which would relieve the huge pressure on these services and others.

I have a good deal of sympathy with the concerns expressed by the noble Lord, Lord Best, but I share the view of the noble Lord, Lord Sutherland, that it would not be right to hold things up. We must get on, but in doing so we must be realistic about the challenges that will be posed to those responsible for delivering these services. I look forward to hearing the Minister’s response to the various questions that have been raised in the debate.

[Earl Howe]

My Lords, I do agree with the spirit of this amendment. It is critical that care and support generally, and these reforms in particular, are fully funded. Without adequate funding, they will not deliver the benefits we all want to see. However, let me reassure noble Lords that we already have full procedures in place to ensure that there is proper funding for social care.

The first and very basic point is that the Government set spending plans for all areas of public expenditure at once during a spending review. This ensures that decisions can be taken about the future funding requirements of government as a whole, rather than assessing each part piecemeal. The noble Lord, Lord Sutherland, spoke about the review of priorities being a task of government. I agree, and that is exactly what spending rounds are designed to do.

Secondly, we have the new burdens doctrine in place, which requires that,

“all new burdens on local authorities must be properly assessed and fully funded”.

That ensures that all new funding pressures, including those that result from this Bill, are fully funded. I can tell the noble Lord, Lord Best, that our commitments are in line with the new burdens doctrine, the costs have been identified in the impact assessment, and the funding in the spending round will support local authorities to deliver on current and future commitments through to 2015-16. To answer the noble Lord, Lord Campbell-Savours, yes, the work has been done.

It is only right that the Government take spending decisions for all areas of public expenditure at once. This ensures that future spending plans are drawn up which are coherent and consistent across all public services. This is exactly the purpose of a spending round, the latest of which concluded last week, as noble Lords know, and set spending plans for 2015-16. Fundamentally, this settlement delivers the funding required to ensure that service levels in the care and support system can be protected and are able to deliver on all the commitments in this Bill.

However, with additional pressure on the system, we must ensure that the Government, the NHS, local government and care and support services are all working together to offer the best possible services for patients while also addressing the growing demand on the system that the noble Lord, Lord Best, rightly referred to. That is why we have announced in this year’s settlement a £3.8 billion pooled health and care budget to ensure that everyone gets a properly joined-up service, so that they get the care and support they need from whoever is best placed to deliver it, whether that is the NHS or the local authority.

In 2014-15, the NHS will transfer £1.1 billion to support social care with a health benefit. The pooled fund will include £2 billion more through the NHS in 2015-16. But this money will be given only on the basis that services are commissioned jointly and seamlessly between the local NHS and local councils. I hope that that helps to answer the question posed by the noble Lord, Lord Beecham.

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The noble Lord, Lord Beecham, asked me how the pooled budget arrangements would produce the kind of outcomes that we all want to see. I think the key point here is that this pooled health and social care budget will benefit by its very nature both care and support and the NHS. It will safeguard those funds in the process and it will, as I have outlined, help to save money by keeping people well for longer. It will be given only on the condition that services are commissioned jointly and seamlessly between the local NHS and local councils. I have already explained about having all the plans agreed together, so that we can ensure that the NHS’s priorities are also met and that this money, as it delivers on the priorities that are important to the NHS—I have mentioned a few—will be used effectively.

[Lord Beecham]

My question was not about the purpose of the pooling, which I think we all share. My question was rather more detailed. If part of the funding is to be based on outcomes, how and when is that to be judged? If the outcomes are not achieved, how will the money be reclaimed? All this is something of a mystery as matters stand.

[Earl Howe]

The details of the payment-by-results system will be worked through. We are working with our partners in the sector including the LGA and NHS England to ensure that the system is designed with a view to incentivising integration. Further details of those arrangements are in course and we will announce them as soon as we can.

The kind of things that we will be looking for are, for example, the results that we have seen in places such as Cheshire West and Chester. The pilots, the whole place community budgets, showed that savings from integration could be substantial if implemented effectively. A business case needs to be presented. In that context, the pilot suggested that, once proposals are fully implemented, the net savings that could be achieved over five years are considerable.

Cheshire West and Chester has made savings of £26 million, with £3.8 million for Greater Manchester, £190 million for the Triborough authorities and £90 million for Essex. These savings are being identified. It gives us confidence to say that there is real potential to save money across the country, as shown by the pilots and other reviews, such as the Audit Commission review. Oxfordshire recently announced that it was nearly doubling the amount of money in its pooled budget for older people. That is a significant move.

I agreed with much of what the noble Baroness, Lady Wall, said. Savings are eminently possible without detracting from quality, by slowing and preventing the development of care needs or the onset of health conditions, or the loss of independence. We hope and believe that preventive care can increase the quality of life for individuals. A proactive stance by local authorities will deliver that. At the same time, preventive care will provide longer-term financial savings to the public purse. For the first time, Clause 2 creates a clear legal duty on local authorities to ensure the provision of preventive services.

I come to the point raised by the noble Lord, Lord Campbell-Savours, about the Dilnot package. I do not view the Dilnot package in the same way that he does. I do not see funding reform as being about protecting people’s inheritances. It is about providing hard-working people with peace of mind about how much they will pay for their care. Deferred payments will ensure that people will not have to sell their homes in their lifetime to pay for care. That will prevent distressing sales of houses and provide everyone with breathing space to make decisions and choices about what happens to their home. In the long term, the scheme is broadly cost-neutral to government, because the deferred payments will be repaid. Everyone will benefit from these reforms, but they will particularly help people with modest wealth who are most at risk in the current system of losing their entire home and savings.

Delivering on these transformational changes to health and care is the only way to secure the long-term sustainability of services, both for the NHS and local authorities. I would be firmly against delaying this —I think we would be heavily criticised if we did. The noble Lord, Lord Bichard, referred to the burgeoning weight of regulation during the past 60 years and one cannot argue with the statistics that he produced. This Bill serves to consolidate more than 60 years of legislation; it will repeal provisions from more than a dozen Acts of Parliament. Reducing the complexity of the statute and rationalising burdens on local authorities are our key aims in this context. I hope that, for the reasons that I have outlined, the noble Lord, Lord Best, will feel sufficiently reassured to be able to withdraw his amendment.

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[Lord Best]

Oh, not again! I do apologise. How many times has this happened to the noble Lord?

[Lord Beecham]

My Lords, I hope to be of some utility, but I would not claim to be utilitarian.

[Lord Best]

I deeply apologise, and not for the first time, to the noble Lord, Lord Beecham, one of the most distinguished of the vice-chairs and past chair of the LGA.

The noble Earl, Lord Howe, agreed with everybody that we need fully to fund the new measures and to ensure that the funding for existing care services is there. He expressed to us the belief that the new measures will do just that and they herald a sustainable funding arrangement for the future. He noted that the settlement for local authorities is extremely challenging this time round, but that, in terms of social care, the settlement that we are now pointing towards, with jointly commissioned services, the pooling of the £3.8 billion and NHS and local authorities working together, will in his view prove enough to fund a sustainable care service. Only time will tell whether those calculations prove to be accurate rather than too optimistic. In the hope that the noble Earl’s predictions are correct, and recognising that government really are attempting to make serious change in this Bill to the funding system as well as in so many important ways to the care services, I beg leave to withdraw the amendment.