Care Bill [HL]

Lord Best Excerpts

Wednesday 3rd July 2013 Lords Chamber

Moved by

[Lord Best]

77B: Before Clause 1, insert the following new Clause—
“Funding
The provisions enshrining the new duties and responsibilities for local authorities in Part 1 shall not come into force unless and until a comprehensive and sustainable solution has been provided by the Secretary of State to address the funding of existing care and support commitments for local authorities and those arising from this legislation.”

[Lord Best]

My Lords, we now come to the beginning of the Bill and the very important Part 1, sensibly postponed until after the Chancellor’s Statement last week on the spending review.

I declare my interest as president of the Local Government Association. The LGA has drafted this amendment and, as with many other Bills, has provided invaluable analysis and briefing for parliamentarians, alongside its direct negotiations with central government on behalf of local councils. Indeed, I commend the LGA’s new publication, Rewiring Public Services, which was launched yesterday and sets out a radical agenda for local services, including social care services.

The provisions in Part 1 have been widely welcomed. They will update and reform the adult social care system. They will support greater integration of health and social care and, on the issue of paying for care, the Bill’s provisions will redefine the relationship between the state and the citizen. Some of these changes will lead to future savings in the cost to the public purse of providing adult social care.

However, achieving later savings means spending more today, and some elements of the Bill mean a shift in the cost of care from the individual to the state. Therefore, before your Lordships’ Committee embarks upon its consideration of the important changes contained in Part 1, it seems important to consider the financial position from which we are starting out.

There is compelling evidence that rising costs of care are leading inexorably towards a crisis in funding for the local authorities which are trying to meet the needs of an ageing population. Before we can assess the practicalities of extra activity and extra spending for social care, it is necessary to be clear how existing care commitments can be paid for, as well as how extra costs arising from the Bill will be funded. Decisions on funding need to be taken before, or at least at the same time as, the policy decisions. Therefore, Amendment 77B—and I am very grateful to the noble Lord, Lord Tope, who has added his name to it—seeks to postpone implementation of Part 1 until the Secretary of State has addressed the crucial issue of how the costs of social care and support will be met in the years ahead.

What we now know from the Chancellor’s Statement last week is that the spending review includes genuinely helpful steps to fund key measures contained in the Bill. Following productive dialogue between central government and the LGA, the plans set out in the spending review make it clear that significant extra funds will be available from the NHS to assist with the costs of local care services. As well as needing reassurance that all extra costs for local authorities resulting from the Bill really will be covered, there remains the greater underlying concern that the financial foundation on which the new position is to be built is not secure. Over the past three years, adult social care budgets have reduced by 20%. In a number of areas, to cope with the funding cuts it has already been necessary for councils to raise the bar before regarding older people as eligible for help from the council. Accordingly, despite growing numbers of older people, fewer people are now being helped because their needs are assessed as moderate, not substantial, even though earlier support can prevent the need for higher costs later.

The Association of Directors of Adult Social Services notes that the bulk of this reduction has been made up by efficiency gains. Many adult services directors believe that they can go a bit further; for example, through better procurement, shifting activity to cheaper settings, subcontracting provision to the private sector, and so on. But the scope for further efficiencies clearly now is much reduced. Demographic pressures, with a 3% growth every year in numbers of older people, mean that savings are predicted to be immediately cancelled out by the cost of meeting increasing demand. The cost of just standing still is estimated at another £400 million a year. Efficiency savings alone cannot keep pace with these budget pressures.

--- Later in debate ---

[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.

[Lord Best]

My Lords, I am deeply grateful to all noble Lords who have spoken: to the noble Lord, Lord Bichard, for pointing out that we cannot keep loading responsibilities on local authorities and others without willing the means to pay for those things; to the noble Baroness, Lady Howarth, who said that we cannot go on like this; and to the noble Lord, Lord Rix, who explained the position from the Mencap perspective—it could have been that of many other charities which are facing very tough times because local authorities cannot keep up the level of support that they used to have. The noble Lord, Lord Campbell-Savours, produced more impressive statistics, not least in relation to the people with long-term conditions and dementia who are living in the community and need to fund their care needs. The noble Baroness, Lady Campbell, brought us the users’ voice, pointing out that funding cuts have already meant people losing some of the control and choice which had been increasingly expected with use of direct payments and so on.

The noble Lord, Lord Sutherland, pointed out that the culprit is not local government or central government but demography, and that we need to make some choices as a result of those demographic pressures. However, in his view, one of those priorities is clear: it is that we should go ahead with this Bill. The noble Lord, Lord Beecham, also felt that it would be unwise for us to delay things, even though he accepted that cuts mean that social services in Newcastle have returned to the position that they faced in 1973 in terms of the resources available. He pointed that it is local government that has shown itself best able to be more efficient in these difficult times. We need to remember that. The noble Baroness, Lady Wall, pointed out that local authorities should try to make savings wherever they can, and the noble Lord, Lord Beecham, was right that statistics show that local government is doing just that.

I think that it is fair to say that the noble Lord, Lord Bentham, felt that it was necessary to find additional resources, but he thought that those could be found from the underspend in the NHS or the uncollected VAT or some other source. However, he did not want the amendment to delay the good things that the measures bring with them. The noble Earl, Lord Howe, agreed that we need fully to fund the measures—did I say Bentham?

[Noble Lords]

Yes!

[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.

Amendment 77B withdrawn.