Health and Social Care Levy Bill

Lord Hain Excerpts

2nd reading & Order of Commitment discharged & 3rd reading
Monday 11th October 2021 Lords Chamber

[Lord Hain (Lab)]

My Lords, I declare an interest that may be common to many, if not most, of us in your Lordships’ House. I have a relative living in a care home in England, so when the Prime Minister, with his trademark flourish, announced a new social care policy, I was naturally encouraged. However, as I examined it against the reality facing my relative and most of our citizens needing residential care or 24-hour home care, I became increasingly sceptical. Here is my take on what his policy means from the front line. If the Minister thinks I have got anything wrong, will he please say so when he replies? Specifically, will he write to me in response to what I have said?

The Government said that the reforms would address the problem of people having to sell their homes to pay for the cost of care. From October 2023, they plan to introduce a new £86,000 cap on the amount anyone in England will have to spend on their personal care over their lifetime. The cap will be applied irrespective of a person’s age or income—so far, so good.

However, Boris Johnson’s reforms do not live up to their marketing, and the cap will help relatively few who need care. It would be a surprise to most people to know that only care costs will be covered by the lifetime cap and that these do not include the so-called hotel costs, which may be very, very high. Under the Prime Minister’s framework, only money spent on meeting a person’s personal care needs counts towards the cap. The Government’s position is that a person would have to pay for living costs even if they did not need residential care but depended on care—maybe continuous care—at home. Spending on daily living costs, or what the Government refer to as hotel costs in a care home, does not count. There is therefore no help under the policy towards accommodation and food, as these are designated by Ministers as part of hotel costs.

The care costs would cover the nursing and care staff and possibly the costs of ancillary staff and medical supplies, but not the other costs of providing a residential care service. These include, for example, any mortgage on the residential home, insurance and legal fees, audit and professional fees, council tax, utility bills—such as rocketing heating costs—waste disposal, registration fees, transport costs, maintenance, marketing, office services and so on. These are categorised as counting towards the hotel costs and not covered by the lifetime cap.

I have looked at the current fees breakdown in a large care home in England with 50 beds running at 92% capacity. The current social service rate—the rate the local authority may contribute—does not even cover the care and nursing staffing costs; nor will the new plan. Yet the Prime Minister has given the impression that people entering residential care will benefit from the reforms to the social care charging framework with the introduction of the £86,000 lifetime cap on the amount anyone will spend on their care. In reality, only a small percentage, perhaps a measly 5%, will be protected from “catastrophic care costs”. Therefore, contrary to what the Prime Minister claimed, many, if not most, people will still have to sell their homes to pay for care.

Although the reforms are meant to solve the current catastrophic crisis in social care, it appears from paragraph 60 of the Government’s much-vaunted new policy, that there will be nothing for adult social care until April 2023. There is no funding in the levy to address the current problems facing social care and no plans to tackle the current gaps in the social care workforce, with over 100,000 vacancies. Although the Government’s plan discusses greater professional development and career support for social care workers, backed by a £500 million investment and a workforce White Paper, it contains no credible plans to tackle the current chronic shortage of social care staff.

Stakeholders in social care have highlighted challenges associated with transferring revenue raised by the new levy from the NHS to social care in future years, pointing out that there is absolutely no precedent for this, especially with many parts of the NHS on life-support, facing massive funding gaps, and serious shortages—running into tens of thousands—of doctors and nurses. The new funding will probably stay in the NHS and care home employers will be left with an additional burden: having to bear the payroll burden of the national insurance hike provided for in this Bill. That means that they will have to pass that on to their residents, many of them dementia patients and therefore oblivious, even if their families most certainly will not be.

The Government have said they will ensure that local authorities have access to sustainable funding for core budgets at the spending review, but local authority leaders across the party divide do not believe this. They have suffered budget cuts of around 30% these past 11 years, and it is not honest to dump the problem back on local councils. That means that people needing care will have to sell their homes whatever the Prime Minister claims. People on very modest incomes or pensions living in modest homes will lose them to finance costs of around £5,000 monthly for residential and nursing care. The new levy is simply totally inadequate to fund plans necessary to reform adult social care if Britain is to claim to be a civilised society.

It is troubling that the Government’s solution to addressing social care’s core pressures appears to be the use of council tax, a social care precept and long-term efficiencies. To describe this as totally unrealistic is overly polite. The Prime Minister might better recognise it as sheer balderdash.

His reforms will instead create confusion and frustration among the public. On the one hand, people are told that the levy will fund adult social care and, on the other, that “hotel costs” are not covered. Hotel costs is a handy label for Ministers, because it implies to the public some super-duper state of luxury when actually it is a massive slice of providing care.

The £86,000 cap will benefit very few people, leaving most to continue paying high care home fees. Rather than create a simpler system of funding, the plan also paves the way for entrenching the complexity of funding that has beset social care for so long. This has left many families in a state of misery as they grapple with care costs of £1,300 per week in residential care homes, with staff on poverty wages and businesses struggling to survive. Sadly, this is no care plan; it is a care con.