Care Bill [HL]

Lord Hunt of Kings Heath Excerpts

Tuesday 16th July 2013 Lords Chamber

[Lord Lipsey]

My Lords, I rise to make two brief points. First, this argument is not really about eligibility criteria but about money. It would be highly desirable to extend eligibility to people with only moderate needs, but we will find it extremely hard simply to cater for people with substantial needs unless the pot of money is substantially expanded. That is the elephant in the room. In all the discussions here, we are describing a marvellous new system, but we have not yet said how it will be paid for.

Secondly, I think that eligibility criteria are, to a degree, a bit of a phantom. We know that there is variation between authorities across the country: some accept people with moderate needs and some accept them with substantial needs. Quite aside from that, there is overwhelming evidence of enormous variety not between local authorities but within local authorities depending on who is assessing you and their state of mind. I quote in support of this a report from the National Care Standards Commission in 2005-06 and an excellent report by the PSSRU last year which tells you what actually goes on when people are being assessed. You might have a social worker who is terribly sympathetic to the older or disabled people she is assessing, and her boss who is, no doubt, sympathetic but who knows what budget he has to meet each month. In those cases, you simply get a wrestling match.

Thirdly, and to me most worryingly, once the cap comes in, people and their families will have a huge economic interest in demonstrating that they have substantial needs because that is when the meter starts ticking for them getting help. The danger is that those with, in some cases, the biggest needs will not be very good at gaming the system. Somebody with autism may be told by their parents to seem as bad as possible so they can get the meter ticking. They are not going to be very skilled at that, but the mums and dads of articulate middle-class people will have a different set of instructions to go on. There will always be a tendency to exaggerate—play up to the full may be a better way of putting it—their needs to get them graded as substantial.

I make these points, not to draw any firm conclusion, not even on the question of whether those with moderate needs should be catered for, but to say that more fundamental thinking has to go into deciding how eligibility criteria should be set and operated. This has not yet been apparent, even in the Government’s improved scheme which is encapsulated in the Bill.

[Lord Hunt of Kings Heath]

My Lords, my Amendments 88R and 88S take us back to the amendments which I moved last week on eligibility criteria, inspired by the noble Baroness, Lady Campbell. Promoting individuals’ well-being, assessing their needs and those of carers, deciding on eligibility and the priority for needs to be met, developing them with an appropriate care and support plan, enabling the best use of a personal budget and/or direct payments and ensuring continuity of capacity during and after a move, such as a house move, are all processes or stages in which the active engagement of NHS professionals or services could have a positive effect on the outcome for individuals and carers.

In his response, the noble Earl said that he agreed and that the Care Bill already allowed for that kind of co-operation from the NHS through Clauses 1 and 3. He also pointed out that Clause 12(1)(f) sets out regulations where a local authority must consult with someone with expertise before undertaking an assessment. He went on to say:

“Regulations may also set out conditions around co-operation with the NHS, by specifying the circumstances in which the local authority must refer the adult concerned for an assessment of eligibility for NHS continuing healthcare”. —[Official Report, 3/7/13; col. 1272.]

That is helpful but I wonder if we should go further and place an explicit responsibility on the NHS so that we know it plays its part in full.

Amendment 88Q, tabled by the noble Baroness, Lady Grey-Thompson, and my Amendment 88T focus on the eligibility criteria in the draft regulations. We support national eligibility criteria. As the consultation paper says,

“the needs which are determined to be ‘eligible’ vary from one area to another”,

at the moment, with local authorities,

“able to set their own ‘eligibility threshold’ or ‘criteria’…This approach has led to perceived wide distances between areas and inconsistency in the offer made to local people, confusion and legal challenge. Because local authorities are able to vary the threshold over time, it also leads to the fear that people may lose their care and support if ‘eligible needs’ are reclassified locally”.

It is also very helpful to have the draft regulations available for debate and I have been able to discuss them with a number of stakeholders in the last few days. The noble Baroness is absolutely right that there is concern among many stakeholders about the level at which the criteria are set. This is reflected in the amendment in her name and those of the noble Lord, Lord Low, and my noble friend Lord Touhig. However, we must also take account of the points raised by my noble friends Lord Warner and Lord Lipsey because this is, in the end, an issue of funding. I hope that, when she winds up, the noble Baroness will address the issue of affordability. This may be a technical point, but this might be a matter of supply, since the Commons might well assert their own position in this regard. The noble Earl, Lord Howe, will, no doubt, advise us on that matter.

The guidance is very important and my noble friend Lord Warner said that it was a good first shot. I agree with him and it is certainly something to work on. However, could it warrant more parliamentary scrutiny than is normally given to regulations? We usually have a debate of about one hour; the conventions allow us to defeat a statutory instrument on very few occasions, and there is no opportunity to amend those regulations. We have benefited enormously from having a Joint Select Committee to advise us on the draft Bill: might it be right to have a similar process in relation to the regulations? I hope the noble Earl might be sympathetic to my Amendment 88T, which asks for a joint parliamentary committee process to look at the regulations before they are laid before Parliament.

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[Lord Hunt of Kings Heath]

My Lords, I hesitate to come between my noble friends Lord Warner, Lord Lipsey and Lord Campbell-Savours, and indeed knowing what is good for me I am not intending to do so. I say to my noble friend Lord Campbell-Savours that I understand the point that he is making and I agree that Dilnot is not the answer to many of the really pressing problems that we are talking about.

I want to tempt the noble Earl to say a little bit more on two areas which have been referred to by noble Lords. The first is the complexity for local authorities of what they have to administer. The noble Earl has not really responded in detail on this matter so far. Indeed, it is noticeable that local authorities have not responded. We have received a huge amount of evidence, but not very much from local authorities and the local authority associations. This worries me. I understand why local authorities would be keen to play a prime part in the administration of this new system, but these are genuine concerns about whether there is capacity to make changes of this complexity happen. Nothing would be worse than the new system coming into being and collapsing almost on day one. At the moment, that is my view on what is going to happen. I do not know what the Government intend in terms of testing out the robustness of the system for when it is due to come in. I hope that at some point during our debate the noble Earl will be able to tell us.

Secondly, the next group of amendments deals with the public understanding the complexity of the system being considered, but it seems to me that this issue relates to the point about insurance raised by my noble friend Lord Lipsey. My understanding is that one benefit of full implementation of Dilnot—although I am not sure that the Government have gone down that path—would be that, if the public knew that their liabilities would be capped, there would be likely to be a ready insurance market. A number of us have looked with interest at the comments of the Association of British Insurers and other parts of the insurance industry. I have to say there does not at the moment seem to be much optimism about whether there is going to be a market and whether packages are going to be developed. This may come up in later amendments, but at some point I hope that the noble Earl will give a little more information about the Government’s view of the potential of the insurance market to develop products which the public can understand and will be willing to invest in.

[Earl Howe]

My Lords, as the noble Lord, Lord Lipsey, explained very clearly, these amendments would mean that the capped system counted time rather than costs. I agree that there are advantages to this approach. The Dilnot commission, in considering this option, said that using years instead of costs would be easier to administer and simpler to understand, and I appreciate those arguments. However, the commission also made the case that to adopt this approach would disadvantage those with more intensive care needs, who over a given period of time could spend significantly more on care than those with less intensive needs, so that what we might gain in simplicity we should lose in fairness. I am sure that we all want to see a fair care and support system giving the most support to those in the greatest need. Using time instead of costs would undermine that goal.

We are committed to using notional spend—in other words, the equivalent of what the local authority would pay to meet an adult’s eligible care needs. As with using time, it is in fact relatively simple to administer because it fits in with the current system of needs assessment. It also ensures that people with more intensive needs are not disadvantaged. That is why the Government agree with the Dilnot Commission, which said,

“the only suitable way of deciding when a person has reached the cap is to meter notional spend.”

The noble Lord, Lord Lipsey, pointed to the understandable fear that Dilnot will mean spending money on administration rather than on meeting people’s needs. I accept that times are challenging for councils, but we are committed to funding these reforms. Critically, we are also committed to co-producing the implementation of the reforms to minimise the bureaucracy that accompanies them and maximise the benefits that they bring. The noble Lord suggested that local authorities might not be ready to implement Dilnot in 2016, and the noble Lord, Lord Hunt, also asked about this, and whether we were intending to test the robustness of the system. We shall be coming to the issue of readiness in the next group, but I agree with the noble Lord, Lord Warner, that there is sufficient time to develop what he referred to as a taxi-meter system.

The noble Lord, Lord Campbell-Savours, took us to a point that he has made in this Chamber before about Dilnot, and his view that it is fundamentally unfair. I simply say to him that the vast majority of state support, under the Dilnot system, will be provided to the roughly 40% of older people with the lowest income and the lowest wealth. The cap, and the extended means test, provide the most reassurance to that particular group. Our view is that we need a system that protects people with the greatest lifetime care needs. It is not about protecting people with the greatest wealth.

To clarify the question that the noble Lord, Lord Warner, raised in the previous group of amendments about the guidance under Clause 71, this will indeed be statutory guidance, and it will look and feel like a code of practice. Importantly, it will have the same legal status. However, we do not think that guidance should be subject to parliamentary scrutiny every time it is updated, as with a code of practice Statutory guidance under this Bill will have the same status as the current guidance issued under Section 7 of the Local Authority Social Services Act 1970. I hope that this is helpful.

In a later group of amendments we will come to what local authorities think about the new system and indeed the whole area of financial services. However, I was reassured that the Local Government Association said that it fully supports and welcomes the inclusion of a cap on what an individual will pay. The Association of British Insurers has welcomed the announcement that we have made as a positive step forward in tackling the challenges of an ageing society. Arising out of that is a sector-led review that is working constructively with government to understand how the market will develop and create the right environments for products to succeed. That review will be completed over the summer.

I hope that with those comments the noble Lord, Lord Lipsey, will for now be content to withdraw his amendment. I hope that he found my comments, if not ones that he can agree with immediately, at least ones that he will put into the context of the Bill in, I hope, a manner that he will understand.

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[Lord Hunt of Kings Heath]

My Lords, my Amendment 90ZA requires the Secretary of State to report to Parliament,

“in advance of this section coming into force with the Government’s assessment of the likely impact of the cap on care costs; and … annually once the section is in effect, with the Government’s assessment of the impact of the cap, in particular its distributional impact across the income spectrum”.

I echo some of the points already made. The operation of the cap ought to be, and continue to be, subject to ministerial oversight. The opportunity to report to Parliament and for us to have an annual debate should not be missed. This links into the amendment of my noble friend Lord Lipsey, Amendment 92ZZB, because it would enable a ministerial advisory group to feed into an annual report on how the scheme is being implemented and whether changes need to be made.

It is important to bear in mind the concern of my noble friend Lord Campbell-Savours that simply operating Dilnot will favour the better off at the expense of the worse off. We must keep an eye on how it impacts on the distributional spectrum in this regard. That is why I have the second part of my amendment.

Like other noble Lords, I agree with Amendment 89E in the name of the noble Lord, Lord Sharkey, and Amendment 90 in the name of the noble Baroness, Lady Greengross. I have learnt over the past few months how complex this issue is, and if noble Lords do not understand the full complexity of the scheme—and I gladly hold my hand up that I have yet to believe that I have full mastery of how it will operate—how can members of the public be expected to understand its full consequences?

In our debate on Clause 2, we discussed the responsibilities of local authorities in providing advice and we debated the need for independent financial advice to be made available. The consequences for a person making the wrong decision on funding could be catastrophic. It is therefore important that advice is readily available, and I agree with those noble Lords who think that it ought to be a national responsibility. Whether I would give it to the current Secretary of State, I am not quite so sure.

I remember how the Government spun this Bill in the Queen’s Speech and the Prime Minister giving the impression that no one would for ever more have to sell their home and that the £72,000 cap was the limit. However, as we have gone through the Bill has become quite clear that neither is the case. I agree with my noble friend Lord Campbell-Savours that the Government have not thought through the implications of what the noble Earl said last week about the issue of transparency.

The point is that most people have to spend more than £72,000 because self-funders do not pay local authority rates. In his sophisticated response last week, the noble Earl suggested that local authorities took advantage of procurement at scale, which is why they were able to get a rate lower than self-funders. That was a remarkable argument. Most people see this as a case where local authorities underpay and that if homes only existed under local authority rates many of them would not be viable. It is therefore not surprising that many homes are on a cliff edge of viability on the one hand and at risk of being put out of business because of CQC inspections on the other. There is no doubt that it is generally thought that self-funders subsidise the people in those homes who are paid for by the local authority.

However, most people do not know that. Only an inside circle is aware of the issue. However, come the new implementation, everyone will know—as the noble Earl said last week, it will be transparent—and people will not put up with it. That is why, first, it is essential that more thought is given to implementation. I am not sure whether my noble friend Lord Lipsey is right to want to delay it by a year, but I am sure that he is right to say to the Government that they need to look carefully at the practicalities of implementation.

Secondly, it is important that self-funders are in future fully aware of the consequences of any decisions they take. At the moment, I and many other noble Lords are not convinced that the public are aware. That is why it is so important that a duty is laid on Ministers to fund, and continue to fund, a national campaign of information and that we come back to our debates on Clause 2 in relation to independent advice being made available.

Thirdly, I hope that the noble Earl will readily accept the amendment of my noble friend Lord Lipsey about the need for a ministerial advisory committee, which could then enable the Secretary of State to report to Parliament annually in relation to the implementation of the Dilnot proposals.

The noble Earl will be aware that, in general—my noble friend Lord Campbell-Savours aside—the Care Bill enjoys support. However, there is a risk of our disagreeing on implementation. If he can reassure us on the readiness of local authorities, on the willingness to provide independent advice and on the willingness to establish some kind of independent mechanism to report on a regular basis, it would provide a great deal of comfort.

[Earl Howe]

My Lords, the clauses on the capped-costs system represent a significant step forward, ending decades of uncertainty, with the introduction of a clear system that fairly shares costs. For the first time, people will be protected from spiralling costs and will no longer have to fear that their home will be sold while they are in a care home. In response to Amendment 90ZA, I can confirm that we published an impact assessment of the reforms which includes the distributional impact by income.

The current system exposes those with little savings or modest housing wealth to the greatest risk of losing everything to pay for their care and support. We will enable people to keep more of their capital and still receive a contribution from the local authority towards their residential care costs. Under new regulations, those with capital assets of less than £118,000 will see the local authority pay a proportion of their residential care costs rather than only those with assets of under £23,250.

As I mentioned earlier, the vast majority of state support will be provided to the 40% of older people with the lowest income and wealth. The cap and extension to means-tested support provides the most reassurance to this group. This is about protecting people with the greatest lifetime care needs and not people with the greatest wealth. The reforms must be sustainable and affordable for the long term, which is why we have accepted the Dilnot commission’s recommendation that the level of the cap should be adjusted annually in line with inflation. It is an approach used in taxes, pensions and benefits, ensuring they remain equally fair year after year.

I turn to amendments 92ZZB, 92ZZC and 104ZC. The noble Lord, Lord Lipsey, shares our aim in drawing up the Care Bill of ensuring the system can respond to changing circumstances. However, that dynamism must be balanced with some certainty about the basis for changes. That is why Clause 16 requires annual adjustments to be made to the cap and to an adult’s accrued costs, so that they keep pace with inflation. Clause 66 provides some certainty that changes are likely to occur only as a result of the annual adjustment or five-yearly review. In reviewing the level of the cap and the means-test threshold, the Government will want to involve a range of experts in assessing how external factors such as demographic change and healthy life expectancy are affecting affordability and the benefits of the capped costs system. A standing independent committee is therefore unnecessary and could suggest that the system is subject to constant change—which may, perversely, result in fewer people planning and preparing on the basis of these reforms.

Amendments 90A, 90B and 90C would require the annual adjustment to be made in line with average care costs. The first point to make is that there is no nationally recognised measure for care costs inflation. Linking the annual adjustment to a care costs inflation measure that has no national benchmark would not give people, or the financial services industry, certainty or confidence in the system. It would of course be possible to develop such a measure, but we feel it is unnecessary, as a robust proxy already exists. Average earnings is one element of the measures used to determine the state pension and therefore represent changes in people’s ability to pay. Earnings is a national statistic certified as compliant with the code of practice for official statistics. In addition, care costs and average earnings are related since labour is a substantial proportion of the cost of care. The latest Laing & Buisson market survey states that,

“in the longer term, fees are inevitably driven by costs … the major cost item is payroll”.

Turning to Amendments 89E, 90 and 104ZD, which is where my noble friend Lord Sharkey began this debate, I fully agree that it is critical that people are made aware of the reforms and what they will mean. The Dilnot commission rightly recommended that there should be an exercise in raising awareness alongside implementation of the reforms. Many people do not realise that they may have to pay for their care and support, which acts as a significant barrier to effective planning and prevention. The Committee will be aware from the debate on Clause 4 that we know that easier access to good quality, trusted information and advice is a critical enabler. The Bill places a duty on local authorities to provide information and advice, including on the capped cost system.

I assure the noble Lord, Lord Campbell-Savours, that we have absolutely no intention to or interest in allowing spin to replace clear and balanced information for the public. In improving awareness and advice, national and local must work together. It will be in the interests of local authorities, the public, government and the financial services industry to make sure that people are aware of the reforms and have access to the right information and advice at the right time so that they can plan and prepare to meet their care and support needs. We will seek views in the forthcoming consultation on the design and technical implementation of the funding reforms, which will include addressing the best way to raise awareness of these reforms nationally and locally.

My noble friend Lord Sharkey made the good point that awareness and understanding of the Dilnot reforms has to be evaluated and measured over time. As with any other policy, we will seek to evaluate the effectiveness of this particular policy, but we believe that to require an annual report in the Bill would incur a potentially high and unnecessary cost. There are other ways of delivering the same aim.