Residential Care: Cost Cap

Lord Lansley Excerpts

Thursday 10th December 2015 Lords Chamber

[Lord Lansley (Con)]

My Lords, I am grateful to have the opportunity to contribute to this debate and to thank the noble Baroness, Lady Wheeler, for initiating it. It is my privilege, not having been here for long, to hear your Lordships on this important subject.

It is important that we are discussing this two weeks after the Autumn Statement and the spending review. I am sorry that the noble Baroness, Lady Wheeler, characterised the spending review, albeit perhaps quoting others, as she did at the end of her remarks. I think that the spending review offered considerable additional resources over the course of this Parliament. I am frank and realistic enough to recognise, not least from conversations with directors of adult social care over the past couple of weeks, that they are sufficient at best to maintain the level of local authority-funded care in circumstances where the demand continues to rise and therefore the gap between availability and demand will grow. At worst, we will be in the situation, as we have been recently, where the availability of local authority-funded care has been falling at a point where demand is rising.

The noble Baroness’s point that there is a need for strategic vision is well taken. It is not simply a matter of resources, even though they are an integral part of the issue. Some of that strategy is being implemented and more is available to us. I pay tribute to my friend Paul Burstow who was a Minister with me in the Department of Health. In the coalition Government, we led together on the preparation of what subsequently became the Care Act. It contains a very important set of measures, including the availability of assessments, additional carers’ rights, more consistent eligibility for care and the availability of universal deferred payments.

We need to go further. Social care and healthcare need to be integrated. Everybody supports that in terms of the integration of service design and commissioning, but, vital as that is, we can and must go further. Integration will only be real if and when care users are increasingly able to exercise control and choice through personal health and social care budgets. To make that real we have increasingly to aggregate the availability of personal health and social care budgets to those care users so that the service providers have an aggregated level of demand to be able collectively to respond and create a market for this.

We must also recognise that this will mean integrated providers with the NHS working with private sector social care providers and housing providers. There is enormous potential for housing providers and other services, particularly personal care services, to redesign the nature of the service they provide. For example, extra care housing providers together with social care providers are able to put together packages that work really well for people who are able to choose between different kinds of accommodation and service.

Time permits me to say one more thing which I think is really important. Much of what we already have in place is the product of the implementation of the Dilnot commission’s view. I hesitate because I may be stealing the thunder of the noble Lord, Lord Warner, and others in the Chamber who may have participated in equivalent work on prior commissions. I asked Andrew Dilnot and others to undertake that work and I think the result was important and right. We have included some of it in the Care Act. The Government have not implemented the cap on care costs and, to be frank, the cap that was intended was in my view insufficient. I continue to subscribe to the view that we should aim to implement a cap on care costs broadly in the way that the Dilnot commission recommended, at around £50,000 with a structure of assessment that means that probably no more than 40% of somebody’s assets would be depleted in the process of means-testing.

The combination of these two things would make it attractive to individuals to insure against this risk in so far as they have to meet that cost, and by taking away a much more substantial part of the risk of high-cost care over a longer period of time make it a more insurable risk for private sector insurers. Additionally, since the Dilnot commission reported we have more options in relation to pension flexibilities, and we always have housing asset flexibilities to enable these insurance products to become available if it is necessary for us to have those resources come into the system.

The original intention for the implementation of Dilnot before the election was that it would be funded out of inheritance tax and changes to opting out of national insurance. That moment has gone, but in internal discussions in 2012 from my point of view we were very clear about how this ought to be paid for, but it was not acceptable inside government. There was not agreement to do it because within the system we have discrimination against residential care in favour of domiciliary care. That creates an artificial distinction that we have to escape from, which is the exemption of the main or only home for the means test on charging for domiciliary care. At any given moment, about 120,000 people benefit from that, and £1.3 billion a year is available to them by virtue of that exemption. That is broadly speaking the amount that is necessary to construct a different proposition for people who are facing the insecurity of potentially very high long-term care costs. We need to go beyond simply enabling people not to have to sell their home to pay for care and give them the security of being able to find, as you do in so many other walks of life, the opportunity to insure against the often arbitrary effects of having to receive long-term care in old age.