Care and Support (Business Failure) Regulations 2014

Lord Lipsey Excerpts

Tuesday 3rd February 2015 Grand Committee

During the Pension Schemes Bill debate on this issue there was little evidence of joined-up working and discussion between the DWP and the Treasury, let alone of discussions with the Department of Health on the implications for the pension pots of applicants applying for support under the Care Act. Can the Minister confirm that the DoH is involved in discussions on this and that the Government will respond on this issue to deal with the situation under the Care Act before the Third Reading of the Pension Schemes Bill, which is tomorrow?

[Lord Lipsey (Lab)]

My Lords, it is a great pleasure to follow my noble friend Lady Wheeler, who has achieved the rare feat of matching the Minister in both her knowledge of the subject and the eloquence with which she expressed it. I shall raise one or two points on just two of today’s regulations. The first is the market oversight criteria regulations—which, in principle, I strongly support. A few alarm bells began to ring in my skull when I saw that the body to be responsible for this is the CQC. My mind drifted back nearly a decade, I suppose, when we were in this Room debating the amalgamation of three regulators, proposed by the then Government, into the CQC. I remember speaking with all the eloquence that I could muster to explain why this was going to be disastrous, and the noble Lord, Lord Darzi, the then Minister, explaining with great eloquence why I was completely wrong. After that, the noble Lord and I would go outside and he would say, “I totally agree with you, David; this is an act of absolute madness”. I am afraid that for years so it proved.

I regard the CQC as on probation. It has new management. David Behan, the chief executive, is a man for whom all of us, I think, have the greatest respect. There are examples in which the CQC is improving its practice but it is still only on probation, which in itself does not provide me with the complete reassurance that I should like. More seriously, it is all very well having market oversight, but you need the resources to do it. I have done a little back-of-the-envelope calculation based on the Explanatory Memorandum, which suggests that the CQC will spend £6,000 per chain monitoring whether it is in financial trouble. Frankly, £6,000 does not buy much of a top accountant’s time. So while I should like to think that the CQC will pick up readily in advance of crises that there are problems, I doubt whether it is resourced to do so. The Minister and the Government should satisfy themselves that this job will be done and is not just a paper exercise so that, if something goes wrong, they can say that they did something about it. In practice, that will not be effective.

It is not entirely accurate to say that the eligibility criteria regulations translate into legislation the present criterion of substantial. Indeed, it has been argued that this is a slightly more liberal definition than the present substantial definition of what creates eligibility. But it is also not wholly inaccurate. I do not have any objection to this. I have read the useful briefing provided by the Care and Support Alliance but I am not convinced that, given the shortage of finance, to which I shall return in a moment, it would make sense to impose a much looser definition of eligibility and substantial, as recommended by Dilnot—particularly in view of the financial situation in social services.

I know that figures get bandied about for ever on this. I chose to take one from the Department of Health’s publication of March 2014 in which it said that spending on adult social services had fallen by 8% in the previous two years. Since the Government say that that is true, it must be true. Incidentally, we are seeing a folly in public finance which deserves to be highlighted. When you ring-fence one bit of public finance or guarantee it in real terms, that leads to more pressure on other forms of public finance. Because healthcare is ring-fenced and maintained in real terms—I am not arguing about whether the numbers are right—social services ends up taking more of the brunt.