Care and Support (Deferred Payment) Regulations 2014

Debate between Lord Lipsey and Lord Hunt of Kings Heath

Tuesday 9th December 2014 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, I imagine that the tummies of some noble Lords are starting to rumble, but I must detain the House a little longer. Inevitably, this is a complex matter. Let me start with the history of the deferred payments. I think that my noble friend Lord Joffe, who is beside me, and I were the people who invented them when we were involved in the minority report of the royal commission. We were against the majority view that all social care could be free because it was unaffordable and greatly benefited the rich. We thought it was right that people with means at the end of their life should dip into those means to pay for care.

However, we were very aware that a great deal of political heat had been understandably stirred up by one particular aspect; namely, that people could be forced to sell their homes to pay for care—homes which they hoped that one day their children would be able to live in. The Daily Mail, the Telegraph, and “Panorama” all have reported on this issue. We thought it was necessary to take the heat out of all that before a rational view on the future of care funding could be taken. We therefore recommended a scheme of deferred payments whereby in such circumstances the local authorities would lend people money to pay for their care, taking a charge on their homes which would be repayable on their death. The Labour Government accepted that but, unfortunately, we botched the implementation in 2002. Of the 55,000 self-funders who go into care each year, fewer than 4,000 sign up to the current scheme.

The next stage was the Dilnot commission, which recommended, as part of its package, a new universal deferred payment scheme. The Government immediately accepted this and proudly proclaimed, and continue to proclaim, that, under their scheme implemented by these regulations, no one will have to sell their home to pay for care. They probably meant it at the time, but the rats got at it.

As the Care Bill was going through the House last year, a proposal was smuggled out that meant the payment scheme was not universal in the true sense; namely, that it would be open only to those who had less than £23,250 in non-housing assets. Therefore, 30,000 of the 55,000 people who would otherwise have qualified for the scheme were disqualified by this measure. When this was pointed out to the House—it was headline news in the Telegraph and the Mail—the Government indicated a retreat. The noble Earl, Lord Howe, who alas is not here tonight, said the Government were,

“happy to consider a range of figures”,—[Official Report, 29/10/13; col. 1474.]

for the ceiling and No. 10 emitted similar emollient noises. Encouraged, the House decided not to amend the Bill. The Government by this stage had ratted on their original proposal of universal deferred payments. Now they are re-ratting, this time on their implied pledge that £23,250 would be increased. What is before the House now is, in effect, an extremely limited scheme from which in my opinion, and as we will see in reality, very few people will benefit.

Have the Government and the Prime Minister, who must have authorised the No. 10 briefings, lied? Perhaps I should rally to the best defence I can find. This scheme is universal, just not in the original sense that it was available to everyone. It is universal in that the same scheme—or broadly the same scheme—applies in every local authority. Indeed, no one will be forced to sell their house when this scheme is in place. Take a family of fairly modest means with £75,000 in non-housing assets. The Government expect them to run down those assets until they have got only £23,250 left in the bank. It would pay £500 in interest a year, if they were lucky. It is not enough to cushion them from the uncertainties of life, not enough for presents for the children and so on. Who in this House would ever be happy if they had only £23,250 in their old age to sustain them for the rest of their lives? None of us. Nobody of modest means will take advantage of that scheme and run their savings down to £23,250. The last government proposal I said was batty; I would say that anybody who did that would be pretty well crackers. I have never met an adviser to the elderly who would advise them to do so. They are not forced to sell their house; they can do something completely ridiculous that leaves them in penury for the rest of their days. That was not the intention of the minority of the royal commission or Dilnot and it is not the intention the Government wish to convey to the public at large.

We live in a time of some crisis with the political class, of which I am a long-established member. People out there worry that we use words in a different way to them. We use words that are literally true but, when you examine them under any form of illumination, they turn out to be weasel words designed to hoodwink. That is what the Government have done here. They have used words that are strictly and literally true to hoodwink the public as to what they are proposing. I think the use of clever language to disguise intent is desperately sad and is essentially part of the crisis we are facing in this country. It is for that reason I ask the House to regret that situation this evening.

The Minister will reply in a minute, but let me get my retaliation in first by dealing with two of the arguments she could use. A proper universal deferred payment scheme, she could say, would mean state support for the rich. I empathise with that. I would not want to be handing state money to the rich, but we are not talking about the rich here—we are talking about £23,250. There would have been a perfectly sensible course for the Government to take. Under the new means testing for social care you can be helped if you have up to £118,000 in assets—£23,250 is the present upper capital limit and £118,000 is going to be the new limit. The Government could have set the same limit for this scheme and aligned the two. That would have been perfectly logical and completely right. Instead, today they are saying that somebody who has accumulated £30,000 in savings and a house should be disqualified. How can they say that such a person is rich? That person has worked hard for what they have, has played by the rules and is being betrayed by a Conservative Government who claim that that is the kind of person to whom they want to appeal.

Secondly, the Minister could say that to change this would cost public money—a higher ceiling would mean spending more money. That is simply untrue because the loans would be made at interest—the interest on gilts—so in the long term the Government would get back every penny that they spend. Indeed, they have gone to great lengths to ensure that they do because people will be charged for the administrative costs of taking out one of these. There is no cost to the Government. It is true that there is a cash-flow cost because in year one the loans are paid out and then the repayments come back later—not much later because the average loan lasts only 18 months.

But there are plenty of ways that a similar saving could be made within the current budget for care without slapping middle England in the face. As I proposed earlier, they could have introduced this scheme a year later, boosting the public finances in a tight year next year. They could reduce the £144 to be allowed to individuals before they have to contribute to their care home fees—some six times the amount allowed for personal expenses to people under this scheme than applies to people who are getting means-tested benefits. I look forward to discussing this with my noble friend Lord Joffe, since we were responsible for it, but they could freeze the nursing cost allowance paid to everyone in nursing homes or reduce its amount for new claimants. We could debate the merits and demerits of these alternatives all night, but none of them is half as bad as the scheme that the Government are putting before the House tonight.

As happened when the royal commission was considering these matters—and we two stood shoulder to shoulder against the weight of the majority who came to loathe us for our unwillingness to dip into taxpayers’ pockets for paying for care—again, siren voices are being raised in favour of making personal care free for all. That was the recommendation of the recent Barker report for the King’s Fund. It even sometimes seems as if Andy Burnham, the shadow Health Secretary, has flirted with such an idea, but it is noticeable that it does not appear in the shadow manifesto that the party produced yesterday, and I am glad to hear it. That is one side of what might come out.

On the other side are the sane and sensible proposals of the Dilnot plan, albeit with a higher threshold than Dilnot recommended, of which universal deferred payments were an integral part. Tonight, with these recommendations, the Government are effectively demolishing a keystone of the Dilnot proposed universal scheme.

I am under no illusion that the Government are likely to give way on this tonight, but your Lordships, who so often have been the bulwark against arbitrary and misguided government, should have this chance to debate it and, unless the Minister says something wholly unexpected, if necessary, to vote against it. I beg to move.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I again thank my noble friend for bringing us back to a very important part of our debate during the passage of the then Care Bill some months ago. We need to remind ourselves of the fanfare with which the Government introduced that Bill. As my noble friend said, there was an explicit statement that older people would no longer have to sell their homes to pay for their care. As he has carefully outlined, that is strictly true even within the provisions of the deferred payment regulations. But as he said, it is not in the spirit with which the Government actually announced this policy. Instead of a scheme that would have brought comfort to thousands of people, they have produced a very mean-spirited scheme that will clearly exclude many people who one would have thought should have taken advantage of its provisions.

As these are regulations, we tend to ask technical questions. I have two questions for the noble Baroness, on which she may want to write to me. On the impact of the relevant figure on pensions, how will a pension pot be treated in relation to the calculation of the non-housing asset? Do the Government expect the new flexibility in assessing pension savings contained in the Taxation of Pensions Bill to have any effect on this policy? Will those savings be counted towards the £23,250 cap? I would be very happy for the noble Baroness to write to me on those points.

My noble friend Lord Lipsey came to the crunch of the matter when he said that he did not expect a scheme to be available to the wealthy and the very asset-rich. I endorse that. My noble friend Lord Warner wrote to the right honourable Norman Lamb a year or so ago. My noble friend was a member of the Dilnot commission but is unable to be here tonight. He wrote:

“As a commission we accepted there had to be some eligibility criteria because this was never intended as a scheme that was available to the wealthy and asset rich”.

However, as he said, and as my noble friend Lord Lipsey said, being required to spend down to assets of £23,250 seems far too restrictive to deliver a viable scheme or to reflect what the Dilnot commission recommended.

Surely, even at this stage, the Government need to reconsider this scheme. It is very disappointing that the consultation has taken place, we had a very good debate on it and yet the Government have moved not one inch on this policy. If it goes ahead, it will be very disappointing for many thousands of people who had every reason to expect that they would take advantage of the scheme. The noble Baroness may say that we should not worry because local authorities will be able to offer schemes above the threshold of their own volition. However, I very much doubt whether many local authorities will take advantage of that. Therefore, I support my noble friend. I am delighted that he will push this measure to a Division tonight. We are very happy to support him.

Care Bill [HL]

Debate between Lord Lipsey and Lord Hunt of Kings Heath

Monday 14th October 2013 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, I shall speak briefly to Amendment 55 on top-ups and comment, also briefly, on the proposal for a ministerial advisory committee.

I can be brief about top-ups but not because the issue is not important. Indeed, its substance is vital if the Government’s scheme for a cap is to work. We made good progress on the basis of the Minister’s remarks in Committee, and further progress was made in the Government’s consultation document, published on 17 July. I hope that he will indicate that things are still on the right track towards reaching final solutions in the near future.

I recapitulate the argument from Committee. You cannot at the moment top up your own care home fees. If you go into a care home, a third party—your son, daughter or friend—can top them up but you cannot put in your own money. That is important now, and the statutory bar is often got around or simply ignored. However, it will be a lot more important once the Dilnot scheme incorporated in the Bill takes effect.

Consider an old person who is living in a home in which the fees are £800 a week. Suppose that the limit to what the local authority will pay in fees is £500 a week. What happens when the person has spent up to the cap, at the local authority rate of course? It may be that a third party can give them the extra money to pay up, but suppose they are isolated and on their own. I am afraid that the answer is simple and stark. The individual would have to choose between only two alternatives. One is to accept the £500 a week from the local authority and move into a cheaper, perhaps worse, home, with all the disruption to that person’s life that that would involve. The other would be waive the local authority contribution and continue to pay the £800 themselves. That would mean that the cap had not done them a blind bit of good. The way round this is to permit individual top-ups, so £500 would come from the local authority, £300 from the individual. The noble Earl endorsed this in Committer when he said that,

“people should be able to use their savings to purchase more expensive care if they want to”.

He went on to say that revised arrangements to this effect would,

“be set out in regulations made under Clause 30(2) of the Bill”. —[Official Report, 16/7/13; col. 736.]

This is spelt out in paragraphs 263 to 266 of the consultative document, which also has pointers to some of the potential risks. I hope that this was with a view to solving those risks and not to coming along at a later stage and saying that they are insuperable. I ask the Minister to make a brief progress report to reassure the House that this bar on individual top-ups is going to be rescinded. Without it, the Dilnot scheme simply will not work.

I will now say a word on the ministerial advisory committee amendment in the name of my noble friend Lord Hunt of Kings Heath, who kindly adopted a proposal that I made in Committee. As the House knows, I have previous in this field, having been working on long-term care since I was on the royal commission in 1999. I also have a bit of previous on public policy in general because I started working for Tony Crosland when he was shadow Environment Minister in 1972. Of all the myriad subjects on which I have had to do reasonably serious work in this time, this is by far the most complicated. It involves a mix of financial and administrative problems with the most sensitive human considerations, particularly since it concerns people at a stage of their life when they are going into the second age of vulnerability due to age. Public and private are inextricably mixed in a way that complicates things. The whole cap is part of a private/public co-operation; therefore, it is crucial to align what both parts are doing.

The scale and range of the stakeholders involved is enormous. The Care and Support Alliance had more than 100 individual voluntary organisations which came together to promote a solution in this Bill. There are also a lot of nooks and crannies that are not obvious. I am going to come to one in a speech later this afternoon, a feature of this Bill which only became known to me on Friday which greatly changes the deferred payment scheme under the Bill. There are nooks and crannies that can be simply ignored. We had another one earlier in the Bill. It suddenly turned out that if somebody had an income close to the top for which they could claim means-tested support, they had better not claim it, because otherwise they would lose more than they gained through attendance allowance. So it is a hugely complicated field.

I am not a critic of the department on this, nor of its Ministers. They have wrestled bravely with this, helped of course by the superb Dilnot report—I am standing behind my noble friend Lord Warner, who was involved in that process—which helped hugely to clarify the intellectual framework. But there are complications as yet unfathomed. As the scheme goes forward I promise that there will be lots of unexpected and unintended effects. In particular, how people register they are getting care needs, how they are then assessed, and how it builds up towards a care cap will work out quite strangely. The Government will need the best possible advice on how to do it.

All I am suggesting, as my noble friend Lord Hunt will propose in his amendment, is that it would be well for us to set up right at the beginning a ministerial advisory committee that includes everyone—the voluntary groups, the financial services industry and those who regulate it, and government departments—that can keep on top of these things. As major problems are identified, the committee can report to the Minister on them. As I say, it is not a vote of no confidence in the Department of Health. Indeed, I hope that the department will welcome the proposal because it has shown itself to be willing to talk openly throughout this progress of this Bill. The Minister used a good phrase to describe it when discussing the regulations earlier—co-production. We will need co-production as much after the Bill and the regulations have gone through as before. An advisory committee would provide that.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I welcome the noble Earl’s amendments. As we start another day on Report I should declare my interests as chair of a foundation trust, as a consultant trainer with Cumberlege Connections, and as president of GS1. The noble Earl said that the first group of amendments is designed to give more flexibility to local authorities so that they can make a contribution to a person who might normally be affected by the means test. That is entirely reasonable, but I wonder if he could tell us a little more about the consultation timetable from which this has clearly flowed.

I have also noted the amendments that will allow the local authority to charge the cost of care to those people who refuse to undergo a financial assessment. Again, this seems reasonable, but given the difficult circumstances in which that scenario might arise, does the noble Earl not consider that that lends support to those noble Lords who think that there ought to be appeals systems in place? When we come to appeals, I wonder whether the noble Earl might be a little more sympathetic to those amendments.

I want to lend my support to my noble friend Lord Lipsey in relation to top-ups. He argued persuasively in Committee to allow self-funders to top up if they reach the cap but wish to remain resident within a care setting where the costs are higher than the local authority is paying. That is a strong argument, and I, too, welcome the progress that has been made. However, like my noble friend, I hope that the noble Earl will be able to give us a further report on progress on this matter.

I come now to my Amendment 56, which has been very effectively trailed by my noble friend; in fact, it is difficult for me to do as much justice to the amendment as he has done. It requires the establishment of an independent ministerial advisory committee to keep under review the workings of the cap and the means-testing arrangements set out in Clause 17. It is fair to say that all noble Lords who have debated this Bill have welcomed its general intent and the principles that underpin it. The Dilnot commission marked a significant step forward in creating consensus on how people are to be protected from financial catastrophe if they have to fund their own care. We have debated in detail the Government’s response as set out in this Bill: the establishment and operation of the cap, the level of the cap, the continued financial risk to self-funders, the deferred payment scheme, the capacity of local authorities to accept the responsibilities being placed on them, and in particular, I would identify the responsibility for assessing thousands of self-funders who will come into contact with the local authority for the first time. We have discussed the advice to be made available to vulnerable people in a complex area and its interrelationship with the eligibility criteria.

No one, in welcoming the general thrust of the Bill, will believe that this is the last word. I am sure that the operation of the care packages set out in this Bill will need to be kept under frequent review by the Government and particularly by the noble Earl’s department. Oversight of the system would surely benefit from a bipartisan group of people from whom the Government could continue to take advice. My noble friend Lord Lipsey has gone back many years in relation to the debates in this area. Of course, he served on the 1999 Sutherland royal commission. In parallel we have had the Turner commission on pensions and we have seen the benefit of a bipartisan approach in relation to Dilnot.

We would all agree that the funding of long-term care requires stability as far as possible and, even more importantly, a long-term political consensus. As my noble friend Lord Lipsey said, this is a very complex, complicated set of arrangements. We would be best served by the establishment of an independent group that could advise Ministers on how the system was working and enable politicians from all sides to benefit from serious, impartial advice.

I know that the noble Earl has yet to be persuaded of the benefits of an advisory committee, but it would be an effective way to build on the consensus that I think has been created. I hope that even at this late stage, he might be sympathetic.

Care Bill [HL]

Debate between Lord Lipsey and Lord Hunt of Kings Heath

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.