Health and Social Care

Lord Newby Excerpts

Thursday 9th September 2021 Lords Chamber

[Baroness Smith of Basildon (Lab)]

My Lords, yesterday we saw in the House of Commons quite an extraordinary sight. The very day after an outlined policy announcement on social care, the Government rushed through a vote for a 10% increase in national insurance contributions that will not even be used for that purpose until 2023.

There is a no doubt that addressing social care is a critical and complex issue, and one that is expensive to address. However, what we heard in the Prime Minister’s Statement was not the oven-ready plan he promised two years ago. The danger for the Prime Minister—and, unfortunately, for the country—is that this now feels like an impetuous decision made for political reasons when there are so many who are willing to work across parties, professions and interests to find a consensual way forward. Despite the usual hyperbole, we did not hear a plan for dealing with a system crumbling under strain; nor did we hear a guarantee that this money will go into social care.

Despite this measure being flagged as a social care policy, the Prime Minister announced that, for at least the next three years, the bulk of the money raised by the levy will be spent on the NHS to “clear the waiting list backlog”. Yet the Secretary of State for Health seemed very uncertain that this would work. Waiting lists were already at record highs even before the pandemic struck, and our health and social care services had been left weakened and exposed when the virus hit.

Where would that leave both the NHS and social care services? To me, this feels just a bit too close to the Prime Minister’s Brexit bus tactics. Remember: Brexit was going to deliver £350 million a week to the National Health Service. Already, care sector experts and leaders are critical of using the NHS as a political fig leaf to break a manifesto commitment and make the introduction of a deeply controversial tax palatable, as well as using it to cover up many mismanagements and misjudgments during the handling of the pandemic. If the Prime Minister’s tactic of a rushed vote was to avoid scrutiny, it has failed. On an issue of this magnitude, scrutiny is essential. It is not just about holding the Government to account; it is about trying to get the best policy outcomes.

At the election, the Government promised to ensure that no one needing care would have to sell their home to pay for it. Can the Minister repeat that commitment today? The cap benefits those who live in the most expensive parts of the country or have the most expensive houses, but someone who has a house worth £100,000, for example, will still have to pay £86,000 for their care, even with the cap. That cap does not include the associated care home living costs, which are not covered by the cap and often far exceed the personal care costs of residential care.

The Chancellor’s explanation yesterday, which I hope that Minister will not attempt today, was that people needing to raise money for care need not sell their homes while they are still alive because they can get a loan that is then repaid when their estate is sold after their death. That is nothing new. Deferred payments were already available. Did anyone really think that this was what the Government’s promise of not selling homes meant?

I think that most people understand that good services cost money, but it is the unfairness of these tax rises that is wrong, especially with the lack of a proper plan or guarantees. Two and a half million working families face a double whammy: a national insurance tax rise and a £1,000 per year universal credit cut which even the Government’s own analysis has said will have a catastrophic impact. So many of those who kept us going through the pandemic—the medical teams, the care workers, the shop workers, the cleaners, some of the lowest paid workers—will be paying more, but they are the ones who will benefit the least.

The Government have not listened to warnings or proposed alternatives for supporting social care, nor have they addressed the rising demand. Conservative Governments in the years prior to the pandemic have cut the social care budget by £8 billion. At present nearly 300,000 people are on local authority waiting lists for adult social care services in England because of the funding pressures and delays in assessments for social workers. Yet we heard absolutely nothing yesterday about the role of local government. It would be helpful if the Minister could say how much funding will be provided to support local government in delivering social care. She must understand that despite being on the front line, it is concerned that the NHS will absorb the extra money and that the social care allocation will be swallowed up by the cap costs.

The Association of Directors of Adult Social Services has said that a chronic shortage of care workers means that more than one in 10 people assessed as needing care in their own homes were instead offered care in residential facilities, often against their own wishes. This is a stark reminder of why we need the investment now. A well-thought-out plan would, as we have repeatedly said, involve a real reform of services that allows people who wish to do so to stay in their homes for longer. There is nothing in the Prime Minister’s Statement about how we use technology, how we improve home adaptations, how we build and adapt more lifetime homes and how we support care workers. Can the Minister tell us whether there has been any engagement with charities and campaigners who deal with these issues every day of their lives, with the national forum, with policy makers, with service users or with carers?

It is a huge frustration that the long-promised White Paper on reforming social care and integrating it with healthcare has again been kicked into the long grass. All Ministers have said is that it will be published later this year. Would it not have been logical—a response to this would be appreciated—to publish the White Paper, set a timetable to consult and then discuss and engage in order to provide a transformative plan that includes how we support an army of unpaid family carers, how we ensure that working-age adults with disabilities have more control over their lives and how we tackle the workforce crisis and support care workers? Instead, we have an unfair funding plan, no reforms and no guarantees.

None of us underestimates the scale of the challenge this issue presents in funding and providing the proper services the country needs. Unfortunately, the fear now is that in the Government’s rush, they have missed that opportunity to seize the real prize for the British people. There is a better way to do this.

[Lord Newby (LD)]

My Lords, according to the Prime Minister, the package of proposals in this Statement represents

“a project of our era equivalent to the creation of the NHS and the welfare state.”

How, then, do the proposals measure up to this challenging claim?

Taking the spending side first, the Statement covers three separate but related areas. First, there is the implementation, at last, of something like the Dilnot proposals for placing a cap on the contribution that individuals need to make towards their social care. This principle was legislated for by the coalition in 2014 and its implementation is long overdue. Secondly, the Government are making a major investment of about £10 billion per annum for the next three years in the NHS to deal with the backlog of elective procedures. Undoubtedly this is necessary, but not necessarily sufficient. Yesterday, the Prime Minister failed to give any assurances about the rate at which the backlog of procedures would be reduced. Can the Minister today give any further indication of timescale on this?

Thirdly, the Government claim to be making more resources available to state-funded social care beyond Dilnot. This is arguably the most pressing problem of all, with 112,000 vacancies, massive staff turnover rates and providers teetering on the edge of financial viability. Sadly, the Statement was almost silent on the substance. Instead, all details about the future of social care are yet again pushed back into the long-promised White Paper, for which no publication date has been set, as the noble Baroness pointed out. Can the Minister confirm that there will be no immediate increase at all in funds available for social care, not a penny? If so, how does she expect care homes and domiciliary care providers to survive over the coming months? Over the whole three-year period covered by the Statement, exactly how much additional central government funding will flow into adult social care provision unrelated to the Dilnot reforms, bearing in mind that the current annual cash shortfall is somewhere in the range of £6 billion to £14 billion?

After the first three years, the proceeds of the levy are supposed to go increasingly towards social care. However, given that, on the basis of previous experience, overall NHS spending in future is likely to be greater than that currently budgeted for, there will undoubtedly be pressure for this additional level of NHS funding to continue, even after the pandemic catch-up is more or less complete. What assurance can the Government give that over the medium term, the bulk of the revenue raised by the levy will go to social care, as promised? When later this year does the Minister expect the White Paper to be produced? We have heard so many assurances that it is almost here, nearly here or will soon be here. We are a bit sceptical.

The Government document states that they want to

“make care work a more rewarding vocation”.

How will these announcements allow care providers and local authorities to increase the wages of the many thousands of care workers stuck on zero-hours contracts and the minimum wage? Do the Government really believe that offering a few training courses will solve the recruitment and retention problem in this sector? The Government say that they will

“ensure that the 5.4 million unpaid carers have the support and respite that they need”.

How much additional funding over the next three years will now be available to fulfil this promise?

The Government say that they will move towards equalising the amount paid by self-funders and those funded by local authorities. Do they plan to do this by reducing the amount paid by self-funders or by increasing the amount paid by local authorities? If it is the latter, where will the money come from?

I turn to the new hypothecated health and social care levy. Many people are indignant that a major manifesto promise has been broken, but why are they surprised? For this Prime Minister, a promise is not a binding commitment; it is simply a holding position, until it becomes easier to do something else. More surprising than a broken promise is that the Treasury has agreed to introduce a hypothecated tax—something that it normally never countenances, because of all the inflexibilities that it brings. Why has a new, unprecedented, hypothecated tax been introduced here? The obvious reason is that the Government know that they will have ever-growing demands for future spending in health and social care, for which tax rises will be required, and they see this tax as a vehicle for doing that in future. Can the noble Baroness confirm that, for this Parliament at least, there will be no more increases in the levy?

All in all, does this Statement amount—as the Prime Minister claims—to the equivalent for our age as the creation of the NHS and the welfare state? For those trying to run a care home, act as an unpaid carer or subsist on a minimum income, such a boast will ring hollow. Beveridge, Attlee and Bevan must be turning in their graves.

[The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)]

I thank the noble Lord and the noble Baroness for their comments, but I am slightly surprised that they have not welcomed our announcement of a new £36 billion package to help tackle NHS backlogs, reform adult social care and bring the health and social care system together on a long-term, sustainable footing. That is a hugely significant amount of money to help our precious NHS and to solve a problem that all across this House have acknowledged for many years.

We have indeed held many discussions throughout the year with leading members of the sector, specifically on reform, and will of course continue to do so. We have committed to spending an additional £5.6 billion on social care in England, across the next three years. As the noble Baroness rightly says, the deferred payments agreement remains in existence to enable people to use the value of their home, if they need to, without selling it. Both the noble Baroness and the noble Lord asked why this involves national insurance. To raise the sums needed for this significant investment in the NHS and to reform social care, only a broad-based tax, such as VAT, income tax or NICs, is able to do so. NICs already ring-fences funds for the NHS and successive Governments have increased it, so there is precedent for our belief that this is the best and fairest way.

The noble Lord is absolutely right: the levy will be ring-fenced for health and social care. HMRC will send funds to the health bodies in all four nations of the UK and, by 2023, to social care funding bodies, such as MHCLG, which will deliver it through local authorities. As I say, part of the reason for using NICs is that the more you earn, the more you pay. I am sure noble Lords are aware that a typical base-rate taxpayer, earning £24,100, will contribute roughly £180 a year, whereas a typical higher-rate taxpayer, earning £67,100, will contribute £715 a year. The highest-earning 14% of people will pay around half the revenues. The 6.2 million lowest earners will be kept out of the levy. The use of NICs also means that the cost of the levy will be shared between individuals and businesses; however, 40% of all businesses will pay nothing extra.

The noble Lord asked about tackling the backlog in the NHS. We will spend £2 billion this year, which is double our previous commitment to tackle the backlog. In addition, we plan to spend more than £8 billion in the following three years, from 2022-23 to 2024-25. On the waiting list, we do not know how many people who did not come forward for help from the NHS during the pandemic will now seek treatment, so plucking numbers out of the air about the size of the waiting list is not helpful. But I can certainly assure both the noble Lord and the noble Baroness that the funding announced will deliver 9 million more checks, scans and procedures until 2024-25. This is a significant investment and, over the next three years, will be the biggest catch-up programme in NHS history.

The noble Baroness asked about local government. She is aware that, in 2021-22, we have provided councils with access to over £1 billion of additional funding for social care, on top of the significant funding provided to help the sector. In the spending review, we are also committed to ensuring that local authorities have access to sustainable funding for core budgets. This announcement includes funding to enable local authorities to move towards paying providers a fair rate for care, which should drive up the quality of adult social care services, improve workforce conditions and increase investment. The funding package covers the costs to local government of implementing the charging reforms, including the cap, the increased capital limit moving towards paying a fair rate for care, which I just mentioned, and associated implementation costs.

The noble Lord asked about self-funders. As he knows, under the current system, individuals who fund their care often pay more than individuals who are funded through their local authority for equivalent care. Under this new system, self-funders will have a choice to ask their local authority to commission their care on their behalf, which means that individuals fully funding their own care could choose to benefit from the market power of local authorities. We will be publishing a consultation document on the details of these proposals next month.

On other issues, we are investing more in supported housing and exploring other innovative housing solutions to support more people to live independently, as the noble Baroness said. As part of the additional £5.4 billion of investment announced, we will fund an extension to the established disabled facilities grant to enable more people to live independently in their own homes.

On the integration work, the House will be looking at the Health and Care Bill shortly, before Christmas, when it begins its passage through this House. That is laying the groundwork for reform, and we will see an improved oversight of how social care is commissioned and delivered. It will facilitate a greater integration between health and care services, on which these reforms build. As we have said, we will work further with the sector and more broadly to coproduce a comprehensive national plan for supporting and enabling integration between health and social care, but I am afraid that I cannot go any further than saying that the White Paper will be published later this year.

Finally, the social care workforce has worked incredibly during this pandemic. Our investment of £500 million across three years will deliver new qualifications, progression pathways and well-being and mental health support, which is critical. We will continue to support the fantastic 5.4 million carers to have the support, advice and respite they need.