Social Care

Lord Shipley Excerpts

Thursday 29th November 2012 Lords Chamber

[Lord Shipley]

My Lords, I thank the noble Baroness, Lady Pitkeathley, for initiating this debate and declare my interest as a vice-president of the Local Government Association. My contribution will amount to a plea for urgent clarity in the future funding of adult social care. Time is short, given the enormous pressures on local authority budgets, where the cuts in central government grant amount to 28% overall in the four years up to 2014-15 but which in their implementation have impacted most heavily on the poorer parts of the country, where demand for publicly funded social care can be very high.

It has been generally agreed for some time that social care reform is essential. From the perspective of elderly people, local government, central government, the NHS, the voluntary sector and care providers, clear policy decisions are necessary to enable planning to take place and responsibilities to be agreed that will stand the test of time. Without that clarity, councils risk running out of money. That is a very serious matter, so I hope that the reports published yesterday that work is concluding on the recommendations of the Dilnot report prove to be true.

However, this is not just about Dilnot. There is a financial vacuum which needs to be overcome, of course, but it is not just about affordability. Government policy needs to be agreed as a crucial building block for allocating financial responsibilities. Policy-making affects individuals needing support; councils trying to cope with rising demand and reducing budgets; central government trying to cope with having less money to distribute; voluntary groups trying to plan and deliver services; the NHS trying to control its costs; and care home providers trying to maintain both capacity and standards of care.

From the perspective of local government, by 2019-20 there will be a funding gap of £16.5 billion—or 29%—between the revenue available and the spending pressures forecast. Assuming that social care is funded as now and that other essential statutory requirements are met by councils, there will be cuts of two-thirds in cash terms to all local government services other than social care. If concessionary fares are also fully funded and capital financing charges are met, 90% of current spending on other services will disappear. I believe this to be simply undeliverable for those other services include leisure, libraries and transport, all of which play a major role in the lives of elderly people and their health and well-being.

From the perspective of central government, net public spending on social care and continuing healthcare for older people will rise from £9 billion in 2010 to £13 billion in the early 2020s if current demand and spending assumptions apply—a rise of a little under 50%. There is actually a current funding gap, which has in practice been papered over through temporary financial solutions. The imperative of a long-term solution commanding all-party support has become overwhelming. Dilnot has been estimated to cost £2 billion. Current suggestions are that the cost will prove to be higher and require a higher cap. All this tells us that there is a very serious financial problem. I hope that the Minister will be able to say a little more about how the Government plan to address this funding problem and, in particular, what might be done in the very short term given that the focus of cuts is at the moment being applied to the poorer parts of the country.

We should remember that older people are a massive asset to their communities. They may become recipients of care but they are for many years essential providers of help and support to neighbours, families and friends, saving substantial sums of public money through their voluntary action. Implementing Dilnot would give many of them, and their families, peace of mind and confidence in their financial planning. It would also give the Government greater certainty about how to manage a 60% forecast growth in the number of over-75s within the next 20 years.

Perhaps I may draw your Lordships’ attention to the perspective of care home providers. Providers are claiming that there is now a funding gap of approaching £1 billion between the cost of providing quality care and the amounts paid to them by councils. Indeed, it is claimed that the average residential care home fee paid by councils does not meet the essential standards of the Care Quality Commission. If this is true, there needs to be an urgent review of why and what can be done because one of the consequences of inaction is a risk of more hospitalisations. We should note that fewer older people are now getting care, with a reduction from 1.2 million to 1.06 million in the past three years, which in itself may increase the numbers entering hospital directly. Yet we know that investment in prevention and in the voluntary sector saves money for the NHS. We also know that delayed transfers from hospitals are estimated to cost the NHS £200 million a year, which pooled budgeting might reduce.

While the Caring for our Future White Paper is in principle welcome, unless answers to Dilnot and related funding problems are given speedily there is a danger that councils will cut spending on social care, reducing levels of support to “critical only” and reducing fee payments in real terms to providers. Some older people who are not able to afford extra costs might then have to be looked after by the NHS. The long-term costs to the NHS of this could be substantial, which is why we need so urgently an agreed funding system for care.

In conclusion, we spend £121 billion on health and social care. I feel certain that the King’s Fund is right when it says that budgets should be pooled locally, with a single strategic assessment of the funding needs of the NHS and social care. It is vital that health and well-being boards should work well because they will drive the integration of adult care and health, which should in turn generate some efficiency savings to be redirected into service provision. It is vital that spending on prevention gets protected because in the end that is better for the individual but cheaper, too, for the public purse. Above all, it is vital that we get clarity in implementing Dilnot as the first step in building a system of adult social care that is sustainable into the future.

Much of this is about the medium to longer term but there is a massive problem now in some parts of the country. Over the past two years, I understand that the NHS has sent back to the Treasury some £3 billion. If that is the case, might the Government return that to health and well-being boards to enable them to find local solutions to their specific funding problems and for those parts of the country suffering the biggest cuts to get further support to reduce their impact?