Funding of Care and Support

Lord Warner Excerpts

Thursday 24th November 2011 Lords Chamber

[Lord Warner]

My Lords, I, too, congratulate my noble friend Lady Pitkeathley on securing this debate and on her excellent speech, after which I felt that I should like to make her an honorary member of the Dilnot commission. I also pay tribute to the coalition for setting it up. I declare my interest as a member of that commission, which was so ably chaired by Andrew Dilnot.

I do not have time this afternoon to go through all the issues that were raised in the commission’s report; I want to concentrate on a few key issues. First, I emphasise that we formulated our recommendations only after an exhaustive consultation with a very wide range of interests, encompassing commissioners and funders of care, providers across the different sectors, the financial services sector, carers and many others with experience and expertise in this area. These groups were united in the view that the system of funding long-term care needed urgent reform on a sustainable basis that had cross-party political support. This issue will require the leaders of the three parties to oversee a political concordat on a solution. It must not just be left to the health teams to sort out, particularly since, if I may say so, some of the current health-post occupants have form on this issue.

The other thing that was clear from our work was that, however much some people still hanker after a wholly tax-funded solution to the issue of funding, there is now widespread recognition that we must move forward on the basis of a partnership between the state and the private citizen in funding adult social care but—and it is a big “but”—with the state covering the cost for the poorest groups and those incurring high, unpredictable costs at the end of their lives. Only through a partnership of this kind will a sustainable system of mixed funding sources be built and new financial services products developed. The commission has created a wide measure of public agreement on this vexed issue, as the reception of our report on publication has demonstrated. I hope that the elected political class will not casually waste the consensus that has been created.

If I may put it as bluntly as this, the funding system for social care is bust. Despite the additional £2 billion announced by the Government in the previous spending review, for which they deserve huge credit, the King’s Fund estimates that there will be a funding gap of at least £1.2 billion by 2014. Despite their best efforts, local authorities are having to continue to tighten eligibility criteria and face more legal challenges for doing so.

We are seeing a growing number of reports of poor care of elderly people at home, in care homes and in hospitals. Too many of the staff undertaking this care are poorly trained, poorly paid and poorly supervised. A shrinking social care funding pot will inevitably produce more scandals and load pressure on expensive and inappropriate NHS in-patient care. That is the stark reality that we face as a country.

We have to start the process of increasing the size of the adult social care funding pot as a matter of urgency. This cannot all be done by implementing the Dilnot proposals but they are critical to showing commitment to building a more sustainable funding solution. If I may say so to the Government—I make this as a helpful contribution—there is nothing to stop them taking powers in the Health and Social Care Bill to implement Dilnot by regulations subject to affirmative resolution procedure. In the spirit of helpfulness for which I am famed, I have put down an amendment on these lines to test their appetite for a bit of decisive government. They could still complete their consultation on the details to be covered in regulations and the timing and cost of implementation. I suggest that this would give a clear signal to the sector and the public that change and improvement are going to happen.

I recognise that in this difficult financial climate the Government face difficult financial choices. I am sure the Minister will say that even just another 0.25 per cent of GDP—that is the cost of the Dilnot proposals at £1.7 billion—is difficult to find. However, it would be unlikely that all these costs would be incurred in one go, or immediately. I make another constructive suggestion. The Government could implement the proposals in stages of their own choosing. They could halve the cost by raising the cap to something like £65,000 rather than £35,000. I, for one, would be sympathetic to moving in that direction just to establish the principle of the cap, as my noble friend Lord Lipsey said.

While I am in radical mode, I bring one of the Health Secretary’s favourite subjects to the House’s attention—the so-called death tax. The reality is that many people in my generation have seen a remarkable increase in the value of our housing assets. Some would see these as windfall profits. There is no reason why some of those assets should not be collected after death to pay for care. Indeed, as we said in our report, some local authorities already do this but do not charge interest on the effective loan of the care costs. Why do the Government not accept our proposal to have a national scheme to allow more people to meet care costs from their estate if the property value is sufficient and up to a capped limit, and let local authorities charge interest at an agreed national rate? If we have a state student loan scheme, why cannot we have a state long-term care loan scheme? On that constructive note, I end by saying that if we do nothing about this, as the King’s Fund has shown, the cost of the current inadequate scheme for public funding of adult social care will rise from £6.7 billion in 2011 to £12.1 billion in 2026. That is a pretty expensive way of doing nothing.