Care Bill [HL]

Lord Warner Excerpts

Monday 22nd July 2013 Lords Chamber

[Lord Patel of Bradford]

My Lords, I shall also speak to Amendment 92AZ. I welcome the aspects of the Bill that are aimed at securing the sustainability of the social care sector and social care provision. It is particularly important to put measures in place setting out the action to be taken to protect people from the negative impacts of business failure in adult social care. However, I have some concerns about the key clauses that relate to provider failure and market oversight. I refer specifically to Clauses 47 to 54, which specify the criteria for the application of market oversight, determine whether criteria apply to a care provider and cover the assessment of financial sustainability of care providers.

Amendment 92AY focuses on the financial regulation of providers. The Bill currently allocates to the Care Quality Commission responsibility for maintaining quality care services, mitigating risk to business sustainability and ensuring continuity of care for any person who receives care services. These steps will include obtaining regular financial and relevant performance information, working with the provider to develop a sustainability plan to manage any risk to the organisation’s ongoing sustainability, using powers to commission an independent business review to help the provider to return to financial stability and requiring information from the provider to enable the CQC to support local authorities to manage provider failure.

I concur with the view that all providers of care and support services should be subject to thorough financial checks which may indicate that a care organisation might be unable to fulfil its obligations as a provider of services in the future. However, plans to allocate responsibility for financial regulation to the CQC appear to be poorly thought through and Monitor, as the current financial regulator for health services, should assume this role. The pressures facing the CQC as part of its expanded remit for regulating quality across the health and social care sectors have already been eloquently highlighted in previous debates on this Bill by many noble Lords, including the noble Lord, Lord Sutherland, and my noble friends Lord Hunt and Lord Campbell-Savours.

We are all aware that the CQC is undergoing significant structural change and it does not have the capacity and organisational expertise to take on responsibility for assessing the financial stability of care providers. This is being proposed because of the belief that service users would benefit from having a single regulator, specifically the CQC, to oversee care and support services and provide an overall assessment of performance, combining quality and financial data. I am also aware that the Francis report highlighted the importance of simplifying the quality and financial regulation regime for health providers to eradicate overlap and minimise the gaps between the functions of the different organisations and regulators. This included changes to the current division of regulatory responsibilities between Monitor and the Care Quality Commission.

However, the noble Lord, Lord Sutherland, in a previous debate, specifically highlighted the key concerns—which I share—about giving the CQC additional responsibilities for financial assessment. He stated, and I agree, that the CQC is not prepared for these additional responsibilities. I would question whether it has the specialist staff, skills, experience and, most importantly, expertise required to decide whether care providers have financial sustainability.

Alongside all the other demands it faces, the CQC will also be pressured into developing a rushed financial accountability system, without proper consultation and checks and balances. These additional responsibilities for financial regulation place added pressure on an organisation that is already undergoing significant change and faces a greatly increased workload as part of its expanded duties for quality assurance. The development of a poor-quality financial accountability system will only affect its credibility further and I therefore question the rationale for designating the CQC as a financial regulator for the care and support sector.

In fact, under the Health and Social Care Act 2012, Monitor became the economic regulator to promote effective and efficient providers of health and care, promote competition, regulate prices and safeguard the continuity of services. Monitor can license providers, work with NHS England to set prices for NHS-funded services, prevent anti-competitive behaviour and work with commissioners to ensure continuity of services when providers get into financial difficulty. I would therefore argue that Monitor already has its own robust financial oversight regime for healthcare providers that can be adapted and applied to the social care sector; and the Government should use these existing powers as a means to effectively regulate the sector in the future. My amendment to Clause 52, on the assessment of financial sustainability of care providers, simply replaces the CQC with Monitor. I hope that the noble Earl will agree that this is a sensible and helpful amendment.

I now turn to Amendment 92AZ on the accountability of commissioners. As many noble Lords have commented throughout the Committee stage, the focus in the Bill on greater integration between health and social care services is to be welcomed. As services between health and social care become more integrated, it is essential that the plans of local authorities face the same levels of scrutiny as clinical commissioning groups and have clear lines of local and national accountability.

However, there is at present no effective regime in place to oversee and monitor the standard of local authorities’ commissioning of care and support services. The annual performance assessments previously undertaken by the Care Quality Commission to evaluate the quality of councils’ commissioning of adult social care services were scrapped in 2010. Of course, the Minister may argue that the scrutiny of commissioning plans is now covered under the provisions of the Health and Social Care Act 2012 and that additional oversight is not therefore required.

I know that that Act contains a number of duties that focus on aligning the plans of clinical commissioning groups and health and well-being boards to ensure that clinical commissioning groups take into account the joint strategic needs assessments when preparing their commissioning plans. Equally, I am also aware that health and well-being boards are expected to have a key role in bringing together local authorities, clinical commissioning groups and local Healthwatch to assess the health and care needs of local populations through joint strategic needs assessments and joint health and well-being strategies.

However, recent cases such as those at Winterbourne View and Southern Cross have demonstrated the devastating impact on vulnerable people when commissioners, commissioning systems and processes are found wanting. Winterbourne View was set up as an assessment, treatment and rehabilitation centre for people with learning disabilities and autism, but the review into Winterbourne View found that it had “strayed far” from this purpose and stated that the commissioners, as well as the owners, Castlebeck, were to blame for this. The primary care trust commissioners who placed people at Winterbourne View did not set performance targets for the company or effectively check the progress of patients, despite being charged an average of £3,500 a week for places. Their reviews were clearly flawed, completely ineffective and did not bring to light either concerns about the quality of assessment and treatment or the detail of abusive practices. Strategic health authorities also did not effectively performance-manage primary care trusts in their commissioning of placements for this client group. The review concluded that closed establishments such as Winterbourne View would benefit from a more prescriptive approach. This includes far more effective planning processes, and performance management and monitoring systems by commissioners.

That is why I am proposing a new clause that focuses on the accountability of commissioning organisations that would give NHS England a duty to scrutinise the commissioning plans of local authorities for adult social care services to ensure that they are upholding the safety and care of vulnerable people, and the efficient and effective operation of a market. Equally, notwithstanding my previous comments, I would be content if the noble Earl thought that the CQC rather than NHS England would be able to provide that scrutiny. I beg to move.

[Lord Warner]

My Lords, I intervene briefly to make a couple of observations and put a question to the Minister on this set of amendments. I must confess that I am not thrilled by the idea of NHS England being asked to supervise the commissioning of local authorities. I think that it may struggle to supervise the commissioning of 211 clinical commissioning groups, or however many we have this week, without our turning it loose on 152 local authorities as well. There must be some doubts about whether it is the right body to supervise local authority commissioning.

My noble friend Lord Patel of Bradford makes a very fair point in asking where we will get some sort of overview of the quality of local authority commissioning. It may not be NHS England, but we could perhaps have some idea of the Government’s thinking on how they will be satisfied that the commissioning is of a reasonable standard across 152 local authorities. If the Minister could tell us this evening which quality assurance mechanism the Government have in mind, that would be a useful insight.

The other point was about whether it should be Monitor rather than the CQC. This is an area where I have struggled quite a lot, because I think that there is a problem with what is going on with the financing of adult social care. Who actually bankrolls the providers in this sector? I question whether, without a lot more expertise, either Monitor or CQC are well placed to penetrate some of the private equity models of financing adult social care provision. These models are being brought in almost as we speak.

The financial complexities of this sector are very considerable. The providers of residential and nursing home care within the adult social care sector have moved on a long way since my days in local government as a director of social services. People are assembling packages of money to buy groups of homes, and they put groups of homes together in what is often basically a hedge fund or private equity-type process, essentially consolidating providers in this sector. The days of mom and pop homes seem to be passing quite quickly, as the sector tries to secure greater financial capability to respond to the buffets of a market system.

In this extraordinarily complicated market, it is not clear to me how the Government will equip any regulator—or help it equip itself—to secure the expertise to actually raise the money to buy and merge groups of residential and nursing home providers. It is not a very transparent system. Either CQC or Monitor will require a lot of expertise. It will have to go into territory into which few of us are equipped to go, and find out what is actually going on, if we are not to have another Southern Cross experience.

I suggest that the risks of that happening again are becoming greater as the funding systems for these organisations become less transparent. They are not publicly quoted companies, and in many cases they are hidden behind a rather mysterious cloak of financial allocations. Without making adverse comments, I suggest we look at what happened with Four Seasons, which was taken over by Terra Firma. Where are the loyalties? Are the loyalties of that organisation to the people receiving care, or are they to the people who are creating the funds for the purchase of that organisation? I would like some reassurance that CQC or Monitor—I do not feel strongly doctrinal, one way or the other—will have the expertise to penetrate some of these rather opaque organisations that are now involved in funding providers in this sector.

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[Earl Howe]

My noble and learned friend is, of course, right. That goes back to a question posed in an earlier group by the noble Baroness, Lady Wheeler, about what the definition is of business failure. We propose to define in regulations circumstances in which a provider can be deemed to have failed. Those circumstances may include a situation in which a provider is struggling to service its debts as they fall due or has breached its financial covenants under loan agreements, or an administrator, liquidator or receiver has been appointed—which is a clear-cut case of failure. As I said, this will be defined in regulations because we want to capture these various different scenarios where a business can be deemed to have failed. We will, of course, consult on the regulations before they are laid. No doubt what I have just said will be refined and augmented during that process.

[Lord Warner]

The Minister mentioned that the Government will look very closely at some of these ownership issues and their opacity. Will he be willing to look at some of the other sectors which have been regulated? I would cite water and the electricity and gas industries, where we are already seeing the emergence of a clear conflict between the rights and needs of shareholders and those of consumers. There are lessons to be learnt from these other sectors, which now have a lot of experience of regulators trying to hold the balance between those who invest and those who are receiving the services from the providers of those services. Consolidation has also taken place in those industries, particularly in the energy sectors.

In this sector, we are seeing the early stages of consolidation, which is moving apace. Given the vulnerabilities of the people who live in these homes, it is conceivable that some ownership patterns could simply not be acceptable in this particular sector because of the high risk that they pose for the users of the services. Will the Government look at those other sectors and at that issue as they start to consider this? I am the last person to want to stop new entrants coming into a market, but Southern Cross was a wake-up call for us. We have to see whether certain ownership patterns have too much of a conflict of interest between the investor and the user of the services for us to be able to be comfortable that they could ever deliver the bacon in a satisfactory way.

[Earl Howe]

The noble Lord is absolutely right. We are entirely open to looking at the lessons to be drawn from other sectors and the regulators of other sectors. I am sure that important messages will come from such sectors of the kind the noble Lord describes—no doubt not just the energy and water sectors but others, too.

I will move on to the question of whether there should be central oversight of local authority commissioning practices. I wholeheartedly agree with many of the arguments that have been expressed this evening. Commissioning practices which risk undermining personal dignity and lowering quality are simply not acceptable. That is why Clause 5 of the Bill introduces a duty on local authorities to shape high-quality, diverse and sustainable markets in care and support services. Clause 5(4) requires local authorities to have regard to this duty when commissioning services. As I said when the Committee discussed Clause 5, we are aware that there are examples of poor commissioning practice across the country. We need to move away from overly prescriptive commissioning that focuses only on price or time slots, to consider how it can do things differently and deliver better outcomes in quality care.

In relation to the option of central oversight of local authority commissioning that the noble Lord, Lord Patel of Bradford, suggested, the Bill leaves open the possibility of the CQC conducting reviews of local authority commissioning. However, by enabling the CQC to review local authority commissioning, if it is prescribed in regulations, the Bill gives us the opportunity to discuss this option further. In particular, we are considering whether the new chief inspector, who will work with local authorities that commission care and support, should have a formal role in assuring the performance of those authorities, building on the strength of the current programme of improvement activity and peer assurance led by councils.

I emphasise at this stage that if there is to be central oversight of commissioning, the CQC, as a consequence of its links with the chief inspector and its existing relationships with, and expertise in, the social care sector, will be the most appropriate body to undertake this function. Although we have not closed our minds to the option of central oversight of local authority commissioning, the fundamental problems underlying poor commissioning practices are cultural and structural. Central oversight on its own will not necessarily tackle these issues.

The noble Lord, Lord Warner, asked how we could be satisfied that local authorities’ commissioning will be of a suitable quality. It goes without saying that it is for local authorities to decide the most appropriate way for them to fulfil their duty of commissioning and of shaping local markets, responding to local needs and circumstances. They will be accountable locally for those decisions. However, we are working with local authorities to support them to develop their capacity to shape local markets. We launched a programme of support last year and intend to continue working with local authorities to improve commissioning practices. We are committed to working with the sector to support local authorities to shape diverse and high-quality markets, including through improving commissioning practices, through the recently announced homecare challenge and through a programme to support the authorities in their market-shaping capacity.

In conclusion, I fully understand and sympathise with the issues raised by the two amendments. However, I hope that I have been able to shed some light on why the Government have come to their view on the issues. In so doing, I hope that I have provided a measure of reassurance to the noble Lord, Lord Patel of Bradford.

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[Lord Adebowale]

My Lords, I support Amendments 92B, 92C and 92D, which are also in the names of the noble Baroness, Lady Pitkeathley, and the noble Lord, Lord Patel, who have spoken eloquently on this matter. I declare an interest as the chief executive of Turning Point, which provides health and social care to many young people in the process of transition. I know, as we all do, that transition can be a very delicate process if not done well. Young people slip through the net between children’s and adult services and begin their adult lives without adequate care and support, which risks deterioration of physical and mental health, and the escalation of need to the point of crisis. That is both immoral and expensive.

The Bill goes a long way to improve the current situation. I am pleased to hear that Ministers informed the House during an earlier session that discussions between the Department of Health and the Department for Education about the links referred to between this Bill and the Children and Families Bill are already taking place. These transition amendments offer an opportunity for us to go further—it is quite rare for a Bill to offer an opportunity to do something quite brilliant for young people—and to ensure that all young people receive support under other legislation. That support is likely to continue after young people reach 18 and they will receive an offer of a needs assessment from their local authority. Importantly, this process will begin in good time.

This includes those young people—or their families and carers, as has already been mentioned—who have not themselves requested an assessment. It is an important addition to recognise that there may be cases, as mentioned by the noble Baroness, Lady Tyler, where a family just does not realise that they need to request an assessment. Good transition is about helping to ensure that local authorities are better prepared to meet the needs of young people. If assessments can be conducted earlier, so long as this is what young people and their families want, care and support can be in place sooner, and there is less risk of people’s needs escalating to the point of crisis.

I hope that the Minister will agree that the assessment process needs to begin in good time, and that he can assure the House that those who do not themselves request an assessment will also be able to benefit from the improvements that this Bill offers.

[Lord Warner]

My Lords, I will make two quick points, the hour being late. The Government need to look again at the way this Bill works with the Children and Families Bill. These arrangements look clunky for those moving from childhood into adulthood. The real problem is that this Bill does not seem to work on the basis that many, if not most, of these children will be known to the same local authority. Why, then, is this Bill framed as though they are strangers coming into the system, in which the local authority is permitted to involve them? The local authority should have an obligation to make seamless the move from childhood to adult services. The Bill does not really deliver that. The Government need to look again at that transition point, and reconcile the Children and Families Bill and the Care Bill, because they do not work together as well as they might.