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Care Services: Older Adults and Disabled People

My Lords, first, I should declare a couple of interests as president of SOLLA, the Society of Later Life Advisors, and as a member of the editorial panel of the study into decumulation—sorry about that word—being carried out by AIFA, the Association of Independent Financial Advisers. This debate, so admirably introduced by the noble Baroness, Lady Fookes, is timed just as we celebrate—I suppose that that is the right word—the 10th anniversary of the royal commission on long-term care of the elderly chaired by the noble Lord, Lord Sutherland of Houndwood, to which the noble Lord, Lord Joffe, and I signed what was in effect a minority report. Pretty well everyone who commentates on this field believes that we need to move on from that royal commission, which palpably did not lead to the introduction of a permanent solution to the problem. By all means let us move on, but there is one thing which it is not possible to move on from. That is the dilemma that in the end prompted the noble Lord, Lord Joffe, and me to write our minority report: there is a limit to the amount of money that government—society—are willing to devote to the care of elderly people. Within that limit, we face and always will face a choice. We can spend money on paying for services which, at the moment, better off people have to pay for themselves, or we can spend that money on better services, more care, more help for carers, smarter housing for people living in their own homes and better care homes—all are services that people need. I am afraid that in the real world we cannot do both. In Scotland—the noble Lord, Lord Sutherland, may talk about this—they have tried to defy this logic by introducing free care. The consequence, besides runaway costs, has been the severe rationing of services. South of the border, we await the Green Paper—my God, we may have climate change but spring gets later and later in Whitehall. I meant to say that as we await the spring White Paper, the situation is not much better. Ministers, led by the Prime Minister, have canvassed radical reform of the care system for all the good reasons set out by the noble Baroness, Lady Fookes. Charities for the elderly are demanding that more be done to help with the costs of long-term care. I give an example. The Joseph Rowntree Foundation, which has done some very useful work in this field, puts forward four possibilities for a partial reform: equity release, higher capital limits for care home fees, higher personal allowances for care home residents—which of course I particularly support—and free personal care for people needing nursing care. The foundation says that even in the present climate, these provisions can be afforded. Well, they cost £800 million, so it obviously has a different view of what the present climate is like than I do. The landscape of "realityland" is very different. The last public expenditure plans provided for an increase in spending in this field for elderly people of just 1 per cent a year on social care. That 1 per cent is dwarfed by the costs implicit in the ageing of the population. Local authorities, as CSCI among others has pointed out, are having to cut home care for all but the most severely disabled older people. This actually means that the less severely disabled will deteriorate and have to go into homes rather than be cared for at home, all in the interests of short-term economy—that is a disaster—and that 1 per cent was before the credit crunch. Now, thanks to the crunch, the Government are borrowing billions to bail out banks, and the interest on those billions will have to be paid when the recession is over. It we turn from the social pages of the newspapers to the economic pages, we see a complete consensus that public spending is going to be subject to an eye-watering squeeze. No one wants to cut health or education, but in these circumstances and in my judgment, the chance of the Government funding a major new programme of spending on social care is not high. We must use the public money we have to better effect—that is pretty obvious—but in this bleak landscape, many of the hopes voiced by the noble Baroness and which will be voiced by others in the debate are only hopes. I have one other positive proposal. There will not be a lot more public money. It follows, therefore, that if we are to make headway, we must look at the potential contribution from the private sector: something that has been almost entirely neglected. One example is the role of equity release. Despite the recent weakness in house prices, most people retain substantial equity in their homes. This is particularly true of elderly people who often bought their homes years ago when prices were low. Equity release enables them to access this asset to pay for care. Some very good work is being done in this field by the Safe Home Income Plans organisation, which will be published shortly. It is a way in which people can pay for care of all kinds, whether it is care at home or care in care homes. Another is the development of private insurance for care costs. This has been terribly in the doldrums for reasons that I do not have time to go into, but backed by Ministers and if certain tax problems were sorted out, it could play a real role in taking from people the worry of how they are going to pay for their care if they need it. This is for better off people, it is true, but it is they who have to pay under the present system. Wearing my SOLLA hat, we are all used to councils advising people what to do, but neither they, nor social workers, have a monopoly of wisdom. SOLLA is designed to increase the skills of independent financial advisers who choose to work with the elderly, get to know what they really need and give them advice. Often, that is what they need most because it is such a bewildering landscape and good advice is priceless. Private provision of this kind is not a substitute for public provision, even though I fear that public provision will become more of a safety net. The SOLLA report said as much. It said that we have to plan for public expenditure on the basis that it will be a safety net and not a duty of local authorities. It will not be a substitute, but it can be a useful supplement, particularly for the better off who should pay for their care from their own resources and not from the limited resources of the state and the taxpayer.