---

Personal Care at Home Bill

My Lords, it is quite clear from everything we have heard today that, rather like one of those trick diagrams where one sees either a pair of human profiles or, alternatively, the outline of two candlesticks, this is a Bill which can be viewed and appreciated from a number of different angles. One of those angles is that which the Government invite us to adopt as we consider the Bill’s proposals, and I would be hard put to disagree that the perspective of the noble Baroness, Lady Thornton, is a natural starting point in this area of policy. Like other noble Lords, I do not think that anyone could cavil at the principle of enabling people living at home who have critical personal care needs to receive such care free. It is a laudable aspiration. It is equally laudable to try to devise ways in which those who need personal care can avoid having to go into residential care, or at the least can delay doing so. Who among us, especially those of us with elderly relatives of our own, could take issue with that aim? I begin by commending the Government on their worthy instincts. It will however be clear to the Minister that the Bill represents something rather more complicated. The Government have taken 12 years to reach this point. The Royal Commission on Long-Term Care for the Elderly, under the able chairmanship of the noble Lord, Lord Sutherland, contained some extremely valuable analysis of demographic trends and their implications for social-care delivery, and a great deal of the commission’s thinking is relevant to our deliberations today. However, one of the things that the Government took away from that report was the conclusion reached by a minority of the commissioners that free personal care for all was not an idea that was either practicable or, in terms of its net benefits, politically defensible. The Green Paper published last year restated that conclusion on the back of some home truths. The first home truth is that the current system of social-care funding is under considerable strain. If nothing is done, it will come under progressively greater strain as we move into the future as a consequence of demographic trends. Over the next 20 years we are going to see the proportion of the working population diminish in relation to the number of people of retirement age. To fund personal care solely from taxation would inevitably mean placing an increasing financial burden on those people who are working. The problem with that is not just one of affordability but also one of fairness. A fully tax-funded system would entail a shift of resources from the young, who have relatively fewer means at their disposal, to the old, who have accumulated wealth over a lifetime. It was not surprising, therefore, that the Green Paper explicitly ruled out a wholly tax-funded system and proposed instead a number of options resting in one form or another on co-payment. The paper states: ""We think that the Partnership option should be the foundation of the new system"." The Bill before us has been heralded as one of the building blocks of that new system, yet its proposals, as we have heard from so many noble Lords, run completely counter to the partnership option. What on earth can account for that? Neither in the Prime Minister’s speech at the Labour Party conference nor at any time since have we had an explanation as to why the Green Paper’s carefully formulated arguments, based in essence on principles of social justice, should have been ignored in a Bill that is meant to represent the very first step along the road to comprehensive social care reform. It is not as if those wider principles of fairness magically disappear. If we look at those older people whom this Bill will benefit, we see that no fewer than half are currently paying for social care, either in part or in full from their own pockets; in other words, people who by definition are not in the poorest bracket of society. Given that the windfall that those people will receive is in large measure to be funded out of general taxation, we are looking, exactly as the Green Paper said, at a large slug of public money going into the pockets of those with means at their disposal. At a time when public funds are under serious strain, it is hard to see the social justice in that. It is equally hard to see the justice in the discrimination which underlies the Bill. One group of people with critical care needs who happen to be living at home will benefit; those whose needs are equal if not even greater, but who happen to be in residential care, will not. The Government go to some lengths to justify this distinction, but, in truth, their explanations sound pretty hollow. If it is compassion and people's level of need which have motivated the Government to act in the way that they have, why have they not tried to produce a package that would be fairer to all in greatest need, instead of just some? Let us take the Bill on its own terms. Its key aim, as the Explanatory Notes tell us, is to enable, ""more people to avoid or delay entering residential accommodation"." The key phrase there is "more people". In other words, there is a test, as there always is, of value for public money. The more people who benefit from reablement and from personal care at home who are currently not in receipt of those services, the greater is the value for money. We need to look quite carefully at how many more people will actually avoid going into residential care as a result of the Bill. In a full year, the number of people in the highest category of critical need who will receive personal care at home is budgeted at 277,000. Of those 277,000 people, only a tiny fraction, under the Government's assumptions, are not currently in receipt of such care. In fact, the figures, even by the Government's own admission, are a matter of uncertainty, because nobody knows how many people there are whose needs are currently not being met in any form. If we take the £537 million that it is going to cost to deliver personal care in the home as a result of the Bill, it is clear that the net additional benefit conferred by that money will fall, first, on the 2,000-odd people who it is assumed will switch from residential care; and, secondly, on the 5,000-odd people who will stop receiving informal care and switch to social services; in other words, a very small number of additional people set against a very sizeable sum of public expenditure and therefore a very large dead-weight cost. What is the justification for that? It looks like a very poor deal for the taxpayer. Not for a minute would I wish to belittle the value of reablement, which is the other part of this package. Reablement is a good concept, although it is perhaps just as important for us to focus on prevention as on reablement; sadly, the Bill says nothing on that topic. Nevertheless, as regards value for money, I am fully prepared to believe that, per pound spent, reablement is capable of achieving very considerable benefits. The problem with reablement, as envisaged, is the way in which it has been costed. As we have heard, just about every single figure used in the Government’s impact assessment comes with a giant health warning, but the figures underpinning the reablement calculations look particularly shaky. One hundred and thirty thousand people at £1,000 a head is suspiciously broad-brush. Those whom I have spoken to in local government say that the underlying cost assumption of £30 an hour for 30 hours is likely to be a gross underestimate of what will actually be required. That brings us on to what the Bill does to local authorities. Local authorities are being told that they must find the money to pay for their share of the cost from extra efficiency savings. I am all for efficiency savings, but how realistic is it to suppose that authorities which are already working to achieve 3 per cent efficiency savings a year, shortly to rise to 4 per cent—a very tall order for many of them—will suddenly be able to find an additional £250 million at practically no notice? Even the Government say that these savings are achievable only over time, but local councils are not being given time: the money has to be found as from October of this year. What is more, given the chasm of uncertainty underlying all the financial assumptions, the annual cost to them may be a lot more than £250 million. We are now led to understand, contrary to what was understood initially, that if the total cost of delivering the Bill should exceed the budget, local authorities will have to find whatever extra money is required; in other words, they are being landed with an open-ended commitment. I should like to hear from the Minister why she thinks that the funding arrangements needed to deliver the aims of the Bill do not run counter to the new burdens doctrine. When it comes to placing new financial burdens on local authorities, the Government have given clear and unambiguous undertakings. I quote from the website of the Department for Communities and Local Government: ""A new burden is defined as any new policy or initiative which increases the cost of providing local authority services … Government as a whole are committed to ensuring new burdens falling on local authorities are fully funded. This commitment is called the New Burdens Doctrine"." It defies explanation as to why the Government believe that this Bill does not break faith with that commitment. The squeeze on local authority finances caused by the Bill will be of the severest kind, and it is not hard to imagine what will happen. In the first instance, there will be a stampede of applications for free personal care. When the money available has been used up, local authorities will do their utmost to avoid having to take more people on to their books, and we will find pressure being placed on the elderly to move into residential care instead of staying at home. It will prove harder for people to pass the test of eligibility. Alternatively, or perhaps additionally, in order to fulfil their obligations to those in critical need, councils will be forced to remove social care funding from those who are in lower categories of need. To the extent that this happens, it may drive some people out of their homes and into residential care, thereby serving to dilute the main benefit of the Bill, which is supposed to be to enable more people to avoid or delay entering a residential setting. These are some of the perverse incentives which the Bill is likely to create. It is inevitable that the ability of the system to look after an increasing number of elderly people in their own homes, however that care is funded, will vary from council to council, if only because of the lack of available manpower. No thought appears to have been given to the training requirement implicit in these proposals or the need to deliver care to an acceptable standard of quality. One is led to the inescapable conclusion that the speed at which the Government are aiming to roll out this policy is grossly imprudent. It is bound to disappoint a lot of people and it will give rise to false hope among those in critical need who find that they are denied free personal care because they fall the wrong side of a certain definitional boundary. A spate of legal challenges seems almost inevitable. A national policy for care of the elderly requires a long-term view. Hence, any new initiative has to pass one test above all, and that is the test of sustainability. I fear for this Bill because I do not believe that its provisions will prove sustainable in the long term. The haste with which it appears to be have been devised has led some to think that its arrival in Parliament is less about delivering long-term reform and more about playing to the gallery. For all the reasons I have given, I suspect it would not take a jury long to decide which view they preferred.