Personal Care at Home Bill

My Lords, I have already declared my interest as chair of the Hanover Housing Association, which provides extra-care housing. I must now declare an interest as president of the Local Government Association. I am grateful to the LGA for its briefings on the Bill. The first amendment in my name in this group, Amendment 17, and Amendment 44, which is also in the name of the noble Earl, Lord Howe, both raise questions about the real cost of providing care free of charge to people with high needs living at home. Amendment 44 calls for a regular appraisal of the actual expense in place of the unsure estimates that are all we have to go on at present. Amendment 17 seeks to put back the date of commencement of the legislation by six months. My motivation for pursuing these amendments comes from the real anxieties felt throughout local government that, first, the Government’s "guesstimates" of the costs involved may turn out to be highly inaccurate; secondly, that the financial penalties, possibly in hundreds of millions of pounds if the figures turn out to be underestimates, will be borne entirely by the local authorities, which are already expected to contribute £250 million by making efficiency savings on other spending; and, thirdly, the current planned deadline of 1 October 2010 represents for local authorities an impossible task. Let me explain why these fears, expressed very plainly by the LGA, seem likely to prove well founded. However, I preface my remarks with some positive comments about the financial arrangements which the Bill seeks to deliver. It must be a good thing that the Bill has helped to trigger this national debate on paying for personal care for older people and others. In the mid-1990s I organised an inquiry by the Joseph Rowntree Foundation into paying for long-term care. We recommended a national care service, with no boundaries between health and personal care, free at the point of delivery, but paid for by a compulsory national care insurance scheme funded by payments from earnings over one’s lifetime alongside national health insurance contributions. We failed at the Joseph Rowntree Foundation in 1996—as did the King’s Fund with an excellent financial analysis from Sir Derek Wanless 10 years later—to provoke sufficient debate for this issue to become a central concern for politicians of all parties. The publication of this Bill has helped to bring these issues centre stage and, I hope, will eventually lead to the essential consensus that we need on how the dramatically rising care costs of the future can best be met. My second positive comment about the Bill is that its financial framework is built on removing some of the divide between health and social care budgets. The Government intend that this will lead to £420 million moving from the central health budget to the local social care budget. This is just the kind of holistic, joined-up thinking, pooling resources across old boundaries, that will achieve sensible outcomes for those who need personal care at home. My third commendation for the Bill is that it should lead to equality of treatment in the assessment of care needs throughout the country, along with, I hope, the portability of that assessment for those who move from one place to another, as proposed by the noble Baroness, Lady Campbell. This approach to assessment of needs should lead to greater fairness all round. However, I believe that these amendments are necessary if local authorities are to be able to carry out the new duties now laid upon them. Amendment 44 would make sure that Parliament and the wider public know the real cost of free personal care at home and understand where the cost will fall. They can then decide whether any in-flight corrections are needed to make the arrangements affordable at central and local government levels. The amendment would require the Secretary of State to commission an independent review, initially and then annually, reporting to Parliament on what the measures really cost and what they are likely to cost over the next five years. The amendment calls for the itemisation of any efficiency savings which the Government expect will arise from a reduced use of residential care by people for whom the local authority has to pay. I am not sure how real these savings may be, but if there are savings, the independent review will identify them. The noble Earl, Lord Howe, spelt out at Second Reading some of the key concerns of the LGA’s members. I want to underline and expand on these points. I fear that the accuracy of the Government’s estimate of a £670 million total cost is very much in doubt. The Bill’s impact statement says there is "inherent uncertainty" in estimating the costs. It is not known how many people who currently fund their own care at home will come forward and claim the costs of care from the local authority. It is unknown how many people who have gone into residential care and pay their own way will move back to their homes or into new homes or extra-care housing where their care will be free. Statistics are not collected on the number of people who are defined as being in "critical" need of care under the Fair Access to Care Services assessment process. Nor are there figures for the numbers already receiving reablement services or what proportion of those receiving reablement services will need no further help once that reablement exercise is over. Therefore, there are lots of uncertainties. The Association of Directors of Adult Social Services reckons that the true cost of offering free personal care to those with high needs could well exceed £1 billion rather than the Government’s figure of £670 million. Because the Department of Health has capped its own contribution at £420 million, the balance will all fall on the local authorities. I have noted that local councils are already expected to fund £250 million in very uncertain efficiency savings. For sure, there are few opportunities for any savings within the overstretched social care budgets. Eighty-one per cent of home care is currently provided by the private sector under very competitive contracts. Wages are notoriously low and, consequently, staff turnover can be high and shortages of properly qualified care workers are acute in some areas. Social care has had to be fiercely rationed in many areas, so it is not surprising that local authorities are fearful of the consequences, not only for funding the £250 million allocated to them but also perhaps another £300 million if the Government’s estimates of the real cost prove completely wrong. Amendment 17 would put back the start date for the implementation of the new arrangements from the Government’s planned 1 October 2010 to 1 April 2011. It seems unreasonable to expect local authorities to be fully geared up and ready to go by 1 October when the following points are taken into account. First, a new national assessment tool is to be provided to local authorities in the summer of 2010. This will be essential to them in implementing the Bill’s measures, but they might not receive the details until as late as 31 August. There has to be training and the organisation of administrative structures. New IT systems will be needed to record assessments and capture all the necessary data. If guidance came out much earlier than late August, it would be sure to find people away on holiday. All this work will have to be done in a space of perhaps four short weeks. To expect local authorities to handle all the necessary training and organise internal administrative structures in that timescale is simply not realistic. Secondly, the Government are also planning to revise their guidance on fair access to care services. Eligibility for free care will depend on that, which, again, will mean new software, with providers having to develop the requisite systems and councils having to procure them. More training will be necessary on top of that already required. Thirdly, new staff will need to be recruited to take on the expected extra workload, not least covering the additional reablement services envisaged in the Bill. Fourthly, councils will have to have their budgets set in early March, as they always do, and most are well down that road. The Bill comes very late to reorganise 2010-11 budgets. With local and national elections ahead, it seems unreasonable to expect local authorities to budget for the Bill’s provisions for the financial year that is just about to start. Moreover, although costs would start to fall on local authorities on 1 October 2010, the Government’s Pre-Budget Report indicates that the savings, if ever they materialise, from reduced expenditure on residential care will not be achieved at the target level of £250 million before 2012-13, which means that a new financial burden will fall on local authorities during 2010-11 and 2011-12. Under the agreed new burdens directive, government are committed to funding fully any such burdens that result from new legislation. That adds another good reason for holding back implementation of the legislation. Amendment 17 would put back the start date to 1 April 2011. I have pleasure in moving it and commending also Amendment 44.