Personal Care at Home Bill

My Lords, this amendment is in my name and those of the noble Baronesses, Lady Barker and Lady Murphy, and the noble Earl, Lord Howe. The amendment arises solely from the Government’s failure to convince people in this House and outside that the Bill is soundly costed and affordable. To get in first, let me say that this is a good governance amendment, not a wrecking amendment. The concerns over affordability have been made worse by the fact that we do not know how the Bill would fit into any longer-term solution and what the cost of that solution would be. We know, however, that the Government have failed to convince the Health Select Committee, the LGA, the Association of Directors of Adult Social Services and the King’s Fund with their numbers, so I feel in quite good company. I shall anticipate the Minister’s response that the Government’s estimates are based on independent analysis by the PSSRU at the London School of Economics. The trouble is that the Secretary of State would not let the Health Select Committee see the detailed workings, despite two written requests, and the assumptions behind some of the computations look decidedly shaky. If the number of weekly care hours assumed for people with critical needs, demand assumptions and price increases used all look unrealistic, as I think they do, the Government’s figures are going to be unconvincing—and that is what they are. I start with the ADASS cost figures. I will not repeat my Second Reading speech, other than to remind the House that ADASS said that the Bill would cost at least £1 billion a year to implement, compared to the Government’s figure of £670 million. The Government have consistently tried to rubbish the higher figure by saying that ADASS admitted overestimating some of its costs. However, the association said to me, in a letter dated 15 March: ""At no time have we admitted that the results from our survey were an overestimate of the true state of affairs that would occur if the Bill were to be implemented. If anything, we deliberately decided to underestimate as far as we possibly could, wherever we could, so as to avoid appearing to exaggerate or talk up our figures"." The association has not "sexed up" its figures. It sticks firmly to its estimate of at least £1 billion a year, which is based on real-world calculations from its members. I confirmed this again with the association yesterday by e-mail. ADASS is supported in its view by the LGA. The noble Lord, Lord Best, has already indicated some of the arguments on that, so I will not repeat them. Moreover, the Health Select Committee sided with ADASS’s position more than it did with the Government’s. In paragraph 296 of its report of last Friday, the committee said: ""Furthermore, estimates of the likely levels of demand and cost appear low, and there is a risk that the reform could be substantially underfunded"." The committee was not helped in its deliberations by the Secretary of State’s reluctance to provide his workings, as it made clear in paragraph 280. I have rather more confidence in the ADASS figures than I do in the Government’s, but that £1 billion figure is itself likely to rise faster than the Government estimate and this at a time when the public finances will be deteriorating, whoever is in government. That is because the Government’s assumptions on demand and cost inflation are optimistically low. Their impact assessment states that there will be a 1.5 per cent annual increase in service volume due to demography and a 2 per cent annual increase in price for pay increases. The Government deny that there is any valid comparison between their scheme and what has happened in Scotland since home care was made free. I accept that there is not a direct comparison between this scheme and the Scottish one, but that is not the same as saying that there will be no similarities in human behaviour when you make this care free for some people. In Scotland, the number of people claiming went up by 36 per cent in four years when care was made free. In the last of those years, cost increases by care providers went up by 15 per cent—that was in a single year. There has to be a wide variation between what has happened in Scotland and what will happen in England, but I simply do not believe that the human beings either side of Hadrian’s Wall are that different in their likely behaviour when something is made free. Totally ignoring the Scottish experience as the Government are doing seems to me contrived. The Health Select Committee clearly did not believe the Government’s estimates on future cost increases for this Bill and neither do I. Lastly, there is the issue of whether local government is being treated fairly over funding this legislation. The noble Lord, Lord Best, has described well its grievances, so I will not repeat them. However, if ADASS and the LGA turn out to be right about the costings—as I believe they will—it will be a pyrrhic victory, because they will have to pick up the extra tab, which could well be over £300 million in the 2011-12 financial year alone. There is also something of a conjuring trick about how local government is supposed to meet its £250 million share of the claimed £670 million annual cost. The Government have said that local government is expected to find its share from the 4 per cent efficiency savings that it is to deliver in 2010-11 so that there are no extra burdens. In its letter of 15 March, ADASS said to me: ""We believe this is very poor reasoning. We are already delivering 4% savings to fund demographic changes and to keep council tax increases down. As a result of the PCaH there will have to be additional savings or increases in council tax"." Since it is difficult to increase council tax so close to the new year, this looks like cuts in services and possibly cuts to other elderly and vulnerable people, as others indicated earlier in the debate. The Government should accept the reasonable local government argument that this is a new burden that should be properly funded by central government. We are at the beginning of a long, difficult and expensive road to comprehensive and durable reform of adult social care. This is probably the biggest social policy issue facing us in the next few years. A recent report by the London School of Economics suggests that the cost of free personal care for the elderly could have a price tag of an extra £20 billion a year building up over the next couple of decades. Getting the sums right and apportioning the cost fairly will be an important part of the journey that will have to be undertaken on, I hope, a cross-party basis. With this first faltering step on this journey, the Government have not covered themselves with glory in their costings. They need to accept some help with the numbers from an independent source—I would suggest an organisation such as the Audit Commission or the King’s Fund. This amendment will help them to get back on track without delaying the implementation of the Bill beyond next spring as the House voted for earlier this afternoon. I beg to move.