Reform of Social Care

John Healey Excerpts

Monday 4th July 2011 Commons Chamber

[The Secretary of State for Health (Mr Andrew Lansley)]

With permission, I wish to make a statement on the reform of social care.

The coalition Government have from the outset recognised that reform of the care and support system is needed to provide people with more choice and control and to reduce the insecurity faced by individuals, carers and their families. By 2026, the number of people over 85 years old is projected to double. Age is the principal determinant of need for health and for care services. It is further estimated that in 20 years’ time, 1.7 million more people will have a potential care need than do today.

People often do not think about how they might meet the costs of care in later life. They assume that social care will be provided free for all at the point of need, but since the establishment of the welfare state that has never been the case. Currently, people with more than £23,250 in assets, often including their home, face meeting the whole cost of care themselves.

The cost of care can vary considerably and it is hard for people to predict what costs they may face. The average 65-year-old today will face lifetime care costs of £35,000, but as the Commission on Funding of Care and Support notes, costs are widely distributed: one in four will have no care costs, but one in four will face care costs of more than £50,000 and for one in 10 it will be more than £100,000. The lack of understanding of how the system works and uncertainty about costs means that it is difficult for people to prepare to meet potential care costs, and there are currently few financial products available to help them. This means that paying for care can come as a shock to many families and have a severe impact on their financial security.

Change is essential. That is why we took immediate action last July by establishing the Commission on Funding of Care and Support, which was tasked with making recommendations on how to achieve an affordable and sustainable funding system for care and support for all adults in England. In response to its initial advice, we allocated an additional £2 billion a year by 2014-15 in the spending review to support the delivery of social care as a bridge to reform. This represents a total of £7.2 billion of extra support for social care over the next four years, including an unprecedented transfer of funds from the NHS to support social care services that will also benefit health.

Since then we have taken forward wider reform. Last November we published our vision for adult social care, setting out our commitment to a more responsive and personalised care and support system that empowers individuals and communities, including the objective that all those who wish it should have access to a personal social care budget by 2013. In May, after three years of work, the Law Commission published its report on how to deliver a modernised statute for adult social care. Making sense of the current confused tangle of legislation to deliver a social care statute will allow individuals, carers, families and local authorities to understand more clearly when care and support will be provided.

Andrew Dilnot’s report comes at the same time as the final report from the palliative care funding review, which I received last week. Tom Hughes-Hallett and Sir Alan Craft have made an excellent start in looking at this complex and challenging issue. We want to see integrated, responsive and high-quality health and care services for those at the end of life. We will now consider the review team’s proposals in detail before consulting stakeholders on the way forward later this summer. We will also consider how best to undertake substantial piloting, as recommended in the report, in order to gather information on how best to deliver palliative care services.

We are also responding to events at Southern Cross, which have caused concern to residents in Southern Cross care homes and their families. We welcome the fact that Southern Cross, the landlords and the lenders are working hard to come up with a plan to stabilise the ownership and operation of the care homes. We have also made it clear that we will take action to ensure proper oversight of the market in social care. That is why we are seeking powers through the Health and Social Care Bill to extend to social care the financial regulatory regime that we are putting in place in the NHS, if we decide that that is needed as part of wider reform.

A central component of those wider reforms will be the long-term funding of care and support. Over the past 12 months Andrew Dilnot, who chairs the Commission on Funding of Care and Support, together with the noble Lord Warner and Dame Jo Williams, has engaged extensively with many different stakeholders. They have brought fresh insight and impetus to this most challenging area of public policy. We welcome the commission’s excellent work and its final report. I would like to thank Andrew Dilnot, Lord Warner and Jo Williams for their work, which has made an immensely valuable contribution to meeting the long-term challenge of an ageing population.

The report argues that people are unable to protect themselves against the risk of high care costs, leaving them fearful and uncertain about the future. The commission’s central proposal, therefore, is a cap on the care costs that people face over their lifetime of between £25,000 and £50,000—it recommends £35,000. Under the commission’s proposals, people who cannot afford to make their personal contribution would continue to receive means-tested support, but it proposes that the threshold for receiving state help for residential care costs would rise from £23,250 to £100,000. People would make some contribution to their general living costs in residential care, but the commission suggests that this should be limited to between £7,000 and £10,000.

The commission also proposes the following standardised, national eligibility for care, which would increase consistency across the country; universal access to a deferred payments scheme for means-tested contributions; improvements in information and advice; improved assessments for carers and better alignment between social care and the wider care and support system; and considering changing the means test in domiciliary care to include housing assets. The commission makes recommendations about how as a society we can organise and fund social care. We will consider the recommendations as a priority.

The commission recognises that implementing its reforms would have significant costs. In the current public spending environment, the Government will have to consider the recommendations carefully against other funding priorities and calls on our constrained resources. The commission’s recommendations present a range of options, including on the level of a cap and the contribution that people make to living costs in residential care, which could help us to manage the system and its costs. We intend to engage with stakeholders on those issues, including on the trade-offs involved.

Reform in this area will have to meet a number of tests, including whether the proposals would promote closer integration of health and social care and increased personalisation, choice and quality; support greater prevention and early intervention; whether a viable insurance market and a more diverse and responsive care market would be established as a result of the proposals; what is the level of consensus that additional resources should be targeted on a capped costs scheme for social care; and what a fair and appropriate method of financing the additional costs would be.

The Government have set out a broad agenda for reform in social care. We want to see care that is personalised; that offers people choice in how their care needs are met; that supports carers; that is supported by a diverse and flourishing market of providers; that has a skilled work force who provide care and support with compassion and imagination; and that offers people the assurances they expect of high-quality care and protection against poor standards and abuse. Andrew Dilnot’s report was never intended to address all those issues, but it forms a vital part of that wider agenda.

To take the matter forward, we will work with stakeholders in the autumn, using Andrew Dilnot’s report as the basis for engagement and as a key part of the broader picture. That engagement will look at the fundamental issues for reform in social care, such as improving quality, developing and assuring the care market, integration with the NHS and wider services, and personalisation. We want to hear stakeholders’ views on the priorities for action from the commission’s report and on how we should assess the proposals, including in relation to other priorities for improvement in the system. As the right hon. Member for Wentworth and Dearne (John Healey) and I have discussed, the Government will engage directly with the official Opposition to seek consensus on the future of long-term care funding.

We will set out our response to the Law Commission and the Dilnot commission in the spring. There will be full proposals for the reform of adult social care in a White Paper and a progress report on funding reform. It remains our intention to legislate to this effect at the earliest opportunity. The care of the elderly and of vulnerable adults is a key priority for reform under this Government, and I commend this statement to the House.

[John Healey (Wentworth and Dearne) (Lab)]

I thank the Health Secretary for the copy of his statement, and for making it to the House himself.

We welcomed the Hughes-Hallett report last week and we welcome the Dilnot report on social care today. The Dilnot report sets out important recommendations on capping the catastrophic costs of care; lifting the wealth threshold for state help; immediate free support for children with care needs on becoming adults; universal disability benefits continuing as now; a standard national needs test; and better information and advice, led by local councils.

The important elements in the Dilnot report are similar to the plans that we set out in government in the care White Paper in March last year. Our concern was and is to protect the one in 10 people who have to pay more than £100,000 for the cost of their care in older age; our concern was and is to protect hard-working people on modest incomes, who are more likely to care for their relatives and a lot less likely to get any help in doing so; and our concern was and is to protect people from the lottery of where they live, rather than what they need, determining their assessment for care and the level of support.

It should be a cause for celebration and pride that one in five of us in this country who are alive today will live to 100, and that our children are likely to spend a third of their lives in retirement. Instead, too many of us approach our older age in fear—fear that we will need care that will not be there; fear that our savings will be wiped out by the open-ended costs of care; fear that we cannot protect our families from that risk; and fear of becoming a burden or being left alone.

Today’s report from Andrew Dilnot is a starting point, but it is what the Government do with it now that counts. My right hon. Friend the Leader of the Opposition has made a big offer to the Prime Minister to put politics aside and work to see a better, fairer and lasting system of support for our older and disabled people in England. Labour is willing to talk to and work with the Government and all other parties to do so, because we know that any new system of care must give all of us long-term confidence about what will be on offer for us and our families as we plan and prepare for older age.

That requires the Prime Minister to give the lead, because discussing and agreeing an affordable, sustainable system and how we pay for it involves important parts of Government beyond the Health Secretary. It requires the Prime Minister to give a guarantee that the Government will not kick Dilnot’s recommendations into the long grass, because as Dilnot says, the system needs “urgent and lasting reform”. If the Government are serious, we are serious; and if they are serious, we need to hear more. Dilnot recommends a White Paper by December this year, so why are the Government already saying that it will be spring before publication?

Any solution is a solution only if it is available and affordable to everyone, so what assurance can the Government give that the voluntary insurance protection will be an option for all? Dilnot states that the current system is

“under extreme strain, and people are experiencing tightening eligibility and reduced care packages.”

Do the Government accept his conclusion that additional public funding for the means-tested system is urgently required?

The corporate crisis at Southern Cross is causing extreme anxiety for many people living in its homes. Do the Government accept that there is a case for regulating business standards as well as care standards, to give people greater confidence in their care?

The Secretary of State said that he would engage directly with me. I thank him, but this is a big challenge not just for him but for the Chancellor and the Prime Minister. Will the Government accept that cross-party talks are required across Government? This is a once-in-a-generation chance, and the House and the public will need to hear from the Prime Minister himself to believe that his Government are determined, as we are, to build a better, fairer and lasting system of care in our country.

[Mr Lansley]

I am grateful to the right hon. Gentleman for the welcome that he gives to the report by Andrew Dilnot and his colleagues, and indeed to the report that Tom Hughes-Hallett and Alan Craft produced on palliative care. They are both immensely valuable.

The right hon. Gentleman rightly says that it is important for us to move beyond many of the suggestions that have been made in the past. One of the essential purposes of the Dilnot commission was to seek something that was affordable and sustainable, that met tests of choice, fairness, value for money and ease of understanding, and that would be sustainable for the longer term. Dilnot has responded immensely well to the issues that we put to him, but that is part of a broader process of reform. In that sense we have not waited for Dilnot, because we have made progress on the wider aspects of reform. Now we have to ensure that we bring them together in a way that is coherent and works to deliver long-term, sustainable reform across the whole social care sphere.

The right hon. Gentleman rightly points to the fact that we inherited a fragile system in which there had already been a substantial tightening of eligibility and loss of care and support, with increasing levels of unmet need. That was precisely why, in an interim report last year, Andrew Dilnot and his colleagues asked us to make additional resources available in the spending review. I set out in my statement precisely how we have done so.

The concerns in relation to Southern Cross are particular to that company, and the Minister of State, my hon. Friend the Member for Sutton and Cheam (Paul Burstow), has made clear to the House how we are interacting with those who are involved with the company. We are making it very clear to the public—I reiterate it today—that we are prepared to act to secure the interests of individuals if there were any threat to their position in care homes. We are working with the Association of Directors of Adult Social Services and local authorities to ensure that those contingencies are in place. What I said today in the statement, and which people have not previously recognised, is that as early as last year we set out in the Health and Social Care Bill that we were prepared for regulatory powers to be available to ensure the future viability of social care providers, as we intend to do in relation to health care providers.

Let me may make one final point. I believe that my statement makes it absolutely clear that we will engage on the basis of the Commission on Funding of Care and Support, and that we will do so on a timetable that will work and that gives stakeholders and the public, and indeed the Government and the Opposition, an opportunity to come forward with a consensus. I discussed that timetable with Andrew Dilnot, and he is clear that he supports it. It will lead to a White Paper in the spring and an associated progress report on funding reform. I am clear that that assures stakeholders that we will take this forward as a priority.