HL Deb 11 February 1993 vol 542 cc830-9

7.47 p.m.

Earl Russell rose to move, That an humble Address be presented to Her Majesty praying that the Social Security Benefits (Amendments Consequential Upon the Introduction of Community Care) Regulations 1992 (SI 1992, 3147) be annulled.

The noble Earl said: My Lords, I believe that we are all used to social security matters being complicated. When we have thrown in a large element of health, a dash of environment and, in dealing with ex-offenders, a certain amount of Home Office, we have something of a quadrilateral of complications. For that reason it is impossible to explain what is involved without a little complexity, but I shall try to keep that to a minimum.

The regulations against which I seek to pray are consequent on the introduction of community care. They deal with residential care where responsibility is being transferred to local authorities. A jigsaw of funding systems is being put together. There is an income support residential allowance for the residents which is fixed by these regulations. It is from the size of that component that questions necessarily arise about the other components. The local authorities are to contract with residential care organisations for the others. To deal with that a special transitional grant is being made to the local authority for a period of three years, after which it will be covered by the standard spending assessment. There are also further regulations to come from the Department of Health under the National Health and Community Care Act 1990, to which my noble kinsman may refer.

A great deal of what I wish to say arises from Regulation 2A, which fixes the income support component of this financial jigsaw at £45 outside London and £50 inside London. It is that factor which raises questions about the other components of the jigsaw.

The information that I have—there seems to be general agreement on it among those involved—is that the actual cost of running a residential care home, depending on the type of care provided and care comes in many types, is not less than £150 to £200 a week. There is a considerable difference between that amount and £45 to £50. Without asking my noble kinsman to commit himself to an exact figure, does he agree that those figures are in the target area? Is he confident that local authorities at present are in a position to meet that discrepancy?

I have a more technical question. At what rate will standard spending assessments for local authorities allow for their need to provide this care in future? Further, is he entirely satisfied that the system will work to the advantage of London? As we know, London has special problems in many areas. Homelessness and alcohol dependency are among them. The formula for the special transitional grant has not worked entirely to London's advantage. Of London's special transitional grant, 8 per cent. would go simply for existing commitments on drugs and alcohol. The total of London's existing commitments would take up between 104 per cent. and 105 per cent. of its special transitional grant. That factor may create a slight problem. I shall be glad to hear from my noble kinsman on that subject.

My noble kinsman will not be surprised to hear that there is still some doubt about the preserved rights of those residents still in the homes who will continue unless or until they move to receive income support at the old residential care rate. I am sure that he well remembers our debates on the subject in 1990. No doubt he is tired of the subject. However, I am sure that he has learned, as we all have, that being tired of an argument, regrettably, is not enough to make it go away.

At present 117 members of the Association of Charity Officers are spending £4.8 million topping up amounts for people who receive the present level of residential care support. That takes 38 per cent. of charities' expenditure on old people. If local authorities have the idea that they can use the level of income support under preserved rights as a baseline, to indicate how much they need to provide, it could create severe problems.

We also believe that there is a special problem in residential care when dealing with people who are by nature itinerants. It is a problem of particular concern to those who deal with drug and alcohol dependence—to St. Mungo's, and St. Martin's of Tours which deals with ex-offenders. It has always been a question whether local authorities are the best body to provide for and recognise the needs of itinerants. There is, too, a special problem for those who provide hostel accommodation for people who move on fairly frequently. It means that the proportion of their population who enjoy the preserved rights at the higher level of income support will drop much more rapidly than in, say, long-stay homes for the elderly.

There is some problem in applying this local authority-based scheme to itinerants. Which local authority is to be responsible? We are told that the test will be that of the ordinary residence of the person concerned as defined under the National Assistance Act 1948. That is not the same test as the one which local authorities are accustomed to using: the local connection under the housing and homelessness legislation of 1985. The ordinary residence of someone who is homeless and sleeping on the streets can be difficult to discover. Even when one has all the information, it may be difficult to decide. There is a problem about relying on the place of origin of the homeless person who seeks accommodation in care. The only source of information of origin is often the person himself. Sometimes if he has been on the road a long time, or if he has problems with mental illness or alcohol dependence, the information may not always be trustworthy. The parish account of Folkestone in 1623 records a payment of 6s. 8d. to one who came from the land of Babylon. When a local authority is told that, what is it to do?

There is also a problem about ex-prisoners. Costs will fall disproportionately heavily on those boroughs, in particular in London, which include prisons. If that factor becomes recognised, the Home Secretary may find that local authorities are keen to resist the building of a new prison in their areas. He could find that unfortunate.

With the insistence on the place of origin, the Government risk recreating many of the difficulties which were so familiar under the operation of the 1601 Act. There used to be, so to speak, games of ping-pong between two villages, each stating that the other was the place of origin. The hapless person could be sent to and fro, in some cases for as many as 10 years at a stretch. We do not wish to return to that situation.

If the Government consider the way in which schemes such as the rough sleepers initiative have been working, they will accept that for itinerants there is a case for government responsibility and that possibly local authorities are more suited to taking responsibility for stable residents in their own areas than for transitional people who cannot clearly be pinned to any area.

There is considerable anxiety among housing associations about the lack of interaction between the care arrangements for community care and the rearrangements for housing. There is worry about whether the Department of the Environment will continue responsibility for capital and revenue funding for housing associations. If money is transferred to local authorities for the care component, but not the housing component, one cannot conjure the housing component out of thin air and there will be a financial problem.

There is, too, some concern about whether local authorities will be in a position to offer a fair price. Methodist Homes for the Aged has written to 114 departments of social services from whom they have received 61 responses. That is not many, since 1st April is not far off. Only five of those quoted a price. Some of them invite tenders. That creates the suggestion that they are thinking in terms of a free market in care. An auction in care must inevitably be Dutch, and a Dutch auction tends to risk lowering the standard of care provided. It begins to sound a little like the way Crassus used to run the fire services in Rome. He used to draw up outside a burning house and make an offer for the house; if it was refused he folded his arms and a few minutes later he made a lower offer, which was usually accepted. We do not want community care to go that way. I shall be interested to hear what my noble kinsman has to say to convince me that it will not. I beg to move.

Moved, That an humble Address be presented to Her Majesty praying that the Social Security Benefits (Amendments Consequential Upon the Introduction of Community Care) Regulations 1992 (SI 1992, 3147) be annulled.—(Earl Russell.)

8 p.m.

Lord Desai

My Lords, I thank the noble Earl for having introduced this important issue. I am a stranger to the subject, I wandered into it and to begin with, whenever I read the regulations of our welfare state, I am staggered by their complexity. It is an extremely complex issue and so far as I can see this Motion and the regulations make it even more complex. As the noble Earl pointed out, part of the problem is that the regulations under Section 43 of the National Health Service and Community Care Act 1990 have not yet been issued. Thus there is great uncertainty about what will face local authorities when the regulations finally come into force.

It seems to me that, when the system of financing is changed on 1st April, the principal purpose of the legislation will be to take care of those in long-term residential care. As the noble Earl said, there are problems with that as well; even those people in long-term residential care seem to require a top-up of one kind or another. Charities are currently bearing the costs.

That problem apart, what we face here is that, while such people are taken care of, many of the peripheral cases have been sadly neglected. We must ask the Minister this evening this question: how do the Government envisage that the various peripheral entities will be taken care of?

Perhaps I may go through the points quickly because the noble Earl has already mentioned most of them. First, there is the problem of the homeless and itinerant. Who will take care of them? Last night we had a debate on the mentally disordered offender. Many noble Lords pointed out that such offenders are not likely to be popular or high on the local authorities' list of priorities. Similarly, the homeless are not popular, nor are they high on the list of priorities and they are unable to lobby to obtain their entitlement. Given the usual shortage of resources that local authorities face—and in this case we already know that the amount of money transferred from the DSS to local authorities is inadequate: that has been shown several times—we shall face the problem that people with low priority will suffer. I should like to know from the Minister how he sees the problem of those who are homeless and itinerant. I recognise that they are two different categories, but how will they be dealt with under the shortage of resources?

A further set of problems arises with drug and alcohol abuse cases. There was a such a case pending yesterday before the High Court and I do not know whether it has yet been settled so perhaps one cannot talk about it. I should also declare an interest in the matter, in that I am the chairman of an inner city drug intervention agency. I know from that standpoint that there is a great deal of uncertainty among agencies which are struggling to manage, even with current standards. When the new set of rules comes in on 1st April, the agencies will move down the list of priorities for local authorities and they are worried as to how they will survive.

Thus the problem of drug and alcohol users—who are sometimes both homeless and itinerant and for whom the local authority pays when they arrive at the drug intervention agency—is an open question. There is a problem about the resources for them.

One or two questions were raised in another place yesterday when the issue was discussed which I may as well raise now in order to obtain clarification on them.

One issue is that it seems that paragraph (1ZE) discriminates against residents who live in supported lodgings or small residential homes. I readily admit that I am not an expert on this so I may have got it wrong but it appears to me that the people who have been resident in supported lodgings or small residential homes since 1st April 1987 are about to lose their rights to income support payments towards their fees. I am surprised that the Government are discriminating against small residential homes: I thought that small businesses were the thing. I know that the Federation of Small Businesses is unhappy about the forthcoming changes on 1st April.

Lastly, I quote a problem from the Official Report of another place. It is peculiar that residents in terminal care will suffer particularly because income support limits for them will be frozen from April. I do not quite know how one discriminates between residents in terminal care and other people. Why is income support for them being frozen? Again, I admit that I may have got it wrong but I should like clarification from the Minister.

We thank the noble Earl once more for raising these important questions. It seems a pity that the debate is so short: we need a much larger debate on all these issues. Perhaps we shall have another opportunity for one.

8.6 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

My Lords, I feel that there no doubt will be other opportunities to debate these matters, just as there was a debate last October instituted by the noble Lord's noble friend Lord Carter, when my noble friend Lady Cumberlege dealt with a great many of the points and matters of concern relating to community care.

What we are specifically debating today are purely the social security regulations and what I might call the social security contribution to the community care arrangements. I am well aware that both the noble Earl and the noble Lord have covered ground well beyond those regulations and I am most grateful to my noble kinsman for giving me advance notice of a considerable number of the points he wished to raise. He has not now raised some of them, but I shall certainly be able to write to him on those specific points. I appreciate the concern of my noble kinsman in view of the hour and the time that we have available.

Before dealing with some of the specific questions that have been raised, may I just very briefly say what the purpose of the regulations themselves is? Even if it is just in a couple of sentences, I think it is worth getting on record the points behind the regulations. The community care reforms require major changes to certain social security benefits and the purpose of the regulations is purely to introduce the necessary changes to the regulations concerning income support, housing benefit, attendance allowance and disability living allowance, particularly the care component. I should stress that it will affect only the care component, not the mobility component in the disability living allowance. The amendments contained in the regulations are simply, as I said earlier, the necessary DSS contribution towards achieving the community care objectives.

As both my noble kinsman and the noble Lord will be aware, we spend considerable sums of money. Currently some £2½ billion are being spent through social security on the special high levels of income support paid to people in residential care and nursing homes. Just to underline the problem that that £2½ billion points us towards, the figure was a mere £10 million back in 1979, when there were some 12,000 people in residential care and nursing homes being supported by the social security system. It has now risen to some £265 million.

Our aim obviously at the outset has been to ensure that such sums of money are spent in the most beneficial way and that available resources are targeted in those areas which will provide the greatest help and the maximum effect. We hope that the new community care arrangements will provide the vehicle with which to ensure that this happens to a much greater extent than the current system allows.

I do not intend to describe the regulations in detail which are, in the way of social security matters, necessarily very complex. Many are of a purely technical nature. I should like to deal with some of the points that my noble kinsman and the noble Lord, Lord Desai, have raised.

The first and most important is on the adequacy of income support levels for those with preserved rights. As my noble kinsman made clear, we have been over that course before. I believe this point is underlined by the figures I recently quoted: I have to make clear that no government could aim to meet the full cost of all fees in homes through a system of income support limits. I hate to think what would happen to the level of some fees if we had no limit and if home owners (as I am sure the noble Lord will appreciate) were able to set their own fees and to claim whatever they wanted. Over the past three years there have been four (in just three years) significant increases in the limits. Increases from April 1992 were well over inflation. One of the largest increases last time went to the very dependent elderly people in residential care homes—that was £15 from April 1992—which helped about 40 per cent. of people in that type of home. In that context, I should like the noble Lord, Lord Desai, to look at the freezing of just one particular rate last year. As with all up-rating measures, my right honourable friend the Secretary of State has to make very difficult decisions about the priorities. That is why some of them went up and some did not. But overall, the noble Lord will find that most limits for 1993 increased above the rate of inflation.

As for the future, those individuals with preserved rights will have those levels up-rated each year so long as there are people with preserved rights. That could be for a very considerable number of years. Each year my right honourable friend will have to make, as he has done in the past, the same judgments about how much they should be up-rated each year to cover inflation and rising costs in the homes. I can assure my noble kinsman that my right honourable friend will continue to do that each year. I can make no predictions as to what level he will set them at. One cannot make predictions as to what other pressures on the budget there will be and what, for example, the state of inflation will be.

My noble kinsman then turned to Regulation 2A and the level of the residential allowance which has been set, as he puts it because he is in London at £50; I would put it at £45 because I speak for the rest of the country. It is set at the two different rates. Last year my right honourable friend announced that he would be introducing the residential allowances. He said that the level of the allowance was expected to be in the range of about £35 to £50. At that time he was unable to announce the precise level because we were awaiting the results of a survey carried out by the Department of the Environment on the level of rents typically paid by people in sheltered housing accommodation. We felt that was the best available guide to the housing cost of people in residential care and nursing homes. I stress that it is just to cover the housing cost. As I said, when we were finally able to announce the level of allowance, it was at the top end of the range that my right honourable friend put it: at £45 per week, or £50 for my noble kinsman in London. My noble kinsman raised the question: would local authorities have adequate funding to pay the extra costs of someone who was in a St. Mungo's home with drug or alcohol problems? I believe that is the example he used.

Currently, income support will pay £210 or £220 from next April to residents in homes which cater for drug addicts and alcoholics. The money that will be transferred to local authorities uses that current expenditure as a base line and local authorities will be expected to be able, with the funds transferred to them, to continue to meet the need for that type of care. I stress that it will be some £472 million in the first year that will be transferred to the local authorities and to the NHS towards hospice funding to meet their new responsibilities. That is £472 million from my own department, the Department of Social Security. The Department of Health have, in addition, made a further £166 million available for local authorities in England alone (I am afraid I do not have the United kingdom figure) to help them with their new arrangements.

Overall, resources for community care will then continue to be considered in the normal way throughout the public expenditure process. After the first three years that will take into account any further forecast DSS savings to my department as the numbers continue to fall off relating to the remaining number of people with preserved rights to higher rates of income support.

The commitment which we gave in the White Paper was to transfer to the local authorities the resources which the Government would but for those arrangements have provided to finance care through social security payments to people in residential care and nursing homes. The transfer is to be distributed by a 50 per cent. reference to the local authorities' standard spending assessment—50 per cent. by the current patterns of income support spend as measured in January and July last year. The rest of the special transitional grant is to be distributed according to the social security standard spending assessments.

In future years a similar distribution is proposed but only the annual increment of the transfer will be included in the grant with the previous year's transfer moving into the local authority's base line revenue support grant. Therefore, overall, an increasing proportion of the transfer money as time goes by will be distributed by the standard spending assessment (the SSA).

My noble kinsman also referred to a report of the Association of Charity Officers and its survey. I think he was worried that the burden will continue to be shifted on to charities by local authorities merely using the remaining but preserved rights income support rates as a base line. I acknowledge that at present many charities are providing funds to top up the income support people in independent homes where the benefit does not meet the full cost of the fees. I have already dealt with why we feel we cannot meet any cost, however high.

I point out that under the new arrangements local authorities will be responsible for paying the full fee charged by the home. Residents will be able to choose what home they go to; but if they select a home whose charge is not within the range the local authority normally meets, then relatives or charities may wish to make up the difference to enable the resident to go to a more expensive home. But it will be the local authority who will remain liable for the full fee charged by the home.

My noble kinsman was somewhat concerned that there would be, to use his words, something of a Dutch auction, in terms of the contracts that were placed by the local authorities. We do not think it sensible to attempt to dictate centrally how authorities should make their contracts, nor the specifications, terms and conditions that they should use. It is up to them to negotiate prices on the basis of their local knowledge and circumstances. They have a duty to obtain the best value for money and the highest quality of care for their clients. We certainly expect them to use the contracting process to secure just that.

The noble Lord, Lord Desai, expressed anxiety reflecting the worries expressed by his colleagues in another place, that regulations under Section 43 of the 1990 Act have yet to be seen. I understand that the Department of Health is currently considering the extent to which local authorities should be enabled by regulations under the National Assistance Act 1948 to make residential accommodation arrangements from April 1993 for people who have preserved rights to the higher levels of income support under the current system.

A consultation exercise with the local authority associations and the main voluntary organisations took place at the end of last year. The regulations and covering guidance circular to the local authorities are currently being drafted. They will be laid before Parliament shortly. I am afraid I cannot go beyond that at the moment.

The noble Lord, Lord Desai wondered why we were excluding self-funding residents in "small homes". I can assure the noble Lord that that was given careful consideration. There were two practical problems. First, it would be necessary to establish, perhaps several years after the new arrangements came into effect, where the person was resident on 31st March 1993. Owners of larger homes have to keep records of their residents but small homes are not at present required to do that.

Secondly, the adjudication officers would need to establish whether the care criteria which currently entitle people in small homes to the special higher levels of income support, had been met on 31st March 1993, which again creates a practical problem. We believe that few people will be affected by the new rules. I would also stress that the absence of preserved rights does not place those residents at a disadvantage. They can still look to the local authority for an assessment of their care needs in the same way as any other potential new resident.

Both my noble kinsman and the noble Lord, Lord Desai, expressed anxieties relating to itinerants and the definition of "ordinary residents". I can only say that a draft guidance circular on the settling of disputes about "ordinary residents" which will deal with the problem of itinerants was sent by the Department of Health to local authority associations and the main relevant voluntary organisations yesterday, 10th February. In the light of any comments received, the circular will be finalised and issued to all local authorities towards the end of March. As I say, at the moment it is a matter for consultation.

The noble Lord, Lord Desai, expressed some anxiety about services for homeless people and felt that they might be to some extent sidelined. We believe that they should receive care on the same basis as all other systems. Local authorities will need to develop flexible systems of assessment and care management to meet the specific needs of homeless people and ex-offenders with high care needs. We shall shortly be issuing guidance to local authorities to help them resolve disputes about ordinary residents and indicate their responsibilities in individual cases.

We accept that housing is an important element in community care. Further guidance has been issued to social services departments and housing authorities stressing the importance of close collaboration between them. We shall certainly continue to maintain regular contact at ministerial and official level within the departments to ensure that there is close contact particularly between the Department of the Environment and the Department of Health. Obviously the effect of the new community care changes on housing supply and demand will be gradual. As I said, we hope that various authorities will work together to identify what they see as the needs to ensure that their planned and operational strategies work together and coincide.

I hope that I have dealt with most of the problems and anxieties of my noble kinsman and the noble Lord, Lord Desai. I hope that my noble kinsman will not be pressing his Prayer. I shall respond to his letter in due course on those points of concern that he did not elucidate in the debate. In the meantime, I commend the regulations—to a full House!—and repeat that I hope my noble kinsman will not be pressing his Prayer.

Earl Russell

My Lords, I thank my noble kinsman warmly for the care and courtesy of his reply. I can assure him that the further points I shall make are simply in the form of questions.

I take his point about relying for fixing levels on level of rents in sheltered housing. But there is a real difficulty in making that separation between housing and care costs. It sounds clear enough in theory. It is not always quite so clear in practice. Also, we should all be prepared to think, as we go ahead on this, about how different one residential care home is from another. They provide different sorts of care for different sorts of problems. If we were to adopt the idea that one level of funding is absolutely right for all homes regardless of what sort of care they provide, we might run into unnecessary problems.

I was grateful to my noble kinsman for acknowledging as clearly as he did that charities are at present topping up the preserved rights. I take his point about the difficulty of meeting any level of fee and am well familiar with the argument. We do not need to go into that. The only point is that, if charities are putting that much of their income into one area, they will be asking the Government to take on other areas which otherwise they would have taken on. It becomes a merry-go-round which may be worth thinking about.

I was grateful to my noble kinsman also for not slamming the door on what I said about itinerants. It is a problem that we have discussed before. My noble kinsman may remember—I am not sure whether he was in the House at the time—the debate on women's refuges on 11th March last. The same problem arises. There is a deep reflex in local authorities towards saying, "These are not local people", even where there is clear guidance otherwise.

I am glad to hear about the draft guidance. I look forward with a great deal of interest to seeing it and I shall wait to see what happens next. Meanwhile, I beg leave to withdraw my Motion.

Motion, by leave, withdrawn.

Viscount Long

My Lords, I beg to move that the House do now adjourn during pleasure until fifteen minutes before nine o'clock.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.28 to 8.45 p.m.]