Community Care (Direct Payments) Bill [H.L.]

HL Deb 15 January 1996 vol 568 cc364-433

3.9 p.m.

Baroness Cumberlege

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Baroness Cumberlege.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.]

Clause 1 [Direct payments]:

The Chairman of Committees (Lord Boston of Faversham)

In calling Amendment No. 1, I should point out to the Committee that if it is agreed to I cannot call Amendment No. 3.

Lord Rix moved Amendment No. 1: Page 1, line 10, leave out from ("Services,") to the end of line 12.

The noble Lord said: By way of preamble, may I say how glad I am sure the whole Committee is to see the noble Baroness, Lady Cumberlege, back in her place on the Front Bench. I trust that she has fully recovered from her indisposition. I also trust that it has left her in a good mood to face the amendments to which she will respond this afternoon.

I suspect I am not alone in having had to do some hurried rethinking on what I propose to say in the light of the last-minute access to the consultative document. We have in front of us a number of amendments alike in purpose but different in character, all dealing to some extent with issues now discussed in the consultative document. I speak in particular to Amendments Nos. 1 and 38.

I notice that the copy of the consultative document that the Minister's officials kindly faxed to MENCAP was timed at 19.14 on Friday, which indicates some after-normal-hours work in the Department of Health which ought to be acknowledged. It is a pity, however, that there could not have been a longer gap between the publication and this debate.

Since the document has been published, and since it clarifies the Government's intentions on the scope of the direct payments arrangements, I can helpfully tighten up my remarks on my related amendments. Those amendments would remove the Government's regulation-making powers and, as a necessary counterpart, prevent local authorities excluding whole categories of potential beneficiaries. Contrary to the apparent instinct of other participants in this debate, I see no great virtue in preventing the Government discriminating while allowing local authorities to discriminate.

The reason for my amendments is straightforward. I want those who have learning disabilities who are in a position to benefit from the new option, and want to benefit, to have that chance.

There are perhaps two counter-arguments inherent or explicit in the consultative document. The first is that it is better to start with physically disabled people of working age and learn from their experience. With respect, I do not believe that we can learn more about accommodating the particular needs of people with learning disabilities from a scheme limited to people with physical disabilities; and I do not see what is to be gained by covering people with learning and additional physical disabilities—which is another option tabled—though that is certainly better than restricting the option solely to people with physical disabilities. People with learning disabilities are included in existing not dissimilar schemes. That provides a starting-point in experience.

The second argument that needs to be addressed is this. If local authorities do not have to run any sort of direct payments scheme, why tie their hands as to the sort of scheme they choose to run? My answer is that I do not favour authorising unfair discrimination. Authorising local authorities not to open a particular option to anyone seems marginally more in line with good practice than authorising them to indulge in unfair discrimination against some potential beneficiaries.

I raise one final point. I do not see a huge rush of people immediately anxious to take over the somewhat onerous task of buying their own support package. That reinforces my view, which other noble Lords clearly share, that it is wrong to restrict entitlement to a very narrow band among those who want to pursue this option. I beg to move.

3.15 p.m.

Baroness Hollis of Heigham

I support the amendment moved by the noble Lord, and speak to Amendments Nos. 2, 3, 38 and 44 in this grouping. We strongly support Amendment No. 1 tabled by the noble Lord, Lord Rix, and Amendment No. 3 by the noble Baroness, Lady Darcy (de Knayth), which she will no doubt move in a moment. Amendments Nos. 2 and 44, standing in my name and that of my noble friend Lord Carter are probing amendments. They seek simply to press the Minister on her thinking. The first would leave eligibility to be defined by regulation; the second would remove the power of the Secretary of State to determine by regulation who would be eligible for direct payments. They cancel each other out. We do not want either amendment, except as a probe.

Our view on these Benches is clear. We do not believe that the Secretary of State should determine, either by schedule or by regulation, who should or should not be eligible for direct payments made by the local authority in lieu of services. There are two broad reasons for our view.

First, we believe that anybody suffering from any type of disability may be suitable, and should be eligible, for direct payments rather than services. Such people should not be debarred by a priori category, by stereotype, whether on grounds of age or by type of disability. Someone who is 66 may be better able to cope with direct payments than someone who is 46. Someone with a moderate educational learning difficulty may nonetheless have a greater capacity and willingness, particularly if they are in sheltered accommodation, than someone with a severe physical disability which leaves them frail, poorly and sometimes confused. In other words, whether someone is suitable for direct payments should be assessed individual by individual. There should not be blanket category exclusions.

If this Bill means anything, it means putting a disabled person and that person's needs at the centre of the care system; and that such people are seen as individuals, empowered to make their own decisions, and not as a category for whom decisions are made by the Secretary of State, the local authority or the care professionals. That is what the Bill is about. This first amendment seeks to deliver the purpose of the Bill.

My second reason for supporting the amendment (as I have said, we do not believe in category blanket exclusions irrespective of the individual competence of the person concerned) and why we are opposed to the Secretary of State ruling out in advance that certain people should be eligible is this. While everyone should be eligible—and not everyone will be suitable—the decision, the exercise of discretion, should he made locally by informed professional social workers and not at the centre by a Secretary of State who cannot know the individual circumstances involved.

Local authorities regularly exercise discretion, through professional and trained social workers, in all sorts of sensitive issues from child abuse to adoption and the like. It is a discretion informed by professional judgment. That is why we have social workers. Why then should a Secretary of State seek to double-guess or to preclude social workers from exercising their discretion where they believe that direct payments arc in the best interest of the individual and, in terms of value for money, in the best interest of the authority'? Why should the Secretary of State double-guess the professionals who are trained to do the job on the ground?

This amendment is necessary because these lines in the Bill are not. The only test for direct payments should he: is the person in need; has he or she been assessed as requiring community care services; does it represent value for money for the authority; and is it in the best interests of that individual that he or she should receive direct payments rather than services? We do not need the Secretary of State to exercise discretion on behalf of professionals and to limit the discretion of local authorities. That will stifle innovation, inhibit value for money and subvert the purpose of the Bill, which is to put the needs of the disabled individual at the centre of the care system. We support these amendments.

The Chairman of Committees

As Amendments Nos. 2 and 3 are also being spoken to, I should point out to the Committee at this early stage that if Amendment No. 2 is agreed to, I cannot call Amendment No. 3.

Baroness Darcy (de Knayth)

First, let me say how good it is to see the noble Baroness the Minister in her place. I hope that she is recovering well.

I should like to support most warmly Amendment No. 1, which was moved by the noble Lord, Lord Rix, and also Amendment No. 38, which is his proposed new clause. The noble Baroness, Lady Hollis, also put her name to Amendment No. 1. The amendments would remove the exclusion on whole categories of people being eligible, with which I agree absolutely.

My amendment, Amendment No. 3, is also a probing amendment. It is framed to exclude age and form of disability and I tabled it in order to see what the Government have in mind. I absolutely agree with the noble Baroness, Lady Hollis, and the noble Lord, Lord Rix. I do not feel that it is appropriate to assume that everyone with some particular disabling condition or indeed a degree of disability has or has not the same ability to handle his or her own affairs.

Furthermore, as the noble Lord, Lord Rix, said, some local authorities already include in their direct payment schemes, for example, people with learning disabilities. So, if the regulations exclude them, we shall return to the ridiculous situation in which we have been for some time, whereby local authorities are forced to operate either illegally or through a third party or to stop giving the payments to that group of people. I also feel very strongly that it is not appropriate to assume that all people of a given age are equally capable of looking after their own affairs. As the noble Baroness, Lady Hollis, said, someone of 60 or 70 may be far more capable of organising his affairs than another person of 30 or 40 years old and, of course, vice versa.

I have some questions about age to ask the Minister, to which I hope she will reply. First, if there is an age limit on eligibility, will those who are already in the scheme be able to continue with it? I asked that question at Second Reading on 7th December (Official Report, col. 1060) but I cannot find a reply from the Minister. What is the lower age limit? Is it 16, 18 or what age? Might it even be sensilble to consider payments being made to adults for disabled children to give them more freedom and flexibility within their lives? At Second Reading (Hansard, col. 1051) the Minister said that she would consider carefully what people have to say before deciding. That gives me some hope.

In relation to age, there is no financial consideration to be taken into account, which is so often the reason for age limiting new claimants, because the service will still be available, just not the option of the freedom and independence of choosing direct payments. I hope that the Minister will be able to give an assurance that age will not he a criterion governing eligibility. Otherwise, along with Amendment No. 38 by the noble Lord, Lord Rix, we might need another new clause which will state that regard shall not be had to age.

Lord Campbell of Croy

I apologise for being out of breath. I have just come straight from Heathrow. My usual flight from Inverness, which is near my home, was much delayed by fog at Heathrow. It was a beautiful, fine, sunny and clear day at Inverness. I arrived just in time to hear the beginning of the debate and the noble Lord, Lord Rix. I am glad to follow the noble Baroness, Lady Darcy, and perhaps I may congratulate her on becoming a Dame in the New Year Honours.

Almost all the groups of amendments on the Marshalled List and this amendment apply to the first three clauses in the Bill, which are concerned with England and Wales. Clauses 4 and 5 deal with Scotland and there are only three amendments to Clause 4. Two of those amendments are in the name of the noble Earl, Lord Mar and Kellie. It would have been unnecessary duplication for us to table in the Scottish part of the Bill amendments similar to those for Clause I. It would also make the Bill complicated to follow, as the Scottish part of the Bill simply amends the 1968 Social Work (Scotland) Act. The whole point of the two Scottish clauses is to make changes by amending that Act. That would have been difficult to follow. I believe that it is sensible to discuss in Committee today points raised in amendments for England and Wales. If any changes of principle are accepted today, I should expect similar amendments to be considered for the Scottish part of the Bill at Report stage.

That may seem to be a paradox. In Scotland direct payments have been made in recent years by local authorities and made legally in certain circumstances under Scottish legislation. They were found to be illegal in England and Wales and payments had to be made indirectly through third parties. It is also the experience in Scotland that has helped illustrate that a direct payments system works well. It is preferred by the clients, who choose it, and can be cost-effective, giving better value for money.

Now that the Government, through this Bill, are proposing a new system within community care, it makes sense to have uniformity in the arrangements throughout Great Britain. Accordingly, we are not surprised to find new provisions for Scotland in Clauses 4 or 5, although a system has been operating successfully in Scotland. I just wanted to say at an early stage of the Bill that it will save the time of the Committee to consider these points of principle concerning England and Wales, so that we can, if necessary, consider similar points for Scotland at a later stage.

Lord Addington

Briefly, I should like to support all those who have spoken so far. I support in particular Amendment No. 3, on which I added my name to that of the noble Baroness. If we are to [...]dress people as individuals, there is no use putting [...] in categories and then assessing them as individuals. People who have a disability must he taken first as individuals. As the noble Baroness, Lady Hollis, said, unless one pays attention first and foremost to the individual, effectively one is discriminating.

A great deal of the time of this parliamentary Session and the last one has already been spent on trying to obtain legislation to stop discrimination against disabled people. Surely bringing the Bill into line with that is in accordance with government thinking. I hope that the Government will take on board one very simple fact. Every time one establishes a category of people, immediately a sub-category is envisaged to go with it. In the matter of disabilities, that is very much the case.

I use the example of people who have bad eyesight. That category includes every single Member of this Chamber who needs to wear glasses and those who are blind. Are we to say quite succinctly that people with bad eyesight are excluded? If so, we shall simply exclude whole groups who need glasses simply to read. That is an extreme example, but that kind of logic is inherent in the Bill as it stands now.

Lord Swinfen

I too should like to support this group of amendments. I can see no reason why the Government should oppose the principle behind them. After all, they set up the Independent Living Fund. I understand that some 18 per cent. of those who obtain funds from the Independent Living Fund to buy their own care are people with learning disabilities.

If the faculties of those who reach and go beyond the age of 65 suddenly were to go and they were not able to manage their own affairs properly and needed that to be done for them by the local authority, then the effectiveness of this Chamber would be very considerably reduced. We know that there are vast numbers in this Chamber over that age who give extremely good service and very good advice. I am sure that none of us would wish to be without them.

The local authorities are quite capable of using their discretion and local knowledge to help with financial grants those who need help to manage their own affairs. They have to answer to the district auditor for the way in which their funds are spent and ultimately to the local voters if it is felt that the funds are not being properly handled. I should have thought that they could manage things quite happily themselves without restrictions on the type of person to whom grants could be made.

3.30 p.m.

Baroness Seear

Generally speaking, in relation to these amendments, I should like to raise two points with the Minister referring back to some of the comments made at Second Reading.

First, if the Government feel that people with certain kinds of disability are unable to handle their financial affairs—I imagine that is why they are proposing to exclude them—or they are too old to do so (though, as the noble Lord, Lord Swinfen, pointed out, some of us beyond the age suggested seem to be able to manage our financial affairs fairly well) surely one of the ways in which that can be dealt with, contrary to what is contained in the Bill, to my disappointment, is for the carer to be the person who receives the money once that is agreed with the disabled person concerned. It is unfortunate that the Bill as it now stands does not include carers in the categories of people entitled to receive the grants. That is a point which would make it much easier to deal with the problems raised.

Secondly, can we get one point clear? Surely it is not for local authorities to say who will be paid directly; it is for the disabled individual concerned. Of course, the local authority must agree; but it is for the individuals to say whether or not they want to receive the money directly in order to be able to use it to buy the services that they require. It is with them that the decision should lie in the first place.

Baroness Masham of Ilion

I support the amendments. However, can the Minister give us some indication of what is to be contained in the regulations? That would be extremely helpful.

I believe I am right in saying that local authorities make the assessments and therefore they should know, if they make them correctly, who can manage and who cannot. Flexibility is therefore extremely important. Some families will manage, though they may need help if a crisis arises, and other families will not—they may spend the money on the lottery. There should be some flexibility.

Baroness Faithfull

I blame myself for not finding out this information before. Can my noble friend the Minister say, from the work already done by directors of social services—many of whom have already used this method of direct payment, though perhaps not legally—whether or not the provision applies to people with learning difficulties as well as to those with physical disabilities? Also, can she say whether or not the experiment was a success?

Lord Murray of Epping Forest

The Government's proposal to restrict the categories of people available for direct grants, as distinct from enlarging them, is rather puzzling. If the Government are arguing that this is one way of saving money, the provision is understandable, if not totally defensible. But the contrary appears to be the case.

The operation of the Independent Living Fund shows that the cost-effectiveness of people receiving the grants and handling their own money is greater than the provision of services by local authorities. Therefore, first, it will be a money-saving exercise, at least on balance.

Secondly, one of the purposes of giving grants of this sort, apart from providing money with which people can relieve their disability or sustain the way they handle it, is to improve their ability—especially those with mental disabilities—to exercise responsibility; to learn how to live and how to cope; to learn how to do things for themselves. If we can help them in that way and perhaps therapeutically improve their position, even marginally, that is surely a major advantage rather than compelling them to accept services provided by an external authority at the behest of that authority.

I hope that the Government will reflect on those two positive points: first, the cost-effectiveness of the amendment; and, secondly, the possible therapeutic bonuses of providing the grants directly.

Lord Jenkin of Roding

I too must apologise for missing the first few words of the debate; I had hoped to be here earlier. I considered carefully the issue as to whether or not the Government are justified in seeking to phase in the new system and, if so, how it should he done.

Let me say straightaway that I totally support the concept of direct payments wherever that is possible. I derive that opinion from a case many years ago where I was advising the legal association for the disabled. It presented me with the case of a family in West London where the husband had become seriously disabled. The family wrote to the local authority and asked to have a stairlift installed.

The local council sent along its assessment officer who said, "What you really want is a grant for a bedroom, a grant for a bathroom, handholds and ramps" and many other things. The work duly went ahead. Finally, the senior person came along and inspected the house. He said, "This is all extremely satisfactory and the only thing you need now is a stairlift to enable your husband to get up to the top floor". The wife responded, "That is all we asked for in the first place!".

I have no doubt that had the money been directly available to that family, that is what they would have had and the other expenditure would not have been necessary. It is crucial that we realise—as has been said in this Chamber and elsewhere for many years—that by far the best judge of what a family with a member suffering from a handicap needs, is that disabled person or his family. Of course they should be given advice and be made aware of what is available; but the choice should be theirs. Direct payments are a good way of—to repeat the word used several times at Second Reading—"empowering" people. I read the speech of my noble friend both in introducing and in winding-up the debate and some of her comments regarding the actions of individuals who had had the advantage of receiving direct payments were: extremely encouraging and heart-warming.

Of course, we would all love this system to spring fully armed out of the breast of Athena and for it to be available to everybody straight away. I may have it wrong—my noble and learned friend Lord Simon is seeking to put me right and will have an opportunity to do so—but the fact is that anyone with experience of the way these systems are introduced knows that that is not realistic. This is an example of where a system needs to be phased in.

The case made for extending the direct payments system to ranges of people who will not be immediately embraced by the scheme—for example, the elderly, people with learning disabilities, families with children and so forth—is strong. I hope that my noble friend can tell the Committee when she replies that the Government are not excluding any of those groups; but that they are hoping to give a greater priority to the physically disabled who are of adult age though have not yet reached pensionable age. I have no doubt that that is the group from which the greatest pressure for the provision has come. That is the group where the greatest immediate value will be secured.

It is no bad thing to ask local authorities to concentrate their efforts in the first instance on making the direct payments scheme available to that category and, progressively, to others as they gain experience. One must remember that a large number of local authorities have not attempted direct payment before, though some, to their great credit have (it has been said illegally and I do not comment on that); most will he feeling their way and learning how to do it; most will need to become used to the idea of not implementing services themselves but giving people the cash to do it.

I should have thought that it was entirely reasonable to take the power to phase this in. After all, how often have we heard from noble Lords on both sides of the House that pilot schemes and so on would be better than jumping straight away into major reforms? This is not a pilot scheme. This is introducing a scheme by stages. In justifying that I hope that my noble friend will nevertheless be able to reassure the Committee that no group will be excluded—certainly not For all time—hut that all groups will be considered in due course and that the advantages of the scheme will be extended to them. If my noble friend is able to tell the Committee that, I think we would he prepared to say that phasing in may be right as a necessary stage in the introduction of something which everyone wants to see.

Baroness Hamwee

In partial answer to the noble Lord, Lord Jenkin of Roding, as he himself recognised, these schemes are perhaps illegally in operation in a number of local authorities. I wonder whether in replying to this group of amendments, which as my noble friend said we on these Benches support, the Minister could assist the Committee with regard to the timetable relating to the consultation document and the regulations. It is a matter for those affected by these proposals—both the payees and the payers—who are not being asked to respond to the consultative document. We should listen to them with regard to the phasing in of pilot schemes and so on.

Many Members of the Committee will have heard from organisations representing affected groups. They have indicated, certainly so far as my mail is concerned, that they would be against any kind of discrimination, if I may use that word perhaps rather more neutrally than it is normally used, or differentiation between the groups. After all, there is a consultative document. Perhaps it is a little paternalistic for the Committee to seek to pre-empt the answers which will be given to the consultation.

At Second Reading I expressed concern about the timing. The noble Lord, Lord Rix, has told the Committee how very recently the consultation document has been received. If it has gone out by fax I daresay that some people do not have very clear copies and cannot yet read it. It would be helpful to know how long the consultation period is to be and when the regulations are likely to he laid. It was with that in mind that I put down an amendment, which comes rather later in the Bill, seeking a positive resolution in respect of the first set of regulations in order that there might be parliamentary involvement. I can see that we shall have this discussion on almost every line of the Bill as so much of it inevitably will be in regulations.

Baroness Seccombe

My noble friend Lord Jenkin of Roding has expressed much more eloquently than I can exactly my feelings. This is an exciting and positive measure which is welcomed by noble Lords on all sides of the House. However, if it is available for all, it may he so popular that social workers will be swallowed up in the administration of such a scheme. Rather than having pilot schemes in different parts of the country, it seems to me that the measures suggested in the Bill are the right way to proceed. I hope that we shall agree to them.

The Earl of Mar and Kellie

I am a little surprised by the encouragement of the noble Lord, Lord Campbell of Croy, for not discussing Scotland today, especially when I have just flown through the same fog as he did to get here.

Lord Campbell of Croy

My Lords, I am grateful to the noble Earl for giving way. I think that he has slightly misunderstood me. I came in right at the beginning of the day in order to draw attention to Scotland. The first amendments on the Marshalled List right up to his two amendments deal with the part of the Bill on England and Wales. Before we started discussing all the amendments I thought it was important that it should be made clear that they apply to England and Wales only but that I do not find fault with that on the basis that if it takes a great deal of time and if in principle amendments are accepted, the Scottish equivalents could he considered at a later stage. I think the noble Earl will agree with me that it is complicated to try to make amendments to Clauses 4 and 5 which themselves amend an existing Scottish Act. That would make the work of the Committee rather more complicated than it need be.

3.45 p.m.

The Earl of Mar and Kellie

I am grateful to the noble Lord for reminding the Committee that Scotland is perhaps in advance on this. I am certainly not decrying that.

I have no difficulty with the concept of direct payments. However, I wish to support Amendment No. 44, which definitely relates to Scotland. It would be regarded as unhelpful for whole classes of people in Scotland to be disentitled en bloc. Section 12 of the Social Work (Scotland) Act requires the local authority to assess and assist all persons in need. Such payments are made under that section only if they are deemed appropriate after assessment. Discretion is already built into the system. Therefore I would argue that there is no need for further definition by class or grouping, especially if it is to be done by regulation by the Secretary of State for Scotland after the passage of the Bill through Parliament.

Lord Pearson of Rannoch

I do not want to take up the time of the Committee, because I have my own amendments later to speak to, but I would like to amplify some of the comments made by the noble Lord, Lord Murray of Epping Forest, and the noble Baroness, Lady Seear, and invite the Committee to consider the case of the severely mentally handicapped, who are in effect incapable of taking their own decisions in this matter. I hope that what has been said and broadly supported by noble Lords this afternoon will take into account the carer in charge of such a person. I would hope that that carer would as often as possible he a close family member of that severely mentally handicapped person who perhaps has a mental age of four or even less.

Lord Hayhoe

During the course of the persuasive speeches that have been made in favour of this series of amendments reference has often been made to discretion. Perhaps we ought to think carefully whether it is right to take away from the Government the discretion which is implicit in Clause 1(1)(b). I believe that that discretion would be exercised along the lines suggested by my noble friend Lord Jenkin and that this would be a phased process. At this stage, when we arc taking a major, important and broadly welcomed step forward into direct payments, it will require very powerful arguments indeed to deny the Government who are introducing this legislation the element of discretion which would be denied to them if these amendments were carried. Therefore, though I find persuasive the speeches which have been made in their support, they are not persuasive enough for me to be willing to deny to the Government the degree of discretion which I believe is their right in this matter.

Lord Swinfen

When my noble friend replies, can she tell the Committee whether Clause 1(1)(b) is in line with the provisions of the Disability Discrimination Act?

Baroness Hollis of Heigham

When the Minister comes to reply, will she address two points which have arisen in the contributions of the noble Lords, Lord Hayhoe and Lord Jenkin of Roding? Will she confirm that under these proposals the local authorities themselves will have the right to introduce this scheme on a phased basis? According to the experience a local authority brings to direct payments, it may want a quite limited scheme to start with or it may, through third parties or whatever, already be operating a comprehensive scheme. For example, if these regulations were to be introduced they would have to limit a scheme that is already in place and running.

If local authorities have the discretion to phase in the scheme as fits their local circumstances, why should the Secretary of State do it? He cannot know the speed at which local authorities are operating, the experience they have and local demand. We do not need discretion at central government level if it is properly and professionally exercised at local level, otherwise one subverts the purpose of the Bill.

My next question arises as a result of the consultative document which has been published within the past two days or so. I believe that the responses have to he in by middle or late February. In paragraph 12 of the document the Government say that they are limiting the groups of people who will be eligible in order to give local authorities the best opportunity to implement direct payments effectively: in other words, this provision is meant to be helpful to local authorities. At the end of paragraph 16 an array of possibilities is offered as to which groups will be eligible and the Government are asking for responses, saying that they prefer the more limited option but will receive recommendations for a wider option. Is it an open choice? In other words, if the local authorities, which the Minister is so anxious to help, say, "Minister, we do not find your proposals helpful. We would prefer that all groups, on paper, be eligible and that local authorities should determine how they phase in the scheme", will the Minister listen and accept that?

Baroness Cumberlege

I thank the noble Lord, Lord Rix, and other Members of the Committee for their opening remarks. I usually refrain from giving health advice, but I do not recommend renal colic or kidney stones. The pain equals that of labour pains but there is no baby to show for it at the end.

I also offer my congratulations to the noble Baroness, Lady Darcy (de Knayth): her becoming a Dame gave many of us enormous pleasure.

In my opening remarks I would like to thank many Members of the Committee, including the noble Baroness, Lady Hollis, for their timely amendments. That was greatly appreciated by myself and my officials. All these amendments seek to remove or amend the regulation-making power in Clause 1(1). The reason for this regulation-making power is so that we can restrict the size of the potential client group for this new and largely untested development, as many noble Lords have pointed out.

With no restrictions, we feel that the potential client group would include all people who would otherwise receive community care services, and that is a very large group. We think that it is sensible to limit eligibility in the first instance so that we can see how this policy works in practice. What we propose is to make regulations so that it is clear who local authorities should focus their attention on in the first instance. I believe that local authorities will welcome that clarity.

Perhaps I may take up the point made by the noble Lord, Lord Addington, and the noble Baroness, Lady Seear, about restriction being discrimination. That is not our intention at all, and neither do we want to prejudge that certain groups, depending on age or whatever, would not be able to manage. The provision is about selecting a group of an appropriate size who are keen to take on this new freedom. This is a new approach to delivery of care and all parties involved need time to adjust to it. It makes a great deal more sense to specify in regulations who is in that group rather than who is not, as would he the effect of the second amendment tabled by the noble Baroness, Lady Hollis.

We are consulting on how the client group should be defined in regulations. I apologise to the Committee for the fact that the consultation paper did not arrive earlier. But it explains our reasons for preferring that only physically disabled people under the age of 65 should be eligible, and invites comments. The paper also makes clear that this would not exclude people who have a physical disability as well as some other form of impairment such as learning difficulties. The noble Baroness, Lady Darcy (de Knayth), asked whether people who are already receiving direct payments would be eligible after their 65th birthday. The answer is yes, and we would want them to continue.

The noble Baroness also asked about the lower age limit. It is 18 years because direct payments replace community care services, and those services are for adults. Under the age of 18 the Children Act applies. We shall consider very carefully the responses we receive to all our consultations, alongside your Lordships comments, before deciding on the definition of eligibility to be used.

The amendments tabled by the noble Lord, Lord Rix, and the noble Baroness, Lady Darcy (de Knayth), seek to avoid any restriction on the basis of age or nature of disability. I am sympathetic to their reasons for tabling these amendments, but I do not see that there is any fairer way of restricting the size of the client group. We feel that that is important, as my noble friend Lord Jenkin has said. When we are starting a new scheme like this, it is important that we phase it in. We want this new concept to be a real success. We know that some local authorities are finding it difficult at the moment even to implement the community care Act. It is difficult for them to see a national picture. This Government, through their various task forces and the work of the department officials, can get a total picture of what is happening in the country.

The noble Lord, Lord Addington, asked about people with learning disabilities who are currently supported from the ILF. Our reason for proposing to exclude people with learning difficulties in the first instance is not based on the belief that no one with such disabilities would be able to manage the provision. We are simply trying to restrict the size of the client group, as I have already said, while local authorities gain experience of administering the direct payments. There are lessons that they will need to learn, although they will not be specific to the people who receive them.

There were also questions about the current schemes. As we know, some local authorities are currently operating independent living schemes. It is for them to ensure that these schemes are operating within existing legislation. I know that some of those schemes have some clients with learning disabilities. I am sure that they will find that experience useful. But many local authorities do not have that experience and direct payments have never before been a part of the mainstream provision. That is why we feel that in the first instance we need to tread very carefully.

Baroness Seear

Is not that exactly the reason why the scheme should be left to the local authorities? The noble Baroness has just said that some have gone ahead with it and others are far behind. Surely that means that a uniform scheme is not appropriate.

Baroness Cumberlege

I do not know how to put it more strongly. It is important that we focus on a small group to start with. There are other amendments which will look at probity in monitoring the schemes and all the rest of it. Clearly, to some extent the department is also involved. At this early stage it would be very unfortunate to go at such a pace as to include large numbers of people when we could not cope with that. We want the scheme to be a success, and this is a start. We shall certainly be reviewing the situation in terms of client groups, but first we have to look at the response we have to the consultation document.

Lord Carter

We have heard a lot about small, large and phasing. If the Government decide to go ahead with the group which is listed under paragraph 15(a) of the consultation document, referring to adults under the age of 65 who are physically disabled, have they any idea of the numbers involved? I do not believe that we have heard any numbers mentioned. Has any estimate been made of the number of people who are likely to take up the scheme in the first stage?

Baroness Cumberlege

We do not have specific numbers. I have been asking that question. This Bill reflects what is happening under the community care Act. We know under that legislation that 80 per cent. of the people who are assessed as needing services are over the age of retirement. Therefore, we know that the number will be relatively small: that is if we start with the physically disabled who are under the age of 65. But we just do not have the precise information and I have been seeking it.

Baroness Hollis of Heigham

Then how is it a problem?

Baroness Cumberlege

Perhaps I may continue and, with some trepidation, cross Hadrian's Wall and talk about the system in Scotland. As I understand the position there, direct payments can only be made in cases of emergency. Some authorities have set up voluntary bodies through which payments are made to individuals, as they have in this country. The Bill rationalises that arrangement and provides a national framework, which we all seek.

The noble Baroness, Lady Seear, asked who will initiate the direct payments, the client or the local authority. The noble Baroness, Lady Masham, came in on that. I think that both are right in that it has to be a joint agreement. First, the person concerned has to feel that he or she can manage the scheme and needs to approach the local authority which then has to undertake the community care assessment. It has to be an agreement between both parties.

My noble friend Lady Faithfull asked whether disabled people are included in some of the schemes that are running at the moment. I understand that they are, but we do not have any definitive answers about how that is working. However, the Hampshire scheme, which is a pilot scheme, is progressing extremely cautiously—and that county has had direct payments for 14 years.

The noble Baroness, Lady Masham, asked about the content of the regulations. We are anxious that the regulations should he laid as soon as possible, but that will depend on the parliamentary timetable. With regard to the document that we have put out, the consultation period will last for six weeks ending on 23rd February. We very much look forward to receiving people's comments.

I have tried to explain why we think that it is sensible to limit the size of the client group. By doing so in regulations, we shall be able to make adjustments without the need to amend primary legislation. I assure my noble friends Lord Jenkin, Lord Hayhoe and Lady Seccombe that we shall keep the position under review once direct payments are available and consider expanding the client group if that seems sensible in the light of experience

I understand from the noble Baroness, Lady Hollis, that these are probing amendments and I hope that, with those assurances, your Lordships will not press them.

4 p.m.

Baroness Hollis of Heigham

The Minister has been careful to answer as many questions as possible. but perhaps I may press her again on just one point. Clearly, we all want the Bill to succeed, but the biggest single issue that divides opinion in the Committee is whether certain groups should be blanket-excluded in advance by the Government as opposed to local authorities being able to determine how to phase in the scheme according to their own experiences and assessments of local need. That is a central question in the consultative document—we have quoted it to the Minister—in which the Minister asks for responses on whether her preferred option, which is to limit the scheme to physically disabled adults under 65, should command consent or whether wider groups should be included. If there is overwhelming support from the local authorities, which the Minister is so anxious to help and assist, as well as from other organisations, for the idea that the client group should be more comprehensive than the Government are proposing, will the Minister accept that?

Baroness Cumberlege

I sense that there is a feeling in the country that many people want to take this further. I understand that, but the Government have to exercise their judgment and at the moment we wish to consult on a sharper focus and on a limited number of people who would be eligible for the scheme. We think that that is right. The answer to the question will come through the consultation exercise when we shall discover the views not only of the local authorities concerned, but of the general public also.

I would answer the question asked by my noble friend Lord Swinfen about Clause 1(1)(b) if I could, but I am afraid that I shall have to write to him about it.

Baroness Darcy (de Knayth)

Before my noble friend decides what to do about his amendment, and following the points raised by the noble Baroness, Lady Hollis, perhaps I may press the Minister on one point. The last thing that we want to do is to continue a situation which has worried us all, including the Minister, so much for the past five years. I refer to the fact that local authorities will be forced either to operate their schemes illegally, through a third party, or will have to stop operating them. Does the Minister agree that if there is a blanket exclusion of some categories of people, although in some local authorities some of those individuals have already been receiving direct payments) we shall be prolonging something that we all want to avoid?

Baroness Cumberlege

I understand that some schemes that are running are not illegal and I am sure that if they meet the requirements of the district auditor they will continue to run. I am sure that the Hampshire scheme is an example. At this point we want to restrict the numbers. We know of the difficulties that some local authorities are having in implementing the National Health Service and Community Care Act. This is another very new system for some local authorities which is why we want to consult on it.

Lord Pearson of Rannoch

In accordance with what my noble friend is saying, does she not agree that Clause 1(4) is perhaps too restrictive? What is the point of having that subsection if the object of the exercise is to start small and gradually include more categories and get larger? I do not see that subsection (4) of Clause 1 helps in that regard. The discretion would still be left with the Secretary of State to add any category that seems appropriate as time goes on without having to look for primary time to alter the face of the Bill.

Baroness Cumberlege

I think that the point was well made by my noble friend Lord Jenkin of Roding. This is a new scheme. We have to see how it works. If it works well, we are prepared to reconsider the categories to see whether they can be widened with good effect. However, I must advise the Committee that we need to be careful to start with. As my noble friend said, whenever we introduce new measures many people ask why we did not have a pilot scheme. We are not having a pilot scheme in terms of geography, but we are suggesting that we should start with a sharp focus and limit it to the group of people who have pressed most strongly for this measure. We shall then assess what happens.

Lord Swinfen

I thank my noble friend for offering to write to me about my question. I think that it is an important question because if it turns out that Clause 1(1)(b) is not consistent with the Disability Discrimination Act, considerable rethinking will have to be done—and the sooner it is done, the better. Can my noble friend confirm that she will respond to my question before the next stage of the Bill?

Baroness Cumberlege

Yes, I can give that assurance.

Lord Rix

Before closing on this amendment, can the Minister confirm that Report stage will not take place until after the consultative document has been replied to—that is, not before 23rd February? It seems wrong for the Report stage to take place before that date.

Baroness Cumberlege

That is a question for the business managers. I certainly would not dream of giving such an undertaking.

Lord Rix

In that case, it will clearly be difficult for us to press amendments, but I suppose that we shall have to think about that at Report stage, if it happens before 23rd February. Although we recognise the need to phase in direct payments, as I said in my opening remarks, it is vital that people with learning disabilities are seen as having totally different problems from those with physical disabilities. Unless local authorities are able to experience what is required by people with learning disabilities, that is another learning stage that will take place months—maybe years—ahead and that is totally unsatisfactory.

Paragraph 14 of the consultation paper states: In particular, the Government will consider carefully, in the light of responses to the consultation exercise, whether all adults under the age of 65 with learning disabilities who are able and willing to manage direct payments (with help if necessary)"— I think that that responds partially to the remarks of the noble Lord, Lord Pearson of Rannoch— should be eligible". I can only say that we at MENCAP have, through what I have said, given that response this afternoon to Amendment No. 38. I know that I am supported in that by my noble friend Lord Allen of Abbeydale, the president of MENCAP, who is sitting on my right hand which is, I believe, the wrong way round. It is important that the question of making direct payments to people with learning disabilities (with help where necessary) should be addressed in the early stages of the consultation about the way in which the payments are to be made.

If I could have an assurance in that respect I should not press my amendment. In view of the doubts which seem to exist, I have no alternative but to seek a Division—

Baroness Hollis of Heigham

No, withdraw it.

Lord Rix

I beg the Committee's pardon. In view of the advice that I have received from the Opposition Front Bench, I shall return to my natural instinct and beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 2 and 3 not moved.]

Baroness Darcy (de Knayth) moved Amendment No. 4:s Page 1, line 13, leave out from ("whole") to first ("or) in line 14.

The noble Baroness said: In moving Amendment No. 4, I wish to speak also to Amendment No. 5. Before doing so, perhaps I may thank the noble Lord, Lord Campbell of Croy, and the noble Baroness the Minister for their kind words and congratulations on my becoming a Dame. The first joy is to see how pleased everyone else is about it. It is a great honour for me and I believe that it is also a tribute to the work done by your Lordships' House and by the Cross-Benches.

The amendments are a pair and their purpose is to ensure that direct payment covers the whole cost of a person's needs. Unless the words, or such part as they think fit", are deleted, a local authority could, in theory, pay a person far less than it might have to pay if it provided the service itself. Amendment No. 5, which would add the words "all or any part", would ensure that the whole cost of a person's needs was covered, whether by direct payment or by a mixture of direct payment and service provision.

I accept utterly that it is for a local authority to decide whether to provide a direct payment, but the present wording would appear to allow a local authority unfairly to influence a decision that a disabled person makes. Depending on its proclivities, a local authority could push a disabled person towards accepting a service rather than a direct payment or vice versa. For example, leaving aside any contribution from the disabled person, if the local authority assessed him as needing £X-worth of service, it could encourage the disabled person to choose the service by offering him half of the cost of £X in direct payment or to choose the direct payment by offering twice £X as a direct payment. That is to say, depending on the predilection, the local authority can favour its own in-house services or outside commercial services. I would not have thought that such behaviour, if it were to be allowed, would be in the best interests of disabled people. I feel sure that the Government will agree with that. Indeed, on Second Reading the Minister said: The local authority will not be able to set direct payments at a level which is insufficient to meet her needs".—[Official Report, 7/12/95; col. 1051.] The Minister may say that this amendment will preclude a local authority from imposing a means test. I stress that that is not the intention of the amendment. I hope that if the Government's legal advice is that the amendment will preclude a means test, we can find a more suitable wording that will achieve the same aim. I beg to move.

Lord Addington

Both the amendments are welcome and will help the Bill. They will guarantee that a disabled person can purchase the service about which we are talking. Such a provision should be included because it will guarantee that real choice is available to disabled people.

4.15 p.m.

Lord Carter

We are pleased to support the amendment. Perhaps I may refer to the contretemps that took place at the end of the debate on Amendment No. 1. It is the first time that I remember the Opposition Front Bench trying to rescue the Government from embarrassment by having an amendment withdrawn.

There is an important point to he made because paragraph 7 of the consultation document states: The Bill does not require local authorities to offer direct payments. Instead they will be able to decide whether to offer direct payments, or whether it would be more appropriate to continue to arrange services for the person concerned. It then states in paragraph 8 that the person concerned must consent. The object of the amendment is to make sure that local authorities will not play box-and-cox and decide that if they can save money one way or another that will be the criteria rather than the needs of the person concerned.

Paragraph 8 of the consultation document states: If they are offered direct payments and do not want to take on the responsibility of managing their own care at that time. that should not exclude the possibility of their being offered direct payments at a later date. What criteria will the local authorities use to decide whether to offer the payments later? Will there he any pressure on cost if it is decided that it would be cheaper to offer direct services? If the person concerned does not want those services, can the authority bring some pressure to bear on him to accept them?

Baroness Masham of Ilton

I wish to ask the Minister to clarify one matter for me because my noble friend Lady Darcy is not clear about it either. Who is eligible for help and who is not?

Baroness Cumberlege

Perhaps I may pick up that point first. We are suggesting that those eligible for help should be limited to those between the ages of 18 and 65 who are physically disabled. That is the position at the moment and that is what we are consulting on.

Baroness Masham of Ilton

Will there he a restriction on how they receive help? If they can afford their own help, will they receive help from the local authority? I know some very severely disabled people who receive no help at all.

Baroness Cumberlege

It all starts with the assessment and the wish of the disabled person to have direct payments instead of services. It is up to the local authority then to assess the needs of that person. The two have to work together. We can easily envisage a situation in which a disabled person will be receiving direct payments and services from the local authority and will also have his own income. In that case, perhaps he may wish to use that income in order to support himself. It can be a mixture of various means of care.

We understand the concern which prompted the tabling of this pair of amendments. It is an issue of great importance to the people who may wish to receive direct payments. The reasons that we intend to allow authorities to pay part or all of the cost of the services as they see fit are, first, to enable them to require the individual to make a financial contribution to the cost of his care—I understand what the noble Baroness said about that not being the purpose of her amendment—and, secondly, so that local authorities are free to set the amount at the level which they consider will enable the disabled person to purchase the appropriate services. It prevents local authorities from being forced to pay more simply because the disabled person wishes to have what is seen as a luxury service when there is a more basic but certainly adequate service which would do perfectly well. Of course, there is a duty on local authorities to ensure that public money is well used.

As we intend to make clear in the guidance, the Bill allows for local authorities to pay the whole or part of the cost of a service. That does not mean that the authority can arbitrarily decide to make inadequate payments. Authorities are under a power to act reasonably, and that will apply to the way in which they exercise their functions under the Bill. There are also some specific protections for individuals. Under the provisions of Clause 2, if someone is unable to secure the services for which the direct payments are given, it will be the responsibility of the local authority to arrange those services.

Direct payments can be given only with the person's consent. Therefore, a person need not agree to accept a direct payment if he believes that the amount offered will not enable him to meet his needs. Furthermore, those who are receiving direct payments, and those who turned them down because they believed that the sum offered was too small, will have the right to use the local authority complaints procedure to challenge the level of funding which the authority has offered.

We know that there is a real concern here—we understand and share it—that those receiving direct payments should not be treated more or less favourably with regard to the financial contribution that they are expected to make. The Bill gives local authorities discretion as to whether or not to take into account someone's financial circumstances. It does not require them to do so. It also gives local authorities discretion as to how that is to be done. That is intended to mirror the situation which exists currently in relation to non-residential care, where local authorities may decide whether or not, or indeed how much, to charge.

The Government aim to rule out perverse financial incentives so that a disabled person has a genuine choice. It is our intention to issue Section 7 guidance on this issue. The guidance will stress that local authorities must treat people fairly and should treat both service users and direct payment recipients in an equivalent manner. Therefore, when considering the financial contribution which a direct payment recipient should make towards the cost of his care, the authority should treat him in the same way as he would have been treated under the charging policy had the individual been receiving equivalent services. That maintains the local authority's discretion over its charging policy.

I believe that I was asked about the criteria used when direct payments may be offered in future, at a later date. It will be for local authorities to decide the criteria other than those which we are suggesting in our consultation paper. As we all know, many of us change our minds from time to time. Therefore, it is important that the issue is kept open so that people can decide in future whether they wish no longer to receive the services supplied but instead to have direct payments.

The Government believe that the Bill contains adequate protection for individuals and that issuing guidance as I have described is the most appropriate way to achieve our aim of ensuring fair and equivalent treatment. Therefore, I urge the Committee to reject the amendment.

Baroness Darcy (de Knayth)

I thank the noble Lords, Lord Addington and Lord Carter, for their support. I believe that they expressed the matter more clearly than I did. I thank the Minister for her careful reply. I appreciate that local authorities can set levels which they consider appropriate and avoid a luxury service, as the Minister described it; and that the recipient need not agree if he does not believe that what is offered is sufficient. I am happy with what the Minister said. She said that there will be a complaints procedure and that there will be a right of appeal if an individual believes that the local authority is not offering enough.

In the light of what the Minister said—I see that the noble Lord, Lord Carter, is nodding his head—I thank her for her assurance and I beg leave withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 5 not moved.]

Lord Carter moved Amendment No. 6: Page 1, line 15, at end insert—

("( ) Regulations shall provide that each local authority shall provide such advice and assistance to the person as may be necessary to ensure that the person has access to support services to manage a cash payment.").

The noble Lord said: In moving Amendment No. 6, it may be for the convenience of the Committee if I speak also to Amendment No. 45. These two amendments deal with the important need for advice and support services for the recipients of direct payments. I am sure that we all agree that there is a need for sound support and training systems to provide recipients of direct payments with the means by which they may maximise the benefit that they receive from the payments; to protect the employment rights of paid carers; and to enhance the administration of the scheme.

I must admit that I saw the consultation paper only a few minutes before I came into the Chamber and therefore, I did not have an opportenity to read it properly. But, looking at paragraph 35, which I believe is the only paragraph that deals with support services, the fair point is made about the need for support to recipients of direct payments as regards what the recipients will have to do. It mentions that local authorities must make clear the various problems which may arise when direct payments are offered.

On reading that paragraph, it is significant that there is no mention at all of government involvement. The matter seems to be left entirely to local authorities. I admit that the wording of the amendments does not exactly produce the answer that we are looking for and therefore, these are probing amendments. But we believe that guidance needs to be set down by the Secretary of State to establish a national framework of advice.

In response to the last group of amendments, the Minister said that there would be guidance for recipients and local authorities as regards the criteria and so on. I should be interested to know whether the Minister feels that that guidance should include the whole business of the recipient of the direct payments entering into an employer/employee relationship. Responsibility for pay-as-you-earn, national insurance and redundancy payments are all matters which employers are used to. But that will be a whole new arena for many of the people receiving the payments. Also, the financial situation is often such that it may be that local authorities must reduce the width of advice that they can provide from their own resources.

Another important point is that we are all anxious to give discretion to the local authorities. But all of us who believe in local democracy must accept that, if there is not some overall guidance, we shall end up with a patchwork quilt of provision with differing levels of provision and different criteria in different areas. Therefore, there should be support, advice and guidelines for the recipients and local authorities on which they can fall back.

The role which local authorities are to play in providing employment advice should be clarified. Will local authorities become involved in employee/employer disputes? Will the contracts made by the direct payment recipients be vetted? Will the users be permitted to make assistants redundant and, if so, how will that be paid for? We are entering something of a minefield. The Government cannot just sit back and leave it all to the local authorities.

As I said, the point of the amendments is to press the Government to say whether they believe that the guidelines which they have said will be issued, which we welcome, will deal with the issues to which I have referred. We feel that it would be helpful if those issues were addressed and that they may well be needed to prevent local authorities being open to legal challenge.

I have referred to the technicalities involved in the new employer/employee relationships. This will be a whole new field for many of the people who will be in receipt of these payments and they will be in need of sound help and advice. Do the Government feel that that should be left entirely to local authorities or do they believe, as we do, that they have some responsibility for providing national advice and guidelines?

A fear has been expressed by some organisations that the authorities, which are comparatively new to this, do not have experience of providing advice and will find themselves inundated with complaints made by, for example, carers. Therefore, we feel that there should be overall guidance on how those matters are to be handled. If such guidance were provided, the expected teething problems would be minimised.

There are examples around the country of local support agencies and advice support networks which are working extremely well. Could the work that those agencies are doing be brought together by the Government in the guidelines issued so that there is a national framework to which recipients, organisations and local authorities can refer?

I am sure that the Minister has the drift of the argument. If we give elderly and disabled people the opportunity to be in charge of their own care arrangements, that gives them the power of control which we all wish to see. But with that power comes responsibility and we all feel that support from the Government and the local authorities is needed to assist with that responsibility. Therefore, that is the point of these two probing amendments. We wish to know whether the Government feel that they have a responsibility to give guidance and support and to what extent those matters will be left to the local authorities. The consultation document seems to imply that the Government do not see a role for themselves at all in that regard; and I am sure that that is wrong. I beg to move.

4.30 p.m.

Lord Addington

I should like to express my support for the amendment for one very simple reason: if we do not have sufficient support systems available for those individuals who have been given such an empowerment, they may well not benefit from it at all or, indeed, benefit from it very badly.

As the noble Lord just said, it is a very complicated field and a series of new problems are being presented to individuals. Unless we have some sort of national guidelines, local authorities will not know what they are supposed to be giving and what type of help should he provided. Another important point to consider is that if what we have in the Bill as currently drafted—that is, certain categories that will he taken on board—is merely a starting point, having a service which would provide guidelines and help would enable the Government to bring in other groups at a later stage.

It would indeed help to have a national framework. It would help to address all the problems which may arise. In addition, different types of techniques for giving support, and so on, will be required by any agency which deals with such a wide group; for example, support for educational services may well have to be involved when dealing with the divergence of literacy skills. Unless coherent national guidelines are set down, many problems may arise in relation to the administration and any future direction of the scheme. However, so long as a national framework is put in place at the beginning, the scheme will have the opportunity to grow and become better directed.

Lord Jenkin of Roding

I find myself becoming somewhat confused on the issue. We debated briefly, but thoroughly, at the beginning whether or not it was appropriate for the Government to establish some priorities in the area, only to he told by Members of the Committee—principally those on the opposite side—that it was a matter to he left entirely to local authorities as they were the ones who knew about it and, therefore, they should have the choice. In other words, it would he quite wrong to introduce a regulation-making power to allow the Government to limit the recipients.

However, as regards the current amendment, we arc told that unless the Government provide national guidance on the advice services to he offered we shall end up with a "patchwork quilt" of such services. If I may say so, I find that to be a very confusing dichotomy in the thinking of the Front Bench opposite. With the greatest deference, because he knows much more about the subject than I do, I should tell the noble Lord, Lord Carter, that I found some of his remarks faintly patronising. We shall have many extremely active and determined people who want the power to make their own decisions and run their own lives. They are looking forward with great anticipation to the opportunity of having their own payments. I find it faintly demeaning to say that they will not know how to employ people and will have to have advice on that; or that they will not know anything about how to run PAYE or whether they should be paying VAT, or whatever it is now, on the payments. Indeed, I should give my noble friend notice that I shall return to that question at a later stage.

It seems to me that there are ample avenues through which people can obtain advice on such questions. I should have thought that it is perfectly reasonable to leave it to the local authorities which will operate the scheme to decide which of the sort of services and the kind of advice that they will be able to give. As I said, one has come across many organisations which help people who suffer from disabilities of one sort or another. Indeed, the fact that they are there to be consulted and give advice is sometimes one of the most important and valuable services that they provide. Moreover, there is no shortage of such assistance. I should have thought that it was really a work of supererogation for the Bill to lay down a requirement that the Government shall impose upon local authorities central guidelines as to how such services should be provided. It seems to me that that would make an absolute mountain out of a molehill, which is quite unnecessary. With that encouragement, I hope that my noble friend the Minister will feel able to resist the amendments.

Lord Carter

I should like to make one point before the Minister responds. However, I shall deal with the point at length in my response to the Minister. I was very careful throughout my speech to use the word "guidance" and not "regulation". That was quite deliberate. I notice that the noble Lord slipped from guidance to regulation and then went back to guidance. There is a distinction between the two. As I said, I was careful to refer only to guidance. I also said that the amendments were not in fact properly worded to achieve the desired effect.

Lord Jenkin of Roding

I should like to respond to the noble Lord. I must point out that the first words in the amendment are "Regulations shall provide". Indeed, the noble Lord is asking the Government to make regulations as regards the "advice and assistance" that may be given to such people. I feel that that is quite unnecessary.

Baroness Masham of Ilton

Before the Minister responds, perhaps I may ask a few questions. I am now speaking as the President of the Spinal Injuries Association. For some years we have run an emergency care scheme. Individuals and local authorities have used the scheme when the carer has an emergency breakdown and the severely disabled person—and I am talking about people who are paralysed from the neck down—is left without a helper. It is a short-term scheme of two weeks, otherwise provision of carers would he blocked.

However, such carers are trained by the Spinal Injuries Association. I should like to ask the Minister about the training of such people. As I said, we are talking about severely disabled people. Many severely disabled people can train their own carers, but they may need help in doing so. For example, they might need a physiotherapist or an occupational therapist to come in and help with the lifting procedures. Indeed, there are now EC regulations on lifting. Can the Minister say whether insurance will be taken into account in the direct payments to cover the extra expense?

Lord Swinfen

I believe that my noble friend Lord Jenkin of Roding has rather misread the amendment. It says: Regulations shall provide that each local authority shall provide such advice". It is the provision of that advice which is important. It does not refer to regulations as to what advice should be given. We all need advice from time to time, no matter what we do and what is our position in life. I know that a number of disabled people who wish to be independent and manage their own affairs would very much welcome advice on how to deal with employing people and on managing the grants that they receive.

In fact, in one of the briefings that I have received from People First (an organisation of people with learning difficulties for people with learning disabilities) one of the things that is specifically requested is that such people should be able to manage their own purchase of help and care but that they should also be given advice on how to do it, on how to spend the money wisely and on how to manage employees. At present, many of those people are able to live independently with the benefit of such advice. The amendments propose an extension of that advice. On the other side, local authorities are trustees of public money. I believe that the proposed extension would be compatible with their duty to ensure that that public money is properly used and not wasted. I am in favour of the amendment.

The Earl of Mar and Kellie

I should like to express my support for the amendment and speak also to Amendment No. 45 which is tabled in my name. I should point out to the noble Lord, Lord Jenkin of Roding, that he may prefer the wording of the latter amendment. The purpose of my amendment is to ensure that the local authority arranges for appropriate support to be given to people receiving the payments to enable them to arrange their own care. There is no doubting the fact that giving people with disabilities and elderly people the opportunity to be in charge of their own care provision will give them greater power and control over their lives.

However, the downside is that with power comes responsibility and, as other speakers have said, support, advice and information may he needed to assist people to cope with their new responsibilities. For example, individuals may need to know who can provide the services that they need, how they can access them and what is the going rate for them. If a person employs his own personal assistant, he may well need information about the duties of an employer and guidance about national insurance, taxation, health and safety requirements and employer's liability insurance. Again, unfortunately, some people will become unhappy with the care that they are receiving and will need advice about their rights under contract or about how to work the complaints procedure.

Such support does not have to come from the local authority. Indeed, there are centres for independent living in both Lothian and Strathclyde regions run by people with disability for themselves. Those centres have gained experience in supporting people in making their own care arrangements and are a model which other authorities can follow.

The amendment would have the effect of ensuring that the Bill would enable people to take advantage of the new provisions. By receiving support where necessary, they would avoid the pitfalls of employment administration.

Baroness Cumberlege

When a disabled person agrees to receive direct payments in lieu of community care services, that person will take on responsibility for the management of all the arrangements associated with the money he or she receives. Clearly, many people may need advice and assistance to cope with those new responsibilities. Local authorities are required to act reasonably, and I am sure that they will wish to help those people to ensure that they are able to manage their direct payments responsibly and properly. We intend to issue guidance to local authorities to ensure that they are aware of the importance of support. However, we feel that to go beyond that and give local authorities a legal duty to provide advice and assistance would be onerous and probably inappropriate.

I am aware that many people look to the Bill as a way of making local authorities less intrusive than they have been in the past. I agree with the noble Earl, Lord Mar and Kellie, that there are other methods of obtaining advice. We must not lose sight of the fact that the purpose of the Bill is to ensure that people are independent and run their own lives. I am sure that many will seek advice from sources other than the local authority. We believe that it would undermine local authorities' discretion in their dealings with individuals if such a duty was placed on them. After all, as I said, the purpose of the Bill is to ensure that people have their independence.

I should like to address specifically the role of an employer. The ultimate responsibility for the management of all arrangements associated with the individual's cash payments will rest with the individual. That includes the individual's duties as an employer. Direct payment recipients will have the same legal obligations as all employers. We intend to issue guidance to local authorities telling them that they ought to make prospective direct payment recipients aware that they will have legal responsibilities if they choose to employ personal care assistants. However, ultimately it is up to the people receiving direct payments to be aware of their legal responsibilities and to comply with them.

The noble Baroness, Lady Masham, asked about the training of carers and those involved as personal assistants. I looked at a scheme in some detail. The recipients of direct payments I met stressed to me strongly that it was they who needed the training as employers. They had personal wishes as to how the work was to be carried out, and they felt that it was important that they should themselves train the carers on the job.

I was also asked about insurance issues. What is included in the direct payment will depend very much upon the local authority, because, as the Committee is aware, we are not setting a rate that will apply country wide. We want to leave as much discretion as possible to the local authorities. We believe that this is an area in which they may well want to ensure that they have that discretion and that they will exercise it wisely.

Baroness Seear

Before the noble Baroness sits down, can she say whether that means that people providing the care do not require some basic training? For example, in the case of lifting, the person who needs to be lifted will not be able to instruct the lifter in the best way to do it. In addition, there are basic domestic skills to be taught which have nothing to do with the way in which the person being looked after may want meals served or may want to eat. There are standards of cleanliness to be observed. Surely it is highly desirable that the people who will take on these jobs should be given some basic training in the skills that they will need.

Baroness Cumberlege

Again, I believe that is a matter to be left to the discretion of local authorities, just as they operate home help services, for example, now. Many have different approaches. Many will want to make use of NVQs and the new qualifications which are now on stream. We do not want to be prescriptive and say to local authorities that a particular level of training is essential for carers to do the job, because there are people of differing abilities and experience: some may need a great deal of help in order to carry out their duties and others may not.

4.45 p.m.

Lord Carter

I am extremely grateful to all Members of the Committee who have taken part in this useful debate. When I opened the debate on the amendments I said that the wording of the first amendment was not perfect. I understand entirely the point that was made by the noble Lord, Lord Jenkin, and if forced I would accept the wording of Amendment No. 45 in the name of the noble Earl, Lord Mar and Kellie.

It seems to me that the Government are not being entirely logical. The Minister said in respect of the first group of amendments that the Government have to decide which groups will be eligible, but it appears that they will place no duty on local authorities to give support and advice. They will make them aware of the situation but place no duty upon them. The Government will lay down the groups which are eligible and the criteria for eligibility but then it is entirely up to local authorities whether to offer any support and advice. I paraphrase, but that is the basis of what the Minister said. It is not the Government's responsibility, it is up to the local authority whether to offer support and advice, and if it does not that is it.

Of course the ultimate responsibility lies with the individual. All of us who have been employers know the problems of employing the so-called self-employed. If the Inland Revenue decides that a person is not self-employed, then the employer is responsible for tax and National Insurance, which could be a substantial sum.

For all those reasons, I believe that the Government should take much more responsibility and perhaps be prepared to encourage local authorities, through guidance, to sub-contract competent agencies to carry out the work.

I return to the consultation paper, because it seems that the Minister has confirmed the impression that I gained from quickly reading paragraph 35 that the Government see no responsibility for themselves in this area of guidance concerning the problems that could affect the recipient. There are a number of different models of direct payment schemes which are now running which enable disabled people to employ their own workers. Recent research shows that the most successful schemes in terms of user satisfaction and value for money are those for which support and advice are available, often through a personal assistance support scheme, either financed directly by the local authority or using transfer moneys from the Independent Living Fund.

The amendment leaves it to local authorities to decide what support is necessary. The intention is to place an obligation on local authorities to provide the support and advice which we feel is required. We believe that the consultation document does not go far enough in this respect. However, at this point I shall not press the amendment, but I believe that it is a matter that we shall have to discuss with the Minister before the next stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 7: Page I. line 15, at end insert—

("( ) An authority shall not unreasonably refuse a disabled person access to direct payments from a scheme for the making of such payments to which subsection (I) above refers.").

The noble Baroness said: The purpose of the amendment is that anyone seeking a direct payment should he certain that their application for a direct payment will be approved if they fall within the stated requirements of any scheme established by the local authority. In other words, the amendment seeks to tread the line between the rights of the disabled person and the duties, powers arid responsibilities of the local authority. Just as we argued earlier that there should he no categorical refusal by the Secretary of State as to who should be eligible for direct payments, we equally accept that there should he no categorical entitlement for an individual disabled person as of right. Individual clients must be assessed and professional judgment exercised. I do not believe that there is any dispute between us on that point. Local authorities must retain their discretion, but that discretion should not be unqualified.

With the amendment, there is a presumption in favour of the client. If the client comes within the category group, then the local authority's consent to direct payments should not be unreasonably refused. It means that local authorities retain their discretion but that that discretion must be professionally exercised and capable of being reviewed against a test of reasonableness in the appeals procedures, going through to the ombudsman.

It is not a phrase, a new consideration or a new test for local authorities. It is well established in practice. Local authorities have long worked with users and carers to establish criteria of eligibility for services under the Chronically Sick and Disabled Persons Act 1970, the Disabled Persons (Services, Consultation and Representation) Act 1986 and the National Health Service and Community Care Act 1990 within a framework of policy guidance from central government, financial controls of the district auditor, the professional standards and inspection of the social services inspectorate as well as the defence of individual rights within the network of complaints systems leading to the ombudsman. In other words, local authorities expect, act, and want to act within a web of accountability, probity, transparency and controls.

We want the same considerations to apply in this Bill to direct payments. A decision should not he, or appear to be, whimsical. It should not be made. behind closed doors. Social workers and social service departments should be held accountable for their decisions. The amendment provides a simple, clearly understood and well established test. If a client meets the criteria for eligibility, then consent should not be unreasonably withheld. An individual's claim to direct payments cannot be an automatic right. There may be occasional good reason—fear of a grasping relative, or whatever—that direct services may be regarded as more appropriate. Nonetheless we believe that the amendment is the next best thing consistent with local authority professional judgment and discretion that consent should not be unreasonably withheld. I beg to move.

Lord Addington

As the noble Baroness says, the procedure should be accountable. It is essential to ensure that a complaints procedure, to which are applied a set of rules, works properly. It provides a bench-mark by which to ensure that the system works. The amendment is designed to bring the system into line with existing community care procedures. Without the provision, or a similar provision, one will take away the guarantee that the system works better, and is seen to work better. There will be a bench-mark against which to measure success or failure.

Baroness Darcy (de Knayth)

I support the amendment which I believe will he very useful indeed.

Baroness Cumberlege

We believe that the amendment is unnecessary. Local authorities are already required to act reasonably in the exercise of their functions and of their discretions. It would, therefore, he illegal for a local authority to act in an arbitrary or unreasonable fashion.

In addition, there are already several checks and balances within the legal framework in which local authorities operate which give protection to individuals who are affected by local authority decisions. If someone believes that a local authority has acted in an unreasonable or arbitrary way, he can seek redress through the local authority's complaints procedure, the local government ombudsman, or judicial review, or a combination of those as appropriate. Therefore I urge Members of the Committee not to accept the amendment.

Lord Swinfen

Before my noble friend sits down, perhaps I may say that the Bill is an enabling Bill. It states that, the authority may, if the person consents, pay to him". What happens if the local authority does not set up a scheme for direct cash payments and a disabled person then wants a direct cash payment? If there is no such scheme, would it not be reasonable to refuse? Therefore surely the amendment is useful.

Baroness Cumberlege

We believe that the amendment has no legal effect because local authorities cannot act unreasonably in the exercise of their functions or of their discretions. Therefore we believe it inappropriate to have an amendment which has no legal effect.

Baroness Hollis of Heigham

I am a little puzzled by the Minister's argument. She seems to suggest that the amendment is superfluous because it is already the case that local authorities may not act unreasonably.

Our difficulty is that if the government discretion operates in the way in which the Minister outlined, there will be only certain categories of people entitled to have direct payments. Within those categories, local authorities will exercise their professional discretion, professional judgment, based on social work assessment. I do not believe that there is any dispute between us. If someone falls within that category, however generous and inclusive, as we should like it, or however narrowly drawn the Government make it, we seek to establish that the disabled person can reasonably expect to receive direct payment if he applies. There is no weighting in the Bill as drafted in favour of the disabled person as against the local authority. The local authority could decide to refuse direct payments on grounds which are not made public. We seek to weight the matter in favour of the disabled client.

The words may he better expressed elsewhere by regulation or guidance. I do not dispute that. However, we seek to ensure that there is a level playing field: that like clients are handled in like ways. Without such protection there is a risk that whimsical judgments could he made—judgments which are not fully accountable as they should be. We all know the protection that local authorities need in sensitive areas as regards their judgment. We believe that that could operate occasionally to the disadvantage of disabled people. That is why we seek an amendment which clarifies that the presumption of rights is on the side of the disabled person provided that he meets the criteria of the scheme.

If the provision is redundant, that is splendid. However, I would rather have the words in the Bill which secure those rights than leave it to the test of courts or tribunals.

Baroness Cumberlege

The noble Baroness suggested that some people might feel that "whimsical judgments" (I think those were her words) had been exercised by local authorities. That is fully covered already through the appeal system. We believe that the amendment is unnecessary. It is, of course, up to local authorities to use their discretion as to whether or not they want to have a direct payment scheme. However, that is part and parcel of the Bill. It seeks to give local authorities as much discretion as possible once we have agreed the eligibility criteria.

Baroness Hollis of Heigham

We shall have to return to the matter at Report stage. We are not satisfied that the Minister accepts the need to protect disabled people in this way. However, with the leave of the Committee, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 8: Page 1, line 15, at end insert—

("( ) The relevant complaints procedure applicable to a person receiving community care shall be applicable to a person in receipt of payments under subsection (1) above.").

The noble Baroness said: We are at a disadvantage because we received the consultation document long after the amendments were tabled. I realise now that the amendment may not be necessary because I believe that our concerns are addressed in the consultation document. However, it might be helpful if I give the brief purport of the amendment in about three sentences. Then perhaps the Minister may be able to reassure the Committee.

There already exist at least three separate complaints mechanisms within local authorities. Those are the community care complaints procedure, a separate complaints procedure under the Children Act 1989, and a general complaints procedure for other areas of social work. We seek from the Minister a reassurance that any complaints under the Bill will be incorporated within the existing community care complaints procedure: that local authorities will not be required to set up, establish and run a fourth complaints procedure. I believe that that is the intention in the consultative document. However, we have been disadvantaged in this as in so many of our other amendments by not having received that document earlier. I beg to move.

Baroness Cumberlege

I can give the assurances which the noble Baroness seeks. We will give people the same access to the complaints procedures as is given to those who now receive community care services.

I could continue at some length about the Local Authority Social Services Act 1970. However, I think that that is redundant bearing in mind that I can give the assurance which the noble Baroness seeks.

Baroness Hollis of Heigham

In that case I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

5 p.m.

Baroness Hollis of Heigham moved Amendment No. 9: Page 1, line 15, at end insert—

("( ) In the same circumstances as set out in subsection (1) above, an authority may, with the person's consent, pay to a third party the whole, or such part as they think fit, of the cost of securing the provision of any services for which they have decided there is a need").

The noble Baroness said: We now return to an issue which was touched on briefly by the noble Baroness, Lady Darcy (de Knayth). If I read the consultative document correctly, the issue is not touched on in it. The amendment's purpose is to safeguard existing schemes where local authorities currently use third party or voluntary organisations to make direct payments.

The background will be well-known to the Minister and the Committee. Because direct payments are illegal, about 80 local authorities have set up their own third party schemes, their ov/n Independent Living Fund type of bodies, into which the local authorities pay a sum of money and the charities in turn dispense it to disabled people in the form of direct payments. Such a device was in the twilight area of legality, but the Minister sensibly displayed a decent reticence on that occasion which I am sure was welcome. There are now about 80 such schemes in England and Wales, some more limited than others; some affect a few people, some more.

The amendment proposes that where a local authority wishes to continue a direct payment scheme through a third party organisation—it may be one of the smaller, less experienced authorities where there is a good experienced third party payment scheme already in existence—that scheme should be legalised and made legitimate, and it should be enabled to continue. In other words, we think there will be different situations in different localities and unless we legalise what is currently of doubtful legality, there could be fiduciary challenges through the district auditor on behalf of council tax payers.

The amendment is modest: we seek to legalise and legitimise the use of third party methods of paying directly where local authorities deem it valuable and appropriate. I beg to move.

Baroness Darcy (de Knayth)

I warmly support the amendment and look forward to the Minister's reply. In view of what she said to me at the end of the first debate in response to my question, I feel that she might look favourably on it.

Lord Swinfen

I also wish to support the amendment. In doing so, I feel I ought to declare an interest because the charity for which I work already operates a number of schemes for disabled people on behalf of local authorities. The schemes are extremely useful since a number of disabled people, for one reason or another, prefer someone else to handle the cash on their behalf. They do so, first, to ensure that it is properly spent and to use the expertise of the organisation or individuals handling the cash for them; secondly, to make use of the special services that the organisation can often provide. There are also occasions when it will be more appropriate for someone other than the disabled person to handle the cash, possibly for reasons of understanding, as in the case of disabled people with learning difficulties. I warmly welcome the amendment.

Baroness Flather

I wish to snake two brief comments. I have been listening carefully and on the surface it appears to be a good idea. However, I wonder whether it hits at the raison d'être of the Bill. The whole purpose of the Bill, as I see it, is to "empower"—that word has already been used—the person with a disability. If the payment is passed to a third person, it would enlarge the scope of the Bill and change the basis on which we arc proceeding today. There may he a good reason at some other stage to legitimise—if that is the word to use—the existing schemes which the noble Baroness mentioned. I am sure that they work well and that there is a good reason for them to exist, but I am not sure that this is the time to change the scope of the Bill by bringing them in. The amendment would certainly do that and I am against it.

Lord Pearson of Rannoch

Perhaps I may disagree with my noble friend Lady Flather. Once again, if the intention is to follow the course of action set down in the amendment, it seems silly to write it out by not having the wording on the face of the Bill to start with.

Baroness Cumberlege

The provision in Clause 1 that a local authority may make payments to a person in lieu of services that they have been assessed as needing does not preclude that person from nominating an agent to receive the payment and to act on his or her behalf, so long as the user retains ultimate responsibility, as my noble friend Lady Flather said. No amendment is therefore necessary to enable individuals to receive assistance from a third party.

The crucial difference is that the Bill as drafted places the responsibility for managing the payments with the individual who needs community care services. Direct payments are intended to give the user more control over the way in which the care needs are met. The disabled person may well get help from his family or others in managing direct payments, but if they have the final say and not the user himself, then direct payments will not achieve the goal of increasing his independence and control.

We believe that the amendment would move a step away from the responsibility lying solely with the individual concerned. If adopted, the individual's consent would he needed only for the payments to he made to a third party and not for the arrangements which that third party makes subsequently. The Bill is intended to increase the power of individuals to make their own decisions. It does not rule out their having support to make those decisions. But we must not dilute the principle that the decisions are for the individual to make, as my noble friend Lady Flather said.

With regard to safeguarding existing schemes, which was the point made by the noble Baroness, Lady Hollis, and others in the debate, it is up to local authorities to work within legal frameworks and decide whether those arrangements are legal. The Bill does not exclude the possibility of using a third party agent such as the voluntary organisations. I believe that Members of the Committee may not have appreciated the scope of the Bill as drafted.

Baroness Hollis of Heigham

I listened intently but I am still not entirely clear. Can the Minister tell me whether existing schemes are legal and whether any future schemes will be legal?

Baroness Cumberlege

We know that existing schemes vary enormously. It is up to the local authorities to ensure that the schemes which they have up and running now are legal. Clearly they take advice on that, not least from the district auditors. I know that they have taken an interest in the area.

Baroness Hollis of Heigham

I am disappointed by the Minister's response. I had hoped that she might have seen the virtue of a more pluralistic response to the issue. We all take seriously the point made by the noble Baroness, Lady Flather. The last thing one would wish is to make a disabled person dependent or newly re-dependent on some third party organisation, thereby having his or her rights reduced in a way that would not be the case if he or she was receiving direct payments from the local authority. No one wants that situation.

However, many of the voluntary organisation schemes are effective and often preferred when they are user-led. Apart from giving personal assistance, the organisations may provide a range of other support services; for example, independent living in the community. There is an array of other activities of support and help that third party schemes can currently offer. It may be the most appropriate and welcome way for the disbursement of payments. No one would wish in any sense—and certainly no one on these Benches—to limit the right of disabled persons to be fully in control of the disbursement and management of their direct payment funds. However, it may he that both in the original assessment and in the provision of support services, as well as the provision of ancillary services, the disabled person may find it more satisfactory to seek and obtain that help from a third party voluntary organisation than directly from a local authority which has less experience in such matters. We wish to make sure that the plurality of that provision remains possible, open and available in local circumstances. Will the Minister be kind enough to tell me whether that can still he the case?

Baroness Cumberlege

Perhaps I may reiterate my opening remarks. The Bill does not preclude a person wishing to receive direct payments from nominating an agent to receive the payments and to act on his or her behalf so long as the user remains ultimately responsible. That is the point relating to the individual.

The noble Baroness made a second point, about different schemes. It would be very foolish of me to give an assurance at this Dispatch Box today that every scheme running in the country will continue. Schemes differ enormously. As I said, it is up to the local authorities to ensure that they are working within the legal framework.

Lord Swinfen

I am delighted to hear my noble friend say that a disabled person or someone in receipt of community care will be able to receive a grant through an agent acting on his or her behalf who can be dismissed by them should they feel that the agent is not doing what they want. I quite understand that my noble friend cannot, without reference to a list and details of all existing schemes, say that they will continue to be legal in the future. We know that some of them are tolerated, even though they are not within the strict letter of the law, because they are experimental. They have been tolerated by local authorities, voluntary organisations and by my noble friend's own department. The mere fact that, like anyone else, someone in receipt of community care can dismiss an agent and employ another one, in exactly the same way as we could a solicitor if we did not like his or her work, is extremely welcome.

Baroness Hollis of Heigham

We shall have to take advice on this matter to see whether the Minister's answer meets our concerns. In the light of that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 10: Page I. line 15, at end insert— ("( ) Regulations shall provide for any such payment by the authority to be disregarded in the assessment of income-related benefits provided under section 123 of the Social Security Contributions and Benefits Act.").

The noble Baroness said: In this amendment we return to an issue raised at Second Reading—

Baroness Trumpington

Is the noble Baroness speaking also to Amendment No. 18, grouped with this one?

Baroness Hollis of Heigham

I apologise to the Committee. In moving this amendment, I also speak to Amendment No. 18.

Again, this is a probing amendment. I hope it is unnecessary in the light of the Minister's remarks at Second Reading and the consultative document. Again, it would be very helpful to have a response on the record.

We seek to ensure, since a direct payment turns a service into cash, that that cash should not then he taken into account when assessing eligibility for the ordinary social security benefits, whether income support, housing benefit, council tax benefit or whatever. Clearly, if one were in receipt of a service, it would not be taken into account. If one were in receipt of cash, it could be, since it is a form of income.

The Minister made clear at Second Reading, and in the consultative document, that such payments would be disregarded. Payments from the ILF are disregarded. We want the Minister's assurance on this point, not because we doubt her benign intent but because, bluntly, we want to bind, as far as we can, any future Minister to honour that commitment. I beg to move.

Lord Jenkin of Roding

I intervene only to ask whether my noble friend can possibly say a sentence or two about the new child support "Departures" scheme referred to in paragraph 43 of the consultative document dealing with social security benefits, which is the subject of this amendment. It would be very helpful if my noble friend could let us know what is involved in that.

Baroness Cumberllege

We have already made clear that direct payments will not be counted as income for the purposes of assessment of benefit entitlement. Benefits will continue to be paid on the same basis to disabled people, whether they choose services or cash payments in lieu of services, from their social services department. Nor would the benefits of a third party receiving payments on someone else's behalf be affected so long as the payments were spent entirely on purchasing services for that person.

The Government have given a firm commitment that, when necessary, social security regulations will be amended to provide for equal treatment between service users and direct payment recipients. That is the appropriate way of avoiding any unintentional effect on direct payment recipients' entitlement to benefits. It is unnecessary and cumbersome to seek to do so by amending this Bill.

Perhaps this may be helpful to my noble friend in reply to his point about child support. The child support maintenance formula will fully disregard direct payments. (I am not quite sure that that is what my noble friend seeks.) The child support departures scheme will take account of any direct payments in broadly the same way as it would have regard to community care services.

I am aware that that is an inadequate answer. I will write to my noble friend.

Baroness Hollis of Heigham

I think the Minister's consultative document confirms the answer that she just gave to the noble Lord, Lord Jenkin. We are very pleased with the Minister's answer and I happily beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Tordoff)

In calling Amendment No. 11, I draw the attention of the Committee to the fact that, were this to he agreed to, I should not he able to call Amendment No. 12.

5.15 p.m.

Baroness Hollis of Heigham moved Amendment No. 11. Page I, line 18, leave out from ("authority") to end of line 19 and insert ("shall, in determining how much to pay to a person under that subsection, not require him to contribute more than it appears to the authority that it is reasonably practicable for him to contribute.").

The noble Baroness said: I apologise to the Committee for revisiting an issue in relation to which the Minister appeared to make the Government's views clear, but it is perhaps a little more complicated than it might seem. The same charging policy within local authorities which currently applies to services should also apply to direct payments—so if a service is free there should be no means testing for its equivalent service when translated into a direct payment. If there is a banded charge for services, a banded charge should be offset against direct payments; if it is means-tested, it should be means-tested. We are asking for a level playing field within each local authority. Clearly, local authorities will differ. Obviously, if resources permitted, we should all like such services to be free and no deductions to he made from direct payments. But that is not the real world, and we want to ensure a level playing field.

In her reply the Minister seemed to suggest that that is what the Government intended and expected would happen. In that case we are puzzled by the words on the face of the Bill. Perhaps our advice is wrong, but it seems to us that the words on the face of the Bill do not deliver that. They appear to apply harsher financial criteria to direct payments than is the existing case for services.

Perhaps I may give a little of what I understand to be the technical background. The power of a local authority to charge for services was formalised in Section 17 of the Health and Social Services and Social Security Adjudications Act 1983, which provides that where a local authority is satisfied that a person's means are, insufficient for it to be reasonably practicable for him to pay for the service", he should not be required to pay more than, it is reasonably practicable for him to pay". In other words, the test now for any charging policy on services is one of reasonable practicability. But that phrasing, "reasonably practicable", has not been reproduced in the Bill. Instead, there is the harsher, more stringent criterion, have regard to his financial circumstances". Even if a service was free, having regard to financial circumstances must mean that a person's situation must be means tested, whether you want to or not. Otherwise, it can have no meaning. "Have regard to his financial circumstances" must mean that at each and every point you must test for financial circumstances; namely, apply a means test.

Therefore we believe that by having different wording for the financial criteria applied to services at the moment and for direct payments on the face of this Bill introduces the possibility that there will not he the level playing field that the Minister, and we, want. Will the Minister please reconsider the wording? Will she apply the wording that currently applies to services, to direct payments, thus making it transparently clear that there is a level playing field?

On an additional point, I understand that, should there be a dispute about the level of the charge, at present the local authority continues to provide the service until a dispute is resolved. Is it the Government's expectation that a similar response will apply to a dispute over direct payments? This is quite a difficult area. We hope that the Government will give us a clear reply now and perhaps, if necessary, follow it up with authoritative guidance as to what constitutes disability-related expenditure and how it may be verified. I beg to move.

Lord Jenkin of Roding

I am not quite clear whether it is appropriate for me to raise my point on this or the next amendment. However, I feel that I should raise it at this juncture. It is about the liability of the recipient of a direct payment to pay VAT on the bills that might be submitted for personal services contracted for. For the local authority, there is no VAT to pay in respect of services which they provide, because it is a service in kind. But let us suppose that a disabled person purchases personal services from a firm supplying people to give personal support. If that firm's total turnover is above the level of about £45,000, which is the present level, it is obliged to charge VAT.

I understand that health services specifically are exempted and always have been exempted from any charge for VAT. There have been continuing arguments in another place—I daresay echoes have been heard in this Chamber—about VAT on appliances and other aids to help disabled people. But I am not clear on what happens about a firm which may provide personal services and may undertake to supply someone for three hours a day for five days a week, for example, to a disabled person to help with personal care and so on, sending someone in in the morning and again in the evening to help them get up and go to bed. If that firm is registered for VAT, will the payments be chargeable to VAT and will the disabled person have to pay it?

If the answer is yes, the question which follows from that is whether the direct payments which will be made by the local authority will be sufficient to cover the VAT as well as the direct cost of the service being supplied by the firm. It seems to me that in some circumstances people will face a choice: either they can employ someone, in which case, as we discussed earlier, they will land themselves with problems of national insurance and PAYE if the hours come above the minimum; or they can contract with a firm—or indeed a self-employed person—and pay them the sum gross. But if that person—it is more likely to be a firm, simply because of the nature of the work—has a turnover above the threshold limit for VAT, that person will have to charge VAT because he himself would be charged it by the Customs and Excise.

I hope that I have spoken for long enough to enable my noble friend to locate the answer to that question, in which she knows that I am interested and that I may now sit down.

Lord Carter

As the noble Lord said, we shall reach Amendment No. 19, which deals with VAT. But to help the Minister perhaps I may now contribute on this point and deal with it. Then Amendment No. 19, which I am supposed to move, will obviously be withdrawn. All the points have, in fact, been made by the noble Lord, Lord Jenkin of Roding. It is an important point about VAT that local authorities, but not individuals, can reclaim VAT if the agency is registered for VAT.

There is a minefield here because of the EU directives regarding the level of VAT. That may cause problems. There would seem to be a difficulty if an individual receives direct payments which attract VAT and the recipient is not able to reclaim it because he is not able to register.

I wonder whether a way round that difficulty is to apply zero rating. Zero is a rate of VAT and the payments would be exempt. Are we allowed to apply a zero rate to direct payments under EU directives?

Baroness Darcy (de Knayth)

I, too, support the noble Baroness's amendment. An identical means test is encouraging, and is very much what my amendment—Amendment No. 12—is about. In some ways, I prefer my amendment, in that it clearly states that the tests should be identical. However, it may be that the noble Baroness's amendment is more acceptable.

I look forward to hearing what the Minister says. It may influence me very much in what I do about Amendment No. 12.

Baroness Cumberlege

I think the amendments are very similar. I hope that what I am about to say will meet the needs of the noble Baroness, Lady Darcy (de Knayth).

We understand and share the concern that neither service users nor direct payment recipients should he treated more favourably one than the other in the question of the financial contribution that each is expected to make toward the cost of their care. I understand the concern of the noble Baroness, Lady Hollis, that the Bill might appear to apply harsher criteria for direct payments than when charging for services. That is not true. Local authorities do not have to charge users of services. They have discretion there and we should want them to have discretion with regard to direct payments.

The Bill gives local authorities the discretion on whether or not to take someone's financial circumstances into account. It does not require them to do so. The Bill also gives local authorities discretion on how they take someone's financial circumstances into account. This is intended to mirror the situation which currently exists in relation to charges for non-residential care, where local authorities can decide whether or not to charge, and how much to charge. It is the Government's aim to create a level playing field on the issue of whether, and how much, people pay towards the cost of their care, so that there are no perverse financial incentives to seek direct payments or, indeed, to refuse direct payments.

It is therefore the Government's intention to issue Section 7 guidance on this issue. The guidance will stress that local authorities must treat people fairly, and should treat both service users and direct payment recipients in an equivalent manner. So, when considering the financial contribution that direct payment recipients should make towards the cost of their care package, the authority should treat them in the same way as they would have treated them under the authority's charging policy had the individual been receiving the equivalent services.

Baroness Hollis of Heigham

I thank the Minister for giving way. If she is saying that the local authorities should treat them in the same way, why does she not use the same words?

Baroness Cumberlege

We have made it quite clear in the Bill but, if the noble Baroness feels that there is something better that we can do, perhaps we can discuss it before the next stage of the Bill.

Perhaps I may now address the concerns of my noble friend Lord Jenkin of Roding about VAT. I understand that there is an amendment that has been spoken to by the noble Lord, Lord Carter. No amendment is necessary to ensure that direct payments are not subject to VAT. VAT is a tax on supplies. It is not due on payments which the local authority makes to an individual to enable that individual to buy services.

People who receive direct payments may have to pay VAT on some of the services that they purchase. Many of the uses which recipients will make of direct payments will not incur VAT—for example, if they employ their own personal assistant or purchase services from an agency operating below the VAT threshold or from a charity providing services on a not-for-profit basis.

Payment of VAT is something that individuals will wish to consider when deciding from whom to purchase their services. Clearly that is an issue which local authorities will have to take into account when they are deciding the level of the direct payment.

Lord Carter

I do not expect the Minister to give me an answer to my next point, which is a highly technical one. It will be interesting to know whether the Government will have the power by regulation to apply to those services a zero rate—which is a rate of VAT—instead of the rate of 15 per cent.

Baroness Cumberlege

We are trying to ensure that the recipients of direct payments act in the same way as other members of the public. This provision is to try to give them more independence. We should be reluctant to do this, because we hope that the independence that they gain puts them much more on an equal footing with members of the general public.

Lord Jenkin of Roding

Perhaps I may come back on that point. First, let me offer a profound apology to the noble Lord, Lord Carter. Although I had laboriously entered his amendment as a number on my Bill, I failed to read it. I do apologise. I had given notice on an earlier occasion that I intended to raise this matter. However, with great respect to my noble friend I am not sure whether she has addressed the problem.

It must be the case that, as direct payments become more common and their acceptability becomes more widespread, highly specialised, expert firms will be formed to undertake to deliver expert and trained services to the people who need them.

As I said earlier, from the beginning health services which are supplied under contract have always been exempt from VAT. It is difficult to see why, say, domiciliary nursing services—somebody coming in to nurse a terminally-ill patient, which is not uncommon—should be free of VAT, but somebody who comes in to look after a disabled person and who may he providing many of the same services—somebody with a high level of training—should, because they are supplied by a firm which is above the threshold, incur VAT.

The practical problem will arise when the local authority is deciding whether to make a direct payment after the client has applied for it and indicated that he or she wishes to contract with Personal Services plc (or whatever it may be called). The council may say that that will cost more because they are liable to VAT and it will pay only what would be required if the firm was below the threshold for that tax.

In the consultation document and in her opening speech at Second Reading my noble friend gave the example that, if somebody wanted a service which costs £300 and the local authority knows that it can he contracted for £200, why should the council pay the extra £100? Yet the difference may be the VAT at 17.5 per cent. It is militating against the growth of extremely valuable services and highly specialised companies employing skilled, trained assistants which could provide an admirable service for people in receipt of direct payments.

I cannot expect my noble friend to give what may be a Treasury answer from the Front Bench in this debate. However, this is a problem which needs to be addressed. I cannot understand why there should be a distinction between health services and social services in that regard when one is dealing with a defined category of people; namely, those who qualify for local government support by direct payments.

5.30 p.m.

Baroness Seear

To add to what the noble Lord, Lord Jenkin, said, in practice there may be a number of cases where the service rendered is only partially related to health. I can well imagine a situation where someone comes in to help with a simple dressing or other minor help a disabled person may need by way of treatment and then tidies up the living room and makes up the bed. Where does health stop and other domiciliary services begin? If one is VAT-free and the other VAT-charged, the situation will become extremely complicated.

Lord Carter

As we are discussing the amendment relating to VAT, perhaps I may respond to that. It may mean that the recipient has to choose a supplier of a service on the basis of cost rather than skill. We all know, when obtaining quotes for painting our homes, the difference in the cost between a painter registered for VAT and one that is not. It tends to affect the size of the quote. Effectively, the recipient may be saying, "I would sooner have this other person but, because they will cost more due to the rate of VAT, I shall have to choose a supplier who is not so effective but is cheaper". The Government must look at that as an important point.

To return to the zero rate point—I do not want to overemphasise this—it is common for a supplier who is supplying a service in the UK to have to apply the VAT rate; but if he is supplying that service for somebody overseas he applies a zero rate. It is as simple as that. If those services can be included in the category of the zero rate, it may solve the problem.

Lord Swinfen

It is not uncommon that a disabled person receiving community care will not be buying medical or health services at all. A disabled person can be described as quite healthy, despite their disabilities, and will not have a need for health services.

It may be helpful for my noble friend to postpone answering the question on VAT in relation to this amendment and to take a little time to obtain advice. The issue will come up again on Amendment No. 27.

Baroness Cumberlege

I like the government health warning; I shall accept it. Clearly this is an issue that needs further consideration.

A difficulty exists as to whether we draw a distinction between those receiving direct payments and their requirement to pay VAT—or not to pay it, as Members suggest—and those who buy the services through "normal channels". It would be unfair to discriminate between those two groups of people. The matter needs further consideration and perhaps this is one of those issues in which Members of the Committee excel in pointing out that there is something we need to consider further.

Baroness Hollis of Heigham

My delay in rising arises from the fact that we seem to have spent most of the time talking about Amendment No. 19 rather than Amendment No. 11. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Darcy (de Knayth) moved Amendment No. 12: Page 1, line 19, at end insert ("in an identical manner to that which the local authority would have applied had they themselves provided the service.").

The noble Baroness said: The purpose of Amendment No. I2 is self-explanatory; that is, to ensure that means testing for services and for direct payments are identical. It seeks to do almost exactly what the amendment of the noble Baroness, Lady Hollis, sought to do.

I am a good deal reassured by the Minister's reply to Amendment No. 11. However, I would be happier if she could state categorically that the tests will be identical. We have had a great deal of discussion on other matters and I should like to read and reflect on the whole question. I shall be extremely grateful if the Minister will, outside the Chamber if necessary, agree further to discuss the matter. I beg to move.

Baroness Cumberlege

A number of issues have been raised in this Committee stage where a meeting will be extremely valuable to many Members. This amendment is one of those and I suggest we put it on the agenda.

Baroness Darcy (de Knayth)

I am grateful to the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Brougham and Vaux)

Before calling Amendment No. 13, I should advise the Committee that if Amendment No. 13 is agreed to, I cannot call Amendments Nos. 14 to 17 inclusive.

Lord Carter moved Amendment No. 13: Page 1, line 20, leave out subsection (3).

The noble Lord said: Amendment No. 13 should really have been grouped with Amendments Nos. 14 to 17. If the Minister and the Committee do not object—I know that the noble Baroness, Lady Darcy (de Knayth), who tabled Amendment No. 17, does not object—in moving Amendment No. 13 I shall speak also to Amendments Nos. 14 to 17. They all cover the same subject.

The amendments concern the categories of people who may act as personal assistants. The Bill gives the Secretary of State the power to make regulations that describe the categories of people a disabled person may not employ as a personal assistant. The amendment would remove that power completely. This is a probing amendment. I do not intend to divide the Chamber. It is intended to allow discussion on the kinds of people who may or may not be excluded.

We feel that we need some clarification from the Government regarding their intentions as to precisely who is likely to be excluded under the provision. During Second Reading the Minister indicated that informal carers will be excluded as their role is different to that of paid employees who provide care on a formal basis. Direct payments are not intended to replace existing support networks within the families and communities.

We have now received the consultation paper which presumably indicates what will be contained in guidance. At the moment the direct payment schemes tend to operate under a similar definition to that used by the Independent Living Fund; that is, that the payment cannot be made unless the disabled person lives alone or with someone who cannot provide for all their care needs. On first reading of the consultation paper, in paragraphs 24 and 25 the Government appear to he widening the exclusion from that contained in the Independent Living Fund rules. If the Government intend to do that, it would be helpful if the Minister would say so.

Also, the Government picked up the point which I know was made to them in discussion that, Local authorities will have discretion to make exceptions to the rules set out in this guidance in exceptional circumstances, where they are satisfied that it is not possible to find a suitable person to provide care who does not fall into one of these categories"— the ones that they have excluded— For example, the recipient may live in a sparsely populated rural area, or may have cultural or religious reasons for needing to employ only people from the same ethnic background. In certain areas, such a person may only be available within the recipient's family". That is a quote from the consultation document. However, in the "exceptional circumstances" it seems that residence is not mentioned. If there is a need for an exception, perhaps under the examples the Government give—the recipient lives in a sparsely populated rural area or comes from an ethnic community—will the residency exclusion still apply? If the only person who can supply that help is in the recipient's house, will he or she still be excluded?

The widening of the exclusions, which we feel has happened in the consultation paper, could undermine the objective of direct payments in promoting independent living. We all know of the tasks of personal assistants. They may be involved in personal and intimate matters such as dressing, bathing and toileting. The popularity of direct payment schemes is rooted in the greater opportunity for the disabled person to choose exactly who is to do these tasks and to ensure that they are undertaken in such a way as a disabled person desires. The choice of person is therefore integral to independent living. We are not trying to widen the idea to formalise the present informal arrangements, but we need to know a little more about the way in which the Government will look at the exclusions policy and about whom in fact they intend to exclude.

Some research was conducted on the Independent Living Fund by the Policy Studies Institute which found, not surprisingly, that family helpers scored highly on appropriateness and reliability although less highly on control and empowerment. However, the overall score for family help on the choice score was 47 compared with 20 for direct employees and 38 for agency staff.

I turn to Amendments Nos. 14 to 17. A point has been made by the Alzheimer's Disease Society about the position of people with dementia. That is a special situation. We need to clarify whether the Government plan to enable direct payments to be paid to a relative or to a partner of a person who is mentally incapacitated, and, if so, under what arrangements. That point has been specifically raised by the Alzheimer's Disease Society. We all know that dementia is a progressive and degenerative condition and that circumstances can change. Do the Government intend that direct payments could he paid to a carer who was caring for someone who had Alzheimer's on a degenerating basis? Because they are excluded at the beginning of the scheme, we do not feel that that should continue. There is also the position with regard to HIV or AIDS. With regard to the small numbers of people with HIV or AIDS who feel safe only when their personal care is given by immediate family members, is that one of the exceptional circumstances which the Government will recognise?

I have mentioned the problem of rural areas, with which I am familiar. How do the Government intend to define "living in the same household"? For example, will someone who is living in a so-called granny flat be allowed to pay his relatives in the home? We now have the definition of "close relatives" for which we were going to ask. That is in the consultation paper. It seems to be wider than the rules under the Independent Living Fund. Altogether I feel that the Government have to be a little clearer than they have been in consultation and in previous discussions on the Bill. I beg to move.

Baroness Seear

I do not expect to succeed in trying to persuade the Minister to think again about the position of the informal carer living in the house of the person needing care. The Alzheimer's disease case has already been quoted. It is an obvious one but there are others. If a person who needs the care is incapable of handling the money himself—in a case such as Alzheimer's, which progresses, that is undoubtedly true—and he has in the house a daughter who has given up her job in order to look after this person, what could be more suitable than that the money which would be available to the person needing care or the services which he would have received from the local authority under the old scheme could be passed to the informal carer who could then go and buy the care from outside?

That is the most obvious and practical way of alleviating what is the incredibly difficult position of the single person living in a house, someone with a deteriorating mental condition, who needs to buy outside help, who would have received the outside help from the local authority. I suppose one could say that in those circumstances the person would take the local authority help. But why should he be forced to do that if he can have the money and make an arrangement by employing someone from outside who can relieve the position of both the person needing care and the extremely tense and deteriorating position of the person—usually a woman—who is trying to give that care in very difficult circumstances? Can the Government not think again about this?

5.45 p.m.

Lord Jenkin of Roding

The rules are intended to he the same as to whether the local authority is providing the service direct or whether the local authority is making a direct payment to the beneficiary. Perhaps I must postulate a case slightly different from that given by the noble Baroness, Lady Seear. I read her remarks at Second Reading with some interest. Let us say that a wife has given up employment in order to look after her husband because the local authority has said that it can provide a local authority service. The wife says that she would like to look after her husband herself rather than have social workers coming in who are strangers. In those circumstances, it is always open to the wife to say, "We are going to have to have more support in our retirement. I really have to get hack to work. I have to increase the family earnings. We shall therefore ask, although it is a second best, the local authority to provide the service". As I understand the matter. in those circumstances the local authority cannot refuse if the service is of a kind which it would provide.

If my noble friend can tell me that exactly the same provision applies in a case where a family member wants to go back to work and there is a direct payment, I will feel that much of the difficulty that has been aired about this provision may disappear. If, on the other hand, as seems to be implied in the speeches made in support of the amendment, it will somehow be more restrictive if there are direct payments and that under no circumstances could the payments be made in the circumstances I have described, I shall have some anxiety. However, as I have understood the position, I do not think that is the case. Provided that the rules are exactly the same, that will be fair between those who are able to get direct payments and those who are not. The family member who has been looking after the person will be able to go back to work and earn and in those circumstances the direct payment can be made and the service can be bought instead of the family member looking after the relative.

Baroness Hollis of Heigham

Am I not right in thinking that we are running together two significant issues which perhaps would be more helpfully explored separately? The issue raised by my noble friend Lord Carter was whether the disabled person could employ a relative as a personal carer and that personal carer could then be paid as though he or she were any other person employed from an agency. The concern expressed by my noble friend was that the Government are now making it illegal, we understand, for people who could be paid under the ILF scheme to be paid under the local authority direct payments scheme. Local authorities will retain a discretion in exceptional circumstances—rural areas, ethnic minorities and possibly the HIV or AIDS cases—but nevertheless the presumption is that a whole raft of people who currently could be employed and paid will not now be so. That was the issue raised by my noble friend Lord Carter and others.

The second and equally important issue was the one addressed by the noble Baroness, Lady Seear, and the noble Lord, Lord Jenkin of Roding, as to whether someone in the household—a close relative—could act as manager of the money. The money would be paid to them and they in turn would go on to employ a third party. As I understand it, that has always been the case under the Bill. I do not think that that is particularly problematic. The local authority can make payments either to the disabled person or to an appropriate carer who can then go on to employ other people to do the caring.

Therefore, I believe that the concerns raised by the noble Lord, Lord Jenkin, and the noble Baroness, Lady Seear, are, as I understand it, rightly covered in the Bill, but those raised by my noble friend Lord Carter are not. We would especially welcome the Minister's help on that.

Baroness Masham of Ilton

As the Minister whose department deals with HIV and AIDS, the noble Baroness will know that those people are now covered by the legislation dealing with discrimination. Therefore, how will this work?

Baroness Darcy (de Knayth)

Amendment No. 17 is in my name so perhaps I should speak to it now. I support the other amendments in the name of the noble Lord, Lord Carter, and the noble Baroness, Lady Hollis. The noble Lord, Lord Carter, speaks very eloquently and he also speaks very fast. On paper it may seem that I am repeating all that he said. I have also tried to précis so I apologise if I make no sense now, but I shall do my best.

I shall deal with the second part of my amendment first because we have been discussing families, including a family member whether or not he or she resides with the person in receipt of the payment and whether or not the direct payment can be received. I understand the difficulties and the pitfalls in accepting that. I understand what the noble Lord, Lord Jenkin of Roding, has said, but I ask the Minister to consider it carefully, particularly if the relative is not living with the person he or she is helping. I support what the noble Baroness, Lady Seear, has said about the carer.

As regards the non-relative residing with the person in receipt of the payment, I would not like to see a disabled person unable to employ a lodger to look after him or her or to offer accommodation to a carer whether on payment of a rent or otherwise. It would rule out a great many genuine helpers. I know of a number of very severely disabled people who employ people to look after them and, as part of the deal, provide them with accommodation. Indeed, I know of one person who, on becoming disabled, moved into a larger house precisely in order to be able to offer accommodation to a series of helpers. Many severely disabled people are looked after by community service volunteers and they allow the volunteers to live in their homes. Indeed, accommodating the CSVs is an essential part of the service. When considering severely disabled people, I guess that the majority who are not looked after by a spouse will be looked after by someone living with them. It is very important that that should not preclude a direct payment being made because it is precisely for that type of person, particularly the young disabled, that many of us have argued for so long for direct payments to be allowed. I look forward to hearing the Minister's reply. I note at Second Reading that the Minister said: we do not intend to use this power significantly to restrict the individual's choice of support".—[Official Report, 7/12/95; col. 1051.] Therefore, I hope that she can relax as regards relatives and particularly those who are non-resident and perhaps also non-relatives who are resident.

Baroness Cumberlege

Direct payments will he an alternative to community care services, which would otherwise be arranged by the local authority. They are not intended to replace existing support networks within families and communities. The relationship which someone has with family or friends who provide care is very different from the relationship someone has with a person whom they are employing to provide care. The reason for the provision in Clause 1(3) is to avoid creating pressure for informal care to be put on a formal contractual basis.

If there were no restrictions, there is a risk that payments recipients might come under pressure to employ family members when that is not what they really want to do. Conversely, a parent or spouse who did not want to give up their employment might find it difficult to resist pressure to give up their job and take on full-time care if there would be no loss of income.

The Government recognise that there is a balance to be drawn between, an the one hand, preventing the formalisation of informal care, as I have described, and, on the other hand, not prohibiting sensible and appropriate arrangements. In particular, the Government have no intention of preventing people from being able to employ live-in personal care assistants.

We therefore propose to make regulations under this provision which will prohibit payments recipients from paying their spouse, partner or a close relative living in the same household to provide a service. In this context we intend to define a close relative as a parent, parent-in-law, aunt, uncle, grandparent, son, daughter, son-in-law, daughter-in-law, stepson or daughter, brother, sister or the spouse or partner of any of these.

In addition, we intend to issue guidance to say that local authorities should not make direct payments where the recipient intends to employ or contract with close relatives who live elsewhere, or other people living in the same household, unless the latter are people who have been specifically recruited to be live-in personal assistants. Local authorities would have the power to make exceptions to this guidance in exceptional cases—I suspect that AIDS and HIV may well be one of those—where they were satisfied that there was no other way to find a suitable person to provide care.

We are consulting on these proposals for regulations and guidance, and will take account of the consultation responses, and the comments of this House, before making our final decision.

Baroness Seear

I am still confused about this matter. The noble Lord, Lord Jenkin, referred to the wife who has given up work to look after the husband and was able to have some local authority help under the existing scheme. As the noble Lord postulated, if she then decided to go back to work, but in order to do so, thought it better to have the money and employ someone rather than use the local authority services, she would he unable to do so. Is that what the Minister is saying?

Baroness Cumberlege

No. We are trying to put direct payments on the same footing as the community care which is provided through services. It depends on the initial assessment. For the schemes that I have seen that is the situation. People who were formerly carers have gone hack to work and they are employing someone through direct payment because they qualify for community care services. They have been given that option. Our whole intention is not to make this scheme different in that respect, but the same. If that is not quite clear perhaps I may write to the noble Baroness and to my noble friend Lord Jenkin.

Baroness Hollis of Heigham

I am sorry to interrupt the Minister again. The Minister is making a distinction between regulation and guidance. From what she has said, am I right in understanding that under regulation close relatives who live in the same household will not be able to be employed and receive direct payment from the disabled person, but for close relatives who do not live in the same household but on, say, the other side of town, the guidance will say that they should not be employed, but that the local authority will have complete discretion to waive those conditions where they judge the circumstances to be exceptional? Am I also correct in understanding that there will be no limitation by the Government on the exercise of local authority discretion because, clearly, we cannot anticipate all such exceptional circumstances?

Baroness Cumberlege

The noble Baroness has put it very succinctly and that is how I understand the position. If there is any change to that, then perhaps it is another issue that we can discuss when we meet.

Baroness Hamwee

I apologise to the Committee for prolonging this point. The noble Baroness, Lady Hollis, put the matter in a different way to the Minister and the consultation document, which refers to exceptional circumstances being where the local authority is satisfied that it is not possible to find a suitable person to provide care. That is not necessarily the same as some of the exceptions to which Members of the Committee have alluded, taking it from the point of view of the person to be cared for who will have views as to who might be best, for very personal reasons, to provide that care. In other words, that relates to the receiving end rather than the providing end. It seems to me that the consultation document deals only with one of those ends. Can the Minister take that distinction on hoard as part of the further consideration?

6 p.m.

Baroness Cumberlege

To some extent that is reflected in the community care Act. Clearly, we are not trying to draw a distinction, but to start with the same form of assessment which is made through the community care Act. As I said, this may be a matter which the Committee would prefer to have further clarified and I am very happy to do that.

Perhaps I may now address the issues raised by the noble Lord, Lord Carter, in Amendments Nos. 14, 15, 16 and 17. Direct payments will he an alternative to community care services which would otherwise he arranged by the local authority. The relationship which someone has with family or friends who provide care is, as I have already said, very different from the relationship that someone has with a person whom they are employing to provide care. The reason for the provision in Clause 1(3) is to avoid the pressure for informal care to be put on a formal, contractual basis. If there were no restrictions, there is a risk that payment recipients might come under pressure to employ family or friends when that is not really what they want. As I have said, conversely, a parent or a spouse who did not want to give up employment might find it difficult to resist pressure to give up that job and to take on full-time care, especially if there was no loss of income.

The Government recognise that a balance needs to he struck. We are trying to be careful to prevent the formalisation of informal care and are trying not to prohibit sensible and appropriate arrangements. We have no intention of preventing people from being able to employ living-in personal care assistants.

The noble Lord, Lord Carter, made a most interesting suggestion with regard to people living alone or with another person who is unable to meet their care needs. I can see that, like us, the noble Lord is seeking to achieve a balance. The Government propose to make regulations to prohibit payment recipients from paying a spouse, partner or close relative living in the same household for providing a service. As your Lordships are aware, we have set out the relationships that we think appropriate in this context.

The noble Lord, Lord Carter, asked about the ILF rules and whether the definition of "close relative" is wider in this context than that provided by the ILF. The noble Lord asked whether we are now making illegal what is legal under the ILF scheme. I can reassure him that the proposed regulations adopt the same rules as the ILF. The proposals for guidance go further but allow exceptions. As I have said, it is a question of trying to strike a balance.

The noble Lord, Lord Carter, and the noble Baroness, Lady Seear, asked whether the exclusions would apply where the only person available lives with the recipient. Yes, in those exceptional circumstances local authorities will have the discretion to make payments where the recipient intends to employ or contract someone living in the same household. The consultation paper gives a couple of examples, but it is up to local authorities to decide when it is appropriate to make exceptions to the guidance.

The noble Lord also asked whether informal carers will be able to receive and manage payments on behalf of a disabled person. As I have already explained, there is nothing in the Bill to prevent someone asking a third party to receive and manage direct payments on their behalf. That third party may well be a member of the family, but the person needing care must consent to the arrangement and will retain ultimate responsibility for the money. This is an area in which we need more explanation and clarity. As I have said, I am willing to discuss this when we meet.

Lord Carter

I must start with an apology to the noble Baroness, Lady Darcy (de Knayth), and, indeed, the Committee for speaking too quickly. I really must speak more slowly.

In these amendments we are seeking to establish the difference between regulations and guidance. That point was quickly and well put by my noble friend Lady Hollis. If the regulations state that you cannot employ a close relative but if in exceptional circumstances a close relative is the only person who can provide that service, does the local authority have the discretion to ignore the regulations and make a direct payment? I refer to cases where the close relative who is the only person who can supply the service lives in the same household as the disabled person. We have given examples relating to ethnic groups, rural areas and cases involving HIV and AIDS. Does a local authority have discretion, through guidance, in effect to ignore the regulations?

Baroness Cumberlege

We need to remind ourselves of the three basic principles underlying the Bill. The first is flexibility. It is important that local authorities should be given enough flexibility to exercise their duties and to be fair to all concerned. The second principle is simplicity and the third is trust. If we can keep to those three tenets, we cannot go far wrong. Flexibility is the most important with regard to the point made by the noble Lord.

The noble Lord asked whether local authorities can ignore regulations. The answer is no.

Lord Carter

That makes the point that the exceptions cannot overcome the regulations. Therefore, if the close relative is the only person who can provide the service, the regulations stop the local authority exercising its discretion. I think that that is what the Minister is saying.

Baroness Cumberlege

I suspect that this issue will he hotly debated when we go out to consultation on the regulations or the guidance document.

Baroness Hollis of Heigham

The Minister has got herself into the position of saying that a close relative is excluded under the regulations but may be employed under the guidance and that the difference between the two is whether the relative lives in the same household. Will not that mean that that person is pressed to move out of the house, thus moving out of the category of regulations and into the category of guidance, whereupon the local authority may then operate discretion? That is batty. Clearly we need to sort this out.

Lord Swinfen

Before the noble Baroness sits down, I am sure that she will agree with me that that would be impractical in some rural areas because there would not be anywhere else close enough for the relative to live and still he able to provide the care that was needed.

Lord Carter

I think that we have had enough and that the Minister is now aware of the difficulty. I am sure that this matter will need further discussion. Perhaps I may give the Committee a final example that has been passed to me. Where someone is getting a payment from the ILF, he or she may employ a close relative. If in future the local authority's contribution is made in cash, the disabled person will not be able to pay the relative with that money, although he or she already uses ILF money to pay the relative and it may well make sense to employ that person. That means that there is no choice. This is the difficulty that we are in.

Baroness Seear

I can envisage getting even more confused. If a close relative cannot he employed while living in the same house, what happens if the house is divided into two flats and the close relative moves into the upstairs flat? Can that person then be employed?

Baroness Cumberlege

I am sure that we can all think of some interesting schemes in this context, but I still think that a balance needs to be drawn. Although a relative may want to give the care that the dependent person needs, the dependent person might not want that relative to provide that care. What is often at issue is that one cannot sack one's closest relative. The disabled person has to be in control. What is important is how we strike the right balance.

Lord Carter

I think that we have discussed this enough and that the Minister is aware that the matter needs further discussion. Indeed, that is the point of Committee stage. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 14 to 19 not moved.]

Baroness Hollis of Heigham moved Amendment No. 20: Page 1, line 23, at end insert— ("( ) Where a payment made under subsection (I) above covers part of the cost of services far a purchaser, the authority may provide directly the remainder of the required services.").

The noble Baroness said: I wondered whether we were going to rediscuss Amendment No. 18 and whether we might make the same speeches and receive the same replies.

However, turning to Amendment No. 20, we discussed earlier on Amendments Nos. 4 and 5 the fact that many clients will need a mix of direct payments and services. This amendment would permit a client receiving direct payments to buy services not only from private providers, such as agencies or by employing an individual person, but also from local authorities. I realise that in the consultative document the Government said that that may mean extra bureaucracy and that we do not want to pay a person money only to have them re-employ the same person who would have provided the service in the first place. However, perhaps I may try to shift the Minister from her original response.

It is clear that many services—probably most—ranging from cleaning services to taxi services will he purchased from the private sector, but there will be other services which might be quite specialised for which there will not he much in the way of a local market and it may be that the local authority will provide the best value for money for the client, especially in the light of Amendment No. 19 on the VAT requirement under which purchasing a service from the local authority will obviate the need for VAT. Clearly, many disabilities involve similar care needs, but particular disabilities may have quite specialist care needs—I refer, for example, to blindness and to the fluctuating care needs that are due to, say, multiple sclerosis—when it might he appropriate to purchase care from the local authority through direct payment rather than from a private provider, particularly in a vast rural area where there may not he a well established private market.

It would seem foolish artificially to limit where a disabled person can place his contract. Over and beyond that, there will certainly be occasions when privately purchased services will falter or fail and emergency situations in which a carer is ill, a service collapses or an agency fails to deliver. In that situation, a client must be able to turn to the local authority and expect to purchase those services from it in the interim.

In circumstances in which a client wishes to purchase services from the local authority because they are specialist services, because they may he a statutorial area, because there may not be alternative agencies from which he can choose to purchase, or because he may believe that the local authority offers better value for money, or circumstances in which he may need to turn to the local authority for emergency cover, we believe it important that that option should be available and not artificially restricted. I beg to move.

Lord Jenkin of Roding

I do not wish to trample over the VAT ground again. However, the suggestion that the client may buy his services from the local authority because the local authority will not charge VAT may be misconceived. At present local authorities cannot sell their services and therefore they are not in the trading area in this field of their activities. If they were free to sell their services and they came above the threshold I cannot conceive that Her Majesty's Customs & Excise would prevent their being liable for VAT. As a local authority almost certainly would be above the threshold, the argument would tilt the other way.

It is interesting to note that the paper we have received from the Association of Directors of Social Services states: From an ADSS perspective", and those are interesting words because they point to the direction in which these admirable people are looking, it is important that a 'level playing field' be created for an individual in receipt of direct payments to be free to purchase services not only from the independent agencies and individuals but also from local authorities. It is not a matter of a level playing field hut a matter of sheer common sense that if a local authority is capable of providing the services and the individual wants them from the local authority the existing arrangements can perfectly well continue. To interpose a nexus of a payment one way and then a payment the other way—the noble Baroness is shaking her head but she will have an opportunity to prove me wrong in a moment—would be unnecessarily cumbersome and bureaucratic, as the consultation paper states.

Surely the purpose of this exercise is to enable people to go outside and make their own choice. To imagine that somehow it is greatly widening the choice if they can say after an admirable local authority social worker has provided them with services, "Ah, now I have got the money I am now going to pay the local authority for the same admirable person to come in", seems to be rather ridiculous.

It would be a major change in the law to allow local authorities to enter the market to provide these services in competition with the agencies, charities, firms and so forth. What the Bill envisages is immensely sensible. Of course, the client can have a mixture; he can have a direct payment for some of his services and can have the local authority providing the balance. That is made perfectly clear in the consultation paper. It seems to me to he the sensible way of doing it.

Lord Swinfen

That is what I understand the amendment does, which is why I was puzzled when it was moved. I agree with the amendment, as I understand it. It provides, I understand, that the recipient of community care can elect to have part of his care provided in the form of grant and then he buys that care for himself. However, if he wishes to do so he can retain that care from the local authority if the local authority is the only provider of that particular kind of care in the area or if the recipient of community care deems that the local authority is the best provider. I believe that that is right. Let the individual recipient decide how best he wants those services and control his care himself.

Baroness Hollis of Heigham

There appears to be some misunderstanding and if I have contributed to that I apologise to the Committee. I was trying to make the point that the amendment is not about the privatisation of care by putting it through the cash mechanism. It is about choice. It is about putting the disabled person at the centre of the choice mechanism.

Clearly, as the Minister made clear on Second Reading, it was always open to a disabled person in negotiation with his social worker to go for a mix of direct payments and services from the local authority. That has not been in dispute; that mixture applies. However, it may he that the client wishes to use his direct payments to purchase services from the local authority.

There is a difference between my reading of what the Bill intends and what the noble Lord, Lord Jenkin, appears to believe it intends. I believe that, if the individual client is purchasing services with direct payments, whether from the local authority or from any other private body, that individual client remains at the centre of the care system. He decides who, how, when and in what way even though he is purchasing from the local authority. That is not the case and cannot be the case when he is simply the recipient of services. If he is the recipient of services he must fit the local authority pattern of managing that care.

The question and the real issue is whether we are empowering the disabled person. Yes, we hope to do so. Do we unnecessarily limit the choice of that disabled person as regards the supplier from whom he can purchase his services? Unless we accept the amendment, I fear that we may do. That is why I hope the Minister will feel able to support it.

Lord Jenkin of Roding

Does the noble Baroness not recognise the logic of what she was saying? It is that the local authority can perfectly well provide precisely the service that the individual wants but is prepared to do so only if there is a financial nexus. That is a pretty strange proposition to put forward. Either it can or it cannot. If it can, it should, and, if it cannot, the service ought to be bought outside anyway. I do not see the point of having the right to buy the service from the local authority. It is a double handling of money and will add to the cost.

Baroness Hollis of Heigham

Why is the noble Lord so reluctant to allow the disabled person to make that choice?

Lord Jenkin of Roding

I am not.

6.15 p.m.

Baroness Cumberlege

Perhaps I may put the Government's view. We do not believe that the amendment is necessary because the Bill already allows people to receive a combination of direct payments and local authority arranged services, as my noble friend Lord Jenkin said.

Under subsection (1), the local authority may make payments to someone in relation to any of the services for which it has decided his needs call. That leaves open the possibility that it may provide direct payments in relation to some but not all of the services which the individual needs.

Under Clause 2, the local authority retains the responsibility to arrange services except where the individual's needs are met through the arrangements that he has made using direct payments. It follows that, where the local authority provides direct payments in lieu of some but not all of the services which it has assessed an individual as needing, it has the duty to arrange the direct provision of the remainder. I hope that that clarifies the situation.

Baroness Hollis of Heigham

I am not entirely sure that it has met all the points that we have raised. We shall wish to study the Minister's reply and perhaps return to the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy of Chairman of Committees

I should tell the Committee that, if Amendment No. 21 is agreed to, I cannot call Amendments Nos. 22 to 24 inclusive.

Lord Carter moved Amendment No. 21: Page I, line 24, leave out subsection (4) and insert— ("( ) A payment under subsection (1) above shall not be exercisable in relation to the provision of residential accommodation except for such temporary care for respite purposes as is determined by the local authority, and only at the request of the direct payments user.").

The noble Lord said: Amendment No. 21 deals with the question of respite care. It is intended to tease out the point of whether direct payments can be used for the respite care of either the recipient or the carer and, if so, under what circumstances. I have looked at the consultation paper quickly because I received it only today, and I do not believe that that is mentioned at all.

There is a four-week limit to residential accommodation in the consultation document. We are not entirely clear what the situation is in regard to respite care. We know that the concept and practice of direct payments came from disabled people who were looking for an alternative to either full-time residential or part-time respite care. We know that personal assistants enable disabled people to remain in their homes and give their partners or informal carers the opportunity to leave the home for employment or recreation. We have received comments from people who say how much they appreciate the direct relationship that this permits and that residential care obviously produces a number of problems.

The Government have said in consultation that they will limit the amount allowed to be spent to four weeks in any 12 months. How does that apply to respite care that the recipient wants to use over and above the four weeks? Can it apply to the carer? How does all of this fit in to the Government's wish to see use made of the payment? Will it be met by other aspects of the Community Care (Direct Payments) Bill, or will it have to he dealt with only through the particular avenue of direct payments? I beg to move.

Lord Swinfen

It is essential that an element of respite care should be provided under the terms of the Bill in order to allow those who are normally caring for the individual to have a holiday, for their unpaid relatives who will be helping also to have a break and possibly even to allow the disabled person to have a break from his or her relatives who are providing that care. We all need breaks every now and again. Where there is a large team of carers, it will be very much more expensive to recruit a completely new team to cover the periods when the normal carers are on holiday or when family and friends who are doing unpaid work are away. It will probably be cheaper, more effective and efficient to provide respite care than to ignore it altogether. This may well be something that is required in an emergency where full-time carers suddenly become ill or relatives have to go into hospital. These are matters that cannot he foreseen but we should be prepared to deal with them.

Baroness Cumberlege

As I understand this amendment, it seeks to write on the face of the Bill the principle that I have said will guide regulations made unde,r subsection (4). I have explained previously that this provision is intended to exclude the use of direct payments to pay for long-term residential care but to leave open the possibility that they may be used for temporary care for respite. This is an area in which we consider it desirable to lay down national parameters because this is a new untried development. The regulations will be adjusted to keep them sensibly aligned with social security regulations. This is one of the specific questions that is asked in the consultation document in the box at the top of page 10: Q. Do you agree that the maximum period for which direct payments may be used to pay for residential accommodation should he four weeks in any twelve month period? Q. If not, do you think the maximum should be shorter or longer? What would you propose instead? Why? We believe that this is a matter that needs national debate.

Lord Carter

I am extremely grateful to the Minister for her helpful reply. If the consultation reveals that there is overwhelming evidence to support an eight-week limit on respite care in any 12 months, for example, will the Government be prepared to listen? They have chosen a four-week period, but are they prepared to listen to other suggestions? I see that the Minister agrees.

This has been a short but helpful debate. It was not entirely clear from a reading of the consultation document exactly how the two points about permanent and temporary residential care marched together. I believe that I now see what the Government are driving at. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Pearson of Rannoch moved Amendment No. 22: Page 1, line 25, leave out ("not").

The noble Lord said: I should like to move Amendment No. 22 and speak also to Amendments Nos. 23, 24 and 31 which have been tabled together. I regret that my noble friend Lady Cox, who has put her name to this amendment, cannot be here this evening. She has been delayed on her return from a humanitarian visit to distant parts and will not he back in this country until much later tonight. I also regret that my noble friend Lord Renton has not been able to put his name to these amendments or speak to them. Unfortunately, he contracted viral pneumonia over the Christmas break. I am sure we all hope that he will be hack with us as soon as possible. I believe that he is making reasonable progress.

I should declare an interest as the unpaid honorary president of RESCARE (the National Society for Mentally Handicapped People in Residential Care). These amendments follow on from what I said and the questions that I asked—not all of which have been answered—in the debate on the gracious Speech on 20th November last year, at cols. 200 to 203, and the Second Reading debate on this Bill on 7th December, at cols. 1,064 to 1,068. Those interventions are integral to a full understanding of these amendments. Although I shall not repeat all of them now, I shall need to touch upon aspects of them later.

Amendments Nos. 22 to 24 would vary the Bill to make it clear that local authorities could eventually give money to people to pay for places in long-term residential accommodation. Amendment No. 31 is aimed at allowing the families of mentally handicapped people, particularly the more severely handicapped, to purchase a place in a village community, or other forms of residential care. In referring to the more severely handicapped, I am talking particularly of those with a low mental age who cannot be expected to take the decision as to where they wish to live. Your Lordships will appreciate that I am concentrating on the mentally handicapped not only as honorary president of RESCARE but because of the other interest I should declare as the father of a mentally handicapped daughter.

I have promised not the weary your Lordships by repeating all of the points mentioned in my earlier contributions. Most of them can he found in the booklet Made to Care written largely by my noble friend Lady Cox. with a foreword by my noble friend Lord Renton, and published last April. Copies of that booklet are available in the Library or free from RESCARE via me. The booklet claims that village communities are care-effective, cost-effective and appear to be preferred by about half the families of mentally handicapped people. Yet they are being stifled by lack of support and negative ideology in the Department of Health, and in local authorities and social services. Choice between a village community and community care for one's relative very often simply does not exist. It has to be community care or nothing.

It is generally accepted, not always entirely fairly, that the old mental hospitals were bad news, but now the pendulum has swung too far in favour of integration at any price. These amendments will do something to alleviate that unsatisfactory state of affairs.

A number of questions have been put by me and my noble friends to the Government for a number of years. As yet, we have not received any satisfactory answers, or indeed any answers at all. Because these amendments are inspired by what we think the correct and obvious answers to our questions should be, I shall repeat some of them now in the hope of eliciting answers and sympathy from the Government for the amendments themselves. The first and most urgent question is whether the Government are absolutely confident that it is safe to continue their present policy of closing all the remaining long-stay mental hospitals and evicting all of their 16,000 more severely mentally handicapped residents into community care by the end of this year, 1996. In view of all the other difficulties surrounding community care at the moment, the Government cannot possibly have that confidence. Assuming that my noble friend cannot put her hand on her heart and assure us that these people will be properly looked after, can she explain why the Government do not order a stay of execution on the remaining long-stay hospitals, at least until the picture is clarified? Can she also explain why her department continues to refuse to put village communities back on the list of provision which the Government encourage local authorities to support? When answering the last question, with the greatest possible respect, can I ask her not to repeat that the Government believe that choice is working adequately at local level? It is absolutely clear that it is not. It is also clear that considerable suffering is being caused because local services and authorities are forcing into community care a growing number of people who cannot cope there and who cannot be coped with there.

I should like to repeat my request to my noble friend to explain why there is such a strong ideological bias in her department against village communities; and, indeed, against our most mentally handicapped people living in the countryside generally? Why is it all right for many of the landed aristocracy to avoid living in a town as though it were the plague, but not all right for my daughter to do the same? I fear that my noble friend Lady Cumberlege gave something of the game away as to her department's thinking on the question when, in reply to a Starred Question on 13th December, she described some of the aspects of normal living which the rest of us take for granted. She referred, for example, to such things as, living in a normal house, in a normal street; going to the pub: going to the shops; and going to church".—[Official Report, 13/12/95; col. 1271.] Why does normality have to include living within walking distance of a supermarket or shops or a pub or in a town at all? The answer is that of course it does not. If my noble friend agrees with the Government that choice should prevail in such matters, then she should look favourably upon my amendments.

I should just add that most people do not go to church, alas, and for mentally handicapped people it can he a far more spiritual experience to go to church in one of the excellent Camphill communities, for example, than in an almost empty inner-city church accompanied by social workers who may be well out of their depth.

I should also add that most village communities are not placed in deep country; they are near or even in towns, and all of them enjoy appropriate interaction with the local so-called "normal" community.

Once again, I should confirm that nothing I am saying should be taken as critical of community care when it works. Community care has enriched the lives of many handicapped people and, indeed, is often advanced and supported by RESCARE.

After our Second Reading debate on 7th December, I wrote to my noble friend Lady Cumberlege the next day to say that I could not accept what she said then in reply to the debate. She said that making direct payments for permanent or long-term residential care would simply add to the bureaucracy. Surely it would require less bureaucracy to pass funds direct to the family of a mentally handicapped person than it would to deal with some of the more mentally handicapped themselves and, indeed, with people suffering from other forms of more severe handicap. As I have not received an answer to that letter, I should he very grateful if my noble friend the Minister could answer it now.

In conclusion, the amendments, if accepted, would do nothing to compel local authorities to support village communities or other forms of residential care. They, like the Bill itself, are merely enabling measures. But they might encourage local authorities and others to start changing their attitudes a little more in favour of our communities. They might help the pendulum to swing back towards the centre. In that hope, I commend the amendments to the Committee. I beg to move.

6.30 p.m.

Lord Carter

The noble Lord made a persuasive and caring argument, hut we believe that it is wrong because, in a sense, it is in the wrong place. We are discussing a direct payments Bill and the whole concept of those payments actually came from disabled people who were looking for an alternative to full-time residential care. That is what the Bill is about. Direct payments are all about helping people to remain in their own homes and to live independently. Residential care is not about independent living.

We could have a very good debate about the weaknesses or strengths of community care and what has happened in the whole mental health field. However, for reasons which we can well understand, I believe that the noble Lord has introduced an argument which we would say—and I expect the Minister will say the same thing—is not in fact relevant to the Bill. We are discussing direct payments to disabled people to enable them to live independently in their own homes with the right level of care, and to give them the freedom to pay for the care package that they need.

The noble Lord has put forward an extremely good argument, but it is on a completely different subject. Indeed, what should happen to the mentally ill and mentally handicapped as regards how they should he accommodated—whether it be in the community or elsewhere—is a different debate. We have had such debates in the past and I should be happy to join in them again, but I do not believe that the Bill is intended to deal with the problem described by the noble Lord.

Baroness Flather

I now understand more clearly why my noble friend disagreed with me when I spoke against an amendment moved by the noble Baroness, Lady Hollis. Obviously my noble friend is keen to widen the scope of the Bill much further than even the noble Baroness wished to do. I was trying to stop her going in that direction at that stage. Clearly we have almost got a new addition to the Bill itself. It would be good if we lived in an ideal world and could look at everything in connection with a single Bill. However, that is not practical. I hope that we can now continue and get on with the job in hand.

The Earl of Mar and Kellie

I should like to express my support for Amendment No. 31 tabled in the name of the noble Lord, Lord Pearson of Rannoch. I hope that Members of the Committee will tolerate my speaking to Amendment No. 46 which, in fact, builds upon what the noble Lord mentioned as being the content of Amendment No. 31.

Amendment No. 46 is aimed at allowing direct payments to be made to people who may be unable to administer their own financial affairs due to mental disorder. That is a particular concern of the Scottish Association for Mental Health. We are discussing an amendment to the Scottish part of the Bill, but I accept that it could be implemented across the entire United Kingdom. It has been tabled because the Bill seems to be aimed only at someone who can make his own arrangements and administer his own payments. The amendment would allow a simple procedure whereby a local authority would be able to appoint someone, who had volunteered, to administer the arrangements on behalf of the recipient.

The amendment is needed in Scotland, and probably in the United Kingdom, because the laws regarding decision-making for adults with mental disability, are, sadly, out of date. For a few, arrangements have been made through a Curator Bonis, a tutor dative or by power of attorney, but that is rare. At present, there are unimplemented proposals to improve the situation from the Scottish and English Law Commissions.

I can see that there is an argument that a person who cannot administer his own affairs would not benefit from direct payments. However, in response, I would say that such an argument misunderstands the situation of many people with dementia or learning difficulties. Although they may lack sophisticated financial understanding, they, their carers and their families may well be able to indicate what kind of help they would like and who they would wish to supply it. Through their carer or independent advocate, arrangements could be made for care which would he more in line with the person's needs and wishes than the local authority may be able to offer. There would need to be safeguards as, indeed, there would be in the case of anyone who was legally capable. The local authority would monitor the situation to confirm that direct payments were being used correctly.

Amendment No. 46 creates the opportunity for dignity to be accorded to the individual, his family and carers. It is a tragedy that the person has learning difficulties or dementia. Let us try to restrict the tragedy to that factor alone.

Baroness Cumberlege

Perhaps I may, first, deal with Amendments Nos. 22 to 24 and then address my comments to Amendment No. 31. I understand that the noble Earl would wish me to reply only to Amendment No. 31 and not to Amendment No. 46, but perhaps he would care to clarify the position?

The Earl of Mar and Kellie

I did in fact speak to Amendment No. 46 simply because it has been grouped with Amendment No. 31.

Baroness Cumberlege

In that case, and with the leave of the Committee, I shall he most happy to address those two amendments.

Amendments Nos. 22, 23 and 24 would remove the Secretary of State's ability to set a limit to the period of residential accommodation. I have explained previously that the provision is intended to exclude the use of direct payments to pay for long-term residential care but to leave open the possibility that they may be used for temporary care for respite. I do not believe that any benefit from allowing direct payments to be used to purchase permanent residential care world outweigh the extra bureaucracy involved for the local authority and for the individual in making direct payments. Suitable arrangements already exist to provide users with a choice of residential care in the statutory direction on choice.

This is an area where we consider that it is desirable to lay down national parameters because this is a new and untried development. The regulations will be adjusted to keep them sensibly aligned with social security regulations.

My noble friend Lord Pearson of Rannoch raised the issue of village communities. I agree with my noble friend Lady Flather and the noble Lord, Lord Carter, that that goes somewhat wide of the Bill that we are discussing today. However, perhaps I may say that we intend to use the regulation-making power in Clause 1(4) to exclude the use of direct payments to pay for permanent residential care. Suitable arrangements to provide choice in permanent residential care are already in place and to make direct payments available for that purpose would simply add to the bureaucracy. We believe that that is the same for all client groups.

I know that my noble friend is frustrated that village communities are perhaps not being selected as a first choice for many severely handicapped and disabled people. I am afraid that my noble friend knows my answers very well in relation to the direction of choice and the complaints process which can be used to seek redress. He is also very much aware of the review that is taking place at the moment, which includes his informative booklet, Made to Care, which will be very useful. That review will be completed within six months.

Perhaps I may now turn to Amendments Nos. 31 and 46.

Lord Carter

Before the noble Baroness leaves Amendments Nos. 22 to 24, is there not another argument? Are they not outside the scope of the Long Title of the Bill which is: for community care services to make payments to persons in respect of their securing the provision of such services"?. I do not believe that the amendments are within the Long Title.

Baroness Cumberlege

I suspect that that is right.

I turn now to Amendments Nos. 31 and 46. The provision in Clause 1 that a local authority may make payments to a person in lieu of services he has been assessed as needing does not preclude that person nominating an agent to receive the payment and act on his behalf so long as the user retains ultimate responsibility. No amendment is therefore necessary to enable individuals to receive assistance from a third party.

The crucial difference is that the Bill as drafted places the responsibility for managing payments with the individual who needs community care services. Direct payments are intended to give the user more control over the way in which his care needs are met. He may well get help from his family or others in managing direct payments, but if they have the final say and not the user himself then direct payments will not achieve the goals of increasing the user's independence and control.

The amendments move away from responsibility lying solely with the individual concerned. They remove the need for the individual to consent that payments should be made to a third party.

As the Bill is intended to increase the power of individuals to make their own decisions, we feel that the amendments arc inappropriate. The Bill does not rule out individuals having support to make those decisions, but we do not feel that we should dilute the principle that the decisions are for the individual to make.

I hope that the amendments will not be pressed.

Lord Swinfen

Before my noble friend sits down, can she say, in the case of a mentally handicapped person having a legal guardian to undertake all his business for him, what would be the position of the legal guardian? Would the legal guardian be able to obtain a direct grant on behalf of the person for whom he is guardian?

Baroness Cumberlege

At this stage we do not suggest that people with a learning disability would qualify for direct payments.

6.45 p.m.

Lord Pearson of Rannoch

I am grateful to all Members of the Committee who have spoken, and particularly to the noble Earl, Lord Mar and Kellie, for his support and for what he had to say about his amendment, Amendment No. 46, which fits very closely with what I propose in Amendment No. 31.

I confess to the noble Lord, Lord Carter, and other Members of the Committee that I am indeed trying to widen the scope of the Bill. As I said earlier, I believe that it is rather a waste of time for your Lordships to go through the long process of passing a Bill of this kind, blocking off avenues which we may well come to need in a year or two but which we shall not be able to facilitate because primary legislation will then be required.

I am grateful to the noble Lord, Lord Carter, for his sympathy. I hope that I may take him up on his offer that perhaps we may join in a more specific debate on village communities another day.

As for what my noble friend Lady Cumberlege had to say, I am afraid that I remain unconvinced about the extra bureaucratic costs which my amendments would cause. I do not believe that that statement can be justified.

In response to my noble friend's statement that suitable arrangements are in place for choice in the areas I talked about, I have to tell her again that they are not in place. That is why I am moving the amendments. In her winding-up speech at Second Reading, and again this evening, she mentioned the complaints process which is supposed to satisfy the hundreds of people who complain to RESCARE about not being given sufficient choice. As I asked in my letter of 8th December, I should he grateful if she would explain to us, in as public a way as possible, exactly what those complaints procedures are, who is using them and with what success, because I am told that they do not work at all.

As to the review which my noble friend mentioned, it is extremely frustrating that the review was announced last April, and only because we have put as much pressure as we can on her department are we now told that its first part will be ready in six months. That will he too late for many of the institutions that are being closed in the meantime. I urge my noble friend to go back to her department and see whether something cannot be done more speedily to avoid the disastrous effects which I fear will be visited on thousands of our most unfortunate people.

Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 23 to 25 not moved.]

Baroness Hollis of Heigham moved Amendment No. 26: Page I, line 27, at end insert— ("( ) Each local authority shall consult with users of direct payments for the purpose of preparing a plan for community care services under section 46 of the National Health Service Act 1990, and produce an annual report on the progress of direct payments schemes which includes monitoring of Independent Living Fund expenditure within that authority.").

The noble Baroness said: Amendment No. 26 is a three-part amendment. Perhaps I may explain the reason for each part.

First, the amendment seeks consultation on the development of the direct payments schemes. It is clear from the Policy Studies Institute 1994 study, which has been quoted, of existing indirect payments schemes that the schemes that work best are those which are constructed in consultation with disabled people. The report shows that such full consultation is successful because the outline and shape of the direct payments scheme will be most relevant if user groups can influence its design, cutting out unnecessary waste and procedures. Equally, that will allow for a tailormade scheme in each area, which will reflect local circumstances. Such schemes, constructed in a spirit of partnership, will be more robust and any problems that emerge will be resolved in a more co-operative manner. Therefore, we believe that full consultation is especially important in constructing new direct payments schemes, categories of client need and the like.

The second reason for the amendment is more oblique. It is not compulsory for local authorities to establish direct payments schemes. They are permissive. We have accepted the Minister's position in that respect for the time being. In the absence of a mandatory requirement on local authorities to establish direct payments schemes, we believe that it would help and encourage local authorities to develop such schemes if they were required to report to the Department of Health on how they were proceeding to meet the needs of disabled people and independent and community living. By asking them to report, it would allow us to map progress on a national basis. It would allow local social services committees to receive a progress report. It would allow disabled people to monitor how their local authority was proceeding in implementing the new legislation. I suggest that such monitoring should take place annually for about three years, after which there could be, if you like, a sunset review. The pump would have been primed for establishing such schemes.

The first reason for asking for progress reports is that consultation is a good thing. The second reason is to encourage local authorities to establish such schemes in the absence of those schemes being mandatory. A third is to monitor the use of funds provided to local authorities following the termination—the sunset clause—of the original ILF moneys of November 1992. At that time a sum of just under £100 million—usually referred to as the Independent Living Transfer—was transferred over three years to local authorities to assist severely disabled people. That period of transfer came to an end in 1995–96, but the total amount has been included in the standard spending assessment for local authorities from 1996–97.

We would welcome the fact that any such report monitors the expenditure of this transferred fund in order to ensure that the money continues to be spent for the purposes for which it was originally intended, to ensure that there is clear accountability for the use of such funds and to secure, where appropriate, that such a transfer element might well provide the backbone of direct payment schemes.

We consider that the amendment would do three things: it would involve local people in constructing direct payment schemes; it would ensure that local authorities which may not have adopted such a scheme were encouraged to do so by being required to report on progress; and it would keep a monitoring eye on the Independent Living Transfer Fund. I beg to move.

Baroness Cumberlege

I thank the noble Baroness for that clear explanation. We agree that consulting users and carers and providing them with information are extremely important. The Government have consistently stressed that, and it is a major component of our community care development programme, Building Partnerships for Success.

We have said that we want to see local authorities involving users and carers, not just in discussing issues that affect them personally but in looking strategically at the way in which community care is implemented. That will apply equally to the way in which this direct payments legislation is implemented.

We issued last year revised guidance on the production of community care plans which stressed that users and carers need to be more fully engaged in drawing up plans and that plans need to reflect their views. The same guidance said that community care plans should include service developments and how they will be implemented. Again, that will of course cover direct payments once this legislation is in force.

We would expect local authorities to put information on direct payments into their community care charters, and I do not therefore see a need for a duty to publish a report.

I also see a problem with authorities being required to include information on Independent Living Fund expenditure, as they would not necessarily have this information available.

We have already tackled the issue of consultation and information and consider that the amendment is therefore unnecessary. I hope that the noble Baroness will not press it.

Baroness Hollis of Heigham

Perhaps I may ask the Minister to say a little more about the second part of the three-pronged push on the amendment. I take her first point, that disabled people will be involved in constructing the plans. However, we referred to monitoring and I asked for progress reports. I believe that the Minister said that local authorities are required to publish community care progress reports and that direct payments could—I do not think that she said "must"; it is the point I press—be included in that. If the Minister assures me that guidance to local authorities will indicate that in the community care progress reports local authorities will be expected to address the issue of direct payments schemes, I shall be well content. Can the Minister give me that assurance?

Baroness Cumberlege

We go back to basic principles: that the direct payments legislation, if enacted, is part and parcel of the community care legislation of 1990. Where we look for progress reports from local authorities, I would consider direct payments as being part of those annual reports.

Baroness Hollis of Heigham

What happens if a local authority decides not to set up a direct payments scheme and does not have a third party or voluntary organisation doing so? Particular circumstances may well apply to that local authority. There may be good reason why that local authority is reluctant to set up such a scheme. It is clear from consultation that 90 per cent. of local authorities would set up such a scheme tomorrow if they considered it legal. However, for 10 per cent. there may be pressure of circumstances, lack of inhouse expertise or a wish to wait for a year or two and to piggy-back off other people's experience. I can conceive of circumstances in which a local authority may not set up a direct payments scheme with the speed that disabled people, voluntary organisations and indeed the Minister wish.

If local authorities are not required to set up the scheme—I accept that discretion for local authorities—and if they are not required to report on the moves that they are making towards such a scheme, how can we hope, expect and check that they will do so?

Baroness Cumberlege

At this moment, I believe that all Members of the Committee are in agreement that we should like to see the direct payments scheme introduced as widely as possible. However, as the noble Baroness said, there may be instances where it is not appropriate for the social services department to set up the scheme. I anticipate that when social services report through their community care charters, the impact of that will be seen on the remainder of their report. Therefore one can see the whole matter as a package.

Baroness Hollis of Heigham

There is no point in pressing the amendment at present. However, I shall follow up the line that the Minister indicates. If what she says meets the purpose of the amendment, we shall be delighted. I am not persuaded that it does. But if necessary we shall return to the issue at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Swinfen moved Amendment No. 27: Page I, line 27, at end insert— ("( ) Regulations shall provide for any amount of a cash payment to be calculated in such a way as will include all such costs as are reasonable to allow the person to act as a good employer.").

The noble Lord said: In the consultation paper on the Bill, paragraph 35 on support services states: Where people prefer to employ someone as a care assistant then of course they would take on responsibility as an employer for tax. National Insurance and other liabilities". The purpose of the amendment is to ensure that payments can include elements for value added tax, national insurance contributions, tax, advertising and all the expenses of employing someone else.

The Independent Living Fund or social services indirect payment schemes have never had the same financial commitment enjoyed by equivalent services provided by the statutory services. I am advised that in Hampshire the cost of an hour of care attendant service is approximately twice as much as the cost of an equivalent indirect payment. There is no logic to this other than that disabled people accepted much lower payments when the schemes originated because they were only too willing to have the opportunity to break free from direct services.

By and large, one encounters similar overheads in managing one's own care as those experienced by a larger organisation in establishing similar provisions. If one is running a small business and hiring and maintaining staff, costs such as sickness and holiday pay, insurance, recruitment, accountant and possible payroll support, and employers' national insurance contributions must all be taken into account in addition to the hourly rate. In most cases the hourly rate and a small amount of holiday/sick pay is all that is presently offered to the user.

I understand from the British Council of Organisations of Disabled People that some indirect payments users from around the country are finding the funding situation inadequate. I have two examples. I am sure that this applies possibly to the majority of users and not just those whom I quote. A user in Oxford states: I am funded for 24 hours, 7 days per week by the original ILF. This covers a basic salary for somebody working 6 days live in and one day covered by a local agency. It does not cover the National Insurance I pay as an employer or the costs of covering my live in worker's illness. I cannot give my full time worker a paid holiday and it certainly does not meet the cost of assistance over Christmas, Easter etc. when people expect time and a half. My other main difficulty concerns the recruitment of staff; this happens approximately four times a year and costs between £60 and £200. My needs would probably be met with a further £1500 a year. Much less than Social Service Homecare overheads, but over £1000 more than I can scrape from my personal finances!

Another disabled person receiving grants in the Bognor Regis area writes: I have no spare money to meet the extra employment costs demanded by Tax and [national insurance contributions]. All I need is an extra £400 per year added to my care package to ensure my legal requirement as an employer is adhered to. The Authorities say I must find that out of my care component of the Disability Living Allowance, but that is more than taken up by my hidden disability costs of extra heating, lighting and food hills of my live in personal assistants. I have no means to meet these extra costs".

Those quotes reflect well the position of countless payment users up and down the country who feel quite distraught about being forced into bad employment practice due to inadequately calculated funding requirements. The reputation of the user is at stake and, of course, the quality of the provision will suffer if this employment costs issue is not addressed. If adequate indirect payments are not made, the service user will he forced to compromise on whom they can recruit. Even worse, some may be forced, for survival reasons, to submit to the temptation to cut corners in the respect of poor fiscal and legal practices, such as perhaps being less than honest about tax and national insurance, having inadequate employers' insurance and public liability insurance policies and as regards matters to do with terms and conditions, hours of overtime, sick pay and so on. I am sure that the Government would want to encourage none of those things.

That would lead people into severe difficulties. Unfortunately, some beneficiaries of the original Independent Living Fund have already run into major problems with the Inland Revenue. The Disablement Income Group is currently involved with two of those cases where unpaid tax and national insurance contributions have run into several thousands of pounds. In both cases, neither tax nor national insurance contributions were deducted from the personal assistants' wages nor were employers' contributions paid. The Inland Revenue is now threatening action for recovery of outstanding amounts, in one case almost £11,000. Neither individual is in a position to pay.

There is also evidence of personal assistants being left in a vulnerable position because national insurance contributions were not being paid. Sometimes personal assistants have found that their contributions were adrift and that they did not qualify only on attempting to apply for a benefit during sickness. It is essential, in my view, that in calculating the amount of direct payment, local authorities should take into account those additional employment costs. I beg to move.

7 p.m.

Lord Carter

We are glad to support the amendment from this side of the Committee because we believe that the noble Lord, Lord Swinfen, has raised an important point. We have already touched on it once or twice in discussion on the previous amendments. It is important that the new responsibilities and liabilities of the recipient of direct payments must be recognised. We discussed earlier the effect of VAT and other costs which arise. I referred to the problem of the recipient thinking that the person he or she employs is self-employed. If the Inland Revenue turns round and says after a time that that person is not self-employed, the recipient will be liable for both the employer's and employee's proportion of tax and national insurance contributions.

The amendment is well worded to draw attention to the reasonable costs of a good employer. It also makes the point that regulations should provide for this rather than the consultation paper which only refers to guidance. There is nothing in the consultation paper on the matter. It states that advice is required from the local authority. The liabilities and responsibility for tax, national insurance and other liabilities, should be made clear by the local authority when offering people direct payments". That is fair enough. It is good guidance to local authorities as regards the advice that they should give. But unless it is in regulations, it is not clear how it could be enforced. It is an area at which the Government may have to look carefully to ensure that recipients of direct payments arc not penalised.

Baroness Masham of Ilton

I wish to acid one point which has not been mentioned. There might he a problem with maternity leave if the carer became pregnant and had a baby. Perhaps local authorities should be encouraged to be flexible and take such matters and all extra payments into consideration.

Lord Addington

I wish to support the amendment which is based on common sense. If you are to provide someone with the ability to purchase or employ—that is, the carer and the support services—he must have this type of backing. Otherwise it is conceivable that funds will be insufficient, as has been pointed out—and practical examples ram the point home—or that he will run into legal problems. Unless one is prepared to fund the whole thing properly, as with all types of care outside institutions, there is a distinct danger that, with the best will in the world, what one has may well he worse than whatever it replaces.

Baroness Cumberlege

It will be for local authorities to determine the level of direct payments. Just as authorities decide on the nature and level of a community care service which someone receives, so it should be the local authority which decides on the level of the direct payment, the basis of its calculation and what it is meant to cover.

Not everyone who receives direct payments will wish to become an employer. Others may contract with an agency or secure services in some other way. We feel that to give local authorities a legal duty to include an allowance for a specific item which would not necessarily be relevant, would not be sensible. It would also fundamentally undermine local authorities' discretion in their dealings with individuals, which is at the heart of community care legislation.

I understand the points made by Members of the Committee in regard to having sufficient funds to cover the care needs of the individual. That is something which, of course, I endorse, but I believe that it has to be left to local authorities to decide what that level should be.

Baroness Hamwee

Before the noble Lord responds, perhaps I may reinforce the support for the amendment from these Benches. I had thought that the Minister might reply that the amendment was unnecessary because the cost of securing the provision of services—the wording in Clause I—might be interpreted as extending to all the costs, including those which the noble Lord, Lord Swinfen, mentioned. However, I am rather more perturbed now because the Minister seems to be suggesting that the cost mentioned in Clause 1 may not be the full cost.

Lord Swinfen

I too was somewhat disappointed by the reply. My noble friend seems to think that because a number of people in receipt of grants would be using agencies to provide staff, they would not need to worry about the on-costs. But the agencies would have to provide the national insurance contributions, the holiday and sick pay and all the rest of it. They would have to include it in the charge that they made to the recipient of the grant. Therefore, fewer hours of care could be bought with the grant than might be provided by the local authority if the local authority which was not responsible for all the costs—particularly value added tax—were basing the grant on exactly what it was paying for the services. It might not necessarily be so in all cases but it may well he that the staff employed by the agencies were better trained and therefore entitled to higher rates of pay. All these matters need to be taken into account.

I hope that my noble friend will consider this between now and the next stage of the Bill. I intended this as a probing amendment; therefore I shall not be awkward to my noble friends at this hour of the evening and divide the Committee. However, we should return to this matter at the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Trumpington

I beg to move that the House be now resumed. I suggest that the Committee stage begin again at 8.10 p.m.

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

House resumed.