§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Donald Thompson.]10.23 am
§ Mr. Neil Thorne (Ilford, South)
When I applied for this debate, I knew of one or two cases of constituents who were aggrieved, but my researches in the past few days have disclosed that the unhappiness is much more widespread.
As most people know, residence in hospital under the NHS is provided free and no charge is made for accommodation or food, although those on pensions receive a reduced rate after a period of time. However, those who are well enough to leave hospital, but not well enough to live alone, are provided for by the state in social services residential accommodation administered by the local authority.
Local authorities provide such accommodation for elderly people and others under part III of the National Assistance Act 1948. Under section 22 of the Act, local authorities are required to fix a standard charge for their accommodation, the idea being that it should be the economic cost of providing that accommodation. If the resident cannot afford to pay the full charge, local authorities are required to assess his or her ability to pay and to charge accordingly.
However, the charge must not fall below a prescribed minimum rate—currently £27.25 per week, which will rise to £28.85 on 26 November. That amount is always equal to the standard rate of retirement pension, less a specified sum for personal requirements.
In assessing someone's ability to pay, the local authority is required by section 22(5) of the 1948 Act, as amended, to give effect to part III of schedule 1 to the Supplementary Benefits Act 1976, which is used in assessing eligibility for supplementary benefit. In fact, for supplementary benefit purposes, that has been replaced by new provisions in the Social Security Act 1980, but the earlier provisions have been saved for the purposes of charging for accommodation.
Paragraph 17 of schedule 1 to the 1980 Act provides:In taking account of the value to any person of an interest in the dwelling in which he resides, any sum which might be obtained by him by selling that interest, or borrowing money upon the security of that interest, shall be disregarded.Under paragraph 20 of the schedule, £1,200 of capital is disregarded. Above that, a weekly income of 25p for each complete £50 is assumed. That assumes that an interest rate of 26 per cent. after tax—about 35 per cent. before tax — can be obtained. I cannot imagine where one could obtain such a rate of interest from a reliable source.
The problem is deciding when someone does not, in practice, reside in a house any longer. In 1978 the DHSS published a memorandum of guidance "Residential Homes Under Part III of the National Assistance Act 1948: Charging and Assessment Procedures", which is still current guidance. It says in paragraph 17:It is for local authorities to decide in the light of the circumstances of each case whether a person provided with residential accommodation has effectively given up residence in a dwelling in which he retains an interest and accordingly whether—and at what stage—the value of his interest in it should cease to be disregarded under paragraph 17 of Schedule 1 to the Supplementary Benefits Act 1976.The memorandum goes on to say that once a property ceases to be considered the place in which the resident of 908 the home resides, the value of his interest in the dwelling should be treated as capital. Normally, the only exception would be if a spouse or a child under 16 continued to live in the house. However, the memorandum says in paragraph 20:Local authorities have no power to compel a resident to sell his property so as to pay the assessed charge out of available resources. When a resident declines to sell, however, it is reasonable for the authority to suggest that a charge be placed on the property that would enable them to recover the accrued balance of the charges, including any interest at an agreed rate, when the property is finally sold (possibly after the resident's death). Residents should be advised or assisted to consult a solicitor about this procedure.That means that local authorities can allow unpaid charges to accumulate and the debt to be recovered eventually from the estate.
Even then, a DHSS background note "Assessment of Ability to Pay: Capital Value of a Former Dwelling", issued in January 1984, says:In general, it is not the practice of authorities to enforce any outstanding debt against the personal representatives of the deceased when this would result in hardship through the sale of the property.Relatives other than spouses or parents are not liable to maintain someone living in residential accommodation, although they may make a contribution and, in circumstances where the local authority is intending to recover the debt in due course from the estate of the resident, to do so would reduce the size of that debt.
The January 1984 background note points out that there isno compulsion on an authority to take into account the value of a former dwelling; in addition to the circumstances in which they should not do so (e.g. because of a resident's liability to maintain a spouse (or a child) they have discretion to ignore or discount such capital assets.During the Standing Committee debate on the Health and Social Services and Social Security Adjudications Bill, my right hon. and learned Friend the Minister for Health explained the circumstances in which that discretion should be used as follows:People in residential accommodation on a permanent basis can normally be assumed to have given up residence in their former dwellings. The value of any interest such a person has in that house will normally be treated as part of his capital resources. But there is no compulsion on an authority to take into account the value of the house. In some circumstances an authority definitely should not do so, such as where the house is still being lived in by a spouse or a child. We are giving discretion to ignore or discount such capital assets in such cases. The position of a husband, wife or a dependent child is obvious, but there is another case where the Government believe that it would be entirely reasonable for an authority to exercise discretion. That is where a principal supporter or a carer continues to live in the house. Let me give a hypothetical case. An adult child, or perhaps a friend who was in no way related to the elderly or disabled person, could have spent many years living in the home and looking after the elderly person. It would be wrong if the elderly person went into part III accommodation and the interest of that carer to be disregarded and the local authority to take the value of the dwelling into account when assessing charges so that a sale is forced.It is not difficult to envisage circumstances in which that discretion should be used. Normal residence and direct support of the elderly person can easily be checked. Furthermore, the elderly person could normally say whether he regarded the house as the only home of the person who had cared for him and whether he assumed that 'the carer' would be the beneficiary on his death.When we make the new assessment regulations on which we are about to consult, we firmly intend to make provision for the continued exercise of local government discretion and to indicate that relevant circumstances should be taken into account. We believe that the circumstances such as I have described should 909 be taken into account by local authorities and we shall seek to cover that in the regulations." — [Official Report, Standing Committee B, 19 April 1983; c. 574.]The January 1984 background note says that it would be difficult to codify the circumstances in which the value of the home should be ignored without widening its scope to cover the home in all circumstanceshence the present discretionary nature of the provision.It therefore appears that, although the local authority can take account of the value of the interest of a home resident in a house, it is not obliged in all circumstances to do so. If it takes it into account it cannot compel the sale of the property, and it can agree that the debt should mount up to be paid eventually out of the estate of the home resident. In January 1984 the DHSS issued a consultative paper on charges for residental accommodation that is provided by local authorities under part III of the National Assistance Act 1948. The document says that it is proposed thatwhere a local authority judges it appropriate, the value of a former dwelling or of other property should be taken into account.It goes on to discuss circumstances in which the value of the home should be disregarded. It says:It is proposed also that the regulations should specify the circumstances in which the value of the family home must be disregarded and when a local authority has discretion to include its value in a charging assessment. Normally people who are in residential accommodation on a permanent basis can be assumed to have given up residence in their former dwelling and the value of any interest that person has in the property will be treated as part of his capital resources. However, the capital value of a resident's former home will be disregarded where a spouse, or a child under 16 years of age, continues to live there as his normal place of residence. For this purpose, it is proposed that the regulations should treat on the same basis as spouses all long-standing relationships in the same residence—irrespective of the sex of the partners and the nature of the partnership. The value of the property should he disregarded also where it has been and remains the permanent residence of a principal supporter. The latter, in addition to providing care, may also have been the financial mainstay of the household.No decisions have yet been announced following the consultation period and the DHSS has not announced any date for the commencement for the operation of that system.
There is no doubt that my right hon. and learned Friend the Minister was right to say what he said in Committee. There is no doubt, either, that the present situation is causing great upset and misery to many elderly people who are not able to take care of themselves. Admittedly the regulations make provision for local authorities to have a solicitor consulted on behalf of the person concerned, but, of course, that is not always easy, particularly where the person taken into care is senile and cannot look after himself. Therefore, several issues need to be carefully considered, and the Government must pay special regard to them.
§ The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten)
I am sorry to interrupt my hon. Friend, as I know he is anxious to get on with his speech, but will he accept from me, on behalf of my right hon. and learned Friend the Minister of State, that we are very concerned about the point that he has made? We are particularly concerned that elderly people should not be upset or worried by the misapprehensions that my hon. Friend has described. We shall certainly bear everything that he has said very much in mind.
§ Mr. Thorne
I am grateful to my hon. Friend for saying that. Perhaps I can do no better than illustrate my case by a recent example that was brought to my attention. It involves two elderly sisters, one aged 76 and the other just over 80. The older sister was taken into part III accommodation. I received correspondence from the younger sister, a Miss Gladys Lane, who used to live in Eastern avenue, Newbury Park, in my constituency. The house in which she lived with her older sister was the family house, and it had been owned by their parents. The family moved into it in 1934 and it was eventually passed on to the older sister. The two sisters lived together, sharing expenses on a 50–50 basis. Eventually the older sister had to be taken into a council home.
Through ignorance, the ownership of the property was vested in the older sister and the younger sister had no title to it. Although the older sister had left the property in her will to the younger sister and the younger sister quite naturally expected to inherit it in due course, she was in for a nasty shock. When the older sister went into a home, she was asked to pay the sum of £ 111.30 a week. That sum has now risen to £116.14 a week. To those ladies, that was an enormous sum. It was impossible for them to pay that money out of their normal income. The younger sister, who was left in the home in which she had lived since 1934, approached the local housing aid centre in York road, Ilford. She was offered a single person's bed sitting room with a shared bathroom. She objected to that offer and went to the citizens advice bureau, which found her a good solicitor.
After several months of negotiations the local council consented to the sale of the house and the purchase by the younger sister of—in the council's words—accommodation more suited to her needs. Miss Lane found the flat in which she now lives. It consists of a lounge, bedroom, kitchen and bathroom. She has settled in and has no complaints about it. However, a charge has been placed upon the flat by the local authority which must be repaid if she ever sells it. There was a difference of £6,000 between the proceeds of the sale of the house and the cost of the flat, after all the legal expenses had been paid. The council took every penny of this money and now has the deeds of the flat.
Miss Gladys Lane naturally feels that the law is cruel and unjust. She is unaware that hers is not an isolated case. According to the advice that she has received from the CAB and from her solicitor, the practice is widespread. The CAB advisers have told her that they constantly have to deal with similar cases involving sons, daughters, brothers, sisters and other family members living in properties which are legally occupied by a close relative. When the owning relative has to be taken into care, the family members find that they have no legal right to the property or interest in it of any kind.
In Miss Lane's case the council decided, as she had lived in the house for so long and it had been the family home, to allow her to purchase a small flat. However, Miss Lane, who was in her mid-70s, had to have a major fight with the council to persuade it to agree to that. She is most anxious that others in similar circumstances should not find themselves in the same predicament.
Miss Lane makes the point that she has never claimed anything from the state and had had no intention of doing so. She feels herself to be at a grave disadvantage in that this matter is hanging over her head. She feels that there is no just reason why that should be so.
911 Moreover, Miss Lane's older sister, who is now in a council home, is a former civil servant. She had worked in the GPO telephone service all her life, and her pension is now paid by British Telecom. The money is paid into a Girobank account in the joint names of the two sisters. The older sister's pension amounts to about £165 a month and this, with the state pension, is her sole income. The younger sister, Miss Gladys Lane, has had to make an arrangement with the council whereby every quarter a cheque for £480 is paid over to the council to offset a portion of the debt which is building up for her older sister's keep in the home. Miss Lane is very worried about that. By 13 October this year the amount had risen to no less than £2,965.12 in spite of all her efforts to reduce it as much as possible. Through having lived throughout their lives without calling upon the state for support at all, the sisters are now debtors to part of the state system—through no fault of their own—to the extent of almost £3,000.
One might consider that that was enough—but no. Of the older sister's state pension, she receives only roughly £6.80 a week as pocket money. She still has to pay income tax on the pension which she receives from BT before the balance is shunted on to the council. The situation is appalling.
These elderly ladies have lived a life of hard work, dedication, effort and thrift. Our present Government do all that they can to encourage thrift. They encourage people to own their own homes. In view of the increasing number of us who are moving into the home-owning sector, I believe that such problems will increase in number.
Several matrons of elderly people's homes have told me that they do not like elderly people entering their homes with money raised either from their own assets or through the sale of their house, because such people enter the home feeling very resentful about the way in which the money has been taken away from them. Matrons have told me that, in their view, these elderly people should spend the money before they enter the home. They should go on a world cruise, ending up at Monte Carlo, and have a good time. They should get rid of everything they have, because no distinction is made between whether they finance their stay in the home or whether the DHSS and the ratepayer do so. That is a strange philosophy, and one which I do not believe the Government would normally wish to encourage.
However, there are other matters which we should consider. My hon. Friend may tell me that the local authority has discretion in the matter and can find part of the cost out of the rates. Some local authorities have been more profligate than others. The two elderly sisters live in the London borough of Redbridge, which has been Conservative-controlled for the past 20 years and has been extremely careful in balancing its budget. The council has made sure that it has not spent more than necessary, and the ratepayer has benefited. When such a council is then told to reduce its budget further, it finds it difficult to do so, because it has already cut spending to the bone.
The leader of Liverpool council was crowing on television last night about the fact that his council had rebelled against the Government and forced them into allowing the council an additional £30 million last year. Redbridge is not in that happy state. The council tries to 912 follow not only the letter of the law, but the wishes of the Government about cutting back on expenditure and reducing manpower. There is therefore now no fat to cut away, and the council must look after every penny. It is therefore not able to give way on matters of discretion as easily as local councils which have built up a reserve of fat over the years.
If the Government wish to encourage thrift through investment particularly in home ownership, they must face the problems that could arise when one of the occupants of a property goes into part III accommodation. They must lay down strict guidelines, if necessary reinforced by law, to detail specifically what should happen to a property which has been occupied for some years by a companion, and especially if that person is a close relation.
If a companion has been sharing that accommodation for five or 10 years, or even longer, a legal entitlement to a 50 per cent. interest in that property should be written into the regulations. Such a person should be treated as a spouse. It is only through the support that is given by such people that the state is saved a great deal of money over many years. Such care prevents the other person having to go into hospital or part III accommodation at a much earlier date. I do not believe that to introduce such a measure would be charity—it would be doing the right and proper thing.
If a person goes into part III accommodation, we should make provision for him to make a capital payment. The cost of part III accommodation could easily be calculated. The person going into that accommodation should be able to buy an interest in it so that when he leaves that accommodation, either because of death, going into hospital or because he is taken out of care, the district valuer would find it feasible to reassess the value of that person's interest in the accommodation, and he or his estate could be reimbursed. The elderly person would not then feel aggrieved at the constant drain on his resources of between £5,000 and £6,000 a year at current prices. That person would have owned a part of the home in which he lived.
Of course, there would be the running costs of the home and the supervision required, which would be recurring charges. They could be set against the capital assets in due course if there were insufficient resources to fund those also. I see no reason why the elderly should not be given the right and the dignity to own an interest in the property they occupy for the remainder of their lives. It is what the Conservative party stands for—property ownership and the dignity of the elderly. The Government would be doing the right and proper thing if they extended home ownership into part III accommodation and allowed people to own an interest in it.
I hope that my hon. Friend the Minister will throw some further light on the appalling position in which so many elderly people find themselves. They are worried about receiving a bill of such magnitude day after day, week after week, month after month and year after year, which mounts up to sums that are quite foreign to them because some of them retired many years ago. Sums in three or four figures worry them. We should try to lift the burden from those people and save them from taking the matron's advice and throwing it all away.
§ The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten)
In 913 raising the question of charges for local authority residential accommodation my hon. Friend the Member for Ilford, South (Mr. Thorne) has raised an important and complex subject, and has done so with characteristic thoroughness and a pragmatic approach. It reminds me of the way in which he dealt with the last social services questions, not only in his capacity as an hon. Member, but as chairman of the National Council for Civil Defence. He mentioned the important issue of civil defence planning, and the effect on that of plans within the DHSS.
I welcome what my hon. Friend had to say this morning. I hope to clarify at least some of the misunderstandings about current arrangements. My hon. Friend drew attention to an apparent anomaly — that people admitted to local authority residential accommodation are required to pay towards its cost, while those in long-stay geriatric accommodation are not so required. My hon. Friend gave two excellent and telling examples of two elderly sisters residing in his constituency. We wish them well. It is right that time in the House is devoted not only to main issues but to the welfare of individuals.
The requirement on local authorities to provide residential accommodation for thosewho by reason of age, infirmity or any other circumstanceare in need of care and attention that is not otherwise available to them dates back to the National Assistance Act 1948. I am sure that my right hon. and hon. Friends who are now filling the Benches in the Chamber will be sorry not to have heard my hon. Friend make his point on that important issue.
The purpose is to provide accommodation for those no longer able to live in their own homes, even with the support of community services such as home helps and meals-on-wheels. It was never the intention that the state should relieve people directly of the cost of their accommodation and upkeep. Rather, the 1948 Act provides that those who enter residential accommodation 914 —currently more than 100,000 people—should meet the cost of providing that accommodation to the extent that their means make that practicable.
The NHS was, of course, established for quite different purposes, and on the basis that health services are, in general, free at the time of need—something on which the Government set great store. The vast majority of patients receive treatment from their general practitioners or on an outpatient basis. It is true, unfortunately, that some patients are destined to spend the last years of their lives in hospital, despite the magnificent efforts made by consultant geriatricians, geriatric nurses and others to ensure that as many as possible are rehabilitated to the community or other long-term accommodation. To that extent, the position of the elderly patient in a geriatric ward, for whom there is no possibility of discharge, is similar to that of the elderly residents of an old people's home.
We have considered instituting "hotel charges" for NHS patients, but have rejected that essentially because hospitals are not geared for the billing and collection of debts on a large scale, especially as there would be exceptions for those in receipt of supplementary benefit, family income supplement and other forms of help from the social security system. I see my hon. Friend the Minister for Social Security nodding. For such a charge to be worth collecting it would have to be set at a fairly high level, with the risk that it would deter people from seeking necessary treatment.
The Government have set their face against that. There are, however, provisions under which long-stay patients receiving retirement pensions and all other national insurance benefits which contain an element for day-to-day living have their benefits reduced after a certain period in hospital.
§ It being Eleven o'clock, MR. SPEAKER interrupted the proceedings, pursuant to Standing Order No. 5 (Friday sittings).