HC Deb 18 June 1986 vol 99 cc1069-77 4.48 pm
The Minister for Social Security (Mr. Tony Newton)

With permission, Mr. Speaker, I should like to make a statement on supplementary benefit arrangements for board and lodging.

As the House knows, when the main lines of the present system were set in April 1985 the Government undertook to monitor its working carefully and to review the financial limits on maximum payments after a year. Following the subsequent decision to have a general social security uprating in July 1986, it was thought sensible to defer any changes until then, but meanwhile, in advance, to make significant increases in the limits for residential care and nursing homes alongside the previous uprating in November 1985.

I am arranging to place in the Library copies of reports on the extensive monitoring and statistical surveys undertaken by the Department since April 1985, together with the full report commissioned from the consultants Ernst and Whinney on residential care and nursing homes. I have placed in the Vote Office copies of Ernst and Whinney's summary of its report, and of my right hon. Friend the Secretary of State's response to the Social Security Advisory Committee's comments on last November's amending regulations. In reaching our conclusions we have, of course, also taken account of the representations that we have received from Members and from other individuals and organisations.

For ordinary board and lodging, our most recent figures show that expenditure in 1984 rose not to £380 million, as we earlier estimated, but to over £500 million—an increase of no less than 80 per cent. in a year. At the same time, the number of boarders increased from 112,000 to over 160,000. Our monitoring and surveys confirm the existence of an accommodation market unduly influenced by the amount of benefit payable, rather than by normal commercial factors, and of an unacceptable degree of abuse. Many landlords have reduced their charges in response to the restraint imposed, and across the country our studies show average charges are for the most part close to average limits.

In view of this, and of the continued need to ensure firm control in this area, the Government have concluded that no general increase in the financial limits for ordinary board and lodging, or in the associated meals allowances, is at present justified. This is also the case for hostels, where our monitoring showed that average charges in all regions including London were below the present limit. We have, however, looked again at the current limit for couples without young children which is one and three quarter times the single adult limit. This has been widely represented to us as unrealistic, and we have decided to increase it to twice the single limit, as for couples with young children.

It will not surprise the House that many of the representations about ordinary boarders have focused not on the financial limits but on the limited time for which many of those under 26 can be paid as boarders at all. The regulations which came into effect on 24 November 1985 provided for those paid as boarders at the time to be exempt from time limits until 28 July 1986. We propose to extend that exemption indefinitely. New boarders under 26 will, however, continue to be subject to time limits, which we do not propose to change, unless they come within the extensive range of exemption categories covering those for whom longer-term boarding is a genuine need.

I turn now to the limits for residential care and nursing homes. Following the November 1985 increases of £10 a week in the residential care limits and £31.40 in the nursing home limits, the evidence is that in general homes charging at or below the average will fall within the benefit limits— in several categories, well within. While there is therefore no clear case for an all-round increase in July in addition to last November's, we nevertheless think it right to make some further increase where the evidence suggests it is most needed, in the limit for residential care homes for the elderly. We now propose that this should go up by £5 to £125 a week, making an increase of £15 a week overall since April 1985. In addition, we intend to make five important changes to meet specific problems which we judge to be of greater significance than the limits for particular categories of home. First, for those elderly people in residential care homes who are very dependent who are at present limited to £120 a week, we propose an increased limit of £140 a week where they qualify for the higher rate of attendance allowance.

Secondly, for blind people over pension age, where the same limitation currently applies, we similarly propose to increase the limit from £120 to £140 a week.

Thirdly, for those in residential care or nursing homes in Greater London, we propose to increase the limits by a special extension of up to £17.50 a week.

Fourthly, for those whose benefit is being paid at a transitionally protected rate in July, we propose an addition of up to £10 above their protected rate. This is a departure from the normal conventions concerning transitional protection, but one which will I think be welcomed in all parts of the House.

Fifthly, for those who are away from a home for short periods—for example, for a break or to maintain contact with their families—we propose new provisions to meet retaining fees.

Taken together, the changes I have outlined mean that, for example, the limit for a severely disabled elderly person in a residential care home in Greater London will rise by £37.50 a week. To assist the House, I am arranging for details of the new pattern of limits to he inserted in the Official Report.

These proposals are an important step towards the more flexible approach, but within a firmly-controlled framework, which is also the aim of the longer-term studies that we are conducting with the local authority associations, in consultation with the private and voluntary sectors. Subject to the views of the Social Security Advisory Committee, we intend to embody them in regulations to take effect from 28 July.

Residential Care and Nursing Home Limits from 28 July 1986
Residential Care Category July Limit£ London Limit£ Present Limit£
Elderly 125 142.50 120
Very dependant or Blind Elderly 140 157.50 120
Mentally ill 130 147.50 130
Residential Care Category July Limit£ London Limit£ Present Limit£
Drug or Alcohol dependant 130 147.50 130
Mentally Handicapped 150 167.50 150
Physically Disabled
Disabled under pension age 180 197.50 180
Disabled over pension age 125 142.50 120
Very dependant elderly 140 157.50 120
Others 125 142.50 120
Nursing Home Category
Mentally ill 180 197.50 180
Drug or Alcohol dependant 180 197.50 180
Mentally Handicapped 200 217.50 200
Terminal ill 230 247.50 230
Physically Disabled
Disabled under pension age 230 247.50 230
Disabled over pension age 170 187.50 170
Others (including elderly) 170 187.50 170
Mrs. Margaret Beckett (Derby, South)

The first point that I should make on behalf of the whole House is to complain about the timing of this statement in relation to the publication of the information on which it is claimed to he based. Most hon. Members will not have seen the monitoring results on which this statement is said to be based, but I have them with me. Clearly it has been impossible for any hon. Member to assess the information contained in them in the time available before the statement was made.

Last July, following parliamentary questions about the results of monitoring, I wrote to the Minister. I wrote again on 15 October, not having had a reply. I finally received a reply in December from the Under-Secretary, which indicated that the information would be published as soon as we are in a position to do, although this may not now he until after Christmas. Obviously, in DHSS language, may not now he until after Christmas means 18 June. From the brief glance that I have had at the information, it is clear that the monitoring in respect of care was carried out early in 1985. It also appears that in respect of another report the information was ready in February this year. Why, therefore, was this information in its cold form not made available to the House in time for hon. Members to consider it before this statement was made?

The Minister said that many landlords have reduced their charges. I draw his attention to a report, which I am sure he has seen, entitled "It's the Limit", which indicates that landlords in London have recently put up their prices by 20 per cent. since the limits were set. It suggests that in 1984–85 the average price for a single room was £85.34 a week, compared with the DHSS allowance of £48.30. The report shows that in London only 60 hotels had charges below the limit set, and that of those only 22 had any vacancies. On average, people were sharing four to a room, although in some cases it was as many as 12 to a room. We are talking about 10,000 people who are subject to these limits in London.

In recent weeks, surveys have arrived in the House from various other parts of the country. They have usually been local studies. I refer the Minister to one that we have received from Preston, which indicates that none of the bed-and-breakfast establishments or hotels that could be contacted were within the maximum allowance, and that only one had ever taken unemployed people. In any case, only one had vacancies, and again everyone was expected to share rooms with strangers.

I also refer the Minister to similar reports from Ipswich, which indicate that many claimants are not able to live below the limits that now exist. There is a reference to bed and breakfast costing £73 a week, and no establishment there is within the cash limits for bed and breakfast. Therefore, it is hard for us to believe that the Minister's summary is justified, and I am not sure about the liming of the study that was made.

The hon. Gentleman also referred to the fact that there would he no general increase in the meals allowances. I think I am correct in saying that these meals allowances have not gone up for two years, during which VAT has been imposed on takeaway meals and the average increase in the cost of food has been 12 per cent. That must mean that these meals allowances, which are inadequate now, will become seriously inadequate in the coming year.

We are glad that the Minister is now giving the proper rate for couples, as that has always been what landlords have charged, as opposed to what the DHSS has given. We are also pleased that the threat of the time limits has been removed for existing boarders. Nevertheless, I remind the House that all the difficulties that have been experienced will still apply with equal force to new boarders.

The Minister referred to the extensive exemption categories. As there is a great deal of evidence to suggest that those categories are not working properly, will new claimants still have to apply to he made exempt—as opposed to that being considered as a point of principle —and what will happen to appeals?

The hon. Gentleman said that the costs for residential care homes were considered to be adequate. The evidence was collected in 1985 and compares costs at the beginning of 1985 with limits at the end. I refer the Minister to a series of reports from voluntary organisations, such as the Royal National Institute for the Blind, all of which show that existing limits are inadequate. All their complaints will not be met by this statement.

I note that no increase is allowed for the special category of senile dementia, although 22 per cent. of people over 80 fall into that category. If the Minister claims that the new limits are adequate, why is an increase being proposed for transitional protection? Presumably transitional protection is above existing limits and, indeed, new limits, so if the new limits are adequate, why is that proposal needed?

Finally—[Interruption.] I am sorry if I am distressing hon. Members, but this is an important subject and I have drawn their attention to the amount of information on which the statement is based. Will the Minister tell us how the physically and mentally handicapped will be affected by the statement? Their transitional protection was due to come to an end in April 1986 and they are presumably facing the effects of these proposals.

The information about these regulations was made available to the House only at the last possible minute and in a form that makes them extremely difficult to assess. It is outrageous for the House to be treated in this way when it is clear that much of the information has been available for months.

Mr. Newton

Perhaps I can deal with the hon. Lady's questions in the order in which she asked them. We have made available more extensive monitoring and survey information than, I suspect, any Government have hitherto made available in connection with a matter of this sort. I shall not make any apologies for the fact that it has taken us some time to put the information together and ensure that it was available to the House at the right time.

The Central London Social Security Advisers Forum is a complex matter and it is difficult to comment on everything that the hon. Lady mentioned, but we think that the survey overstated the case. The survey appears to be based on the proposition that supplementary benefit should enable people to compete with tourists for hotels in central London—a proposition which we do not accept. We are not sure whether its data are complete. As the forum knows, DHSS officials merely responded to some advertisements in newspapers over a particular period and found 20 places advertising within the DHSS limits which were not included in the CLSSAF list, so we are sceptical about that.

The hon. Lady is right in saying that the meals allowance has not been increased for some time. On the other hand, one of the surveys by the social security policy inspectorate shows that a majority of claimants think that the meals allowance is adequate. Indeed, it is only a fraction less than the householder rate of supplementary benefit and is significantly higher than the non-householder rate of supplementary benefit. Therefore, we see no good reason for increasing it at present.

The hon. Lady suggested that not everyone would be fully satisfied with the residential care homes limits, and I am sure that that is the case, but she referred to the Royal National Institute for the Blind, and she will have registered the fact that one of the significant concessions in my speech was specifically directed at the elderly blind. Indeed, the general concession that I have announced for those in receipt of the higher rate of attendance allowance is expected, and certainly intended, to cover the group suffering from senile dementia, to which she understandably referred.

I simply do not understand the hon. Lady's point about transitional protection. Its purpose was to cover those in homes who were paying levels which, by definition, were above those that we thought it appropriate to meet through supplementary benefit. We protected them at that time and have concluded that it is right to improve that protection to ensure that their position is fully safeguarded. That is entirely sensible. Indeed, the whole package is far more sensible than the hon. Lady's rather grudging comments gave it credit for.

Sir Geoffrey Finsberg (Hampstead and Highgate)

Does my hon. Friend accept that the majority of us do not take the carping view of the hon. Member for Derby, South (Mrs. Beckett), that we were perfectly happy to listen to what he had to say, and that we shall study the basic information at our leisure, because there will be other opportunities to debate the subject? I wish to thank him for two particular matters. First, I thank him for responding so generously to the genuine problems of voluntary homes which look after the frail elderly, especially in Greater London. The Minister has made immense progress there and listened carefully to the many homes that put views to him.

Secondly, I welcome what he said about the transitional provisions, which 98.5 per cent. of the House understood, leaving 1.5 per cent. on the Opposition Benches who did not, and for what he said about people in accommodation not having to move as a result of the eight week short-term period. My hon. Friend has listened carefully to the points put to him, certainly by Conservative Members, and he deserves warm praise for what he has done.

Mr. Newton

Perhaps I may return the compliment by saying that I am grateful to my hon. Friend for the trouble that he took to ensure that I was put fully in the picture about some of the problems that were troubling him.

Several Hon. Members


Mr. Speaker

Order. Again I must say that there is to be a debate on this matter. Following this we have a ten-minute Bill, which, I understand will be opposed, so that will delay the subsequent debate even further. I shall allow questions to continue until 5.15 pm and then we must move on. I ask hon. Members to make their questions brief.

Mr. Frank Field (Birkenhead)

First, is it wise of the Government not to make any changes in the time limits and the exemption categories, considering that a constituent of mine. Simon Cotton, managed to take the Government to the High Court and the Court of Appeal and win? Is there not a case for extending those exemption categories? Secondly, as the fees increase for old people in nursing homes who are eligible for attendance allowance, should not the attendance allowance be unfrozen?

Mr. Newton

The answer to the hon. Gentleman's first point is that I am not sure that I understand the connection that he makes with Simon Cotton, because the issue of exemption categories was separate from the Cotton case, and we adjusted the regulations in November —[Interruption.] I understand that Mr. Cotton was not exempt, but the case concerned the technical legitimacy of some parts of the regulations, and that has been corrected. At the same time, we took the opportunity to extend the exemption provisions to give the Secretary of State a discretionary power over exemption in cases of exceptional hardship.

I must make it clear that we do not propose to reintroduce the disregard of the attendance allowance, which undoubtedly led to excessive payments in many cases under the previous regime, as was generally accepted. In respect of residential care homes, we propose to introduce an additional limit for those in receipt of the higher rate of attendance allowance as a proxy measure of their likely need for care over and above that which would normally be provided in the home.

Mr. Robin Squire (Hornchurch)

Clearly both the statement and the accompanying evidence will repay study. However, will my hon. Friend say whether the summary of that evidence is that at present there is sufficient accommodation available in London, particularly for single people, at the present rate?

Mr. Newton

Our general view is that the evidence suggests that there is sufficient accommodation to meet legitimate needs for board and lodging, that the average price comes within our limits and that it is not appropriate to increase the limits for London, which my hon. Friend may have had in mind. I would not necessarily tie those comments to central London. This matter includes an issue on which we have already touched, which is whether the supplementary benefit system should be expected to enable people in London, or coming to London, to compete with tourists for hotel accommodation in central London.

Mr. D. E. Thomas (Meirionnydd Nant Conwy)

Will the Minister explain to the House the impact of these proposals, and any others that he has in mind, on women in voluntary refuges run by Women's Aid? Will he particularly consider the supplementary benefit position of women, not only during their period in refuge, but at the point of transition when they leave the refuge and start looking for alternative accommodation?

Mr. Newton

The point about alternative accommodation is rather wide and goes into other aspects of the benefit system. Refuges would normally count as hostels, in which case the time limits would not apply. The limit would be unchanged under the proposals. As I have said, our evidence clearly suggests that the average charges for hostels are generally within the limits that we already have.

Mr. Robert McCrindle (Brentwood and Ongar)

I warmly welcome the various changes announced by my hon. Friend in respect of residential homes. He and I have spoken about such homes in the past. I recognise that central London is an expensive area in which to run such establishments. Does my hon. Friend concede that costs are also fairly high in areas close to London? Would it not have been better to introduce a tapering measure so that my constituency, which is the first one just over the border of Greater London, would not be adversely affected?

Mr. Newton

I might have predicted the points raised by my hon. Friend because, as he knows, I pass through his constituency—I do so only because the roads are now so much better—on the way to my constituency, several times each week. I think that my hon. Friend understands the problem. Generally, costs are higher in London than in other parts of the country. There is no such clear pattern elsewhere. Wherever we draw a line, there will be difficulties. I regret that my hon. Friend's constituency is just outside London, but the step that we have taken is the appropriate one for the moment.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

Can the Minister assure us that, once the board and lodging regulations for new applicants bite on 28 July, he will carefully review the position over coming months? Some alliance Members fear that there will be great deal of confusion and hardship as a result of those regulations. I welcome the increases effected by the changes. Do they take proper account of the extra impositions placed on residential homes by the Residential Homes Act and the Residential Care Homes Regulations?

Mr. Newton

There is no change in the time limits. New claimants have been subject to a time limit since November. From 28 July, existing claimants as at 24 November will continue not be subject to a time limit. As I understand it, the arrangements are working satisfactorily. About a quarter of the younger claimants fall within the exemption categories.

At the time we made what I might call the interim increase—which was a substantial increase—last November, we had in mind the fact that increases in the charges for registration, and so on, were coming along. The £15 a week increase in the basic residential care limit, taking November and July together, takes sufficient account of the costs imposed by the registration system.

Mr. Nigel Forman (Carshalton and Wallington)

Does my hon. Friend accept that many of the changes that he has proposed are welcome, because they are well chosen and are well directed at specific deserving categories, notably the residential elderly in London? Does my hon. Friend agree that in the longer term there will be a problem that must be addressed? We must get more regional and category differentiation into some of the measures, because there is a danger that what is adequate in some parts of the country will be inadequate in central London, and vice versa.

Mr. Newton

Ideally, we should have more differentiation according to individual homes, instead of on a regional basis. That is why we attach so much importance to the working party with local authority organisations, and to the pilot studies using local authority social service assessment procedures. We hope to start these studies later this year.

Mr. Christopher Chope (Southampton, Itchen)

I thank my hon. Friend for his sensitive attention to this complicated area. I thank him also for what he has done for the severely physically disabled in residential care homes. I also draw attention to the staggering sum spent on ordinary board and lodging payments. Is my hon. Friend satisfied that all that money is reaching the landlords for whom it is intended? If not, will he introduce a voucher system?

Mr. Newton

I am not satisfied that all the money reached the people for whom it was intended. We are aware that there was a degree of abuse, both among claimants and landlords. We have sought to tackle that. The result of the measures that we have taken, together with those that I have announced today, will be to reduce still further the amount of abuse, to concentrate what money is spent on those who have a genuine need for it, and to tighten up the system generally. It is clear from what my hon. Friend said that he will support our efforts.

Mrs. Edwina Currie (Derbyshire, South)

I welcome my hon. Friend's excellent statement and his willingness to publish all the information available, including the Ernst and Whinney report. Does he agree that, on the basis of a rough, back-of-the-envelope computation, the increase that he has announced for residential care means an increase, since April 1985, of about 13.5 per cent. for most people in private residential care, and up to 27 per cent. for the more disabled, the blind and the handicapped? Is that not how we would expect a Conservative Government to behave—to target their money on those most in need?

Mr. Newton

I can only express my gratitude to my hon. Friend, without necessarily confirming her second figure. The first figure of 13.5 per cent. is about right. The increases for particular needy and vulnerable groups are substantial. I shall check my hon. Friend's mathematics later.

Mr. Derek Spencer (Leicester, South)

Is my hon. Friend aware that some local authorities, such as Leicester county council, have used the Residential Homes Act to discriminate against the private sector? Will he ensure that when the order is drafted, it is done in such a way that local authorities cannot meddle in the benefit system?

Mr. Newton

The matter would be subject to a separate order. I endorse what my hon. and learned Friend said about the tendency of some local authorities to seek to demand from homes in the private and voluntary sector standards higher than they have in their own local authority homes. We are anxious that the registration and inspection procedures should be worked in a sensible and flexible way. Within the past few months we have strengthened our advice to local authorities in that respect.

Mr. Peter Bruinvels (Leicester, East)

I welcome my hon. Friend's statement and the good news that there is to be an increase in allowances for residential care homes. Noting my concern that it is a growth industry, can my hon. Friend assure the House that the payments will be properly policed? Has my hon. Friend considered making recommendations about a minimum fee and a maximum fee for those poor, unfortunate people who receive love and attention in residential care homes?

Mr. Newton

The regulations set maxima. Obviously, they do not set minima. We have enough difficulty deciding what the maxima should be, without seeking to venture down the other path. The object of policing is to get a benefits system which directs help to those who need it, and not to those who do not. Some aspects of ordinary board and lodging must be seen in the light of our announcement a few weeks ago about the injection of additional staff into the system to combat fraud generally and, not least, fraud in the board and lodging area.