§ Motion made, and Question proposed, That this House do now adjourn—[Mr. John M. Taylor.]12.35 am
§ Mr. Michael Colvin (Romsey and Waterside)
I welcome this opportunity to raise the subject of the difficulties that people on income support now face in meeting their fees in residential homes and, more particularly, in nursing homes. First, however, I pay tribute to my hon. Friend the Member for Maidstone (Miss Widdecombe) whom I am pleased to see in her place, who, I hope, Madam Deputy Speaker, may catch your eye later, and who sat through the night until 7.55 am on 20 December in order to be last hon. Member to speak in the Consolidated Fund Bill debate before time ran out. Her most pertinent questions on elderly people in nursing homes were not answered by a Minister then and have not been answered since. I hope that they will be answered tonight.
Through the early part of the past decade the Government have encouraged, through the provision of grants, the change from looking after old people in large geriatric hospitals to caring for them in much smaller homes rooted in the community. While local authorities have marked time because of financial constraints, the private sector has expanded fivefold during the period of office of this Government from 35,000 places in 1979 to nearly 200,000 places today—figures given to me by Help the Aged, which celebrates its golden jubilee this year. Currently, however, Government grants are well below the level required to meet even the ordinary running costs of a home providing the minimum laid-down standards of staffing and care.
Today we have a rising population of elderly people with an ever-lengthening life expectancy. "Social Trends" figures show that there are now 8.75 million people in Britain over the age of 65. Half a million require some form of care; three quarters of a million need residential care and 125,000 require nursing care—and this later group will grow as people live longer.
To meet this growing demand there has been a massive and very welcome increase in the provision of pleasant, homely, modestly sized nursing and residential homes throughout the country. There are several in my constituency like Colbury house, Totton, whose owners, Mr. and Mrs. Saunders, saw me only last weekend to lobby me about Government funding. Many of these homes are run by charities, whose usual policy is to charge only the direct operating costs against fee income, bearing the burden of general overheads, capital improvements and depreciation themselves. Such homes are caring and well run.
First, I would like to deal with nursing homes. Before 1988 these institutions could just about make ends meet on the basis of income derived from the Department of Social Services' contribution to the fees. Over the past two years, however, the situation has changed completely. By the middle of this year the Government will have awarded salary increases to nurses totalling approximately 50 per cent. in four years. We all applaud this move as right and fair; but if one considers that increase in the context of the cost of running a nursing home—where nursing and nursing-related salaries comprise almost 60 per cent. of total direct operating costs—one does not have to be a 1025 mathematical genius to see that the Government have imposed, at a time of increasing shortage of nurses, additional operating costs of some 30 per cent. in four years. Nursing homes have no option but to pay these increases. They cannot pay less than the NHS and often they have to pay more, and they have also to meet the staffing levels that are laid down by the health authorities. In the same four years, inflation has exceeded 22 per cent. in all, and that has an effect on all the running costs of a nursing home.
The Government's response to the major increases in costs, which they have awarded or presided over, has been to increase the contribution to nursing home fees provided by the Department of Social Services by 3 per cent. in 1986, 5.7 per cent. in 1987, 2.7 per cent. in 1989 and 5.3 per cent. in 1990. The total increase in four years is only 17.7 per cent. as against a 39 per cent. increase in costs that are outside the control of nursing home operators.
These facts and figures are confirmed by a number of well-known, well-run charities providing, or involved in, nursing home accommodation, including the Royal United Kingdom Beneficent Association—RUKBA—Methodist Homes for the Aged, Help the Aged, the Abbeyfield Society and Age Concern. I take the opportunity to pay tribute to Lady Jean MacKenzie, a constituent of mine, who is the chairman of RUKBA, and the association's director, Mr. Bill Rathbone, who have spoken to me about these difficulties and whose work in this area is second to none.
Methodist Homes for the Aged says that the direct costs in its nursing homes without charging capital expenditure, depreciation or overheads were £265 a week in 1989, against a DSS contribution of only £190 a week. RUKBA reckons that its average cost a week was £229, slightly lower than that of Methodist Homes for the Aged because of differences in location and size. We are talking about a fees gap of £40 to £75 per week per head, which will grow as the announced DSS increase of £10 a week from April 1990 does not even meet inflation.
How does someone who is so poor that he needs income support find more than £2,000 a year? Does the DSS really maintain that its increased support meets the rising nursing costs imposed by the Government over the past two years, not to speak of inflation?
The position of residential homes is similar, even though the Department's response appears to be more realistic. They received an increase of 7 per cent. to £140 a week in 1989. A further 7 per cent. has been announced for April this year in the fees that the Department will pay, although on the face of it, no nursing is required. If an old person is fit and well, charities can just about make ends meet on the criteria that I have described, but most people do not move straight from being fit to needing full nursing care. They slip gently down the slope of increasing need for more and more care and nursing, becoming more and more dependent. They have to move a long way down that slope before they can be classed as very dependent and receive the extra £15 a week.
The Government have created a predicament for the elderly and their carers. First, they stimulate the provision of homes, rightly requiring rising standards to ensure that the care provided is what should be provided. Secondly, they create a financial gap as a result of one Department failing to match cost increases that are caused by another.
Does my hon. Friend the Minister realise the difficulty in finding a home whose fees are at DSS levels and which 1026 provides proper care? Does she realise the appalling anguish and distress that is caused to those already in homes by fees shooting beyond what they can afford to pay, with that gap becoming too wide for charities to bridge, even when acting together? Does she realise that she is putting people in a position where they will be unable to stay in the home of their choice? In some parts of the country, residential homes—especially nursing homes—are going out of business at an alarming rate.
It is frequently said that the elderly are better off now than they have ever been. That may be so for those who have retired in the past five to 10 years, many of whom have occupational pensions that are inflation-proofed to some degree. It is not true of the generation of elderly people for whom charities such as RUKBA are now being asked to care in ever-increasing numbers. This generation, the over-80s, retired prior to 1975, before inflation took off. Many of them do not have occupational pensions. Even if they did, those pensions were almost invariably not inflation-proofed, and have therefore shrunk in value.
This generation saved for an old age which they thought might extend to their 70s. Today they live into their 80s and 90s, or even to 100. Continued survival is an uphill economic battle and they do not have the savings or the pensions that will enable them to meet the ever-growing gap between the fees that a nursing home must charge to cover its costs and what the Department of Social Services will contribute.
Charities are doing their best to make up the shortfall in an attempt to allow these old people, who have served our community well, to live and die in peace. They ought to enjoy a sense of security and be able to live in the home of their choice—not a home with high fees, but one operating reasonably and efficiently. Here we have a case of the Government's left hand not knowing what the right hand is doing.
Yet the Government owe a duty of care to this generation of old people. It is right to look to charities to do their best, but the massive increase in urgent requests for help from charities to cover the shortfall in fees has grown since 1988 to such an extent that those charities are in danger of being overwhelmed.
I therefore ask my hon. Friend the Minister, first, to acknowledge that the help presently provided is inadequate; secondly, to increase substantially the Department's contribution to fees—I know that we are talking about big money: and thirdly, to give to local authorities the power and resources to top up grants paid by Government so that old people are not turned out of their homes. I urge the Government to face the fact that care costs money.
§ Miss Ann Widdecombe (Maidstone)
I am most grateful for the opportunity to take part in the debate. I congratulate my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) on securing it, as well as on the eloquence with which he has made his case. The Minister will not be unaware that, in the Consolidated Fund Bill debate in which I had the good fortune to secure the last four and a half minutes, two hon. Members had bid to raise the topic, the other being my hon. Friend. Considering the relatively small number of hon. Members, 20, who were on the list, it is significant that two of us had chosen this topic.
1027 I think the Minister will not be unaware that this subject is of concern to a large number of hon. Members on both sides of the House. I do not wish to intrude on the time for the Minister's reply, so I shall keep my remarks brief.
The Minister will be aware that there is an increasing demand for places for old people and that that demand will increase solidly, at least until the turn of the century. One estimate is that we must provide 40 new beds a week in the public or private sector to cope with the demand. That means considerable capital investment.
At the moment, it is impossible for people running private residential homes and private nursing homes to recoup their capital costs, even down simply to paying the interest, through the charges that they levy if they have no means of making up the gap betwen the sum of DSS benefits and the charges which it would be reasonable for them to make.
I draw the Minister's attention again to my constituent, about whom I have written to her twice and on whom I centred my remarks in the debate on the Consolidated Fund. Florence Smith is 93 years of age. She has no means of support whatever other than the benefits that she gets from the state. She is in just about the cheapest nursing home, although a very respectable one, in our area. There is still a substantial gap between the sum of her benefits and the charges being levied. Her only relative is a daughter, herself an old-age pensioner and wholly dependent upon the state pension. From where is Florence Smith to make up the gap?
Perhaps the most depressing thing I have heard today came from my hon. Friend the Minister of Health when she was speaking to the Select Committee on Social Services. She said that, when the National Health Service and Community Care Bill is enacted, although there will be arrangements for topping up for the new entrants in the system entering residential or nursing care, there will be no such arrangements for those already in the system. Do I take it that Florence Smith, aged 93, can look forward to no relief?
§ The Parliamentary Under-Secretary of State for Social Security (Mrs. Gillian Shephard)
I congratulate my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) on his success in the ballot and on the skill with which he explained his case. I know that he has wanted to raise this issue for some time.
I was sorry not to reply to the points made by my hon. Friend the Member for Maidstone (Miss Widdecombe) in the brief time that she was given in the Consolidated Fund Bill debate—although, as she knows, I was poised to do so. She will also understand that during this debate I cannot reply in detail to her points about an individual constituent, Mrs. Florence Smith, although a letter to my hon. Friend is being prepared.
In responding to the speech of my hon. Friend the Member for Romsey and Waterside and the short intervention of my hon. Friend the Member for Maidstone, I should like to develop two themes. First, I want to say something about the present social security arrangements. They aim to provide help in a way that is simple to understand and to administer. They are, 1028 however, concerned with the generality of cases and they have to operate nationally, like other features of income support. Secondly, I want to explain that we, like my hon. Friends, recognise that the system should be improved, and I shall return to that point later.
I shall first explain a little of the background to public support through social security for the cost of care in homes. Since 1985, the amount of income support payable to residents of independent residential care and nursing homes has been governed by a system of national limits. Before that, each social security office set one maximum amount for fees in residential care homes and another for fees in nursing homes in its area, regardless of the type of care provided. That meant that an elderly person receiving non-specialised nursing care could claim as much benefit as, for instance, a person suffering from a terminal illness who had especially high care needs.
That was clearly not the best use of resources, and in April 1985 we introduced the present system of separate limits for six different types of care. Those limits are tied to the type of care that a home can provide and differentiate between levels of need and levels of cost, thus more satisfactorily targeting the funds available. My hon. Friend the Member for Romsey and Waterside has suggested that, through the system as it was before 1985, we encourage a growth in independent provision only to remove that support, capriciously, later.
I should say that it was never really by design that social security became a major funding source for the private or voluntary sectors. The Government's view has always been that the right approach is a mix of private, voluntary and statutory provision, but the first concern of the social security system is to provide personal benefit to individuals in need of it. As a result, many people have enjoyed a wider choice of provision in that area. But the point has been made by others, including the Audit Commission and Sir Roy Griffiths, that the growth in independent provision, fuelled by the earlier social security rules, was not the best way to use public money—a point on which my hon. Friend put his finger. The Government are responding to that criticism in the National Health Service and Community Care Bill.
The National limits are not rates, but maximum allowances towards fees. In addition, we provide an allowance for personal expenses or pocket money. My hon. Friends will be aware that expenditure on those limits has risen dramatically. In 1979, we were paying benefit to 12,000 claimants in residential care and nursing homes, at a cost of £10 million. Now there are 176,000 claimants resident in that type of accommodation, and they cost the taxpayer £1.1 billion.
That is an enormous increase. The changes in 1985 enabled us better to direct resources to those most in need of certain types of care, but I must stress that the majority of claimants in residential care and nursing homes throughout the country can meet their fees in full from their income and benefits.
As the House knows, we are committed to reviewing the limits every year as part of the general review of income support and other benefits. We take account of representations made to us by interested individuals and organisations, such as Age Concern and the National Federation of Housing Associations. Bearing in mind our responsibilities to other groups of elderly and disabled in their own homes, as well as the changing cost factors in care homes, such as registration standards and nurses' pay, 1029 to which my hon. Friend the Member for Romsey and Waterside has referred, the increases that we have made in the past—and which we propose for this year—are to the Government's credit.
My right hon. Friend the Secretary of State announced in October proposals for this year's increases in these limits. They will cost £100 million, increasing the money given to the vast majority of residents by an additional £10. I remind the House that, under our uprating proposals, this year will be the first year since 1985 in which all the limits will increase. When taking decisions on increases, we took account of a wide range of information on costs and charges in homes. This primarily came from the Department's own local office returns, independent research and detailed representations from outside bodies, to which I have referred already. We had also to bear in mind the Government's overall public expenditure objectives and to make the decisions in the light of the cash available for the benefit uprating as a whole.
In reviewing the limits, we considered the need for regional variations beyond the existing extension of £23 for London. The London extension was increased by more than 30 per cent. in April last year. We considered other regional differentials, but concluded that there was no sufficiently clear pattern of regional variation in charges to justify them and that it was better to use any extra funds available to improve the scheme as a whole. One of the improvements from 1991 will be that the new arrangements for those entering residential care or nursing homes will include the payment of housing benefit, which will automatically take account of regional variations in cost.
I must emphasise that it has never been the policy of this Government—nor could it be the policy of any Government—to undertake to meet all fees charged by homes, however high they may be. We set the limits with due regard not only to the interests of the residents and the homes concerned, but also to the interests of the taxpayer. I take the point made by my hon. Friend the Member for Maidstone about the problems for capital investment and the renovation of homes, but I think that she would agree that those matters have to be regarded as business decisions to be made by those running the businesses, in the context of their knowledge of existing financial provision. I shall deal later with arrangements for the future. We are also mindful of the fact that a prime responsibility for providing nursing and medical care to those in need of it lies with the National Health Service.
It is important to emphasise that income support is only one source of public help for those in need of care. The NHS has powers and duties to provide a place in a hospital or in a contractual bed in an independent nursing home. Local authorities, too, have responsibilities to provide accommodation for those who, through age or disability, are assessed as in need of it if it is not otherwise available.
These arrangements are, of course, for local decision, but I do not think that these very important powers for helping people needing such care should be overlooked in considering care provision. Expenditure on community health services in England alone has also risen—from £370 million in 1978–79 to £1.6 billion in 1988–89.
The social security system, good as it has been—and good as it still is—in providing hundreds of thousands of people with the power to choose residential or nursing care, is only part of state provision. The provision of suitable care services for what, as my hon. Friend has 1030 pointed out, is a growing number of elderly people, is a challenge that we are determined to meet. But as my hon. Friends are aware, the income support scheme is a national benefit system and is not geared to respond to the rapidly changing and developing system of care in this country.
We recognise that there are problems with the present system. The Government have given a priority to expenditure on community care, and their record is impressive. We recognise also that the arrangements for people in homes have serious drawbacks. It could indeed be said that income support arrangements have contained an in-built bias towards residential and nursing home care when, perhaps, priority should have been given to developing services to enable people to be supported in their own homes. It is also difficult to assess whether social security payments have been giving value for money. The Government's proposals for reforming the funding of residential care and nursing homes will ensure that, in future people enter a home only when a proper assessment of their needs has been made.
That brings me to my second theme. The Government's White Paper "Caring for People" and the Health Service and Community Care Bill now before the House will introduce fundamental changes to the structure of hell) we can provide. Local authorities, via social services departments, will be responsible in collaboration with health care professionals for assessing the needs of new applicants for public support for residential or nursing care. If care in a home represents the right choice for an individual, it will be the responsibility of the social services authority to arrange a place in a suitable home.
Social services authorities will be expected to make maximum possible use of independent providers of residential and nursing home care. They will need to estimate the number of places needed and arrange to meet projected demand. There will be no nationally set limits to the level of fees which may be met by local authorities, and each local authority will exercise its own purchasing power to achieve best value for money because authorities are better placed to judge local care needs, and in future will have the authority and resources to respond quickly to change.
It is also worth remembering that in London arid other metropolitan areas those same local authorities which are now setting standards in homes will be funding the new scheme. I think that this answers the point raised by my hon. Friend the Member for Romsey and Waterside about the source of conflict he sees in locally set standards and centrally set limits.
I should emphasise that the changes are not about making savings. We shall transfer to the local authorities the resources which the Government would otherwise have provided to finance care for those receiving social security payments in residential care and nursing homes. The transferred resources will allow for the projected growth in the number of people requiring support. The Government believe that the introduction of competitive tendering disciplines to the residential and nursing homes will enhance the ability of social service authorities to obtain the best value for public money. They will be in a strong position to use their new-found purchasing power to ensure high quality care for those who really need it.
Our policy on the role of the National Health Service in providing continuous care was also reaffirmed in the White Paper. We made it clear that health authorities will still be 1031 expected to provide continuous care services in parallel with the independent sector and with the new system of local authority support. Each local authority and health authority will agree on the proper local balance of provision.
My hon. Friend the Member for Maidstone referred to the top-up powers proposed for local authorities in respect of people who are already claimants in local authority homes. As she said, that is a matter for my right hon. and learned Friend the Secretary of State for Health. Knowing my hon. Friend the Member for Maidstone as I do, I know that she will pursue the matter with her usual vigour.
I am sorry that I cannot offer my hon. Friend the Member for Romsey and Waterside an easy solution to the 1032 problems identified by RUKBA and other organisations. However, on behalf of my right hon. Friend the Secretary of State, to whom my hon. Friend has written, I would be happy to meet my hon. Friend and members of RUKBA in the near future to hear their concerns direct if that would help.
I conclude by repeating that the Government are taking clear and concrete steps to address the structural problems in the system of support which have led to the problems that have been raised this evening. We are convinced that the changes will be of major benefit to those on behalf of whom my hon. Friends have spoken so eloquently, and I am very grateful to both of them for giving me the opportunity to spell this out.
§ Question put and agreed to.
§ Adjourned accordingly at four minutes past One o'clock.