HC Deb 30 March 1995 vol 257 cc1218-39 5.44 pm
The Parliamentary Under-Secretary of State for Health (Mr. John Bowis)

I beg to move,

That the Special Grant Report (No. 13) (House of Commons Paper No. 286), which was laid before this House on 13th March, be approved. The report sets out the proposed allocation of the special transitional grant to local authorities in England for the next financial year for expenditure on community care services. It also describes the main features of the grant and the conditions that the Government intend to attach to its use.

It is two years since the introduction of the community care reforms, which allow people to receive better-targeted care to meet their needs. Under the old system of community care, before the introduction of the reforms, people who asked their local authority for help would be fitted into a system of predetermined service provision.

We have turned all that around by requiring social services to assess an individual's needs and then to decide what service to provide. It is a complete change of perspective, putting the client first, changing from a ready-to-wear to a tailor-made approach. It is the right policy. It has been universally recognised as such. It is popular with local authorities that implement it and with the many individuals who benefit from it.

The improvements brought about by the community care reforms have been clearly recognised. Last December, the Audit Commission published its second report, called "Taking Stock: Progress with Community Care", on the implementation of the reforms. It says that authorities have become more sensitive to their populations' needs. They are promoting flexibility and exploring new options for service provision—new ways of doing things to make services more appropriate to the needs of the people whom they serve. We shall shortly publish our latest monitoring report, which shows the same picture—services that more accurately reflect the needs of users, more support for carers and innovative approaches to care provision.

Of course there is still more work to be done. We have always said that it would take some time for the full benefits of the community care reforms to show through. Such a radical sea change from service-led to user-led care cannot happen overnight. Both the Audit Commission's report and our monitoring report highlight sectors where further development is necessary. We shall be launching a community care development programme, which will take that important policy forward.

Mr. Barry Field (Isle of Wight)

I sincerely thank my hon. Friend for seeing the Isle of Wight delegation not once but twice to discuss care in the community. Will he confirm that the development order provides the opportunity for the Isle of Wight's particular needs to be considered?

Mr. Bowis

I am grateful to my hon. Friend. I pay tribute to the way in which he has presented his constituents' case and carefully considered the allocation of resources for the Isle of Wight last year and for the coming year. I give him the undertaking that I gave to the delegation who accompanied him. If they will put their minds to finding new ways of considering the allocation of resources, and to new points about the identification of the island's particular needs, I should be more than happy to consider them, where they fall within my orbit, and to pass them on to my right hon. Friend the Secretary of State for the Environment, where they relate to his Department.

I pay tribute not only to the points raised by my hon. Friend but to what he has achieved in terms of the fire service allocations, which have been at the root of a number of the social service problems perceived in that island. Given the increase in resources this year, that gives the island's social services leadership the opportunity to bring, if it wishes, better financial control to the island's social services budgets, so that it can provide good services for all the people of the island.

Mr. Field

Would my hon. Friend be pleased to hear that, as a result of his comments, Isle of Wight county council has decided to spend up to its standard spending assessment for care in the community and social services?

Mr. Bowis

I am delighted to hear what my hon. Friend says about the island. It is a matter of record that, although the island's current political leadership has been complaining about the resources allocated by central Government for the island's social services, the budgets that it has produced have not required all those resources. Let me add that, in 1990–91, the Isle of Wight personal social services budget was £8.4 million; in the coming year, it will be £17.4 million, a substantial increase in anyone's mathematical book.

It is also our intention to give disabled people greater independence by the provision of direct cash payments in lieu of services, an exciting and far-sighted policy which has been unanimously welcomed. We shall be working out the necessary proposals.

The special grant report gives the amount of special transitional grant for each English local authority for 1995–96. The total amount of the grant is £647.6 million, a very substantial sum. The grant for 1995–96 is the third tranche of money that the Government have provided for local authorities' new community care responsibilities. That money is intended to cover the estimated costs of care of those people who, under the previous funding system, would have entered non-local authority residential care, funded by Department of Social Security benefits; but it is more than that—in 1995–96, it is £170 million more than that, or £170 million more than the DSS would have spent under the previous arrangements.

Thus, the Government have amply fulfilled their promise to fund community care fairly. In 1995–96, the total provision for local authorities' new responsibilities will be £1.8 billion. That is 44 per cent. higher than in the current year. It is a very large sum of money, but it is still only a small portion of the Government's total provision for community care, which will be a massive £5.1 billion, representing a 12 per cent. increase over the current year. That is on top of other generous increases throughout the decade. Since 1990–91, the funding that the Government have provided for community care services has more than doubled. These are impressive statistics indeed.

Yet some authorities appear to believe that the only money that the Government have provided for community care is the special transitional grant. To them I have to say that is nonsense. Local authorities have had community care responsibilities, and funding for those responsibilities, for very many years, long before 1993. Community care was not invented on 1 April 1993; that is when it was reformed. All the part III accommodation, the council meals and home support services, all the council respite and day care services were and remain social service community care responsibilities.

Beyond the ring-fenced element of the STG, it is, of course, up to local authorities to decide how much of their general funding they spend on community care, but they must not pretend that the provision that we have made for their new responsibilities is intended to cover all their responsibilities. One has to consider all the available resources and deploy them, and redeploy them if necessary, to cope with the demands on the service. It is, therefore, quite extraordinary for authorities to claim that they have run out of money for community care services. As I said, the total amount available exceeds £5.1 billion. That is what authorities should be focusing on.

The special grant report also sets out the conditions of payment of the special transitional grant. For 1995–96, as for the previous two years, we have required local authorities to reach agreements with their health authorities on hospital discharge procedures and on their respective responsibilities for long-term care. All local authorities have done so.

We have stressed that effective collaboration between health and local authorities is a necessary element in the success of community care. Our recent guidance entitled "NHS Responsibilities for Meeting Continuing Health Care Needs" reinforces that and the fact that the NHS is required to provide cradle-to-grave health care.

We have made it clear that health authorities must arrange and fund a full range of services to meet continuing health care needs. The NHS executive will actively ensure that the guidance is followed. That will be as welcome to local government as it is to the health services themselves and, indeed, to representatives of users of the service and carers.

We are also again using the grant to support the mixed economy of care by retaining the condition that requires local authorities to spend at least 85 per cent. of the social security transfer element of the STG in the independent sector. That gives stability and security to the residents of that sector and time for the independent sector to consider diversification if it wishes.

Mr. David Hinchliffe (Wakefield)

Will the Minister confirm that it is still Government policy to have a mixed economy of care? If it is, will he explain why his colleagues at the Department of the Environment, in their consultation document on the deregulation of local government which is the subject of consultation, propose that the statutory duty for the provision of part III accommodation for the care of the elderly should be removed and that it should no longer be a legal duty of councils to provide their own care homes? That seems to be a move away from a mixed economy of care.

Mr. Bowis

That is a debate for another day, but the hon. Gentleman does not make a fair point. We are looking for good-quality care at a reasonable price, irrespective of which sector it may come from. If local authorities believe that all their needs can be met in one or more of those sectors, the hon. Gentleman should not oppose that. If one can get better-quality care at a better price from the independent sector, the only person who could conceivably object would be an idealogue. I am not suggesting that the hon. Gentleman is an idealogue, but I am suggesting that, occasionally, some of his colleagues in local government are.

Mr. Hinchliffe

The Minister should bear in mind the fact that many people make a positive choice to enter local authority care homes. In Wakefield, for example, each of the major estates has had a care home built since the last war. Many people who have lived in those communities choose to enter those care homes. My concern is that the Government are removing choice. "Choice" must surely mean the ability to select good-quality public sector care. Does the Minister put a price on that choice? It appears so.

Mr. Bowis

The hon. Gentleman is confusing the issue. The people to whom he referred are not choosing a home on the basis of whether it is managed by the council or by the voluntary or private sectors; they are saying that they should like to go into a particular home. Many authorities are finding that those homes can offer better-quality care if the management of those homes is put out to tender. That is perfectly fair.

The hon. Gentleman let the cat out of the bag by saying that people should be able to make a positive choice. People can have a positive choice only if they have a real and informed choice. That is not the case in many parts of the country. If people are given a choice at all, it is whether they would like to go into this council home or that council home. That is not a real choice. We believe that a range of options should be placed before the individual along with information about residential care, if that is what is deemed appropriate. The individual should then have a choice of home, irrespective of which sector it is in.

Mr. Hinchliffe

I do not want to pursue the matter for too long, but it is important to place on record our concern about the fact that the Government constantly say that private sector provision is cheaper. Has the Minister examined why that is so in some instances? Has he, for example, considered public sector investment in the training of many care staff who are subsequently recruited by the private sector? If we are to be able to compare like with like, the private sector should take the training of care and social work staff as seriously as the public sector. Would not the situation then be rather different?

Mr. Bowis

The hon. Gentleman is, in fact, further making my case. Backgrounds costs such as training, solicitors' fees and other costs are exactly the costs that are often omitted from the notional price of the council or state sector. They are often not incorporated in the price when the comparison is made. In the independent private or voluntary sector, all the costs of training and managing those homes have to be incorporated in the price which people pay. The hon. Gentleman may think that price is insignificant. He may say that it is not important. Indeed, it is not the only factor. Quality and price matter, and one looks for both.

When I was in Lancashire last week, it was put to me that using council-run residential homes rather than homes in the independent sector cost £93 per person a week more. There was a comparable price difference between using the independent sector and council-run domiciliary services. If those figures were added up—I cannot vouch for the figures, but I put them to the leader of Lancashire council and the chairman of social services and they did not in any way deny them—they could result in savings to Lancashire county council of some £15 million. The council could extend services to people in need with that £15 million. What is it doing? It is removing services from people who need home help and other services in their homes and blaming that on its lack of resources. The resources are there. The efficient use of resources is not.

Mr. Roger Sims (Chislehurst)

As my hon. Friend mentioned, a number of former council homes are now run by other organisations and are thus classified as being in the independent sector, under the terms that he has been discussing. Has he received representations from organisations representing private homes that complain that some local authorities tend to give preference to those former council homes at the expense of private homes, despite the fact that the quality may be inferior and the fees charged are often considerably higher? It is not a level playing field for all those in the so-called independent sector. Is my hon. Friend taking steps to put that matter right?

Mr. Bowis

I am grateful to my hon. Friend. I have certainly had representations on exactly those points from hon. Members from all parties on behalf of many care home managers and owners. They are complaining that, in many cases, there is not a level playing field. They feel that, too often, contracts are placed for ideological reasons and that they are far too cosy for their previous owners and runners in the council sector for comfort and for justice to be seen to be done.

Mr. Rupert Allason (Torbay)

Will my hon. Friend give way?

Mr. Bowis

I shall in a second. I recall one case in respite care in which those who went to former council homes in a trust and therefore technically in the voluntary sector were paying some £375 a week for a service which, had they gone to private sector homes—which are probably more comfortable and certainly just as good—would have cost £300 a week. Again, it is a question not of inferior quality but of good quality at a lower price which means more resources are available for other people.

Mr. Allason

May I draw my hon. Friend's attention to the extraordinary disparity in Devon? It is not unusual for a local authority home there to offer a more expensive service, thereby incurring far more expenditure, yet, curiously enough, it does not reach the standard set by the private sector. What really irks the private sector is that the local authority is responsible for registration, supervision and the setting of standards which come nowhere near the standards already set in the private sector.

Mr. Bowis

My hon. Friend makes a valid point. Our overall review on inspection this year will certainly want to look very carefully at the way in which the public sector is inspected. We require it be inspected to the same standard as that required in the independent sector and we need to be sure that that is not only done but seen to be done. We know what happens when homes fall below standard in the independent sector, but we do not always know what happens—perhaps we do—in the public sector.

I shall return to the point made by my hon. Friend the Member for Chislehurst (Mr. Sims), because I omitted to tell him what steps are being taken in the matter to which he referred. The independent district auditors are responsible for value for money. It is time that more cases were submitted for their consideration.

I shall pursue the explanation of the minor change in the condition required of local authorities. The condition is cumulative and therefore bites on expenditure in the independent sector going back to 1992–93, the year before the reforms. For 1995–96, we have reduced the amount which we require to be spent in the independent sector from the 1992–93 figure to 50 per cent. That is a somewhat technical change, but it may be helpful to local authorities. Of course the condition involves the minimum necessary spending in the independent sector.

Many authorities now recognise that the future lies in becoming purchasers or brokers of care rather than providers. Indeed, many are already spending far more on independent sector services than the 85 per cent. of the transfer element of the STG that they are required to spend. They realise that services provided in that manner are often of lower cost and of higher quality. Indeed, that can be applied to all their services. The independent sector has been invaluable in raising standards of care and in increasing efficiency, yet there are still some foolish authorities that appear to retain an ideological bias against the use of that sector and would rather use their own, more expensive, provision.

Rarely a week goes by in which I do not receive representations of the sort to which my hon. Friends referred. Those foolish authorities should take note of what the Audit Commission said in its report "Taking Stock": Costs that are unnecessarily high deny other people the care they need. Those are very wise words.

Although the independent sector's involvement in residential care is well developed and established, its involvement in day and domiciliary care is much more patchy. To some extent, it is like the chicken and the egg. If local authorities do not invite it to tender, the independent sector cannot prove its value. We certainly wish to encourage authorities to consider making greater use of independent sector providers of day and domiciliary care. For that reason, we have asked local authorities to include in their next community care plans information on their plans to purchase independent sector domiciliary care. That will give the independent sector the information that it needs to develop its proposals in that area.

Mr. Hinchliffe

On the development of independent sector domiciliary care, does the Minister accept that one of the problems facing local authorities and one of the reasons for lack of development in that area, whatever one's view on it, is the total absence of inspection or registration arrangements? Is it not highly irresponsible of the Government actively to encourage more and more private companies and individuals to move into such a sensitive area without at the same time legislating for similar registration and inspection arrangements as those for residential care?

Mr. Bowis

The hon. Gentleman knows, because I have told him on more than one occasion, that that is one of the issues that we shall consider in the general review and inspection during this year. He should remind the House that many voluntary registration and inspection schemes—I am sure that he has encountered them around the country—are being introduced with the good will of the independent sector, which would like its good name to be protected. Even without such schemes, local authorities have the power and, I should have thought, the duty to ensure that good-quality services are provided when placing vulnerable people in services. Surely councils already guarantee such services to people whom they place in domiciliary care. But we shall consider that in future.

Supporting people in their homes, wherever feasible and sensible, is, of course, one of the key objectives of the community care reforms. Under the old system, there was a perverse incentive for people to enter residential care whether they really needed it or not. We have removed that perverse incentive, by basing the provision of both residential and non-residential services on an assessment of need.

The assessment process is at the heart of the Government's community care policy. The assessments are "joint" assessments in the fullest sense of the word. A qualified social worker will be involved and, where necessary, so will other professional staff such as doctors and nurses. They will all have a part to play in deciding on the most appropriate services for each individual. The circumstances of carers, too, will be taken into account in deciding the outcome; so recently I was especially pleased to welcome the Carers (Recognition and Services) Bill, which should bring into statute what we have already made clear is best practice.

Last year, we provided an extra £20 million in grant to encourage the development of home and respite care. Early reports show that that has been put to good use in many parts of the country. This year, we are increasing that sum to £30 million, and I hope that that will help to support carers. I take the opportunity to pay tribute, in which I know hon. Members on both sides of the House will join, to all carers across the country. Theirs is a difficult and demanding task, both physically and emotionally.

Today, the Audit Commission published a comprehensive set of indicators that can be used to compare different authorities. They showed wide variations in the level of councils' performance. Some of the biggest variations in social services arise in the provision of respite services for carers. For example, some authorities provide 10 times more overnight breaks for carers than others do. Of course that discrepancy may reflect different ways of specialising in providing respite care, and other authorities may use alternatives, such as sitting services, but authorities certainly need to investigate the differences.

We do not propose any change this year in the distribution formula. I emphasise the fact that we have clearly shown our commitment to community care and have made substantial resources available. The report provides for the distribution of additional funds to local authorities totalling more than £600 million for 1995–96. I commend it to the House.

6.11 pm
Mr. David Hinchliffe (Wakefield)

I am grateful for the opportunity to debate the special grant report. This is our only opportunity during the year to have a brief debate in Government time on community care—an issue of profound importance to many millions of people in this country.

I start by repeating the Opposition's strong support for the objectives of enabling older people and those facing physical and mental disabilities and mental illness to live their lives within the community in as normal an environment as possible. To the Labour party, community care is fundamentally a human rights issue, and we strongly support any attempts to deliver to people opportunities that have been denied to far too many people in the past.

As I have previously made clear, we have therefore offered broad general support for the Government's attempts to address the difficulties that arose directly from the previous system of paying Department of Social Security top-ups to people entering independent sector care or nursing homes. The National Health Service and Community Care Act 1990 was aimed at unravelling the serious problems that stemmed from the massive expansion of private institutional care, which resulted in many unnecessary admissions of people who should have been enabled to continue living independently.

The Minister mentioned the perverse incentive, but that incentive was a direct consequence of Government policies. The arrangements that prevailed from 1981 to 1993 provide the best possible illustration of the impact of the market on the provision of care, when the models of care offered were often more suited to the business interests of providers than to the real needs of users. The end result was the investment of £10 billion worth of public money in the expansion of private institutional care at a time when official Government policy was to develop alternatives to models that had their roots in the poor law. In short, the market has taken us backwards.

In supporting the changes introduced in the 1990 Act, the Labour party has consistently expressed concern that the implementation of the changes has been adversely affected by the Government's prime objective of protecting business interests. That objective came over loud and clear in the Minister's speech.

During the debate on 1 March last year I criticised the Government for the serious difficulties caused to local authorities because the funding distribution formula was originally geared more towards ensuring the survival of private institutional care than towards addressing known local needs. I made clear our view that the Government had badly bungled the funding arrangements, and made the proper planning of community care year on year totally impossible for local authorities.

As the Minister will recall, I predicted that, as a direct result of serious errors in implementing the care changes, a number of authorities would face severe difficulties during the 1994–95 financial year. I have taken no pleasure in being proved right as authority after authority has publicly stated its inability to meet legitimate demand for services.

Those authorities could have been identified in March last year, and in November, with four months of the financial year still to go, I established that at least 12 authorities had exhausted their special transitional grants. They had raided base budgets and shunted money from a range of other sources. Some had increased the charge for services, but often they had still been unable to meet the needs identified through care assessments.

The result, as the Minister knows, is an increasing queue of users in the courts demanding judicial reviews of their case. From Gloucestershire to Lancashire, and from Islington to Wandsworth—a Tory authority that covers the Minister's constituency—service users are taking councils to court.

I know that the Department of Health is taking a close interest in that development—as well it might, bearing in mind the prediction by the Association of Directors of Social Services that if the court rules against Gloucestershire, Every Local Authority in the country is going to find itself challenged". I visited Gloucestershire a few weeks ago to speak at a conference, and I had the pleasure of meeting Mr. Robert Parry, the chairman of the local carers forum, who showed me correspondence from the Minister and others in the Department expressing a belief that local authorities had been fairly funded. At the same time I met the local director of social services, Mr. Derek Mead, and I was struck by his comments on the court action in last week's edition of Community Care magazine:

The issue before the Court is what avenues are open to Local Authorities faced with a situation where there has been a cut in grants and a doubling in demands. Something somewhere has to give. We can't be told to meet people's needs whatever they are and then be given a budget which is capped". The Minister must concede that demand for care services has exceeded all predictions. The Government have trumpeted the care changes as a new deal for users and carers, which is often not quite matched by people's experience. For political reasons their expectations have been raised, and the consequences are all too clear.

Alongside the Department of Health propaganda there are the equally important implications of the introduction of the market in health and its impact on community care. Some organisations, such as Values Into Action, have argued strongly that trust status has meant that local health policies, especially in relation to learning disability, have been in direct contradiction of the professed aims of the Government's community care policy.

In the context of the care of the elderly, the introduction of the market alongside the community care changes has been grasped by health purchasers as a heaven-sent opportunity to pass huge chunks of the traditional health role over to social services departments. When the Prime Minister said that the national health service would not be privatised while he lived and breathed, he ignored the fact that privatisation of the care of the elderly has happened both under his predecessor's Government and under his Government. In 1979 there were 55,139 care beds for the elderly in the NHS, but the number had dropped to 37,539 by 1993–94. In the same period, the number of private care beds increased from 26,095 to 134,510. If that is not privatisation, I do not know what is.

If anything, the process has quickened in recent times. The implications were rightly picked up by the ombudsman last year in respect of the actions of Leeds health authority, but such examples have arisen across the country. The Minister will recall the survey that I published in December entitled "Passing the Buck", in which more than half the authorities that responded—some 43 councils—gave examples of cost shunting from health to social services. Cost shunting on to councils has been a major factor in the budgetary difficulties of the current financial year. I fear that it will also have a serious effect during 1995–96—the period to which the report that we are debating applies.

I know that the Minister will say that new guidelines on continuing care should deal with the difficulty, but they cannot restore to the NHS almost 20,000 elderly care beds that have gone from my constituency and many other areas. The fact that the Department of Health has failed to offer a clear national definition of the health care divide means that battles will continue over who is responsible for what.

We fear that the serious difficulties of the current year are likely to get even worse during the period to which the special grant report applies. The local authority associations predict that the current year's estimated shortfall in funding—the gap between the special transitional grant and known needs—is about £96 million, but under the next financial year's settlement set out in tonight's report it will reach £261 million. Their projections are that for 1996–97 it will reach £495 million and for 1997–98 £796 million.

We know that many councils have used base budgets and reserves this year to meet needs that could not be covered by special transitional grant.

Mr. Bowis

As the hon. Gentleman knows, the Government are putting a further amount of more than £600 million into the community care grant. He says that that is not enough. Is he committing his party, if it were in power at some time in the close future, to put in more? If so, how much?

Mr. Hinchliffe

I am repeating criticisms that have been made to me by the local authority associations. They are in the best position to assess the level of needs. I am expressing the concern that they as providers—as people who are landed with the task of administering the new system—have expressed. Councils' projections of the total gap in funding in the current year were reasonably accurate.

Mr. Bowis

The hon. Gentleman would not wish to mislead such local authorities or raise expectations unnecessarily in them, so how much would he give in addition?

Mr. Hinchliffe

I think that the Minister is aware that I regularly meet local authority colleagues from different political parties. If he will give me a few moments, I will set out the steps that I would wish to take in our approach to community care. I cannot quantify how much. As the Minister will obviously appreciate, the figures that I have mentioned are those that local authorities say are needed, where there is a gap. The gap is fairly apparent around the country in area after area. The Minister has to face the fact that his Department is directly involved in court cases. He must be aware of the problems that councils face.

The Minister is a reasonable man. He will concede that some councils have genuine difficulties in meeting the task that they have been landed with in implementing the care changes.

Mr. Bowis

The hon. Gentleman has mentioned a figure of £700 million in addition to what the Government have provided. He must either say that he would provide less than that if he was in government or that he would give that amount. If he would give that amount, I should like to have that confirmed. I should also like confirmation that it has been approved by the leader of his party and the shadow Chancellor.

Mr. Hinchliffe

The Minister should have listened to what I said a few moments ago. I said that I would expand on what my party would do. We have some important proposals to make to tackle the current crisis in community care. In particular, we would make much better use of existing resources than the Government are making with their policies, which directly impact on local authorities.

If I had been a Minister in the Department of Health between 1981 and 1993, I would have made much better use of £10 billion of public money than the Conservative Government have in respect of reinstituting the expansion of institutional care.

Mr. Ian McCartney (Makerfield)

Perhaps I could give an example to the Minister of the colossal waste of resources. In my area, a health authority and a trust are mothballing provision in the public sector for long-term care of the elderly confused. After 14 days, the family at the side of the bed are given a letter about arrangements to go into the private sector, to be funded from the local authority's budget. This evening there are beds lying empty. Facilities that cost more than £1 million for the specific needs of the elderly confused in my area are not available as a result of the Minister's private care market and his ideology of driving the elderly into the hands of the private sector. Authorities are disbarred from using their own resources, paid for at the expense of the local authority care budgets.

Mr. Hinchliffe

My hon. Friend makes a strong point in the way that only he can. When the Minister talks of his ideology of privatisation, he uses the word "choice", but he means shunting public responsibility for care services on to the private sector. He should take responsibility for some of the problems that arise as a direct result.

I did not intend to use the letter that I have with me tonight, but I shall do so because the Minister has raised the issue of cost and because it reinforces the point made by my hon. Friend the Member for Makerfield (Mr. McCartney). I have had passed to me by the office of my right hon. Friend the Leader of the Opposition only this week a letter which I know has also been passed to the Department of Health. It is about a lady in her eighties who is currently in a care home. She faces severe difficulties because her income does not meet the care fees on a week-by-week basis. I shall be only too happy to pass the letter to the Minister.

The lady has received from a group of solicitors in Northampton a letter which says: Should the invoice not be paid on the due date then I have been instructed to issue a county court summons forthwith. The relative who raised the matter with my right hon. Friend ends her letter by saying:

As I complete the final draft of this letter, there has been a change in Mum's health. She is now dying. Her health has been deteriorating for the last three weeks, but particularly for the last week. I hope that we can at least make sure that others will not have to face the problems described here, but suspect that this may only be the case with a change to a caring Government policy. Such cases are brought to my attention every week and must be brought to the Minister's attention. He talks about the move to the private sector. Such cases are the reality of the care problems that face people in the private sector.

The Minister cannot deny the problem. He can look at the correspondence. I will happily copy it to him, but I believe that his Department has it already. That is the reality facing vast numbers of constituents of both Opposition and Conservative Members throughout the country as a direct result of the privatisation of care by the Minister's Government.

I shall continue to expand the point that I was making about the financial difficulties that face local authorities. I set out the projections that local authorities have made for the effect of current policy and the problems that they face in the next three financial years. We know that many councils have used their base budgets and reserves this year to meet needs that could not be covered by the special transitional grant. The 8 per cent. increase in gross personal social services total standard spending for 1995–96 is almost wholly made up of additional funding for community care in the form of the 1995–96 grant. Local authorities believe that the settlement effectively represents a cash freeze once the effects of additional resources for new community care responsibilities have been excluded. The increase in total standard spending is £0.7 million pounds and, at 0.01 per cent., is well below the average increase of 0.8 per cent. quoted for all services.

In that context, raids on hard-pressed base budgets in 1995–1996 will simply not be an option for many councils. I read with concern the worrying projections of the Association of Directors of Social Services arising from a survey of local authorities published early this month. It showed that more than 80 per cent. of social services departments will have to reduce their services during 1995–1996. The cuts range from 0.5 per cent. to 10 per cent. with an average of £1 million per authority, although one council is cutting £12 million.

To stay within budgets, there are proposals to raise strict eligibility criteria, to increase charge levels, to put tighter ceilings on individual packages of care and to reduce investment in domiciliary care. That is the reality of the next financial year from the point of view of those at the sharp end. I recognise that there will never be sufficient resources to meet all expressions of need presented to social services, but steps could be taken to address the serious difficulties that I have described.

There are steps that the Government can take to deal with the crisis that is facing personal social services. They must, first, take account of the impact of the NHS changes in terms of local authority budgets and bring to an end the obvious buck-passing process, which has had huge resource implications for councils. In my survey, I came across the case of a person in a coma who had been passed for community care from a hospital to a local authority, and people who were unconscious and on drips who had been referred for community care. That is what faces local authorities.

The Government must strengthen the continuing care guidelines and further protect councils from having to fund the care of people who should be the responsibility of the NHS. Only this morning, I addressed a conference of health and social services managers, councillors, chairs of health authorities and regional authority members. Their concern was that the guidelines are, frankly, meaningless.

The Government have not addressed some practical problems which are being faced at a local level. They must look at that, and ensure that the guidelines mean something. They must resolve the difficulties in terms of who does what in many local communities.

The Government must also look again at the calculations of future community care funding and its distribution. The Minister will be aware of the Association of County Councils call for research to be undertaken into the definition of the unit costs of community care service. There is a possibility of linking that with local needs identified in community care plans and other relevant information to lead to a much more satisfactory distribution of resources.

I repeat the point that I made in last year's debate and, indeed, in the previous year's debate: the Government should drop their dogmatic insistence that the bulk of the special transitional grant should be spent in what they term the independent sector. The Minister knows that there is clear evidence that that requirement is resulting in a significant number of unnecessary admissions to permanent care because independent sector domiciliary care is simply not available in many areas. That condition is wasting scarce resources, as well as resulting in a denial of an individual's rights to care within the community.

I made clear at the outset the Labour party's support for the principle of community care and our policies would take the process a good deal further, with choices for users and carers which they are denied at the moment because of the Government's market dogma. Choice for us means more than giving somebody a list of private carers.

Mr. McCartney

Will my hon. Friend ask the Minister an important question on an issue that the Minister ducked in his eulogy about Government policy? What will be the Government's position on funding if the courts decide to place on Gloucester and other local authorities a duty to fund care propositions? Will a supplementary grant be awarded by the Department? What arrangements has the Department made if, following the court ruling, local authorities have to act unlawfully or carry out the decision of the court in respect of the provision of the service?

Mr. Hinchliffe

It would be helpful if the Minister felt able to respond to that point, as he has had guidance from his officials on what response the Government might make. I am well aware that the Department of Health has been involved in the Gloucester situation, and the Department must be looking at what is happening elsewhere in the country.

In conclusion, our view of choice is somewhat different from that of the Government. To us, it means policies about the active encouragement of a continuum of care options from independent and semi-independent living to individualised provision in permanent residential or nursing care settings. It means ensuring choice and a good quality of public sector services, as well as the voluntary sector and private provision.

We are pleased that progress has been made in community care, but a comparison of provision in Britain with that in some adjacent European countries shows that we are, frankly, light years behind. The problem is not just resources, but thinking, philosophy and attitudes. If our outlook is essentially determined by market dogma and if our central thrust is one of deregulation, we will continue to deny people the rights, freedoms and choices available to the majority. I hope that the Government will accept that our criticisms reflect what is being said to us by users and carers, and that they will respond to some of the serious points that I have made tonight.

6.36 pm
Mr. David Rendel (Newbury)

I am delighted to have the opportunity of joining the other two main parties on one matter. In principle, we also fully support the idea that lies behind community care. However, the Government must recognise that, in introducing the processes of community care, they have raised expectations which have failed to be met.

The Government must do something rapidly if they wish the principle of community care to continue to meet with the widespread acceptance that it had before it was introduced in practice. Community care has been widely accepted and implemented successfully in a number of counties. Interestingly, one may exclude Buckinghamshire from that number, and we all know that there are severe difficulties in the community care processes there.

Community care procedures were always bound to cost more than the previous procedures, and the Government let themselves down in not recognising that. Too little money has been allocated year after year for the proper implementation of those procedures and, sadly, that includes the budgets that are about to be set for 1995–1996.

Mr. Bowis

Before the hon. Gentleman moves on, let me make a point which I know he would wish to answer. He is saying that inadequate funds have been allowed to resource community care. The additional special transitional grants which we are talking about today were, in the first year, £565 million, in the second year £1.2 billion and in the third year £1.8 billion. The total will rise to £2.2 billion in the fourth year. What figures would the hon. Gentleman put on it?

Mr. Rendel

I am not pretending that I can put a precise figure on that now. The principle was correct, but we must find the right amount of funding to make sure that that principle works in practice. It is up to the Government to make sure that those sums are met out of their finances. I have no doubt that, before the next general election, all of the parties will provide a proper menu with prices for all of the policies that they intend to implement in the new Government. My party will do that, and I hope that other two main parties will as well. They have not always done so successfully.

A number of problems are associated with the financing of community care. The first is a severe problem that has already been mentioned—it is clear that some services that were dealt with within the national health service have been transferred to the community care service without the equivalent funding being transferred along with them. That problem is causing difficulties for the elderly—a particularly vulnerable portion of our population.

The second problem is the way in which funding has been switched. Some £80 million was taken away from funding for the shire counties and provided for the metropolitan authorities, That has caused immense problems for counties such as Devon, Gloucestershire and the Isle of Wight. Numerous hon. Members who represent those areas have already mentioned those problems. It is important that we recognise that that switch caused a certain amount of chaos during the early implementation of community care.

Mr. Bowis

I happened to look at the figures for the hon. Gentleman's county of Berkshire and noticed that, as a result of that change, it received £800,000 more than it expected, in addition to the £1.6 million more than it had expected from the standard spending assessment review. Has the county had difficulty managing that additional income under his party's control?

Mr. Rendel

Sadly, Berkshire is under joint control, not under the control of my party. I wish that it were, but perhaps that will come about soon, as I understand that there is a good chance that some Conservative members of Berkshire council may be about to resign the Whip. Perhaps we shall take control rather sooner than the Minister might think.

My argument was not about Berkshire, but about shire counties in general. Some have done rather better than others. The point is that the switching of resources in such a sudden and unexpected manner throws procedures into difficulties. The shire counties that lost out not unnaturally found it very difficult to provide the community care resources necessary under the Government's new system.

I visited Devon recently and talked to some owners of private homes there. The switch has hit them hard. If there is a lack of resources and the money has to go to publicly funded homes—it would only cost more to shut them down in a hurry—that inevitably causes the private home owners difficulties, as they are without the clients whom they had expected, or without clients who have the funds to pay for their accommodation. The Government must recognise that, in many cases, they have caused problems for the private home owners. If those owners are squealing, perhaps they should turn to the Government.

Mr. McCartney

Will the hon. Gentleman ask the Minister about overcapacity in the private sector? If I remember rightly, when the Government introduced the changes, they said that there was 40 per cent. overcapacity in the private sector, which they could not fund. That has led not merely to failure to win contracts—when those are available—but to the cost of repaying loans for refurbishment, or the capital cost of new builds, settling on private home owners. They are having to meet the bills for the capital that the Government encouraged them to borrow, with no income because of overcapacity in the market. They are unable to fund the loans by gaining contracts to care for the elderly. Should the Government not give some estimate of the number of private sector homes for the elderly that will have to close because of overcapacity?

Mr. Rendel

I thank the hon. Gentleman for that intervention. It would indeed be interesting to hear the Government's response. Perhaps the Minister will reply when he sums up.

The third problem that has arisen is that, under the Government's new system of assessing the needs of all those who require community care, we are moving towards a system based on need. The Government said so at the time and were right to do so. If one has a system that is based on need, however, one must provide the funding for it, or people will feel let down.

The fourth problem is the fact that local authorities have been forced to spend such a large proportion of their funding on the private sector. Interestingly, the arguments against have focused on choice and on the fact that funding must go into public sector provision because it is there now. One argument that we have not heard is whether there are hidden costs to local authorities when they move the provision of services from the public to the private sector.

The House will no doubt know that the Equal Opportunities Commission produced an interesting report on compulsory competitive tendering today, which apparently shows that the hidden costs have been roughly twice the size of any expected savings. It is clear to all of us who have been involved in local government that, while there are superficial savings in some cases, CCT often costs local authorities a great deal of money because of hidden costs, which are not necessarily obvious from their accounts but are nevertheless very real. The way in which the Government are forcing community care into the private sector may well result in hidden costs that they have failed to recognise. The costs are part of the reason why funds are insufficient to meet the needs of people in community care.

It is cruel of the Government, when assessing their needs, to raise the hopes of those who need community care, only to dash them by failing to produce the necessary funding. They are some of the most vulnerable members of our community—the very old, the very sick and people with severe disabilities. They cannot be expected to look after themselves and their own needs. The Government have played a cruel trick on them by introducing the community care system and raising their hopes, only to dash them because community care is not working as we all hoped that it would. The Government must fund the necessary community care resources in line with the identified need of the people concerned.

6.46 pm
Ms Ann Coffey (Stockport)

I was astounded to read in the Audit Commission report that came out today that a very low number of elderly people in Stockport, of all the metropolitan authorities, are in residential care and being provided with care in their own homes. I found it difficult to understand because Stockport social services department spends well above the standard spending assessment. It suddenly dawned on me that the problem with the Audit Commission's figures is that many elderly people in Stockport are in nursing homes and, therefore, would not come under the category of residential care. They are in nursing homes as a result of the joint policy of the local authority and the local health authority for social services to be a health provider. The figures are misleading.

The difficulty when one receives an Audit Commission report is that one has to spend a considerable amount of time puzzling out what the statistics mean. If such reports continue to be published, I think that we shall find fewer people in residential homes in Stockport because one of the impacts of joint commissioning by the health authority and social services departments is that purchasing is targeted at those in greatest need. Residential care will inevitably be provided through the nursing sector because the people in greatest need will have health needs that can be provided only through nursing homes.

The Audit Commission provided an indication, not of the performance of a local authority, but of the purchasing trend because of the level of nursing and the health needs of elderly people. It showed how local authorities are turning into health purchasers.

I become disappointed when I hear the Minister talk about community care. Although he constantly says that the Opposition are guilty of the maxim that private is bad and public is good, he is guilty of always assuming that public care is bad, private care is good, and the only way to improve public care is to introduce a market mechanism. Essentially, that is what community care is about.

I sat as a councillor on a social services committee when we were deciding what to do with our residential homes because of standards being set by the Department of Health to improve the physical environment and the space to which people were entitled. Those standards were all good and proper, but the council was not allowed to borrow money to improve standards in the public sector. The council closed a number of residential homes because it did not have the money to improve standards. There was no fair playing field between the public and private sectors, as the private sector had access to capital borrowing and could therefore provide private homes to the standards set by the Department of Health, and the local authority ended up purchasing places in private homes. We all felt that it was a bit of a rigged market, which had more to do with the Government's ideology than with a genuine attempt at a partnership between the public and private sectors, which we would all welcome.

The Minister said that local authorities' responsibilities go beyond spending the community care grant. We understand that. May I illustrate the problem by explaining the position in Stockport? Stockport is a capped authority, and since the disaster of the poll tax, the proportion of Government grant to money raised by the council has increased enormously. Some 80 per cent. of the council's income is Government grant, so the Government have a stranglehold on the council's resources. Inevitably, that affects the council's spending and how it decides between priorities. For example, the Government's failure to fund the teachers' pay increase has meant that it has had to be funded from elsewhere in the budget. [Interruption.] I am sorry, Minister, but it is not rubbish.

Mr. Bowis

I did not say that it was.

Ms Coffey

Part of those funds are being taken from money that should be spent on community care. The council is unable to provide home helps, which are part of community care. In my authority, like all authorities, the problem with the home help service is that it has been targeted at those in greatest need. Although people in greatest need require home helps, those in a little less need have no access to home helps because the council cannot provide home helps for them all. Effectively, therefore, the community care infrastructure is not preventive but targeted at those in greatest need. That is fine, but it creates problems.

A core issue in respect of community care is enabling people who live in their own homes and who become disabled or elderly-infirm to climb the stairs to the bathroom. Installing chair lifts in private housing is a big problem because the money comes from the urban renewal grant, so the application competes with applications for mandatory grants to renovate houses. If the council wants to make more money available for installing chair lifts, it must come from other budgets. If no chair lifts are available, elderly-infirm and disabled people cannot stay in their own homes and we therefore do not have the community care or choice which the Government talk about.

So let us not pretend that there are not enormous problems. I hear the Minister talk about the money which the Government give local authorities, and it seems like a lot of money. But when I see my constituents' problems, all I can say to the Minister is that, although it may seem like a lot of money, it is not sufficient to finance the community care procedures that the Government have introduced. The measure of the scheme's success must be whether community care can be delivered. My experience, and that of all my hon. Friends, is that it cannot. Local authorities are being turned into health purchasers to save the health authority budget. That was not the original intention of community care, which was essentially to provide a community infrastructure for people to stay in their own homes, not to buy privately the health care that should be provided through the national health service.

In case the Minister thinks that my view is unbalanced, may I raise a problem about which I have corresponded with him on behalf of private home owners? If elderly people who were admitted to a private home before 1993 and funded their place themselves now run out of money, they cannot be funded through the community care grant. They may receive a DSS grant but that will be less than the purchasing price within the private home. For elderly people to receive funding from the community care grant, they must leave that home. They cannot go into another home managed by the same organisation but must find a home managed by another organisation.

Mr. Hinchliffe

May I reinforce my hon. Friend's concerns? I discovered from a parliamentary answer recently that 78,500 people come into the category that she describes. It is a serious problem and I hope that the Minister will deal with it.

Ms Coffey

I thank my hon. Friend for that supportive comment.

As I was saying, elderly people who run out of funds must be evicted from a home in which they may have been living for five or six years, but if they go to a private home run by a different organisation, they will be funded out of community care money. Where is the sense in that? How does that care for elderly people? I understand that the legislation was framed to prevent abuse by private home owners, but its only effect has been to abuse elderly people. As the Minister knows, moving elderly people from one home to another puts them at risk—

Mr. Hinchliffe

It kills them.

Ms Coffey

As my hon. Friend said, it effectively kills them. I have corresponded with the Minister's Department about that matter but have not received an answer, so I am pleased for an opportunity to raise it in this debate.

We shall have no sensible idea of what community care funding is about until we resolve the problem of the respective purchasing roles of health authorities and local authorities for the health needs of elderly people. Although a recent Government circular told authorities that they must come up with a number of continuing care beds for elderly people and an appeal process will be put into operation, that issue is by far unresolved. The problem with the community care grant is that much of the money is, of necessity, being used to buy health care because the national health service has decided to give up caring for elderly people as that produces no profit.

6.58 pm
Mr. John Gunnell (Morley and Leeds, South)

I have only a minuscule amount of time to speak, so I suggest that the Minister and I meet to discuss some of the issues.

I was part of the Audit Commission when it drew up its original report on community care. Although progress has been made, two matters are causing great difficulty and a third is now on the horizon. They need to be tackled. In some cases, they show a departure from what the Audit Commission originally envisaged.

First, obviously many authorities find that there is not enough money. The figure for Leeds appears generous if one compares it with other figures in the table, but Leeds is £3 million short of the money that it expected to receive. That is bound to have an impact on community care. For example, when reductions are made in the total budget, there is an increase in vacancies for social workers. That makes the assessment process much more difficult. Therefore, considerable difficulties result from a shortfall of funding. It is not a generous settlement, and it should not be considered generous.

Secondly, grave difficulties result from the restriction of 85 per cent. going to the independent sector. I am not dogmatic about those issues. Yesterday, I met people from my constituency who run homes for Registered Residential Care Homes. They expressed their anxieties about some of the other private care homes in the city which were not registered. They felt that I should inquire about them, and especially that I should examine whether people in those homes had control of their pocket money. They felt that control of pocket money added to people's status and their sense of having a little independence. They said that that happened in their organisation, but that some other organisations, for commercial reasons, took all the money at the start and allowed individuals little freedom to choose the way in which they used any of it. Anxieties about the quality and actions of some care homes were therefore expressed to me by other private care homes yesterday.

The third factor, which must be considered in future, is the likely impact of the Government's pronouncements about long-term care coming as a direct result of the Leeds case mentioned by my hon. Friend the Member for Wakefield (Mr. Hinchliffe). Obviously, in this country that will be a critical issue for the future.

When I lived in the United States, I found that people spoke about the American dream, but they also spoke about the American nightmare. The American nightmare was that all one's resources would be spent and used up on health care in one's old age, and that one would then be forced to rely entirely on a welfare system which, in the United States, is very poorly developed.

We are approaching a position in this country in which many elderly people realise that any long-term sense of security is being taken away from them by Government. They now know that, if they have specific afflictions that the health service says will not improve, they may be off into a private home and their original homes will have to be sold to pay for their upkeep. In that way, the American nightmare is coming to this country, and it is a cause of grave concern.

I do not know whether the Minister has met many local authorities which have difficulty meeting their community care budgets, but I should like the opportunity to have a proper discussion about some of the issues that I mentioned, which cannot be discussed properly in a short debate.

7.2 pm

Mr. Hinchliffe

With the leave of the House, I wish to make one or two brief arguments in summary.

The hon. Member for Newbury (Mr. Rendel) made some important arguments in his contribution about the over-concentration on private provision of institutional care; fair arguments that apply, not only to Berkshire, but elsewhere in the country.

My hon. Friend the Member for Stockport (Ms Coffey) made the important argument that local authorities are now health purchasers. That is a simple fact. Five or 10 years ago, they would certainly not have dealt with the type of cases with which they now deal. They are now health purchasers, but they are not funded as health purchasers. The Government must tackle that.

My hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell) reinforced that argument by describing the impact of problems with long-term care. I am worried that the Minister's line has consistently been that local authorities should be able to manage. He believes that bad management is at the root of the problems faced by some of them.

I was very conscious of the remarks of Mr. Peter Stock of the National Users and Carers Group, who has written to the Secretary of State for Health, complaining that her Department's press release on an issue had manipulated the facts. I quote from Community Care of 9 March 1995. Mr. Stock said: The document, which concentrated on remarks by John Bowis that a few councils were unable to resource their community care programmes because of bad management, did not reflect the group's views and had prompted him to consider resigning. That is the users and carers group, which says that arguments about bad management simply do not wash. It is not the issue. Is it any wonder that directors, according to the same magazine, are outraged by Bowis's attitude to cuts? [Interruption.] Directors of social services are outraged; perfectly reasonable people, as the Minister well knows, are outraged by his attitude.

I say seriously that the Minister should recognise the very real difficulties that are arising in several areas. He must recognise that it is not about bad management. He should tackle a range of issues that cause worry and seriously affect users and carers in many parts of the country. I hope that he has listened to the constructive arguments that have been made from the Opposition Benches. I hope that he will respond to those arguments and consider some of those issues seriously.

7.5 pm

Mr. Bowis

Despite the attempt at a private assignation by the hon. Member for Morley and Leeds, South (Mr. Gunnell), the debate has nothing to do with OutRage!

I welcome the general support that has been given from both sides of the House for the policy of community care. That was emphasised at the beginning by the hon. Member for Wakefield (Mr. Hinchliffe) for the Labour party and by the hon. Member for Newbury (Mr. Rendel) for the Liberal Democrat party. I think that similar support was expressed by almost everyone who has contributed to the debate. I very much welcome that.

It would be wrong—and I do not intend to do so—to refer to any of the matters that may be before the courts now or shortly, so the House will understand why I shall not follow one or two hon. Members down that path.

We have heard references to cost shunting, and to the guidance that we issued, to which I referred in my opening remarks about continuing care. Despite the conference that the hon. Member for Wakefield may have attended this morning, I have to say that those guidelines have been very much welcomed by those who manage social and health care—by the Association of Directors of Social Services, by the National Association of Health Authorities and Trusts, by the British Geriatrics Society and by those representing the carers and users, the National Care Homes Association. We have therefore made good progress in that.

We have heard reference to preserved rights cases. They are nothing to do with the report. That is a matter largely for my right hon. Friend the Secretary of State for Social Security, but at the time the House—and I do not recall the Opposition objecting—gave the people who were resident in the independent sector at that time that special degree of security by giving them preserved rights. They did not have to go through the assessment procedures. They retained their rights to income support for as long as they needed it.

The hon. Member for Stockport (Ms Coffey) made an argument about the additional safety net that we put in, which was not there before. That ensured that, if someone who was in a residential care home in the independent sector ran out of resources, the social services would have the power to pick up the case. As the hon. Lady well understands, the reason for the requirement that it not be in the same home was to remove any perverse incentive for any home to increase the rates to meet a top-up that was there. The actual rates are not a matter for the debate.

We have heard a great deal from Opposition Members of what I can only describe as hostility to the independent sector. We hear it again and again throughout the country. Conservative Members want quality and the best use of resources. Resources have been central to the debate.

I have to say to the hon. Member who mentioned Devon that, in 1990–91, Devon received £63 million for its social services; in the coming year it will receive £135 million. I think that Devon can manage as long as it uses those resources well and efficiently; that was the message of the Audit Commission. The Audit Commission says that it has started well and that often, where problems exist, better financial control and better use of the independent sector are needed. The Audit Commission has also highlighted £500 million that could be spent on front-line services if local government managed its pay bills better. We have heard much from the Labour and Liberal parties tonight about resources and reference has been made to £700 million. But when I asked both parties to put on the table their pledge for more money in addition to what the Government spend and are prepared to spend, there was not a word. They will not give promises of additional resources; they merely engage in a political tease with people who are trying, responsibly, to use the generous resources that have been given for community care.

The report provides £647.6 million—real money and real resources. There is to be £5.1 billion for community care in the coming year and for personal social services a fraction under £7 billion. Those are fair resources and I look forward to working with the responsible leaders and directors of social services—the vast majority—up and down the country. I commend the report to the House.

Question put and agreed to.

Resolved, That the Special Grant Report (No. 13) (House of Commons Paper No. 286), which was laid before this House on 13th March, be approved.—[Mr. Kirkhope.]