§ '. Care and nursing homes registered with the National Care Standards Commission shall be counted as one unit for council tax purposes.'.—[Mr. Heathcoat-Amory.]
§ Brought up, and read the First time.
§ Mr. David Heathcoat-Amory (Wells)
I beg to move, That the clause be read a Second time.
The new clause would remedy an injustice in the law by relieving small units in residential and nursing homes from being separately assessed for council tax. At present, accommodation units that have the rudiments of self-catering facilities are in danger of incurring full council tax, even though the occupants are residents of a home and dependent on the care of that home.
The issue was brought to my attention by the residents of the Kathleen Chambers home in my constituency. It is a home run by the Royal National Institute of the Blind to a very high standard. In October 2001, 19 residents of the home wrote to me about their imminent assessment for full council tax. I raised the matter in the House on 20 November 2001, and the then Minister, the hon. Member for Southampton, Test (Dr. Whitehead), invited me to write to him and undertook to look into the matter. I then engaged in lengthy correspondence with the Department and I was assured thatwe are aware of the problem you highlight and are presently reviewing the regulations to see if they can be updated to reflect new forms of residential care.The RNIB also supplied a large amount of background information to the Department.
The problem has arisen only because of the high standards in that home and others. I know that the Kathleen Chambers home is not the only one affected. My hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor) has also raised the matter in the House, and I know that other hon. Members have similar problems in their constituencies. The Kathleen Chambers home was rebuilt in 1996—I had the honour of reopening it—and the RNIB followed Government guidelines and used the social services inspectorate to set the standards. Those guidelines include the provision of facilities for people to prepare snacks and drinks for themselves. They state that the units should includesmall kitchen facilities, near or in their own accommodation.It was precisely because the home did that that the residents were separately assessed for council tax. The problem will increase. As more homes are updated and meet the higher standards in the regulations, more will be in danger of having separate assessments made.
I eventually received an assurance that the matter was being looked at and that legal changes were being considered. On 26 March 2002, I received a letter from the Minister thanking me for some information that I had provided and saying:This will be helpful to my officials who are currently reviewing the issue to see whether any changes in legislation need to be made".I would have thought that the Bill would be an obvious vehicle for any changes that needed to be made to remedy the problem.
905 Meanwhile, the RNIB appealed against the assessment. On 18 February this year, it appeared to win the case, having appealed against the verdict of the valuation tribunal and won. However, their celebrations were premature, because the Inland Revenue intends to appeal the decision. The whole matter is therefore back in the melting pot. A great deal of money has been spent on it—charitable funds that would have been spent much better on caring for the blind.
The people in the Kathleen Chambers home have considerable spirit. I visit the home at election time, and the people there are well versed in current affairs. They know exactly what is going on but are bemused and baffled as to why the matter has been allowed to drift on for more than 18 months, despite reassurances from the Department.
The people in the home clearly depend on the home—they would not be there otherwise. They have enough problems in life: they are blind, and many are of very slender means. They cannot understand why the Government look on while these unjust assessments are made. They seemed to secure a win in court, but that decision is now subject to another appeal.
Great anxiety has been caused in the Kathleen Chambers home, and the problem needs to be resolved. I look to the Government to do that by accepting the new clause. There are safeguards in it, because only care homes registered under the care homes regulations would qualify. The matter is therefore policed automatically. If a care home ceases to be so registered, separate assessments could be made for each small unit, as appropriate. There is therefore no possibility of leakage into other dwellings.
I hope that the Government will bring the matter to a conclusion. It is very regrettable that the Bill as drafted does not do that, despite the written assurances that I received. It is about time something was done, and I await the Minister's response with great interest.
§ Mr. Edward Davey
I rise to support new clause 18. The right hon. Member for Wells (Mr. HeathcoatAmory) got to the Table Office with the new clause just before I got there with my own proposal. I am glad it happened that way, as the House has been well instructed by the right hon. Gentleman.
Constituents have not raised the matter with me, but the RNIB and voluntary organisations representing disabled people in general have. However, there may be wider implications for all elderly people, given that standards of care in homes are rising, as a direct result of Government policy. The Government should consider the new clause, because the council tax legislation is ambiguous.
The ambiguity arises from the way in which care homes and domestic and sheltered accommodation are defined. It appears that the people who assess whether a home fits into the care home category or the domestic and sheltered accommodation category think that the addition of some small extra facilities—such as cooking facilities—to a room will have a specific effect. 906 They deem that those facilities can change what was always intended to be a simple room in a care home, where a person may enjoy the care provided by staff, into a place where the resident can be independent, and therefore liable to council tax.
We could be at the beginning of an issue that will grow and grow. As care standards improve and facilities are enhanced, what in the past was deemed unnecessary will become more common. Disabled people and residents of RNIB homes may be more affected than others, as they may be more able to make drinks and food for themselves, even though they still need extra care. By contrast, frail, elderly people may not have a need for such facilities. That might be a narrow point but there is the potential for growth. The Minister has been lobbied and received letters on the issue, so he is aware that there are many ways around it. I am informed that he could utilise town and country planning use class orders—such as the C2 order that currently applies to care homes—and tie council tax tests to part of the planning system or to the Care Standards Act 2000, as new clause 18 seeks to do.
This is not a party political issue but is about making sure that the tax system is updated to reflect the way that care homes are developing and standards are changing. If the Minister cannot accept the new clause, I hope that he will have his solution presented in this House or another place.
§ Sir Teddy Taylor (Rochford and Southend, East)
I congratulate my right hon. Friend on his presentation of new clause 18. If Parliament is to serve any purpose, his arguments will succeed. The new clause deals with a small anomaly that has cost some charities a great deal of money trying to resolve—and it could be sorted out quickly and precisely if new clause 18 were adopted. The vast majority of registered care homes are not affected by the anomaly but are regarded as one rating unit. Only a tiny number of care homes are affected. One of them is Dolphin Court in my constituency—which I invite the Minister to visit, to see for himself the facilities it provides to people who are desperately disabled.
I spend a lot of time visiting residential homes. Some of them can be acutely depressing; a group of elderly people are to be seen sitting in a circle looking at each other. Others—such as those run by the Abbeyfield Society and John Grooms—go out of their way to provide disabled people with independence and dignity. Not to regard Dolphin Court as a single unit is ridiculous. The individuals who reside there are not independent although they have separate accommodation, together with enablers and facilitators who actively encourage and motivate residents to be less dependent. Guidance is given to each residence on acquiring the skills needed to achieve personal goals. Group meals and activities supplement the individual's living programme. Communal meals are provided, but such care homes try to provide the kind of independent accommodation that encourages disabled people to be more independent.
The tribunal that considered Dolphin Court stated that while the residents were not able to live independently, their individual flats constituted separate living accommodation and should be assessed accordingly. Uncertainty has existed since 1993. In case after case, evaluation tribunals have decided not to 907 proceed, while others—as in the case of Dophin Court—have proceeded. Charities have spent a great deal of money on professional advice. I have pursued the issue with various Ministers—including the delightful lady who was Minister of State at the Department of the Environment, Food and Rural Affairs, from whom I received a letter on 19 January 2002, in which she stated that there would be no overall change in rates payable by classifying the property as separate dwellings. She said, "Don't worry. There'll be no financial impact."
I then took the matter up with the Minister of State, Department of Health, the right hon. Member for Barrow and Furness (Mr. Hutton), in a question on 13 November and he said that he would look into it. However, I would like to tell the Government what it means for John Grooms, Dolphin Court, Southend-on-Sea. The council tax payable rose from £700 a year to £4,000, which is a substantial increase and a large amount of money.
Of course, individuals can apply for rebates. There are 20 residents and the majority receive rebates, but is it really fair that a residential home providing limited basic accommodation is regarded as a single unit while worthwhile organisations or charities such as John Grooms, which try to help people to become more independent, to have more dignity and to widen their contribution to society, are hammered? We are telling those homes to pay £4,000 instead of £700.
Only a limited number of homes are affected. They are the ones that go out of their way to provide better facilities for people. I am sure that that is the last thing that the Government would want to stop. The Minister should consider the matter seriously, and not just blether, as he sometimes does in these debates. Is he saying that if a home provides people only with meals and the opportunity to look at each other the Government will give them a benefit, but that if a home tries to provide separate accommodation and opportunities that give people more facilities for an independent and dignified lifestyle, they will hammer it? That is what the measure will do. If a home goes out of its way to improve things for its residents, it will be hammered; if it does nothing, it will be okay.
It is simply a question of logic. The independent valuation tribunal's report on Dolphin Court stated that the residents were unable to live independently, but that it had to regard the accommodation as separate units. I am sure that the Minister will accept that the measure is unfair and unreasonable, and discriminates against people who are trying to provide better facilities, so I hope that he will accept the excellent new clause proposed by my right hon. Friend the Member for Wells. The vast majority of homes are okay; we are simply trying to ensure that all registered homes are treated in the same way.
As the Minister knows, my right hon. Friend and I, and other MPs, have been troubling him with this issue for quite a while. We have said that something is wrong, and that the situation is unfair and should be put right. Charities have spent a great deal of money to try to resolve the problems. They feel strongly that they are being hammered for going the extra mile for disabled people who require assistance. I hope that the Government will put things right; that is only fair and reasonable.
908 If the Minister has any doubts, I hope that he will visit Dolphin Court to see for himself. When people with great disabilities are not merely being looked after but helped to improve their opportunities and to do better in society, that deserves encouragement. However, instead of getting that encouragement, the charities are being hammered. I hope that the Government will do something about it.
§ Mr. Clifton-Brown
The Opposition strongly support the new clause proposed by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory). I congratulate him on pursuing the case on behalf of his constituents at Kathleen Chambers House so diligently over such a long period. I echo the words of my hon. Friend the Member for Rochford and Southend, East (Sir Teddy Taylor).
Since my right hon. Friend drew the matter to my attention, I have been contacted by the Royal National Institute of the Blind, which produced a brief for this debate for Members of Parliament.
We seem to be moving into the more enlightened regime envisaged by the Care Standards Act 2000 whereby people who are blind or physically disabled can lead as near a normal life as possible. As other hon. Members have said, guidance was issued under the 2000 Act so that facilities would be upgraded to allow residents to live as independent a life as possible.
As my right hon. Friend the Member for Wells said, the accommodation needs to be brought up to modern standards. Those people need a sink, a cooker and other kitchen facilities to live a more independent life, but that does not mean that individual residents could live a completely independent life if it were not for the general, overarching care provided by the home. The problem is that the individual units become subject to council tax when those minimum care standards are achieved.
The RNIB makes the point that there is a high degree of regulation and inspection of care homes, so the valuation tribunal has less grounds for concern about illicit operation in care homes than in the housing stock at large. One of the grounds that the Minister might use in rejecting the new clause is that there would be council tax leakage. However, the RNIB also makes the point that, if the premises ceased to be used as a care home, the registration would automatically cease, which would effectively reinstate the exemption from residential care accommodation that used to exist under community charge regulations.
As my right hon. Friend the Member for Wells has said, it seems totally wrong that the law should be unclear. As my hon. Friend the Member for Rochford and Southend, East, said, cases have gone to valuation tribunals way back as far as 1993. The Minister now has an opportunity to clarify the law. Even if he does not accept new clause 18, I hope that he will accept the principle that my right hon. Friend has established and say that the detailed drafting required to amend the law on council tax regulations will be prepared so that an amendment can be introduced in another place.
The Opposition support my right hon. Friend's new clause, and I hope that he will press it to a vote and encourage the Government to introduce regulations in another place.
§ Mr. Leslie
May I first put on record my appreciation of the fact that the right hon. Member for Wells (Mr. Heathcoat-Amory) has raised this issue today? We have had a useful debate and a number of important issues have been raised. I hope that the hon. Member for Cotswold (Mr. Clifton-Brown) will at least give me the opportunity to say my piece and then reflect on what I have to say before drawing his conclusion about whether to press the motion to a vote.
I have to admit that this is clearly an issue, and the right hon. Gentleman has clearly come up with a possible solution in new clause 18—a proposal that would ensure that care and nursing homes registered with the National Care Standards Commission were counted as one unit for council tax purposes. The RNIB has also deduced that that option is a possible solution, and that issue has been raised in correspondence with my Department. Again, I should like to put on record my appreciation of the work done by the RNIB—not just its work on this issue but the wider beneficial work that it does for people with visual impairment.
Residential homes have traditionally been interpreted in council tax regulations as essentially a series of bedrooms with communal facilities, but, as the hon. Member for Kingston and Surbiton (Mr. Davey) said, such accommodation is becoming increasingly self-contained—units have their own kitchens and bathrooms, for example—precisely to facilitate more independent living, and many hon. Members support that as standards are raised. However, that type of accommodation traditionally falls under the definition of separate chargeable dwelling. That is why such accommodation has been billed separately in certain circumstances.
I was very interested to hear what the hon. Member for Rochford and Southend, East (Sir Teddy Taylor) said about Dolphin Court and what the right hon. Member for Wells said about Kathleen Chambers House—the home in his constituency. Indeed, I have no reason to challenge what they have said about the circumstances that they have reported to the House. The chargeable dwelling can either be a complete dwelling—for example, a house—or part of a building with self-contained units such as flats. The definition tends to focus on whether there are kitchen and bathroom facilities either in or outwith the unit. The specific test is whether the units have been adapted for use as separate living accommodation; that is the definition in the regulations.
However, as care homes establish more self-contained units, that can result in residents in the more modern units receiving separate council tax bills for the first time. Obviously, that can be surprising and unwelcome for those residents, and also awkward for the local authorities that have to administer the billing process.
I want to put on the record the fact that I am very sympathetic indeed to the rationale behind the arguments of the right hon. Member for Wells and the others who tabled the new clause. I hear the suggestions by the hon. Member for Kingston and Surbiton about other mechanisms, such as planning classification, that might be used.
The hon. Member for Cotswold says that the Government should not be thinking about the loss of council tax revenue, but that is not the reason why I 910 shall, I am afraid, have to ask the right hon. Gentleman to withdraw the new clause. There are drafting issues that mean that the new clause would not fit into the Bill as it was intended to. Moreover, it is not needed, as the changes to the regulations defining a chargeable dwelling can be made by secondary legislation under section 3(5)(b) of the Local Government Finance Act 1992. There are also other issues affecting application to the National Assembly for Wales, which mean that new clause 18 is technically deficient.
The Government may well decide to exercise our powers to change the regulations and treat all registered care homes as single dwellings. We are considering that in great detail now; the valuation of care homes is being carefully examined and evidence is being collected to see how widespread the problem is. If need be, we will use our legislative powers to remedy the problem.
The right hon. Member for Wells specifically mentioned that he had written to previous Ministers on the subject and that the attention given to the issue had not been as swift as he would have liked. I have raised the matter with my officials, and I intend to ensure that we can resolve the problem satisfactorily over the coming months. After the useful debate that we have had, which has put everything on the record, I shall go back and redouble our efforts to ensure that we can resolve the problem. In the light of that commitment, I hope that hon. Members will accept that the time has come to withdraw the new clause.
§ Mr. Heathcoat-Amory
I am grateful to the Minister for his recognition of the problem, and to my hon. Friend the Member for Rochford and Southend, East (Sir Teddy Taylor) for his powerful support, based on another real case. I am also grateful to the hon. Member for Kingston and Surbiton (Mr. Davey), the Liberal Democrat spokesman, who is clearly concerned about the problem too.
The Minister said that he was "very sympathetic" to our case. I think that in parliamentary parlance, that means that he will definitely act. He also said that there were avenues for remedying the defect through secondary legislation. He recognised that his Department had been somewhat dilatory in grasping the issue, which has been around for at least 18 months— if not a great deal longer, according to my hon. Friend the Member for Rochford and Southend, East.
A great deal of expense has been incurred. In the case that I have described it was incurred by the RNIB—a body which I much value, and which I am sure would rather have spent the money on front-line care. As I said at the outset, the problem has also caused much anxiety among vulnerable people for whom life has already created a good many difficulties.
In the light of the Minister's remarks, however—I take his assurance at face value that he will find a remedy, and that his Department will grasp the issue with the urgency that it deserves—I beg to ask leave to withdraw the motion.
§ Motion and clause, by leave, withdrawn.