Community Care (Direct Payments) Bill [H.L.]

HL Deb 12 February 1996 vol 569 cc420-70

4.48 p.m.

Consideration of amendments on Report resumed on Clause 1.

Baroness Hollis of Heigham moved Amendment No. 2: Page 1, line 12, at end insert ("or ( ) the Secretary of State agrees to a representation from an authority that it wishes to exercise its discretion to make payments under this section to any person or persons who are willing and able to secure the provision of their own services,").

The noble Baroness said: My Lords, this is a compromise amendment. We on these Benches would prefer that the Minister did not restrict the categories of people eligible to receive direct payments. We would prefer that all disabled people who might benefit from them should be free to do so. However, the House voted very narrowly indeed to reject the amendment moved so ably by the noble Lord, Lord Rix. The Minister argued basically that the scheme should be phased in gradually so that local authorities should not be overwhelmed. We hope that Amendment No. 2, a fall-back amendment, will be acceptable to the Minister or that she will bring forward her own version.

What does the amendment do? It takes for granted that the local authority would have the power to make direct payments to physically handicapped people under 65, as the Government and the Bill envisage. The purport of the amendment is that, in addition, local authorities would also be able to seek consent from the Secretary of State to extend direct payments to other categories of people within their own local authority. To receive such consent from the Secretary of State, the Minister would have to be satisfied that local authorities were experienced and competent in running direct payments, that they would not be overwhelmed and that it would be a sensible action to take.

What are the advantages? First, some 60 local authorities have been running direct payment schemes in some form or another for up to 14 years. Local authorities are not all starting from the same point. Some are experienced and have led the campaign for direct payments; for others, it is a new venture. If local authorities come in with different experiences, why treat them all the same? Why not recognise that difference as a source of strength? The amendment would ensure that all local authorities would be able to make direct payments to physically handicapped people under 65, but that where the Minister was satisfied that an experienced local authority could expand the scheme he would have the power to give consent for it to do so. For example, 10,15 or 20 of the 140 local social service authorities might seek that consent, and the Minister might agree. That would mean that the Government benefit from a willing pilot group from which both the Government and other local authorities could learn before a more general extension of the scheme is contemplated.

One of the difficulties, particularly in social security and health legislation, is that national legislation reduces the opportunity to learn from feedback, to start pilot schemes and learn from them. The amendment would allow us to learn from feedback, both central government and local authorities. That must be useful.

Secondly, I emphasise that not only are all local authorities starting from different positions and therefore the amendment would give flexibility, but also the Secretary of State must be satisfied that local authorities would be right to take on that power. The Minister will only be satisfied if local authorities are clearly competent to do so and there can be no question of them being overwhelmed or failing to deliver. The right of consent remains firmly with the Government, they control the speed.

The amendment allows the Government to empower local authorities to extend their scheme. Without such an amendment, the Government may unnecessarily tie their own hands until they bring new regulations into force. With the amendment, the Government control the pace, speed and size of any advance beyond the original category. The Government have nothing to lose. They could say "no" to every request if they thought it wise to do so. The amendment would equally give the Government power to say "yes" to those requests which they believe are sensible and appropriate.

Thirdly, if the Secretary of State agreed, the amendment would meet the problems on which we have already touched of local authorities which are already making direct payments to a larger group than the Bill envisages. Some 60 local authorities make direct payments. Most have restrictions of one kind or another, but many go beyond the range of the Bill. We have discussed what may happen to disabled people. The Minister said that they may continue to receive payments through third party schemes. That means that, instead of running one scheme, an experienced local authority has to run not only its own scheme but fund and organise a second third party scheme, doubling rather than reducing the amount of bureaucracy. With our amendment and with the consent of the Minister, the local authority could bring all those it deemed eligible within the framework of one straightforward scheme.

The amendment is modest, sensible, cost-free and is a fall-back amendment on the one which the House so narrowly rejected. It would allow the Secretary of State to agree that individual local authorities could extend the range of their schemes. It would not hold back progressive and experienced local authorities and force them to go at the pace of the newest and slowest local authority. In the process, we would all benefit. It is a win-win amendment. The Secretary of State would benefit from having a pilot scheme on the ground. The local authorities would benefit because they could exercise their discretion according to their experience, with the consent of the Secretary of State. Disabled people would benefit. I hope that the House and the Minister will accept the amendment or that the noble Baroness will come back with something broadly similar. I beg to move.

Lord Hayhoe

My Lords, before the noble Baroness sits down after moving the amendment, perhaps she can answer a question. She said that, through the Secretary of State, the Government could reject every request. In those circumstances would all the decisions be subject to judicial review or application for judicial review?

Baroness Hollis of Heigham

My Lords, I shall have to take advice on that, I do not know.

Baroness Darcy (de Knayth)

My Lords, I warmly support the amendment and was delighted to add my name to it. I am not at all happy with the Government's proposals to limit direct payments to physically and sensorily disabled people under 65, nor am I happy with any other possible groupings in the consultation paper. They all have drawbacks. I voted for the amendment of my noble friend Lord Rix because it is hardly logical merely to include people with learning difficulties if they also have a physical and sensory impairment, as the Government propose. It would be difficult to justify that in practice when dealing with real people in their homes. I do not like the idea of distinguishing between physically and sensorily disabled people on the one hand and people with learning difficulties on the other, singling out one group for special treatment.

Ideally, direct payment should be payable to all adults who are willing and able to manage them, with help if necessary and with no age limit. Local authority staff who have direct contact with the individual people concerned are in the best position to decide whom to include. However, as the noble Baroness said, the amendment is a sensible half measure to allow the Government, in regulations, to limit direct payments but to allow local authorities to approach the Secretary of State to bring in others. Local authorities are to be allowed to refuse direct payments to individuals, provided they act responsibly and reasonably. So why not let the local authorities act responsibly and reasonably in deciding whom to include?

As the noble Baroness, Lady Hollis, said, the amendment of my noble friend Lord Rix was lost very narrowly. When the Minister replied to it I was cheered, in a way, because she said that local authorities who already issue direct payments to categories other than the ones which she plans to make eligible would be able to continue to do so. That is cheering in a sense, but in a way it is even battier because it means that in some areas a category will receive the payments whereas in other areas it will not. Even in the areas issuing direct payments to non-eligible categories, will authorities be able to bring in more or will they have to say "no" to new claimants? The present wording creates several anomalies.

I hope that the Minister will respond positively to the amendment or that she will agree to have a long, hard think before Third Reading. Local authorities already making payments to other groups would be put on a sound legal footing and it would act as a pilot study which could be of help to the Government. If the noble Baroness cannot give a faintly encouraging reply, or say that her door is at any rate open to discussions, I should have no hesitation in following the noble Baroness, Lady Hollis, into the Lobby if she decides to divide the House.

5 p.m.

Lord Addington

My Lords, the amendment is very reasonable and almost cautiously supportive of the Government's stance. It provides in certain situations, where there is the expertise available, for a scheme to be introduced to which the Secretary of State can give his approval. Where the Secretary of State and the powers-that-be think it appropriate a scheme could be brought in. Surely such a proposal cannot offend anyone. It cannot be suggested that it would cause overloading since by its very nature it safeguards against taking on too much. I hope that the Minister will be able to take the idea on board.

Lord Swinfen

My Lords, this is purely an enabling amendment. It allows local authorities which feel capable of taking on a new category of direct payments to do so where they have the skills and where the need exists. The need will vary from area to area.

Under the amendment, the Secretary of State has a power of veto. He must satisfy himself that it is right and proper to agree to the local authority's request. It is a sensible amendment and one that allows different local authorities to proceed at different rates of learning. It would allow a group of authorities in different parts of the country to expand in slightly different sections so that there would be a much broader learning curve throughout the country as a whole. For instance, half a dozen local authorities might be given permission to make direct grants to those with mental disabilities. In other parts of the country another half dozen could be allowed to give grants to people over the age of 65. The knowledge acquired of how grants are best applied could be disseminated throughout all local authorities. It would be useful to learn how pitfalls were overcome. The amendment is eminently sensible; and I strongly approve of it.

Baroness Cumberlege

My Lords, as I have said throughout the course of this Bill we are bringing a new way of ensuring that people's needs are met into the heart of community care. As the noble Baroness rightly said, that is what lies behind the Government's proposal to restrict eligibility.

We want to limit the scope of direct payments for two reasons. The first is to allow local authorities to focus on a relatively small group as they begin to make direct payments. We do not want to put at risk the long-term future of direct payments by being over-ambitious in the short term. The second reason is so that the Government can assess how direct payments are working. It is a completely new way to deliver community care. It is radically different from the way local authorities currently arrange community care services. In many respects it is far more revolutionary than were the community care reforms that we introduced in 1993.

The Government want to limit the scale of direct payments so that we can see how they work in practice on a controlled basis. We shall need to see whether the framework we have put in place is the right one. Of course the policy proposals are those which we believe are best. They create the environment which we believe is most likely to lead to successful implementation.

But we are moving into uncharted waters. Existing experience is limited. Direct payments have not previously been in the mainstream of community care. We want to see how things go, how this policy works. Then we shall be able to judge whether we need to adjust the national framework.

The amendment would clearly undermine our second aim in restricting eligibility. If we make exceptions for some local authorities then the national framework is haphazard and it becomes far more difficult to judge on a national basis how direct payments are working. I also find it difficult to see how the provision might work in practice. It would be extremely cumbersome and bureaucratic for the Secretary of State to have to review every application in order to exercise his discretion. A great deal of information would be needed to form a proper judgment as to whether each individual local authority is in a position to make direct payments to a wider population.

The new system has to be fair. It is essential that there is a criterion that can be used in order for the Secretary of State to make his judgments. This Bill, when enacted, has to be fair to local authorities, to those who might benefit, and also to the Secretary of State. It would be difficult for him to retain his control if, as my noble friend Lord Hayhoe suggested, every decision could he subject to judicial review. That would put the Secretary of State in an impossible position.

I return briefly to the third party schemes mentioned by the noble Baronesses, Lady Darcy (de Knayth) and Lady Hollis. As I said in the previous debate, people on existing schemes could continue to receive direct payments. To clarify that, it is up to local authorities to ensure that their schemes are legal. If schemes are currently legal this Bill will not make them illegal. If schemes are currently illegal, then they may or may not be legalised by the Bill. As I said, it cannot be the aim of the Bill to legalise ultra vires arrangements. We are setting the legal framework that we believe will work best. That must be our aim.

The amendment would increase the variation between local authorities in the way they implement the legislation. That would make it extremely difficult for the Government to see, on a national basis, how direct payments were working. I urge the House to reject the amendment.

Baroness Hollis of Heigham

My Lords, I was very surprised indeed at that reply. Given the discussions that have taken place, I really had hoped that the Minister would think this a sensible, modest, "compromise" way in which we could all benefit from the experience of local authorities acting, as it were, as a pilot scheme for the Minister.

When it suits the Government—as with in-work benefits for couples and single people without children—they are very happy to have pilot schemes. They do not refer back to the need to have all schemes nationally implemented across the board all at the same time. When it does not suit the Government, the opposite argument is used.

The Minister gave three arguments; first, that she wanted the scheme to focus on relatively small groups and not be over-ambitious; secondly, that she wished to see how it was first working; and, thirdly, that she did not want the national framework to become haphazard. I suggest that the amendment addresses all three concerns.

First, for virtually all local authorities, except where the Minister gives explicit consent to do otherwise, the scheme will focus on the relatively small group of physically disabled people under 65. It will not, in the Minister's words, be over-ambitious. It is probable that only those local authorities which already have experience of, and are implementing, a scheme will be given consent by the Secretary of State to continue it within the existing framework. Therefore, the argument of wanting to focus on a relatively small group remains unaffected.

Secondly, the Minister said that she wished to assess how the scheme was working. All the Minister will be doing is assessing how part of the scheme will be working—that part which applies to those who are physically handicapped. We offer the opportunity for the Minister to see, in selected areas where the Secretary of State has confidence in the local authorities, how an extension of the scheme might work and therefore to see whether, on that basis, it makes good sense to extend it to all local authorities.

Most governments would be delighted to have such an opportunity to learn from willing pilot pioneers on the ground. In that way, and only in that way, can we assess how the scheme is working and, equally importantly, how it would work were it to be extended. But the Minister refuses the opportunity to learn from the experience of local authorities willing to pioneer with the support of the Secretary of State.

Thirdly, the Minister said that she did not want the national framework to become haphazard. That argument does not hold up. First, the national scheme will already be haphazard since it is a discretionary scheme. A quarter of all local authorities could decide tomorrow not to implement the Bill. The scheme will remain discretionary. In that sense it will be haphazard by its very nature. For the Government to complain that the amendment makes a haphazard scheme haphazard is perverse. Secondly, the amendment will allow the Government to learn what would happen if the categories were extended to other local authorities—if one moved from a narrow minimum standard to a wider more comprehensive one. One cannot learn from experience if that experience is not permitted to be piloted. Of what are the Government frightened? Local authorities which are currently involved in running such schemes or have that kind of experience will seek consent. The Minister has to be persuaded that they are competent to accept those schemes and to run them. If the Minister is not so satisfied, he will say no. Why should the Minister deny herself the power to say yes or no to local authorities which believe that they are competent to extend this scheme? Why should she deny herself that power? It is absurd, particularly when in most other fields of social security legislation the Government say that they want pilot schemes in order to learn from them and understand in what ways it makes sense to apply a scheme nationally.

I truly believe that this is a win-win scheme; and a win-win amendment. It is a win-win for the Government as they can learn from experience; a win-win for those local authorities which are already supporting disabled people beyond the scope of the Bill; and a win-win for disabled people—all at no cost to public expense. I am so disappointed by the Minister's reply. I had hoped that she would accept the amendment or give us some encouragement. I shall test the opinion of the House.

Lord Hayhoe

My Lords, before the noble Baroness sits down, perhaps I may comment. She stressed the positive aspects of the amendment. In Clause 1(6) of the Bill there is a fair amount of discretion. All the good things of which she spoke that the Government should seek will surely be available to the Government under subsection (6). Therefore, I cannot see why she pushes the amendment, when the good things that she mentioned seem to me—in my limited judgment of reading legislation, and I always acknowledge that it is easy to misunderstand it—to be covered by subsection (6). That subsection allows regulations to be made to: make different provision for different cases, and … include such supplementary, incidental, consequential and transitional provisions". That is a very wide power that is available. All the good things—I stress that, as indeed the noble Baroness stressed it when she spoke in favour of her amendment—could be done. Therefore, I cannot see why she should press her amendment. I hope that she has a response.

Baroness Hollis of Heigham

My Lords, I am delighted that the noble Lord—in a phrase often used from the Government Benches—is absolutely right. Clause 1(6) does by regulation what the amendment seeks to do by an individual local authority making application to the Secretary of State. The noble Lord does not need me to tell him that there is a world of difference between the Secretary of State having the power to respond to individual applications and requiring each application to be laid by regulatory process.

Whether that is done by the negative procedure or the affirmative, it may take up time in both Houses for a judgment which I believe is very properly exercised by the Minister or Secretary of State in a professional capacity. The Minister will have to make that judgment anyway before laying a regulation. Why do we need to check that in Parliament? So there is not only a local authority making a decision about whether it wishes to empower a disabled person and the Secretary of State confirming the judgment of the local authority, but now Parliament has to confirm the judgment of the Secretary of State to confirm the judgment of the local authority. That is infinitely too cumbersome for what is suggested. The spirit of the noble Lord's remarks will best be met by this amendment. I hope that he will support it.

Baroness Cumberlege

My Lords, before the noble Baroness sits down perhaps I may just ask her—she has clearly thought through the amendment carefully—what criteria she would expect the Secretary of State to use when making a judgment as to whether a local authority was or was not able to implement the scheme broadly.

Baroness Hollis of Heigham

My Lords, I should expect the Minister to seek discussions with the ADSS—the Association of Directors of Social Services—and agree the common criteria. That would be the right way to proceed, following the response from the consultation documents. The kind of experience that I should expect the Secretary of State to take into account is, for example, whether an authority—such as, say, Kingston or Hampshire County Council—is currently running a third party direct payments scheme in which, for example, people who have learning disabilities or who are, say, over 65 are currently receiving payment. On that basis, the Secretary of State may well be satisfied that those authorities have that experience, are competent and should be encouraged to act as pilot schemes. That is the kind of consideration involved. There may well be others. They will be drawn up in discussion with the Association of Directors of Social Services, but those are the kind of criteria that I have in mind.

5.15 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 92; Not-Contents, 112.

Division No.2
CONTENTS
Acton, L.	Kilbracken,L
Addington, L. [Teller..]	Kirkhill,L
Ailesbury, M.	Longford,E.
Barnett, L.	Lovell-Davis,L.
Birk, B.	McIntosh of Haringey, L.
Blackstone, B.	Mackie of Benshie, L.
Borrie, L.	McNair, L.
Broadbridge, L.	McNally, L.
Carmichael of Kelvingrove, L.	Mallalieu, B.
Carnarvon, E.	Mar and Kellie, E.
Clinton-Davis, L.	Masham of Ilton, B.
Craigavon, V.	Mason of Barnsley, L.
Darcy (de Knayth), B.	Merlyn-Rees, L.
David, B.	Milner of Leeds, L.
Desai, L.	Mishcon, L.
Donaldson of Kingsbridge, L.	Monkswell, L.
Donoughue, L.	Morris of Castle Morris, L.
Dormand of Easington, L.	Nelson, E.
Dubs, L.	Nicol, B.
Falkland, V.	Prys-Davies, L.
Farrington of Ribbleton, B.	Rea, L.
Fisher of Rednal, B.	Redesdale, L.
Fitt, L.	Richard, L.
Gallacher, L.	Rix, L.
Geraint, L.	Robertson of Oakridge, L.
Gladwin of Clee, L. [Teller.]	Robson of Kiddington, B.
Glenamara, L.	Saltoun of Abernethy, Ly.
Graham of Edmonton, L.	Sefton of Garston, L.
Gregson, L.	Shannon, E.
Grey, E.	Simon, V.
Hamwee, B.	Stedman, B.
Hanworth, V.	Stoddart of Swindon, L.
Harris of Greenwich, L.	Strabolgi, L.
Haskel, L.	Swinfen, L.
Hayman, B.	Taylor of Blackburn, L.
Healey, L.	Thomas of Walliswood, B.
Henderson of Brompton, L.	Thomson of Monifieth, L.
Hollis of Heigham, B.	Tordoff,L
Holme of Cheltenham, L.	Warnock. B.
Hughes, L.	Weatherill, L.
Hylton-Foster, B.	Wedderburn of Charlton, L.
Jay of Paddington, B.	Wharton, B.
Jeger, B.	White, B.
Jenkins of Hillhead, L.	Williams of Elvel, L.
Jenkins of Putney, L.	Williams of Mostyn, L.
Judd, L.	Young of Dartington, L.

NOT-CONTENTS
Aberdare, L.	Cadman, L.
Addison, V.	Campbell of Croy, L.
Ailsa, M.	Carlisle of Bucklow, L.
Ampthill, L.	Carnegy of Lour, B.
Archer of Weston-Super-Mare, L.	Carnock, L.
Arran, E.	Chalker of Wallasey, B.
Ashbourne, L.	Charteris of Amisfield, L.
Astor, V.	Chelmsford, V.
Astor of Hever, L.	Chesham, L [Teller.]
Barber of Tewkesbury, L.	Clanwilliam, E.
Belhaven and Stenton, L.	Clark of Kempston, L.
Beloff, L.	Courtown, E.
Blaker, L.	Craig of Radley, L.
Blatch, B.	Crathorne, L.
Boardman, L.	Cuckney, L.
Bowness, L.	Cumberlege, B.
Boyd-Carpenter, L.	Dean of Harptree, L.
Braine of Wheatley, L.	Denham, L.
Brentford, V.	Downshire, M.
Brigstocke, B.	Eden of Winton, L.
Brougham and Vaux, L.	Elles, B.
Burnham. L.	Elliott of Morpeth, L.
Butterworth, L.	Faithfull, B.

Ferrers, E.	Milverton,L.
Flather, B.	Mottistone, L.
Fraser of Kilmorack, L.	Mountevans, L.
Gage, V.	Mowbray and Stourton, L.
Gardner of Parkes, B.	Moyne, L.
Gilmour of Craigmillar, L.	Munster, E.
Goschen, V.	Murton of Lindisfarne, L.
Gray of Contin, L.	Newall, L.
Greenway, L.	Norrie, L.
Hamilton of Dalzell, L.	Northesk, E.
Harding of Petherton, L.	O'Cathain, B.
Harlech, L.	Orkney, E.
Hayhoe, L.	Park of Monmouth, B.
Hemphill, L.	Plummer of St. Marylebone, L.
Holderness, L.	Rankeillour, L.
Hooper, B.	Rawlings, B.
Howe, E.	Rees, L.
Inglewood, L.	Rennell, L.
Johnston of Rockport, L.	Renwick, L.
Killearn, L.	Romney, E.
Kinnoull, E.	Seccombe, B.
Lauderdale, E.	Shaw of Northstead, L.
Lindsay, E.	Shrewsbury, E.
Liverpool, E.	Skelmersdale, L.
Long, V.	Soulsby of Swaffham Prior, L.
Lucas, L.	Strange, B.
Lyell, L.	Strathclyde, L.[Teller.]
McConnell, L.	Sudeley, L.
Mackay of Drumadoon, L.	Teviot, L.
Macleod of Borve, B.	Thomas of Gwydir, L.
Merrivale, L.	Trumpington, B.
Mersey, V.	Ullswater, V.
Miller of Hendon, B.	Wade of Chorlton, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.23 p.m.

Baroness Hollis of Heigham moved Amendment No. 3: Page 1, line 15, at end insert— ("( ) An authority shall not unreasonably refuse a disabled person access to direct payments from a scheme for the making of such payments to which subsection (1) above refers.").

The noble Baroness said: My Lords, Amendment No. 3 will ensure that a local authority may not unreasonably refuse direct payments to a disabled person who falls within the category of eligibility. In Committee the Minister said that if local authorities acted unreasonably or arbitrarily there was redress through the local authorities' complaints procedure, the local government ombudsman or judicial review. The Minister went on to say that, as local authorities were not allowed to act unreasonably, they would not do so and, if they did, there were abundant mechanisms to check their behaviour.

All that is entirely true and we all expect and hope that local authorities which introduce direct payments will be committed to making them successful. However, a local authority could come to a decision which does not further the interests of the disabled person if the present wording of the Bill is retained. At the moment, as long as a local authority has taken all relevant considerations into account and has not had regard to irrelevant considerations, it is unlikely to be held to be acting unreasonably unless its actions are so perverse that no reasonable authority could possibly act in that way.

A high standard of proof is required. It can entail a long and costly argument in which a disabled person may hesitate to engage, especially if, should they lose, they may then be regarded by the local authority as a difficult client. Amendment No. 3 will ensure that what the Minister intends to happen will happen. It will tip the checks and balances a little further in favour of the disabled person. The amendment makes the responsibility of the local authority unambiguous. It makes it clear that someone who is eligible for direct payments will receive them unless it is unreasonable to make that assumption. The test of reasonableness implied in the amendment is one that is well understood in professional local authority circles. I hope therefore that the House and the Minister will support the amendment. I beg to move.

Baroness Darcy (de Knayth)

My Lords, I added my name to the amendment because I felt that it would be useful to have this message spelt out on the face of the Bill. As the noble Baroness, Lady Hollis, reminded us, in Committee the Minister said that an aggrieved person would be able to seek redress from the local authorities' complaints procedure, the ombudsman, judicial review or a combination of all three. But none of that is well known to the public at large.

I am sure that none of us, including the Minister, wants disabled people to go through such lengthy and difficult procedures. Therefore, while there may not be a strict legal requirement to repeat the need for reasonableness on the face of the Bill, there are good reasons for doing so. It will remind local authorities of their obligations in respect of direct payments and inform disabled people of their right to be treated reasonably. It will also remove any doubt that may arise in future, through some legalistic quirk of fate, that local authorities may not unreasonably withhold direct payments from an otherwise qualified person. I hope therefore that the Minister feels able either to accept the amendment or to table something similar to go on to the face of the Bill.

Lord Addington

My Lords, if we are to state that people who are qualified to receive direct payments should receive them if they so choose, and there is a legal requirement for them so to do, why not say it as loudly and clearly as possible? The best way of doing that is to include the requirement on the face of the Bill. If it does not change anything, it will at least ensure that the message is unambiguous. I support the amendment.

Lord Campbell of Croy

My Lords, Amendment No. 3 is word for word the same as an amendment moved at Committee stage. I do not believe that much has changed since then. At that time my noble friend Lady Cumberlege convincingly pointed out that the amendment was not necessary. Why, therefore, is it suddenly felt to be necessary?

I do not believe that while Bills are progressing through Parliament one should keep inserting statements that local authorities or other bodies should not act unreasonably. As my noble friend said at the last stage, it would he illegal for a local authority to act unreasonably, and nothing has changed since then.

Baroness Cumberlege

My Lords, local authorities already have a responsibility to act reasonably. No amendment to the Bill is needed to prevent local authorities from exercising their discretion unreasonably. In any case, local authorities should not make whimsical decisions. They should consider whether direct payments are appropriate for someone who wishes to receive them, taking into account all relevant matters. That includes a person's wishes and ability to benefit from direct payment, as well as other considerations. We would normally expect that to mean that like clients are treated in like ways. Local authorities should not treat clients with similar needs and a similar ability to manage direct payments differently unless they have good reason to do so. If there is a good reason, we should not legislate to prevent them from taking it into account. They cannot treat like clients differently unless it is reasonable to do so.

My noble friend Lord Campbell of Croy said that a similar amendment was moved at Committee stage. That is correct. In her speech at that stage the noble Baroness, Lady Hollis, said that the exercise of a local authority's discretion must be capable of being reviewed against a test of reasonableness in the appeals procedure. That is already the case without this amendment, since local authorities must exercise their discretion reasonably. As the noble Baroness said, people can use the complaints procedure to challenge the local authority's decision not to offer them direct payments. They can expect to be told the reasons for the local authority's decision. If anyone is dissatisfied with the outcome, he or she may ask the local government ombudsman to investigate or apply to the courts for judicial review.

To go any further would effectively limit local authorities' discretion to decide whether direct payments are appropriate in each individual case. Local authorities must have discretion to base their decisions on the wider interests of the local population—for instance, taxpayers and other service users—and not just on the interests of the particular individual concerned. They have a responsibility to obtain value for money and to use their resources to meet the needs of all people in need of assistance in their locality, not just one individual.

Local authorities must act reasonably. It would not be appropriate to restrict their discretion further. I urge your Lordships not to support the amendment.

5.30 p.m.

Baroness Hollis of Heigham

My Lords, the noble Lord, Lord Campbell of Croy, and the Minister have basically said the same thing—that the amendment is unnecessary because local authorities already have to act reasonably. When moving the amendment, I tried to say, although obviously I was unclear, that the current test of reasonableness embedded in local authorities' procedures is a high standard of proof—that only if no reasonable authority could have acted in such a way would a test of unreasonableness be upheld. That is quite tough compared with what the wording in the amendment would ensure. It requires that local authorities may not unreasonably withhold their consent.

However, the Minister's words are in Hansard and they do enlarge on the issue. Given the time and the discussion we have had, I have no wish to press the House for a view on the matter. With the leave of the House, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 4: Page 1, line 18, leave out from ("authority") to end of line 19 and insert ("shall, in determining how much to pay a person under that subsection, not require him to contribute more than it appears to the authority that it is reasonably practicable for him to contribute").

The noble Baroness said: My Lords, Amendment No. 4 also visits an issue which we discussed in Committee. I was not entirely happy with the answer we received at that time and we hope that the Minister may have thought again. One of the reasons for bringing back on Report amendments which were discussed at Committee stage is in the hope that the Minister will have taken further opinions on the issue, reflected further and decided to move a little beyond the Government's position in Committee.

The amendment seeks to provide for a more equitable basis for levying charges. The basis for local authority charging for social services—for example, for home helps—is founded in the 1983 Act. It says that an individual may be charged where the local authority is satisfied that it is, reasonably practicable for him to pay".

Where local authorities provide a free service, the individual will receive the service free; where his means are very modest he may contribute little or nothing for a service for which a charge must be made. What the amendment seeks to do is to bring the same wording, "reasonably practicable", of the 1983 Act which applies to charging policies for services into the charging policy effectively for direct payments. There will then be a level playing field between the two so that the assumptions about charging which apply to services will apply to direct payments in which an income will be offset against the money received.

The words of the Bill do not do that. Instead, the Government use the phrase, have regard to his financial circumstances".

That is a much harsher test than that of the 1983 Act, which uses the words "reasonably practicable". What this appears to presume is a means test, even though, where services are concerned, no means test is involved—the service is free.

If the Minister is anxious to ensure, as I believe she is, that there is a level playing field and that there should be no difference between the two, the best way of doing so is to have the same wording in the Bill. If we want local authorities to approach the charging claw-back on direct payments in the same way as they charge for services, we should have the same words. If the Minister wants them to do it in the same way, she should use the same words. If she does not want them to do it in the same way and there are different words, that will suggest different practices. The Minister has suggested to us that she does not want that to remain. We want the situation to be unambiguous.

In Committee the Minister said that she would issue Section 7 guidance to clarify the wording. But why issue guidance to clarify the wording of the Bill when one can clarify the wording by amendment of the Bill? Why seek to tidy up ambiguity by guidance and regulation when one can tidy up ambiguity on the face of the Bill itself? Yet, by conceding that, the Minister agreed that there could be cause for concern and that local authorities might need to have further regulation or guidance. Why go for clarifying it by regulation or guidance when one can do it on the face of the Bill? I very much hope that the Minister will accept that the simplest and cleanest way to ensure a level playing field is to have the wording of the 1983 Act applying to services applying also to the claw-back mechanisms of direct payments. If there is any difference in the wording, local authorities can be forgiven for thinking that the Government do not expect them to behave in like ways in like circumstances.

I have one final point. Will the Minister may it clear that in assessing charging local authorities should be asked to take into account any extra expenditure that may be incurred because of the service user's disability or frailty? It would be helpful to have the Minister's views on that point. I beg to move.

Baroness Darcy (de Knayth)

My Lords, I should like briefly to support the amendment which the noble Baroness has moved so clearly and comprehensively. In Committee I moved an amendment which sought identical means tests. I accept now that the word "identical" could present practical difficulties so I have now joined forces with the noble Baroness, Lady Hollis. I accept that we and the Government are at one in not wanting the means tests for services and for direct payments to allow a local authority to influence the decision either towards in-house services or towards private arrangements. The amendment seems to be a practical way of achieving that. I hope the Minister will agree to it.

Baroness Cumberlege

My Lords, we share the concern, as the noble Baroness, Lady Darcy (de Knayth), has said, that neither people who receive services nor those who receive direct payments should be treated more favourably than the other. On the question of the financial contribution which each is expected to make towards the cost of their care, they should be treated alike.

The Bill gives local authorities the discretion, when calculating the amount of direct payments, as to whether they require the person concerned to make a financial contribution. It does not require authorities to do so. If a local authority considers that an individual should contribute to the cost of his care, it would be unreasonable for the authority to expect him to contribute more than he can afford. The Bill also gives local authorities discretion on how they take someone's financial circumstances into account. This is intended to mirror the situation which currently exists in relation to charges for non-residential care where local authorities can decide whether to charge and how much to charge.

The Government's aim is to avoid perverse financial incentives in agreeing or refusing direct payments. As the noble Baroness, Lady Hollis, said, we believe that the best way to ensure equivalent treatment is to issue guidance under Section 7 of the Local Authority Social Services Act 1970. The guidance will stress that local authorities must treat people fairly and should treat both those who receive services and those who receive direct payments in an equivalent manner—that is, when considering the financial contribution that people make towards the cost of their care, those receiving direct payments will be treated in the same way under the authority's charging policy as they would have been had they been receiving the equivalent services. Of course, that still gives the local authority discretion over what charging policy is.

The Government have considered carefully the alternative of introducing language similar to that in existing legislation on charging, as is suggested in the amendment of the noble Baroness. However, to reproduce the words in existing legislation will not change the effect of Clause 1(2). We would still need to issue statutory guidance to ensure that direct payment recipients and service recipients received equivalent treatment. We have considered all of the options and do not see a need to amend the wording of the Bill. We believe that this amendment would have no effect. I urge your Lordships not to support it.

Baroness Hollis of Heigham

My Lords, before the noble Baroness sits down, even if she believes that additional guidance will have to be offered, will she explain the objection to the use of the same words? The Minister has assured us that the aim is to avoid unfairness and that guidance will still need to be issued so that the effect is the same, but what is wrong with using the same words?

Baroness Cumberlege

My Lords, we simply do not believe that it is necessary. The amendment as it is set out will have no effect, and therefore we believe that it is pointless to put it on the face of the Bill.

Baroness Hollis of Heigham

My Lords, the Minister says that the amendment is not necessary and that it will have no effect, but she has to have some words on the face of the Bill. Why do we not have the same words on the face of the Bill for direct payments as for services? That will make the situation unambiguous as far as local authorities and disabled people are concerned. The Minister may argue that it is not necessary, but she has not said why the same words should not be on the face of the Bill. What is wrong with having the same words?

Baroness Cumberlege

My Lords, I believe that I have made the situation perfectly plain. We do not want to clutter up the legislation with additional information that is not necessary. The amendment as set out here will have absolutely no effect. Therefore, we believe that it is ridiculous for the Government to accept it.

Baroness Hollis of Heigham

My Lords, I have not carried out a word count to see whether very many more words will be added, but I am convinced that this amendment will add considerable clarity to the intention of the Government. We agree with everything that the Minister has proposed. We want a level playing field. We do not want perverse incentives for people to move from charges to services, or hack to charges, because there are different financial implications in terms of what they have to pay. The easiest and most straightforward way to avoid any such misunderstanding is to use the same words on the face of this Bill as in the existing Act of 1983. I have not heard the Minister give a single reason why the words cannot simply be changed, because the 1983 words can replace the words in this Bill. If they need a little tidying up we have plenty of time to do it. We have all the Commons stage for that purpose. At least it will make clear what the Minister has in mind, instead of the Minister having to resort to guidance to explain what is in her mind.

I thought that legislation should be clear, simple and understandable. Our amendment would do precisely that on the issue of financial arrangements. I remain baffled. I understand why most of the time the Government do not accept our amendments: they cost money; they are ideologically unacceptable; they are administratively unworkable, or whatever. But I believe that as to a proportion of the amendments—perhaps 5 or 10 per cent.—if the Government had thought of them they would have proposed or accepted them. However, because they come from these Benches there is a knee-jerk reaction to resist, resist, resist. Here is an amendment that does everything that the Minister says she wants to do. It establishes a level playing field on the face of the Bill by repeating the wording used in the previous Act to establish the charging pattern for services. The Minister has not given one good reason why the words should not be changed, except that it is not necessary because we all know that it means the same thing anyway. If it means the same thing, why not use the same words?

Although I had not intended to do so, I seek the opinion of the House on this amendment.

5.44 p.m.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 75; Not-Contents, 105.

Division No.3
CONTENTS
Action,L.	Borrie,L.
Addington,L.	Carmichael of Kelvingrove,L.
Barnett,L.	Clinton-Davis,L.
Beaumont of Whitley,L.	Cocks of Hartcliffe,L.
Birk,L.	Craigavon,L.
Blackstone,B.	Darcy(de Knayth),B.

David, B.	McNair, L.
Desai, L.	McNally, L.
Donaldson of Kingsbridge, L.	Mallalieu, B.
Donoughue, L.	Mar and Kellie, E.
Dormand of Easington, L.	Masham of Ilton, B.
Dubs, L. [Teller]	Mason of Barnsley. L.
Falkland, V.	Merlyn-Rees, L.
Farrington of Ribbleton, B.	Milner of Leeds, L.
Fisher of Rednal, B.	Monkswell, L.
Geraint, L.	Morris of Castle Morris, L.
Gladwin of Clee, L.	Nelson, E.
Graham of Edmonton, L.	Nicol, B.
Gregson, L.	Palmer, L.
Grey, E.	Prys-Davies, L.
Hamwee, B. [Teller.]	Rea, L.
Harris of Greenwich, L.	Redesdale, L.
Haskel, L.	Richard, L.
Healey, L.	Rix, L.
Hollis of Heigham, B.	Robson of Kiddington, B.
Holme of Cheltenham, L.	Saltoun of Abernethy, Ly.
	Sefton of Garston, L.
Hughes, L.	Simon, V.
Jay of Paddington, B.	Stoddart of Swindon, L.
Jeger, B.	Strabolgi, L.
Jenkins of Hillhead, L.	Taylor of Blackburn, L.
Jenkins of Putney, L.	Tordoff, L.
Judd, L.	Warnock, B.
Kilbracken, L.	Wedderbum of Charlton, L.
Kirkhill, L.	White, B.
Lawrence, L.	Williams of Elvel, L.
Longford, E.	Williams of Mostyn, L.
Mackie of Benshie, L.	Young of Dartington, L.

NOT-CONTENTS
Addison, V.	Faithfull, B.
Ailsa, M.	Ferrers, E.
Archer of Weston-Super-Mare, L.	Flather, B.
Arran, E.	Fraser of Kilmorack, L.
Ashbourne, L.	Gage, V.
Barber of Tewkesbury, L.	Gardner of Parkes, B.
Beloff, L.	Gilmour of Craigmillar, L.
Blaker, L.	Goschen, V.
Blatch, B.	Gray of Contin, L.
Boardman, L.	Hamilton of Dalzell, L.
Bowness, L.	Harding of Petherton, L.
Boyd-Carpenter, L.	Harlech, L.
Braine of Wheatley, L.	Harmsworth, L.
Brentford, V.	Hayhoe, L.
Brigstocke, B.	Hemphill, L.
Brougham and Vaux, L.	Holderness, L.
Burnham, L.	Hooper, B.
Butterworth, L.	Howe, E.
Cadman, L.	Inglewood, L.
Campbell of Croy, L.	Kinnoull, E.
Carnegy of Lour, B.	Lindsay, E.
Cannock, L.	Liverpool, E.
Chalker of Wallasey, B.	Long, V.
Charteris of Amisfield, L.	Lucas, L.
Chelmsford, V.	McColl of Dulwich, L.
Chesham, L. [Teller.]	Mackay of Ardbrecknish, L.
Clanwilliam, E.	Mackay of Drumadoon, L.
Clark of Kempston, L.	Macleod of Borve, B.
Colwyn, L.	Merrivale, L.
Courtown, E.	Mersey, V.
Craig of Radley, L.	Miller of Hendon, B.
Crathorne, L.	Milverton, L.
Crickhowell, L.	Mottistone, L.
Cuckney, L.	Mountevans, L.
Cumberlege, B.	Mowbray and Stourton, L.
Dean of Harptree, L.	Moyne, L.
Denham, L.	Munster, E.
Downshire, M.	Napier and Ettrick, L.
Elles, B.	Newall, L.
Elliott of Morpeth, L.	Northesk, E.
Elton, L.	O'Cathain, B.

Orkney,E.	Skelmersdale,L
Park of Monmouth, B.	Soulsby of swaffham Prior,L.
Plummer of St. Marylebone,L.	Strange,B.
Rankeillour,L.	Strathclyde,L [Teller.]
Rees,L.	Sudeley,L
Rennell,L.	Swinfen,L.
Renwick,L.	Thomas of Gwydir,L.
Romney,E.	Trefgarne,L.
	Trumpington,B.
Seccombe,B.	Ullswater,V.
Shaw of Northstead,L.	Wade of Chorlton, L.
Shrewsbury,E.	Whitelaw,V.

Resolved in the negative, and amendment disagreed to accordingly.

5.52 p.m.

Baroness Cumberlege moved Amendment No. 5: Page 1, line 19, at end insert— ("(2A) Subsection (2) above shall not apply in relation to the determination of how much to pay in respect of the provision of a service which, apart from this section, would be provided under section 117 of the Mental Health Act 1983 (after-care).").

The noble Baroness said: My Lords, this is a minor technical amendment to ensure consistency with existing legislation. Our intention is that local authorities should treat both those who receive services and those who receive direct payments in an equivalent manner. When local authorities decide the financial contribution people make to the cost of their care, they should treat both groups alike. Local authorities do not have the power to charge for services under Section 117 of the Mental Health Act 1983. These are aftercare services for people leaving hospital after compulsory detention under mental health legislation. This amendment is needed to make clear that that is also the case if direct payments are made instead of those services. Where local authorities do not have the power to charge, then neither should they have the power to take into account a person's financial circumstances when setting the level of his or her direct payment. I beg to move.

Baroness Hollis of Heigham

My Lords, we are happy to support the Minister's amendment. The Minister has just given the exact reply which, if only I had had access to the departmental staff, I should have given on the previous amendment. She wants words to say what they mean and to mean what they say and for them to be consistent with previous legislation. Obviously, that is wise, but I only wish that the same wisdom had been applied to the previous amendment because then we would not have needed to have a vote and to take up the time of Parliament as we did.

Of course, we support the intention to be clear. We support the idea that the Bill should say what is meant and for the provisions to be consistent with previous legislation. We should like such a principle to be accepted here and in all other aspects of the Bill. I do not know how the Minister could keep a straight face when she moved the amendment and gave her reasons for doing so, having stated precisely the opposite just five minutes previously. However, we support the noble Baroness on this amendment.

Lord Campbell of Croy

My Lords, I am afraid that I do not agree with the noble Baroness, Lady Hollis, who will not he surprised by that because I think that the reasons given for this amendment—about being consistent with other legislation in England and Wales—are quite different from the reasons given before the three recent Divisions when it was said that the amendments were not necessary.

Although I do not expect my noble friend the Minister to reply to me now and I do not want to hold up proceedings, I should like to raise a small but important point. In relation to the equivalent Scottish clause of the Bill, Clause 4, is my noble friend able to say that the Government are happy that there is no inconsistency between Clause 4 and any Scottish mental health legislation?

Baroness Cumberlege

My Lords, I thank the noble Baroness, Lady Hollis, for her generous comments, but should point out that no Section 7 guidance is involved here.

To reply to my noble friend Lord Campbell of Croy, I understand that no amendment is needed in Scotland as local authorities in Scotland have the power to charge for their equivalent to our Section 117 services. I commend the amendment to the House.

On Question, amendment agreed to.

Baroness Hollis of Heigham moved Amendment No. 6: Page 1, line 23, at end insert ("except where the person to whom payment is made is living alone or with another person who is unable to meet all of his care needs").

The noble Baroness said: My Lords, this amendment refers to the question of who may receive direct payments: relatives within the household and relatives outside the household. We explored the problem in Committee when a number of anomalies were raised. The Government are proposing to forbid by regulation the possibility of a disabled person employing a relative who lives in their home and paying them by direct payments. The Government are proposing to forbid by guidance—exceptions can be made—disabled people from employing a relative, such as a niece, who does not live within the household but lives, say, the other side of town.

In Committee the Government offered two arguments for extending the number of people who might not be paid with the direct payments. First, they said that they did not want to formalise informal care arrangements by paying relatives who were already offering family help. Secondly, the Minister said that the provisions offered protection for a disabled person who might not want to employ a relative and who would certainly find it harder to sack a relative than would be the case with any other employee. The Minister is right on that. Behind that lies a psychological truth which I shall share with the Minister: many disabled people receiving direct payments would prefer an impersonal employer/employee relationship which they control rather than to pay money to a family carer on whom they may depend. There is no difference between us on that point.

Having said that, however, I believe that the Government's position in their draft consultation paper goes too far and, as currently drafted, is too inflexible. When we explored this in Committee, we found that it produced all sorts of unnecessary tangles and complications. Although I respect the Government's concerns, I hope that the Minister will be able to accept the amendment which states that where someone is living alone or with someone else who is unable to meet all their care needs, they can employ a relative who is not a member of the household or living in the same house and pay that person with the direct payments. As I have suggested, such a person could be a niece or a brother-in-law living on the other side of the city.

There are two arguments behind our amendment. One relates to choice and the other to administrative practicalities. The Government have already conceded that local authorities may make exceptions with regard to relatives living outside the household who may receive direct payments. They may make exceptions in difficult situations, such as in rural areas where there might not be much choice. In ethnic communities there may be strong social and cultural pressures to employ only a relative within the family. The situation of someone with AIDS was also mentioned in Committee. All those examples relate to instances where it might not be possible to find someone from outside the household to act as a carer.

Perhaps I may cite another situation. I refer to the fact that somebody who receives direct payments may have fluctuating needs because of, for example, multiple sclerosis or severe rheumatoid arthritis. A relative living outside the home may be able to offer far more willing flexibility than would be possible within a formal employer/employee contract in which the carer clocks in for so many hours.

The first reason for saying that local authorities should permit disabled people to employ relatives who live outside the household for direct payments is that that will enrich and widen the choice available to disabled people of those they employ. Secondly—the practical argument—it would align the question of direct payments by local authorities with the system currently in operation within the ILF. The ILF permits disabled people to use direct payments to employ relatives who live outside the family home. The amendment would bring local authority practice into line with that of the ILF. It works well.

If we do not have the amendment, it could mean that a severely disabled person was receiving money from both sources. After all, direct payments from the local authority would go up to £200. ILF money comes in for the needs that can be purchased for the sum of between £200 and £500. One then clocks back to the local authority. Someone who needs two or three carers may well be receiving money from the local authority and the ILF. Let us say that a person's care package costs £350 a week. That means that they would be required to employ someone who is not a relative within or without the household for the local authority money but could employ a relative who lives outside the household for the tranche of money that comes from the ILF. That is silly. It means that instead of having one or two people producing continuous care, a disabled person has to chop and change employees in order to fit the different rules applying to the local authority and the ILF for no good reason.

Thirdly, if a relative is living outside the home and is giving up the opportunity of paid work to work for a disabled person, why should that person not be paid? As with the ILF, we believe that it might be unreasonable to pay a relative living in the home because that constitutes being part of a family. However, a relative living outside the home (niece, nephew, brother-in-law) cannot be said to be part of the immediate family in the same way. It is not unreasonable that they should he paid and not merely exploited.

I believe the Government are afraid that unreasonable pressure would be applied where the relative lives outside the home. But that can be vetted by the local authority ensuring that the social worker talks through with the disabled person, at the point when the care package is constructed, the advantages and disadvantages of employing a relative who lives outside the home. If, after going through the advantages and disadvantages, the disabled person still thinks that that is the best choice for him or her, that choice should be respected. It is not the Government's job to restrict the choice of a disabled person, providing that that choice is an informed one and public money is not being abused. Otherwise, the Government are infantilising disabled people—protecting them from the consequences of employing a relative in case they cannot sack them. It is not the Government's job to do that.

The whole point of the Bill is to treat disabled people as moral adults, able to make informed and realistic choices about whom they employ to care for them with direct payments. If the disabled person seeks to employ a relative living outside the home, as they currently do with the ILF—it is not a requirement but a right—which may be sensible not just for those living in rural areas, ethnic communities or someone with AIDS but in a whole range of circumstances that we cannot currently envisage, then disabled people's choices should be respected. I hope that the House agrees. I beg to move.

Baroness Faithfull

My Lords, the noble Baroness puts forward a persuasive case, but I am worried about various aspects on a human level. I am worried about the employer-employee relationship. Elderly people needing help from a relative outside the home are not always objective. They will say things such as, "This is my niece. I am very fond of her. I do not think that she does the job awfully well, but she is my niece and she is out of work, so I would like her to have the job."

To provide good help for the disabled person there needs to be a proper, businesslike arrangement between employer and employee. I understand the points made by the noble Baroness. But if a disabled person has care from someone outside who is not a relative, that brings in another stream of interest.

What is a relative? Is it a cousin? Is it a niece? Have we qualified who is a relative? I feel that out of generosity a handicapped person who needs someone to help will not choose wisely. They will choose kindly. We should stand by the proper, businesslike employer/employee relationship.

Baroness Darcy (de Knayth)

My Lords, I put my name to the amendment, because, although I agree broadly with the proposal not to allow relatives to be paid as a helper—I listened to what the noble Baroness, Lady Faithfull, said—I have reservations. I believe, incidentally, that a relative is defined in the consultation document. I believe that it should be possible to employ a close relative living elsewhere without treating the case as exceptional. As the noble Baroness, Lady Hollis, said, the practice of employing a family member not living in the same household has worked well with the ILF. Why should it not work with direct payments?

Another important point relates to the Government's requirement, set down in the consultation paper at paragraph 33, that disabled people will be expected to make sensible arrangements so that they have adequate cover in an emergency. For example, if one of the usual assistants is taken ill I should have thought that it would be normal to ask a relative to stand by in case of emergencies. The current proposal would preclude payment to a relative in those circumstances. Is that reasonable or sensible? Perhaps the Minister will comment.

I come now to the question of the lodger and other persons living in, which the amendment does not cover. It is a point I raised in Committee. Paragraph 24 of the consultative paper and the Minister in Committee, at col. 411, say that such people cannot be paid unless they are people who have been specifically recruited to be live-in personal assistants. That means that a disabled person who has someone other than a close relative living in the household (a lodger or a friend) would be precluded from arranging for that person to become the helper unless the person came into the household after the disabled person had decided on direct payment.

The wording suggests that the person would have to be hired as a helper and then be given accommodation. That is too restrictive. It would rule out direct payments to people taking lodgers whom they subsequently decide to hire as helpers. There is surely nothing wrong with such a situation. It should be allowed. Under the ILF a lodger already in the house would be allowed. That is something we can perhaps clear up. I urge the Minister to think seriously about the question of the lodger or the friend; it is an important point. The amendment does not deal with it and, as I said, we may have to return to the point on Third Reading if the Minister cannot give us any words of comfort. Meanwhile, I support the amendment warmly.

Lord Campbell of Croy

My Lords, I shall say just a few words on what the noble Baroness has just said. She is right. For the purposes of consultation there is a definition in paragraph 24 of the consultation paper. It is clear, except for one point that I believe arises a great deal nowadays. At the end it says, "sister, or spouse, or partner". "Partner" is something which I think everyone understands but as far as I know it is not defined here or in other legislation.

Lord Swinfen

My Lords, I hope that my noble friend will take the matter away for study. There is the question of the position in rural areas and the difficulty of finding carers who are acceptable in certain ethnic groups, particularly certain strict religious sects. It would be useful to look at the matter and make certain that we have sensible provisions on the face of the Bill by the time that it becomes law.

Baroness Seccombe

My Lords, I feel that the employer/employee relationship would change the views of the family. Very often members of a family are only too glad that someone is coming in to help. Family members will give help willingly and voluntarily and through love. I feel that the exceptional circumstances about which we have heard provide the necessary flexibility and I could not support the amendment.

Baroness Cumberlege

My Lords, direct payments will be an alternative to community care services which would otherwise be arranged by the local authority. They are not intended to replace existing support networks within families and communities. As my noble friends Lady Faithfull and Lady Seccombe said, the relationship which someone has with family or friends who provide care is very different from the relationship someone has with a person who they are employing to provide care. The reason for the provision in Clause 1(3) is to avoid creating pressure for informal care to be put on a formal contractual basis.

We agree that there is a balance to be drawn between, on the one hand, preventing the formalisation of informal care and, on the other hand, not prohibiting sensible and appropriate arrangements. I can see that this amendment is also designed to find this balance.

In our consultation document we have set out our proposals for setting limits on who may be paid to provide care using a direct payment. As the noble Baroness, Lady Hollis of Heigham, said, we propose to make regulations under this provision which will prohibit people who get direct payments from paying their spouse, partner or a close relative living in the same household. In addition, we intend to issue guidance to say that it is not appropriate to use direct payments to employ or contract with close relatives who live elsewhere, or other people living in the same household, unless the latter are people who have been specifically recruited to be live-in personal assistants. Local authorities would have the power to make exceptions to this guidance in exceptional cases, where they were satisfied that there was no other way to find a suitable person to provide care. We are consulting on these proposals for regulations and guidance, and will take account of the consultation responses, and the comments of this House, before making our final decision.

Both the Government's proposals and this amendment seek to create a framework that sets some limits, but also contains flexibilities. The difference between us is that our proposals allow flexibility in the way those limits are applied to individuals, whereas this amendment allows flexibility in deciding which individuals are affected by the limits set in regulations. Our proposals apply the same rules to everyone, but allow for some exceptions if the circumstances merit it. This amendment applies one set of rules to one group of people, and a completely different set of rules to everyone else.

The noble Baroness, Lady Hollis, and the noble Baroness, Lady Darcy (de Knayth), referred to the Independent Living Fund. We are seeking to draw a balance between, on the one hand, preventing formalisation of care, as I have said, and, on the other hand, prohibiting sensible and appropriate arrangements. We believe that the ILF is a useful model and we propose to use the same restrictions in regulations as applied to the ILF. But there is no reason why that should be a blueprint. There are similarities between direct payments and the ILF but there are also differences. Direct payments will be part of mainstream provision and will potentially be available to a much wider range of people to pay for a wider range of services. They will also involve potentially much larger sums of money. We are seeking to provide the best framework for those circumstances. As I said, we are consulting on the restrictions that we propose to make in regulations and guidance.

The noble Baroness, Lady Darcy (de Knayth), asked how people would manage in an emergency when it may be sensible to use a relative. We are consulting on the restrictions and we shall consider very carefully whether that should be an issue which should be brought into final guidance.

The noble Baroness asked also about lodgers who live in the home. Again, we would expect local authorities to judge whether it is appropriate to make an exception to the guidance in those cases—I suppose so long as the lodger is not a partner, in which case we enter different territory.

The noble Baroness, Lady Hollis, said that relatives might offer more flexible hours than non-related employees. We have been told that one of the advantages of the direct payments scheme is that it allows a disabled person more flexibility. Disabled people can dictate the hours that should be worked and as far as we are aware they have not found it difficult to find people who are prepared to work flexible hours. Our proposals allow for exceptions as and when local authorities feel that that is appropriate.

We believe that our proposals are sensible and appropriate. They allow for some flexibility in order not to prohibit sensible arrangements and they are fair because they apply the same rules to everyone. Therefore, I urge your Lordships not to support the amendment.

Lord Swinfen

My Lords, before my noble friend sits down, will she tell the House whether there is a legal definition of the word "partner" in the sense in which it has been used this evening?

Baroness Cumberlege

My Lords, I have been on this territory' before when the noble and learned Lord, Lord Hailsham, asked me to define the verb to "ring-fence". On that occasion, I referred my noble and learned friend to the dictionary and said that I would find a definition for him. I will search.

6.15 p.m.

Baroness Hollis of Heigham

My Lords, I think that the definition which the Minister seeks may be found in social security legislation dealing with cohabitation. There is a notion of cohabitation which is well established in social security law. That may he helpful to the Minister.

I understand the anxieties raised by the noble Baroness, Lady Faithfull. But she referred to an elderly person perhaps employing a niece who lived outside the home. But as we have lost the previous amendment, elderly people will not receive direct payments. Therefore, the people who may feel pressured in the way that the noble Baroness described would not be eligible for direct payments in any event because those payments are confined to recipients aged under 65. Therefore, that situation is less likely to arise.

As regards who may be eligible and who counts as a relative—and I say this in response to the comments of the noble Lord, Lord Campbell of Croy, the noble Baroness, Lady Seccombe, and the Minister—we are talking about close relatives and the family. But one can see that if we look at paragraph 24 of the consultation document, we are not talking about close family at all. One of the problems is that the number and range of people caught by the provision is extremely wide indeed.

I have always understood "close family" to mean children, parents, siblings and spouse. But many others may be banned from employment as carers. Such a person may be somebody living outside the home, living across the city, who may be, for example, a trained nurse or someone who has worked for the local authority in the past as a home help carer. It may be somebody with a great deal of relevant experience who the disabled person would wish to employ because they are familiar and comfortable with each other. The Government's definition of a "close relative" is a parent, parent-in-law, aunt, uncle, grandparent, son, daughter, son-in-law, daughter-in-law and also a stepson or daughter, brother, sister, or the spouse or partner of any of those. Therefore, the partner of a stepson living across the city is regarded as a close relative. I suggest that the Minister may wish to consult a dictionary as regards what counts as a "close relative". Can a close relative really be said to be a stepson or stepdaughter or the partner of the stepson or stepdaughter? The partner of a stepson may well have been a nurse. Indeed, they may have come into contact through the needs of the disabled person. Apparently such a person is to be banned from being employed.

I would have far less of a problem if we were talking about immediate family. One understands that the Government may not wish to pay for the care that one expects to be provided within the family. I do not believe that there is any disagreement about that. We go along with the distinction which the Minister draws between somebody being within the household and outside the household. But the point is that the categories of people who may not be employed are so widely drawn that it seems to narrow unreasonably the choice of people from which a disabled person may wish to choose a carer who may have to perform such intimate tasks as, for example, toileting and bathing.

It seems to me that the real issue is to ensure that the disabled person is not pressured against his or her will or judgment to employ someone who they would rather not employ because, in some sense, that person is a member of the family. That is the real issue. Surely we can address that concern if we ensure that the choice for a disabled person is an informed one and that it is only possible with the consent of the local authority; in other words, the local authority must be satisfied that it is sensible and reasonable for a disabled person to employ, say, the partner of a stepson who lives across the city. Indeed, it is possible that such a person has only recently become the partner after starting off by being the nurse. However, at present, he or she would immediately be disqualified in such a situation.

As it stands, we cannot make the provision work. The best way of overcoming our difficulty would be for the Minister to give the House an assurance tonight—or, perhaps, return to the matter on Third Reading—that the discretion of the local authority, which the Minister said is in place, for difficult circumstances such as AIDS, ethnic minorities and, indeed, in rural areas, will he enhanced so that to employ any relative within the paragraph 24 definition the consent of the local authority must be sought and obtained. The discretion of the local authority should not be unduly fettered.

That may be the way for us to square the circle. The local authority must be satisfied that the disabled person is not being unreasonably pressured. If it was necessary for the local authority in such a case to be satisfied that it was reasonable to employ such a person, that would meet all of our objections. I hope that the Minister will be able to give us some encouragement in that respect, so that we may be able to revisit the matter on Third Reading.

Baroness Cumberlege

Yes, my Lords, we shall certainly have another look at the matter.

Baroness Hollis of Heigham

My Lords, in that case, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Swinfen moved Amendment No. 7: Page 1, line 23, at end insert— ("( ) The Secretary of State may issue guidance to authorities concerning the inclusion of a value added tax element in the calculation of a direct payment.").

The noble Lord said: My Lords, in moving the above amendment I shall speak also to Amendment No. 9. Amendment No. 8, tabled in the name of the noble Baroness, Lady Hamwee, is also included in this group. The purpose of the first amendment is to allow local authorities to meet the costs of value added tax if incurred in the purchase of care. The consultation document on direct payments issued shortly before the Committee stage—indeed, very shortly before—indicates that the Government do not aim to set a floor or ceiling on the amount of cash payment, but that they expect local authorities to make payments only where payments are at least as cost-effective as equivalent services. The amendment would ensure that the Secretary of State could issue guidance to local authorities concerning VAT, where such tax may be incurred. This is likely to be in a minority of cases, but without any element to cover VAT disabled people may face financial hardship or may have to reduce the number of hours of personal assistance that they receive.

After the Committee stage, my noble friend the Minister wrote a letter on VAT to our mutual noble friend Lord Jenkin of Roding, who unfortunately cannot be with us this evening. She was kind enough to send me a copy of that most helpful letter, which I appreciate. However, the letter did not cover all the circumstances. Currently, no VAT is payable on services provided, first, by agencies that are below the VAT threshold of £47,000 a year; secondly, by charities that provide care on a not-for-profit basis; and, thirdly, by agencies employing professional services of medically qualified staff, including unqualified staff under the supervision of qualified staff. However, the distinction between medical and social care is often hard to draw: for example, when is giving someone a bath considered to be social care or as being medically necessary?

So far as concerns direct payments, people who employ their own personal assistant, or who employ professional nursing staff, or agencies operating below the VAT threshold, would not be liable for VAT. But a problem may arise for the minority who may use the services of a home care agency which charges VAT on the services that it provides. VAT can only be recovered by people who are registered for such purposes, which includes local authorities when they are fulfilling a statutory obligation but not individuals.

Since the last stage of the Bill, I undertook some research through one of the care agencies in South Wales which is run by the John Groom Association for the Disabled, for whom I work. I am advised that 75 per cent. of the agencies in that area providing domiciliary care are liable to VAT as they are not medically qualified agencies. In the meantime, I have been talking to the United Kingdom Homecare Association which, although it has no firm figures, estimates that some 40 per cent. of agencies providing home care throughout the nation are liable to charge VAT.

The amendment would give the Secretary of State powers to issue guidance to local authorities about how VAT is handled. My concern is that disabled people who may choose to have some or all of their hours of personal assistance covered by agencies which are liable to that tax, are not unduly penalised for doing so. That is not likely to happen in the vast majority of cases as all the evidence so far indicates that the proportion of hours covered by such agencies is likely to be small. Indeed, the attraction of direct payments schemes for many disabled people is the opportunity to have choice and control through directly employing a personal assistant, rather than simply transferring from a local authority service to a private agency service.

Experience from the people who have received cash payments from the Independent Living Fund indicates that those who have used agencies have done so on a limited basis. As I understand it, only 44 per cent. of users in south-east London were using, or have used, agencies. However, as those agencies tended to be more expensive, users also tended to top up their ILF payments. The ILF has confirmed that currently payments from the fund include an element of VAT if the recipient indicates that that will be payable when he receives an offer.

In Committee my noble friend the Minister stated that, although VAT is not due on direct payments made by local authorities, some individuals receiving payments may have to pay VAT if receiving services from agencies which charge VAT; so I know that my noble friend is aware of the situation. However, service users will not incur VAT and if the intention, therefore, is to ensure that service users and payment recipients are dealt with in a similar fashion, people who use agencies and incur VAT as a result should not be disadvantaged in comparison with a service user. Without an element for VAT, some people using direct payments could face hardship. That is the situation that I should like to see addressed through guidance.

The purpose of Amendment No. 9 is to ensure that payments include not only elements for VAT but also for national insurance contributions, tax, advertising and all the other costs of employing an individual. The Independent Living Fund or social services indirect payments schemes have never had the same financial commitment enjoyed by equivalent indirect payment. There is no logic to that, other than that disabled people have accepted much lower payments when the schemes originated because they were only too willing to break free from direct services.

By and large, one encounters similar overheads in managing one's own care to that experienced by a larger organisation in establishing similar provision. If one is running a small business and hiring and maintaining staff, costs such as sickness and holiday pay, insurance, recruitment costs, accountant and possible payroll support and employers' National Insurance contributions must all be taken into account in addition to the hourly rate. In most cases, the hourly rate and a small amount of holiday or sick pay is all that is presently offered by the user—and, indeed, to the user—by the payer.

I understand that the Government are likely, through my noble friend the Minister, to tell me that it is the responsibility of individual local authorities to make such decisions. In Committee, my noble friend said that she believed that it should be left to local authorities to decide what the level of direct payments should be. However, when replying to my amendments I wonder whether my noble friend can let us know whether she is prepared to refer the matter to the Technical Advisory Group so that those who arc looking into the technical aspects of applying the Bill can take a proper look at the problem. I beg to move.

6.30 p.m.

Baroness Hamwee

My Lords, Amendment No. 8 is in my name. I shall seek not to repeat too much of what the noble Lord, Lord Swinfen, has said with regard to VAT as the amendment is addressed to the same issue although it goes rather further. As the noble Lord has explained, not all care agencies are able to avoid charging VAT, if I can put it that way round. This amendment seeks to tackle the problem of those who wish to purchase services from an agency. That, of course, will not comprise all the clients to whom this Bill is addressed, nor all the agencies. Therefore, to that extent, it is a relatively confined problem. I have sought to suggest a way in which the advantages of local authorities with regard to VAT are retained without putting local authorities and clients back into the position from which we are seeking to move them. The financial memorandum to the Bill states that the provisions of the Bill will be implemented within existing resources. That is not quite the same as saying that it will be cost neutral, because it raises the spectre that it might be an income-generating provision for the Government, in that VAT will have to be charged and paid—and will therefore accrue to the Exchequer—where it is not at present. I hope that the Minister can reassure noble Lords that generating income is the last thing that is in the Government's mind with regard to the area we are discussing.

I suggest, through this amendment, that a client may use a local authority as his or her agent to purchase the care and in that way avoid VAT. I use the word "avoid" and not "evade". That may not be a technically sound suggestion. If it is not, I hope that the Government will recognise the problem and will be able to suggest another mechanism to resolve it. I am concerned that, if the VAT element—an extra 17.5 per cent.—has to be borne by the user, it will be an unnecessary and inappropriate constraint in the choice of service. I appreciate that, if it is borne by the local authority, in a sense that would mean moving funds around between tiers of government. However, I shall not discuss at this stage whether this VAT element will be recognised in SSA and grant. Perhaps that is too detailed a point to discuss now. However, it would be sad if what is really a peripheral matter affects—perhaps fundamentally—the choice of service.

Baroness Seccombe

My Lords, two years ago I was involved in securing care from an agency for a relation. Funds had to be found and VAT had to be paid. If the amendment were accepted, it would mean that people who received direct payments would be better off than those who had to find the funds for themselves. Am I right or have I got that rather muddled?

Baroness Masham of Ilton

My Lords, we have a problem, in that the microphone has become severely disabled; in fact, it has broken its neck. However, I congratulate the noble Lord, Lord Swinfen, on his research. For severely disabled people, employing carers can be complicated because it may involve a rota system comprising several carers. Insurance, holiday pay, maternity leave and other such matters have to he taken into account. Help may need to be provided in resolving those matters. Is it possible for people to receive such help even if they receive direct payments from the local authority, because these matters can be complicated? Many severely disabled people are living on their own without family support.

Baroness Darcy (de Knayth)

My Lords, I support the noble Lord, Lord Swinfen, as I have added my name to Amendment No. 9. He gave a clear and comprehensive explanation. I steered clear, nervously, of adding my name to a provision which concerned VAT matters, but nevertheless I support this whole group of amendments as they are important.

Baroness Gardner of Parkes

My Lords, I do not know whether my next point has already been discussed at an earlier stage, but I should say that a body can amass a fairly large turnover before it has to register for VAT. I should have thought that such a provision would encourage those using carers to use people who had small businesses or who were setting up in business. The provision may be a good one in that sense.

Baroness Cumberlege

My Lords, I understand your Lordships' anxiety which lies behind these amendments. The level of a direct payment must be sufficient to enable the recipient to buy the services the payments are intended to cover. It must also enable someone who gets a direct payment to purchase the services legally. By that I mean that a local authority cannot set a payment at such a low level that the only way someone could purchase the relevant services would be to break the law, by not, for example, complying with legal responsibilities to pay tax. If a local authority deliberately offers an amount in direct payments which would not enable the recipient to buy adequate services, taking into account any financial contribution he may be required to make, that is effectively the same as the local authority not offering direct payments at all. It would not be a proper exercise of local authorities' powers and it could be challenged.

The Bill leaves it to local authorities to decide on the level of a direct payment. To do this, the local authority will have to reach a view on how much it will cost the individual to buy the relevant service. The authority's assessment of costs will have to take account of the legal responsibilities involved. I can give a commitment to my noble friend Lord Swinfen that the Section 7 guidance that we shall issue will say that the direct payment should—taking into account any financial contribution that the authority is asking the individual to make towards the cost of his care—be sufficient for the individual to purchase the relevant service, and should take account of the fact that there may be legal responsibilities, such as paying VAT or national insurance, in doing so. However, local authorities also have a duty to obtain value for money, so the payments will not automatically cover specific costs where there is a more cost-effective way of securing the service. Local authorities cannot be required to fund the cost of a person's preferred method of purchasing a service if, in fact, a service of adequate quality can be purchased more cheaply in another way.

So, for example, the cost of the services may include a value added tax element, but it may not need to if the person can secure adequate services from a provider who is not required to charge VAT. It will be for the local authority to decide on an appropriate level of direct payments. Clearly the payment of VAT is something that individuals will wish to consider when deciding what arrangements they will make using their direct payments, just as they will take into account other factors which cause variations in cost and quality of service from different providers.

No amendment is necessary to enable the Secretary of State to issue guidance, as Amendment No.7 aims to do. Clause 3(3) already gives him the power to issue guidance by adding direct payments to the list of social services functions in Schedule 1 to the Local Authority Social Services Act 1970. Sections 7 and 7A of that Act authorise the Secretary of State to issue guidance and directions in relation to local authorities' exercise of their social services functions. Amendment No. 7 is therefore not required.

Amendment No. 9 raises the question of what being a "good" employer means. People have different views and different expectations about what a good employer is. It is not clear what the amendment means in this respect and it would therefore be difficult to implement, or enforce. It is a rather unclear and open-ended commitment. It could result in local authorities being required to set the direct payment at a higher level than they thought appropriate. That would interfere with their ability to use their resources efficiently and to help all the people for whom they are arranging services.

I now turn to Amendment No. 8. I understand the concern of the noble Baroness, Lady Hamwee, in that she wishes to see that people who receive direct payments are not disadvantaged with regard to paying VAT. I have already explained that, where people use their direct payments to purchase services upon which VAT is charged, they will not be able to recover the VAT. There is a special provision which enables local authorities to recover the VAT in relation to their non-business activities but there are strict limitations imposed by EC law on the bodies to which this provision can be applied. These limitations preclude members of the public, so VAT cannot be refunded to individuals.

Amendment No. 8 seeks to enable local authorities to recover the VAT which people who receive direct payments incur. There are two possible scenarios but neither appears to achieve what the noble Baroness intends. In the first a local authority pays an agency to provide a service to an individual. In that case, the local authority will be able to recover any VAT, but then it will not have made a direct payment. The Bill already allows for the possibility that people may continue to receive services arranged by the local authority or a combination of direct payments and services. If the local authority does not pay the money to the individual but pays it directly to the care agency, that is effectively what has happened. The individual does not receive or spend any direct payments.

In the second scenario, the local authority does make direct payments to the individual. The individual receives the payments and decides to purchase services from an agency which is required to charge VAT. Under Amendment No. 8 the individual may ask the local authority to act as agent and purchase the services on his behalf from the care agency. The individual passes the money hack to the local authority, which passes it on to the care agency. For VAT purposes, the supply would still be considered to have been made by the care agency to the individual, not to the local authority. The local authority is acting only as an intermediary. Even though the local authority may have paid the agency, it cannot recover the VAT.

I have already said that we intend to use Section 7 guidance to say that direct payments should be sufficient—together with any financial contribution from the individual—for people to purchase the relevant service taking account of the fact that there may be legal responsibilities such as paying VAT. But local authorities also have a responsibility to obtain value for money, so the payments will not automatically cover specific costs where there is a more cost-effective way of buying the service. Individuals cannot recover the VAT they may have to pay. That is not something we can change. The payment of VAT is something that individuals will wish to consider when deciding what arrangements they will make using their direct payments, just as they will take into account other factors which cause variations in cost and quality of service from different providers. A difficulty arises if we seek to advantage purely for VAT purposes those receiving direct payments but not those who pay for their own care. As my noble friend Lady Seccombe said, we believe that that would be a very unfair arrangement.

My noble friend Lord Swinfen asked whether we would refer the question of paying VAT to the technical advisory group. The general issue of matters which will affect the level of direct payments has already been considered by the technical advisory group, but I have mentioned what we intend to say in guidance. I hope it will be reassuring if I say that the technical advisory group will be consulted on that guidance and we will be undertaking a wider consultation generally.

The noble Baroness, Lady Hamwee, asked whether I could give an assurance that generating income is not in the Government's mind. I can give that very firm assurance.

The noble Baroness, Lady Masham, asked whether someone could obtain help from the local authority on VAT issues. Local authorities may offer advice but probably the best way to obtain guidance is through Customs and Excise. The noble Baroness asked whether services will be provided by local authorities. The purpose of direct payments is that they are instead of services which are provided. It is possible for a recipient to receive both direct payments and services together, but clearly one would not have a home help and then receive direct payment to pay for a home help. I hope that I have made that matter clear. The noble Baroness looks mightily puzzled and perhaps we can discuss it afterwards.

We believe that Amendment No. 8 is ingenious but we do not believe that it achieves its desired effect. If the local authority purchases the services, then VAT may be recovered but no direct payment is made. If the local authority purchases the services acting as the individual's agent, then the supply is to the individual and the local authority may not recover the VAT. We believe that the amendments should not be supported.

6.45 p.m.

Lord Swinfen

My Lords, I thank my noble friend for a long and comprehensive reply. I was encouraged when she indicated that all proper taxes and so forth must be included in the grant. However, I was a little disappointed when she gave me the impression that people in receipt of grants might lose some of their independence by not being allowed to use the care agency that they particularly want in case there is a charge for value added tax.

I am grateful that some of these matters will be considered by the technical advisory group and by other bodies when my noble friend and those in her department are taking advice. I wish to read the reply because it was long and complicated and I shall reserve my right to come back to the matter on Third Reading. In the meantime, I beg leave to withdraw the amendment.

[Amendments Nos. 8 and 9 not moved.]

Lord Addington moved Amendment No. 10: Page 1, line 27, at end insert— ("( ) Regulations shall provide that each local authority shall ensure that recipients of payments under subsection (1) above have access to personal assistance support services to help with the management of direct payments.").

The noble Lord said: My Lords, Amendments Nos. 10 and 13 relate to advice and support for those who will be purchasing their care requirements for the first time. It takes no great leap of imagination to realise that many of the issues will be difficult and complicated for people to deal with, in particular those who have not previously purchased their own community care requirements. The vast majority of us when confronted by a new form, shiver when we first see it and wonder what it means. I wonder how many noble Lords are totally familiar with legalese and how often they see it. It is frightening to many of us.

Both amendments provide for ways in which support can be given. Amendment No. 10 is similar to an amendment tabled in Committee and is put forward in hope and expectation. It provides that guidance shall be given. However, if the Government have not changed their decision about such support being on the face of the Bill, we ask them to consider Amendment No. 13. That provides that the Government will be able to give support and is tabled in response to a reply given by the Minister in Committee. She stated: We intend to issue guidance to local authorities to ensure that they are aware of the importance of support. However, we feel that to go beyond that and give local authorities a legal duty to provide advice and assistance would be onerous and probably inappropriate".—[Official Report, 15/1/96; cols. 389.]

Amendment No. 13 merely enables the Government to give guidance and is therefore in line with the Government's own thinking. Without such support many people who are supposed to benefit from direct payments will not be able to do so simply because they will be unable to understand the system. They will be frightened off, or, even worse, some people will not be able to follow through and give the correct help to the employees and may have legal action taken against them.

There is a practical problem as regards understanding and implementing the regulations. Surely some direct form of guidance would be appropriate and I invite the Government to accept Amendment No. 13 if they cannot accept Amendment No. 10. Such advice is vital to the operation of the scheme, which we all hope will work. I beg to move.

Baroness Hollis of Heigham

My Lords, I am happy to support the amendments. I should prefer a regulatory power. However, a Section 7 guidance might meet the point, as the noble Lord said.

The issue is simple. Many disabled people who have only received services from a local authority would prefer to receive cash payments to buy those services but are apprehensive about being an employer. People who have been employers are familiar with the situation. However, as a mother in full time work, with two young children, employing a mother's help, I found it difficult to cope with national insurance, tax and all the other requirements of an employer. Many disabled people will be similarly nervous, especially as they may need to employ not one mother's help but two or even three carers, some of whom may be on the PAYE system or self-employed, as well as turning to the back-up support of an agency.

It is easy to make mistakes. The ILF has experience of people who have done so and who have run up arrears of national insurance, tax or the like. But whereas someone like myself in full-time work was able to throw money at the problem (if I may use that expression) and sort it out with the tax and national insurance offices, a disabled person might not have the finances to sort out the financial problem retrospectively.

Most local authorities recognise that when skilled people find themselves unemployed and, perhaps with a redundancy payment in hand, consider moving into self-employment or setting up a small business—they may wish to start a taxi service, a sandwich delivery service or engage in desktop publishing, all small businesses which I was involved in establishing in local authority days—the biggest single obstacle is the ability to cope with the paperwork as an employer. That is what deters most people when employing someone else. They need to be able to cope. Most local authorities, including my own, have enterprise agency trusts precisely to give the wrap-around support and guidance to help small businesses avoid being broken by bureaucracy in the first two years of trying to fly.

What is available in most authorities for a fit and able person starting up a small business employing an individual should also be available to a disabled and unfit individual employing someone. An employer who employs an individual performs in the same way as a small business. It makes good sense. The amendment ensures that direct payments are properly spent and there is no risk of misuse—I do not say abuse—of public moneys. It ensures that the disabled person acts as a good employer. He does not rely on cheap labour and casual arrangements which leave the employee without adequate holidays, sick pay or the like. The amendment avoids the risk of financial problems. With the knowledge that there is a support package in place, many more disabled people will take the risk of moving from services to cash payments.

We want the Bill to succeed. We know that the Minister wants the Bill to succeed. We want local authorities to take on this provision with goodwill. But we also want disabled people to have the courage to manage their own affairs. They will do so with the support package. They will not do so if there is no support package. If the Minister cannot provide by regulation, will she please use her best endeavours to ensure that the provision is in place by guidance.

Lord Swinfen

My Lords, the measure to extend cash grants to people who have community care and wish to manage their own care will, I fear, have limited success unless support services are also available. This is, I understand, the view of organisations such as the British Council of Organisations of Disabled People and the Disablement Income Group, both of which have considerable experience. They argue that many more people could become confident and competent employers of their own personal care assistance if practical advice, training and other support were provided. Support for people who are managing their own personal assistance arrangements goes beyond the provision of leaflets about the legal requirements for tax and national insurance. Information on a range of issues has to be up to date and available to each individual as he embarks upon independent living.

It is important that resources are made available for the production of written material for direct payment users and that organisations with a track record of producing guidance are involved in its production. A handbook for direct payment users would be a step in the right direction. I hope that the Government will make resources available.

The Earl of Mar and Kellie

My Lords, I support my noble friend's amendments. Last week I visited a lady in Alloa. She has cerebral palsy and receives direct payments. She has achieved her own specially modified home through her local housing association after many years of having to live in residential care. The lady is determined to live independently with 24-hour care, and, to many people's surprise, she is successful. She cannot tackle wages or other employment issues. Those are handled for her by the Whins Independent Living Scheme set up by Central Region social work department. However, she can select her own assistance and prepare on the computer the 24-hour rotas. She lends her staff in emergencies to other members of the scheme. Quite simply, the amendment would enable that situation to occur in England and Wales.

Baroness Cumberlege

My Lords, both amendments deal with the support which will be provided to people who receive direct payments. I agree wholeheartedly with the noble Lord, Lord Addington, that forms can be very intimidating. As the noble Baroness said, employing others is not an easy option. Amendment No. 13 also deals with the choice available to people who receive direct payments. On the question of choice, we have already said that we hope local authorities will allow people who receive direct payments as much freedom as possible in how they use them. But we have also said that ultimately the authority must be satisfied that the money is appropriately spent.

Both amendments seek to ensure that local authorities provide advice and support to those people who receive direct payments. It is not necessary to amend the Bill to enable local authorities to do that. The Government agree that experience to date has shown that direct payment schemes work better where there is support, and we intend to encourage local authorities to do so. We see this as a matter of good practice.

We shall be issuing practice guidance on direct payments in addition to Section 7 policy guidance. Our practice guidance will cover the issue of support to direct payments recipients and will stress its importance. We shall be discussing the content of both sets of guidance with the direct payments technical advisory group and we shall also consult more widely on both sets of guidance before they are issued. We have already said that we intend to tell local authorities that they should inform people to whom they are offering direct payments that they may have responsibilities as employers before the individual decides to accept direct payments.

Amendment No. 13 talks about safeguarding the terms and conditions of people who are employed by those who receive direct payments. People who use their direct payments to employ staff will have the same legal liabilities as every other employer. That means that those who are employed will have the same safeguards as other employees. I do not think that it is either necessary or desirable to attempt to use the legislation to do something different for this particular group of employees than for the workforce generally. Nor do I think it right that the Secretary of State should tell people who receive direct payments what terms and conditions of employment they should use.

Amendment No. 13 places a duty on the Secretary of State to issue guidelines on the issues of choice and employment terms. We have already said that we intend to issue guidance and that we shall consult on that guidance in draft. But we do not think it right to use the Bill to limit the Secretary of State's discretion over what that guidance covers or contains.

The Government are also considering producing a guide to managing direct payments for the people who receive them. We intend to discuss the matter with the technical advisory group to see if it thinks that that would be useful and, if so, what it might contain. If we do produce such a guide I am sure that it would cover the issue of employing staff, although I must stress that it would not be an exhaustive, authoritative guide on employment liabilities. That would not be appropriate. Authoritative information and advice are already available from the appropriate sources such as the Inland Revenue and Contributions Agency. It would not make sense to attempt to duplicate. In addition to the guidance we shall issue, we intend to produce training materials to help local authorities train their staff to implement direct payments. We have not yet decided what exactly to produce, as again we intend to discuss the matter with the technical advisory group.

The Government intend to encourage local authorities to provide support or arrange for it to be provided by some other agency such as perhaps a voluntary organisation of disabled people. We do not, however, think it right to go beyond that and require local authorities to provide support, as Amendment No. 10 proposes. We think that it should be left to local authorities to decide on the level and type of support they provide, taking into account local needs, circumstances and priorities. Local authorities are best placed to decide what is appropriate, just as, for community care generally, local authorities decide on the level and nature of services to arrange. It is clear that direct payments will only work with the commitment of local authorities to the policy. I am sure that authorities who want to make direct payments a success will want to help and support direct payments recipients.

Lord Addington

My Lords, that is an answer I have become used to hearing. "Yes, we agree with you in principle, but not here", is the sub-text. I would rather have the provision on the face of the Bill but it is not worth dividing the House now, although I may change my mind. The Minister's answer should be studied. There is one remaining stage of the Bill and considering the hour and the number of Divisions that have already taken place, it is appropriate that the matter should be taken away and considered. However, I give no guarantee that I shall not bring it back on Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7 p.m.

Baroness Cumberlege moved Amendment No. 11: Page 2, leave out lines I to 4 and insert— ("(5) If the authority by whom a payment under subsection (1) above is made are not satisfied, in relation to the whole or any part of the payment—

1. (a) that it has been used to secure the provision of the service to which it relates, or
2. (b) that the condition imposed by subsection (3) above, or any condition properly imposed by them, has been met in relation to its use,

they may require the payment or, as the case may be, the part of the payment to be repaid.").

The noble Baroness said: My Lords, in moving Amendment No. 11, I wish also to speak to Amendment No. 16. In Committee I gave a commitment to bring forward an amendment to give effect to the Delegated Powers Scrutiny Committee's recommendation. The scrutiny committee wanted the provision for local authorities to require direct payments to be repaid written on the face of the Bill instead of taking a regulatory power. Amendment No. 11 fulfils that commitment and Amendment No. 16 is a similar amendment to the Scottish provisions.

The amendments give local authorities the power to recover mis-spent funds; there is no duty placed on them to do so. As I explained in Committee, the Government do not believe that local authorities should have a duty to recover money which is mis-spent. To impose such a duty could force authorities to pursue trivial sums which could well be less than the cost of recovery. Giving them a power rather than a duty also gives authorities discretion to take into account hardship considerations when deciding whether to seek repayment. Local authorities' existing duties to ensure that they manage their resources with due regard for propriety and value for money are sufficient to ensure that they will seek recovery of funds in appropriate cases.

The amendments provide that local authorities may require all or part of a direct payment to be repaid where they are not satisfied that it has been used for the purpose for which it was intended or that the conditions properly imposed on its use have been met. A local authority will only make direct payments on the basis of someone's assessed needs, and it must be able to recover money which is not used to secure services to meet those needs. We intend to encourage local authorities to use their discretion to allow individuals as much flexibility as possible over how they use their direct payments but ultimately the authority must be satisfied that the money is appropriately spent. Local authorities have a duty to ensure that public funds are not mis-spent and so the final judgment on what is appropriate must remain with local authorities. They must be satisfied that the money is spent for the purpose for which it was intended.

The amendments also provide for direct payments to be recovered where the conditions on their use have not been met. This part of the subsection is needed to recover funds if payments are used to employ someone who is excluded by regulations under Clause 1(3) or the related Section 7 guidance we propose.

The amendments place the onus of proving that direct payments have been spent properly with the recipient rather than requiring the local authority to satisfy itself that the money has been mis-spent. That will ensure that local authorities can lay down the monitoring arrangements with which they expect people who receive direct payments to comply. Our guidance will emphasise the importance of local authorities making clear to people—before they start to receive direct payments—what the money may or may not be spent on, and what information on expenditure the authority will require for audit purposes.

The wording of the amendments ensures that local authorities can recover only that part of a direct payment which they are not satisfied has been spent properly to ensure that there is sufficient flexibility to deal with whatever circumstances arise. I beg to move.

Lord Campbell of Croy

My Lords, I thank my noble friend for explaining the reasons for the amendment. I moved amendments in Committee to enable discussion to take place on two suggestions by the Delegated Powers Scrutiny Committee. The Government then announced that they intended to adopt one of the options which was to include a general provision to give a power to local authorities and to do so in the Bill in the primary legislation. These amendments carry out that proposal out and I welcome them. The scrutiny committee had suggested that if that did not happen, then the regulations under subsection (5) should be subject to the affirmative resolution procedure in the first instance. That is not now necessary. However, I note that in Amendment No. 19 the noble Baroness, Lady Hamwee, proposes that all regulations under the Bill should be subject to affirmative resolution in the first instance. I shall keep my comments on that until we reach the amendment.

I welcome Amendment No. 16, the Scottish equivalent of the one being discussed. As a former member of the scrutiny committee—a new committee which is only three years old—I am glad to witness yet another case in which the Government have moved to adopt one of the committee's suggestions.

Baroness Masham of Ilton

My Lords, with all the problems of employing people which we have been discussing, can the Minister say what happens if someone who receives direct payments gets into debt?

Baroness Cumberlege

My Lords, I thank my noble friend for his support for the amendments. As regards the noble Baroness's question, the social services department would clearly wish to try to help the individual concerned if it felt that it was not a wilful debt but was incurred through lack of knowledge or something similar. Ultimately the social services department could decide that that person was unable to manage direct payments. In that case it would want to discuss the matter with the person concerned and possibly provide services instead of direct payments. However, it would be for the local authority to keep an eye on such situations and use its discretion.

On Question, amendment agreed to.

[Amendment No. 12 not moved.]

[Amendment No. 13 not moved.]

Baroness Faithfull moved Amendment No. 14: After Clause 3, insert the following new clause— REGULATION OF INDIVIDUAL INDEPENDENT CARERS (". After consulting all persons who appear to him to be interested, the Secretary of State shall establish a body for the regulation of individual providers of home care to recipients of payments under section 1(1) above.").

The noble Baroness said: My Lords, the purpose of this amendment is to establish a regulatory body to ensure that all providers of direct payments to recipients work to a satisfactory and uniform standard of conduct and practice. In that way, recipients of direct payments, and the local authorities responsible for those payments, would be assured of a high standard of care.

The regulatory body would be along the lines of a general social work council. The membership of such a body would be an important factor. It would be fair to all concerned that it should have representatives from among users, local authorities, professionals, voluntary and statutory bodies and other interested parties. It would regulate powers of competence, which would effectively mean the power to issue a licence to practise that in the event of incompetence could be withdrawn.

In 1970, Professor Parker of Bristol University carried out a study that made a compelling case for the setting up of a general social services council. At that time local authorities were entirely responsible for the work of their department. It was felt that it would be duplicating their responsibilities.

Times have changed. Local government increasingly assumes the role of enabler of services. We now have a purchaser-provider system involving the public, the private sector and the voluntary sector. Thus, it is necessary to ensure a uniform service of high quality, both within the local authority and throughout the country. The setting up of a general social work council would ensure that the recommendations made in this Bill would be carried out effectively; and, as I said earlier, would ensure uniform standards of conduct and practice, not only within the local authority but throughout the country. The medical and nursing professions, with whom social services work closely, have such a council. The time has come to set up a general social work council to monitor and help in the implementation of this Bill. I beg to move.

Lord Addington

My Lords, my Amendment No. 15 is grouped with this one. Although it takes a slightly different approach, the idea is the same. Those who provide care that can be purchased directly should be regulated in some way. Bad care, cowboy operators, or call them what you will, are apparent in most walks of life. It would be tragic beyond belief if people who do not know what they are doing enter this service and, for instance, advertise at cheaper rates. The capacity for a series of very unpleasant little tragedies is immense. Surely, some form of regulation should be in place. It does not matter which of these amendments—the one aimed at services or that aimed at individuals—is accepted. There must he some form of regulation. If the Minister can prove that there is already some form of legal framework to provide that, all well and good. But there must be protection. Without it, we tread extremely dangerous ground. Without regulation, we almost guarantee that at some point there will be a total abuse of this new system.

The Earl of Mar and Kellie

My Lords, to back up the remarks of my noble friend I give an example from Scotland. On Friday I was told of an appalling case history. Prior to the setting up of the local independent living scheme, a student with brittle bones had a directly employed carer who liked to receive a loan whenever the direct payment arrived. The carer would make the threatening remark, "You know, I could drop you". Not surprisingly, the student lived in terror of his carer. Subsequently, and fortunately, the student joined his local independent living scheme. After interview, the scheme manager was able to tackle the dismissal of that wholly inappropriate carer. The student's life improved dramatically with his next carer.

7.15 p.m.

Baroness Darcy (de Knayth)

My Lords, I direct my remarks mainly to the amendment of the noble Baroness, Lady Faithfull, dealing with the regulation of individual carers rather than agencies, as in the amendment of the noble Lord, Lord Addington. I stress that this does not relate to her general point, but to individual carers in the context of this Bill. I have enormous respect for the noble Baroness. As she knows very well, normally I happily follow her through any Lobby. However, this amendment worries me, as a disabled person who is at the moment lucky enough not to need personal assistance. It also causes concern to the British Council of Organisations of Disabled People (BCODP), many of whose members were in the forefront of the independent living movement which campaigned for disabled people to employ and train their own personal assistants and direct their care according to their own particular needs and ways.

BCODP feels that to impose upon disabled people carers who are professionally trained to do the job by people other than disabled people themselves would serve only to perpetuate the professionalism and administration of disabled people's lives. That is, after all, the very thing that this Bill tries to get away from.

I should like to ask the noble Baroness, Lady Faithfull, a few questions as to how her amendment might affect a disabled employer's freedom and independence. For instance, how would a disabled person be certain that he or she would be able to employ the personal assistants of his or her choice? Those persons may not be on the register. Would the local authority then restrict employment only to those on the register? Many users recruit from other European countries. They would lose a potential source of labour if new regulations meant that such recruits had to be accredited before starting work. Would they be safeguarded? Would local authorities set dual standards for the pay and conditions of registered and non-registered personal assistants? How would a national register respond to local and cultural differences? How would the standard for going on the register be decided? There are currently no qualifications or training for personal assistants; so what criteria are being suggested? Whose interests do they serve? Did the noble Baroness, Lady Faithfull, consult disabled people and their organisations on this amendment? Did she specifically consult the British Council of Organisations of Disabled People, which has great expertise in this area?

I appreciate that the noble Baroness's amendment states that the Secretary of State should consult all interested parties before establishing a regulatory body, but it also states that, after consultation, it shall then he set up.

I very much hope that, if such organisations as BCODP were not consulted, the noble Baroness might feel able to withdraw the amendment—I do not know whether she put it forward at this stage only for discussion. I hope that she will not press it and will be willing to consult disabled people's organisations. BCODP says that it is very willing to consult. It would be very regrettable if a move designed to protect instead ended up forcing people back into dependent relationships.

I should like to give two brief quotes from Cashing in on Independence, written by Zarb and Nadash. They are quotes from people who use direct payments. The first is: Some people impose their own ideas and I've still got mine, even if I haven't got my legs". The other is: Being able to chose the right person—personality, attitude to disability, how they fit in with the family. I'm able to retain my self respect". Those are examples of what it is all about. I hope that the noble Baroness will think very carefully and perhaps consult.

Lord Swinfen

My Lords, the general idea behind both these amendments is admirable. The amendment of the noble Lord, Lord Addington, which aims to ensure proper standards with care agencies, is very much easier to implement than is that of my noble friend. With a care agency, as with medically qualified agencies such as nursing agencies, at the moment one can insist that the senior person in the agency has obtained certain qualifications and that the individuals supplied by the agency are working under the proper supervision of qualified people in the agency.

However, with the individual carer who is recruited on an individual basis, the standards and work required are so varied that adequate qualifications will be extremely difficult to produce. A carer may perform some very complicated tasks providing care for six, seven or eight hours a day for a very severely disabled person. On the other hand, a carer may go for half an hour or an hour in the morning to get someone out of bed, washed and dressed and possibly go in at other times just to give a bath. A great deal of professional knowledge is not required, only a certain amount of genuine common sense.

I am delighted that both the amendments have been brought forward. It is absolutely essential that we make certain that the carers who will be produced once the Bill is implemented—I am sure that agencies will spring up throughout the United Kingdom and more disabled people will seek individual carers—have the right standards.

The amendment of the noble Lord, Lord Addington, is quite easy to implement because it deals with qualifications which managers and staff may have. The amendment of my noble friend Lady Faithfull is much more difficult for the individual. I should like to hear her reply to the questions put by the noble Baroness, Lady Darcy (de Knayth), although I doubt whether she had time to take down all the questions and may have to deal with them at Third Reading—she may write shorthand, whereas I do not, so she has the advantage of me.

I support the principles behind both the amendments.

Baroness Hollis of Heigham

My Lords, I shall be brief. Most of my points have already been made. We support the amendment moved by the noble Lord, Lord Addington, for the regulation of agencies. It seems to me absolutely right that where people operate a commercial service in a sensitive area of care, they should be registered and appropriate qualifications checked.

Like other noble Lords who spoke, I too have some unease about the amendment of the noble Baroness, Lady Faithfull. Nobody in this House can match her experience in the fields of health and social service. She is absolutely right to remind us that when we move to direct payments there is a risk of abuse. Clearly her amendment aims to offset that risk by seeking to professionalise the role of carer.

The problem is that professionalising the carer generates other problems in turn and may, but not necessarily will, displace the disabled person from the centre of the care network and again make him dependent on it. By virtue of their training, professionals bring assumptions to bear—that is what their training is about—which may not always be appropriate in the eyes of the individual. If they seek to retain their authority as employer, it can make things difficult.

Perhaps I may suggest a more appropriate route. The noble Baroness was right to remind us that there is a risk of abuse in this area and we should safeguard against it. I suggest that the right route is less through seeking a general council or regulation through that device than by revisiting the amendment so ably moved by the noble Lord, Lord Addington, a few moments ago, which seeks to ensure that local authorities have in place support and advice packages for disabled people which will strengthen them in their abilities and competences when it comes to selection and recruitment of staff. That seems to be the right way to work with the grain of what disabled people want rather than seek to meet the fears that the noble Baroness addressed along routes that they clearly do not want.

In those circumstances and given the strength of experience of the noble Baroness, I wonder whether the Minister may, on reflection, be able to move even further down the road of Amendment No. 10 moved by the noble Lord, Lord Addington, than she was previously minded to do.

Baroness Masham of Ilton

My Lords, I should like to add a few words. One needs flexibility and freedom for the individual but also one needs protection. The example given by the noble Earl, Lord Mar and Kellie, was a real one. Recently there have been some unpleasant cases of abuse in homes for handicapped people in Yorkshire. Disabled people could be very seriously abused even more so in their own homes where there are no other people around. Also there is now the growing problem of alcohol and drug abuse. Therefore, I hope that the Minister will look closely at some acceptable way of protection for the individual.

Baroness Cumberlege

My Lords, I am very much aware of the commitment and support of my noble friend Lady Faithfull for a social work council and regulation generally. The noble Lord, Lord Addington, and the noble Earl previously expressed their concern with regard to regulation in this area. We share that concern. We are now undertaking a major review of the way in which social services are regulated and inspected. Part of the remit of that review is to consider whether non-residential services should be subject to regulation. As my noble friend Lord Swinfen and the noble Baroness, Lady Hollis, pointed out, this is a very difficult area. I do not envy the task of the review team. But we consider that it would be jumping the gun to introduce regulation of the kind of independent provision about which we have been talking tonight in the context of direct payments while the whole subject is being reviewed.

The review was launched by the publication of the consultation document Moving Forward in September 1995, fulfilling our earlier promise to consider the need for statutory regulation of day and domiciliary care services. We appointed an independent assessor, Tom Burgner, to lead the consultation process. His job is to receive and assess written responses to Moving Forward and to hold direct discussions with relevant bodies. We believe that Tom Burgner's background as a successful public servant, most recently as Secretary of the Chancellors and Vice-Principals of the Universities, has equipped him well to distil the outcome of a major public consultation exercise and to make recommendations balancing all interests.

Responses to the consultation document have to be submitted to Tom Burgner by the end of this month. He will then make his report to Ministers in the summer. We expect the report to be published. How the issues are handled after that will, of course, depend on the recommendations and their legislative implications. We do not know what the outcome of the review will be and whether it will recommend that we regulate non-residential care. But once we know the outcome of the review we shall consider its implications for direct payments.

Baroness Faithfull

My Lords, I thank the Minister for her reply and also thank all those who have spoken. I believe that the noble Baroness, Lady Darcy (de Knayth), made nine points. I hope that she will forgive me if I do not go through all of them. First, if such a council were to be set up, it would include the voluntary organisations, as I said, and there would be co-operation between the two. Also, there must be co-operation between the local authorities and the voluntary organisations, to which she referred.

I was asked to move the amendment by the Directors of Social Services, the Association of Metropolitan Authorities and the Association of County Councils. It is not a question of one taking over from the other. It would be co-operation between the two. It is very important that the statutory and voluntary bodies work closely together.

I did not envisage that the amendment would deal with details. Those will be for the local authority and the voluntary organisations concerned. It concerns much more the policies and structures. However, I realise that we have not consulted with the bodies and we shall do so before the next stage. I shall also answer the nine points made by the noble Baroness. It is absolutely essential that there are joint policies between voluntary organisations and the local authorities.

Obviously, I do not intend to press the amendment. I should be grateful if I could discuss it further with the Minister and bring it up at the next stage of the Bill. I withdraw it for today.

Amendment, by leave, withdrawn.

[Amendment No. 15 not moved.]

Clause 4 [Direct payments]:

7.30 p.m.

Baroness Cumberlege moved Amendment No. 16: Page 3, leave out lines 26 to 30 and insert— ("(5) If the authority by whom a payment under subsection (I) above is made are not satisfied, in relation to the whole or any part of the payment—

1. (a) that it has been used to secure the provision of the service to which it relates, or
2. (b) that the condition imposed by subsection (3) above, or any condition properly imposed by them, has been met in relation to its use,

they may require the payment or, as the case may be, the part of the payment to be repaid.").

The noble Baroness said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

The Earl of Mar and Kellie moved Amendment No. 17: Leave out Clause 4.

The noble Earl said: My Lords, perhaps I may explain why I seem to be opposing the extension of this good scheme of reasonably sound principle to Scotland. I believe that it is a little too restrictive and I ask the fundamental question: is it necessary in Scotland? I have already given examples which indicate that the scheme is already being practised in Scotland to some extent and that it is legal.

I received two written Answers to parliamentary Questions which were extremely helpful. The first was a response from the noble Earl, Lord Lindsay, when I asked about local authority powers under Section 12 of the Social Work (Scotland) Act. He replied that a local authority may give cash to, any person aged at least 18 years who is in need, within the meaning of the Act, and requiring assistance in exceptional circumstances constituting an emergency, and where to do so would be more cost effective".—[Official Report, 25/1/96; col. WA81.]

Clearly two conditions need to be fulfilled before a local authority can give cash, so the latter part of the Answer was extremely helpful.

Similarly, on 7th February the noble and learned Lord, Lord Mackay of Drumadoon, in response to a further written Question, came up with the helpful reply that: Local authorities have powers under Section 10(3) of the 1968 [Social Work (Scotland)) Act to make payments to certain voluntary organisations which may be used to assist individual adults purchase community care services".—[Official Report, 7/2/96; col. WA25.]

I feel quite confident therefore that the schemes which are presently running in Scotland and any others which may come along are working from a legal base and are therefore not in need of further legislation.

I wish to mention three schemes that are already running in Scotland. Both in Strathclyde and Lothian there are centres for integrated living and the Lothian scheme is already helping with direct payments for people with physical handicaps, learning disabilities or mental health problems or who are elderly. The main problems encountered by that scheme relate to arguments with social security and taxation departments.

I have already mentioned in passing the Whins Independent Living Scheme. Perhaps I may give a number of examples of what that scheme does on a broad base. It provides a 24-hour package of assistance for an individual who is tetraplegic and returned to the community from an acute hospital unit following a road accident. It provides 24-hour assistance for an individual who is deaf and blind who moved into the community from long-term hospital care. It provides 24-hour assistance for an individual who suffered a brain injury and recently moved from the family home to his own home in the community. It provides 24-hour care Monday to Friday for a physically disabled person who has a learning disability: there are flexible care hours at the weekend when his elderly mother returns from hospital where she is currently receiving treatment for cancer. The scheme provides constant overnight assistance for a terminally ill person, providing support and respite for the daughter who is the main carer. It provides 24-hour assistance for a physically disabled single parent who has a young daughter, and assistance three days a week for a physically disabled child while attending a family centre. I am certain that noble Lords will agree that that is a broad client group rather wider than that envisaged by the provisions for England and Wales.

The Whins Independent Living Scheme is already providing 3,000 hours of assistance, which represents £500,000. It delivers that help to 100 members and employs 140 assistants. I should point out that the scheme helps members to select their own assistants; it trains the assistants; it offers employer services and will help clients work out rotas; it offers a relief scheme through which members often loan staff to each other in the event of illness and, if necessary, the scheme's headquarters will provide emergency staff. The scheme negotiates with the Department of Health and Social Security in Stirling. The key is that each member has the determination to live independently, and I praise the Central Region social work department for that bright idea.

In Scotland there is anxiety among social work departments and voluntary organisations in relation to the guidance and who will write it for Scotland; there is considerable anxiety also in relation to the age restrictions of 18 to 65 for the physically handicapped. We hope that that regulation will not apply in Scotland. Indeed, perhaps the Minister can tell us who will control the regulations in Scotland. I hope the answer is that it will be the Secretary of State for Scotland, and I look forward with interest to the Minister's reply.

To add a little political dimension to the argument, the issue I am raising concerns the classic problem of a split in administrative and legislative devolution. I am certain that it could be more easily dealt with in a Scottish parliament with less confusion—but I suspect that I would think that.

I believe that the Bill would give us duplication of legislation. In the case of many amendments that I have tabled in the past I have been firmly rejected on the grounds of being unnecessarily explicit when the Government believed that a more implicit approach was appropriate. I hope therefore that it can be established that this legislation is not necessary for Scotland and that fewer restrictions will be imposed for Scotland. I beg to move.

Lord Campbell of Croy

My Lords, I am glad to follow the introduction by the noble Earl, Lord Mar and Kellie. I say straight away that I have known him for many years, in fact since he was at school, and that he has an immense knowledge of social work in Scotland, having worked for many years in that field himself. We should therefore take note of what he suggests.

When I saw Amendment No. 17 I was not sure whether the noble Earl simply did not want the Bill to apply to Scotland; whether he wanted alternative drafting for Clauses 4 and 5; or whether he wanted a separate Scottish Bill, which was another possibility. Having heard him speak, I recognise that he does not want the Bill to apply to Scotland.

The noble Earl referred, as I have done several times in your Lordships' House in recent years, to the fact that it is not illegal in Scotland to make direct payments in certain circumstances and that that has been practised in Scotland without the need for it to be done indirectly through a third party. However, it is not something which all local authorities have felt able to do.

The noble Earl was able to help the House by showing that the system operates in Scotland but only in certain circumstances. When the proposals came forward for a system of direct payments in this country, I was keen that it should extend to Scotland and that if there was to be fairly complicated legislation, which all of us now realise is the case, it would be a pity if Scotland were to miss an opportunity to address the whole subject of direct payments.

Therefore, while I follow and understand what the noble Earl suggested, I would prefer a discretionary system for all local authorities in Scotland along the lines—it cannot be in the same words as we have different systems in Scotland—that apply to the rest of the United Kingdom. I shall not go into all the other details about people moving north and south of the Border and having different systems. Given this opportunity of a United Kingdom Bill—we have separate clauses dealing with the Scottish system and Scottish law—it would be a pity for Scotland to be taken out of the Bill, as suggested by the noble Earl, although I recognise and respect his reasons for putting forward the suggestion.

Baroness Masham of Ilton

My Lords, as a Scot—even though I live in England, once a Scot always a Scot—may I ask the Minister for an assurance that the good schemes now working in Scotland will not be restricted by the legislation. Such an assurance might please the mover of the amendment.

Baroness Cumberlege

My Lords, it is always with trepidation that I cross Hadrian's Wall and although I am quite tempted I am not so foolish at this hour of the night to become involved in constitutional issues.

I am advised that the amendments prevent direct payments being made available in Scotland. We would not want to deny people in Scotland access to the new freedom on the same basis as the rest of the United Kingdom. As my noble friend Lord Campbell, a former Secretary of State for Scotland, undoubtedly knows, Scottish local authorities have a power under the Social Work (Scotland) Act 1968 to make cash payments to individuals. But those cash payments may be made only in exceptional circumstances constituting an emergency; for example, to pay for food, fuel or accommodation. It is a very limited power. Those cash payments may not be used to substitute for mainstream community care provision on a planned and regular basis.

The noble Baroness, Lady Masham, asked whether payments would be jeopardised by the Bill. My understanding is that they will not. I shall write to the noble Baroness and to the noble Earl if that is not the case.

Local authorities also have powers under Section 10(3) of the 1968 Act to make payments to certain voluntary organisations. As part of their own activities, those organisations may themselves make payments to assist individual adults to purchase community care services. Neither of those powers is equivalent to the powers created by the Bill. Clause 4 will enable local authorities in Scotland to pay money directly to individuals on a planned and regular basis to enable those people to secure for themselves the community care services they need. With the amendment, local authorities in Scotland would not have that new power. Accepting the amendment would disadvantage disabled people in Scotland who would be deprived of the opportunity to receive direct payments on the same basis as people in the rest of the United Kingdom.

Clause 5 makes a minor technical amendment to ensure that the provisions of Section 13 of the Social Work (Scotland) Act 1968 continue to relate to Section 12 of that Act as originally intended. We see no reason to remove it. With that explanation, I hope that the noble Earl will see fit not to press the amendment.

The Earl of Mar and Kellie

My Lords, I said that I am in favour of this type of activity. There is a good deal of confusion in social work as to how the provisions of Section 12 are to be interpreted. It is confusing not just for me hut for all those trying to provide a service. There is a genuine debate about the remarks of the noble Earl, Lord Lindsay. I am glad to see that he is in his place. In his Written Answer he referred to people requiring assistance in exceptional circumstances constituting an emergency and where doing so would be more cost effective. I would interpret that as two separate conditions; others have not done so.

I was hoping that the noble Baroness could tell me who would be responsible for issuing the guidance for Scotland. If she can tell me, I would he very appreciative.

Baroness Cumberlege

My Lords, I am sorry that I did not mention it. It is the Secretary of State for Scotland.

The Earl of Mar and Kellie

My Lords, it has become easier to withdraw the amendment. I am extremely grateful for that last piece of information. Without more ado, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 [Consequential amendment]:

[Amendment No. 18 not moved.]

7.45 p.m.

Baroness Hamwee moved Amendment No. 19: Before Clause 7, insert the following new clause— POWER TO MAKE REGULATIONS (". In this Act the power to make regulations shall be exercisable by a statutory instrument which—

1. (a) on the occasion of the first exercise of any such power shall not be made unless a draft has been laid before and approved by resolution of each House of Parliament; and
2. (b) thereafter shall be subject to annulment in pursuance of a resolution of either House of Parliament.").

The noble Baroness said: My Lords, the amendment replicates one I moved at the previous stage. It proposes that regulations should in the first instance be the subject of the affirmative resolution procedure and thereafter the negative resolution procedure. In her answer to the amendment in Committee the Minister said that the main drawback was the need to find parliamentary time every time the Government wished to amend. She also said that the amendment would be inconsistent with existing legislation in the community care field where Members have been content to allow the negative resolution procedure. It was quite late when we discussed the amendment on that occasion and I did not pick up that the criticism was the need for parliamentary time. I want to clarify that point and to suggest that we have not yet fulfilled what I think are parliamentary responsibilities because of the order in which we are dealing with different issues. I am suggesting that there should be one occasion when parliamentary time is required unless there is a problem in your Lordships' eyes or in the eyes of Members of another place.

Although parliamentary time would be required if the amendment were agreed to, it would not be excessive parliamentary time. I am sure your Lordships agree that Parliament is the servant of those whom we represent or serve, that Parliament should not he master, and that parliamentary time should not be our master beyond what is reasonable. We are dealing with the Bill at a time when details are out for consultation. A response is not required until 23rd February and the Minister cannot, I imagine, say tonight how long it will take for the Government to react to that consultation. By definition, until it is over it will not be known what the level of response is. I do not know about quantity, but it is clear that in terms of quality there is a very considerable response.

One of the things that has impressed me most since I arrived in your Lordships' House is the level of contribution by members of the public and by interest groups. We ask for their contributions. We regard ourselves as a pluralist society and therefore we should listen to their contributions very carefully and consider them formally. I say that in the context of what I believe to be an increasing blurring of the line between the legislature and the Executive. We are by definition dealing here with legislation. There are aspects of this legislation that should be considered by Parliament. They will come within regulation. I accept that they may be subject to annulment, but is it not right and proper that we set ourselves the goal of devoting parliamentary time to consideration of the specific issues that we believe may he addressed by the consultees? With regard to the client groups, the Minister said that the Government will not consider those groups until after consultation. That alone appears to answer my argument in the affirmative; namely, that it is proper to come back to your Lordships' House with that response and consider it in a formal manner. I beg to move.

Lord Campbell of Croy

My Lords, the amendment of the noble Baroness, Lady Hamwee, will introduce the affirmative resolution procedure in the first instance and then the negative procedure for all of the regulations that will arise under the Bill. The Delegated Powers Scrutiny Committee, of which I was a Member until last November, suggested that that concept should be used only in relation to regulations under subsection (5) if a change was not made in primary legislation. That has been done. Today, we have supported an amendment by the Government that carries out the recommendation of the scrutiny committee to include what would have been subsection (5) in primary legislation; that is, this Bill. Therefore, the alternative suggested by the scrutiny committee of the affirmative procedure in the first instance and then the negative procedure for that section is no longer necessary.

The concept of affirmative procedure in the first instance and subsequently negative procedure is a new one. It has been proposed by the scrutiny committee and has already been adopted by the Government on two or three occasions in other Bills. I am attracted by this procedure, as I believe noble Lords will remember from previous debates on other Bills. I understand the concept that the noble Baroness has espoused, but in this Bill the committee did not think that the procedure was necessary for any of the other regulations which would arise. The committee considered that the negative procedure was appropriate for all of them. All of that can be looked up in the first report of that committee in this Session. While I am personally delighted that this idea has commended itself so remarkably, particularly to the noble Baroness, I cannot support its inclusion for all or any of the regulations to be generated in due course under the Bill. That was not considered necessary by the scrutiny committee because those provisions were to be introduced gradually. One of the reasons why the scrutiny committee thought that the negative procedure was appropriate for all of the regulations was that the Government intended to bring in client groups and categories gradually.

Baroness Cumberlege

My Lords, I understand the concern of your Lordships to have the opportunity to express views upon and influence the content of the secondary legislation; but I have given, and will repeat, the assurance that we will take into account the views of this House in making our decisions on the content of regulations. We will also be taking into account the responses to the major consultation exercise that we have initiated on the regulations.

The main drawback to the proposed amendment is that it requires the Government to find parliamentary time while the negative procedure provides for parliamentary scrutiny, if your Lordships feel that that is necessary. Your Lordships will he aware that that is the usual approach for regulations of this kind. To make regulations subject to affirmative resolution in the first instance is highly unusual. Parliamentary time is not always easy to find. It would be undesirable to be constrained to find that time if no further discussion of the point was needed, particularly as it might hamper progress towards the implementation of a very exciting scheme that enjoyed wide support in the country as well as in your Lordships' House.

As my noble friend said, the question of the appropriateness of the Government's proposals on secondary legislation was considered by the Delegated Powers Scrutiny Committee. We have accepted that committee's recommendation on Clause 1(5). However, it made no recommendation on the rest of the proposed regulatory powers and was content with our proposal that negative resolution regulations should be made. Therefore, I urge your Lordships not to support the amendment.

Baroness Hamwee

My Lords, I recognise that the Delegated Powers Scrutiny Committee dealt with only one subsection in its comments on the Bill. I have deliberately sought to go further. I confess that I did not expect to achieve entire acceptance of this amendment. However, it is a pity that we have dealt with the Bill in the order in which it has been dealt. False constraints are applied by the parliamentary timetable and the artificial end of the parliamentary year. We are dealing with a Bill where so much depends upon detail. Those affected have been asked for their comments on the detail. We do not have the benefit of it in dealing with the legislation of a stage where no doubt it will get far more detailed scrutiny than in another place. It is a great pity that that is the order in which it has been dealt with, and that is why I feel it is necessary to raise the point. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.