HL Deb 12 December 2001 vol 629 cc1358-86

6.2 p.m.

Lord Mayhew of Twysden rose to call attention to the state of local authority funding for care home places; and to move for Papers.

The noble and learned Lord said: My Lords, the subject is sadly topical and one could wish that it was not. I am grateful to those who have indicated that they wish to take part in this short debate because there is a wealth of experience in this House.

At the beginning, I want to outline the character of the current financial position in social care at the national level in England. The Local Government Association estimates that between the current level of government support to social services, which fund much of the social care industry, and the true level of expenditure required to meet local need, there is a shortfall of no less than £1 billion.

At local level, where it is all happening, or sometimes not happening, this is a cross-party issue. The Chancellor's recent Budget report elicited much regret and disappointment in the field at the inadequacy of the resources.

To take an example from the South West, local authorities there estimate that the shortfall in their region alone is some £70 million. Throughout the country a similar picture is seen; and that is irrespective of the political composition of the authorities, of whether they are county councils or unitary authorities, and no matter how high-performing or innovative they are.

There are, however, some particular and additional pressures facing authorities in the South East. That is not only because of higher costs, but also because of the purchasing advantages that the London boroughs have over those authorities with boundaries which are contiguous to London.

Those are both matters to which I shall return, but I hope first to illustrate the general situation by drawing on our experience in Kent, where I am lucky enough to live. I suppose I should accordingly declare an interest because although neither I nor my family is likely to be applying for these facilities in the near future, one can never tell.

It is helpful to look at Kent's position because the county council is recognised by the Audit Commission as being at the forefront of innovation. Nevertheless, its experience, for example, in relation to hospital discharges delayed by bed shortages in care homes is serious enough. In November, 173 beds in National Health Service hospitals were blocked in that way. The regional average for the South East is worse.

There is great concern in Kent as to how the authority is to meet the needs of those older people who need support, either to continue to live at home or to return home after an unforeseen admission to hospital, as well as those who need to move permanently into a residential or nursing home. It is not an exaggeration to say that in Kent we are facing a crisis in the social care market.

I speak of a market because, like most local authorities. Kent County Council has to rely heavily on the private sector for the provision of nursing and residential care for people who can no longer look after themselves.

Of the total of about 17,000 beds that the private sector still provides for adults, the county council buys about one-third. Across the country a thriving independent care home sector is pivotal to the effectiveness of the overall healthcare system. A further one-third of those beds is paid for privately. In the South East generally and in Kent in particular, a high proportion of elderly residents are having to pay for their own care. Even when they do receive council support, relatives often have to make up the difference between what homes charge and what local authorities can afford to pay. The remaining one-third is bought by other local authorities or health service bodies from London and the Home Counties.

The trouble can be very simply put. Kent, to continue giving that as an example, is funded for these purposes only to an extent that leaves a substantial shortfall between what the council can afford to pay the homes and what the homes need in order to be commercially viable. The Government's funding formula for residential care of the elderly is lower per head in the South East than anywhere else in England, even though charges are higher in the South East than in any region other than London.

That is of course partly because costs there are higher but it is partly because the proportion of standard spending assessment paid, for example, to Kent in grant from central government has fallen by 2 per cent in the past four years. Yet SSAs are intended to measure need to spend and they determine levels of Exchequer support for council spending.

The fact that we are not in the presence of some sellers' ramp may be seen from the number of home providers who have gone out of business in Kent alone. The East Kent Health Authority has suffered a loss of nursing beds of about 25 per cent since 1999. The figure for the West Kent Health Authority is 11 per cent. Between the two authorities, the overall decline is 17 per cent and they cover the greater part of the county. Not all beds that are on offer are available to the county council because they cost more than the council can afford. Therefore the loss of contracted beds to the county council is of the order of 21 per cent. Nationally, I believe that 50,000 beds have been lost since Labour came into office.

Home providers' own rising costs, which have been fuelled by the strength of the economy in the South East, have been added to by the expense of the Government's admirable strict new statutory standards for providers and new obligations placed on employers. However, no additional funding has been made available to pay for those requirements.

Next year will see the transfer to local authorities of responsibility for the care of people who previously had preserved rights to income support. Yet no additional funding is being held out. For residential care, the independent sector calculates that charges of £300 per week are the minimum required to enable homes to stay in business. Yet to bring fees up to that figure from the present average of around £260 per week paid by the county council would cost the authority an additional £6.5 million per year.

For nursing home care the position is even more dire. The average fees presently paid by the county council are £376 per week. The independent sector states that continued viability will require £500 per week. Yet even to increase the present average paid by the authority by £100, to £476 per week, would cost an extra £7 million per year.

The Strategic Director of Social Services for Kent, Mr Peter Gilroy, points to additional costs for the support of independent providers of domiciliary care to enable them to meet the higher standards and the increased expectations of older people. Taken together, those cost pressures mean that Kent County Council will have to find between £16.9 million and £17 million extra.

The story does not stop even there. London boroughs receive SSA typically on a far more generous scale than Kent. This year, for example, SSAs provide for £351 per person per week for residents in Kent aged over 65 years, while the comparable provision in Islington, for example, is £917. While I accept that some of the difference can be attributed to higher levels of deprivation—although Kent itself has too many deprived areas—some of that difference in funding is enabling London boroughs to place their clients in homes in Kent, with obvious consequences for the bargaining position of the less well resourced county council. For example, 1,700 looked-after children have been placed in Kent by other councils.

I suppose that it is hardly surprising that the grievous state of so many hospitals nowadays should be the primary focus for government attention, but the pressure to vacate beds in itself increases the pressure on nursing and residential beds outside the hospitals. When rising pressure is applied to a falling number of beds, the inevitable result will be longer delays before hospital beds can be cleared of patients who no longer need them, but who cannot manage on their own.

As the Continuing Care Conference has stated, it is important that care is provided within an enduring, sustainable and long-term care policy framework, not a series of short-term, politically expedient policies. The recently announced settlement for social services appears superficially to be generous, as it puts further money into the care of the most frail and vulnerable people in our society. But the difficulty with this additional investment is that much of it is hypothecated to specific new tasks and so still leaves the core services with insufficient money. I am afraid that the expectation is that the recent settlement will lead to further and greater problems in funding social services over the coming year. The chairman of the Local Government Association, Sir Jeremy Beacham, is a well-known Labour supporter. His comments on the Chancellor's Budget Statement illustrate that these are cross-party anxieties.

Perhaps I may finish my remarks with a further illustration from Kent. The county council is faced with a stark choice either to make an unacceptably high increase in precept or to make large savings which inevitably will impact on the elderly and the vulnerable. It is no good the Government willing the end in this field if they are not prepared to will the means.

For my part, I hope that the Minister will take advantage of this brief debate to show that the Government have taken on board the grave position in this area and will meet the urgent need with no less urgent action. I beg to move for Papers.

6.5 p.m.

Lord Lipsey

My Lords, the whole House will welcome the timely debate introduced by the noble and learned Lord, Lord Mayhew of Twysden. I think that he is a neophyte to the little gang of noble Lords who congregate on these occasions. After the deliberations last year on the Care Standards Bill, I think that they know each other's views. Having said that, the noble and learned Lord is a most welcome neophyte and we look forward to his continued presence in future debates.

I wish to make a number of brief, sharp points. First, in the care home industry, we need to encourage a flourishing private sector. We need it because between 1996 and 2010 demand for places will grow at the rate of I per cent per year. Even on the most optimistic of assumptions, at the point when the time-horizon of the Royal Commission on long-term care expires in 2050 we shall need to double the number of places. We shall need to do so because direct local authority provision is hugely more expensive than that of the private sector. At the time when the Royal Commission reported, on average a local authority place cost £360 per week for residential care, compared with £238 per week in the private sector. The Audit Commission found that the standards of local authority provision were no higher than those of the private sector.

Secondly, this industry—if I may call it that—is faced with a disastrous squeeze. That has been the case for a number of years. Fees have been falling behind costs, which have been and will continue to be greatly elevated by the 11 per cent increase in the national minimum wage recently introduced. The current shortfall in fees for publicly funded residents is authoritatively estimated by the industry to be running at between £50 and £100 per week per resident—that is the national shortfall; it may be worse in Kent—which translates into a 30 per cent to 50 per cent shortfall.

Thirdly, as a result, care homes are resorting to increasingly desperate expedients to remain in business. I shall categorise them. Desperate expedient one concerns the provision of free nursing care so generously introduced by the Government. Many homes are trying to use that money to subsidise the fees, so residents will be no better off. That is not how it was intended the money should be used. Parliament did not vote for that.

Desperate expedient two is to sting the private payer in order to subsidise the public payer. Care providers charge the public sector the marginal cost for care, while the gap between that and the full average cost is met by the private fee payer. An excellent firm which I have looked at recently, Westminster Care, charges the average local authority a fee of £370 but charges £535 for the average self payer.

Fourthly, the desperate expedients I have outlined are not proving sufficient to enable care homes to stay in business. Laing & Buisson, the authoritative source in this area, estimates that 25,000 beds have been lost over the past two years. It believes that a similar number will be lost over the coming five years. Others in the industry think that the situation is even worse, that the crisis is accelerating and that the loss will amount to 5 per cent of all beds over the coming two years. Such losses do not imply only financial costs—on occasion some of those concerned with these matters are accused of being spokesmen for the Treasury. When a care home closes, there is also a human cost. We know that when an older person is moved from one home to another, very often they die shortly thereafter. Thus finance and humanity point in the same direction.

I have come to my fifth point. I regret that Members on the Liberal Democrat Benches will now stop nodding in agreement with my words. I am sure, however, that they anticipate what I shall say. The situation demonstrates the absolute futility and absurdity of the majority recommendation of the Royal Commission, of which I was a member, franked, I am afraid, by noble Lords opposite, that care should be provided free for all. If money is put into that provision, then it will not be available to address the terrible shortfall that ultimately will mean little care available to anyone.

I am very sorry that the noble Lord, Lord Sutherland of Houndwood, who, as chairman of the Royal Commission, has a deep knowledge of these matters, is not in his place to dispute the point with me. I look forward greatly to debating the subject with him one day. However, we have not yet managed to coincide on a platform. Every pound spent on free care is one pound less available to keep the sector thriving, in business and providing decent levels of care. I have in reserve attacks for certain other groups of people. However, there is some good news—I pay tribute to my noble friend here which is that the Government have at last noticed that the position is unsustainable. As I remember it, there was a kind of denial phase; then there was a phase of, "Yes, we realise that, but we cannot get any money to do anything about it"; and now we are moving into a better and more open phase.

There are a number of hopeful signs. One is that the agreement with the private sector, Building Capacity and Partnership in Care, produced in October 2001 by my noble friend's department, sets out better ways of contracting for services which can provide a combination of viability, efficiency and better services.

The second hopeful sign is the hike of 5.4 per cent in the money available for residential and domiciliary care to local authorities contained in the revenue support grant settlement. I have seen all kinds of figures as to what this hike represents. The Government's own document states that the figure is £175.9 million and the figure of £300 million has appeared in some newspapers. Whatever it is, it is a good deal better than the figures we have seen in the past.

To their credit, the Government are now concerned about profitability in the industry and are studying the matter. It is to be hoped that where study starts today, money will flow tomorrow.

I said that I would attack more than one group of people, and here is the bad news. The Government are planning—I use the phrase hoping not to shock any noble Lord—to kick the sector in the goolies with the new standards that they propose to introduce next April. I am a great defender of the British Civil Service, to which we owe a great deal—this House contains many fine examples of that institution—but when the document Fit for the Future first appeared, I simply could not believe my eyes. It was as though a jobsworth at the Department of Health had plucked from a shelf ancient standards based on the days—they were my heydays in politics—when regulation was all. We did not worry about the cost to the private sector nor its effects. The great thing was to have regulations that bureaucrats could impose on private industry. This is a document for the 1970s; it is not a document for the new millennium.

If anyone should think that I am exaggerating, they should look at the suggestions for room sizes for old people and consider how the industry is supposed to economically convert existing homes to provide the new metricated room sizes. They will find their confidence in the British Government shattered because this is a policy to destroy enterprise and standards. In the long run, it will generally reduce standards under the guise of increasing them. These were Bourbons among bureaucrats. They had forgotten nothing from the 1970s and learnt nothing from the 1970s.

I do not know how Ministers allowed this to slip past their eyes—it must have been a momentary inattention in the excitement of the many good things they were doing—but they woke up when MPs signed Early Day Motions as their constituents pointed out to them that they were about to be forced out of business. This was an all-party matter. My party is sometimes accused of being a regulatory party and the Conservative Party of being a deregulatory party, but people from all sides could see lousy regulation when it was displayed before their eyes.

I know that the Government have shifted quite a bit on the issue. I pay tribute to John Hutton, the former Minister, who was very active in bringing about that shift. We no longer have bedroom size, we have recreational facilities size—and that is progress. But there are still ludicrously damaging remnants around. For example, all facilities are supposed to be checked by occupational therapists. That would be all right if there was not such a major national shortage of occupational therapists, with no way of remedying the situation.

Again typical of the numerically-driven rather than practical regulation, there is to be a set ratio of 80:20 of single and shared rooms. That would be absolutely wonderful—I would love everyone to have their own room; I would love everyone to have their own suite of rooms—but if there is no money to pay for it, there will be a bad result because there are simply not enough rooms.

The new regulations are at present out for consultation. I hope that the Government remain in listening mode. The costs of the regulations—on top of the squeeze that has already got the industry into such trouble—are frightening. The banks are starting to say, "We will not lend money on residential homes. No, you cannot borrow to keep the business going. We do not like the security any more". People are saying increasingly, "I am not going to convert my home. I can sell it for more money as a private home for someone to live in than by staying in business". Some people are, for their pains, criticised as being profiteers. It is a curious situation for the Government to stop someone turning in a decent profit and then complain that they are profiteers when they refuse to go on working their guts out for nothing.

Everything that is being done to help on the local authority side—and I welcome and pay tribute to the tremendous change in attitude—is in danger of being spoilt by these regulations. When they come to the other place, we will find that many Members oppose them. So will many in this House. I say to the Government that many of their most loyal supporters will oppose the regulations unless there is further change. I trust the Government. Therefore I trust that, even at this late hour, they will see sense. If perchance they do not—and no doubt there is room for compromise—I do not believe that this House will shirk its duty to pay true scrutiny to the legislation. If we do not, we will be conniving in a situation which could leave—with the very best intentions, I freely admit—old, frail and vulnerable citizens literally with nowhere to go.

6.27 p.m.

Lord Clement-Jones

My Lords, this is a timely and important debate. Neophyte or not, I congratulate the noble and learned Lord, Lord Mayhew, on initiating it. I also congratulate him on eliciting a speech from the noble Lord, Lord Lipsey, the first half of which I agreed with wholeheartedly—for a change.

It is vital that proper resources are allocated to the residential care of older people, not only to ensure that there is a quality and quantity of residential care available to those who need it, but also in terms of the knock-on effect on the NHS if there are insufficient ca re places and bed blocking occurs.

As the noble and learned Lord pointed out, the number of care beds is shrinking dramatically. Fifty thousand beds have been lost in the past five years; 30,000 of those in the past three years. In some parts of the country, there has been a continual fall in care beds over the past five years. One in five beds occupied by people over 75 is now blocked because of delays in discharging.

The problem of bed blocking is particularly bad in the South East, as the noble and learned Lord, Lord Mayhew, pointed out. Ten per cent of all acute beds are blocked in the South East region by delayed transfers from hospital. The cost of bed blocking to the NHS has recently been estimated to be as high as £3 billion.

The problem is not only about the numbers of beds. The King's Fund report, Future Imperfect?, published in June 2001, commented on huge problems being experienced by the sector in maintaining quality. There is a major recruitment and retention crisis, together with a worrying picture of inadequate training for care and support workers. The report stated: Immediate action is needed to avoid a catastrophe and estimated that a further £700 million of extra resources was needed by social services each year. However, social services cash is rising by only 3.5 per cent per year compared to health spending rises of 6 per cent.

There has been some acknowledgement of this problem by the Government. They have allocated £300 million to end bed blocking—£100 million this year to local authorities and £200 million next year. Their target is to unblock 1,000 beds this winter and 2,300 by 2002–03. "This winter" is now upon us. How many beds have been unblocked so far in using this cash? How much of it has actually been spent to date, and to whom is the funding going?

Even if the funding is being spent and if it is going in the right direction, even Labour-supporting local authority leaders such as Sir Jeremy Beecham say that it is too little, as the noble and learned Lord, Lord Mayhew, pointed out. Quite apart from the King's Fund figures, some estimates say that three times that amount is needed to stop the decline in the care sector.

Then there is the issue of personal care and nursing care, and the extent to which they should be funded by government. We have debated this on numerous occasions in this House, not least when the Health and Social Care Bill was before the House. The view on these Benches has always been that it is wholly unjust that people with Alzheimer's and similar chronic conditions are treated differently from those who are regarded as having treatable illnesses.

As part of our partnership agreement with Labour in Scotland, the Scottish Executive, to its enormous credit, took the decision to fund all long-term personal care. The sky has not fallen in, as some Members on the Labour Benches would have us believe. Money for free nursing care is, frankly, inadequate. Depending on a person's condition, nursing care costs—

Lord Lipsey

My Lords, I wonder whether the noble Lord noted that the first action of the new Labour leader in Scotland was to re-examine that policy; and those who know have no doubt that he would like to dump it but is being stopped from doing so, and thus saving the Scottish exchequer from bankruptcy, by pressure put on him by those in the noble Lord's party.

Lord Clement-Jones

My Lords, that just shows the benefit of having the Liberal Democrats in government in Scotland. I am sure that the noble Lord's words will be taken very seriously by the Scottish electorate.

Depending on a person's condition of health, nursing care costs are met in rising hands of £35, £70 and £110. What level of nursing care can those amounts actually buy? In many areas of the country the bands do not cover real nursing costs. In London and the South East, costs can be up to 80 per cent higher than this. Furthermore, what guarantee is there that self-funding residents will actually receive the extra cash? That was a point made by the noble Lord, Lord Lipsey.

As it is, the whole process of carrying out assessments looks as though it is getting off to a slow start. These need to be carried out by Christmas. Health authorities are faced with an impossible task and local authorities are having to guess the amount of nursing care which is appropriate. No wonder the head of policy at Help the Aged commented: The whole thing is going to end in tears. The operation looks a complete mess". And a group of major charities representing older people, including Age Concern and Help the Aged, have described the scheme as, unfair, unworkable and a broken promise to the elderly". In the face of this, can the Minister give assurances on progress to date? Will assessment targets be met? Will costs be covered? Will residents receive what they are due?

There is a further problem with insisting that not all personal care is free; namely, the need for people on low to middle incomes to sell their homes. Some 160,000 people have had to do this since the Government took power in 1997.

Granted, the Health and Social Care Act, which completed its passage earlier this year, now provides for loans and deferred sale provisions. But loans still have to be repaid after death and property has to be sold. That causes particular hardship to former carers who are living in the family home. Also, such loans are available only to those with assets of less than £18,500. There are some excellent care home providers. There are also some bad ones. My honourable friend Paul Burstow, referring to a recent survey, demonstrated how 30 per cent of residents in care homes are regularly prescribed anti-psychotic medication and that they receive four times as many prescriptions as older people living in their own homes.

Our aim must be to make sure that, in the way in which we allocate resources and in the standards that we set, we ensure that the best homes are allowed to thrive and the worst wither away. At present, however, all the pressure seems to be on local authorities to do the exact opposite. In fact, many of them seem to pay less for care in private homes than they do in their own homes. Evidence is accumulating that self-funding residents are paying higher fees than they should to make up for these shortfalls.

One of the key findings of the King's Fund report, Future Imperfect?, was that there is a "damaging preoccupation" among commissioning bodies with containing costs rather than promoting quality in care services. The situation is compounded by the fact that higher standards are being introduced as a result of the Care Standards Act and its regulations. We have heard that a large number of closures may be necessary because of the way in which the regulations insist on shaft lifts rather than stair lifts for communal areas. Is that correct? On these Benches we firmly support the new regulations, unlike the noble Lord, Lord Lipsey. But if the regulations are to come into effect, how will the cost of work such as this be recognised in commissioning by local authorities?

The answer to these issues lies to a large extent in additional resources for local authorities commissioning residential care. The King's Fund was not alone in saying that social service allocations should rise at the same rate as the increases for the NHS. In addition to commissioning care home places, it is vital that resources are made available to allow older people to stay at home where possible through good home care services. Some of the models which allow that to happen—such as the Rapid Response homes service, created in partnership between Sheffield City Council and the health authorities and trusts in that city, are excellent.

Rehabilitation services are also crucial. The Government have promised considerable resources in this area. But many of us are concerned about the restrictive definition of "intermediate services", which means that such services can only be provided free outside an NHS hospital for six weeks.

There are other matters of concern. There needs to be a fundamental review of the NVQ in care work, and action to ensure that care workers receive the training that they need. Commissioning bodies must take training costs into account in setting prices.

Finally, to return to former battlegrounds, we must adopt an integrated, holistic approach to health and social care, so that cost shunting which leads to bed blocking does not occur. There needs to be an appreciation that health and social care are two sides of the same coin. There must be an end to the uncertainty and delays when older people are due to be discharged from hospital, caused by the fact that NHS care is free whereas personal care is not.

6.36 p.m.

Lord Astor of Hever

My Lords, I, too, am grateful to my noble and learned friend Lord Mayhew for introducing this important debate. I am taking part because I have followed with growing concern developments in care home provision in Kent—where, like the noble and learned Lord, I too am lucky to live.

I want to approach the subject from a regional angle. Debate about the current situation has been in the public domain in Kent for some time. Some valuable observations have been brought to my attention—observations which I am sure are not unique to Kent and which may help to put more general points into context.

Like other councils, Kent County Council relies on purchasing services from independent sector providers. Market demand for care homes is high in Kent. The county has a large independent sector for social care and Kent County Council purchases only around one-third of the 17,000 beds. As my noble and learned friend Lord Mayhew said, a further third is paid for privately, and the final third is bought by other local authorities and health services from London and other Home Counties.

The number of nursing beds in Kent has been reduced by 17 per cent over the past two years. For several months it has been almost impossible for the county council to place people in nursing homes at all. Few homes are prepared to take new patients—or "clients" as they might appropriately be called—at the prices which the council can afford.

A council's ability to pay reasonable prices for care services is governed by the funding available to it. This funding is subject to significant regional variation. During 1999 and 2000, the North East received about £4,800 per head; London £5,000 per head; and the South East £3,700 per head.

In spite of such variation, the situation in Kent is not unusual. The noble Lord, Lord Lipsey, mentioned the Laing and Buisson figures. The widening gap for councils in the South East from the rest of the country comes on top of a growing national under-funding of social services. Over 80 per cent of local authorities over-spent their budgets in social services last year. At present local councils are spending 10.2 per cent more on social services than the government standard spending assessment. While the pressure is most apparent in care of the elderly, most authorities' overspend is in children's services. Nevertheless, the fact remains that local authorities' main problem with regard to care home places is underfunding. They are unable to contract for care at levels which reflect realistic care home costs.

It is a familiar story. However, there are issues unique to the care homes and domiciliary service industry which have exacerbated the problem of general underfunding. Difficulties are faced by local authorities and care providers alike.

Care homes and nursing homes are closing for a number of reasons. For example, new employment legislation has had a significant impact on the industry. Strangely, the inability of many homes to recruit and retain staff is to some extent due to economic growth. Care homes are unable to match the pay being offered in the retail sector and elsewhere. The recent King's Fund report, Future Imperfect? quotes the Association for Residential Care. It states: In some parts of the country providers say that the only people applying for vacancies are those that McDonald's and Tesco have already rejected. and if employed they come with high … training needs. New government standards flowing from the Care Standards Act have placed new costs on the industry, yet no specific new funding has been made available to make up the shortfall. Many of the new standards are welcome. Everyone would like to see improved standards in nursing and residential care homes and domiciliary care services. But at what cost? The noble Lord, Lord Lipsey, in a powerful speech, drew the House's attention to the cost to homes of the regulations, and those homes are closing.

The implications for hospital admissions and discharges have already been mentioned. On 9th October government figures suggested that approximately 6,000 beds were blocked by patients well enough to be discharged. Less than a week later, the Daily Mail suggested that the true figures was 100 times higher than the figures announced by the Government. This has led to increasing numbers of operations being cancelled. The figure has risen by over a third since last year.

The implications for the elderly and others needing long-term care are also clear. The element of choice is fast disappearing from the care homes industry. People will go where the local authority can afford to accommodate them. Some families will pay for care themselves if finances permit them to do so, although, with the care homes industry becoming increasingly a seller's market, this will become an option for only a few.

While specific local difficulties require local solutions, there seems to be a general impression that until the true costs of providing care are recognised little progress can be made. An objective assessment of what care costs per head would afford us a realistic estimate of appropriate fee levels.

The picture seems gloomy but the willingness of local authorities to work with central government is most encouraging. Local authorities have in the past demonstrated how effectively they use one-off injections of money. For example, winter allowances have had a wholly positive impact on hospital throughput. However, local authorities have stressed that funding will be successful only if it is direct. Every 1 per cent increase in fees paid to independent care providers by Kent County Council amounts to £2.4 million per annum. That money has to be found somewhere; and it has to be found quickly.

All this is familiar ground. What is unfamiliar is the likely severity of the situation. The future promises additional pressures for local authorities and care providers. In April 2002 local authorities will be responsible for preserved rights residents, taking the proportion of care homes residents having their fees paid by local authorities to over 60 per cent. And we should not forget those older people who will continue paying for personal care rather than care in a residential home.

The care homes sector and local authorities face difficult times. Let us hope that an accurate assessment of the real cost of providing care will ensure that those who need it will receive it and to the highest possible standard.

6.46 p.m.

Lord Bradshaw

My Lords, I declare an interest as a member of Oxfordshire County Council. I thank the noble and learned Lord, Lord Mayhew of Twysden, for introducing the debate. As noble Lords have said, this is not a new problem. It was indeed forecast because it is a demand-led service and the people who are getting older are in the system now. The problem does not arise unexpectedly. It was building up through the 1990s and has grown worse in London and the South East, as several noble Lords have said, because homes cost more, the alternative use of homes is greater and the care staff cost more money. It has been a major problem facing councillors of every political party. It is not a political argument at this level because every councillor must face the same problem.

In Oxford, we have cut from our budget all the discretionary services we can think of in order to feed the money into social services. But that process has to stop somewhere; otherwise roads disintegrate through potholes and other services get into a state of dereliction. One can only continue so far. There is room for increased efficiency. We have increased our efficiency but not sufficiently to close the gap.

Independent care home owners protest very loudly, sometimes to me, that we treat them differently from the people in our own homes. We still have some of our own homes although they will be externalised. However, the same people are not being compared. We house the more difficult and more objectionable people. I am convinced that the answer does not lie in comparisons between public and private sector homes.

The problem of finding care for the elderly mentally infirm is particularly acute. Some of those who are cared for are "warehoused"—as I term it—in homes in which they are over-prescribed with anti-psychotic drugs. One could say simply that they have been abandoned. That does go on and it is a dispiriting experience to visit such homes.

Local authorities need long-term funding to enter into contracts with the private sector which the private sector knows will stand up: they are bankable; they can invest money on that basis. At present: that is not so. We pay between £100 and £150 a week below the market rate for the remaining care homes in the county. The number is diminishing. That means that an elderly person has often to be sent out of county, away from their friends and families. There are many devices but it means effectively that the old person is abandoned. That is a problem, which places a huge burden on carers as many of them go on caring for people rather than sending them away. I have the figures for Oxfordshire of the number of beds blocked in acute hospitals. They amount to between 50 and 60. People could either go to a nursing home if there was a bed for them, or to their own homes if the county council could provide satisfactory domiciliary care. We can do neither. I had a letter from the director of social services last week saying that the county council was tightening the eligibility criteria for care in the person's own home. The words may sound nice but in reality they mean that people will be given inadequate care.

This issue is an incubus around the neck of the National Health Service, as well as being dispiriting for people in hospital and their carers. I play in a brass band, and I am reminded that two years ago virtually the whole town turned up because the community hospital in the town was to be closed by the Government. They did not close it in the end; they closed one ward somewhere else and two others instead. At the same time as care homes have been closed, the Government have been closing community hospitals as well.

I do not believe that this problem is separate from the problems in the National Health Service. The two services work closely together. It is entirely a question of the availability of doctors, nurses or high technical equipment in hospitals. The John Radcliffe is full of the stuff. The hospital does not have enough staff but it has plenty of high-tech equipment. We want to take people out of the hospital system and put into proper care, or to support them in their own homes, but we need more money to do that. The noble Lord, Lord Lipsey, referred to over-regulation of homes, and, like him, I shall look at that issue carefully. We need to pay care home owners a reasonable price for the service that they offer, whether to the elderly, the mentally infirm, or whoever. If we are not careful, people will not provide that service. It is time that the Government woke up.

I shall quote something that I heard this morning, which is: It is winter all the year round in caring for the elderly nowadays".

6.53 p.m.

Baroness Barker

My Lords, I begin my speech with the customary declaration that I work for Age Concern. I join other Members of your Lordships' House in thanking the noble and learned Lord, Lord Mayhew of Twysden, for giving us the welcome opportunity to have this short, but valuable, high quality debate.

I thank the noble and learned Lord for a rare opportunity to focus on the issue of social care. All too often, we concentrate on the far more dramatic and emotive problems of the NHS. The diminution of social care services such as bathing, domiciliary care or handy person schemes do not command the headlines in the same way as waiting times for surgery or time spent on trolleys in accident and emergency departments. But they are clearly connected.

In many ways care home closures are but one manifestation of the much broader problem of the chronic under-investment in social care. We need to look at that issue before we can get to the heart of the matter, which is demand. We know from the Government's own figures that underfunding of social care has reached unprecedented levels. The Department of Health's publication, Personal Social Services Current Expenditure in England: 1999–2000 shows that gross expenditure by social services on older people in 1999/2000 was £5,640 million gross and net expenditure following fees and charges was £4,160 million. While the Government have provided a real-terms increase in funding levels for social services departments via the SSA and special grants, the average increase over the next three years will be 3.5 per cent as opposed to the 5.9 per cent increase for the NHS.

Moreover, the data from the NHS Performance Assessment Framework returns show that the costs of providing home care, day care and residential care are rising more quickly than SSAs. In the current financial year, as the noble and learned Lord, Lord Mayhew, said, there will be expenditure of £1 billion by social services over and above government provision. That is a staggering figure. It is particularly astonishing when one considers that for most of the last decade, since the passage of the NHS and Community Care Act, services have been focused on those with the highest level of need and eligibility criteria have been ever more tightly drawn. Perhaps that policy is not working.

My noble friend Lord Bradshaw eloquently explained how local authorities cannot sustain that level of expenditure. We know from everything we read that when cuts have to be made, services for older people are always first in line, well ahead of anything else—even within social services. The consequences to local authorities of not funding children's services, for example, are so much more severe. Your Lordships will know that the race is on to implement the NSF for older people. The people in social services departments in health authorities are waiting for NSFs for other client groups to hit them. Most social services departments are also waiting for the findings of the Victoria Climbié investigation to put the re-emphasis on children's services.

It is important to stress that pressures on local authorities come not only from the extent to which SSAs are being outstripped by rising costs. When new resources are made available, they are increasingly via special short-term programmes. I shall not go into the plethora of the different funding sources, but one of the most precious resources in any social care agency is time. The amount of time spent chasing resources, in meetings and on developing partnerships is rising dramatically. It is not clear that that always manifests itself in better client care.

The Government's greatest input into the residential and nursing care sector has been intermediate care money. I was interested to hear the noble Lord, Lord Lipsey, of the Treasury, say "whatever the figure As". Throughout the passage of the NHS and Community Care Act, many noble Lords asked about intermediate care funding. We were never given a clear answer. There is an additional figure of £300 million. Perhaps the noble Lord, Lord Lipsey, will agree on that one. The figure is concentrated on the 50 local authorities with the most severe bed-blocking problems. It is not money to be spent across the country.

From the outset there has been uncertainty about intermediate care. Now, several months on, it is right to ask how the system is working. What mechanisms are in place to track the use of intermediate care moneys? What mechanisms are in place to check whether such moneys have been diverted to acute services? If such moneys have been diverted to acute care, what remedies do social care agencies have as they seek to reach the targets set by departments? What mechanisms are in place to evaluate whether a maximum of six weeks rehabilitation effectively meets older people's care needs and whether such short-term placements can be sustained by nursing homes?

Those may be the inquiries of a social care anorak, but I believe that the transparency of that funding is essential, especially now as pooled budgets and Section 31 partnerships become more widespread. To put it another way, if social services turn up at the table in a care trust with £1 billion of debt, who will meet that deficit? I suspect that the answer is users and carers.

Turning specifically to the issue of care homes, it is clear from all the figures quoted this evening, especially from Laing and Buisson, that there is a huge problem. About 16,000 care home beds were lost during 2000 and 8,000 private residential nursing homes were closed. The figures for the year before are similar.

Care home occupancy rates have increased by 3 per cent. In April 2001, nursing home occupancy averaged 91.3 per cent. Despite those increased occupancy rates, margins remain under pressure. We have talked about the way in which local authority baselines do not cover essential items such as staff salary increases. Following what the noble Lord, Lord Lipsey, said, staff training is one of the key points on which we need to focus. During our discussions on the Health and Social Care Act 2001, the noble Lord, Lord Lipsey, was brought in to give us all a going over one night. He talked eloquently about the disgrace of some of the places that he went to visit during his time as a member of the Royal Commission on Long-Term Care of the Elderly. He is right that the fabric of the building does not determine the quality of the care, but the standard of the staff does. The Government should not compromise on standards, but if, in the dire situation that has been described tonight, only one thing can be saved, it ought to be the training of staff. Can the Minister tell us whether specific resources will be made available over the next three years to address that?

In April this year, well before some people came along to think about it, Laing and Buisson forecast turbulence in the care market as a result of the Government's policy on the payment of nursing costs. Age Concern, which is my organization, has begun to register the increases to personal care costs as a result of healthcare fees being paid by the Government. Given that that was not the intention of the Government's policy, how is the department going to monitor and remedy that situation?

There is widespread evidence from many organisations, including the Alzheimer's Disease Society, that self-funded private patients and their relatives are increasingly being asked to pay top-up fees, regardless of whether they should. The Government have made it clear in their guidance under CRAG (LAC 2001/29) that in most situations, if the cost of a placement is above that normally paid by the local authority, it should not be for relatives to pick up the difference. How are the Government planning to make sure that their guidance is observed?

Perhaps the most alarming aspect of the care home crisis is that touched on by the noble and learned Lord, Lord Mayhew, and the noble Lords, Lord Astor of Hever and Lord Bradshaw. I may be about to upset those noble Lords present from Kent, but I do not see why the noble Lord, Lord Lipsey, should have all the fun. I shall talk from the perspective of someone who works in London. The rate of care home closures in the South East is 4.6 per cent. That is significantly above average.

However, there is another factor that is never covered in any of the research or briefing. The noble Lord, Lord Lipsey, and others have talked about the distress and the higher mortality rates of older people who are moved when homes close. In some areas of the country, including some London boroughs, there are either no homes at all or no homes that are willing or able to take people at local authority rates. I was talking recently to an older person who lives in an inner London borough. He said, "You know, I've got friends who have had to go into a home. But the thing is there aren't no homes here. They've all been put in places like Bournemouth. They don't know anybody there because they lived here all their life. We can't afford to go and visit them, it's too expensive. You can't just drop in for a game of dominoes. You know, they're just wasting away down there".

It is a well known fact that involvement in social activities is as important to life expectancy as is healthy living. People with strong social networks live longer. That is a key point in rehabilitation. I question whether intermediate care can be successful if it takes place miles away from a person's social network. I have not been able to uncover any research into the effects of extra-authority placements. I wonder whether any research has been done. If not, will the Minister look at that issue?

The rate of new registrations is slowing down. They are not happening in high-cost areas, because people cannot afford to open. We know that the older population is becoming increasingly diverse. That means that the different types of unmet need will increase. For example, there are unlikely to be care homes catering especially for black and minority ethnic elderly people or for those from different cultural and religious minorities. That is a problem, because we know that high quality, added value care is provided when institutions are attached to such communities.

I suspect that the Minister will make much of the Government's efforts to support people in their own homes. The figures from the social policy ageing information network suggest that the number of people supported in their own homes has been declining. Moreover, when the new domiciliary care regulations and the regulation of day care begin to bite, I suspect that the number of providers in those sectors will go down. That will increase demand in the residential sector.

Over the past two years it has seemed that every month the NHS faces more regulations but receives increased resources, while the social care sector just faces ever more regulations. That policy will rebound. If the question of demand is to be tackled, the Government need to go back and look at low-tech solutions that help people to maintain their independence in their own home. The frequent cry from older people is, "I really would like a home help". Only one or two local authorities provide home helps, yet those low-tech services are among the most important in delaying admission to hospital or to social care.

Finally, current comments about pension provision in the longer term make it seem alarmingly likely that many of us will reach our old age without sufficient private resources with which to pay for high-quality care. Perhaps, on the strength of today's gloomy debate, there will not be any high-quality care for us to pay for. In considering the economics of this turbulent sector, at least for the medium term the Government have to provide more funding for social care.

7.8 p.m.

Earl Howe

My Lords, my noble and learned friend Lord Mayhew deserves our thanks for having tabled a Motion of central importance and for having introduced it with his customary clarity and wisdom. Having listened to him, I wondered what more needed to be said. The answer is probably very little, especially in the wake of so many well-informed contributions from around the House. Nevertheless, in summing up the debate from these Benches, I have no hesitation in saying that my noble and learned friend has touched a decidedly raw nerve.

While there is always a danger of making too free a use of emotive terms, I believe that throughout the country, but particularly in certain parts of it, we are facing what can properly be described as a crisis in the provision of social care for elderly people. That crisis has been looming gradually but visibly for the past couple of years or so.

In that time, the Minister and I have enjoyed a number of exchanges on the issues confronting care homes, not least during the passage, last year, of the Care Standards Act 2000. I may be wrong, but, during those debates, I do not think that either he or his Department really accepted the gravity of the concerns that care home owners were collectively voicing. That situation may be changing; I hope so. Therefore, in concentrating the Minister's mind, as my noble friends and I hope to do today, I shall begin by picking up one or two key points.

There is compelling evidence not only from individual local authorities but from independent bodies such as Laing and Buisson, which was cited by the noble Lord, Lord Lipsey, that capacity in the residential care sector has been declining significantly for some time. Laing and Buisson has put the decline at just under 50,000 places since 1996, which represents a decrease of just under 9 per cent. One cannot generalise about that type of figure because the impact of the decline differs depending on where one is located in the country. In some parts, such as the North West, there are undoubtedly surplus beds; however, there are no surplus beds in the home counties, Cheshire, the West Midlands, North Yorkshire and many other areas. Last year alone, 4.5 per cent of care home places in the South East of England were lost. So in being sanguine about the extent of bed losses in a national context, as the Government have tended to be, it behoves them also to listen to what they are being told by individual regions.

The pressures being felt by care home owners in individual regions are different in their intensity and their effect. Wage and cost pressures and staff recruitment difficulties vary considerably in different parts of the country. However, almost all those who are now experiencing severe financial problems will agree on one thing: the main cause of these problems is that local authorities are continuing to pay fee increases below the rate of inflation, thus leaving care homes with an income shortfall. Currently, two thirds of care home places are funded by local authorities. It is important, however, that that national statistic should not mask the detailed picture. Homes that can rely for most of their income on residents who can afford to pay the fees from their private means will not be greatly affected. Other homes catering principally for those of lesser means will be affected seriously. Those are the homes that are now having to take the painful decision of whether they can afford to stay open.

My own county of Buckinghamshire provides one example of many. The county council is currently paying 20.6 per cent above the standard spending assessment to social services. That effectively means that other budgets are having to be severely trimmed back to ensure that elderly people can receive the care that they need. In the past three years, Buckinghamshire has added £34.5 million to government funds to pay for care services. Despite that, and despite the prospect of a budget overspend this year, the Buckinghamshire Association of Care Homes, which represents 200 care home owners, says that unless the county is prepared to pay a higher than usual increase in fee rates, its members will suffer very considerable losses or else go out of business. The funding gap, it says, amounts to about £50 per resident per week. In proportion to fees, that is a very large sum.

It is perhaps ironic that the Government are insisting that unit costs for social care in Buckinghamshire must be reduced. It is difficult to see, quite honestly, how that can happen in an area with a cost of living that is considerably higher than the average. Already we are seeing care homes being sold to developers because of the premium that land attracts especially in the south of the county. Why should care home owners struggle to make ends meet when, by cashing in on the value of their property, they can sit back and relax? As we all know, however, the ripples from such closures spread outwards. As my noble and learned friend Lord Mayhew rightly pointed out, for every care home that ceases to trade, there is even more pressure on local hospitals where delayed discharges from acute beds are a constant and serious problem.

Not only is there a waiting list to go into hospital, there is a waiting list to get out of hospital as well. Already it is proving very difficult to find vacancies in care homes in some southern areas of the county. In the end, Buckinghamshire may be faced with little alternative but to impose a substantial increase—perhaps even a double-digit increase—in council tax. The Government may wish that to happen. If they do, it would be interesting to hear their reasons. The SSA received by Buckinghamshire is currently the second lowest of all the shire counties. The amount it receives per elderly person in residential care is £345. The contrast could not be more striking between Buckinghamshire and authorities in London, such as Islington, where the equivalent figure is £917. We have to ask the Minister whether he is satisfied that the relatively low level of funding paid by the Government to the south-eastern counties of England—far and away lower than other areas—is fair.

To those who may suppose that counties such as Buckinghamshire are a soft touch and that it may perhaps be too easy for an elderly person to receive local authority funding for a care placement, I have to say that nothing could be more wrong. Buckinghamshire has the strictest of rules on who qualifies for support. However, that fact is itself adding to the cost pressures on care homes. In times gone by, it was possible for a partially under-funded care home to cross-subsidise residents who needed a higher than average degree of looking after by having a mix of residents, some with minimal care needs, others with greater needs. Swings and roundabouts operated. Nowadays, that cross-subsidy is much more difficult to achieve. The harder it is for an elderly person to pass the local authority's local eligibility test, the more likely it is that those who do pass will have a greater degree of acuity, as it is termed, and so will be more costly to look after. As average levels of acuity rise, as they are doing, so the finances of care homes are progressively squeezed.

A further consequence flows from the arrangements. Some care homes that remain in business will be tempted to compromise on their standards of care. Most will not contemplate doing so. However, in the recent report by the King's Fund—entitled "Future Imperfect?", which was mentioned by the noble Lord, Lord Clement-Jones—we see some important messages. That report emphasised the risks of ever greater cost containment by local authorities in terms of the slippage that in some areas has already occurred in care standards. Care and support workers tend to be inadequately trained and poorly paid. There are high levels of turnover. Staff are often as hard to recruit as they are to retain. Workers have less time to spend with the people whom they are meant to be looking after.

In such a climate, service users lack choice and control over the type of service that they want and need. Cultural and ethnic minorities are especially disadvantaged; how right the noble Baroness, Lady Barker, was in all that she said on that matter. Unless as a society we consciously decide to value care workers more than we do, we shall be short-changing not only our elderly citizens, but anyone at all who uses the NHS for secondary care. I agreed very much with what the noble Lord, Lord Bradshaw, said in his excellent speech. Without enough care and support workers, and without a thriving care home sector, our health care system as a whole will suffer.

That will take money. The King's Fund estimates that social services nationally are under-funded by about £700 million annually. If that figure is valid, as I believe it may well be, the question that follows from it is who will pay. That is a question that I put to the Minister during passage of the Care Standards Act 2000 when we debated the effect of the new national minimum standards on care homes. Those minimum standards are nearly upon us, but we still have not had an answer to the crucial question.

As my noble friend Lord Astor rightly said, we all agree that improvements in physical standards in care homes are desirable. But unless care home owners can see that the investment required to meet the standards will be reflected in the income they receive, many will not be in a position to continue in business. The trenchant remarks of the noble Lord, Lord Lipsey, about being "fit for the future", were music to my ears. I said exactly the same thing during our debates on the Bill.

The costs arising from the forthcoming regulations will be significant. There is grave worry in the sector that for many providers those costs will be unaffordable. Already the care home system has had to absorb the cost of the minimum wage amounting to around £90 million in total, yet no specific recognition has been paid to that in revenue support grant.

There are over 200,000 elderly people supported by local authorities in nursing or residential homes in England and Wales. It is difficult to know how that figure will change over the next few years. But with the introduction of a single assessment process next year for all local authorities, and with the elderly population increasing in number, it is not unreasonable to imagine that demand for care home places could rise substantially. That prospect alone should be enough to concentrate the minds of Ministers on what needs to be done.

We have seen some welcome additional funding being injected into the system in recent weeks. But what really matters is how the system will cope in the longer term. Unless there is the necessary capacity in the care home sector, and unless that sector is in good heart in all areas of the country, then occasional ad hoc sums designed to reduce bed-blocking will count for little. That ultimately is the issue posed by my noble and learned friend's Motion. I hope that in his response today the Minister will give us cause to think that the Government understand the seriousness of the matters we have been debating and, in so doing, provide some basis of hope for the future.

7.22 p.m.

Lord Hunt of Kings Heath

My Lords, I congratulate the noble and learned Lord, Lord Mayhew, on securing this debate. He is a new and formidable addition to the regular cast list of noble Lords who have happily debated these issues over the past three years. I agree with the noble Baroness, Lady Barker, that those debates have been "sandwiched" between more general debates about the National Health Service. It is extremely useful for us to have a concentrated and focused discussion on social care and the impact of the current situation on the care home sector.

I say at once that I am by no means complacent about the current pressures on the care home sector. Like my noble friend Lord Lipsey, I agree that a strong, viable care home sector is a crucial requirement for the effective delivery of care services. Indeed, the noble Earl, Lord Howe, talked about the "seamless thread" that needs to run between the NHS and social care. I agree with that. The NHS Plan depends crucially on our ability to deliver that approach to seamless care.

A number of concerns were raised in the debate. The noble and learned Lord, Lord Mayhew, and the noble Lord, Lord Bradshaw, raised specific issues of funding. My noble friend Lord Lipsey talked about the need for a care sector which has long-term viability. The noble Lord, Lord Clement-Jones, talked of the need for a better local government-NHS interrelationship. The noble Lord, Lord Astor, talked of staffing requirements. The noble Baroness, Lady Barker, re-emphasised that point in relation to the training of staff and the noble Earl, Lord Howe, talked about a crisis in the provision of social care for older people. I shall return to all those points.

As I said, I do not wish to underestimate those concerns. Nor do I underestimate the real problems that some individual homes are facing. But some of the difficulties arise from what might be described as a structural change in the care home market. Two factors are currently having an impact. The first is the movement of large multi-home companies into the market which is impacting on individual, single-owned care homes. The second is the desire on the part of almost everyone to allow people to remain in their own homes wherever possible. I suggest that those drivers are having as much of an impact on the care home sector as the other issues raised in the debate tonight.

We are taking a number of steps to try to bring stability to local markets and to reassure service providers. But stability is not about leaving things as they are; it is about managed change; it is about allowing people to remain in their own homes wherever possible. It is in that context that intermediate care is so important.

The noble Baroness, Lady Barker, in her sparkling contribution, seemed to be facing two ways. At one time she was suggesting that the panoply of controls and bids that had to be made by local government and the NHS were causing massive bureaucracy which was inhibiting local innovation. At the same time, she was suggesting that we should introduce such a panoply of controls to make sure that the money was being spent wisely in relation to intermediate care.

I am confident that the proposals that we have put in place for intermediate care will lead to the increased capacity we require. There is no doubt that preliminary results of a recent survey for the NHS in relation to intermediate care indicate that good progress is being made towards the targets. A number of examples of good practice were indicated.

In relation to the evaluation of intermediate care, we commissioned a national evaluation. The results will not be known for two to three years because it is a rigorous assessment. But we have evidence from local independently-conducted evaluations that properly co-ordinated and targeted intermediate care schemes have a significant impact on admissions and discharges. That too has lessons for the care home sector.

I turn to the issue of the number of places currently available in the sector. The noble and learned Lord, Lord Mayhew, and the noble Earl, Lord Howe, said that 50,000 care home places have been lost since 1997. The Laing and Buisson reports, from which those figures are drawn, show that the net loss of places in the UK was around 19,000. That is because of the new homes that have opened and others that have reregistered or extended their facilities. In saying that the position is not as bleak as painted, I do not underestimate the importance of this issue.

In essence, if one takes the year March 2000 to March 2001, recent figures published by my department show that the number of residential care and nursing home beds fell by just over 11,000. That represents 2 per cent of the total number of beds. In addition, the average national occupancy rate shows that 8 per cent of beds are unoccupied. That suggests that there is spare capacity in some places, though I accept, as the noble Earl, Lord Howe, suggested, that the position is patchy. There are areas of the country where the occupancy rate is much higher and other parts where a good many vacancies exist.

It is clearly important to understand where the sector is going in terms of the supply of residential and nursing care accommodation in England. I say to my noble friend Lord Lipsey that the Government have commissioned the Personal Social Services Research Unit to carry out a study of the supply of residential and nursing care accommodation in England. That study examines future requirements in the sector and is looking closely at the issue of profitability and closures. We expect it to produce a final report early in the new year. I shall ensure that a copy of the report is placed in the Library. It is an important report which will discuss a number of issues of concern that have been raised and will, of course, inform the future direction of policy. I accept the point raised by the noble Earl, Lord Howe; namely, that not only do we need a viable market but also one that is concerned about the future and about raising quality. I am hopeful that the report will greatly help us in securing that aim.

I return to the County of Kent. The noble and learned Lord, Lord Mayhew, mentioned a number of the problems faced by that large county in the South East. A significant number of care home beds in Kent are occupied by residents who receive funding from outer London boroughs as some London boroughs have not taken action to develop an adequate care home market in their own area. That creates particular problems for the county council which finds itself competing with some London boroughs for a limited supply of care home beds. I shall discuss in a minute the issue of bed blocking. In recognition of the problems that Kent faces we have ensured that it will be among those authorities which receive extra funding.

My colleague Jacqui Smith, the Minister responsible for social care, wrote to some Members of Parliament from Kent on 20th November acknowledging the particular problems faced by the council and setting out the action the Government are taking to address them. Her letter touched on a number of the initiatives which I shall describe. However, if the noble and learned Lord, Lord Mayhew, has not seen that, I shall, of course, ensure that he receives a copy. I want him to understand that we are aware of some of the specific issues which he raised.

As regards the overall situation in Kent, my understanding is that the number of residential care and nursing homes dropped by eight between March 2000 and March 2001, although, interestingly, the actual number of residential care and nursing home beds throughout the county increased during that period. There was an increase in residential care home beds of just over 1,000 but a loss of nursing home beds of 183. I accept that, as in the country as a whole, there are variations within the county. Kent is a large county both in terms of population and geography. I accept that there are variations between different parts of the county.

It is also worth making the point that Kent's PSS SSA will increase by 5.3 per cent for the period 2002 to 2003, compared with a national average increase of 5.4 per cent. The carers' grants increased by 21.2 per cent which was very much in line with the national increase. The children's services grant increased by 18.1 per cent, compared with a national increase of 12.5 per cent.

That brings me to the more general issue of social services funding. I do not think anyone could argue that historically—I rather hope that the noble Earl, Lord Howe, might acknowledge this—funding for social services has not been pressurised. That was certainly the position the Government inherited. We have increased social services funding by 17.8 per cent in real terms since 1997 and we shall increase it by a further 3.9 per cent in real terms next year.

I understand that there are pressures on personal social services. As someone living in Birmingham who experienced a problem with bed blocking just some months ago, I understand those pressures. However, I believe that the Government have made significant moves to try to address some of those problems. The bed blocking fund is but one example of that. The £300 million to be allocated to social services over this year and the next to tackle the problem of bed blocking is aimed at stabilising the care home market as well as reducing delays in discharge from hospital. I say to the noble Baroness, Lady Barker, that the causes of delay and the size of the problem vary from place to place. That is why £47 million of this year's £100 million is being focused on the 55 councils that need more help. The rest of the money—£43.5 million—will be distributed to the other 100 councils on the basis of the standard spending assessment. Kent will receive £2.1 million of that fund. I hope that that will help relieve some of the immediate problems it faces.

As regards a number of the points that were made, I refer to the need for a proper relationship between personal social services authorities and care home providers. I certainly agree with the noble Lord, Lord Bradshaw, that we wish to see certainty in that relationship and agreement on capacity. All the work that we have done, for example, on winter planning shows the need for an holistic approach—that is what the noble Lord, Lord Clement-Jones, asked for—across the health and social care sector within which independent providers must play an integral part. It is because of that belief that we are very much committed to working in partnership with the independent sector to use capacity and resources to the best effect.

We have established a strategic commissioning group, chaired first by my right honourable friend Mr John Hutton, and now by Jacqui Smith, to give greater direction to the commissioning of care services for adults, in particular older people. The group recently published an agreement entitled, Building Capacity and Partnership in Care. The agreement sets out responsibilities and expectations for central government, local government, the NHS and independent providers. It focuses on councils and the independent sector entering into those much needed long-term agreements concerning placing people into care homes or giving them other forms of support. I believe that that agreement, the increase in resources and the work that has been done on viability.

profitability and capacity in the care home sector provide the structural building blocks, as it were, to try to sort out some of the problems that noble Lords have mentioned tonight.

We have not talked much about the performance of local authorities generally, but, of course, that is an intrinsic part of the matters we discussed. I believe that the approach taken by the Social Services Inspectorate, the introduction of best value service reviews and our intention to have vigorous but none the less sensitive approaches to performance assessment and management will be the right way forward to get the kind of relationship that we obviously need between social services authorities and the care home sector.

The noble Lord, Lord Astor, and the noble Baroness, Lady Barker, made some important points about staff training. They were talking about the independent care home sector but their remarks could equally well have applied to those who are directly employed by social services departments. In all such debates over the past three years, I have increasingly emphasised the need for effective training and development programmes, and for them to be backed up with support from local authority social services committees. I strongly maintain that. I also maintain that that applies to the independent care home sector.

The noble Baroness, Lady Barker, asked about how the independent sector could take advantage of current initiatives relating to training in the social care sector. There are several opportunities, the first of which is available through the training support programme grant. That is paid to local councils but it can be used for those in independent organisations. Funds are also available for the implementation of the training strategy and through the learning and skills councils and our access to European funding. I should be happy to write to the noble Baroness about that if she wants me to.

I turn to the Care Standards Act and the National Care Standards Commission. I thought that there was little more to say on that matter but perhaps we should discuss it. There is no running away from the fact that standards need to be improved in the sector. Survey work and the personal experience of many noble Lords make it clear that parts of the sector need drastic improvement. On that basis, I make no apology whatever for the Care Standards Act.

My noble friend Lord Lipsey raised the issue of room size. I accept that that implies that the outcome of care is more important than physical standards. However, I say to him—I am sorry to drag this up yet again—that the room-size issue can be tracked back to a 1973 building note that was issued by the Department of Health. It is right to ensure that physical standards are up to scratch.

Lord Lipsey

My Lords, that is precisely the point. That is what was done in the 1970s. The point has been marvellously made that the matter is now about training, contestability of services, proper complaint mechanisms and the correct motivation of staff. Those are the issues that matter to people, not whether their room is three inches bigger or smaller. Those 1973 standards should be dead by now.

Lord Hunt of Kings Heath

My Lords, if my noble friend had been a little patient, I should have come to that. My point was that the standards are not, as it were, plucked out of the air. They are based on thinking around this area that has been going on for many years. As I said, I also accept that while I want good physical standards, the outcome of care is crucial. The National Care Standards Commission has taken that point on board. I look forward to further debates on those issues.

The Government have shown, in their willingness to apply long lead-in times for compliance, a flexibility of approach that has been warmly welcomed. Ms Anne Parker, the chair of the commission, and Mr Ron Kerr, the director, are serious and sensible people who wish to take a serious and sensible approach.

I shall desist from debating free nursing care again, although I suspect that this is not the last time on which we shall debate that interesting issue. Like my noble friend, I am sorry that the noble Lord, Lord Sutherland, was not here to debate that.

I, least of all, do not doubt that there is real pressure in the care home sector; there is no question about that. In discussions over the past few months with people in the NHS and social services departments about planning capacity for winter pressures and—as noble Lords often point out to me—all-year-round pressures, the situation in the care home sector often comes up as an issue. All of us are exercised about that issue.

Our approach involves an immediate injection of funds in relation to bed-blocking, to give greater stability; more resources that are more directly allocated to local authorities for personal social services spending; the partnership agreement, which is very much based on getting stability and good relations between local authorities and care home providers; and, finally, the work that is being undertaken to consider issues such as viability, profitability and capacity in the care-home sector. I hope that we will be able to publish our report very soon. Those are the essential ingredients for sorting out the problem. That cannot happen overnight, but we can give a message of hope to the sector.

The sector must recognise that it does not function in an unchanging world. The emphasis in future will not just be on residential places; it will also be on exciting, innovative packages in the community. I hope that the sector is prepared to advance schemes that will take advantage of that. We are indebted to the noble and learned Lord, Lord Mayhew, for allowing us to discuss these very important issues.

7.46 p.m.

Lord Mayhew of Twysden

My Lords, the Minister ended as he began—charmingly. We expect as much from him. As he said, the ingredients are in place; the trouble is that there are not enough of them.

I thank all noble Lords who have taken part in this short debate. It has been extremely instructive—as much to me as to the Government—and it was a worthwhile use of our time.

When I began drafting my speech a few days ago, I recognised that this was a sadly topical subject and a source of anxiety. Just how topical I had not realised until earlier today when I learned of a residential home in Kent—one of many maintained by the voluntary sector, if I may so express it—that is at serious risk of closure because of the pressures mentioned in this debate.

I should have mentioned the work of the voluntary sector earlier—I did not and that of the Kent Community Housing Trust in particular. Its work is valuable and it is no less liable to the pressures and their consequences than the other two sectors that I did mention.

Noble Lords confirmed that the crisis is not confined to Kent or even to the South East. In varying degrees, it is found throughout the country. I began my opening speech by expressing the hope that the Minister or the Government would take the crisis on board and meet the urgent need with no less urgent action.

The Minister told us of various proposals that are in the pipeline. I am afraid that I was not convinced that the urgency of the situation is being met with measures that will bring urgent palliatives.

Since we have a minute or two remaining I shall briefly recapitulate the anxieties of noble Lords. As a neophyte—the noble Lord, Lord Lipsey, accurately used that description—I was rather relieved to find that my points were confirmed by people with much more experience on the ground. The noble Lord referred to the desperate expedients being resorted to by the independent sector in order to cope with current pressures. To be fair, that point was reiterated by the Minister. The noble Lord's words were well chosen. He said that the losses of beds in that sector were accelerating and he spoke of the frightening cost of new regulations. That was a theme throughout the debate.

The noble Lord, Lord Clement-Jones, confirmed the grave loss of beds and the consequences of bed-blocking in national health hospitals. He spoke about the difficulties of recruitment and retention in homes—a matter upon which I had not touched—and he cited the King's Fund. My noble friend Lord Astor spoke of the regional variations in funding and the adverse disparity that the South East, in particular, experiences.

The noble Lord, Lord Bradshaw, spoke with authority, if I may say so, as a member of Oxfordshire County Council. He spoke of the drastic cost-cutting that was necessary in that authority and, I am sure, in others, in order to channel more money to areas of most need, including homes for the elderly and the frail. He said—I was glad that he had it confirmed by the Minister—that there is a need for long-term, bankable funding policies. I venture to say that it is not enough to have expedient, short-term policies but that what is needed is long-term planning that is bankable and can be relied upon.

The noble Baroness, Lady Barker, spoke of costs rising faster than the SSAs. She confirmed my figure of £1 billion for the shortfall in funding overall. My noble friend Lord Howe spoke of the crisis in the provision of care. Apropos of bed-blocking, he coined what I considered to be the remarkable and very telling aphorism that not only is there a waiting list to get into hospital; there is now a waiting list to get out of hospital when one no longer needs hospital care but cannot be accommodated in the type of home that one needs.

I see why the long-term members of this club, to which I am a neophyte, so enjoy their encounters with the Minister. The noble Lord does it all with such tremendous charm. One begins to feel reassured towards the end because of the way in which he answers. But then one looks at the measures that are proposed and asks oneself the vulgar question, "Where is the beef?". There is not too much beef now or in the immediate short term. But that is what is needed. In the short term, more homes will go out of business. Whatever exciting new measures are proposed and cooked up—I do not wish to undervalue them—they will not do anything for the people who at present are trying to struggle with the problems on the ground.

At bottom, the problem is that Her Majesty's Government seek improvements in standards from homes—often homes that have improved greatly in recent times, although some need to do more—without providing the means of paying for them. That is the problem. It is, of course, admirable to legislate for a better deal for the frail and the vulnerable. But it is less admirable, to put it mildly, to neglect to provide the necessary means and to try to offload the resulting costs or the resulting failures on to local authorities which are in the straits described by the noble Lord, Lord Bradshaw.

Her Majesty's Government are not resiling from the principle that SSAs will provide for the kind of proportion of costs that we are used to. But the combination of too small SSA increases and expensive statutory upratings of standards, and so on, amounts to much the same thing but in a less open way. I do not believe that we should let this subject drop, and I shall be most surprised if we do. However, for the present, I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.

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