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Maxton, John

Meale, Alan

Michael, Alun

Michie, Bill (Sheffield Heeley)

Milburn, Alan

Miller, Andrew

Morgan, Rhodri

Morley, Elliot

Morris, Rt Hon Alfred (Wy'nshawe)

Morris, Estelle (B'ham Yardley)

Mudie, George

Mullin, Chris

Murphy, Paul

O'Brien, Mike (N W'kshire)

O'Brien, William (Normanton)

O'Hara, Edward

Olner, Bill

Orme, Rt Hon Stanley

Pendry, Tom

Pickthall, Colin

Pike, Peter L

Prentice, Gordon (Pendle)

Prescott, Rt Hon John

Purchase, Ken

Raynsford, Nick

Rendel, David

Roche, Mrs Barbara

Rooker, Jeff

Rooney, Terry

Ross, Ernie (Dundee W)

Sedgemore, Brian

Shore, Rt Hon Peter

Short, Clare

Skinner, Dennis

Smith, Andrew (Oxford E)

Smith, Chris (Isl'ton S & F'sbury)

Soley, Clive

Spearing, Nigel

Spellar, John

Stevenson, George

Sutcliffe, Gerry

Taylor, Mrs Ann (Dewsbury)

Taylor, Matthew (Truro)

Thompson, Jack (Wansbeck)

Timms, Stephen

Tipping, Paddy

Walker, Rt Hon Sir Harold

Wicks, Malcolm

Wigley, Dafydd

Williams, Alan W (Carmarthen)

Winnick, David

Wise, Audrey

Worthington, Tony

Tellers for the Noes: Mr. John Cummings and Mr. Jim Dowd.

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Question accordingly agreed to.


That the draft Contracting Out (Functions in relation to the Registration of Companies) Order 1995, which was laid before this House on 6th March, be approved.

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Local Government Finance

5.44 pm

The Parliamentary Under-Secretary of State for Health (Mr. John Bowis): I beg to move,

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

The report sets out the proposed allocation of the special transitional grant to local authorities in England for the next financial year for expenditure on community care services. It also describes the main features of the grant and the conditions that the Government intend to attach to its use.

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

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

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

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

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

Mr. Bowis: I am grateful to my hon. Friend. I pay tribute to the way in which he has presented his constituents' case and carefully considered the allocation of resources for the Isle of Wight last year and for the coming year. I give him the undertaking that I gave to the delegation who accompanied him. If they will put their

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minds to finding new ways of considering the allocation of resources, and to new points about the identification of the island's particular needs, I should be more than happy to consider them, where they fall within my orbit, and to pass them on to my right hon. Friend the Secretary of State for the Environment, where they relate to his Department.

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

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

Mr. Bowis: I am delighted to hear what my hon. Friend says about the island. It is a matter of record that, although the island's current political leadership has been complaining about the resources allocated by central Government for the island's social services, the budgets that it has produced have not required all those resources. Let me add that, in 1990-91, the Isle of Wight personal social services budget was £8.4 million; in the coming year, it will be £17.4 million, a substantial increase in anyone's mathematical book. It is also our intention to give disabled people greater independence by the provision of direct cash payments in lieu of services, an exciting and far-sighted policy which has been unanimously welcomed. We shall be working out the necessary proposals.

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

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

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Yet some authorities appear to believe that the only money that the Government have provided for community care is the special transitional grant. To them I have to say that is nonsense. Local authorities have had community care responsibilities, and funding for those responsibilities, for very many years, long before 1993. Community care was not invented on 1 April 1993; that is when it was reformed. All the part III accommodation, the council meals and home support services, all the council respite and day care services were and remain social service community care responsibilities. Beyond the ring-fenced element of the STG, it is, of course, up to local authorities to decide how much of their general funding they spend on community care, but they must not pretend that the provision that we have made for their new responsibilities is intended to cover all their responsibilities. One has to consider all the available resources and deploy them, and redeploy them if necessary, to cope with the demands on the service. It is, therefore, quite extraordinary for authorities to claim that they have run out of money for community care services. As I said, the total amount available exceeds £5.1 billion. That is what authorities should be focusing on.

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

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

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

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

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

Mr. Bowis: That is a debate for another day, but the hon. Gentleman does not make a fair point. We are looking for good-quality care at a reasonable price, irrespective of which sector it may come from. If local

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authorities believe that all their needs can be met in one or more of those sectors, the hon. Gentleman should not oppose that. If one can get better-quality care at a better price from the independent sector, the only person who could conceivably object would be an idealogue. I am not suggesting that the hon. Gentleman is an idealogue, but I am suggesting that, occasionally, some of his colleagues in local government are.

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

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

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

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

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

When I was in Lancashire last week, it was put to me that using council-run residential homes rather than homes in the independent sector cost £93 per person a week more. There was a comparable price difference between

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using the independent sector and council- run domiciliary services. If those figures were added up--I cannot vouch for the figures, but I put them to the leader of Lancashire council and the chairman of social services and they did not in any way deny them--they could result in savings to Lancashire county council of some £15 million. The council could extend services to people in need with that £15 million. What is it doing? It is removing services from people who need home help and other services in their homes and blaming that on its lack of resources. The resources are there. The efficient use of resources is not.

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

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

Mr. Rupert Allason (Torbay): Will my hon. Friend give way?

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

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

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

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standard in the independent sector, but we do not always know what happens--perhaps we do--in the public sector.

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

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

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

Rarely a week goes by in which I do not receive representations of the sort to which my hon. Friends referred. Those foolish authorities should take note of what the Audit Commission said in its report "Taking Stock":

"Costs that are unnecessarily high deny other people the care they need."

Those are very wise words.

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

Mr. Hinchliffe: On the development of independent sector domiciliary care, does the Minister accept that one of the problems facing local authorities and one of the reasons for lack of development in that area, whatever one's view on it, is the total absence of inspection or registration arrangements? Is it not highly irresponsible of the Government actively to encourage more and more private companies and individuals to move into such a

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