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New clause 6
'.--(1) The Secretary of State shall issue guidance which has the effect of establishing national criteria as to the account to be taken by an authority of the financial circumstances of an applicant for a payment under section 1 or section 4 above.
(2) An authority making a payment under section 1 or section 4 above shall have regard to any guidance issued under subsection (1) above.'.--[Mr. Milburn.]
Brought up, and read the First time.
Mr. Milburn: I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Janet Fookes): With this, it will be convenient to discuss also the following: New clause 7--Review of impact of different charging policies--
'The Secretary of State shall institute a review of the impact on the level of direct payments under section 1(1) and section 4(1) of this Act of differing local authority charging policies in respect of the provision of community care services, and shall report his findings to Parliament within three years of the date of the commencement of the review.'.
Government amendments Nos. 13 to 15.
Amendment No. 3, in clause 1, page 1, line 12, at end insert--
Government amendment No. 16.
Amendment No. 1, in clause 1, page 1, line 15, leave out from 'authority' to end of line 16 and insert
Government amendments Nos. 17 to 19.
Amendment No. 4, in clause 4, page 3, line 10, at end insert--
Government amendment No. 20.
Amendment No. 6, in clause 4, page 3, line 13, leave out from 'authority' to end of line 15 and insert
Mr. Milburn:
The new clauses and amendments deal with a key principle which I think we all agree should underpin direct payments to disabled people: the principle of fairness. New clause 6 would establish a national framework for the charging and assessment procedures to which local authorities should have regard when making direct payments. Both service users and local authorities have become increasingly concerned about the extreme variations in the way in which authorities currently charge for direct services. The different charging systems mean that there are different yardsticks to determine how direct payments are made, the financial contributions that will be expected against those direct payments and the level at which such payments will be set for the individual disabled person.
Each local authority currently has discretion to charge for non-residential services under the Health and Social Services and Social Security Adjudications Act 1983. Broadly speaking, it is up to each authority to decide whether to charge and how much to charge, and, indeed, how to make the financial assessments that will determine the level of charging. Authorities therefore have considerable discretion when it comes to charging for such services.
That charging is very controversial for many disabled people, and for the organisations that represent them. There is concern that disabled people should not have to pay for services, or make a financial contribution to direct payments. Organisations such as the British Council of Organisations of Disabled People point out that the services that disabled people receive from local authorities--and, therefore, the equivalent direct payments that they will receive when the Bill becomes law--come about as a result of their disability. Those services and direct payments are essential to their means of living.
I am sure that hon. Members on both sides of the House will sympathise with the concern expressed by disabled people about charging for services. No hon. Member wants disabled people to be disadvantaged in relation to other members of society, and the last thing that any of us wants is for them to have to pay a double tax simply because of their disability. There is anxiety about
charging, and therefore about the financial contribution that will be equivalent to the contributions made towards a service if that is what someone chooses.
As I said in Committee, we live in a far from ideal world. Charging goes on, and more local authorities are charging more for more services. Indeed, authorities are empowered to charge, and do so increasingly. New clause 6 does not compel them to do so; it merely seeks to regulate how they charge if they choose to do so. Above all, it seeks to bring fairness to charging procedures.
The absence of the sort of national framework that new clause 6 would establish is at least in part responsible for the enormous variations in the amounts that councils are currently raising in care charges. An analysis undertaken for me by the House of Commons Library, for example, shows that the cash raised by local authorities from community care charges overall rose by 27 per cent. in just one year. In 1992-93, English and Welsh authorities raised some £481 million in charges for services such as home helps and meals on wheels; by 1993-94--the latest year for which we had figures--charges had risen to£609 million. Nearly two thirds of councils in the two countries had increased the amount of their social services spending that was raised through charges.
There are wide variations in the amount of cash that is clawed back by local authorities charging for services. In Waltham Forest, the lowest in the country, only 1.4 per cent. of gross current social services spending is recouped through fees and charges, but in Buckinghamshire, the highest in the country, it is 18.4 per cent. The problem is that pressures on community care budgets undoubtedly force more local authorities to charge more for more services.
A second problem is that, by creating incentives to charge but refusing to offer clear guidelines to local authorities on charging policies, the Government have invented a charter for confusion. The result of not having a national framework for non-residential care services is not only that more local authorities charge more for a greater number of services but that different local authorities operate markedly different means of charging. Local authorities make different assessments of the value of disabled people's assets and incomes--even their benefits--when calculating what financial contributions they should make towards a service. If they make different calculations for direct services, they will also make different calculations when assessing the direct payments that they make under the Bill.
A number of organisations--not just disability organisations--have expressed great concern about the lottery that we currently have in charging provision, and local authority associations, for example, have spent many months trying to establish new protocols that they can issue to their member authorities on what is and what is not appropriate for local charging regimes. Of course disability organisations are concerned about the operation of those regimes, but, in the past few months, equally as reputable an organisation as the Audit Commission has highlighted the fact that people on income support in one authority may be charged more for care than people in receipt of a much higher income in another authority, simply because of the latitude that local authorities have in determining their charging procedures. Clearly, disability organisations are concerned that people's
benefits are often used to pay charges and that their disability-related living expenses are not always fully taken into account when their ability to pay is assessed.
Amendment No. 3, for England and Wales, and amendment No. 4, for Scotland, would address the specific disability related cost concerns. They would ensure that when a local authority makes a direct payment it should properly take account of a disabled person's expenditure as an employer. There are lessons to be learnt from the experience of the independent living fund and from existing indirect payment schemes operated by local authorities. Once again, the British Council of Organisations of Disabled People has highlighted how a failure properly to assess employer costs has led in some instances to poor employment practices and to more strain on the disabled employer.
Similarly, just last year, the National Consumer Council highlighted the fact that different local authorities charge in markedly different ways in different parts of the country. It also found that widely different criteria were used to assess people's ability to pay. I mentioned in Committee that the Disability Alliance has indicated that forthcoming research shows that disabled people can be asked to pay double or even treble the charges that are paid by people who live in other areas but who receive broadly similar services.
New clause 7 would impose a duty on the Secretary of State to become a key player in assessing the impact of local authority charging procedures. It asks him to report to Parliament on how those procedures affect the operation of the direct payments approach. However helpful such retrospective action might be, a proactive initiative is what is most needed. Leaving it to the discretion of local authorities to decide how disabled people's financial status is taken into account when setting the level of direct payments runs counter to the principle of fairness that we all, surely, want the Bill to promote. People in one part of the country will be assessed in a markedly different way from people in other parts of the country if the Bill, as drafted, is passed; in other words, disabled people in neighbouring authorities will receive markedly different direct payments because of the way in which local authorities assess for financial contributions.
'(1A) Regulations under this section shall provide for the level of any payment under subsection (1) above to be calculated in such a way as to include all such costs as are reasonable to allow the person to fulfil his statutory obligations as an employer and to ensure adequate contingency arrangements in case of absence through sickness or other cause.'.
'shall, in determining how much to pay a person under that subsection, not require him to contribute more to the cost of securing community care services than it appears to the authority that it is reasonably practicable for him to contribute.'.
'(1A) Regulations under this section shall provide for the level of any payment under subsection (1) above to be calculated in such a way as to include all such costs as are reasonable to allow the person to fulfil his statutory obligations as an employer and to ensure adequate contingency arrangements in case of absence through sickness or other cause.'.
'shall, in determining how much to pay a person under that subsection, not require him to contribute more to the cost of securing community care services than it appears to the authority that it is reasonably practicable for him to contribute.'.
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