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Mr. Brian Cotter (Weston-super-Mare) rose--

Mr. Oliver Letwin (West Dorset) rose--

Mr. Milburn: I want to make a little progress. I have given way many times, and I know that many hon. Members want to speak.

Together, those four steps will help to deliver a fairer and better integrated system of care for older and disabled people. They will improve user and carer choice, as well as the consistency and quality of the long-term care system. All those initiatives were either called for by the royal commission, or go significantly beyond its recommendations. In total, we are already actioning 11 of the royal commission's 23 recommendations, so we are making good progress.

Mr. Letwin rose--

Mr. Milburn: I shall give way, and then I shall turn to funding issues.

Mr. Letwin: I thank the right hon. Gentleman for giving way, and I rise on a genuine point of information. Has he just said that he will establish a new police force to oversee how people are, in their own homes, looking after elderly people?

Mr. Milburn: No. The hon. Gentleman should try to put aside his ideological convictions and think about the type and quality of care that people receive. We are contemplating, for the first time, means of ensuring that standards among home care providers are as high as possible. That sector has never been regulated, and as a consequence, as we are all too aware--or should be aware--from our constituency experience, standards have not always been as high as they should be, and in some cases abuse has taken place. We are determined to avoid that.

Mr. Cotter rose--

Mrs. Joan Humble (Blackpool, North and Fleetwood) rose--

Mr. Milburn: I shall give way once more and then I must crack on.

Mrs. Humble: Does my right hon. Friend recognise that the many frail, elderly people who are cared for in their own homes by a single carer are more at risk and more vulnerable than elderly people being cared for in a residential setting, where they are surrounded by many more people and have regular visitors? That is one reason why it is vital to consider regulating home care.

Mr. Milburn: I am grateful for my hon. Friend's support. I know that she comes from an active background in social services and that she understands the issues.

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Social services authorities are all too aware of some of the problems that occur precisely when the system of domiciliary care services is improperly regulated.

Many of the royal commission's suggestions for changes to the funding system for long-term care have substantial cost implications, both now and for the future. Those costs range from over £1 billion a year to over £6 billion a year. As a Government, we are committed to a prudent, disciplined approach to public spending, so we have already set out our spending plans for the three years to March 2002.

Looking to the future, the 2000 spending review will agree new spending plans for a further two years. We intend to complete the review by next summer. It will aim to find out how best our spending programmes can contribute to achieving the Government's overall objectives. In particular, we want to create a fair, inclusive society where communities are secure and healthy. Improving the care of older people will be an important element of the Department of Health's input into the spending review. The review will consider long-term care funding, alongside changes to improve the quality and delivery of care. Our proposals on financing long-term care will be completed next summer when funding decisions will be announced. We aim to publish a White Paper around that time.

We shall base any future reforms in this area on three key principles: choice, fairness and quality. Similarly, just as elsewhere in our welfare reform programme, our policy will be that people should provide for themselves where they are able to do so. In particular, people prefer and should have the opportunity to remain at home for as long as possible. There will, of course, be situations where a person needs to be admitted to a residential care or a nursing home, and that choice should be available, but any reforms to the system of long-term care must reflect and reinforce the crucial policy objective of encouraging independence through choice.

We know that we need to find a fairer way of funding long-term care for the future. There are around 375,000 older people in residential care and nursing homes in England. The taxpayer already helps to fund the care costs of about three quarters of them, fully or in part. Of those people in residential care and nursing homes, about 100,000 with assets over the present capital limit of £16,000 fund their own care. We established the royal commission because of widespread criticisms of the current arrangements.

The means test for residential care is hard on those with only modest amounts of capital, usually their family home, and lower retirement incomes. It also leads to a widespread fear that people will be forced to sell their homes in order to fund their long-term care requirements. There can be pressure for the immediate sale of the home when people enter care. Sometimes, of course, selling an empty house makes sense, but premature sale can rule out the possibility of people returning home after some support and rehabilitation. Many older people are anxious about a decision to sell, and the move into care can itself be extremely stressful.

Mr. Geoffrey Clifton-Brown (Cotswold): I am grateful to the right hon. Gentleman for giving way. Does he agree that long-term care requires long-term solutions? Is he aware that the average worker, over a 40-year

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working life, pays more than £100,000 in national insurance? Would it not be better to move towards a system whereby a properly funded pension was built up, which could be put towards the funding of proper long-term care?

Mr. Milburn: As the hon. Gentleman rightly says, we must consider these highly complex issues. They are issues not just for the Department of Health. They cut across the entire Government--the Department of Social Security, the Department of the Environment, Transport and the Regions, the Treasury and other Departments are all involved in the discussions. It is extremely unlikely that there is one simple big-bang solution, but it is important that we understand the nature of the problem in order that we can begin to posit where we could move in the future.

Mr. Burstow rose--

Mr. Milburn: No, I will not give way. I have already taken too much time and I must move on.

There are insufficient incentives for authorities to rehabilitate and support people in their own homes. The charges that people pay for care at home vary too much between different parts of the country. Private financial products for long-term care, as they are currently structured, do not deliver attractive options for most people who have to pay for their own care. Finally, the system as a whole needs better ways of assuring and improving the quality of care.

Mr. John MacGregor (South Norfolk): The Secretary of State said that one of his principles was fairness. As he develops his proposals, will he bear in mind that what many people regard as one of the most unfair elements of the present system is having to sell the family home, particularly a modest family home, in order to qualify for state assistance, whereas others who have not struggled to build up a home of their own are in a better position?

Mr. Milburn: I understand that. I understand both the unfairness and the very real fear that that causes among people who are growing old, their relatives and carers.

Mr. Burstow rose--

Mr. Milburn: I shall give way to the hon. Gentleman because he is so persistent, but that will be the last time.

Mr. Burstow: I am grateful to the Secretary of State for recognising my persistence. Will he ensure that when he returns to the House after the review, he can justify the present situation in which a dementia sufferer must pay for nursing care? How can that be fair? Will it be addressed in the review?

Mr. Milburn: I shall come on to these important issues in a moment. They were raised explicitly by the royal commission and in the commission's consultation, and I am sure that they are reflected in the postbag that the Department of Health has received since the royal commission produced its report.

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It is now time to explore practical ways of addressing these fundamental failings in the current long-term care system, and I shall set out for the House how we intend to do just that.

Many of the possible changes to the funding system raise complex practical issues. As part of the 2000 spending review process, we shall be exploring some of those issues and the commission's recommendations in detail. The royal commission raised six issues in both the minority and majority reports which we are examining in particular detail.

First, the royal commission recommended that consideration should be given to providing nursing care free, whether delivered in the NHS or in private nursing homes. Even within the royal commission, there were different approaches to the definition of nursing care. We will be working with interested parties to see if the definitional problems can be overcome. Come what may, we will need to weigh that option against other priorities for funding long-term care.

Secondly, we intend to explore with the financial services industry how it could best design long-term care insurance products and other financial products to see if they could be made attractive to a wider audience.

Thirdly, we are exploring the costs and effects of possible changes to the residential charging rules. Those include the treatment of houses where a former carer continues to live. They also include measures to ensure that local authorities use their powers to avoid an immediate sale by helping with care home fees while taking a charge over the person's home.

Fourthly, we are considering the implications of changes to two social security benefit payments. As we said in the social services White Paper, we are considering transferring to local authorities the funds for the income support residential allowance, which is currently paid only to people living in independent residential care homes. We are also considering transferring to local authorities the funding and care management responsibility for people who entered care homes before the 1993 community care changes and who have preserved rights to income support towards their care costs.

Fifthly, we are reviewing policy and guidance on continuing health care with a view to improving consistency and equity of access to services.

Sixthly, we shall consider the implications of a forthcoming report by the Audit Commission on charges for care at home, as we look at ways of reducing the scale of variations in local authority domiciliary care charging policies.

Where appropriate we intend to publish short consultation papers on those issues. The lead Government Department in each case will involve key organisations, including users and carers as well as independent sector care providers. That detailed work will help to inform the Government's final decision on the future funding of long-term care following the conclusion of the next spending review.

As well as preparing for that detailed work on funding issues, we have been considering the royal commission's other central recommendation for a national care commission. Devolution means, as the royal commission recognised, that the remit of any such organisation is likely to be confined to a single country. However, we

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believe that many of the functions proposed for a care commission are just as usefully done for England as for the United Kingdom as a whole.

The four main roles suggested for the care commission were monitoring, representing the consumer, providing national benchmarks and encouraging the development of better services. Those are all important. Each is already being carried out, at least in part, by existing organisations, including my Department, ombudsmen for the NHS and local government, and professional training and regulatory bodies. We also believe that there is merit in bringing together many of the individual functions suggested for the care commission through a single organisation covering England. The key test is that any such body should have a coherent role which will improve matters for everyone who needs long-term care.

Our social services White Paper published last November proposed the establishment of eight regional commissions for care standards to enforce new minimum standards for residential as well as domiciliary services. In the light of the royal commission's report I have looked again at whether eight regional bodies would give us the national overview and consistency that we seek. I have concluded that they would not. I can therefore announce today that we have decided broadly to accept the royal commission's recommendation in this area. Our Bill on care standards will establish a single national care standards commission. The measure, which sets out its broad functions, will be introduced in another place today. The commission will take up the four main roles that the royal commission proposed and will, therefore, be established in the way in which the royal commission suggested. I hope that the Bill will complete its parliamentary stages next summer.

The national care standards commission will be responsible for ensuring that all long-term social care in this country is provided at a consistently high standard. For the first time, there will be a single, independent, national watchdog, which will be responsible for ensuring high standards of care wherever it is provided and whoever provides it. The new regulatory regime will be simpler and more streamlined than previous regimes, and, crucially, there will be a level playing field for public and private sector providers.

The new commission will be uniquely well placed to advise and inform Government and consumers. It will build on its regulatory function by monitoring and reporting on trends in the provision of long-term care. We also intend that the commission will be able to put together the information with demographic and resource data, and thus advise Government, as required, on trends in the long-term care market.

The commission will have the power to investigate complaints and to report on them. It will also be able to ensure that consumers have clear and accurate information on services. Building on its regulatory role, it will be able to take a view on quality standards nationally, as well as reporting publicly on each of its inspections. The standards that it enforces will include output measures, and it will have to reflect the views of local service users on the service.

The commission will report every year on service performance against standards, and it will give providers advice on meeting the national standards. It will also be able to run helplines to guide people to registered providers.

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Overall, the national care standards commission will be a powerful new body, which, I believe, will make a major contribution to driving up standards of care and to giving people the necessary information to make choices about their long-term care needs. I hope that it will be up and running by spring 2002.

The Government are committed to improving long-term care for older people and for disabled people. The changes that we are already implementing, and the further changes that I have outlined today, seek to promote choice, improve quality and provide fairness for people who need long-term care.

The royal commission has played its part, and I thank it for its work. My speech today, by outlining work in progress and broadly accepting one of the royal commission's two main recommendations, shows that we are tackling seriously and constructively the issues that it raised. My announcement today is not our last word on long-term care, but it shows our determination to take the necessary steps to put long-term care on a sounder and more sustainable footing.

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