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Mr. Cotter: I wonder whether the hon. Gentleman has had the same experience as I have. Residents in residential homes have expressed concern in my surgery that their homes might be closed. Does he agree that any future regulations must be implemented sensitively, particularly with regard to the size of rooms in residential homes? A lot of small homes are concerned, and we hope that a constructive point will be made here.

Mr. Hammond: I am grateful to the hon. Gentleman for introducing that point. The Government have gone about this from the wrong angle. The "Fit for the Future?" document is an inspector's document, designed for the convenience of inspectors. It seeks to focus on what is easily measurable and to ignore what is not, including--importantly--the overall care experience of residents. It totally fails to acknowledge the individuality of elderly people, some of whom may have different needs and wants from others.

In its present form, the proposal would drive a significant part of the independent sector--and an even larger part of the local authority sector--out of business. We have to hope, for reasons both philosophical and practical, that the Government will approach the draft standards with caution, especially as they refer to minimum room sizes. It is for that reason that I asked the Secretary of State to give an assurance that we will be able to see the definitive form of the regulations before we debate any Bill on care standards, or at least at the same time.

Mr. MacGregor: My hon. Friend makes an important point. Is it not essential that the costs to both sectors be fully taken into account, especially if the income to meet those costs does not follow? I suspect from what the Secretary of State said earlier that it is unlikely that that income will follow. It is therefore essential that, in any

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steps that are taken, an assurance be given to private and local authority homes that the income will be there to meet the extra costs.

Mr. Hammond: My right hon. Friend makes an important point, too. One cannot have quality without paying for it. If one is prepared to pay for it, one does not need regulations to get it. If providers were offered premium payments for premium products, they would be happy to provide them.

The Secretary of State has not introduced any voluntary premium payment scheme--or encouraged local authorities to pursue such a scheme--to increase the standards of the physical amenities and the training of staff in care homes, and intends to do that by regulation. From that, we can only conclude that he is not willing to pay or to provide the resources that will be needed to support the Government's wholly laudable aspirations.

The Secretary of State will be aware that although he said that there was no crisis facing the financing by local authorities of care, his much vaunted increase in social services spending has not been distributed evenly around the country. I am sure that there is not a problem in Darlington, but there is certainly a problem inSurrey, Sussex, Hertfordshire, Oxfordshire, Essex, Kent, Buckinghamshire and Worcestershire.

Local authorities' own funding crises have forced them to keep payments to independent sector providers down below the rate of cost inflation and, in some cases, below their break-even levels. This has resulted in local authorities in some areas--Hertfordshire, for example--being unable to purchase beds in the independent sector at a price they are willing or able to pay. The evidence for that--as the Secretary of State will know--is to be found in the re-emergence of extensive bed blocking by elderly people awaiting social services placements across the south-east of England, before the onset of the--now routine--winter crisis.

The scandal is that, against the background of inadequate funding, leading to a drying up of independent sector supply, there are still many local authorities all over the country which are directing elderly people to local authority-provided accommodation that carries with it a much higher cost than equivalent or better independent sector accommodation.

Without bringing ideology into this matter, it seems to me that there can be no justification in a resource- constrained environment for restricting the total amount of care that can be purchased by a local authority by buying a more expensive product, where an equal quality, less expensive one is available. I urge the Secretary of State to take steps to assess the scale of the problem, and to calculate the additional care that might be purchased with the money saved if expensive local authority provision were substituted by better value independent sector provision.

The figures are substantial. In many councils--on local authorities' own admission, as the Secretary of State knows--the cost of providing care in their own establishments is 60 per cent., 70 per cent., 80 per cent. and, in some cases, more than 100 per cent. higher than the price at which they can buy comparable care in independent sector establishments.

On eligibility, I am grateful for the comments made by hon. Members, and by the Secretary of State. The dividing line between NHS and social care for the elderly is of

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great importance, because NHS continuing care is free but local authority care is subject to the means test, making this a critical issue for many families. The royal commission's principal recommendation would greatly reduce, if not entirely eliminate, the significance of the distinctions.

If the Government have set their face against that recommendation, they have to revisit the aftermath of the Coughlan judgment and issue clear, transparent and universally understood guidance as to the demarcation line between free NHS care and means-tested social care. I am not entirely sure whether the Secretary of State's mini-announcement earlier was an undertaking to do that early in the new year. If it was, I welcome it.

To date, the Department of Health's involvement in the matter has been limited to paying lawyers to slug it out. I see that the Royal College of Nursing is now spending its money on obtaining counsel's opinion on the matter. I say to the Secretary of State that it is abundantly clear that this is a policy issue, requiring a political decision. It is a job for Ministers, not lawyers.

It will be clear from what I have said that there are huge areas beyond the central issue of funding which can and must be addressed if we are to establish a proper system of long-term care delivery in this country. At present, unsurprisingly, the focus of attention is on the Government's response--or lack of it--to the central recommendations of the royal commission. Until we understand how the Government are to take that agenda forward, there can be no real progress on the broader issues.

I hope that the Secretary of State will contemplate the fact that while he ponders and announces another delay of six or eight months before something is to be done, 800 people each week are losing their homes to pay for their long-term care needs.

Mr. Milburn: That is pathetic.

Mr. Hammond: I am sure that the people facing the loss of their homes while the right hon. Gentleman dithers and considers the matter further do not agree with him.

Mr. Leigh: May I be fair to the Government for a moment? Sir Stewart Sutherland and his colleagues have put the Government in an impossible position by asking for an increase in spending of up to £6 billion. The key is the means test, and I hope that my hon. Friend will commend the note of dissent from the royal commission report--particularly the point made on page 115 concerning

That seems to be a sensible proposal, and I hope that both sides of the House can agree that we should at least do that.

Mr. Hammond: I thank my hon. Friend, and there is much to be recommended in the minority report of the royal commission. I can assure my hon. Friend that we are working hard with outside bodies and looking at an appropriate response to the issues raised by report.

There is much in the royal commission's report that all sides will welcome and can agree on, but it seems to me that the commission has missed one of the most important

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points. The crisis today in long-term care arises from a real and genuine sense on the part of many older people of a breach of contract by the state. For years--perhaps all their working lives--they paid high taxes on the assumption of a cradle-to-grave welfare system. That system changed, as it had to if our nation was to prosper, and this generation of politicians and taxpayers--operating in a globalised economy--prefers, indeed needs, lower taxes. The intergenerational contract, to which the report refers, has failed. The state, as a contracting party, suffers from a fatal flaw--it is above the law and reserves to itself the right to change the rules unilaterally and, in the case of the time scales for the subject of this debate, at the whim of generations of politicians yet unborn. When the report speaks of a contract between Government and people, and between all generations of society, it means not a contract but a blind faith that can draw little inspiration from experience.

I make a distinction between the need for a system for future generations and the need to relieve the immediate, legitimate concerns of today's generation of pensioners. If a system for future generations is to command the confidence of today's 20-somethings that it will deliver for them 50 years hence, it will have to be based on enforceable contractual rights or on individual control of assets. A vague promise of "pay up now and we will look after you later" is unlikely to convince them.

Government policy would appear to dictate that the partnership between the state and the individual for future generations will depend on the principle that those who can make planned provision for their long-term care should do so. One of the principles of the Government's Green Paper on welfare reform says precisely that. We urgently need to know what the Government's solution for future generations of older people will be.

There can be no doubt in anyone's mind that today's generation of retired people have legitimate expectations that the current system does not meet. The royal commission has proposed a solution for them based entirely on an additional public spending commitment, but it also offers the same solution for future generations, which inevitably generates an open-ended public spending commitment scary enough to guarantee a Treasury veto.

Today's elderly are left in limbo because the Government will not seize the initiative and separate the question of provision for them from the longer-term and perhaps more challenging question of provision for future generations. It is only by separating those two issues that there is any hope of clearing the Treasury hurdle and moving forward rapidly to address the real injustice that is being experienced by hundreds of thousands of older people. In each week of delay that goes by, another 800 pensioners lose their homes.

The Government, in this area as in so many others, have cynically raised voter expectations. Now they must deliver on those expectations or pay the price.

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