Examination of Witnesses (Questions 280
- 299)
WEDNESDAY 8 NOVEMBER 2000
RT HON
ALAN MILBURN,
MR JOHN
HUTTON, AND
MR COLIN
REEVES CBE
280. I do not want to make an argument out of
this. I just want a clear steer from you that you are not going
to cap the costs on individual patient's care which I understand
and that is clear cut. Logically that does mean that the budget
for patient care in this field is going to be unlimited to keep
that commitment. I just want to check that is the right assessment.
(Mr Hutton) There is another dimension to this argument,
Mr Burns, that I do not think you are considering which perhaps
I should suggest to the Committee and essentially it might help
you. What we have been trying to develop, as the Secretary of
State has been saying, is for the first time a clear National
Assessment Procedure which will allow a nurse led assessment of
the person's nursing needs to take place in a proper framework.
If the result of that assessment is somebody needs, say, for example
ten hours of registered nurse time taken in a nursing care home
every week, that is the package of care and that will be resourced.
That is what we have made very clear. The other dimension to this,
which might help you a little bit, is that of course on top of
that and running in parallel to that, as you will be aware, as
the Committee will be aware, we have the review currently taking
place about continuing care guidelines themselves and, of course,
there will be cases, around about eight to ten per cent of cases
currently at the moment, whose needs are so heavy, whose nursing
and other medical needs are so intensive that they need full-time
care and support from the NHS funded by the NHS sometimes within
an NHS facility but, more often than not, in a private nursing
care home too. Of course that is the mechanism by which we deal,
I think, with the kind of case that you are indicating there about
a person whose needs might be very, very intensive. There are
resources there, there always have been, to fund those types of
care packages and that is an NHS responsibility. Of course that
means we pick up the tab, Chairman, for the whole package of care
that person needs, including their living costs, their food, their
personal care, their nursing care costs as well. I am sure the
Committee would like to be reassured about that.
281. On the question of your assessment, will
the patient or the family of patients who may have responsibility
for them have a right of appeal against an assessment if they
do not agree with it?
(Mr Hutton) Yes, they will. Of course that will be
a feature of the proposals.
282. How will it work?
(Mr Hutton) I think it will work through the way that
the appeal system currently works. Of course there is, as you
know, an established Social Services Complaints Procedure, there
is an NHS Complaints Procedure. We will make sure that if there
is a dispute around the assessment that people will have a proper
opportunity to exercise a right of appeal. That is fundamental,
that is how we want to be treated by the NHS and social care.
Those appeal mechanisms will be in place for this assessment process
as well.
283. May I ask you a question that I asked your
officials last week, which I think they suggested would be better
to ask you, which is this. There is anecdotal evidence—I
suspect all around the country, certainly in my constituency—that
when the social service budget or the health budget is under strain
for other reasons, that there is a tendency on the patient to
assess an individual for residential care when, strictly speaking,
they should properly be in nursing care because, of course, residential
care is relatively less expensive than nursing care. Providing
you accept that this probably does go on in this country, how
will your proposals get round that problem or minimise it?
(Mr Hutton) I think you are probably right. I think
we have all picked out cases in our own constituencies where we
think that might be going on. I accept the point you are making.
That may be an aspect of how the current system works. Of course,
the key to challenging that will be the new assessment procedure
that we put in place, which will for the first time give us a
proper framework right across the country, led by nurses, delivered
by nurses, so that we can properly assess nursing care needs.
So dealing with the problems of cost-shunting, which I think is
right to refer to, is something that we will have to address and
the new assessment process will allow us to do that. The full
budgeting arrangements that the Royal Commission were very keen
on, in supporting integrated care for services for other people,
which we certainly endorse and embrace, are taken forward in the
NHS Plan through the new care trust system that we want to see
up and running, together with that flexibility which we introduced
last year, I think that will help us to overcome some of those
problems. Certainly, as I said earlier, it is not our intention
in introducing what I think is quite a fundamental reform, bringing
great fairness to the long-term care system, that as a result
of that we somehow build into the system some other anomaly, some
other disincentive to get the system working properly. We are
not going to do that. The key to that is to have a new assessment
protocol, but we do not have that at the moment. That may be in
part why the anecdotal evidence that you have drawn to the attention
of the Committee may be surfacing because we do not have that
proper assessment procedure in place. Through all of those many
and different ways we will get to a position where I hope the
Committee and yourself will be satisfied that we have not put
in place the type of arrangements that facilitate that type of
inappropriate assessment which we have identified.
284. Do you think it is a lost opportunity,
having gone through the whole procedure of a Royal Commission
on long-term care and aroused a lot of both interest and expectations
from that, that at the end of it all, apart from the proposals
to raise the savings levels, which undoubtedly will be welcome,
nothing else, to the best of my knowledge, is being done on helping
people, with regard to residential care and the costs of that,
which will continue to see a situation where individuals or families
on their behalf have to sell their homes?
(Mr Hutton) It is completely wrong. There are a number
of other changes that we are proposing, which we identified in
the NHS Plan. For example, a three-month disregard. The new arrangements
for home loan schemes which we will resource local authorities
to provide in future, which will prevent that type of scenario
coming out at the end of the day. The response we have made is
a pretty full response. We have certainly accepted the vast majority
of the Royal Commission's recommendations. It is clear that we
did not accept the recommendations about personal care but let
me be absolutely clear to the Committee. Of course, we have a
choice about that. Of course, we have. We could have spent the
billion pounds that we have available on providing free personal
care but we would not have been able to address the sort of criticisms
that our constituents are always addressing to us about the deficiencies
that we have in the care services for older people. Not enough
choice. Not enough individually tailored services. Not enough
intermediate care. Not enough home based care packages to keep
people independent at home where they want to be. The choice we
have to make is a very difficult choice. Of course, it is. But
we have chosen to make the resources that we have available: £1.4
billion investment in this area to try to address the key deficiencies
in the fairness agenda about how long-term care is brought in;
and also addressing what I think are the most serious problems
facing the development of long-term care for the elderly. It is
a choice we have made. We are very confident that it is the right
choice. Had we done it differently, we would have simply locked
in place the present totally unsatisfactory range of care services
for older people. We would not have moved on that agenda at all.
We would still be here two years from now dealing with the same
criticisms that our constituents are raising about flexibility,
availability, the quality of care services to meet their needs.
We would not have moved on that agenda at all. So we have tried
to do the two things together: to improve the care services across
the range for older people, as well as addressing the glaring
unfairness of the arrangements about funding long-term care. We
have drawn the line where we have drawn it. I think it is in exactly
the right place.
285. Why is it then that most people do not
share your view on residential care and think you have it wrong?
(Mr Hutton) We have an obvious argument to make and
can have a discussion about that. But we should not lose sight
of the fact—I tried to slip this into the argument earlier
and I will try to slip it in again, it might help—the argument
is often presented as a choice between free personal care or personal
care that everyone has to pay for. In fact, as I said—
286. It does not have to be.
(Mr Hutton) It is. As I said, 7 out 10 people in residential
nursing homes get all or most of their nursing and personal care
costs already funded by the state. That is the issue about personal
care. We have 30 per cent who get no help at all with their personal
care costs. Now we have to make a choice. We have made a choice
about whether we invest one billion regardless of a person's needs
to deal with that issue. If we do that, we make no further changes
to the quality of older care services or we make the investment
in those services. That is what we have done.
287. I think I heard you right. You said basically
that 70 per cent of people in residential care have their bills
paid for by the state. Of that 70 per cent, what proportion is
people who did not start having their bills paid for by the state,
but after selling their houses and their incomes have dropped
to 16,000 and have tapered down to 10,000 are now being paid for?
Because if that is the case, it is slightly misleading to try
and suggest that 70 per cent may factually be having it paid now,
if you forget that for a lot of those 70 per cent they are only
having it paid for by the state because they have exhausted their
own funds through selling their home or whatever else, or using
up their savings to the threshold.
(Mr Hutton) Clearly some of those who are getting
some or all of their care costs will be people in that category.
I do not know, Mr Burns, precisely what the figures are. If those
figures are available, which allow us to bottom that out, we will
make them available to the Committee.
288. The way you put that figure is slightly,
or seemed to be, slightly misleading.
(Mr Milburn) There is quite an important point here.
As you know yourself, there are always choices and decisions to
make about how best to take forward public policy and how best
to deploy public resources. That was one point of agreement between
the Minority and Majority Report of the Royal Commission on free
nursing care. The way we have defined nursing care has been drawn
rather more broadly than the Royal Commission suggested. Far from
suggesting that has not been welcomed—
289. I was not suggesting, for one minute, that
it has not been widely welcomed.
(Mr Milburn) Let me finish this. It has been widely
welcomed. It has been widely welcomed in particular by the 35,000
people or thereabouts who will pay on average £5,000 a year.
They will welcome it and so will their families. I believe that
people will also welcome the other measures that John has indicated
that the Government will be taking. We are increasing the capital
limits. They have been frozen for very many years. We were not
responsible for that.
290. Hang on, Secretary of State. Factually,
"very many years" is a suitably vague term that does
not bear reality. If you remember, Secretary of State, it was
the last Chancellor in the last Government who increased those
levels. I did not want to bring this in, but if you also remember,
Secretary of State, it was a Labour council in the north west
who refused to accept the will of this House and those levels,
and proceeded to charge elderly people for their residential care.
This went to the High Court and the Department held with great
relief when they won the case in the end. So I think it is a little
unfair to say that.
(Mr Milburn) Regardless, the levels have not been
increased and now they have been increased. Free nursing care
had not been provided and now it is going to be provided. That
is true, is it not? It is also true that we are enabling councils,
because we provide more resources to them, to take charges on
people's homes on the point they go into care; so at the point
they go into care, by and large they will not have to sell their
home. That will be happening now. It did not happen in the past
but there is a big choice to be made about how best we take forward
the improvement in nursing care services. In the end I think it
is quite straight forward, either we can spend roughly a billion
pounds as the Royal Commission suggested to us in the majority
report, although not in the minority report, providing personal
care for free for everybody. That will not provide a penny piece
worth of extra care for anybody, for any other elderly person,
and it will certainly do nothing to improve the standards of care
or the provision of services that elderly people need. That does
not make it any easier a choice but I think the right choice has
been to do what the minority and majority report agreed on, free
nursing care, and the other changes that we will introduce—the
increase in capital limits and so on and so forth—and at
the same time to dramatically expand both the range of services
that are available for people. We have spent a lot of time talking
about intermediate care today, and we will be investing a lot
of money in intermediate care and by 2004 there will be around
about an extra £900 million going into intermediate care
services which had not been available in the past. We all know
from our own constituents, those elderly people who write to us
and contact us, that the shortage in particular of rehabilitation
and recovery services is a real blight on their lives and on their
family's lives. In the end, although it is a difficult choice,
and although you ask about whether it was a waste of time having
a Royal Commission, of course it was not, because the Royal Commission
came up—
291. I did not say it was a waste of time.
(Mr Milburn) No, you asked the question about whether
or not we regretted going through the whole exercise.
292. No, I did not.
(Mr Milburn) It was neither a waste of time nor a
waste of opportunity.
293. I did not say it was a waste of time.
(Mr Milburn) It was not either. I am telling you I
do not think it was a waste of time or a wasted opportunity. Actually
we have actioned the overwhelming majority of the Royal Commission's
recommendations and on top of that we have in addition invested,
and are investing, a huge sum of money in more services for elderly
people and in improvements in the standards of care which they
receive. Now, arguably, that should have happened many years ago,
it did not and we are now getting on with the job.
294. One final question. You do not think though,
on the residential care side, there could have been a third way
which was to look at some form of insurance policy to help elderly
people protect their capital asset, which from your point of view
and the Treasury's point of view would not have involved the massive
amounts of public expenditure if you had paid for the whole bills
of those people?
(Mr Hutton) We are generally in favour of the third
way as you know, Chairman.
Chairman
295. I noticed.
(Mr Hutton) You may not be. If you look at Chapter
5 of the Royal Commission Report, Mr Burns, I think you will see
the Royal Commission themselves addressed this issue and felt
that some of the proposals, that the Government of which you were
a member of had put forward, these issues would not work, they
were not practical, and it did not seem to be clear to the Royal
Commission who would benefit. We are not going down that route.
We do not think that is the solution to the problems in the way
you have described but we are currently looking at the whole issue
of long term care insurance products and the market for long term
care insurance. The Treasury, who have responsibility, of course,
for this work, I understand are shortly to consult on a range
of proposals in this area.
John Austin
296. Can I turn to the PFI. Some people argue
the new hospitals are being built without any regard to how they
may fit in with other resources.
(Mr Milburn) Yes.
297. You have allowed PFI schemes to proceed
in advance of developing a national strategy for health care need.
Was that wise?
(Mr Milburn) I think when we came to office we were
faced with a choice, and that was pretty straight forward. The
hospital building programme had stalled. PFI had stalled as an
initiative, as you will recall. There had been no hospitals built
although there had been rather a lot of money spent by the previous
Government on consultants and on lawyers and by and large it is
a good thing to spend money on patients. I get lots of legal advice
and sometimes it is helpful, sometimes it is not. We had to get
the hospital building programme started. If you like, in some
sense, in truth, we had to create a market in PFI because there
was not a market, there was not capacity and there was not expertise
out there. Now we have got that going and, of course, there will
be lessons to learn, of course there will. I think the most important
lesson for us is this: if in future we are building, as we will
be, more acute sector hospitals, more new hospitals because heaven
knows the National Health Service needs them, we have a stock
of buildings which by and large are pretty ancient—I cannot
remember the figures but Colin will probably be able to tell me
the proportion of our infrastructure that is 50 or more years
old and some of it dates back to Victorian times or before then—clearly
we have to modernise and we have to get new hospitals built but
I think the important thing is this, that as we are building new
hospitals in future what I will be looking for, whether they are
procured, whether they are bought either by Exchequer capital
through the traditional public procurement route or through the
private finance initiative route, is what we are terming technically
as whole health economy PFI deals. In other words, we will only
sign a deal in future where we are able to demonstrate firstly
that the needs of the rest of the local health service have been
fully taken into account before the acute sector hospital is built,
the impact it will have upon GP services, community services and,
indeed, social services and, secondly, particularly in the next
tranche of major PFI deals that we will be announcing before too
long, we will want to encourage more deals that encompass not
just the new hospital but new health community infrastructure,
primary care infrastructure and, where it is possible, social
care infrastructure too. So, if you like, some of the concerns
that have been expressed in the past about the adverse impact
that building a new hospital in isolation from planning the rest
of the local health economy, we can deal with some of these concerns
through this route.
298. Is there a danger with some of the schemes
we have got we may be faced with outdated hospitals which do not
fit in?
(Mr Milburn) That is true, frankly, whether you buy
through the private sector route or the public sector route, of
course it is a danger. At least in the PFI route, with respect,
we can walk away from it at the end of the term, whether it is
30 years or 40 years. If we do not want to continue with the concession
at the end of that period the National Health Service can either
walk away or the asset can return to it at the end of that period.
299. Is there not a problem that you need to
adapt to change in the mean time because you are locked into a
contract?
(Mr Milburn) No, and let me give you a good example
of where we have been able to vary a PFI contract in the shape
of the Norfolk and Norwich Hospital, for example. I know that
concerns were expressed there that in the original outline business
case and then in the full business case, and indeed when the hospital
started I think its building work, that sufficient provision had
not been made for general and acute beds, the number of beds in
the hospital. We varied that, we changed it, and I think we increased
the number of beds in that particular case by 144, if you like,
during the building phase of the thing. The other important issue
is if you go around and talk to some of the people who are responsible
for designing these new hospitals, they are acutely aware, as
indeed they should be, that health technology and health needs
are changing so fast that whether in the future frankly we build
a hospital through private finance or through Exchequer capital,
we are going to have to have flexibility built into the very structures
of the building. We will have to have that in the future.
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