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Horticulture Research International, East Malling

1 pm

Sir John Stanley (Tonbridge and Malling): In the years that I have been privileged to be a Member of Parliament, I have travelled to agricultural, rural and fruit-producing areas in many parts of the world, including Africa, Asia, the Indian sub-continent and Latin America. I am invariably asked what constituency I represent. Hon. Members would be forgiven for thinking that "Tonbridge" and "Malling" are not words that command instantaneous international recognition, but they would be wrong. When I say that I represent Tonbridge and Malling, the response all over the world is, "Oh yes, that is where the fruit research is carried out."

HRI East Malling, formerly the East Malling research station, is a research establishment of genuinely worldwide renown. Against that background, it has come as a source of acute dismay, even disbelief, that the Government could be contemplating the closure of that remarkable research establishment, which is of proven international capacity. Indeed, the announcement has been greeted with shock not only in East Malling, but in the British horticultural industry as a whole. I am deeply concerned about and, I believe, justifiably critical of, the content of the announcement and its handling.

Most regrettably, the Department's press release did not even accurately reflect the key recommendation in relation to East Malling contained in the "Quinquennial Review of Horticulture Research International". Paragraph 1.6.3 of that review states:

Most regrettably, the key word—"preferably"—was omitted from the Department's press release, implying that the Government are entirely neutral as between the options of closure or transfer to the East Malling trust.

Inescapably, in those circumstances, closure blight now threatens HRI East Malling. The key elements in any research establishment are, of course, the people. If there is closure blight people contemplate leaving and might actually do so. Research contracts that are coming to an end might not be renewed, and new contracts will not be entered into. I must tell the Minister candidly, that the suspicion—wholly unfounded, I hope—is that the Government want to close HRI East Malling in all circumstances. I earnestly hope that he can give me a categorical assurance that that is not the case.

I am also very critical of the timetable for consultation, particularly in the context of HRI East Malling, which is potentially far and away the research establishment most seriously affected by the announcement. The announcement of possible closure was given in the press release of 23 September. The consultation closing date was announced as 18 November, which is barely eight weeks flat. That is a totally unrealistic timetable in which to put together the non-closure option—in other words, the transfer option to the East Malling trust.

That transfer will involve the creation of a completely separate charity, or company limited by guarantee, to contain the assets and the business of what is now HRI

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East Malling; the production of a detailed business plan and the negotiation and working out of contractual arrangements between the new independent HRI East Malling and the existing East Malling trust; and the establishment of the continuing terms, conditions and pension rights of existing HRI staff who are transferred to the new independent East Malling. It will involve getting clear commitments from the Department for Environment, Food and Rural Affairs as to its future financial policy and placing of research contracts with the new organisation. Those commitments must be sufficient to enable the trust's trustees to take decisions. A substantial amount of work will need to be done by lawyers, consultants and others. It is ludicrous to suggest that all that can be done in eight weeks. I urge the Minister to tell us that the Government will show a sensible degree of flexibility about the timetable for consultation.

To assist the Minister in giving detailed replies, I gave him in advance my eight specific questions, which are as follows. First, DEFRA has stated that, as an alternative to closure, HRI East Malling should become an independent research station under the auspices of the East Malling Trust for Horticultural Research. Will DEFRA fund the legal and consultancy fees necessary to bring that structure into being? Unless DEFRA is willing to fund those inescapable fees, a merger or transfer to the trust will not be able to take place, as it would be impossible for the trust, which is a charitable organisation, to engage in large expenditure on professional fees that might conceivably bring no results.

My second question relates to paragraph 1.6.3 of the quinquennial review, which states that

to create an independent East Malling under the auspices of the East Malling Trust for Horticultural Research. Does the Minister accept that interim financial arrangements will be needed, and are the Government, through DEFRA, prepared to provide the necessary interim finance to enable HRI East Malling to make the transition to independent status under the auspices of the trust?

Thirdly, well over half of HRI East Malling's income comes from DEFRA contracts obtained competitively. Will the Minister give a clear assurance that DEFRA will continue to place contracts, when competitive, with the new independent East Malling, which has to exist outside HRI? Without such an assurance, the consultation on a transfer or merger with a trust is a charade, given the extreme dependence of the research establishment on DEFRA contracts—again, I stress the fact that those contracts have been won competitively by East Malling.

Fourthly, the review rightly says that research institutions need at least 40 per cent. of their budget to be secured over a four to five-year period, and that they cannot survive efficiently with too much of their budget dependent on competitive funding. What assurance will the Minister give that DEFRA will place with East Malling contracts of sufficient length to make an independent East Malling viable?

As a Minister, I was involved in the research establishment business in that I had responsibility for the Building Research Establishment. Anyone with that

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type of experience knows that one cannot run a research establishment in the public sector on a hand-to-mouth basis, with only short-term contracts lasting a year or so. Such establishments need the security of having a significant proportion of their income underpinned by longer contracts, running for four or five years.

Fifthly, the review makes it clear that almost all the Biotechnology and Biological Sciences Research Council's funds are spent at Wellesbourne. Will the Minister give an assurance that an independent East Malling will have access to BBSRC funding on the same basis as Wellesbourne currently enjoys? That key area of ministerial policy is judged to be very important to East Malling's ability to make its way independently under the auspices of the trust.

Sixthly, will the Minister explain how it happened that his Department made the welcome decision to finance the new £2.8 million conference centre at East Malling, which was officially opened on 20 September, only for his Department to announce the possible closure of East Malling three days later, on 23 September?

Seventhly, will the Minister clarify whether the staff of HRI East Malling who move to an independent East Malling will have their present terms and conditions of service protected, together with their pension rights? Will the Department meet the costs of any redundancies?

My eighth and final question is, will the Minister acknowledge that, contrary to the impression given in the review, East Malling's research focus is not on soft and top fruit alone but extends to ornamental shrubs, woodlands, hops, amenity horticulture and tropical forestry, all of which have considerable commercial potential? It would give some reassurance to those who work at East Malling to know that the Minister and his Department acknowledge that East Malling has a much wider operational base than is suggested in the report.

I come finally to the grounds on which the review body based their regrettable decision that East Malling may be closed. The basis for the review body's conclusion in the report is far from clear, and one suspects that it is financially oriented. If that is the case, I should give the Minister some key facts. The British horticultural industry has a turnover of £3 billion, one third of which links into research carried out at East Malling. It is clear from the accounts of HRI East Malling that, given a reasonable level of DEFRA contract placing on a competitive basis, East Malling can wash its face financially. Surely it cannot make financial sense to contemplate the closure of a nationally valuable research establishment, which is financially viable and which supports a huge industry that is, by definition, import-saving and that has good export prospects and actual exports.

I trust that the Minister will give me a clear assurance that the Government accept that not closure but merger with the trust is the preferred option. In my view, it should be the only option now on the table. He and his Department should make every effort to bring that merger with the trust to a successful conclusion—it is in the national interest that that should be the outcome.

1.14 pm

The Minister for Rural Affairs (Alun Michael) : I congratulate the right hon. Member for Tonbridge and Malling (Sir John Stanley) on instigating the debate and finding international status for his constituency.

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The Government provide substantial funding for horticultural research and development, and we spent more than £18 million on it in Great Britain in 2001–02. At nearly £10 million, DEFRA's horticultural budget accounts for 7 per cent. of our total research and development budget this year. In cash terms, the horticultural programme is the third-largest after environmental protection and BSE.

I am not sure that the right hon. Gentleman did his constituents any favours by being so critical of DEFRA, which is grasping a nettle that has needed to be grasped for some time. Speedy decisions are needed to ensure a secure future for HRI, and he rather contradicted himself by suggesting that further delay would be good for the establishment's future. He is wrong to cast doubt on DEFRA's commitment to finding a sustainable future. HRI is our country's leading provider of horticultural research and development services. It is rightly regarded as a centre of excellence, and DEFRA continues to be its principal customer, providing almost 50 per cent. of its income.

The report of the review contains challenging findings. Paragraph 5 of the executive summary states:

That is a challenging but positive conclusion. The review team members also stated in their findings:

They recommended

That is a clear set of proposals.

The three-month consultation on the quinquennial review team's report runs to 18 November. HRI will continue until Ministers have considered the options and decided the way forward. When that has been done, we will proceed by discussion with all stakeholders, including the East Malling trustees. There is no question of having to solve the issues of staff and pensions by 18 November, but we are happy to talk to the trust about those important issues.

HRI is at an important stage of its history following the publication of the quinquennial review report. I am sure that the right hon. Gentleman understands that we are not in a position to respond to either all the detail of the review today, or to all his questions. The report was prepared by a distinguished and independent team of experts. It makes a thorough and challenging assessment of the institution's circumstances, as well as some radical and well argued recommendations about the future direction of HRI.

It is important to get this right, so the Department has invited stakeholders to comment on the report before Ministers take decisions. We have also commissioned consultants to provide further financial analysis of the

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review team's main recommendations. We need to ensure that the proposals are robust and tested and that they will stand the test of time.

Staff and other HRI stakeholders are anxious to know their future and that of the institution. I completely understand that desire—having lived through a period of reorganisation in my own professional career, I know how unsettling it is, not only for the individuals involved, but for their families and the wider community. I know understand how it can disrupt normal working and the effectiveness of professional activity, but that is one reason why we need to proceed quickly to conclusions. We shall try to reach and implement decisions expeditiously, but that must not be at the expense of proper analysis of the issues.

We must make sure that our decisions are based on a sound assessment of the various options, and that they create robust and durable solutions. A key consideration in reaching decisions will be ensuring that HRI has a stable platform from which to develop its future business, taking account of actual and potential funding possibilities and business opportunities available to it.

However, it is not for the Government alone to provide for the future of Horticulture Research International. The horticulture industry is a key partner. The Government's primary consideration when they first set up the institution was the industry's wish for an institution that would provide a critical mass of horticultural research capacity. Those involved in HRI's management must ensure that it operates in the most cost effective and efficient manner.

The operation at East Malling is the oldest of the organisations that were merged in 1990 to create Horticulture Research International. It was originally set up in 1913 at the initiative of the local horticulture businesses, supported by grants from the then Board of Agriculture and Kent county council. Like the Ministry of Agriculture, Fisheries and Food before it, DEFRA continues to be a major customer of HRI. This year, we have commissioned research projects worth nearly £3 million. DEFRA has a number of research programmes at East Malling, including breeding work on top, stone and soft fruit; improving propagation rates; the genetics of hardy nursery stock and fruit quality; pest and disease control in fruit crops; organic apple production; biodiversity of ground flora and tree improvement in farm woodlands. I recognise the scope of the activities that are undertaken at East Malling.

Some of the work is due to end in March 2003, but we hope to commission new projects on apple, pear, cherry, plum and raspberry breeding, subject to the receipt of satisfactory research proposals and the securing of the necessary funding. New projects on tree improvement in farm woodlands and local provenance of trees and shrubs are intended for next year, in partnership with the Forestry Commission. Projects on propagation and the improvement of hardy nursery stock are also planned, with some work in that area being put to open competition or to the joint Government-industry LINK programme.

We are also strong supporters of the new organic research and conference centre that was opened at East Malling in September. That was made possible by a grant of more than £2 million won competitively from

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the Treasury's capital modernisation fund, with financial support provided by the East Malling Trust for Horticultural Research. HRI also deserves credit for attracting the enterprise hub with the support of the South East England Development Agency.

I recognise that the review team's recommendations about the future of the site—including its view that it might have to be closed—cannot make comfortable reading for HRI's staff and customers. However, I note that the review team considered that the site has the potential for a successful future as a regional centre for applied research and knowledge transfer, provided that it receives the necessary support from DEFRA and the horticulture industry. With that in mind, the Department's officials have been in contact with the East Malling trust to discuss what role it might play in the site's future. That dialogue will continue. I do not think that it would be right, as the right hon. Gentleman suggests, to put all our eggs in one basket, but the time being spent in discussion with the trust shows that we have responded positively to the report in that respect.

The right hon. Gentleman asked some specific questions, and he might be reassured to know that I think that they are the right questions. However, we need to reflect on stakeholders' responses to the current consultations, and we have not yet reached the end of that process. There is also a need for discussion with the board and management of Horticulture Research International and with the East Malling trust, before all the questions can be answered.

The right hon. Gentleman will understand what I mean when I say that he has both asked for immediate answers to certain questions, and suggested the need for time to work through some of the issues. We need to move quickly if we are to achieve a secure future for the organisation, but it would be inappropriate to answer some of the questions in advance of the discussions, or to rush to judgment.

Paragraph 1.6.3 of the quinquennial review, to which the right hon. Gentleman referred, suggests that

That was the finding of an independent team of experts, whose recommendations will be considered in the light of responses to the public consultation exercise and the results of further financial analysis. It would be inappropriate to give a yes or no answer until that has been done. I am not answering no to the question today, and I understand that it is important to the right hon. Gentleman and to people in East Malling that those questions should be considered and fully answered.

The right hon. Gentleman asked for an assurance about the placing of contracts. As I have already said, there is no reason why East Malling should not continue to receive research income from DEFRA, provided its work continues to meet our objectives and satisfies the

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criteria for selecting proposals. He also sought assurances in relation to the statement in the review that research institutions need to have at least 40 per cent. of their budget secure over a four to five-year period. We need to discuss that detailed matter with the East Malling trust—assuming that, as a result of the discussions that are taking place, it wishes to take over the site. We are sympathetic to the argument that DEFRA work placed at the site should have an element of stability, but the future of East Malling will depend largely on the site's ability to attract a range of work from customers in the public and private sectors, not only from DEFRA. It is important to achieve the right mix so that the new organisation is competitive. That is the secret of its secure future.

Sir John Stanley : Will the Minister answer a key question and tell us whether DEFRA is willing, at least in principle, to pay the cost of the considerable professional fees that will be incurred, without which it will not be possible to begin the work of creating a separate entity for HRI East Malling, of negotiating a memorandum of understanding between East Malling and the trust, and of developing a business plan?

Alun Michael : I am not ruling that in or out, but as I have said, it is one of the issues that we will consider, not least in discussion with HRI's management and the East Malling trust.

The right hon. Gentleman also asked about the opening of the conference centre on 20 September 2002, three days before the review's findings were announced. There is no link between the two events. With the Department's support, in 2000 the Treasury awarded a grant of £2.2 million from its capital modernisation fund to enable HRI to build its new organic centre; the East Malling trust subsequently provided additional investment of £500,000. As I have explained, the quinquennial review report was prepared by an independent team of experts, which started work in December 2001.

The right hon. Gentleman asked about employment arrangements. We cannot deal with that matter in advance of decisions about the future shape of the organisation. We shall certainly try to reach early decisions so as to minimise uncertainty for staff, whose representatives will be consulted in the normal way. I understand the difficulty presented by uncertainty, but the best way to achieve long-term certainty for staff is to ensure that the outcome of the discussions provides a robust platform for the long-term security and future success of the organisation, which, as the right hon. Gentleman said, has an international reputation.

Mr. Deputy Speaker : We must now turn our attention to the final topic for debate today.

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Care Homes (Braintree)

1.29 pm

Mr. Alan Hurst (Braintree): I am most grateful for the opportunity to raise an important issue that is affecting people in my locality, although its ramifications extend well beyond Braintree and its sister town of Bocking.

The issue has been highlighted by the imminent closure of St. Francis's nursing home in Bocking. I appreciate that the Under-Secretary of State for Health, my hon. Friend the Member for Tottenham (Mr. Lammy), and his Department are not responsible for the closure. The home is a charitable institution run by the Missionary Franciscan Sisters of the Immaculate Conception. Although its closure is entirely a matter for them, the same is not true of its effect on the patients, their relatives and friends, and others who live in Braintree and Bocking.

As I said, the home is run by the Franciscan order. It is adjacent to St. Francis's convent, which was founded towards the end of the 19th century. The property was, in part, acquired from the Courtauld family, who played a large part in the development of Braintree. The home does not adjoin the convent, but is on the other side of the appropriately named Convent lane. It has had a number of uses over the years—as an orphanage and then a school—before becoming a nursing home. It currently has permission to provide 40 residential nursing places.

It is not only the Franciscan order that has contributed to running the home; a substantial and successful appeals committee has operated for many years. Only last week, I spoke to Susan Harper, a former Braintree councillor who has served on the committee for many years. She told me that it had raised about £1 million, predominantly from the small communities of Braintree and Bocking. That substantial sum has not been spent on matters ancillary to nursing care; it has been expended in large part on the building's fabric and on providing the material wherewithal to run the home. The effects of that spending will disappear if the home is closed.

For several weeks in the summer, there was rumoured to be a notice of closure. Closure was announced in mid-summer and it is now scheduled for 10 January 2003. Like the local people, I understand that there may be reasons why the Franciscan sisters do not want or cannot continue to run the nursing home. They might be unable to find a sufficient number of sisters who are young enough or able enough to carry out that function. I make no criticism whatever of the local Franciscan sisters, who are held in high regard in Braintree and who for many years have done a wonderful job for those in their care. I am fairly certainly, however, that the decision was not taken in Braintree. I suspect that it was taken on the advice of the accountants, solicitors and land valuers who advise the head of the order, who is, I believe, in Rome.

The purpose of the local campaign is to secure the future of St. Francis' as a nursing home, and there is a great desire to find another proprietor. Although the names of potential buyers have been put forward, people remain concerned. I have no connection with BUPA, but I made a cold call to ask whether it would be interested in running the home. It expressed an interest,

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and, quite naturally, I passed the information on to the Franciscan order. The local care trust, which was set up only last month—I cut the welcome cake at its inauguration—has also expressed great interest in being involved in the operation of the nursing home, and I understand that other prospective purchasers have shown an interest.

I have spoken to Dr. Paul Zollinger-Reid, the new chief executive of the care trust, who is most anxious to ensure that the facility is maintained and extended in the Braintree district. I have written to the Bishop of Brentwood, as have others, and only yesterday we attended upon the office of the Archbishop of Westminster, Cardinal Murphy-O'Connor, to present a petition of more than 2,000 names urging him to use his good offices to seek to persuade those who take such decisions to keep the home open, albeit with another proprietor. So far, unfortunately, there is no news. In many spheres of life, it is said that no news is good news, but as the days slip by I fear that, in case of St. Francis', no news is bad news.

I do not know whether it was the delivery of the petition or the imminence of this debate, but I am told that yesterday, several months after the first approach was made, a representative from BUPA was being shown around the home. It is often said that one swallow does not make a summer, and there is no more than one swallow, but it is certainly the first spark of hope.

One of the banes of nursing home provision and many other types of social provision is the high price of land. Braintree is a housing boom town. Houses are going up in every vacant space, both in the town and in the surrounding areas. That impedes progress, because the higher the price of land, the more difficult it is to use it for anything other than the building of houses. In the past, when land was cheap, mid and north Essex had the advantage of public institutions with large gardens and surrounding green areas. Those green areas remain, but they provide a terrible temptation for housebuilders and developers to acquire public or charitable institutions and develop them for other purposes than were originally intended. St. Francis's home is no exception. We need to consider the importance of the value of land in our social policies. I wonder whether it is time to reread Henry George's "Poverty and Progress" in order to realise the link between the price of land and the speed with which we can make progress.

If St. Francis's nursing home closes, 40 places will be lost. I accept that it currently has only 16 residents, but that is because the order has decided to reduce the number of places to none by January—which is understandable if the home is to close. The constituency of Braintree has a total of 89 places for more than 100,000 people—not a good ratio, which will worsen if the closure of St. Francis's goes through—and not all those places are available to the public: more than half are available only to private patients. The reason for that is probably divinable: the prices paid by private patients can be higher than those paid for by state organisations.

Essex county council, which is currently controlled by our political opponents, is conducting a review of care home facilities in the county, but I do not hold out much

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hope, as it has proceeded with due diligence to close one home after another. It will not be long, therefore, before we have to rely entirely on private provision.

The difficulty lies in striking a balance between public and private provision. I fully accept that not all nursing or care homes can be run by public authorities. Many will be well run by private operators, and many others will be well run by charitable trusts. It is a question of balance. I give due credit to my hon. Friend the Minister and his colleagues in the Department for the additional moneys that have come to the county. I think that £7.4 million has been directed towards nursing home care. That money alone has allowed the health trusts to offer higher fees to nursing homes, and therefore a greater proportion of the nursing home places in the county can be secured.

Nevertheless, there is still a difference in fees between nursing care and residential care. Assessments of all residents are now taking place to ascertain what categories they should properly be put into. Unseemly disputes have arisen in the past about such questions as whether Mrs. Jones should go into the home as a nursing patient; a squabble might then ensue about how quickly to take her out of that category, because then the fees would fall and the payer of the fees would change from the health trust to the local authority. We need to avoid such unseemly conduct, and I believe that progress is being made. The extra financial provision for fees is welcome and will assist.

The effect of home closures is severe on patients and their relatives and friends. Every one of us is attached to the place in which we live. It is said that moving house is near the top of the list of traumatic events in life—even for people who are hale, hearty and in good fettle. What must it be like for a frail, infirm person, who has had to become acclimatised after leaving their own home for a nursing home, to find that they must leave that nursing home and all the bonds that they have formed with staff and other people, and go to a strange situation? I do not want to speculate on the possible consequences, but I am sure that hon. Members have all seen examples in their constituencies.

Another problem is the location of nursing and care homes. Essex, people are surprised to learn, has the longest seaboard in England. That is because it has so many creeks and inlets around its coast. A large proportion of the care homes in the county are situated along the sea coast, even though much of the population does not live along the coast, that is because it is relatively easy to take over hotels and convert them. The result is that there is an imbalance of provision in relation to need, and inland areas of the large county of Essex are disadvantaged.

Many of the relatives of elderly patients are bound to be elderly too. It is terrible when a man's wife goes into a nursing home at the other end of the county. How is he to get to see her as often as he would like if she is not within easy travelling distance? Halsted is only 10 miles from the man to whom I was speaking about that issue, and that is a long way for him, so to have to travel 30 or 40 miles must seem like the end of the world.

My general point is that we can go too far in deciding that private providers can provide everything. Many years ago I served in opposition on a borough council in Essex. The then leader of the county council, Norman

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Clarke, was a Conservative. As always in the 1980s there was a big debate going on about privatisation of council services, including privatisation of the direct labour force. In the end, he said to me that he had decided against privatisation that if he could avoid it, because he would then have no control over council operations if the private provider failed.

If we have no fallback position, we need to be careful that our private providers do not fail us. I can go further than Councillor Norman Clarke by recalling the words of Frederick the Great, King of Prussia, who once said:

It sounds like an argument for the mixed economy and it can be taken that way. We need a balance between our allies in the private and charitable sectors and our own troops in public provision.

The relatives, friends and people of Braintree and Bocking are literally praying that St. Francis' can be saved. They are looking for help and support from whatever quarter aid might come.

1.45 pm

The Parliamentary Under-Secretary of State for Health (Mr. David Lammy) : I congratulate my hon. Friend the Member for Braintree (Mr. Hurst) on securing the debate, making a powerful case for the care home sector in his area, and—as usual—illustrating his argument with a literary allusion. His constituency is at the forefront of establishment social care thinking. It established this country's first care trust to specialise in caring for older people, which was launched by my hon. Friend very recently.

I appreciate that there is local concern that St. Francis's nursing home has been forced to announce its closure. I put on record my deep respect for the work that the sisters have carried out there over the years. I understand that the sisters are now ageing, with many of them reaching their 70s, and that there have been no new recruits to the order in the past 15 years. Those factors, coupled with a facility that is currently not financially viable and is unlikely to meet the national care standards that we have set, mean that, sadly, the order has to close the home. My hon. Friend is right to emphasise that there has been no enforcement activity by the National Care Standards Commission that has precipitated the closure; none the less, the closure has come as no surprise.

We must never forget the human face of such issues, and it is right that my hon. Friend brings the matter to the House today. Such closures mean the moving of individuals from places that they consider to be their homes and probably thought would be their last homes. However, the decision has been taken outside the control of central Government and for what seem to be understandable reasons. It is important that we ensure that the best is done for those residents.

Good notice has been given of the closure, and there has been time to prepare properly and to consult and involve the individual residents. I understand that every effort is being made to encourage the Franciscan Sisters of the Immaculate Conception to sell the home as a going concern. I hope that those efforts are fruitful. I am assured that the care trust will continue to offer support and look for any possible solution that will maintain the facility. However, if the home closes, it is important that the trust identifies alternative arrangements.

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I shall outline briefly some of the steps that have been taken to manage any closure. In July, social services and the primary care group met with two trustees and their financial adviser to offer support to explore the options for keeping the nursing home operational. Benefits checks were run on identified residents to ensure that they were in receipt of their maximum allowances. Essex county council and the care trust offered to act as a broker between the order and any parties interested in purchasing St. Francis's as a going concern. There has been ongoing support and discussions with the manager to find employment elsewhere in the sector for the experienced staff who would be displaced in the event of closure.

A closure date of 10 January next year has been formally given to Essex county council, so it has a duty to ensure that a process is in place for funding new placements for the remaining 16 residents. All residents and relatives were invited to a meeting in September, and two social workers have been allocated to work closely with each resident to secure an alternative placement. In short, there is a lot of work going on to help the 16 residents who will be left to find suitable alternative accommodation should the home close.

My hon. Friend is understandably concerned about capacity in the area. We are all encouraged that he has taken such an active part in trying to keep the home open as a going concern. I hope that the flame that he talks about will be a bright one in the future.

As my hon. Friend will know, there is more to the care of older people than simply care home provision. The Government's objectives, as set out in the national service framework for older people, are to provide the right care in the right setting and to promote the social inclusion of older people. Much is said in the House about social exclusion. We should never forget that the elderly are the most vulnerable and often the most socially excluded people of all. It is right that we enhance their independence. That means allowing people with care needs to remain in their own homes as long as possible, which is what older people and their families tell the Government they want, and the figures suggest that we are helping more and more people to achieve that. In September 1998, 60,700 households were receiving intensive home care packages; by the end of 2001 that number had risen to 76,400 households. That is quite an achievement for the Government.

On 23 July, my right hon. Friend the Secretary of State made an important announcement in which he said that there would be an overall £1 billion package of investment for social care services for older people by 2006. The purpose of the new investment is to improve access to social care services and expand their capacity, increase the choice of services available to older people, stabilise the care home market, and ensure that delayed discharge is reduced to a minimum. I hope that my hon. Friend is encouraged by our right hon. Friend's announcement. The investment will help to alleviate the difficulties and increase care home capacity in his area. Within the overall £1 billion package, resources have been allocated to allow councils to pay higher fees if that is what is needed to stabilise the local care home market. I hope that my hon. Friend will be encouraged by that and that providers in his area benefit.

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There will, of course, be a need for care home provision for the foreseeable future. I accept that there has been a reduction in the number of care homes in recent years, but there is spare capacity within the sector nationally. That spare capacity varies from region to region, which is why we are providing further resources to councils to assist them to further stabilise care home provision in their areas. There will be demographic changes and features particular to a certain area, for example, some parts of the country have larger elderly populations than others.

The allocation of the building capacity grant for Essex in 2002–03 is £5.5 million. That grant has been used to fund increases in assessment capacity, additional community equipment, a 24-hour care scheme attached to an accident and emergency service, increased payment rates for residential, nursing and domiciliary care, and incentive schemes in the most difficult of localities to increase that capacity.

Thanks to the additional resources that Essex social services department received from central Government, it has been able to increase the fees it pays to nursing homes from £386 a week to £453 a week, and to increase the fees it pays to residential homes from £310 to £364. Of course, there is more to improving services than providing resources: relations between councils in their role as commissioners and independent sector providers have often been fraught—indeed, adversarial in several cases—which has damaged both the prospects of good strategic planning that would add stability to the care system, and the interests of service users and their carers, leaving them anxious about the future.

By establishing the strategic commissioning group—chaired by my colleague, the Minister of State, Department of Health, my hon. Friend the Member for Redditch (Jacqui Smith)—we have established a new, more positive partnership between the statutory and independent social, health care, and housing sectors at national level. That must be replicated at local level—for example, by setting up care trusts, such as the one in Braintree.

The "Building Capacity and Partnership in Care" agreement was published last October. It sets out clear good practice guidelines about the nature of the relationships that need to be developed to secure stability in the system and to deliver benefits to the people using services and their carers. The document encourages a whole-system approach: we cannot view the care home sector in isolation from the entire health, housing and care economy or from the reforms that are happening elsewhere.

My hon. Friend the Member for Braintree drew careful attention to the context in which his local care homes operate and the relationship between the private and the public; that was very instructive. We should never forget how we got into this position: throughout the 1980s, there was a huge expansion in the number of care homes, when uncapped Department of Health and Social Security budgets were available for publicly-funded people entering residential care, and money flowed from the public purse into the private purse. Profits were high, but I think that all of us accept that standards were far too low—the result of many of the policies of the 1980s. We have tried to control that and to bring provision closer to what older people say they would prefer.

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Essex council is taking steps to try to keep the home open. However, if it is unsuccessful, it must ensure that any displaced residents are placed in suitable alternative accommodation, and that should, of course, be done in discussion with residents and their relatives.

Witham, Braintree and Halstead care trust was the fifth in the country to be set up and the first to specialise in older people. It will enable health and social care

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partners to integrate their services in a single organisation and I wait with interest to see how the trust will be able to improve local services for older people and, in particular, to show how these arrangements can help to deliver the type of services that older people and their carers want now and in future.

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