Social Care - Health Committee Contents

6  Achieving lasting reform

227.  In this chapter we examine the key issues of social care reform that remain controversial and the reasons why they continue to be major obstacles to reform.

Funding

228.  The most contentious part of social care reform is the issue of funding, which underpins all other aspects of reform. Below we examine why consensus on this issue has not yet been achieved.

FUNDING OPTIONS

229.  The Green Paper sets out five possible funding options for social care, each with the potential to bring in additional funding, which it explains sit "on a continuum".[264] At one end of this is a Pay for yourself system, where everybody would be responsible for paying for their own basic care and support, whether through insurance or savings. This is ruled out on the grounds that it would leave many people without the services they need.

230.  At the opposite end of the continuum is a Tax-funded system, free at the point of use. This too is ruled out, on the grounds that it:

—  would place "a heavy burden"[265] on people of working age;

—  would be unsustainable, due to the projected worsening of the old age support ratio;

—  would allow older people to get more out of the system than they paid in; and

—  does not allow for the fact that older people have benefited disproportionately from house-price inflation (holding £932 billion in housing assets in 2004), while people of working age are disadvantaged by high property prices.[266]

231.  Three further funding systems, sitting between these two extremes, are put forward by the Green Paper as options for debate:

—  Partnership

Everyone who qualified for care and support would receive state funding for a proportion of the cost of their basic care and support (for example a quarter or a third), or more if they had a low income. They would have to pay the rest themselves, effectively as a co-payment or user charge. The Green Paper indicates that the majority of working-age adults who need care and support would not have to pay under this system because younger disabled people tend to have low incomes and few assets. The DH told us that this option was based on the funding model developed by Sir Derek Wanless for the King's Fund.[267]

—  Insurance

This is the same as the Partnership model, but with an element of voluntary insurance to cover individuals' contributions in the event of their needing care. This could be a state insurance scheme, or one developed with the private insurance market. With the state guaranteeing to pay part of the cost of care, premiums for private insurance would be lower than in a purely private system. The Green Paper estimates that the total insurance premium would be between £20,000 and £25,000 (compared with the average lifetime cost of care for a 65-year-old of £30,000);[268] this could be paid in instalments or in a lump sum, before or after retirement. This option is not for working-age adults, since they would not be able to insure against the care needs that they already have. It appears to be presumed that they would mostly qualify for free care on the basis of means-testing, as under the Partnership option.

—  Comprehensive

Everyone over retirement age, apart from the poorest, would be required to pay into a state insurance fund; the contribution could be set at a flat rate or varied according to people's ability to pay. Everyone would then receive free care and support if they needed it, paid for from the insurance fund. The Green Paper estimates that the total contribution from each person would need to be between £17,000 and £20,000. The cost would be less for people who were already aged over 65 when the scheme was introduced. It is suggested that couples might make lower contributions, in recognition of the extent to which people within couples act as each other's carers. The Government would consider having a free care and support system for people of working age alongside the Comprehensive option for older people.

Ms Norrish, of the DH, told us that all the shortlisted options were based on the principle of progressive universalism, with all eligible people receiving some state help but less well off people receiving more help than others.[269] The National Care Service would thus not be a fully universal service like the NHS (despite the, presumably intentional, similarity in names).

232.  None of the funding options is intended to cover "hotel costs" for people in residential care, which would continue to be the responsibility of individuals (with means-tested help available for the poorest). The Green Paper states this is "because we would expect people to pay for their own food and lodging whether or not they were in a care home".[270]

233.  It also states that, in recognition of the difficulty of meeting these costs, they could in future be met by means of a "universal deferred payment mechanism",[271] so that payment could be taken from people's estates after their death. (Although councils currently have the discretion to offer this option, around a fifth do not.)[272] This mechanism could potentially also be used to meet co-payments under the Partnership and Insurance options, or the one-off insurance contribution under the Comprehensive option.

RESPONSES TO THE OPTIONS

234.  It is widely agreed that the Government is correct to rule out the Pay for yourself option. In our evidence we heard that private insurance against care and support needs has long been characterised by "market failure". This is due to low take-up (because few people expect they will need care) and "adverse selection", i.e. the fact that people who are more likely to need care are more likely to buy insurance (which skews the "risk pool" of any insurance fund). These factors drive up premiums and make this form of insurance at best a niche product for better off people (e.g. immediate needs care annuities),[273] or at worst commercially unviable.

235.  We also heard there is scepticism in the insurance industry itself about the Conservative Party's plan for a privately-run insurance scheme to cover residential care at a premium of just £8,000. Chris Horlick, of Partnership Life Assurance Company Ltd (a provider of immediate needs care annuities), welcomed the idea of exploring funding options involving the private sector, but on this specific proposal told us:

I think there are some pretty flawed assumptions in it and the two most fundamental ones are the numbers of people going into care, so the front end bit of it, if you like, and at the other end their longevity in care. I have not seen the model so I do not understand the details of it but it seems to me to be flawed, I am afraid […][274]

236.  There was general agreement that it was desirable to have a more universal system than the status quo (in which many people receive no state support at all), but beyond that opinions differed.

237.  A wholly universalist system (i.e. the Tax-funded option) had considerable support among those who gave evidence to our inquiry. Its advocates pointed out that the three progressive universalist options put forward for consideration in the Green Paper "all continue to involve an element of means-testing and unfairness", as the National Pensioners Convention told us.[275] The Tax-funded option, by contrast, would be a truly fair and equitable way to pay for care and support. It would enable "risk pooling" right across society, with people contributing, through the tax system, on the basis of their ability to pay and receiving care and support solely on the basis of need. This approach is supported by all the main political parties, and the great majority of the public, as the underpinning principle of the NHS and many cannot see why it should not apply to social care too.[276] It is notable that the DH's own polling shows that half of people asked think social care is already provided on the same basis as the NHS.[277]

238.  In attempting to justify funding social care in a different way to the NHS, the Secretary of State referred to people accepting personal responsibility for aspects of social care and to the extent of home ownership nowadays.[278] Yet variants of these arguments could just as easily be deployed against the principle of a free NHS. Mr Humphries, of the King's Fund, thought the Green Paper made a "cogent" case for believing tax-funded social care would be unsustainable, but could not see why this did not apply equally to the NHS. He concluded: "Some of this does boil down to political choices about what you want to do out of taxation or not, as the case may be".[279]

239.  Support for the Partnership form of progressive universalism put forward in the Green Paper did not seem strong in the evidence we received and it attracted a number of criticisms. Linda Pickard, of the PSSRU, told us that it could lead to heavy reliance on carers, since "many of those without sufficient financial resources to purchase care services would seek support from their families". This would make the social care system vulnerable in the future to declining availability of informal care.[280]

240.  Professor Caroline Glendinning, of York University, told us that the Partnership model:

may be very difficult to operationalise with people who have very significant fluctuations in their conditions, or deteriorating conditions, where the amount of money that would be contributed may well change from time to time and, indeed, on a very frequent basis […][281]

241.  Mr Laing, of Laing & Buisson, argued that this option would constitute a de facto continuation of the current means-tested system. While better-off people would receive some state funding, this would be offset by the impact of reforming Attendance Allowance (which is currently payable as a non-means tested benefit to self-funding care home residents): "that is smoke and mirrors; no change at all!"[282]

242.  Another weakness in the Partnership model is that, as under the current system, there is no cap on the amount that a person could end up paying from their own resources, should they need care that is very expensive by reason of its type or duration.[283] There is some indication that the relatively low level of state contribution for some people in the Green Paper's version of the Partnership model (at least a quarter of each person's costs) would leave significant numbers facing substantial co-payments at the point of need.[284]

243.  Although the DH insisted its version of the Partnership option was essentially the same as Sir Derek Wanless's, we heard that there were crucial differences and Sir Derek's proposal may have more support. Sir Derek's version of the Partnership option involved state funding of two-thirds of the cost of a benchmark package of care, with the remainder paid for by co-payments, along with further pound-for-pound "match-funding" by the state (meaning that the state could contribute up to 83% of the cost in each case).[285] Mr Humphries told us that the King's Fund thought match-funding, which was intended to give people an incentive to make provision for themselves, was "an important component of the original partnership".[286] Another difference is that Sir Derek's proposal involved higher quality benchmark packages of care than does the Green Paper, which simply assumes that care packages will be worth their current value.[287]

244.  The Insurance option is a variant of the Partnership option and, as such, is susceptible to the same criticisms. In addition, it is improbable that the voluntary insurance element of the Government's Insurance option would actually attract significant numbers of people, since it would fall foul of the problems that have always beset private insurance (i.e. low uptake and adverse selection).

245.  The Comprehensive option found some support among our witnesses because it would effectively "cap" people's contributions from their own resources, unlike the two co-payment options (Partnership and Insurance), as well as spreading risk significantly more widely than those options.[288]

246.  The charity Counsel and Care supported the Comprehensive option, seeing it as close in spirit to the Tax-funded option (which Counsel and Care also favoured). The charity thought that the Comprehensive option would operate most fairly by means of a "care duty" of 2.5% on people's estates (with perhaps a threshold of £25,000 below which assets were disregarded), to be hypothecated, i.e. paid into a ringfenced fund for social care expenditure.[289] There has recently been political controversy about the possibility that the Government will favour this form of the Comprehensive option, which has been criticised as a "death tax". From this point of view, it is regarded as effectively an additional form of Inheritance Tax, which would hit people hardest in London and the South East, where property values are highest. However, a recent Care and Support Conference, involving a range of stakeholders was favourably disposed to it, while also regretting "that the option of general taxation had not been explored".[290]

247.  Others who were also sympathetic to the Tax-funded model have been less positive about the Comprehensive option.[291] While Ms Pickard thought that, of the options in the Green Paper, only the Comprehensive one "would potentially reduce reliance on intense informal care" (since there would be no financial disincentive to accessing care and support), she added:

It is not clear, however, that a "comprehensive" option should necessarily be funded only by the resources of older people themselves, as is suggested in the Green Paper. There are many organisations representing older people who feel that tax-funding of social care should not be ruled out and that "costs must be shared fairly across the generations".[292]

Professor Glendinning pointed out to us that in Germany, where social care is funded through a social insurance scheme, contributions are paid by the working age population and this is generally accepted.[293]

248.  Age Concern and Help the Aged reported that: "our research shows that the proposal for a 'care charge' outlined in the 'comprehensive' option is very unpopular."[294] The charity calculated that overall (allowing for the reform of Attendance Allowance and "hotel costs") the option was likely to prove:

little cheaper than insurance people can already buy to cap their costs, once they know they will need care [immediate needs care annuities]. We think few older people will see the care charge as a "price worth paying".[295]

249.  Mr Lloyd explained to us how "soft compulsion" might be used to avoid the pitfalls involved in both voluntary and compulsory insurance. This could be done by automatically enrolling everyone in a state insurance system, but giving people the choice to then opt out if they wished. Since most people would not trouble to opt out, this would give the broad coverage of compulsory insurance but would not be as strongly resented.[296]

250.  The DH's view that funding reform did not need to address "hotel costs" was widely criticised. It was pointed out to us that these costs can be much higher than the cost of living at home; and "hotel costs" can end up being catastrophic just as care costs can.[297] We heard that in Scotland, despite free personal care, residents still pay substantial sums from their own resources to cover "hotel costs".[298] The independent consultant Donald Hirsch told us:

Is there not another way of looking at this and that is to say not an accommodation cost but an accommodation charge? […] It certainly would not look right to have a system which provides everything to people when previously they would have been paying for those things, food and accommodation, but if you could have a charge based on what people can pay, then you would not have this issue.[299]

People of working age

251.  Another issue that caused concern was the Green Paper's failure to say enough on how the funding options would affect people of working age. It assumes that people of working age will mostly qualify for wholly free care under the Partnership option on the basis of means-testing. The charity Leonard Cheshire Disability told us:

We are very concerned that a means-test in the partnership model could have exactly the same effect as now, actively discouraging saving among disabled people who use care and support services, preventing many from going out to work and leaving more trapped in poverty.[300]

252.  Regarding the Insurance option, the Green Paper indicates that this is for people of retirement age only (it would not be possible for people of working age to insure against an existing impairment). This appears to mean that, as under the Partnership option, working-age people would qualify for free care on the basis of means testing.

253.  The Government says it would look at a free care and support system for people of working age alongside the Comprehensive option for older people. However, Leonard Cheshire Disability told us:

this brings its own complexities with regard to a subsequent point of transition being created between working age and older people's services, by requiring individuals to start paying for some or all of their care at the point when they are no longer earning a monthly income from work.[301]

THE OVERALL "FUNDING ENVELOPE"

254.  The Impact Assessment for the Green Paper suggests that the National Care Service could cost the state annually between £18.2 billion and £20.7 billion by 2014 (in real terms at 2006 prices), depending on the funding option chosen. The Partnership and Insurance options would cost the state marginally more than the current system in 2014, and the Comprehensive option significantly more (£3.4 billion, i.e. the same additional cost as the Tax-funded option).[302]

255.  These are "illustrative comparative costs suggesting the possible cost to the state of the different models",[303] with the assumption that the budget for Attendance Allowance is merged into social care funding (we discuss this proposal further below). They are, therefore, no indication of what the future "funding envelope" for social care will actually be.[304] Thus, as ADASS noted in its evidence to us, the Green Paper:

is silent on the prospects of more state funding even though the options imply increased state expenditure and increased contributions from individuals.[305]

Yet, as we have noted, one of the greatest problems with the current system is the extent to which it is underfunded. Age Concern and Help the Aged stated in their evidence that:

The Green Paper proposals are broadly "revenue neutral" (except for the "comprehensive" option). But the care and support system needs more resources—even to respond to the needs of people who meet today's means-test—in order to achieve better quality and earlier availability of services […] Before we can make any meaningful comment on the funding options proposed in the paper we need more detail on the costing assumptions: the level at which eligibility criteria will be set; how much resource will be available per person; and the nature of the means-test […][306]

In giving oral evidence the charity's representative, Mr Harrop, elaborated on this:

The critical issue that is missing from this Green Paper is the analysis of the problems of the current system, all those issues […] about it not being available to enough people, the amount spent per service user being insufficient, all that is rolled forward into the Green Paper's proposals. The Green Paper is mainly about extending the current offer to higher income groups, rather than deciding: are there enough services available, is the amount of resource in that total envelope sufficient? We say it is not.[307]

Mr Chidgey, of the Alzheimer's Society, also explained:

the big worry for people is there is nothing in the proposals that they think very clearly describes: what are you going to get? Are you going to be able to get some respite care except in an emergency, which is often the case at the moment, some planned respite? Are you going to be able to get a little bit of help to get someone out of bed, and to involve them in some meaningful activity?[308]

256.  However, when we pressed the Secretary of State on the future social care "funding envelope", he could only tell us:

Obviously, those are decisions for the Treasury and the Chancellor. Spending on social care through local government is obviously a decision for the Chancellor when the final spending review is completed […] Obviously, we cannot prejudge spending reviews in future.[309]

IMMEDIATE REFORMS

257.  While there is universal recognition of the need for fundamental reform, we heard in our evidence that there are several more limited reforms that could quite easily, and relatively cheaply, alleviate some of the worst aspects of the status quo.

Revising capital limits

258.  When we asked Mr Burke, of Counsel and Care, about options for short-term reform, he told us:

what we have embarked upon is system wide reform and long-term reform, inevitably that will not happen for three or four years yet, so there are probably things that you could do in the short-term, so certainly increasing the [upper] capital limits [above which a person receives no state help; in 2009-10 set at £23,000], probably [to] £50,000 […] that was the figure recommended by a recent commission on care from Hampshire County Council […][310]

259.  We also heard from Mr Hirsch that the JRF had looked at "suggestions of things you could do while you were fixing the present system in the long term". The Foundation had concluded that one such measure would be to double the upper capital limit "so that at least people would feel they had something to preserve in a worst case scenario".[311] A case might also be made for concomitantly raising the lower capital threshold, below which a person may keep all their capital (in 2009-10 set at £14,000).

Capping individual liability

260.  The charity Mind mentioned to us in its evidence the idea of a "limited liability" arrangement, whereby if someone is required to pay for care from their own resources before they qualify for public support, "the individual contributes only for a certain length of time".[312] In this way, liability is effectively "capped" and there is no chance of incurring unlimited catastrophic costs in the event of needing care that lasts for a long time.

261.  Sir Derek Wanless's report considered "limited liability" as a possible funding model, with a cap taking effect either after a specified period of time or after a specified sum of money had been spent. (It was rejected on the grounds that it would only protect the assets of those who have more than the limited liability threshold.)[313] It was also recommended for consideration by one of the two signatories to the Royal Commission minority report.[314]

Universal access to deferred payment arrangements

262.  As we have noted, local authorities currently have the discretion to offer a Deferred Payment Agreement (allowing people to avoid having to sell their home during their lifetime to fund residential care, should they fail the means test) but many do not. The Green Paper, as we have also noted, proposes that this should be made universally available to help people pay "hotel costs" (and possibly also co-payments or insurance contributions) under a new funding system. There is support for this proposal[315] and there would seem to be no reason it could not be implemented ahead of fundamental reform of the funding system.

Reducing the tariff income

263.  The presumed "tariff income" on capital between the two thresholds (£14,000 and £23,000) in 2009-10 is set at a rate equivalent to an annual net interest rate of 20.8%, which is considerably higher than the current (March 2010) Bank Rate of 0.5%. Although the tariff income is not intended to represent actually available rates of interest, the very large discrepancy between it and currently available interest rates is forcing people to "spend down" their capital much more quickly than would otherwise be the case. Citizen's Advice told us in their evidence that "The tariff income rate is much too high and should be reduced."[316]

Raising the Personal Expenses Allowance

264.  The low level of the PEA for local-authority sponsored care home residents (£21.90 in 2009-10) is a source of particular resentment under the current system. We heard that this amount is far too low for people to be able to maintain their quality of life, for instance by purchasing equipment such as a specialist chair or services, such as foot care.[317] Mr Hirsch told us that the JRF had "thought roughly £20 a week was just not compatible with dignity and it would not cost a lot to double that in the overall order of things".[318]

265.  The Government has, however, resisted demands to increase the PEA on the grounds that this would consume scarce resources but would not "increase the availability choice or quality of care services or support the transformation of adult social care provision".[319]

CONCLUSIONS

266.  The Government's presentation of the funding options in the Green Paper is significantly flawed. The option of free care wholly funded from general taxation is ruled out by the Government on the grounds that it would place "a heavy burden" on taxpayers of working age. However, many of those who gave evidence to us supported this option and most of the arguments against it can be said to apply just as much to the idea of a free NHS. We recommend the Tax-funded option should be debated in order to gauge whether people are prepared to pay higher taxes for social care or wish to see tax revenue diverted to it from other areas of spending.

267.  The DH told us that the Partnership option presented in the Green Paper derived from the model developed by Sir Derek Wanless. However, a key part of Sir Derek's model which is missing from the DH's is the idea of the state matching individuals' contributions pound-for-pound, on top of a basic state contribution, to provide an incentive for people to make provision for themselves. We believe that Sir Derek's original Partnership option should have been included in the debate.

268.  We are dissatisfied with the Green Paper's approach to the issue of "hotel costs", which it excludes from the funding options "because we would expect people to pay for their own food and lodging whether or not they were in a care home". It can plausibly be argued that such costs are significantly higher in residential care than they would be in a person's own home. Funding reform that fails to address the risk of incurring uncapped catastrophic costs of this kind risks being quickly discredited and losing public support. The Government must look at options for dealing with this issue, such as an accommodation charge that takes account of people's ability to pay.

269.  We are also concerned that the Green Paper pays insufficient attention to how the various funding options might affect people of working age who use social care services. The means-testing element of the "Partnership" and "Insurance" options would risk replicating the existing poverty trap in which many disabled people of working age find themselves. The proposed free system for people of working age alongside the "Comprehensive" option for older people would avoid the poverty trap. However, we are concerned that the transition from one system to the other at the age of 65 could mean that people become worse off merely by reason of growing older.

270.  A major deficiency in the Green Paper is that it is silent on the question of the overall "funding envelope" for social care, i.e. how much money, from all sources, will be spent on people with care and support needs in future. This leaves the Green Paper unable to indicate the scope of the new system. The state of public finances as a result of the credit crunch, the bank bailouts and the recession clearly makes the question of future spending levels particularly problematic. However, the issue cannot be ducked. We need to know in hard cash terms what future overall social care funding will be.

271.  Ahead of fundamental reform, there is scope to mitigate significantly the worst aspects of the existing funding system quickly and relatively cheaply. This is not to argue for minor change as an alternative to major reform, but rather to make the case for addressing some of the deficiencies as a matter of urgency. We recommend that the following measures be taken immediately:

—  The capital thresholds in the means test must be substantially raised in order to ease the burden on people of relatively modest means.

—  Consideration should be given to some form of "cap" to limit people's liability to pay from their own resources before they qualify for public support.

—  Universal access to the deferred payment mechanism (which allows people to avoid having to sell their home during their lifetime to fund residential care) must be introduced.

—  The presumed "tariff income" on capital between the two thresholds is punitive must be substantially reduced.

The Personal Expenses Allowance for people in residential care is far too low and fails to ensure dignity or opportunities for people to maintain their social and family relationships. It must, as a minimum, be doubled.

Free Personal Care at Home Bill

272.  Since the publication of the Green Paper, social care reform has been made more complicated by the Free Personal Care at Home Bill. Below we outline the Government's proposals and examine reactions to them.

THE POLICY

273.  At the Labour Party conference in September 2009, the Prime Minister, Rt Hon Gordon Brown MP, unexpectedly announced that the Government would be introducing free personal care for those people with the highest levels of need being cared for in their own homes, beginning in October 2010.

274.  The Personal Care at Home Bill was introduced into Parliament on 25 November 2009 and is currently making its way through the House of Lords.[320] The Government has meanwhile consulted on proposed regulations to be made under the Bill, should it become law. It is proposed that free personal care at home should be given to people whose needs are classified as "Critical" under FACS and who need significant help with four or more personal care-related Activities of Daily Living.[321] There are also proposals regarding how resources will be allocated to individual people;[322] and the formula for distributing to councils central-Government funding earmarked for this purpose.[323] In addition, the draft regulations would permit councils to make free personal care conditional on a person undergoing a period of intensive support or re-ablement for up to six weeks before having their care and support needs formally assessed. A consultation on these proposals took place between 25 November 2009 and 23 February 2010.

275.  The Government estimates that more than 400,000 people will benefit from this policy, with 130,000 people receiving re-ablement services and 280,000 actually receiving free personal care. Of those who will receive free personal care, 166,000 already receive free care after means-testing and 100,000 currently pay charges, receive informal care, receive residential care, self-fund or have unmet need.[324]

276.  The cost is estimated at £670 million per annum, of which £420m will be supplied by the DH (from efficiency savings). In a recent interview, the Secretary of State said £60 million would be "reprioritised" by the DH from "lower-priority" health research and development, and £50 million saved from public health campaigns as part of funding free personal care at home.[325]

277.  He explained to us that these figures related to the first six months of implementation (the second half of 2010-11), during which the DH would have to find £210 million to fund the policy. He said that the Department planned to "release savings from the administration of the research budget", but strongly denied that "front line research into cancer or other high-profile conditions" would be cut, as had been reported. However, he could not yet give "a precise list of the implications" of the planned savings. As regards public health campaigns, he suggested that cuts could be made in "how we procure advertising and communication space from the media" and by "taking a very tough approach to the use of management consultancy".[326]

278.  Local government will be expected to find the remaining £250 million, also from efficiency savings. The Secretary of State referred us to the DH's document Use of Resources in Adult Social Care (October 2009), which he said "identified £250 million efficiency savings that we believe are there to be made", a figure that had been confirmed in the Pre-Budget Report in December 2009.[327] The latter states that local authorities could, by 2012-13, save:

£250 million from reducing variations in spend on residential care, including greater use of preventative approaches to care for older people allowing people to stay longer in their homes[328]

279.  The Government argues that the Bill does not in any way cut across the Green Paper but is rather, as the Secretary of State put it to us, "a stepping stone or bridge" to the National Care Service.[329] He argued that it did so firstly by ending the current "lottery" of care for the most vulnerable and replacing it with a national entitlement to free care; and secondly by linking domiciliary care with re-ablement and a preventive approach.[330]

280.  Following the announcement of this policy, the DH commissioned revised financial modelling from the PSSRU.[331] We twice wrote to the Secretary of State asking him to show us the interim financial model that the DH had received from the Unit in November 2009, but he declined to do so.[332] He denied this was because he was embarrassed to admit that the change in policy had badly damaged the DH's original calculations.[333]

REACTIONS TO THE POLICY

281.  The Government's free personal care at home policy has proved to be extremely controversial. Lord Lipsey, who was a dissenting member of the Royal Commission on Long-Term Care, memorably accused the Prime Minister of being like "an admiral firing an Exocet into his own flagship" when the policy was included in the Queen's Speech.[334] In our evidence we heard a number of reactions to the policy, both positive and negative (although largely the latter), and these are summarised below.

Relationship to the Green Paper

282.  The Secretary of State insisted that free personal care at home had grown out of the Green Paper and not been "unilaterally chucked in";[335] and DH officials insisted to us that the new policy had not been unexpected.[336] However, considerable surprise has been expressed at the announcement of the policy in the middle of the Green Paper consultation (the Big Care Debate). Ms Scott, of the National Care Association, told us:

I thought we were in the middle of a public consultation about the whole issue, and so it was quite a shock, in the first instance, to have the announcement made […] This is a large amount of money that has been dedicated, and we truly believed that we were having this major public consultation which would make these sorts of decisions. So this large amount money that is being allocated to one part of the service makes us think that other parts of the service may not be so fortunate.[337]

Mr Burke, of Counsel and Care, was sympathetic to the policy but thought:

the question is where are we heading generally, because we are obviously halfway through a Green Paper consultation on the future of care which is talking about system-wide reform, and that is what we need, we need to reform across the whole system. So a piecemeal change is not necessarily the best way to approach this.

283.  A key point here is the perceived contradiction between free personal care at home and the categorical ruling out of the Tax-funded option by the Green Paper, as we heard from Professor Peter Beresford, of Brunel University:

if we have ruled out as an option considering general taxation in a Green Paper to which there have been 24,500 responses, a significant number of which have supported the idea of general taxation at least to be included, then it feels like it is policy being made on the hoof to introduce a new idea which contradicts that […][338]

Scope of the policy

284.  The narrow scope of the policy, as outlined in the proposed regulations, has caused concern. Mr Harrop, of Age Concern and Help the Aged, thought the policy was "a really welcome move forward" but noted that the proposed eligibility threshold meant that:

you really will need to be very, very disabled and in need to get this free offer […] the people who are going to be supported by this actually could be relatively few in number.[339]

There is a particular concern that people with fluctuating needs could be disadvantaged by the tightness of the eligibility criteria.[340]

Unintended consequences

285.  The piecemeal nature of this reform raises concerns that it could have unintended consequences in interacting with the rest of the social care system. Mr Chidgey, of the Alzheimer's Society, was worried that it could:

create perverse incentives to either admit people to long-term care too early, because perhaps there is a local authority incentive, or […] incentivise people to keep the person with dementia at home far longer when actually it is not good for that person's quality of life or for the family's quality of life[.][341]

286.  Admitting people to residential care prematurely would, of course, run directly counter to the policy's stated intention (and long-term DH policy) of making it possible for people to be cared for at home for as long as possible. Ms Owen, of ADASS, accepted that councils had a duty not to place people inappropriately in residential care; but they also had a duty to get value for money. If "the same sort of good quality care, can be provided at better value in residential care, you have a real dilemma".[342]

287.  Mr Bolton, from the DH, told us that this would be limited by lack of care home capacity, could be detected using councils' spending returns and would be policed by the regulator (i.e. CQC).[343] He thought there was "nothing particularly" that could prevent the operation of the opposite perverse incentives, for families to keep people out of residential care for too long.[344] The Secretary of State also told us that the operation of the policy would be reviewed after 18 months to check for unintended consequences.[345]

Definition of personal care

288.  The policy's focus on the provision of personal care alone is also seen as problematic. Ms Owen referred to disputes in Scotland about demarcating the boundary between free personal care and other (means-tested) services:

the four activities of daily living I think could wrap us up forever in arguments about what does it mean. This is the experience of Scotland. Let us just take one example: Help with eating. What does it mean? Does it mean cutting up the food? Does it mean help with putting the food in your mouth? Does it mean microwaving it? Does it mean cooking it? For lawyers […] this is going to be an absolute minefield.

She was also concerned at how the focus on personal care alone would fit with personalisation:

we have been spending the last two years working on personalising services, getting away from: "If you need this activity of daily living, then you need this" but having much more flexibility around the response. We must not throw out the personalisation of our services as we have to start looking at this.[346]

Paying for the policy

289.  The most controversial aspect of free personal care at home is the question of paying for it. Sir Jeremy Beecham told us about the "new burdens doctrine", whereby any new statutory duties imposed by central government on local government are fully funded, either by providing new money or lifting other obligations. In this case, he thought the Government had violated that principle.[347]

290.  The Secretary of State insisted to the contrary:

The Department of Communities and Local Government does not consider this to be a new burden; it is part-funding and brings a lot of new money to the table for local government to build those services and help them achieve those savings. We see this as a partnership, not the dumping of a new burden.

He cited the Isle of Wight Council as an example of an authority that was already providing free personal care for all people aged over 80 who were being looked after at home, funded by efficiency savings, including reduced use of residential care. He thought that the Bill "very much nationalises the example of the Isle of Wight".[348]

291.  Sir Jeremy and Ms Owen both indicated that they doubted whether the Government's estimates of the cost of implementing free personal care at home were "robust", in respect of both the level of demand and unit costs. They suggested that the modelling work done for the policy could have understated:

—  the cost of re-ablement relative to its benefits;

—  possible increased demand from people who have hitherto been buying their own care;

—  possible increased demand from people currently being looked after by carers;

—  administrative costs.[349]

Sir Jeremy found the Government's figures "suspiciously precise"[350] and thought it might have been better to pilot the policy before going ahead with full implementation, to evaluate its cost properly.[351]

292.  According to the results of an ADASS survey, published in January 2010, the true cost of the policy could be at least £1 billion per annum, with the cost to local authorities reaching more than twice the £250 million stated by the Government. ADASS questions the Government's assumption that personal care needs can be met through an average package of 6.54 hours of care per week at £15.75 per hour (amounting to £103 per week). It states that local authorities estimate a much more expensive average care package for a person with high needs, at an average cost of about £200 per week. In addition, the Association points out that the number of existing self-funders in any given area is often unknown, as well as the number eligible under the FACS criteria.[352]

CONCLUSIONS

293.  We acknowledge that the Government is itself bringing forward significant interim reform of social care through the Free Personal Care at Home Bill. However, we have strong misgivings about this. The proposal for free personal care should be substantially increased, consistent with the introduction of a National Care Service.

294.  For the Government suddenly to announce this new policy just weeks after publishing the Green Paper, and in the middle of the consultation period, smacks of policy-making on the hoof. The haste with which the proposals have been assembled is all too apparent in their shortcomings.

295.  Since only part of the social care system is to be changed, there is a risk of creating perverse incentives and introducing unanticipated consequences. Witnesses told us that families will have an incentive to try and keep people out of residential care longer than is appropriate, in order to continue receipt of free care. Councils, meanwhile, will have opposite incentives to place people in residential care prematurely, or to manipulate their eligibility criteria so that people being cared for at home are not classified as having higher levels of need.

296.  Furthermore, estimates of the likely levels of demand and cost appear low, and there is a risk that the reform could be substantially underfunded. Local authorities have warned that they will not be able to fund their share of the costs from efficiency savings, as the Government intends. This could result in rationing or cuts in other services, including aspects of social care. Meanwhile, the DH has yet to make clear how exactly it will find its share of the funding. It has indicated that some will come from public health and research budgets, which could be detrimental to the long-term interests of NHS patients.

297.  As we have stated, the option of a free social care system is one that needs to be debated and considered. However, it is not helpful for the Government to rush in a poorly thought-out and very circumscribed form of free care, as it is doing, rather than it being an integral part of a National Care Service.

"Fully national" or "part local/part national" system?

298.  The Green Paper poses a choice between two models for the National Care Service, regardless of which funding option is ultimately chosen: a "part-national, part-local" system; and a "fully national" system.

299.  Under the "part-national, part-local" option, people would be entitled to have their needs met, and a given proportion of their care and support package paid for by the state, wherever they lived. However, local authorities would decide how much to spend on each individual person's package of care and support, giving councils flexibility to take into account local circumstances and costs, as well as the requirements of individual people.

300.  There is certainly a case for a "localist" approach to social care. Geographical variations that are regarded as indicative of a "postcode lottery", may in fact reflect different local circumstances, e.g. variations in cost or need for particular services or priorities. Where services are more limited in some areas than in others, it can be argued that this is balanced out by other things (for instance, lower Council Tax or more generous services of another kind). Sir Jeremy Beecham of the LGA told the Committee:

Sometimes I have been tempted to form a society for the preservation of the postcode lottery because I do think you have to respect local differences, not only in demand but how you meet that demand, and so you need a system which is flexible enough to allow you to engage with other partners, the third sector perhaps, in particular, to commission appropriately and to offer choice.[353]

301.  Under the National Care Service's "universal offer", there would be a "portable" assessment, as we have noted. However, as Ms Norrish, of the DH, told us:

It does not necessarily mean that you get exactly the same services wherever you are, because if you are living in rural Devon you may actually need different services to those that you would need if you were living in the city of Durham […][354]

The prospect of there being no greater consistency between areas in respect of rationing and resource allocations does cause anxiety that the unfairness of the "postcode lottery" will simply be perpetuated under the new system. Sue Ryder Care told us:

if the Local Authorities retain control of the social care budgets and a National Assessment is introduced, both eligibility for services and the level at which they are delivered need to be portable.[355]

302.  From this point of view, "localism" looks significantly less attractive than the "fully national" option. Under the latter, central government would set "the level of funding that people with a particular level of need and who need a particular outcome would receive".[356] The amount of funding allocated could be consistent across the country, or it could vary depending on location, to take account of the different costs of care across the country. Under this system, it is likely that all funding for care would be raised through national taxation, with councils not needing to raise funds locally through Council Tax.

303.  In his evidence, the Secretary of State seemed to lean towards this option:

one can have national assessment and entitlement. Obviously, the question is: entitlement to what? That takes one into the question of how big one makes the offer. I agree with you. In recent times there has been a lot of fashionable talk about localism and giving people the ability to run things at local level. I believe that often the public do not want a postcode lottery certainly for healthcare but also social care; they want clarity about what they can expect and they want it to be fair across all areas. I believe that the case for national entitlement and assessment is very strong.[357]

304.  Another issue is the question of integration of health and social care, for which our predecessor committee argued strongly in 2005.[358] It can be argued that a "fully national" social care service might be more easily integrated with the "fully national" NHS.

CONCLUSIONS

305.  Whether the National Care Service should be a national system locally provided ("fully national") or a local system with national standards ("part local/part national") is a key area of controversy. The argument in favour of local accountability, along with flexibility to meet local needs and priorities, is very persuasive. On the other hand, the "fully national" option would clearly be the best way to ensure more clarity and consistency in provision; it would also seem to be an effective means of bringing about full integration of health and social care. The lack of detail in the descriptions of the two options given in the Green Paper makes it difficult to arrive at a definitive view one way or the other. In particular, the Government must make clear whether the fully national option will involve a funding allocation mechanism that takes account of differing local costs.

Personalisation

306.  Despite the universal consensus in favour of greater personalisation of care and support, the details of implementation are contentious in relation to issues such as fairness, equity and protecting vulnerable adults, as we consider below.

INDIVIDUAL BUDGETS OR PERSONAL BUDGETS?

307.  Professor Glendinning, who led the IBSEN review, told us the Government was implementing Personal Budgets (involving social care funding only), rather than the more ambitious model of Individual Budgets (involving funding from a range of budgets):

The personal budgets that are now being implemented under Putting People First are social care resources only, and I do want to emphasise that this was probably the most disappointing element of the [IBSEN] pilots.[359]

I do not know the reason for the decision. The decision to roll out personal budgets across English adult social care was, of course, made before the findings of the IBSEN evaluation were available […] My own personal view is that it was a political decision. I am not aware of any clear evidence underpinning that decision.[360]

308.  There appears to be a widespread view that such a policy decision has been made.[361] However, this was denied by the Secretary of State and Hazel Hobbs, of the DWP:

Q942 Dr Taylor: Why have you given up on individual budgets which combined local authority social care money and other funding streams?

Andy Burnham: We certainly have not. Ms Hobbs may be able to say more about the right to control work that is going on for which DWP has legislated.

Q943 Dr Taylor: So, you have not given up on the idea?

Ms Hobbs: Certainly not. The principles running through and across government in this sense are about giving people the right to control, bringing together different funding streams, for which parliament legislated in the Welfare Reform Bill last year.

Ms Hobbs agreed there was some confusion of terminology.[362]

309.  The Secretary of State emphasised that this approach was part of a fundamental shift that would occur across public services over the long term:

This is a very interesting side of public service reform that will play out not necessarily immediately but over the next 20 years. When you look at the effect of our health personal budgets pilot the intention is to merge it with direct payments in social care, employment and elsewhere, but here you cannot run before you can walk. The implications of all of this are pretty vast.[363]

REFORM OF DISABILITY BENEFITS

310.  One area where the DH appears keen to run ahead with combining budgets for care and support is the reform of disability benefits for older people by merging them into social care funding (an idea that was suggested by both Sir Derek Wanless and the JRF in 2006). However, this proposal has proved very controversial, illustrating some of the potential pitfalls of trying to combine different sources of funding in practice (something which was also a feature of the Individual Budgets pilots).

311.  The two benefits concerned are Attendance Allowance (AA) and Disability Living Allowance (DLA), both of which are paid by the DWP. AA is a flat-rate, tax-free, non-means tested, non-contributory cash benefit for people aged 65 or over who need help with personal care. A person can receive AA regardless of whether they are receiving care and support. AA is intended to address "extra", i.e. non-care, costs resulting from frailty or disability (such costs are many and varied—including special diets, incontinence pads, additional laundry, special clothes, extra heating, special bedding, extra lighting). However, it is entirely up to the recipient what they choose to spend the money on.

312.  Council-sponsored care home residents are not eligible for AA after four weeks but the benefit is payable to self-funding residents. Many people living in their own homes who are entitled to AA do not receive local authority funded social care services, as they have Low or Moderate needs, which do not qualify for support under the eligibility criteria operated in their area.[364] In such circumstances, AA is often used to help purchase services privately. For those people who meet local social care eligibility criteria, the benefit is used to help pay local authority social care charges.

313.  There are two rates of AA;[365] for 2009-10 they are £47.10 per week and £70.35 per week. At August 2009, 1.3 million people in England were in receipt of AA.[366] DWP data show that in 2008-09, £3.9 billion was paid out in AA in England.[367]

314.  DLA provides a weekly fixed sum for the purpose of assisting a claimant with the extra costs associated with disability. As with AA, it is non-means-tested, non-contributory and tax-free. DLA is made up of a mobility component and a care component. The mobility component (for help with walking difficulties) is paid at two different levels. The care component (for help with personal care needs) is paid at three levels. A person can receive a care component along with a mobility component. Although DLA can be paid indefinitely, there is an upper age limit for making the first claim. Claims must be made before a person's 65th birthday. Otherwise, AA may be claimed instead. AA has no mobility component, but the disability tests are the same as for the middle and higher rate care components of DLA (this means that someone who qualifies for the lower rate of DLA will not qualify for receipt of AA).

315.  In 2009-10, the three weekly DLA care component rates are £18.65, £47.10 and £70.35; the mobility component rates are £18.65 and £49.10. At August 2009, 634,000 people in England aged 65 or over were in receipt of DLA. The amount paid in DLA to people aged 65 or over in England in 2008-09 was £2.6 billion.[368]

316.  Following the publication of the Green Paper, it appeared that the Government was planning to reform DLA paid to people under 65, but, in the face of much concern over the potential loss of this benefit, it was eventually clarified that this was not the case.[369]

317.  We heard that the Government's case for reform rests on its view that AA and DLA, as non-means tested benefits, are ill-targeted and the sums involved could be better used. Ms Norrish, of the DH, told us that "the vast majority of people who get AA need it, they are on low incomes and they have high levels of need". However, the Government believes that significant amounts of money are being paid to wealthy older people with little disability, as Ms Norrish told us:

I have had people coming up to me telling me stories about people they know who get their AA and put it in the bank and are keeping it "to pass on to their grandchildren". There was one person I heard about who every year goes on a four-week Saga cruise and uses her AA to extend it to a six-week cruise. This is where we have to take a view on whether the best use is being made of public funding. The judgment that we took around that was that you could transfer that funding from the people who are on higher levels of incomes to people who are on lower incomes and who potentially have higher levels of need and so that is the proposal in the Green Paper.[370]

318.  However, in our evidence we also heard strong opposition to the reform of disability benefits; and even those who support the idea in principle (seeing the benefits of combining disparate streams of funding) have concerns about implementation.

319.  Ms Norrish's assertion that AA was being spent on Saga cruises prompted Mr Harrop, of Age Concern and Help the Aged, to warn: "I think we are in danger of policy-making by anecdote".[371] This is confirmed by research which has been done by Professor Ruth Hancock, of the University of East Anglia, and her colleagues. This found that disability benefits are more likely to be claimed by "People with higher levels of age and disability, and lower levels of income", with the benefits "display[ing] a degree of income targeting", because less well off people are more likely to have a disability and to claim. The group also found "no evidence" of significant numbers of people receiving the benefits "without any accompanying health problem".[372]

320.  The key objection to the reform of disability benefits is that many people with genuine care and support needs, and only modest means, will be left worse off. The Green Paper states that:

people receiving any of the relevant benefits at the time of reform would continue to receive an equivalent level of support and protection under a new and better care and support system[373]

321.  Ms Norrish and the Secretary of State emphasised that there would be transitional arrangements to ensure that there were "no cash losers"[374] among current recipients of disability benefits in the event of reform. However, there remain concerns that people who develop a care and support need in future could be worse off than they would have been under the current system. While the Secretary of State refused to be drawn on this, saying he did not wish "to second-guess the White Paper",[375] Ms Norrish was more forthcoming and admitted that "yes, some people would be nominal losers".[376]

322.  Critics of reform told us that:

—  effectively means-testing disability benefits would mean "People on the threshold of means tested care and support funding will lose out to the greatest degree",[377] due to the "cliff edge" effect that is inherent in current social care means-testing;

—  disability benefits support prevention by helping people, especially those with low-level needs, to remain independent for as long as possible,[378] in contrast to social care, which currently does very little for people with low-level needs;

—  carers could be adversely affected, since disability benefits are "carer blind", whereas social care very often is not;[379]

—  people who use disability benefits to pay for "extra costs" (their intended purpose) will lose out, as social care services will not pay for these, which could particularly affect people with mental health problems, people with MS and cancer patients, among others;[380]

—  disability benefits act as "passports" to other benefits, including Carer's Allowance, so being unable to access cash support as a consequence of reform could have knock-on financial consequences;[381]

—  there is an apparent contradiction between the Government's support for personalisation and potentially excluding some people from receiving benefits that are described as "the perfect direct payment"[382] and "the original personal budget";[383]

—  applying for disability benefits involves a simple paper-based, self-assessment process and replacing this with something akin to the "administratively bureaucratic"[384] social care assessment could dissuade people from applying;[385]

—  reforming disability benefits only for older people will lead to age discrimination, since someone could become significantly worse off simply by virtue of turning 65 as a result of the type of reform proposed.[386]

323.  All of these points, ultimately, stem from uncertainty about key aspects of the National Care Service: the nature of the funding system; what kind of means-testing will operate; how working-age adults will be affected; how people will be assessed; to what degree rationing will operate; and the extent and value of the care packages that will be available. Mr Hirsch pointed out to us:

the illustrative costings that are being used in the Green Paper are really based on what is being spent now within the care system. They say it would cost £30,000 roughly over somebody's life to fund their likely care from age 65. I think it is likely to be more than that if you bring in these extra needs [currently being met through disability benefits].[387]

324.  Age Concern and Help the Aged told us they would not object to reform of disability benefits if all the advantages of AA and DLA could be preserved in the National Care Service,[388] but the Green Paper says nothing to guarantee that will be the case. As we have noted, uncertainty about winners and losers under the National Care Service leaves scope for some to suggest that "progressive universalism" for many people will be just "smoke and mirrors", since they will lose at least as much as they will gain.

FUNDING LEVELS

325.  We heard in our evidence that it is particularly important for the success of personalisation that the value of the care packages available under the National Care Service should be adequate to meet people's needs and not perpetuate existing shortcomings, such as age discrimination.[389]

326.  These existing problems could also be compounded under personalisation. Mencap told us about its concern:

that some local authorities will use individual budgets […] to save money. It is widely thought that individual budgets are cheaper than the traditional service provision and could be used to reduce local authority spending.[390]

UNISON said it:

would like to see a guarantee that Direct Payments and Individual Budgets will be uprated each year to reflect rising costs so they maintain their real value. Currently some local authorities do not have any agreed indexing of rates, leaving it to individuals to seek to negotiate uplifts.[391]

327.  We also heard that Resource Allocation Systems need to be flexible in order to capture appropriately individual people's needs and ensure adequate funding is made available to meet them. Sense, the deafblind charity, told us this was a "crucial point for deafblind people who often have specialist and therefore more expensive to meet needs".[392]

CHOOSING TO KEEP MAINSTREAM SERVICES

328.  UNISON told us that some people were actually experiencing less choice as a result of councils "claiming that the introduction of Direct Payments is forcing them to close day care centres",[393] since Direct Payments cannot under current law be spent on council-provided services. The union's witness, Mr Low, further told us: "we are getting daily reports of local authorities seeking to close day care centres, and they are saying it is because of the growth of personal budgets".[394]

329.  Professor Beresford explained why the right to choose such collective services should not be withdrawn in the name of personalisation:

mental health service users are seriously concerned about the disinvestment / closure of day services. There have been day services, day centres for mental health service users and people with learning difficulties that have not been good […] but what they can be (and some are) is places where people can feel safe, have relationships, get support and have a springboard to other things […] people say, "It is not often safe outside. If I behave in a way or am seen to be different or weird, people may not be nice to me. I like to be somewhere where it is not like that […] I would like to go somewhere where I can feel reassured."[395]

UNISON suggested that:

certain local authority services need to be ring fenced to protect and guarantee local well run services as a sustainable choice for people wanting a Personal Budget and not a Direct Payment. Direct Payment holders should be free to purchase local authority services if they wish.[396]

John Waters, of In Control, thought that maintaining collective services for some people had to be balanced against people's right to "vote with their feet" and choose other services.[397] Professor Beresford emphasised the importance of "User-controlled services, user-controlled organisations" and was concerned that, for all the talk of "plurality of supply", this approach was still insufficiently supported.[398]

INFORMATION, ADVICE, ADVOCACY AND BROKERAGE

330.  We heard from Professor Beresford that for Direct Payments to be truly empowering much more was needed than simply the ability to make cash transactions:

We know that the group of people who do that routinely—self-funders—is the group most vulnerable, often unnecessarily, to institutionalisation, to moving into residential services. It was intended as a shift in power, and I think a lot needs to be in place […]: the idea of a system of infrastructural support, advice, guidance, of local organisations of service users, neither of which is truly in place, both of which have financial implications.[399]

He cautioned that purchasing care and support "is not the same as buying a fridge or going on holiday".[400]

331.  The lack of funding to allow people to access information, advice, advocacy and brokerage in forms appropriate to their needs is seen as a significant obstacle to self-directed support. We heard that it is vital for such services to be available in appropriate forms and to be adequately funded, so that people are not obliged to fund them from the budget allocated for their care and support; and support must be available on a continuing basis. This could be a role for local authority social workers, although there is an argument for such services to be commissioned from independent providers such as the voluntary sector. While some caution against "over-professionalising" the brokerage role (suggesting that it could be fulfilled through "peer support", for instance), others argue that it does entail a definite set of skills and requires some form of qualification.[401]

MARKET MANAGEMENT

332.  Witnesses informed us that personalisation could have a major effect on the social care provider market, with a shift away from local authority block contracts and towards commissioning on an individual basis. Mr Jerome, the National Director for Social Care Transformation, told us:

A decision needs to be made about what councils need to collectively commission […] and what they might be passing over to individuals for them to access the market. The council role therefore is to make sure in discussion with suppliers—and there is a big issue for suppliers here—that those services that people want are there.[402]

333.  Independent providers could find their services affected by these changes just as much as council services. According to Nestor Healthcare Plc-Social Care Division:

In areas such as Extra Care Housing where service users choose to move into housing where care is provided on site 24 hours per day, the impact of Local Authorities introducing direct payments for individuals within a scheme could serve to destabilise a service.[403]

The UK Homecare Association feared major destabilisation of the homecare sector, with homecare workers being "poached" and employed as PAs, and low resource allocations driving prices down even further. There is even, the Association feared, the possibility of "large-scale destruction of the sector", leading to an overall reduction in capacity.[404]

334.  These predictions may be somewhat exaggerated, but it seems likely that local authorities could face significant challenges in their new role as strategic market managers. There will also be particular local issues that could be difficult to address. For instance, Professor Anthea Tinker, of King's College London, informed us that researched indicated "local care markets may be historically under-developed in more remote rural locations".[405]

PROTECTION AND RISK

Protecting vulnerable adults

335.  The nature of care and support (providing intimate help to vulnerable people, often on a one-to-one basis in their own home) mean that there can be a risk of abuse or exploitation. In 2000, the DH and the Home Office published No secrets, requiring local councils with social services responsibilities, NHS bodies and other partners to develop local multi-agency codes of practice to help prevent and tackle abuse of children and vulnerable adults. In a consultation document in 2008, Safeguarding Adults: A Consultation on the Review of the 'No Secrets' Guidance, the Government recognised potential tensions between protecting vulnerable adults and the personalisation of social care.

336.  In 2004 the DH launched the Protection of Vulnerable Adults (POVA) scheme, whereby prospective care workers could be checked, as part of Criminal Records Bureau (CRB) Disclosure, against a list of care workers who had harmed vulnerable adults in their care. This was mandatory in respect of adult placement schemes, domiciliary care agencies and care homes. People employing PAs using Direct Payments were not required to obtain CRB Disclosure, but had the option to request it. In October 2009 the POVA list became the Adults Barred List and the scheme was replaced by Adult First Check, both operated by the Independent Safeguarding Authority (ISA), a new non-departmental public body.

337.  From July 2010 a completely new system will be implemented. All individuals in England, Wales and Northern Ireland working or volunteering with vulnerable adults or children in the education, care and health sectors will be required to register with ISA under the new Vetting and Barring Scheme (VBS). Individuals will be required to pay £64 to be registered with ISA in England. The VBS will apply to homecare workers, but not to PAs.

338.  In 2008 Skills for Care found that "48% of people receiving direct payments failed to make CRB checks on their PAs whilst 46% failed to seek references".[406]

339.  A survey of social workers in adult social care published in October 2008 found that nine out of ten respondents favoured mandatory CRB Disclosure for PAs and others hired using Direct Payments.[407]

340.  Independent sector providers were unhappy with the different standards applied to their staff as compared to PAs in this respect. According to Nestor Healthcare Plc-Social Care Division:

With the advent of the vetting and barring, system for domiciliary organisations there is potential for careworkers wishing to avoid the ISA processes to migrate into personal assistant roles. In rural areas where the recruitment of personal assistants may be more difficult and the role of PAs is undertaken by family members unregulated support again poses the risk of abuse with research indicating in cases of elder abuse two thirds of incidents are perpetrated by relatives, most often the individual[']s adult child or spouse.[408]

341.  However, others who raised this issue argued that it would not be in keeping with the spirit of self-directed support to require people employing PAs to subject them to formal vetting. UNISON and CQC both echoed the view of CSCI that local authorities could discharge their duty of care by ensuring that all people employing PAs were informed of their right to seek a CRB (or, in future, ISA) check if they wished to.[409]

342.  We also heard that personalisation can raise issues about the welfare of carers. The Princess Royal Trust for Carers said that, in the case of Individual Budgets:

There is […] evidence that the responsibility for managing and co-ordinating the budget holder's support arrangements falls to the carer at the risk of experiencing increased stress.[410]

Workforce regulation

343.  In 1997 the Labour Party manifesto promised that a Labour government would ensure that the entire social care workforce (around 1.4 million people) would, over time, be subject to regulation. The General Social Care Council (GSCC) was set up in 2001 under the Care Standards Act 2000. The GSCC was initially given the task of registering and regulating social workers (who number some 80,000) and social work students (of whom there are approximately 16,000). It was anticipated that regulation would be progressively extended to the entire social care workforce, with the next groups to register being homecare workers and their managers (numbering about 500,000).

344.  In 2004 our predecessor committee recommended in a report on elder abuse that:

when the General Social Care Council opens the register to domiciliary care workers it should also ensure that care workers who are employed through direct payments are also able to register should they wish to do so, and indeed should be so encouraged. We anticipate that over time this would lead to many such personal assistants choosing to register because of the advantage that it would offer in demonstrating their competence and reliability to a prospective employer.[411]

345.  In April 2009 the GSCC was given the go-ahead to open the register for homecare staff in England (initially on a voluntary basis) in early 2010.[412] The Council also planned to consult on options for possible regulation of PAs. However, the Government has, for the time being at least, indicated that the GSCC will operate solely as the professional regulator for social workers. Questions about whether and how regulatory models for other parts of the social care workforce will develop have still to be addressed.[413]

346.  In 2008 Skills for Care published research showing that people using Direct Payments to employ PAs were in favour of a formal register but evenly divided on whether registration should be compulsory.[414]

347.  Independent sector providers informed us that they found it irksome that (as with vetting) there was not consistency between them and the PA market. The UK Homecare Association took the view that:

It seems entirely illogical that government should have brought about a highly regulated sector […], with proposals for further regulating by the General Social Care Council (GSCC) […] while at the same time, promoting a cash payment system for the engagement of untrained, unqualified, unsupported and unregulated personal assistants[415]

Nestor Healthcare Plc-Social Care Division argued that "Regulation of personal assistants needs to be considered."[416]

348.  Mr Low, from UNISON, told us that the union was more open to the idea of compulsory registration of PAs than it was to compulsory vetting. He told us:

At the moment, I believe […] the General Social Care Council are not currently going to proceed with pushing registration into domiciliary care. If they had done, we would have felt that they should have also done personal assistants too, to create a level playing field.[417]

349.  The union thought that one helpful way to give people choice whilst avoiding some of the pitfalls of an unregulated workforce was for councils to take on "banks" of PAs. Another was the implementation of a model code of practice on the employment of PAs.[418]

350.  SCIE acknowledged there were concerns about:

the emergence of unregulated 'grey' markets, the effects of migrant labour, quality assurance and employment and training conditions.

However, it seemed to have no clear view on whether or not further regulation was needed:

These concerns need to be discussed with people employing and planning to employ PAs, representatives of PAs who are becoming a significant part of the social care workforce, and the workforce and service regulators who will need to consider new approaches to regulation that fit the new diversified world of personalisation.[419]

351.  Professor Beresford warned that formal registration or regulation (or vetting) could give people employing PAs "a false sense of security" and quoted one employer's comment that "What really works for me is my gut feeling about [a prospective PA] as a human being". Professor Beresford did not, though, rule out establishing some kind of registration or regulation, in association with employers, once the PA role had had time to develop and become established.[420]

CONCLUSIONS

352.  Although there is effectively unanimous agreement in principle with personalising care and support, the pace of change remains slow. However, "transformation" promises to take social care into uncharted waters and the profound ramifications, and risks, of this need to be fully considered and worked through.

353.  There has been confusion about whether the Government is pressing ahead with Individual Budgets (combining various funding streams in addition to social care moneys) or instead adopting the less ambitious model of Personal Budgets (involving social care funding only). The policy, and the associated terminology, must be made absolutely clear, as well as the basis for whatever decisions are taken.

354.  The Secretary of State told us that personalising social care is part of an aspiration to remodel drastically all public services "over the next 20 years" and the "implications of all of this are pretty vast". The Government appears to have a goal of bringing together all disability-related expenditure while giving individual disabled people control of all the sums available to them, so they are better able to use them to meet their particular needs. There is a logic to this, but it will raise some contentious and difficult issues. For instance, personal health budgets, which are currently being piloted in the NHS, raise the thorny questions of top-ups and vouchers (on which basis the Government itself ruled out individual budgets for healthcare as recently as 2006).

355.  The idea of reforming disability benefits for older people (Attendance Allowance and Disability Living Allowance) by merging the budget for these into social care funding has been particularly controversial. Many of the concerns that have been expressed about the likely consequences of this demand careful attention. It is feared that some people would be left worse off if universal, needs-based and entitlement-led social security benefits are replaced with means-tested, rationed and cash-limited social care provision. The Government has given assurances that there would be "no cash losers" under transitional guarantees for existing benefit recipients. However, no such guarantees would apparently extend to people who develop a care need in future, who could be worse off under a new system than they would have been under the current one.

356.  In justifying this proposal, the DH told us about wealthy claimants allegedly using AA payments to fund Saga cruises. We believe this kind of "policy-making by anecdote" is not helpful and risks disparaging people who have genuine care and support needs. Research by Professor Ruth Hancock and her colleagues indicates that disability benefits are a lifeline to many people, with significant needs and without great wealth, who often don't receive help from the social care system, enabling them to meet costs of daily living. If the DH has hard evidence to the contrary, it should be published. We also note that there appears to be a tension, if not a contradiction, in the Government's policy in that, while it says it is committed to more universalism in care and support, in this case it appears to be intent on going in the opposite direction.

357.  Adequate funding is clearly vital to personalisation, which must not be seen as a cost-saving exercise; it may well cost more to provide adequate personalised care and support. Some people in receipt of Direct Payments have found that inadequate funding and inflexible Resource Allocation Systems make it difficult for them to meet their needs without topping up from their own resources. Personalisation must not mean that people who use services are simply turned into rationers of their own care and support, having to make choices which compromise their ability to meet their needs or to maintain their dignity.

358.  It must be recognised that not every person who uses social care services will want to take on an entrepreneurial and managerial role as commissioner of their own care and support. Nor should it be assumed that taking on such a role is the only means by which people can be empowered and made full partners in their own care. The potential of "co-production" (i.e. full partnership between providers and people who use services) to allow personalisation of mainstream services, including residential care, should be fully explored within the "transformation" agenda.

359.  There are concerns about the right of people who use services such as day care centres to continue doing so, if that is their preference. Such services should not simply be shut down with people being told that it is now down to them to act as commissioners. In some cases it may be appropriate to "ringfence" services for those people who wish to continue using them, although this should not be an excuse to protect outmoded and poor quality services.

360.  Where people do act as their own commissioners, information, advice, advocacy and brokerage services must be available and must not be funded from people's own resource allocations. Offloading such responsibilities and costs onto people who use services could seriously curtail or negate the potential benefits of personalisation.

361.  People commissioning their own services in some areas may find that the market fails and they are unable to procure the care and support they need, particularly in rural areas. It is not certain that councils will necessarily have the capacity or the capability to act as effective market managers in such situations.

362.  Personalisation necessarily entails enabling people who use services to take risks on their own behalf, as part of assuming control of their own care and support. However, there are contentious issues concerning the nature and extent of such "risk transfer". Adult-protection and safeguarding policies (consistent with councils' duty of care) must be tailored to situations where people are directing their own care and support. Many people will be comfortable with managing risks themselves and should be free to do so, but it is imperative that others are able to access appropriate safeguarding mechanisms. The risk of placing unreasonable demands on carers, either as care providers or as care managers, must also be acknowledged and considered.

363.  There are fears about the possible emergence of an unskilled, casualised, unregulated, and potentially exploited, workforce of Personal Assistants (PAs) operating in a semi-informal "grey" market. Local authority "banks" of PAs, which people may choose to commission from if they wish, may be one way of addressing such concerns. There seems to be agreement that people employing PAs should always be given the option of running Criminal Records Bureau checks on prospective employees. Beyond this, however, there are differing views on whether PAs should be subject to mandatory regulation and obliged to register with the Independent Safeguarding Authority under the new Vetting and Barring System. Without a "level playing field" in regulation between PAs and social care staff employed by councils and others, unsuitable staff could migrate from regulated sectors into unregulated PA roles. Nonetheless, many people who employ PAs will insist that they should be free to choose who they wish to work for them. There should be a regulated option for those who wish to use this route, but people who prefer not to use it, and give informed consent to accept the risks that may arise, should be free to do so. Strong safeguards must, though, be put in place to protect the vulnerable.

The social care workforce

364.  The social care workforce has begun to change significantly, and is likely to change much more, particularly as a result of personalisation. This is reflected in several strands of DH policy.

365.  In 2003, the DH commissioned Skills for Care to undertake work to identify new roles in social care. The New Types of Worker project has shed important light on how the social care workforce is changing as new modes of care and support develop, with "about 14 new kinds of jobs" being found in social care.[421] Skills for Care has identified that a disproportionately high number of social care workers have difficulty with basic skills, including reading, writing and simple maths. One way it is addressing gaps in social care workers' skills is through developing a National Skills Academy.[422]

366.  In April 2009, the DH published Working to Put People First: The Strategy for the Adult Social Care Workforce in England. This only sketched out priorities for the development of the workforce in the context of personalisation and left much detail to be filled in on key issues, notably: training and career pathways for PAs; and the future role of social workers.

367.  Lin Hinnigan, Director of Strategy at the GSCC, told us there needed to be funding available to help with the training of PAs, but she pointed out that it would be contrary to the idea of personalisation to try and oblige people to have their PAs trained:

Do you start to impose upon them, "Your partner must have this particular sort of training"? The person who is employing that person may say, "Their knowledge and their learning has been learning about my needs and me and how best to meet them". They are very complex questions to try and set out what are the requirements. We need to unpack this, but we will need to move to certain standards and have the ability for people as part of their choice to say, "I don't want to take those standards".[423]

368.  The future of social work is under active consideration at the moment. In December 2008, the DH and the Department for Children Schools and Families established the Social Work Task Force to conduct a "nuts and bolts" review of the profession and to advise on the shape and content of a comprehensive reform programme. This was done on the grounds that social work is facing some acute challenges and concerns, including the quality of initial training, recruitment and vacancy rates, and the status of the profession as a whole. The Task Force reported in December 2009, recommending a series of measures to be implemented through a single national reform programme for social work.

369.  The GSCC envisages social workers "tak[ing] on the new roles aimed at supporting people to design their own care packages" as social care becomes more personalised. However, there are differing views as to whether social workers will still have a significant role to play in social care once personalisation really takes hold.[424]

CONCLUSIONS

370.  It is clear that the social care workforce as a whole is increasingly in a state of flux, with existing roles changing and others emerging as new models of care and support provision develop. The role of social workers in particular in a radically changed social care system is still unclear, with contending views being expressed. Plans to extend regulation to the rest of the social care workforce now seem to be in disarray. We are concerned at what appears to be the apparent lack of an overarching strategic vision for the future social care workforce, and we recommend that this be addressed as part of social care reform.

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264   Department of Health, Shaping the Future of Care Together, Cm 7673, 2009, p 100 Back

265   Ibid., p 18 Back

266   Department of Health, "Impact Assessment of the Care and Support Green Paper", July 2009, p 46 Back

267   Q 42 Back

268   The PSSRU has calculated that on average at age 65 a person can expect to need (FACS eligible) social care, of all types, worth £31,700 (not including "hotel costs" in residential care) during the rest of their life. Around a quarter will need no care, or support with a minimal cost (equipment only); 10% (mostly long-stay care home residents) will need care worth many tens of thousands of pounds (Julien Forder and José-Luis Fernández, Analysing the costs and benefits of social care funding arrangements in England, 2009, Table 21, p 26). Back

269   Q 16 Back

270   Department of Health, Shaping the Future of Care Together, Cm 7673, 2009, p 16. In taking this position, the DH is actually following the same line as the Royal Commission on Long-Term Care. The current system effectively makes even the poorest of residents contribute towards "hotel costs" by taking all their income, bar the nominal amount represented by the PEA. Back

271   Ibid., p 20 Back

272   In 2007-08 around 80% did so, according to data supplied by councils in response to Freedom of Information requests (www.channel4.com/news/articles/society/elderly+forced+to+sell+homes+to+pay+care+costs/2913557). Back

273   Immediate needs care annuities are bought at the point when a person has developed a care and support need and they provide a guarantee of care until death. The product is individually underwritten, so the premium can vary substantially, but it can cost as much as £80,000. The main provider of this product has insured just 5,000 people in 10 years (Ev 97-99; Qq 549, 555-561 and 644-646). Back

274   Q 579 Back

275   Ev 65 Back

276   Ev 14, 15, 16, 46, 61, 65, 66, 67, 72, 84, 102, 104, 106, 107 and 134; Qq 458, 642, 729, 760, 766, 808-809; SC 19A Back

277   Q 16 Back

278   Q 924 Back

279   Q 255 Back

280   Ev 46 Back

281   Q 760 Back

282   Q 552 Back

283   Q 237 Back

284   Q 273 Back

285   Q 273. The JRF suggested that the state should pay 80% of each person's costs under a co-payment model. Back

286   Q 233; cf. Ev 78 Back

287   Q 240 Back

288   Ev 25, 67-68, 70, 104, 119, 125 Back

289   Ev 125; Qq 647-649 Back

290   Consensus Statement, Care and Support Conference, 19 February 2010 Back

291   Ev 65, 134 Back

292   Ev 46 Back

293   Q 760 Back

294   Ev 114 Back

295   Ev 116; cf. 644-646 Back

296   Q 251 Back

297   Ev 67; Qq 653-659 Back

298   Q 263 Back

299   Q 287 Back

300   Ev 103 Back

301   Ev 104; cf. Q 256, Ev 144 Back

302   Department of Health, "Impact Assessment of the Care and Support Green Paper", 2009, pp 9, 11. The Impact Assessment also gives the slightly different additional cost of £3.3 billion for the Comprehensive and Tax-funded options (ibid., p 46). Back

303   HC Deb, 12 October 2009, col 758W Back

304   Q 67 Back

305   Ev 42 Back

306   Ev 114, 115 Back

307   Q 651 Back

308   Q 609 Back

309   Q 912 Back

310   Q 660 Back

311   Q 274 Back

312   Ev 73 Back

313   Derek Wanless, Securing Good Care for Older People, 2006, p 232 Back

314   Royal Commission on Long-Term Care, With Respect to Old Age, 1999, paras 69-77 Back

315   Ev 77, 125, 141-142 Back

316   Ev 135 Back

317   Ev 90-91, 134 Back

318   Q 274 Back

319   HC Deb, 27 January 2009, col 16WS Back

320   Under section 15 of the Community Care (Delayed Discharges etc.) Act 2003 regulations can be made requiring certain social care services (including personal care at home) to be provided by local authorities free of charge, but not for a period longer than six weeks. The Bill amends the 2003 Act to enable regulations to be made requiring personal care to be provided free to persons in their own homes for an indefinite period. Back

321   On how this is defined, see Annex 1. Back

322   The Government proposes the following options: the setting of an indicative cash sum; the setting of an indicative range in cash terms; or allowing discretion to local authorities in each individual case. Back

323   The Government proposes the following options: using the existing Adult Social Care RNF; using amended Adult Social Care RNF; or using a new formula based on ELSA. Back

324   Department of Health, "Impact Assessment of the Care and Support Green Paper", 2009, p 7 Back

325   "Cancer research at risk in scramble for care funds", The Times, 25 November 2009 Back

326   Qq 907-911 Back

327   Q 905; cf. Q 901 Back

328   HM Treasury, Securing the recovery: growth and opportunity - Pre-Budget Report, Cm 7747, December 2009, p 110; cf. HC Deb, 6 January 2010, cols 470-471W Back

329   Q 900; cf. HC Deb, 14 December 2009, col 665 Back

330   Q 899 Back

331   Q 44 Back

332   Letters from the Secretary of State for Health to the Chairman of the Health Committee, 10 November 2009 and 8 December 2009 Back

333   Q 902 Back

334   "Labour peers savage Brown's free care plan", The Times, 19 November 2009 Back

335   Q 900 Back

336   Q 45 Back

337   Q 459 Back

338   Q 766 Back

339   Q 608 Back

340   Q 766 Back

341   Q 609 Back

342   Q 828 Back

343   Qq 46-53 Back

344   Q 54 Back

345   Q 901 Back

346   Q 833; cf. Qq 766 and 821 Back

347   Q 822 Back

348   Qq 901 and 906. A recent press report has queried whether this policy is succeeding ("Free home care council diverting money from other vulnerable groups", Guardian, 18 February 2010). Back

349   Q 826-827; cf. Q 608 [Mr Burke] Back

350   Q 835 Back

351   Q 829 Back

352   www.adass.org.uk/index.php?option=com_content&view=article&id=542&Itemid=361 Back

353   Q 814 Back

354   Q 15 Back

355   Ev 109; cf. Ev 9, 6-7 Back

356   Q 86 Back

357   Q 877 Back

358   Health Committee, Sixth Report of Session 2004-05, NHS Continuing Care, HC 399-I Back

359   Q 780 Back

360   Q 782 Back

361   Ev 146 Back

362   Q 944. The Minister of State for Care Services, Phil Hope MP, has told the House: "The terms Individual Budget and Personal Budget were used synonymously during the pilot stage of the personalisation project. However, Personal Budget is the term now being used for national implementation and relates to social care funding only. Individual Budgets is now the term used for a notional amount of funding from a variety of sources which may include social care funding as well as other sources" (HC Deb, 18 January 2010, col 115W). Back

363   Q 945 Back

364   Mr Wittenberg, of the PSSRU, told us:

An analysis that colleagues did of the data set known as ELSA […] found that only 26% of the Attendance Allowance group received social care, either publicly or privately funded, and that 29% of the Attendance Allowance people received neither formal nor informal care (Q 213). Back

365   The lower rate of AA is payable if the recipient needs help with personal care frequently or supervision continually throughout the day only, help with personal care or someone to watch over them during the night only, or someone to be with them when they are on dialysis. The higher rate is payable if the recipient needs help with personal care, or someone to supervise or watch over them frequently throughout the day and also during the night. Back

366   statistics.dwp.gov.uk/asd/tabtool.asp Back

367   Department for Work and Pensions, Benefit Expenditure by Country, Region and Local Authority 2008-09 Back

368   Provisional data supplied by the Department for Work and Pensions Back

369   HC Deb, 30 November 2009, 527W; www.dh.gov.uk/en/News/Speeches/DH_107455 Back

370   Q 70 Back

371   Q 620 Back

372   SC 52 Back

373   Department of Health, Shaping the Future of Care Together, Cm 7673, 2009, p 15 Back

374   Qq 71, 935 Back

375   Q 936 Back

376   Q 71 Back

377   Ev 30 Back

378   Ev 131 Back

379   Qq 621, 623 Back

380   Ev 73, 113, 131; Qq 730, 731 Back

381   Qq 627, 927 Back

382   Ev 56 Back

383   Ev 77; Q 620 Back

384   Q 623. The Secretary of State told us the Government intended to develop an "integrated assessment that takes stuff from the benefits side and the local authority side" (Q 929). Back

385   Ev 133; Q 621.There is already said to be significant underclaiming of disability benefits, particularly among the very old. Back

386   Q 627; Ev 115. The Government insists that there is no age discrimination in treating DLA for people aged under 65 differently from disability benefits for older people. Ms Norrish told us that "people who are receiving DLA under 65 are almost exclusively on very low incomes", being "frequently […] unable to work", and so without assets, whereas disabled people aged over 65 "potentially have worked all of their lives" (Q 72-73; cf. Q 931). Back

387   Q 295 Back

388   Ev 115; Q 624. Twenty-six per cent of people polled by the Parkinson's Disease Society said they "would be happy for AA to be abolished if all their disability-related costs were met" (SC19A). Back

389   Ev 114; cf. Ev 59 Back

390   Ev 7; cf. Qq 102, 776 Back

391   Ev 80 Back

392   Ev 10 Back

393   Ev 80 Back

394   Q 365 Back

395   Q 788 Back

396   Ev 80; cf. Ev 122 Back

397   Q 789 Back

398   Qq 789 and 790 Back

399   Q 783 Back

400   Q 792 Back

401   Ev 8, 10, 11, 72, 74, 80-81, 90, 91, 94, 108, 109, 114, 116, 117, 121, 132, 145, 146, 147; Qq 372, 394, 667-669, 672, 733-734, 741, 776, 791, 860-865 Back

402   Q 113 Back

403   Ev 35 Back

404   Ev 52, 54, 55 Back

405   Ev 156 Back

406   Ev 36 Back

407   "Nearly all adult social workers want personal assistants to be regulated", Community Care, 23 October 2008 Back

408   Ev 36; cf. Ev 55 Back

409   Ev 81,83; Qq 369-371 Back

410   Ev 121 Back

411   Health Committee, Second Report of Session 2003-04, Elder Abuse, HC 111-I, para 152 Back

412   Department of Health, Working to Put People First: The Strategy for the Adult Social Care Workforce in England, April 2009 Back

413   The extension of registration was one issue examined in 2009 by the Council for Healthcare Regulatory Excellence in a report commissioned by the DH as a result of concerns about the backlog of conduct cases built up by the GSCC. The report recommended consideration of other approaches in respect of domiciliary care workers "such as a statutory licensing scheme or an employer-led approach based on codes of conduct and practice and induction standards" (Council for Healthcare Regulatory Excellence, Report and Recommendations to the Secretary of State for Health on the conduct function of the General Social Care Council, September 2009, para 8.28). Back

414   Q 405; www.scie.org.uk/publications/ataglance/ataglance14.asp Back

415   Ev 55 Back

416   Ev 34 Back

417   Ev 363 Back

418   Ev 81; Q 362 Back

419   Ev 147 Back

420   Qq 796, 797 Back

421   Ev 139, 163; Q 400 Back

422   Ev 383, 784, 797 Back

423   Q 405 Back

424   Ev 163 Back

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Prepared 12 March 2010