Oral Evidence

Taken before the Health Committee

on Tuesday 17 July 2012

Members present:

Mr Stephen Dorrell (Chair)

Rosie Cooper

Andrew George

Barbara Keeley

Grahame M Morris

Mr Virendra Sharma

David Tredinnick

Valerie Vaz

Dr Sarah Wollaston


Examination of Witnesses

Witnesses: Rt Hon Andrew Lansley CBE MP, Secretary of State for Health, and Shaun Gallagher, Acting Director General of Social Care, Department of Health, gave evidence.

Q172 Chair: Thank you very much for coming to this meeting. As I think you are aware, we have been following up the report we issued earlier in the year on Social Care. We were keen to have an evidence session with you after the publication of the Government’s White Paper and announcements last week, and the context of this is that we are doing further work to follow up our own report and follow through the White Paper and associated documents that were published last week.

I would like, if I may, to open the questioning this afternoon clarifying where the Government’s thinking is on the legislative consequences of what was announced last week. You have published a draft Care and Support Bill for which there is a prelegislative process to be undertaken. Are the Government committed to bringing that Bill forward in the next session of Parliament, other things being equal?

Andrew Lansley: Chairman, thank you very much for the opportunity to be with you. I am grateful to be able to do so just a week after the publication of the White Paper, the progress report, the draft Care and Support Bill and indeed our response to your own report on Social Care. I am glad to have Shaun Gallagher with me, the acting Director General of Social Care, Local Government and Care Partnerships. As far as I am concerned, the draft Care and Support Bill has been published with a view to prelegislative scrutiny. We will hope, subject to that scrutiny, to introduce it at the earliest opportunity, although you will not expect me to preempt decisions about the content of the legislative programme in the third Session. Those will be announced, if not before, in the Queen’s Speech.

Q173 Chair: I might not expect it, but I might hope for it, given the fact that-

Andrew Lansley: I might hope for it too, but both of us will have to wait hopefully.

Q174 Chair: Indeed, but you will understand, I am sure, that there was an expectation, which the Government encouraged at the beginning of this Parliament, that this legislation would in fact be in this Session of Parliament. So a question as to whether it is going to be in the next Session-that is, the third Session of this Parliament-does not seem to me an unreasonable one, given the fact that we have spent a lot of time in the last Session on the Health and Social Care Act now to be in a position to follow through that legislation with legislation on social care, we understand, not in this Session but in the next Session.

Andrew Lansley: As I say, I would hope that to be the case. We are very well advanced. One thing I would say is that-not least, credit to my colleagues in the work they have done in the preparation of the draft Bill-I hope, as you are looking at it, you will say this is something that really does begin to capture a sense of what we are trying to achieve in care and support legislation. In particular, I am grateful to the Law Commission because it does allow us to simplify the legislation. Very often, people think of going through Law Commission reports as a rather dry and desiccated process. In this instance it has allowed us to arrive, with the help of the Law Commission, at potential legislation for care and support that is so much clearer for people to use. From that point of view-clearly, from my point of view-I would hope that we can introduce it in the next Session, but these are matters for collective agreement when we come to decide what the priorities are. As you know, there are always more legislative priorities competing for legislative time than there is time available.

Q175 Valerie Vaz: Are the instructions out to parliamentary counsel, or not yet?

Andrew Lansley: The draft Bill, of course, has been drafted with the benefit of parliamentary counsel, so I hope the Joint Committee undertaking the prelegislative scrutiny will get us to a very good place for introduction of the Bill.

Q176 Chair: But the position is-and you have used the word "hope"-that you hope to introduce it in the next Session of Parliament.

Andrew Lansley: Yes.

Q177 Chair: That at least creates an expectation, which is welcome. Could I ask a followon question from that as to the funding structure? I know in your statement you said that funding for the Dilnot package, leaving aside the broader questions of funding of social care-the hermeticallysealed, if you like, funding of the Dilnot package-needed to be addressed in the next spending review. You also said that you hoped the crossparty talks would continue, and if there was an agreement on a crossparty basis there was scope for including any legislative consequences of an agreement that might emerge in the legislation that we hope will be in the next Session of Parliament.

Andrew Lansley: Yes. It is important to understand that there is something of a complex interrelationship between the funding decisions and the legislative consequences. For a start, we have not yet secured a consensus about what the process-the means-by which we pay for the funding model set out in the Dilnot Commission might be. If, as a consequence, it implies any significant public expenditure in the next spending review period and beyond, it must form part of the spending review discussions. The timetable for those has not yet been set. So one has that. One sets alongside it the hope, on our part, for the introduction of legislation in the next parliamentary Session. By implication, therefore, its progress during the course of that Session would aim towards spring 2014. By spring 2014, or during the passage of that legislation in the latter part of 2013, we may or may not have any kind of resolution on future funding. If it becomes clear that there is sufficient agreement-I would say a consensus and Government agreement-about the structure of legislation for the implementation of that funding model, then we could consider, during the passage of the legislation, introducing legislative provisions to allow us to do that. If not, then we would have to contemplate additional legislation. In that sense, it is sometimes easier to focus on a piece of legislation that does a specific task than to try to anticipate something in advance and find that you have it wrong.

Q178 Chair: I understand that. Would it be fair to summarise the answers you have given so far by saying that you hope there will be legislation in the next Session and you would not rule out, provided it does not have broader public expenditure consequences, a funding package being included in that legislation?

Andrew Lansley: I think that is a fair summary. The only thing I would add is that, of course, in the draft Care and Support Bill we are including legislative provisions that will allow the implementation of a universal deferred payment scheme.

Chair: We will come on to that. I wanted to start off by establishing the legislative framework. Inevitably, we are going to spend most of the time, certainly initially, on various funding questions. Perhaps we can start by looking at funding the Dilnot package as a discrete entity.

Q179 David Tredinnick: Looking at the planned reforms, what criteria are you going to use to decide the level at which the cap should be set?

Andrew Lansley: Essentially, as expressed by Andrew Dilnot and his commission themselves, there are a number of criteria. First, the level at which you set the cap will have an implication in terms of the cost of taxpayer support. It will have an impact on the resources available. There is an interrelationship, which I know you will be aware of, between the level of the cap and the extension of the means test. So, at varying levels of the structures of the cap in relation to the extension of the means test, that will have different implications in terms of what proportion of people’s assets would be liable to be taken up in paying for care costs. If you have the progress report there, in terms of figures, figure 4 on page 21 sets out the interrelationship between those two things quite well. That is one of the things one needs to look at.

It is also important to understand the implications of the cap in terms of its impact upon people’s desire to purchase some kind of protection. If the point of the reform is, principally, to allow for a proper partnership between the state and individuals in which the individuals feel they have the capacity to prepare and plan against catastrophic costs in the future, the cap needs to be set at a level that they feel is worth protecting, but not so high that they are effectively still incurring, from their point of view, catastrophic costs. To some extent, this table here demonstrates that the combination with the extension of the means test helps to do that, but also that the level of the cap in itself has some implication there. All the evidence that we have seen and the discussions we have participated in-the "Caring for our future" engagement-did touch quite a lot on these kinds of issues. There is good reason to suppose that the lower levels of the cap in the Dilnot Commission’s report are too expensive and do not create a proper incentive for people to prepare and plan because, effectively, they would feel that most of the costs would be taken away from them so they would not need to prepare. The very high levels of the cap, of course, have the contrary effect that people feel it does not offer sufficient protection.

Q180 David Tredinnick: To summarise, you have a median range then.

Andrew Lansley: We set out a range in the progress report. When Andrew Dilnot came to see you I think he said that, in effect, he had set out what he regarded as an illustrative range-when he said £35,000 he and his colleagues did not intend that to be their recommendation but merely an illustration-and he contemplated that a cap higher than £50,000 might be concluded to be appropriate.

Q181 David Tredinnick: Let us look at an example of a situation. The cap will limit the proportion of an individual’s assets that they have to spend on care, fairly obviously, but people with very expensive property, for example, will spend a much smaller proportion and people without any care needs will spend nothing. Is that fair and, if not, what can be done about it, please?

Andrew Lansley: If I could direct you to figure 4, the purpose of this and what it helps one to do-I know there are just a lot of numbers-is to recognise that, under the current system when people have very high care costs as a consequence of an extended period particularly in residential home care, their assets can get wiped out. You might have initial assets of, as it says here, £200,000. Under the current system you lose £150,000. But at differing levels of the cap there are different levels of protection as a result of that with a combination of the means test. It would be very nice to be able to say, "Of course we can protect people and their assets", but we have to recognise that that comes with a cost, and with that cost comes a need to pay for it. The issue for many of us is the means by which you pay for the costs of implementing the cap. The meanstest funding model, in itself, enables one to have a more or less progressive system overall.

Q182 David Tredinnick: Moving on from progressive systems, there was the progress report-so called-which suggested that the cap should or could be set at a higher level than Dilnot. It gives an illustration on the effect of setting a cap at £75,000 or £100,000. What range of possible levels for the cap will be considered, please?

Andrew Lansley: In the engagement that we intend to have with other political parties and, more widely, with stakeholders and the public, our view is that we should engage across this whole range of potential levels of the cap. I might say, to reiterate, that we, alone, did not think that higher levels of the cap than those illustrated in Andrew Dilnot’s report were the only levels to be considered. He said so himself, and we will consider them.

Q183 Mr Sharma: Which options did you consider as regards hotel costs? Are you committed to Dilnot’s recommendations that there should be a per annum limit or could hotel costs be included in the overall cap?

Andrew Lansley: If you were to include the hotel costs in the cap, that would have a significant increase in the consequential level of funding subsidy required. I think Andrew Dilnot’s commission made, in my view, a perfectly reasonable case for saying that the hotel costs should at the very least-and perhaps slightly more than this-reflect what people’s income is. If I remember correctly-Shaun will correct me if I am wrong-the £7,000 figure was simply the minimum income that somebody enjoys as a consequence of being on a state pension.

Shaun Gallagher: That takes you to slightly over £7,000, yes.

Andrew Lansley: The figure of £10,000, of course, is a reflection of the fact that people generally are not simply on the state pension alone, but they have other benefits. The proposition is that people should not have, as it were, all the costs of living in a care setting of that kind. That is why people have an income, to meet those costs. To that extent, the intention was to support them. It was not to subsidise their living costs beyond the additional costs of being in a care setting compared to being at home.

Q184 Chair: That is an endorsement, effectively, of the hotel costs principle that Dilnot enunciated.

Andrew Lansley: Yes. I am grateful, Chairman.

Q185 Mr Sharma: That is helpful. Which criteria will you use to decide the level of the increased meanstest threshold, and what range of possible levels is under consideration?

Andrew Lansley: Shaun might like to add something on this. We are principally looking, at the moment, at a funding model based on a range of possible levels of the cap on costs allied, broadly speaking, to Andrew Dilnot’s and his colleagues’ recommendations for the extension of the means test. It is difficult, admittedly-I have struggled sometimes; it takes a lot of hard "head in a towel" moments-to have too many of these things moving at the same time. To that extent, they make a very good proposition for the extension of the means test in Andrew Dilnot’s report. They were very clear that there was a range of options on the cap and they were pretty much looking for their funding model to be structured around that means test extension plus a cap. From our point of view, that is probably the starting point for our conversations.

Shaun Gallagher: If I could add slightly to that-Andrew Dilnot probably has already said this to your Committee-the two components of his recommendations are each individually critical. The cap operates to cap the costs of people’s care whatever their assets may be, and that is universal across the piece. The extension of the means test is a particular protector of people with lower starting assets, so there is a progression in that system. The table that the Secretary of State referred to illustrates how those two come together. If you have a lower starting level of assets, the cap that applies to you is lower than £35,000 or £50,000, or whatever it is, because you are benefiting from the means test support as well. That is one of the critical elements of the interplay between those things. Although the progress report says that we would be willing to consider whether there might be other levels of means test increase than £100,000 and the cost reduction that would come from that, our starting assumption is that that is a good place to set it to combine with the cap.

Andrew Lansley: If you have the progress report to hand, on page 36 figure 14 expresses those numbers from figure 4 in a more visually understandable way. I find it a bit easier to look at-if you have it there at all-and I have the benefit of colour schemes with the one in the progress report. It does illustrate the way in which these two things work together. There is a tendency for people to say that if you set the cap at £50,000, or even £35,000, somehow, because you are living in a property that is worth £75,000, you will lose twothirds of your assets. Of course, that is not the case. If you look, for example, at £50,000, the asset depletion-depending on the level of the cap-could be just over a third, roughly speaking. It is important not to treat the cap in isolation as though everybody was going to lose their assets to that number because the means test is an important offset to that.

Chair: Thank you. It is a "cold towel" subject.

Q186 Rosie Cooper: The Dilnot report said that funding for its recommendations could come from a number of areas: higher general taxation, re-prioritising existing expenditure or a specific tax, probably aimed at older people. Which of these options are on the table currently for consideration?

Andrew Lansley: I will be frank about it. We are engaging with your colleagues on your Front Bench plus with the stakeholders through the "Caring for our future" engagement on a range of those options. I do not think it is helpful, at this stage, either to start the process of saying, "That is ruled out and that is ruled out" or to fix on them. I think, as Liz Kendall said to the House yesterday, it is very difficult for any party to be the first one to put things down and say, "This is the right answer". It is why we are having an engagement of this kind. The Select Committees have the capacity, beyond any of us, to seek solutions to these things. I noted in your report-

Chair: There is just a note of irony there.

Andrew Lansley: Irony does not translate to the record. Your report did not say, "This is the right way to do it". To be blunt with you, I welcome the fact that you are doing further work because we are in a process of engagement. We can now begin to focus on the considerations and-as Mr Tredinnick asked-on the criteria we need to apply to where the cap would be set. We then need to go on and say, "What does that mean in terms of the way in which it is paid for?" There are significant intergenerational, or indeed income-distributional consequences of the different solutions that you choose for how you pay for different levels of the cap. With respect, you are going to ask more questions and say, "Okay, you must have various proposals in mind." Yes, I probably have. But I do not think it is very helpful for me to start putting them out there rather than for us to have a proper engagement that tries to build a consensus. If I put a proposal out there, you would be the first person, probably-or the second or the third-to say, "What is the point of looking for a consensus? You have made your mind up."

Q187 Rosie Cooper: Absolutely, but I am sure everybody would be looking to you to give us some clues as to where you are going. Can I ask you about the progress report-moving on from there-which talks a lot about voluntary and optin models as a potential means of funding the gap and the increased means-test threshold? Why is a form of voluntary insurance under consideration when it is well established that such models fall foul of low takeup and adverse selection?

Andrew Lansley: It is because we are considering a whole range of options. One of the options is to say-I think Andrew Dilnot’s commission said this and, to some extent, it is a good argument-that those who, broadly speaking, are the beneficiaries should also be those who, to some extent, pay. The point is to pool the risk to a greater extent, and you could do that in various ways. You could pool the risk, essentially, through a reprioritisation of some particular form of public expenditure; you could do it through a universal system so that everybody, in a sense, is required to be party to this; or you could do it by creating a Governmentbacked scheme for people to opt into the system. One of the options might well be to say that if people want to have a cap on their care costs and see the benefit-to be able to prepare and plan for that-and the means of doing so is by paying a premium or something of that kind in order to have access to such a cap on their costs, why should we deny them that opportunity?

Q188 Rosie Cooper: What we have heard so far, Secretary of State, is that all options are out there and discussions are going on so you don’t want to pinpoint any preference. The progress report also says that the approach recommended by Dilnot will be implemented if a way to pay for it can be found. What happens if a way to pay for it can’t be found? In listening to and reading the reports from lots of organisations and listening to and watching the television, the commentary on this is that the elderly population question the priority that the Government give to them and to their care when looking at the total Government spend in the United Kingdom. They would say that the amount of money they need in the vast spending of our Government is small, and why do they have such low priority?

Andrew Lansley: If you will forgive me, I think you have completely confused two quite separate things. You started with the question: "By what means should we pay for the implementation of a funding model based on the Dilnot Comission’s report?" But, of course, that does not bring any additional money into the social care system. It might make substantial differences to individuals and their ability to prepare and plan, but it does not bring you money. It might have benefits-I think it would have substantial benefits in the long run-in that, if it creates what is effectively an offer from financial services and others to offset future potential care costs, it will incentivise expenditure on prevention and earlier intervention. All the evidence shows that insurance schemes, for example, in so far as they have been implemented in other countries, have seen insurers invest in reducing people’s care costs because they can, themselves, internalise the benefits of that. But it does not bring in new money. Implementing the Dilnot report does not add cash to the social care system.

As a Government, are we investing to support people in social care? That is the issue we responded to in the spending review 2010 and will respond to again in the next spending review. Andrew Dilnot and his colleagues deliberately gave us an interim report in the late summer of 2010 and said, coming to the point about the timing of all this, "We know, even if we make recommendations, that it will not be possible to legislate and implement those until 2015 at the very earliest. Therefore, in this spending review you will need to make interim decisions." We did. That was the basis upon which, through formula grant and NHS support for social care, £7.2 billion, at that stage-now £7.5 billion-has been made available over the spending review period to support social care. That, frankly, is a measure, in these very difficult times, of the priority that we give. It was right at the front of the priorities in the last spending review.

Q189 Rosie Cooper: Secretary of State, I will end now by saying that I very much appreciate your comments and where you think you are as a Government. The problem is that you are being judged by elderly people and their families throughout the country. I can cite an example in my own constituency-and perhaps we can come to it later-of an interface between health and social care. A woman who has had a stroke is in hospital now and needs to go into intermediate care. A place has been found for her by Lancashire County Council in a residential home, but she can’t go there. It is costing the NHS vast sums of money daily. Why can’t she go there? The bed is there in a residential home, but she can’t go because the home does not have the bed sides that are needed to keep her safe. Her family have been told, "If you want to move her out sooner, then Lancashire County Council would like you to pay up to £100 to get your mum moved." It’s all right saying you have put a lot of money into social care-and you have put a lot of money in-but the truth is that it is not enough and councils are desperate and under great pressure.

Andrew Lansley: I will come back to the point I made. We are deliberately setting out to try and address social care need with additional resources made available, not least from my point of view in the Department of Health, through an NHS transfer to social care. For example, in 201112, as part of the overall £648 million as a transfer from the NHS to support social care, £61,185,000-10%-was provided to bedbased intermediate care services. We are setting out to do that. In addition, in 201112, right at the beginning of this calendar year, £150 million was provided from the NHS to local authorities specifically to reduce delayed discharges, and I recognise that this is against a background of great pressure in social care. It has had the effect of basically stabilising the level of delayed discharges. I would remind you, when you look at the total of patients awaiting discharge and the reasons why they are not able to be discharged from hospital, that 29% of the delays are due to absence of social care provision, but most of the reasons are that they are awaiting further treatment, referrals or activity in the NHS. The total number of delayed discharges, by year, is as follows: in 201112, 1,373,052, which is almost exactly the same as 201011 and 200910, and significantly below 200809, which is, again, substantially below 200708.

Q190 Dr Wollaston: Secretary of State, could I ask you to clarify an answer that was given to Liz Kendall today at health questions? Given that the way we are going to fund Dilnot’s recommendations goes to the heart of the matter, it did surprise me that you said that you would not have Treasury Ministers at the crossparty talks. Surely, that would be crucial. It would be pointless to come to a joint decision and then find that the Treasury rejects it out of hand. Wouldn’t it be better to have Ministers there through the course of the negotiations? Have I missed something?

Andrew Lansley: The Chairman will recall two things that are important to remember. No. 1 is that the Government speak with one voice. The Prime Minister and Deputy Prime Minister have made it very clear, in conversations we have had and will continue to have with the Labour Party, and indeed with other stakeholders, that the Minister for Care Services and I speak for the Government. We do not speak for the Department of Health. We speak for the Government. I think it is fair to say that the Treasury are always with us.

Dr Wollaston: That is not the impression always given.

Chair: But never present.

Q191 Dr Wollaston: Any discussion and decision that you came to would automatically be with the approval and blessing of the Treasury.

Andrew Lansley: Yes. I have said to Andy and to Liz-and I said it right at the outset, back in the early part of this year-that we want to engage and we want to reach a consensus, but if it entails decisions, for example, that are about the introduction of legislation, the tax system and public expenditure, those are decisions for Government. To that extent, yes, we will seek a consensus, and I and Paul Burstow will engage fully in those. But there will always come a point-we have always made this clear-at which the consequences of that consensus, none the less, have to be taken for collective decision-making inside Government.

Q192 Dr Wollaston: Would it not be helpful to have a Treasury Minister there throughout the process so that you know how much you have?

Andrew Lansley: In a sense, that would make no difference because the Government are engaged fully anyway in the discussions and, at the point at which the remit has to go to collective decision-making, that will be taken somewhere else.

Grahame M. Morris: My question is along the same theme, Chairman.

Chair: Everybody wants to come in on this.

Q193 Grahame M. Morris: Yes. Arising from health questions earlier this morning-I know you weren’t keen, Secretary of State, to answer my question, but in response to the question from Liz Kendall-when colleagues asked you about what the level of the cap may be above the Dilnot recommendation of £35,000, you did not give an answer again. Given that the Treasury are involved, either covertly or overtly-whatever the term-is there any indication, given that you have a funding envelope, as to what level of cap you would be looking at in conjunction with the Treasury?

Andrew Lansley: I will say two things: First, that £35,000 was not a Dilnot recommendation. It was an illustration. He made that clear when he came to see you. Secondly, there is not a funding envelope for Dilnot. There is a spending review as to funding for social care.

Q194 Grahame M. Morris: There is a funding envelope from the Treasury, though.

Andrew Lansley: I think we all completely understand that we are talking about implementation beyond the current spending review period, and in that sense there is no funding envelope for this. It is a question of if you seek to fund it, how do you propose to do so and what are the consequences elsewhere in terms of priorities for public expenditure or other mechanisms for funding?

Q195 Grahame M. Morris: There must be a funding envelope. There is a cost involved with it.

Andrew Lansley: There is a funding envelope for Government in 201516 and 201617, but it has not been disaggregated to departmental expenditure limits or a formula or a grant total for local government in those years.

Grahame M. Morris: I am no wiser, I am afraid.

Q196 Valerie Vaz: Has the Treasury costed the White Paper?

Andrew Lansley: We have costed the White Paper, yes.

Q197 Valerie Vaz: We are not going to get a book by Nick Timmins later on to say that it is not you.

Andrew Lansley: You mean the White Paper. You do not meant Dilnot.

Q198 Valerie Vaz: Yes. Has the Treasury costed the White Paper?

Andrew Lansley: We cost the White Paper, of course, in the way that one always does as a Department responsible for the production of the White Paper-

Q199 Valerie Vaz: So it has not been to the Treasury at all.

Andrew Lansley: Of course it has been to the Treasury, but we agree these things.

Q200 Valerie Vaz: Right. I am only asking the question. I am not trying to trip you up or anything. I am just asking you a simple question.

Andrew Lansley: I am a bit surprised because we have published it.

Q201 Valerie Vaz: I don’t know and you know.

Andrew Lansley: I thought the Select Committee would have this. It is in the impact assessment. It is Annex A to the impact assessment. We published it.

Q202 Valerie Vaz: So the Treasury has looked at it and costed it; yes, good.

Andrew Lansley: What we do in Government we do together with the Treasury. Appendix 1 of the White Paper impact assessment sets out the summary table of costs and benefits on the White Paper, so you can look them up. In the spending review period-and, of course, beyond the spending review period these are matters for future decisions-because, as Government, we have published the White Paper, we have committed ourselves to meet these costs as part of the overall public expenditure. It sets out very clearly there, in this spending review period, the net annual cost of some £10 million in 201213, £54 million in 201314 and £87 million in 201415. You will have noted in the White Paper that, among other things, it includes additional capital provision for housing that, in this spending review period, would be of the order of £84 million, and more beyond, and additional support for local government of £100 million in 201314 and £200 million in 201415. That is considerably in excess of the costs of the White Paper in those two financial years which are set out. You can see the itemisation of that in Annex A.

Q203 Grahame M. Morris: In relation to the cost envelopes that would fall on to local authorities, with the burden and responsibilities of providing the loans going to local authorities, how will that be dealt with? Will the Department of Health be suggesting to the Treasury that they give local authorities additional borrowing powers in order to fund that, and have you given any indication or guidance about the interest rates that would be charged?

Andrew Lansley: No, we have not on interest rates. That will be something to be decided closer to the time.

Q204 Grahame M. Morris: Will the Department of Health or the Treasury decide that?

Andrew Lansley: What I said, and indeed I think I said it in response to questions on the statement last week, is that the deferred payment scheme would be administered by local authorities. So the local authorities would, to that extent, make the loans because they are going to be the providers or supporters of the care, under those circumstances, in any case. But the Government would stand behind the local authorities in the consequences of taking on that debt. We would effectively take it as debt on to the Government through the Department of Health rather than on to local authorities.

Q205 Grahame M. Morris: I asked you two questions and you have not really answered them, so could I press you again?

Andrew Lansley: I thought I did. I tried to.

Q206 Grahame M. Morris: You never seem to, so can I be specific?

Andrew Lansley: Such is life. I am so disappointed.

Q207 Grahame M. Morris: I am not suggesting you do it deliberately, but my job is to try and hold you to account so I would like you to answer my questions. I have two specific questions. Will the Treasury give additional borrowing approval to local authorities in order to fund these loans and will the Department of Health have any role in that? Will they have any role in relation to setting interest rates? Will that be a matter just for the Treasury to determine or will it be a matter for local authorities?

Andrew Lansley: As to the interest rate-and Shaun may want to add to this-there is still some work to be done, since none of this will be introduced until 2015 at the earliest.

Shaun Gallagher: Do you want me to attempt to cover the two points that you raised? The first point is that Andrew Dilnot recommended that universal schemes should be available for the deferred payments, and that that should be on the basis of charging interest so it is broadly cost-neutral to local authorities. That is what the Government have said that they will do. So once a scheme is up and running it will be cost-neutral for local authorities to operate.

The costs of introducing a scheme would be the startup funding to have the funds available to give out in the first place. The way in which we would do that is that the Department of Health, with the agreement of the Treasury, as with all things on expenditure, will fund local government for those costs in the early years to get the startup funds in place. We want to consult on the detail of how the scheme would work-options as to interest rates and other elements of how it will work in practice. Until we have done that, we do not know exactly what those amounts will be.

Andrew Lansley: By implication, Shaun, in later years local authorities would find that the receipts, as it were, from deferred payment schemes would themselves help to meet future loans as they come on stream.

Shaun Gallagher: Yes.

Andrew Lansley: I thought I did try to answer that, but Shaun does it much better.

Q208 Barbara Keeley: I want to take you back for a moment to the spending envelope point that you made. The Treasury is reported to have clawed back £1.4 billion of NHS underspend. The question a lot of people are asking is why on earth that could not be used towards implementing the Dilnot recommendations. If the cap is set at £60,000, then it is £1 billion. Why is that £1.4 billion going back to the Treasury? Other Members of the Committee have asked questions about the involvement of the Treasury and priorities, but I think that is an important question that we should not let go at this time. You have one set of proposals with a certain cost on them. You had a very similar amount of money and it went back to the Treasury. Why was that?

Andrew Lansley: There are two things. First, for the avoidance of doubt, the NHS, through strategic health authorities and primary care trusts, had an underspend in 201112 of about £1.6 billion. All of that has been carried forward for SHAs and PCTs, and is available to them in future years as a consequence of their underspend in 2011-12.

The Department of Health recorded an underspend overall, and that is a wider issue. As anybody in public finance will realise, we account in financial years. At the end of a year if you have not spent particular money, by definition, it is not clawed back by the Treasury. It is simply not spent. It is not like the Treasury gave us the money and we have handed it back. We did not spend it. That is a good thing because, if we do not need to spend money, it reduces the amount that the country has to borrow subsequently. By definition, it is not available in future years unless the Treasury allows budget exchange, which it did allow. The Treasury allowed us budget exchange, and we used it, between 201112 and 201213. It is because of that budget exchange that we are able to support the NHS so that NHS organisations have not lost any of their underspending in future years.

Q209 Barbara Keeley: It is a distinction that will be lost on many.

Andrew Lansley: I am sorry, but public finance is not immediately transparent. I assure you that the underspend in the NHS has not been lost to the NHS. To that extent, therefore, it cannot be held to be available for something else.

Q210 Barbara Keeley: Before we leave this point about Dilnot, I have a further comment. I think the opportunities of last year arising from the Dilnot report-the interest and support that it generated, the meetings, of which I have been to very many, and the understanding that developed of these issues-will be lost, given the delay that there is. You do not have to respond to this. I am just making a comment.

Andrew Lansley: I will respond to that because I do not think that is Andrew Dilnot’s view. I heard him responding to the publication of the progress report and others and he very much regarded it as significant progress.

Q211 Barbara Keeley: Fine, but what I am saying to you is that I think now the whole thing has been kicked into the long grass-

Andrew Lansley: It has not. That is simply not true.

Q212 Barbara Keeley: Can I finish?

Andrew Lansley: If it is not true, the premise is completely wrong.

Q213 Barbara Keeley: It is a comment that I want to make. Very many people have been to very many meetings over the last year, including an awful lot of meetings that Andrew Dilnot has been at. He will not be available to comment and present as he has over the last year. You were asked by MPs, and the Prime Minister was asked, if there could be an important national debate-that we could take this out to debate it in the country-and you said that the Select Committee had the resources to deal with these things. This is a debate that needs to be taken out to the country. The priority of what is done with underspends involving the Treasury and of finding some funding for Dilnot is a key question, and it can’t just be done by all of us sitting about here. It has to be done widely across Government Departments and across the country. I personally believe-it is a comment you can reject if you want to-that we have missed a big opportunity.

Can I also come on to the universal system of deferred payments that you have been talking about introducing. Another set of comments is that this has existed since the year 2000. My own experience as a constituency MP is that it exists and works perfectly well, and that it exists and works perfectly well without interest. I had a recent case of a very large amount of money having to be paid from the sale of a constituent’s home after he died, but there wasn’t a question of interest. Could you come back to this question of interest that my colleague Graham raised? It seems to me that people are going to be worse off. How will interest be set? That is a change to the system.

Andrew Lansley: As Shaun said a moment ago, the Dilnot Commission recommended that a universal system of deferred payment should be available and that it should be funded through interest charges that have made it effectively costneutral to local authorities over time. So, in effect, we have accepted Dilnot.

I go back to the first point you made. I know it was a comment rather than a question, but the premise of your comment was that we are kicking it into the long grass. That is completely not the case.

Q214 Barbara Keeley: That is generally the view.

Andrew Lansley: We are making all the progress we possibly can. In particular, what you said seems to be completely contrary to the views of this Committee, as expressed in their report. You recommended to us that we should accept the principles of the Dilnot Commission as a basis for the future. We have done so. We are proposing to implement the universal deferred payment scheme; we have accepted the principle of national eligibility thresholds; and we have accepted the principle of a capped cost model and extension of the means test as a basis for a funding model in the future. Your Committee did not recommend a proposal for how it should be paid for. That needs to be resolved and it needs to be something that we do in the future. We will do that.

Q215 Barbara Keeley: I don’t entirely speak for this Committee, but I have to say that if you do not recognise, Secretary of State, that what was announced last week is regarded as a massive missed opportunity, then you are not reading the signs from outside. But let us leave it there. I am happy to leave it there.

Andrew Lansley: I am experienced enough to know that people always want more and they always want everything to be done now. But I absolutely know that-I am not accusing the Committee because you did not set out to do that-there are many people who say it is a missed opportunity, to which I say, "To do what, exactly?" They did not have a view of how the Dilnot Commission was to be paid for. They wanted, somehow, a solution to magically appear, but they were not actually prepared to say, "This is the answer," because there wasn’t one. The Dilnot Commission did not recommend how it should be paid for.

Q216 Barbara Keeley: You asked them not to.

Andrew Lansley: We did not ask them to, but we do need to do that and they recognise that. We accepted the Dilnot Commission. We need to complete the task by resolving the question of how it is to be paid for. You came in on universal deferred payment. Such a system has not been in place since 2000. There is no universal deferred payment.

Q217 Barbara Keeley: I did not say "universal". I said "a system".

Andrew Lansley: A system has been in place without interest. I am sure it is a very satisfactory system, where available, for those who want to access it.

Q218 Barbara Keeley: I understand there is no-

Andrew Lansley: There is no difficulty there. The difficulty is that it is often not available and the local authorities who provide it incur a substantial cost as a consequence.

Q219 Barbara Keeley: Can you point at cases in which people have been turned down? I understand that there is no case in which it has been turned down. Local authorities have to supply care. I would be interested if you believe that local authorities are not doing this, because I think they are.

Shaun Gallagher: We certainly know that provision of deferred payment schemes is patchy around the country. That was the point that was reflected in Andrew Dilnot’s report as well. One of the things that local authorities say is that the fact that it is required by law to be operated at no interest charged, which therefore means it is a cost to them, is not an incentive to make it available to large numbers of people. Some authorities in principle offer a scheme, but in fact they only have one or two in operation at any time. So the availability, in practice, is not extensive.

Q220 Chair: It might be helpful to the Committee to have a note, if we may, from the Department on the availability of deferred payment schemes in the current regime: What is the Department’s view of the real availability on the ground rather than the theoretical availability in individual local authorities?

Shaun Gallagher: I would be happy to do that, Chairman. A warning in advance is that we do not collect data on this so there is a collection of different types of surveys and other collections of information that we have done over time. But we will certainly offer that.

Q221 Rosie Cooper: Can I take the Secretary of State up on a comment that you made? You talked about the underspend of £1.6 billion remaining with PCTs and strategic health authorities. It sounds a bit like brokerage that I used to know very well in the Health Service-now you see it, now you don’t see it and now you do. What I do not understand is-

Andrew Lansley: I am sorry, but-to correct you-brokerage is a very specific form of financial support to the NHS and is completely the opposite of this. Brokerage is giving NHS organisations in any financial year access to additional resources so that they do not run into deficit. That is then refunded out of the next year. It is the opposite of brokerage. Brokerage is money now offset on next year’s funding and carried forward. But underspend is money not spent now that is available in future years. So it is the opposite of brokerage.

Q222 Rosie Cooper: Absolutely. The point I am making is that it is more jiggery-pokery.

Andrew Lansley: No. We don’t do brokerage in the NHS this year. Do you know where brokerage is done in the NHS?

Q223 Rosie Cooper: Let me ask you a question-

Andrew Lansley: Let me ask a question. Do you have any idea whether there is any brokerage in the NHS in this country?

Q224 Rosie Cooper: There isn’t brokerage in the NHS.

Andrew Lansley: No. There is in Wales.

Q225 Rosie Cooper: There is in where? I am sorry, I couldn’t hear.

Andrew Lansley: There was £24 million at the end of the last financial year in Wales because they had four health boards that were in deficit and would have been in deficit without-

Rosie Cooper: Let us deal with stuff you are responsible for.

Chair: Order, order.

Andrew Lansley: You start on brokerage and I will tell you where there is brokerage.

Grahame M. Morris: They also have free prescriptions in Wales.

Andrew Lansley: It shows you that they can’t afford it then.

Q226 Rosie Cooper: Let’s not do Wales. Let’s do what you are responsible for. Secretary of State, if the £1.6 billion remains within the Health Service, where is it? Is the saving with the organisations that actually did not spend it? Is it in the Department of Health?

Andrew Lansley: No.

Q227 Rosie Cooper: If it is in the Department of Health, do as my colleague says and use it for social care-use it for Dilnot.

Andrew Lansley: I will not repeat what I said because what I said will be on the record, but it is with the PCTs and SHAs. In due course, if it has not been spent in 201213, it will be part of the transfer of resources into the hands of the NHS Commissioning Board and clinical commissioning groups. It is one of the reasons why we can now be increasingly confident that clinical commissioning groups will start their task on 1 April 2013 with no inherited debt.

Q228 Rosie Cooper: So it will not be used to help the elderly in the country. It will be used to-

Andrew Lansley: Yes, it will, because the NHS is continuing, for a start, to provide services to older people and being able to make transfers to support social care. In this financial year-I have a figure here-we are expecting to provide a total of £622 million by way of transfer to support social care plus a doubling this year, compared to last year, of support for reablement of £300 million. That is £922 million NHS support this year.

Q229 Rosie Cooper: Secretary of State, you can sit and read figures out all day-

Andrew Lansley: But they are the facts, aren’t they?

Rosie Cooper: -but the truth is you are talking to the great British public.

Andrew Lansley: I thought I was talking to you.

Q230 Rosie Cooper: The elderly and their families will be listening to and watching this and will see somebody who has not engaged with the desperate plight they find themselves in on a daytoday basis. They can’t get their mum out of hospital into a residential care bed, they are being asked by a county council to pay the £100, and the Secretary of State is saying, "It’s all okay. I am just dishing out these billions and it is fine."

Andrew Lansley: No. What I said was that people would say, "What are you, the Government, doing about it?" The answer is that we are doing things about it. We are supporting social care. We have put in £7.2 billion to support it. Across the country, and I made specific reference to this-you may say they are only numbers-the NHS provided additional specific financial support to local authorities. I also quoted support for bedbased intermediate care services, the kind of thing you are describing: £51 million additionally for early supported hospital discharge schemes.

Q231 Rosie Cooper: Secretary of State, do you think it is right to continue to pile duties on local authorities without giving them the necessary resources?

Andrew Lansley: No, we don’t do that.

Rosie Cooper: You are saying you are giving them resources. Look to any local authority in the country that deals with social care. Even an allparty group-led by Tories-made it very clear yesterday that there is not enough money to enable local authorities to deliver the kind of care we are talking about. In fact, if I jump to a question I was going to-

Chair: I am sorry, Rosie, but before jumping to questions, Virendra is waiting patiently.

Valerie Vaz: I have one or two questions on funding.

Chair: Can we come back to the broader funding question when we have concluded?

Valerie Vaz: It is on the point.

Chair: Fine.

Q232 Valerie Vaz: Secretary of State, can I say on behalf of the Committee that we understand and do not underestimate the huge task that you face? We do all want to be part of that dialogue. I was quite pleased to hear that you are keen to have crossparty talks, but could I first ask when you last spoke to the shadow Front-Bench team about this issue?

Andrew Lansley: I thought we answered questions today, didn’t we?

Q233 Valerie Vaz: We are talking to a different audience.

Andrew Lansley: I am sorry, but I don’t quite get the import of your question.

Q234 Valerie Vaz: What I am saying is that we are trying to support what you are attempting to do. You are in the hot seat because you are the Secretary of State. We are all here to have this discussion, either as the Select Committee or as the shadow Front-Bench team in another place. You said you were keen to have crossparty talks with Andy and Liz, so I am asking: when was the last time you spoke to them?

Andrew Lansley: I talked to them a few weeks ago, but before I published the White Paper and the progress report I invited Andy and Liz to come to a meeting and they did not come.

Q235 Valerie Vaz: Good. We have that on the record. Can I turn to what you were talking about, the funding and the money that has been given? In our public expenditure report, at paragraph 66, it was mentioned that in 201415 £2 billion was passed for social care. As you rightly mention, there is a oneoff payment of £150 million in 201112 that is going to people who are coming out of hospital and then, in your statement, you have mentioned that there is £100 million in 201314 and £200 million in 201415. There is also, in the White Paper, a £200 million fund for homes to be built. In the interests of public money and transparency-I know you thought it was slightly difficult-how do you know where this money is going? How do you know it is going to be spent on the specific purposes that you intend it to? What accountability is there for that?

Andrew Lansley: Let us take 2014 as a year because you helpfully focused on that year. You are right. Previously we had set out that, in that year, the total Government support for additional resources for social care was £2 billion, of which £1 billion was through formula grant, which is available for local authorities to spend on whatever they think their priority is. None the less, I would say to local authorities, on all the evidence that we have-Shaun will no doubt be able to amplify this-that, in the overall context of a reduction in resources available for local government, the reduction in resources spent on social care has been lower than for many other services, and they have prioritised adult social care support. That £1 billion they can spend as they wish, and we do not have a mechanism in Government to tell them how to spend it. That is part of the flexibility that local government should probably have. The NHS transfer was £700 million. While we give them freedoms, we have continuously, in the years that we have been making this transfer, seen what it has been spent on. That is why I can quote figures, as I did, about where the money has been spent. For the last year I have a long list of pretty much all the money that was spent and what it was spent on.

In the White Paper I announced £200 million more in 201415 and, additionally, there is £300 million which is specifically available for reablement, so it is spent for that purpose. In 201415 that is now a total of £2,200 million. In addition to that, there is the question of additional resources to support specialist housing for adult social care. That will be vulnerable young adults with disabilities and older people with special housing needs. In 201415 our current expectation is that that would be an additional £42 million. So you might say that is £2,242 million in that year.

Q236 Valerie Vaz: My point is that local authorities are facing difficulties anyway, aren’t they? How do you know it is going to be spent on social care? How do you know they are going to use the money for the right purposes?

Andrew Lansley: As I say, for the reablement we would know because we are spending it, in effect. The transfer we know because we have a data report that shows how it is being spent. The specialist housing will be capital grants made specifically in relation to particular housing schemes. The £1 billion, through formula grant, local authorities are free to spend as they wish, but the evidence is that they are prioritising maintaining eligibility for social care.

Chair: Virendra wants to conclude the question on the discrete funding of Dilnot and then we will move on to a more general discussion of social care funding.

Q237 Mr Sharma: You say, Secretary of State, that you will ban crude "contracting by the minute", also known as "time and task contracting". How and when will this be done?

Andrew Lansley: We are going to set about that now, effectively, and seek to work with the Association of Directors of Adult Social Services and the Local Government Association to spread best practice, because it is quite clear with many authorities that they are already able to do that. I might say that we will be very much assisted in that task with the extension of personal budgets because those who are recipients and use personal budgets often are very specific about wanting to contract for quality and service rather than for time. They are very much focused on that, but Shaun might be able to help. In a sense, it is about working with our colleagues in local authorities who are responsible commissioners for this.

Shaun Gallagher: It is, and it is a general development of more capable and effective commissioning by local government and building on where good practice is already the case. It is not simply about how long is the right time for a visit for home care because there may be situations in which a short visit is exactly what is needed and suits the person. The question is as to the crude approach that simply assumes that everything should be parcelled out in minutes. Good practice in commissioning can be based on what the outcomes are and how people’s needs can best be served. But looking to the future, as the Secretary of State says, as more people take up personal budgets and direct payments, essentially the choice lies with them about how they can have their own needs met in the way that suits them.

Q238 Mr Sharma: You partly touched on it, but I still feel that you should tell us what you estimate the financial implications of this action will be for councils. How will you avoid unintended consequences such as increased user charges for home care?

Andrew Lansley: Our expectation is that changing the nature of contracting in order to contract, in effect, for service and quality rather than for time will lead, overall, to an increase in costs for local authorities.

Q239 Mr Sharma: You don’t think so.

Andrew Lansley: I don’t think so. Very often the way in which these contracts have been constructed has led to a lot of short visits which do not necessarily meet people’s needs, does not necessarily give them the service they are looking for and entails very significant costs in coming and going between different locations. We can get to a better form of contracting. Many local authorities have demonstrated, as part of their efficiency savings, the ways in which they have gone about it-redesigning services-is part of a broader redesign of services which is delivering savings. In this year the anticipation in local authorities is that a total of some £688 million is going to be achieved through efficiency and service redesign. These are the kinds of ways in which you go about redesigning services.

Q240 David Tredinnick: Personal care budgets have just come up and, as you know, Secretary of State, I raised that at Question Time this morning. Your Department has various trials under way at the moment, so you may not want to say too much about it, with the idea of rolling out in 201314. Is this not going to produce a very profound change in that it appears, from what I am told, that patients have been very responsible with their money and carers have been given a new degree of freedom that they never had before? You are getting a better care service, but, crucially at this time when we are trying to tackle the Nicholson challenge and reduce costs, it has actually shown it is a way of reducing costs and keeping people out of hospital. Would you comment on that, and then I think the Chairman probably wants to move on because we have lots to cover.

Andrew Lansley: In the social care context we have already seen substantial benefits from the introduction of access to personal budgets. The numbers-I told you this morning-we have seen go from about 168,000 to 432,000 on the latest data. We still have a way to go, but that is a very substantial rate of progress. We want to give everybody access to a personal budget by April next year if we can. The legislative framework to support personal budgets, and indeed to give people, where they wish it, access to direct payments is set out in the draft Care and Support Bill. That should be in place by 2015. It really entrenches the system.

Your question, however, also takes us into the area of the extent to which people are able to ally their personal social care budget to an NHS budget-so a personal health budget as well. We have been very clear that where somebody goes on to NHS continuing care, that is generally where they have previously had access to social care support. When the NHS takes responsibility, we do not want what has happened in the past-and I have met people who have been in exactly this situation. People had, through their social care, the ability to decide what the shape of support for them should look like, who came and went, what kind of person and what time and so on, and then, suddenly, the NHS takes over, care is transferred from provider X to provider Y and the character of what is provided is changed, "This is what you are given and that’s it". We do not want that to happen so we have said that all those who are on NHS continuing care should have access to a personal budget alongside as a continuation or extension of their social care personalisation.

In the NHS-you are absolutely right-there is piloting work going on. It is difficult because very often the nature of health care is not predictable. The idea that you could, unlike with personal care, encapsulate people’s requirement for health care support into a fixed monetary sum, make it available to them and they could spend it as they wished is often difficult to do, and in many cases impossible. That does not mean we should not do it where it is possible. Sometimes you can say that people who are the recipients of health care have access to very predictable requirements for care and support, particularly nursing rather than medical. Those nursing and therapeutic requirements, if they are very predictable over a period of time, can be encapsulated into a personal budget allied to their social care and they can be given the opportunity to have flexibility across the whole of that. That, then, really begins to personalise care for those care users themselves and to stimulate real positive changes in the providers of care. Instead of being thought of only as a social care provider or a health care provider, you become a care provider and start to create different kinds of skill mix in the people who are providing care. That can be very important to the recipients of care.

We can see that happening in social care personalisation. We can see how people are moving from often what are very limited skills in some of the care workers who are providing care for them to personal assistants. Where they have substantial personal budgets we have seen a big increase in the number of personal assistants, which is effectively a description of people who bring a wider range of skills than the specific ones of providing certain aspects of personal care. People want to have their lives supported rather than just their care needs met. That is great if it is what people want. There is a big gap, often, between qualified nurses and care workers and in that large area there is clearly going to be scope in the future for there to be a new and different skill mix in responding to people who are using personal health and social care budgets together.

Q241 Andrew George: The providers of care are very much in, if you like, an environment of their own. You have the commissioners, the local authority and the health commissioners of care, and the recipients of that care. I wondered to what extent, in the drawing-up of the Government’s proposals, you have been in any kind of dialogue with that particular sector; in other words, the providers of that care. They seem to have been largely ignored in much of the planning, certainly at the grassroots level, and are anticipated simply to be there and to provide services. Certainly in my conversations with a large number of private providers-a large number of them are private providers-they feel they are simply ignored and not consulted about changes and are expected to respond to the latest policy initiative. They find it very difficult to maintain their businesses on the basis of those shortnotice changes. I wonder to what extent there has been consultation.

Andrew Lansley: Shaun is probably better placed to add to that, but, from my point of view, participating in the "Caring for our future" engagement during the course of the latter part of last year, I would have said that the care provider’s voice was not the dominant voice. If you asked me whose voice was dominant, I would have said it was the representatives of care users and the carers, but the care providers were definitely there. People like Martin Green from the English Community Care Association and major providers of care services were definitely there. Indeed, some aspects of what we have been doing have been-and they are in the White Paper-very specifically the subject of detailed conversations. For example, the White Paper says that we will be consulting in the autumn on a system of market oversight and that has been expressly discussed, as you would expect, with representatives of the care sector. They very much welcome and want to see the kind of reassurance in the future that goes with working positively together with local authorities and the Department to ensure that, where there are signs of potential failure on the part of any care provider, we are there early.

We managed, with a great deal of hard work-for which I am very grateful to my colleagues in the Department and in the Association of Directors of Adult Social Services and the care sector-to deal with Southern Cross. It was difficult, and it was more difficult because we might have had more signals at an earlier stage. None the less, we did deal with it. We made sure we were clear that nobody was going to be out on the street and they were not out on the street. So one deals with that. From the point of view of market oversight and intervention, we need to think for the future how we can be more certain about that.

Q242 Andrew George: That includes domiciliary and peripatetic athome care as well. I was not thinking only about residential care, which is easier to scrutinise and investigate.

Andrew Lansley: Absolutely it does, yes.

Q243 Andrew George: In terms of the domiciliary services, the message that I get from them is that they are very rarely consulted and they are expected to move heaven and earth pretty much on the minimum wage and with very little support.

Shaun Gallagher: Could I say something about that? As the Secretary of State said, in the engagement exercise that we conducted last year-but actually more broadly-we engaged pretty extensively with the provider sector. That is a very broad range. It is the care home providers, private and voluntary-from large corporate players down to much smaller organisations-the domiciliary care providers and those who represent them, and indeed the others, the social enterprises, small mutuals and micro-enterprises who are increasingly present in the social care market. I could list a number of organisations and people, save to say that we have worked very closely with all those players throughout the development of the White Paper and on particular initiatives as well.

One of the things that they have fed in very strongly to us is the sort of thing you are talking about in terms of relationships at local level and how constructive those are or are not in the development of care options with local authority partners. One of the things that the White Paper talks about is how local authorities need to develop their capability, not only in commissioning and procurement but in shaping their local market and working with providers and others to shape a market response that can meet local needs. The draft Bill specifies a particular function that local authorities will have in that area, and we have also committed in the White Paper to some central support to each local authority in the country over a period of 18 months or so to help them in developing how they take forward that new type of development of their responsibility. We need to see a shift from simplistic procurement, which has the rather poor relationships that can go with that, to a partnership of developing local markets together. That is something that we will work with them on.

Andrew Lansley: I was recalling in the "Caring for our future" engagement one of the areas of work that preceded that, which I think was very important. It was led by care providers-the "Think Local, Act Personal" partnership. That was very much a commitment on their part to support personal budgets and communitybased domiciliary care services. That, in the engagement last autumn, was one of the starting points for how we improve quality, particularly in domiciliary care services.

Q244 Dr Wollaston: Can I touch on the particular challenges for rural areas and the extra cost pressures of trying to help support people in their own homes in very dispersed communities? One of the reasons you tended to end up with "time and task" was that there was a shortage of carers and they had to travel relatively long distances. To clarify the point you made about personal budgets, would people living in rural areas, or indeed anywhere, have complete flexibility about who they used to care for them? Could they use, for example, neighbours and friends to support them in their own homes and could they also, for example, employ people via voluntary organisations, say like Dartmouth Caring and various other carer voluntary organisations in the community, or would they be constrained in who they could use?

Andrew Lansley: Yes. Shaun will correct me if I am wrong, but the intention is that generally, with personal budgets, that is true. Some local authorities, in the way they have implemented them, have had some parameters for that, but as we entrench this, in particular as we entrench the right to direct payments, people will be able to use direct payments for any kind of support, whoever is appropriate-family, neighbours or whatever. The White Paper also very much expresses our support for a range of initiatives, like the TimeBank Initiative, which engage community support. We want to get behind community, especially voluntary sector-led initiatives. Those can create, in rural areas particularly, that kind of community and local initiative that enables people to share time, to help neighbours and friends and to offset from one place to another. If you have a member of your family, perhaps an older parent, living a long way away, you would want to be able to have them supported there with that timesharing system to enable it to happen.

There are all sorts of new initiatives. I remember, when we ran the "Maps and apps" competition-you might remember, Shaun-back in the new year, one of the winning maps and apps was one that enabled people to support particularly older people who had support needs. The way they thought about it-I am sorry, this is a bit of a digression-was by saying, "How much time do families and friends spend ringing each other up to try and work out who is best placed to go and support an aged older parent living on their own? We spend a lot of time trying to work out how well they are getting on and when they need something done-the lawn cut or the laundry done-who needs to go and do shopping, who needs to do repairs and so on, and we are all phoning each other up. We can create an online app." An older person can put down what they need and all the people who are part of this online system can see that need and sign up to say, "I will do that". Any time they can’t do it, they can say, "I can’t now do that" and it will automatically go to everybody else who will say, "I can do that". So everybody who is part of this online family can see it all online. It is a great little app.

Q245 Dr Wollaston: That is great, but you said something quite important in there. Can people use their personal budgets to employ a family member?

Andrew Lansley: Yes.

Shaun Gallagher: Actually, not quite.

Chair: "Yes" means "no".

Q246 Dr Wollaston: I am very glad, because that would have been a fairly major change. So it is no.

Shaun Gallagher: We can offer you a note on this. In fact, I believe we have done so following a previous hearing on this point. There are exclusions from the Direct Payments Regulations for payments to close family members simply because it was never the intention that direct payments should substitute for informal family support and care. Those do allow for very exceptional circumstances when the family member is genuinely the only suitable person who could do the caring.

Q247 Dr Wollaston: For rural areas, that is particularly important.

Shaun Gallagher: I recognise that, but in relation to the other points that you made, the purpose of personal budgets and direct payments is absolutely to offer the person the greatest choice possible. So it is not about saying, "You must buy somebody from a list here." It is from anybody of your choosing. There is, in current regulations, an exclusion in relation to family members, but I think we are probably best to send you a note to clarify exactly how that works.

Q248 Chair: It is important also to preserve the principle, isn’t it, that this is taxpayer resource and has to be subject to proper accountability, satisfying an accounting officer and, ultimately, the test of what it would look like in front of the PAC?

Shaun Gallagher: Yes.

Q249 Valerie Vaz: Secretary of State, I have a quick question. I am very pleased that in response to my colleague Mr George you said you would intervene if there was not a significant provider for certain care, and you said you would think about it. I am concerned that you are saying you would think about it if there were not any providers, but I don’t know if you know that for elderly, seriously mentally infirm patients who are stuck in hospital currently there does not appear to be a provider. They are tying up beds in the Manor hospital in Walsall. I don’t know if you could take that away and look at it.

Andrew Lansley: I will gladly look at it.

Q250 Valerie Vaz: Six providers have decided that they do not want to deal with these patients and then they are stuck in hospitals.

Andrew Lansley: I will gladly look at it. I can’t say. Our objective is to secure access to services and continuity of service.

Valerie Vaz: I am pleased that you will intervene.

Andrew Lansley: If there is any instance where there is not continuity of service, then clearly the commissioners, not least locally, would want to put the service in place.

Valerie Vaz: Maybe this money you are giving to local authorities can be used for that.

Chair: It is important that the discussion of social care continues. While there have been some important issues as to Dilnot and all of that, it is not the whole story. Barbara Keeley wants to move the discussion on.

Q251 Barbara Keeley: Thank you, Chair. We have already touched on this, but could we go back to the additional NHS funding for social care? The White Paper says that you are going to build on the success of that. There is still a concern as to whether the additional funding for social care is sufficient to offset what happened at the same time, which was the 27% cut in local government funding. If we look at that first year of operation, I have seen breakdowns that said that almost a fifth of it was used just to support existing eligibility criteria. I think two PCTs-Manchester and Sheffield are given as examples-spent 100% of it, as the Secretary of State said, maintaining existing eligibility criteria. Eight others spent 70% of it that way. It does seem that there is a bit of a correlation between substantial cuts to council budgets, which were not of your doing-it is a different Department-and the situation where, simply to meet demand, those authorities had to do that. I checked this morning and Manchester City Council has budget cuts of £110 million and Sheffield £50 millionodd, so there does seem to be that correlation there. That spending was not going, in those councils at least, on reablement and integration of health and social care, and the other good things which the Government aspire to.

The point is-I know this is argued about and I have asked questions about it, as other people have-that there does now seem, if you look back at it, to be a difference between those authorities that are managing to spend on reablement, telecare and so on and those that are having to use it to prop up or to meet demand and to pay for existing criteria to be maintained.

Andrew Lansley: We are quite clear that, across the country, there has been some variation between local authorities and the extent to which they have been able to deliver efficiency savings in their budget without that entailing service reductions and the extent to which they have been able to orientate towards more preventative and earlier interventions. We are pretty clear that the resources made available to local authorities were intended, through formula grant, to help maintain eligibility, and I think in the last two years there have been some restrictions in eligibility. If you recall, something like 15 authorities changed their eligibility criteria the year before last and about six last year, generally from moderate to substantial. In preceding years there had been a significant shift, hadn’t there, from moderate to substantial in years prior to the election?

Shaun Gallagher: That is a trend that has been moving in that way for some years.

Andrew Lansley: As to the transfer from the NHS, from my point of view I was always clear that it could be used to maintain eligibility and it was not regarded as inappropriate for the local authorities to do that at all. In 201112 the report on the use of those resources suggests that 18%-just under £116 million-was used to maintain eligibility criteria.

Q252 Barbara Keeley: That is the figure I quoted.

Andrew Lansley: That doesn’t mean it was used wrongly. It is simply that that was the priority from the local authority’s point of view. Of course that is only 18% of the total. What is very important, as the ADASS budget survey illustrates, is that over local authorities in 201213 setting budgets for social care there has been an intention to secure £891 million, according to the ADASS survey, by way of total savings, of which £113 million represents a service reduction and £77 million represents revenue from increased charging, but £688 million represents efficiency and service changes. That means that more than three quarters of the savings in social care budgets is by way of efficiency and service redesign, not reduction of service to care users.

Q253 Barbara Keeley: But I think the situation it leaves us with-and I was quite interested to read the analysis of the PCT figures-is the postcode lottery writ very large. There is a sevenfold variation in the proportion of older people receiving care following an assessment. In Gloucestershire and Kirklees that is 4%. In Blackpool and Lewisham it is 20%. There is a sixfold variation in the weekly expenditure on selfdirected support. In Windsor and Maidenhead it is £54 a week and in Essex it is £309 a week. There is a threefold variation in even important things like social care expenditure on home care. That varies very substantially, even on telecare. Birmingham, who we have had in front of us for this inquiry, spent 25% of that NHS funding for social care on telecare, but 65 PCTs spent nothing on it-nothing at all. Secretary of State, you said that, as far as you are concerned, they could use it to prop up existing eligibility, but in terms of looking at what the Government’s aspirations are, it is clear that some local authorities cannot do that. 65 PCTs didn’t spend money on telecare. Some of them are clearly struggling and have spent all of it-

Andrew Lansley: You mean the money they transferred to local authorities was not spent on that.

Barbara Keeley: Yes.

Andrew Lansley: You have illustrated a number of things. It is fair to say that there is continuing variation between local authorities in access to services, in the circumstances in which care users are eligible for support, the character of the support they provide and sometimes the efficiency with which they provide it. There is variation, and part of the job that the Department, ADASS and the Local Government Association are doing collectively is to ensure that the lessons, in terms of best practice and best efficiency, are being identified, disseminated and used to try and deliver those efficiency gains.

But some of the things you were describing do not necessarily mean adverse unwarranted variation. The simple fact that a primary care trust may not report that the money they have transferred to local authorities is not being used for telecare does not mean they are not spending money on it. They may be spending their own money on it, not the money that is transferred to local authorities.

Q254 Barbara Keeley: A lot of them are not, though, I have to say. If you attend events about telecare, in some authorities they really go for it, clearly as Birmingham has been doing, and in others they do not at all.

Andrew Lansley: Absolutely, of course, and we are encouraging that. That is what the "3millionlives" campaign is all about. It is working with the telehealth sector in order to ensure that we do maximise-and "3millionlives" is an expression of that-the number of people who, through access to telehealth systems, will be able to improve their quality of life living with longterm conditions.

Q255 Barbara Keeley: The next question relates to that transfer and an additional £300 million to support integration. Clearly, given the analysis of what happened with the first year’s transfer of funding, can you, and if you can how will you ensure that the extra funding starts to be spent for the purposes you are setting out for it? If you are encouraging spending on telecare and want funding spent on integration, in some cases you are not getting it because the local authorities, given other pressures, are using it for their eligibility criteria. If you regard what has happened as a success and are ploughing on and saying that there is an additional £300 million to support integration, what about those authorities that can’t manage to spend it on integration because they need it to prop up what they are doing?

Andrew Lansley: I do regard what we have done as a success. It has made a substantial and positive difference, and it is important to recognise that local authorities themselves have responded well to the inevitable financial challenge and pressures they face in terms of delivering efficiency savings-£688 million in this financial year, £681 million in the last financial year-and are using the NHS transfer positively.

In terms of ensuring that it is able to support integration, we will be able to see more of that happening, not least because the establishment of Health and Wellbeing Boards, and the clinical commissioning groups working together at the Health and Wellbeing Boards with local authorities, will be looking specifically to try and create joint commissioning plans, intentions and services integrated around the needs of people as a priority. The CCGs will be looking for the money they are transferring to local authorities to benefit their patients in that way and, hopefully, the fact that they are sitting, literally as you are, round a table as a Health and Wellbeing Board constructing integrated commissioning plans should help to drive this forward.

Q256 Chair: Can I ask about what you think the impact of the national eligibility criteria is going to be on service differences in different local authority areas? What is your assessment of current eligibility in different parts of the country? If we start to define national eligibility criteria, what difference will that make to service and spending levels?

Andrew Lansley: The first thing is that the variation in eligibility-Shaun will correct me if I am wrong-in local authorities across the country is probably less now than it has been in the past. We have, on occasions in the past, had a few authorities who have only had people accessing social care when they have critical care needs-a very few of those-and others where people with relatively low care needs were accessing support. That, under the financial circumstances over a number of years, not just in the last year or two, has tended not to be the case so much. As I said, in the last two years some of the authorities who were continuing to offer eligibility for local authority care and support at moderate care needs have shifted that to "substantial"-

Q257 Chair: I am sorry to interrupt, but do you think that local authorities’ interpretation of "moderate" and "substantial" is consistent across the country?

Andrew Lansley: It would be rash to say that. Under the FACS system it is intended to be, but probably the assessments vary. If we can derive more consistency-and indeed one of the things we hope to do, following up the White Paper, is to see if we can design a more robust and consistent assessment process-that of course will mean that when people say "At what level would you set the national eligibility threshold?" that is not simply a financial issue. It is also an issue in relation to the kind of assessments we have and what use those criteria are. If we can design a better system over the next couple of years, I am sure we would like to. Shaun will probably add better detail to that.

Shaun Gallagher: I think your question is absolutely appropriate. The plan is not that we could seek to assure complete uniformity in how care and support works in all different parts of the country, not least because of the differences in localities, in rural areas and so on. What we are seeking to achieve with the minimum national eligibility threshold is a degree of clarity as to what people may expect will be the entitlement that they can be assured of everywhere in the country. At the moment, it varies in different places, but it may also vary within a place over time and people can’t be sure how it may move. That does not assist with planning and preparing ahead.

On the current eligibility framework with the "Fair access to care services"-FACS-on those four broad areas, "low", "moderate", "substantial" and "critical", I think it is fair to say that there is a degree of variation in how that is applied at local level, even when they are nominally the same. If we are honest about it, that probably applies for all national frameworks. For instance, with "The national framework for NHS continuing healthcare" we have taken great steps to try to make that more uniform around the country, but that still does not necessarily mean it is exactly the same everywhere. What we will set out in the Bill is that clarity of the level of minimum threshold that can be expected everywhere. We will also be putting in place work to try to make the assessment process and the work that goes with assessment, eligibility and care planning, more objectively-based and more consistent in operation.

Q258 Chair: I understand the aspiration. What I am searching for is evidence of preparatory work within the Department as to what are going to be the practical implications of the aspiration, both from the point of view of the people who rely on these services and ultimately for the people who have to pay for them. Are we defining ourselves into an even bigger problem than we currently have?

Shaun Gallagher: I think the answer to that is no. There will be work that will need to be done on the nature of the framework that goes into the Bill when it is put in place, so there are powers in the Bill to set eligibility frameworks. The ambition is to have that greater certainty about the level of access. That will never seek to set in stone exactly how every local authority must undertake its work. There are always different ways in which local authorities can offer services-different ways in which they can commission care within an overall framework. There is greater clarity about what people are entitled to, but all individual care needs will always differ. It is not as if we are saying, "This is now going to be the fixed spend per person" or anything as rigid as that.

Q259 Chair: I would like to give myself one more go at this. What work has the Department done on the implications of this policy? Is there work that you can provide to us that shows what the costs of this policy are likely to be and what is likely to be the effect on quality?

Shaun Gallagher: There is probably not a great deal I can offer. In a sense, that is the work that we have said in the White Paper we will set out to do, working with local authorities and other partners to reshape how assessment and eligibility will work. The impact assessment sets out an illustration of the cost impact that we would expect on the assumption that the current substantial level within the FACS criteria is the level at which it would be set. I can’t remember the exact number, but it is a small amount, we believe.

Andrew Lansley: Through to 202122, it is a recurrent cost total of £74 million, and not in each year. So it is relatively modest sums. That is if it were based on FACS in its current form, and there is work that is being done on trying to improve the character of the assessments that we reference in the White Paper. But given, as I was saying, that there has been a narrowing of variation between local authorities, even under the FACS system, of where they set their eligibility thresholds-on that assumption, not a prediction or a plan but the assumption that underlies the impact assessment-it is quite a modest recurrent cost. It is a cost, but a modest recurrent cost if it were set at that level because there is quite a significant grouping around that at the moment.

Q260 Valerie Vaz: Do you accept what Dilnot recommended, that everyone has to be assessed at "substantial", and doesn’t it go to the heart of portability?

Andrew Lansley: That is simply the assumption we put into the White Paper, yes. It is not the plan exactly, not least because we hope to improve the character of the assessments. It is said that people would simply say, "The current assessment, and there it is and that’s it", but we want to improve the assessment. None the less, the assumption is, as Dilnot recommended, setting a national eligibility threshold at "substantial", and the White Paper impact assessment says that by 201718 the recurrent costs of that would have risen to £12.2 million a year.

Q261 Dr Wollaston: Can I clarify what will happen to people whose needs are currently assessed at "moderate"? Will they risk losing their care if we move to "substantial" under the national threshold? Will there be any guarantees to them?

Andrew Lansley: No, because it is a national minimum eligibility threshold. Any local authority would clearly be free to offer greater eligibility than that.

Q262 Dr Wollaston: Would there be any proviso within this to say that people who are currently receiving care couldn’t have it withdrawn-existing users?

Andrew Lansley: Local authorities have to be free to make their judgments about that.

Q263 Dr Wollaston: Have you made any assessment with local authorities that if a national standard were introduced those-

Andrew Lansley: It is not a national standard. It is a national minimum eligibility threshold. To that extent, if you said it was a standard then local authorities would always move to it. It is a minimum.

Q264 Dr Wollaston: Presumably you have taken some assessment with local authorities as to whether or not they are likely, then, effectively to use it as a national standard.

Shaun Gallagher: At the moment, the situation is that local authorities have complete discretion as to where they set their eligibility criteria. The Government have now said that it will prevent local authorities from going beyond a certain point on that scale. In principle, that should not change the situation that currently exists-that local authorities may go more broadly than that. If they were to change, then the same provisions would apply as for now as to the need to consult on how they do it, the impact on individuals who may be affected and so on. So I don’t think it should change that existing arrangement.

Q265 Rosie Cooper: Secretary of State, earlier on, in response to a question, you outlined the amount of cash that the Government were supplying. But you did not really answer the question about what happens if there isn’t enough funding to meet the duties imposed on local authorities, which many believe is and will be the case. The Local Government Association has told us that, on present trends, within a decade social care will consume twothirds of local government spending, squeezing out other services. Do you accept those figures and, if so, how would that situation be addressed?

Andrew Lansley: If you will forgive me, I am not going to accept those figures. That is not because I want to engage in a dispute with the Local Government Association but because they are attempting to make a set of assumptions, including assumptions about future availability of public expenditure and assumptions which, if I recall correctly, probably underestimate the extent to which local authorities have demonstrated they can achieve efficiency savings. It is probably best not to simply run with any particular set of figures.

Are we clear? Were we clear in the last spending review about the nature of the demographic changes and the responsibilities of the local authority for care and support changes, and not just for older people? When you look at the numbers of younger adults requiring continuing care and support, the demographics suggest a rising profile. The Office for Budget Responsibility last week produced a report that looked at something like, from memory, 1.2% of gross domestic product rising over 30 years to 2% of gross domestic product for support for social care. These are big numbers and percentages.

Q266 Chair: Those are very familiar numbers from the Wanless Report, almost precisely.

Andrew Lansley: Yes, absolutely. That was why, in the spending review 2010, we put additional resources-what is now £7.5 billion-behind social care. So, while there are undoubted financial pressures in local government, reductions in real terms in local government spending-the changes in local government support for social care-have not been as severe. In this year, compared to last year, total social care budgets were reduced by something like just over 1%.

Shaun Gallagher: Yes. It is 1.5%.

Andrew Lansley: You may say that is 1.5%. Yes, it is a reduction, but it is not a major reduction and a lot of those reductions have been achieved through efficiency savings.

Q267 Rosie Cooper: Secretary of State, you have said that you appreciate that there is a huge problem and that local government has difficulties, but you are not going to engage with the people who are sitting there absolutely terrified in the face of cuts to their budgets and increased duties and responsibilities without resources and, therefore, are facing a desperate financial situation. You don’t want to engage in the worries that the Local Government Association have. Can I quickly tell you how-

Andrew Lansley: Forgive me, but I don’t think that is true. I did go to the Local Government Association conference the day after they published that report. I had a substantive discussion with them and with representatives at the LGA conference precisely about that report and about, in anticipation of the White Paper, some of the ways in which they and stakeholders in the care sector believe we can address many of the issues that care users experience. It is about personalisation, better information and advice and giving people much better opportunities to exercise choice and control of their care. It is about national minimum eligibility thresholds and creating new community initiatives to support people. I have to say, when you look at the White Paper that there is a whole series of things-we have not talked about most of them, but we have talked about some of them. They include a code of conduct for care workers; improved training and reliability of training for care workers; and ensuring a supply of care workers, with 50,000 more apprenticeships by 2017 for those working in the care sector. All of these things are there.

If you were to ask whether I know from conversations with care users what is important to them I would say, yes, I do; they are not only concerned with the money. They are quite often concerned, principally, with the question, "Is the person who is looking after me at home"-or in a care setting-"somebody who is going to treat me with dignity and respect? What is going to be the quality of what is happening?" So it is everything from the Care Quality Commission inspection regime, which is improving, through to care workers getting training, a code of conduct and the ability for people to be confident that their care needs will be met. The White Paper does address all those things.

Q268 Rosie Cooper: All of that is really important, but the elephant in the room is and always has been whether there is going to be enough money to pay for all of that. You have indicated that you would not engage with the Local Government Association’s view that, within a decade, it will cost two thirds of local authorities’ budgets. Let me tell you how desperate councils are. In Lancashire the external auditor has questioned the treasury management of Toryrun Lancashire County Council which, in the face of huge cuts to its local authority settlement, has taken to borrowing. That is borrowing linked to shortterm interest rates and investing at fixedterm and longterm interest rates creating a large interest rate mismatch in the hope that the shortterm rates do not increase over and above longterm investment rates. It is currently making money. But in Cornwall, where this was tried previously, a large surplus was followed by even larger losses. So increasing duties and responsibilities lead councils like Lancashire County Council to take greater risks. We have had casino bankers. Are your Government’s policies and the pressures and responsibilities you are adding to those councillors meaning that now we are going to end up with casino councils? This is reality. This is today. You are shaking your head and saying, "I am not engaging in the big picture". The elephant in the room is: how is it going to be paid for?

Andrew Lansley: Do I feel a press release coming on, Mr Chairman? Perhaps I do.

Q269 Rosie Cooper: The press release has long gone. It was on the television weeks ago. This is about people.

Andrew Lansley: I am not responsible for the way local authorities exercise their-

Q270 Rosie Cooper: You are responsible for adding pressures to them.

Andrew Lansley: I am not responsible for whether a local authority, whoever runs the local authority, thinks arbitrage is a good thing or a bad thing. It is not my business. My business is care and support. As far as we are concerned-I don’t think I have made a single party political point, but I will make this one-in the context of the financial consequences of the deficit we inherited and the absolute necessity of reducing that deficit, we gave priority to care and support, and manifestly did so both in the spending review of 2010 and in the decisions the NHS has taken since. We are going to continue to do so. Happily, I think it is something that is agreed across political parties in the House. When you look at the list of actions in the White Paper there is wide support for all of these actions. To dismiss them as though they are of no importance and the elephant in the room is funding-

Q271 Rosie Cooper: They are very important, but they need to be paid for, Secretary of State, and you keep on avoiding the question of the money.

Andrew Lansley: We have said that we have looked at the funding. We have made resources available and the next spending review will necessarily, as I have made clear to all of my parliamentary colleagues in other parties, have to address the spending pressures in local government, but all in the context of meeting our overall deficit reduction plan. Local government spending, like the NHS, is a big part of that total. We cannot escape the financial challenges that have resulted from it, but I have to say, not least recognising some of the very difficult decisions some of my cabinet colleagues are having to take, that the NHS has been supported through realterms increases over the Parliament for the NHS and, together, the NHS and formula grant for local authorities, notwithstanding significant reductions in local authority spending, is supporting social care.

Chair: You can have one more go.

Q272 Rosie Cooper: I am not going to continue with that because, Secretary of State, I absolutely understand that you are not going to address the real issues, the elephant in the room, which is how this is going to be paid for. The people-

Andrew Lansley: Forgive me for interrupting, but when you say, "This is going to be paid for", what do you mean by "This"?

Q273 Rosie Cooper: The responsibilities that you are giving to local authorities-

Andrew Lansley: But I have told you that there are additional funds to support the White Paper-

Q274 Rosie Cooper: Secretary of State, we will agree to disagree. I absolutely believe, along with most of the care organisations in this country, that you are throwing away a huge opportunity to address some real problems.

Andrew Lansley: Please.

Q275 Rosie Cooper: Let me go back-and you can "please" all you like-

Andrew Lansley: You are conflating the White Paper and Andrew Dilnot’s commission. Paying for Andrew Dilnot’s commission is a very specific task which does not of itself, important as it is bring additional money for social care. Benefits will be derived and people will see it as a very important thing, and I think it is a very important thing and in principle we are committed to doing it. The White Paper has a very large number of immensely positive steps-

Rosie Cooper: Absolutely.

Andrew Lansley: -that will improve the structure of care and support for people and how it is delivered to them, the quality of what they get. There are costs involved. The costs associated with the White Paper are more than met by the additional support that the Department is giving and the Government are giving-

Q276 Rosie Cooper: The costs of everything in that White Paper are more than met-

Andrew Lansley: There is a separate thing. There are continuing funding pressures in social care which are the result of demographic changes over time. They are addressed in this spending review up to 2015 by the Government, notwithstanding that it does lead to a need for efficiency savings in local government and there have been some reductions in eligibility, service and increases in charges. In the next spending review, we will have to continue to address the baseline funding pressures, but the idea that the White Paper is, in any sense, invalidated now by the fact that we have not made the decisions in the next spending review is utter nonsense.

Q277 Rosie Cooper: Secretary of State, you are reminding me of your Minister of State who was here and told us there was no funding gap and then had to write to us later and admit that he did not quite get it right. Are you also- That is a real problem that you have, Secretary of State: when anyone disagrees with you, you arrogantly look skyward as if we are all boring. Let me say that the country will be watching this performance and worrying about how they will get their care delivered to them and their families.

Can I go on to another bit? Does the Prime Minister intend, as he said, to keep his election promise to maintain universal benefits for older people? Does that now mean that means testing those benefits is not a potential source of additional funding for social care in the longer term, that is, after the next general election?

Andrew Lansley: I think I responded to that question earlier.

Chair: There will be a competition for the last word going on if we are not careful. Before I go to David, there is one more question from Barbara.

Q278 Barbara Keeley: It is about unmet need, which we looked at quite substantially in one of our sessions. When you come on to tackling longterm funding reform, will you be seeking to address unmet need in general and the burden on carers specifically? We have heard a figure from one of our witnesses that unmet need has climbed to something like 800,000 people now who are said not to be receiving care services although they have a care need identified. Is that something that you believe the process of tackling longterm funding reform can start to look at?

Andrew Lansley: It is fair to say, when we look at social care need and the consequences of that in terms of pressures on health and social care budgets, that one of the things we do look at is unmet need. It is not the case, obviously, where we are looking to support local authorities in providing care and support, that we are expecting them to provide taxpayerfunded services to everybody who has any care need. The implication of a national minimum eligibility threshold is that local authorities, with support from central Government, will be setting out to provide, to that extent, assurance that if people’s care needs reach a certain threshold there will be taxpayerfunded support. What the White Paper does, and what I think the NHS support for social care and the integration of services through joint working will do, is increasingly try to direct resources towards earlier intervention and prevention. That is going to have a big positive impact with people who do not yet have substantial and critical care needs because those care needs will be met more effectively. Things like telehealth will clearly do that because, very often, these are the results of longterm conditions, and the Health Service is responding to those morbidities and looking after people in that way.

As I said earlier, if we are able to implement the funding model under Dilnot successfully, it will lead to the development of an offer to people to plan and protect themselves against care costs in the future up to the cap. Those who offer that will, themselves, have an incentive to invest in prevention and earlier intervention to reduce the care costs that they have to meet later on. It is complex to work through because you have to say, "If we take the catastrophic cost, they will be able to manage against the cap." Because they do not have to meet the substantial potential liabilities that the state takes, they can afford to offer a viable and affordable offer to individuals to protect themselves against care costs up to the cap. So it is a kind of twostage thing. If that happens, they could say-and the financial services have probably been here and talked to you, and ABI and others have probably been here and said to you-"We think the capped cost model enables us to do this." The benefit of that is that they then have a direct incentive, when they offer any such product, to invest in order to reduce the care costs of those people who have bought their product. So we have potential for the long term-and it is important to have that-but there are a number of components to that. There is local authority action, NHS action, integrated working of that kind, plus the potential of the Dilnot funding model.

Q279 Chair: I want to come on to more structural issues on integration. Can I be clear, before we do that, on the concept that is often discussed in this arena of unmet need? Going back to the answer you gave me earlier about the cost and quality implications of national eligibility criteria-you put a very modest cost in the White Paper on introducing minimum national eligibility criteria-the assumption there is that that includes the cost of any unmet need where need is defined by the national minimum eligibility criteria. Is that correct? In other words, the implication must be that unmet need to that national minimum eligibility criteria is at a very modest level.

Andrew Lansley: Correct me if I am wrong, but the calculation is based on the assumption that it was applied at the FACS "substantial" care need level and on the basis of the existing system in terms of means testing and access to statefunded support.

Shaun Gallagher: Yes. There is no assessment in that figure of people who are eligible for and receiving state support but it is in some way not fully meeting their needs, which is one component.

Q280 Chair: It is a question of what you define as need in the context of the phrase "unmet need", isn’t it? If need is broadly substantial need, as currently defined, the implication of-I think you said-£17 million, or some very modest number, as the cost of introducing a national eligibility criteria is that there is virtually no unmet need if need is defined as substantial in the current terms.

Andrew Lansley: That it falls to local authorities to provide for.

Shaun Gallagher: Unmet need, I think, is a concept. The Government do not make an estimate of what they believe unmet need is. Lots of people talk about figures for this. Quite a large component of that will be people who are not eligible for state support but choose not to support their own care needs by using their own funding. That is one of the most critical elements of unmet need. Indeed, there are people who, for one reason or another, simply don’t come forward to seek support and who may have some degree of need. One of the things that we know is that people who are liable to pay for their own care because of not meeting the financial eligibility criteria do not always make good choices about their own care. As the Secretary of State said, they often do not invest in services, partly through fear of the additional costs that they may face later. It is one of the arguments as to support for a capped cost scheme.

Another part of it, though, is simply to ensure that there is better advice and information so that people can make better care choices for themselves. To that extent, the measures set out in the White Paper, and indeed the Bill, about a stronger and more universal offer of information and advice may have an impact on that. In terms of those who are receiving state support, the Government have not estimated whether there is unmet need within the population who are already receiving that support. That is not part of the calculation that we have set out.

Barbara Keeley: But my question really touched on the burden on carers. We can argue about definitions, but that was not the purpose of the question really. Where there is substantial unmet need-I think our witness talked to us about 800,000 people-you have to say that probably at least 800,000 carers are taking on an increasing burden. That was the point. As you start looking at this longterm funding reform, will you look at the burden on those carers?

Q281 Chair: Can we combine the questions, otherwise we are going to run out of time? It is partly the burden on the carers and also the cost and quality implications of introducing national eligibility criteria and then improving advice and support to enable people to have access to the system. The earlier question I asked about the implications of this policy ought to take account both of Barbara’s point about carers but also of improved knowledge of the availability of this and therefore the likely cost to the taxpayer?

Andrew Lansley: Yes. The figures I quoted were simply in relation to what is effectively the minimum eligibility threshold provided in the current system. It was a different point, and not the point I thought Barbara was making. It is important to recognise that, in the White Paper, there are costs associated directly with the right, for the first time, of carers themselves to have an assessment and to receive care and support themselves as a consequence of that. That is important in the draft Bill. The impact assessment makes it clear that that, in itself, as a separate aspect of cost, would be on a rising profile year on year which would reach a level of £175 million a year by 201920. That is the estimate we have made of the cost of the provision of this additional support for carers, which is separate from what we have been discussing.

Chair: Let us move on to David’s question.

Q282 David Tredinnick: I would like to revisit and explore integrating health and social care. We have recently got the new Health and Social Care Act and you have a draft Care and Support Bill out there which has similar provisions, in that we are looking here at integrating the services. Do you have confidence that you can do a better job with these new proposals than we have had in the past? Similar duties in past legislation, which have been in place since 1974, have required at least limited integration. Why should you be more confident that this big bang you are proposing will do a better job?

Andrew Lansley: I would say a number of things. First, we have the benefit of seeing where there has been good practice in terms of integration and people building on it. We are investing, as indeed our predecessors did, in piloting work on integrated care to see how it can best be achieved and we are setting about the diffusion of that. It is a combination, as ever, of changes in responsibilities and the way in which those responsibilities are discharged, plus changes in the way in which people in the system behave. As to Health and Wellbeing Boards-I will not repeat what I said earlier-we can see that putting health, social care, public health and the wider responsibilities of local authorities, including for housing, all around the table delivers a joint plan that has much more potential successfully to deliver integrated care.

I want to make a final point. There is a risk that people see integration as something that is achieved by the Health and Wellbeing Board in delivering an integrated plan. In truth, as the Future Forum absolutely rightly set out, as it were, the holy grail of integration is that everybody who is in contact with somebody who has a health and care need designs their services around that person. That is what delivers it.

Q283 David Tredinnick: What I am trying to say is: isn’t there a degree of "Back to the Future" here? We had joint consultative committees between 1974 and 1999 and then there were other mechanisms, such as the health improvement plans, local delivery plans and joint strategic needs assessments in the past. Some of this has been tried before and you have had various role models in the past. I am curious as to why you think that this time you can do a better job than those systems which, some might say, have failed.

Andrew Lansley: First, because most of those have not engaged local authority responsibilities properly and I think the role of local authorities and the scope of their responsibilities is terrifically important. The accountability that local authorities have for the delivery of care is terrifically important. Secondly, I think my experience of going to visit places and sitting round a table with-to take a county at random-the Leicestershire local authority, the clinical commissioning groups, the director of public health and hearing them describe the way in which they are working together convinced me. You can ask them the question, and they say, "We haven’t had this before." I can remember, in another place, a GP saying, "We were talking to a social worker in our area and the social workers said they had had more contact with the Health Service-the GPs, as the Health Service-in the last nine months than they had had in the previous 20 years."

Q284 David Tredinnick: I do not disagree with some of what you are saying, but I wanted to probe. I want to ask one further question. How will the Government ensure that the Health and Wellbeing Boards become the crucible for integration as recommended by the NHS Future Forum rather than-I quote from a newspaper I do not read all the time, The Guardian-"haggling over who pays for social care"?

Andrew Lansley: We have in the past, you are right, but the past is not necessarily a guide to the future. But there have been occasions in the past and within recent memory when we have had the NHS trying to shift costs to local government, and local government trying to shift costs to the NHS. It was made easier to do that because they weren’t required to have a joint health needs assessment and, in particular, weren’t required to have a joint strategy for commissioning. They are required to have that now, and they are working together. They are in the same place. To some extent, in Government, you can create the framework and the incentives, support the pilots, have the right policies and the right funding-or as much of the funding as you can afford-but, at the end of the day, it is going to depend on relationships and behaviour. If you ask me whether I think, from what I have seen so far, that relationships and behaviour are adapting and are broadly positive, yes, I do, when I go out and see people. I freely admit that part of it is because they feel, and some of them would literally say, "We are on a burning platform here. Local authority spending is being cut and Health Service spending is effectively"- in real terms, it is going up by a tiny amount, but they feel this-"pretty static in real terms. We have got demand rising." To them, sometimes the financial challenge and all that goes with it is the incentive to make more dramatic changes in the way in which they behave.

Q285 David Tredinnick: I have a gut feeling about this. We talked earlier about personal care budgets. If you can get in the Health Service a greater tailoring of need, maybe developing these themes of integration further, I think you will bring your costs down and that will help you enormously. I think, personally, that this is phase 1 of a finely tuned service.

Andrew Lansley: I would not dispute that at all. If the holy grail is integration of services around the individual, of course, the exercise of personalisation, as far as we can take it, enables that to happen more confidently than almost anything else. But in the Health Service you just have to be practical about this. Access to medical care and services is very difficult to predict in advance.

David Tredinnick: I will leave it there. Thank you.

Q286 Chair: Can I ask you a hypothetical question? If in a particular locality the clinical commissioning groups, the social care authorities, meeting in the Health and Wellbeing Board for the first time and developing a common agenda in the way you describe, came to you and said, "We want to formulate our Health and Wellbeing Board under section 75 flexibilities as a common commissioner for a range of services, not necessarily all the services for which the CCG and social care authority are responsible," is that something that would be allowed within the current legislation and with the current view of the Department?

Andrew Lansley: Yes, absolutely. Under the Health and Social Care Act we have carried forward all the legislative provisions to enable people to create what is, effectively, care trust-style organisations. It is perfectly possible to do that.

Q287 Chair: There is nothing in the theology of the Department or any other part of Government that says that the Health and Wellbeing Board cannot be constituted to discharge that single commissioner function.

Andrew Lansley: No. I think under the Health and Social Care Act it is necessary for there to be the Health and Wellbeing Board as a committee of the local authority and for there to be a clinical commissioning group. But I think if the two-the clinical commissioning group exercising its statutory responsibilities and the local authority exercising theirs-chose to create a joint commissioning organisation, it is perfectly possible under the Act.

Shaun Gallagher: I agree. That is absolutely possible. The only thing, as you say, as to the theology of the approach towards Health and Wellbeing Boards, is that we very much want them to be seen not only as joint commissioners. In a way, that is one of the downsides. It was before my time, but people say that the joint consultative committees of the 1970s were only there to talk about the joint money and they missed out on the bigger picture. The role of the Health and Wellbeing Board must be broad, shared leadership across the entire health and care economy and the population that they serve. But it is absolutely possible for them to combine commissioning budgets and strategies, and that is something that would be discharged under their oversight.

Q288 Chair: Do you believe that the section 75 flexibilities are fit for purpose to allow that common commissioning budget approach to work?

Andrew Lansley: I have no reservations about that. It has been used and can continue to be used in the future.

Shaun Gallagher: I think it may have a different number now.

Andrew Lansley: Yes, I think it does.

Q289 Chair: Let us hope we can accept that.

Shaun Gallagher: You are quite right, Mr Tredinnick, to say that placing a duty on somebody does not get you naturally to the answer. The participants in the Health and Wellbeing Boards are under a duty specifically to consider joint commissioning and pooled budgets as a way of discharging their responsibilities in the most effective way. We think that the legal powers to support that are there and good for them.

Q290 Dr Wollaston: The Committee shares your enthusiasm for integration. Going to the other end of the spectrum, what powers are available where councils and the CCGs are not working together and integrating-if you like obstructing the path towards integration around the patient? Who will be able to step in and make sure that it happens; that the whole issue is not sidelined?

Andrew Lansley: For us the accountability of local authorities is in terms of their ability to deliver on the outcomes that are set out in the public health and social care outcomes frameworks. For clinical commissioning groups, their accountability is for the delivery of improving outcomes under the NHS outcomes framework and whatever additional outcomes are set out in the commissioning outcomes framework agreed with the NHS Commissioning Board. The answer is slightly different for the two organisations. If a clinical commissioning group is not achieving integration and improving on its outcomes, then it is accountable. The NHS Commissioning Board will have the ability to hold it to account through performance management and, if necessary, intervention in the case of a failure to deliver improving services for their population.

For the local authority, the accountability is subtly different: it is to their electorate principally. We are deliberate about that. Yes, we will hold them to account and there will be financial reporting and reporting against an outcomes framework, but the underlying accountability is to their electorate.

Q291 Dr Wollaston: But of course the electorate would rarely vote on an issue like whether or not CCGs have achieved integration. So the answer is-

Andrew Lansley: They will vote on the basis of things like the outcomes that are being achieved.

Q292 Dr Wollaston: Yes. Central to this, a lot of people have been saying that potentially this is tariff reform. Is that going to proceed at a pace that enables this integration to happen?

Andrew Lansley: I am sorry, tariff reform?

Q293 Dr Wollaston: Tariffs; you know, the way payments are made.

Andrew Lansley: Yes. I feel I have suddenly gone into the 19th century.

Dr Wollaston: I am sorry.

Andrew Lansley: It is fine. It will be very helpful, I think, in the context of trying to deliver joint commissioning in integrated services for there to be an extension of tariff into community services. That will give commissioners much greater ability to manage their contracts with providers.

Q294 Dr Wollaston: But "Year of Care" is what I am thinking of.

Andrew Lansley: Yes, you are absolutely right. The point I was making about predictability is that there are circumstances in which, even if you can’t be entirely certain about the requirements of individual patients, you could at least estimate a year of care for somebody and the standard you are looking for. Of course, we are commissioning for quality.

Q295 Dr Wollaston: Would you agree that this is helpful?

Andrew Lansley: You agree a standard and a budget, as it were, and sometimes that budget could be meshed together with social care budgets in order to create either personal budgets or care budgets that can be integrated at the level of individual patients.

Q296 Dr Wollaston: Is sufficient progress being made on reforming the way those payments are made?

Andrew Lansley: I am always anxious to make more progress and where tariff development is concerned we are making more progress, but it has always been long and difficult. The principal reason is that when you start trying to develop a tariff you pretty much have to start with a process of defining the character of the service you are applying the tariff to; you have to acquire data to be clear about what, as it were, the currency looks like; and you then probably have to spend another year acquiring the data in order to see what those data tell you about the cost basis for applying a tariff in relation to that currency. So it is frustrating, and I completely understand it. I have been pushing and we are doing everything we can, but in many instances we have started and it takes a minimum of about two years to arrive at any kind of tariff.

Where mental health is concerned, for example, we have really pushed through and have from 201213 local tariffs and a lot of opportunities to apply a wider tariff basis for the commissioning of mental health services, which, in this context, is pretty important. There is a lot of commissioning of care and support services for those who also have health needs in the mental health service sphere.

Q297 Dr Wollaston: Would you agree that it is one of the main obstacles to moving this forward?

Andrew Lansley: Yes. It is one of the main opportunities we have for developing and one of the ways in which the organisation is responsible for tariff development. We are doing it now. The NHS Commissioning Board and Monitor will take over that responsibility from 2014 onwards. It is a big responsibility. We are making all the progress we can, and I want to do more. From that point of view, I rather treat it as one of the major opportunities that the process of reform has already opened up and we have more to do, absolutely.

Q298 Valerie Vaz: To take you back to integration, one of the visits that we did as a Select Committee was to Torbay Care Trust. We saw what you seem to think is not happening already; they are talking to each other, and it seems to work. One of the recommendations from our report-recommendation 15 in the summary-is that care trusts ought to continue. Do you see any problem with care trusts continuing?

Andrew Lansley: I think we have had that conversation. As far as we are concerned, it is absolutely fine.

Q299 Valerie Vaz: Under the new arrangements-can I finish?

Andrew Lansley: One must not take the particular to the general. As to the experience of Torbay as a primary care trust, becoming a care trust is not the experience that was replicated to any significant degree anywhere else in the country. Do I think it is possible? Sarah knows better than I do. In Torbay, at the moment, is it possible for reform to enable that continuing programme? Yes. Can it improve and extend on it? I think many of the GPs in that area, through what is the Bayview-

Q300 Dr Wollaston: It is Baywide. It has changed its name now.

Andrew Lansley: Anyway, I think that the clinical commissioning group’s view would be that it has enabled it, if anything, to integrate across primary medical services as well as community and social care services. So there is a potential in the reform process for, if anything, an even wider degree of integration.

Q301 Chair: So it is not strictly your view that care trusts are-I think the quote is-"an experiment that failed to get out of the laboratory"?

Andrew Lansley: No, I would not say that. But I think it is quite important not to treat care trusts as necessarily having a particular organisational model that is focused on the provider side when integration on commissioning may be at least as important.

Chair: Indeed, which we were just discussing.

Q302 Rosie Cooper: I have two very quick questions. Secretary of State, I am somebody who has always supported the theory behind Health and Wellbeing Boards, but certainly always worried about their lack of powers. You have indicated that the Health and Wellbeing Board will be accountable to the National Commissioning Board and to the local electorate. How can a Health and Wellbeing Board ensure integration when they can’t veto or decline to sign off any inadequate local commissioning plan without waiting for some dramatic thing to happen and the National Commissioning Board or the electorate to step in?

Andrew Lansley: The Health and Wellbeing Board is not accountable to the NHS Commissioning Board. The clinical commissioning group has a line of accountability through the NHS Commissioning Board to the Secretary of State. Health and Wellbeing Boards are committees of a local authority. I think we all agree that local authorities are elected bodies. They have their own responsibilities to their community and we should not constantly be trying to tell them what to do. The relationship between the clinical commissioning group, its commissioning plan and the Health and Wellbeing Board is that we do expect them to agree. If the Health and Wellbeing Board did not agree, we would expect that to be referred to the NHS Commissioning Board in order to try and establish such agreement.

Remember that the NHS Commissioning Board will have its representative there as well. The area team of the NHS Commissioning Board will have its representative because it will be responsible for a significant part of the overall specialised commissioning in its area. It will be a participant in trying to make this happen. But it is not a case of veto. It is a case of securing agreement.

Q303 Rosie Cooper: Difficult times. Secretary of State, going in a completely different direction altogether, as secretary of the allparty group on continence, I can tell you that 4 million to 6 million people in the UK suffer from bowel and bladder problems, and providing betterfunded continence care saves resources in the long run and preserves the dignity and well-being of sufferers. The big thing about this is that it enables people to remain independent and stay longer in their own homes. The Government have stated that the proposed new system will focus on people’s well-being and support them to stay independent as long as possible. Therefore, incontinence is a significant factor in admissions to care homes. What are the Government doing to raise awareness and provide better continence care? There is often disagreement about what is provided and the level of service that is provided by differing PCTs, as they were, which perhaps may be CCGs in the future.

Andrew Lansley: I will send you a note by all means, but part of the process of supporting improved commissioning is the establishment and backing up of quality standards. NICE undertakes the preparation of clinical guidelines. My recollection-there is no reason why Shaun should know this-is that part of its work is the preparation of clinical guidelines for continence services, giving us access to quality standards for the provision of continence services. If I am wrong about that, I will write and tell you. If I am right about that, there is more detail to add about where we are in that process and the provision of that. Clearly, clinical commissioning groups will make their decisions about the character of the services they commission, the local services, how they fit together and the priorities that they necessarily have to attach. But they feel-in almost all cases, I have discussed with them-very strongly that they want to have a strong evidence base and clear quality standards that they aim commissioning against. You are right that a continence service is really important in that context.

What is also important is research. It gives me an opportunity to say that there is some excellent research being done into continence care. I have been with, for example, some of the research that has been supported-most recently, nurseled research at Southampton university hospitals. From my point of view, we should be supporting that as well. It is quite interesting that some of that research was in relation to incontinence services for men, many of which were really outdated. It gives a lot of opportunity for thinking about support for new services and medical devices which are much more efficient these days than they used to be.

Q304 Rosie Cooper: Can I draw the Secretary of State’s attention to the fact that the allparty group produced a report in late 2011, which was very well received?

Andrew Lansley: I have no doubt.

Rosie Cooper: I am sure there will be some things in there that-

Chair: We shall look forward to receiving your further detail on incontinence services which will, no doubt, refer to the report of the allparty group.

Rosie Cooper: It also talks about saving resources.

Chair: On that note, unless any Member of the Committee-

Q305 Dr Wollaston: I am wondering, Secretary of State, whether it would be possible for you to send us a further note on how TimeBanks operate?

Andrew Lansley: Yes, by all means. I am sure we will. It will be by way of some illustrations of examples as to it, but we will certainly do that, yes.

Chair: Thank you. We have covered a lot of ground. Thank you very much. The story will run.

Prepared 20th July 2012