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Lord Swinfen: My Lords, this is purely an enabling amendment. It allows local authorities which feel capable of taking on a new category of direct payments to do so where they have the skills and where the need exists. The need will vary from area to area.

Under the amendment, the Secretary of State has a power of veto. He must satisfy himself that it is right and proper to agree to the local authority's request. It is a sensible amendment and one that allows different local authorities to proceed at different rates of learning. It would allow a group of authorities in different parts of the country to expand in slightly different sections so that there would be a much broader learning curve throughout the country as a whole. For instance, half a dozen local authorities might be given permission to make direct grants to those with mental disabilities. In other parts of the country another half dozen could be

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allowed to give grants to people over the age of 65. The knowledge acquired of how grants are best applied could be disseminated throughout all local authorities. It would be useful to learn how pitfalls were overcome. The amendment is eminently sensible; and I strongly approve of it.

Baroness Cumberlege: My Lords, as I have said throughout the course of this Bill we are bringing a new way of ensuring that people's needs are met into the heart of community care. As the noble Baroness rightly said, that is what lies behind the Government's proposal to restrict eligibility.

We want to limit the scope of direct payments for two reasons. The first is to allow local authorities to focus on a relatively small group as they begin to make direct payments. We do not want to put at risk the long-term future of direct payments by being over-ambitious in the short term. The second reason is so that the Government can assess how direct payments are working. It is a completely new way to deliver community care. It is radically different from the way local authorities currently arrange community care services. In many respects it is far more revolutionary than were the community care reforms that we introduced in 1993.

The Government want to limit the scale of direct payments so that we can see how they work in practice on a controlled basis. We shall need to see whether the framework we have put in place is the right one. Of course the policy proposals are those which we believe are best. They create the environment which we believe is most likely to lead to successful implementation.

But we are moving into uncharted waters. Existing experience is limited. Direct payments have not previously been in the mainstream of community care. We want to see how things go, how this policy works. Then we shall be able to judge whether we need to adjust the national framework.

The amendment would clearly undermine our second aim in restricting eligibility. If we make exceptions for some local authorities then the national framework is haphazard and it becomes far more difficult to judge on a national basis how direct payments are working. I also find it difficult to see how the provision might work in practice. It would be extremely cumbersome and bureaucratic for the Secretary of State to have to review every application in order to exercise his discretion. A great deal of information would be needed to form a proper judgment as to whether each individual local authority is in a position to make direct payments to a wider population.

The new system has to be fair. It is essential that there is a criterion that can be used in order for the Secretary of State to make his judgments. This Bill, when enacted, has to be fair to local authorities, to those who might benefit, and also to the Secretary of State. It would be difficult for him to retain his control if, as my noble friend Lord Hayhoe suggested, every decision could be subject to judicial review. That would put the Secretary of State in an impossible position.

I return briefly to the third party schemes mentioned by the noble Baronesses, Lady Darcy (de Knayth) and Lady Hollis. As I said in the previous debate, people on

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existing schemes could continue to receive direct payments. To clarify that, it is up to local authorities to ensure that their schemes are legal. If schemes are currently legal this Bill will not make them illegal. If schemes are currently illegal, then they may or may not be legalised by the Bill. As I said, it cannot be the aim of the Bill to legalise ultra vires arrangements. We are setting the legal framework that we believe will work best. That must be our aim.

The amendment would increase the variation between local authorities in the way they implement the legislation. That would make it extremely difficult for the Government to see, on a national basis, how direct payments were working. I urge the House to reject the amendment.

Baroness Hollis of Heigham: My Lords, I was very surprised indeed at that reply. Given the discussions that have taken place, I really had hoped that the Minister would think this a sensible, modest, "compromise" way in which we could all benefit from the experience of local authorities acting, as it were, as a pilot scheme for the Minister.

When it suits the Government--as with in-work benefits for couples and single people without children--they are very happy to have pilot schemes. They do not refer back to the need to have all schemes nationally implemented across the board all at the same time. When it does not suit the Government, the opposite argument is used.

The Minister gave three arguments; first, that she wanted the scheme to focus on relatively small groups and not be over-ambitious; secondly, that she wished to see how it was first working; and, thirdly, that she did not want the national framework to become haphazard. I suggest that the amendment addresses all three concerns.

First, for virtually all local authorities, except where the Minister gives explicit consent to do otherwise, the scheme will focus on the relatively small group of physically disabled people under 65. It will not, in the Minister's words, be over-ambitious. It is probable that only those local authorities which already have experience of, and are implementing, a scheme will be given consent by the Secretary of State to continue it within the existing framework. Therefore, the argument of wanting to focus on a relatively small group remains unaffected.

Secondly, the Minister said that she wished to assess how the scheme was working. All the Minister will be doing is assessing how part of the scheme will be working--that part which applies to those who are physically handicapped. We offer the opportunity for the Minister to see, in selected areas where the Secretary of State has confidence in the local authorities, how an extension of the scheme might work and therefore to see whether, on that basis, it makes good sense to extend it to all local authorities.

Most governments would be delighted to have such an opportunity to learn from willing pilot pioneers on the ground. In that way, and only in that way, can we

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assess how the scheme is working and, equally importantly, how it would work were it to be extended. But the Minister refuses the opportunity to learn from the experience of local authorities willing to pioneer with the support of the Secretary of State.

Thirdly, the Minister said that she did not want the national framework to become haphazard. That argument does not hold up. First, the national scheme will already be haphazard since it is a discretionary scheme. A quarter of all local authorities could decide tomorrow not to implement the Bill. The scheme will remain discretionary. In that sense it will be haphazard by its very nature. For the Government to complain that the amendment makes a haphazard scheme haphazard is perverse. Secondly, the amendment will allow the Government to learn what would happen if the categories were extended to other local authorities--if one moved from a narrow minimum standard to a wider more comprehensive one. One cannot learn from experience if that experience is not permitted to be piloted. Of what are the Government frightened? Local authorities which are currently involved in running such schemes or have that kind of experience will seek consent. The Minister has to be persuaded that they are competent to accept those schemes and to run them. If the Minister is not so satisfied, he will say no. Why should the Minister deny herself the power to say yes or no to local authorities which believe that they are competent to extend this scheme? Why should she deny herself that power? It is absurd, particularly when in most other fields of social security legislation the Government say that they want pilot schemes in order to learn from them and understand in what ways it makes sense to apply a scheme nationally.

I truly believe that this is a win-win scheme; and a win-win amendment. It is a win-win for the Government as they can learn from experience; a win-win for those local authorities which are already supporting disabled people beyond the scope of the Bill; and a win-win for disabled people--all at no cost to public expense. I am so disappointed by the Minister's reply. I had hoped that she would accept the amendment or give us some encouragement. I shall test the opinion of the House.

Lord Hayhoe: My Lords, before the noble Baroness sits down, perhaps I may comment. She stressed the positive aspects of the amendment. In Clause 1(6) of the Bill there is a fair amount of discretion. All the good things of which she spoke that the Government should seek will surely be available to the Government under subsection (6). Therefore, I cannot see why she pushes the amendment, when the good things that she mentioned seem to me--in my limited judgment of reading legislation, and I always acknowledge that it is easy to misunderstand it--to be covered by subsection (6). That subsection allows regulations to be made to:

    "make different provision for different cases, and ... include such supplementary, incidental, consequential and transitional provisions".
That is a very wide power that is available. All the good things--I stress that, as indeed the noble Baroness stressed it when she spoke in favour of her

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amendment--could be done. Therefore, I cannot see why she should press her amendment. I hope that she has a response.

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