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Page 1, line 19, at end insert--
("(2A) Subsection (2) above shall not apply in relation to the determination of how much to pay in respect of the provision of a service which, apart from this section, would be provided under section 117 of the Mental Health Act 1983 (after-care).").

The noble Baroness said: My Lords, this is a minor technical amendment to ensure consistency with existing legislation. Our intention is that local authorities should treat both those who receive services and those who receive direct payments in an equivalent manner. When local authorities decide the financial contribution people make to the cost of their care, they should treat both groups alike. Local authorities do not have the power to charge for services under Section 117 of the Mental Health Act 1983. These are aftercare services for people leaving hospital after compulsory detention under mental health legislation. This amendment is needed to make clear that that is also the case if direct payments are made instead of those services. Where local authorities do not have the power to charge, then neither should they have the power to take into account a person's financial circumstances when setting the level of his or her direct payment. I beg to move.

Baroness Hollis of Heigham: My Lords, we are happy to support the Minister's amendment. The Minister has just given the exact reply which, if only I had had access to the departmental staff, I should have given on the previous amendment. She wants words to say what they mean and to mean what they say and for them to be consistent with previous legislation. Obviously, that is wise, but I only wish that the same wisdom had been applied to the previous amendment because then we would not have needed to have a vote and to take up the time of Parliament as we did.

Of course, we support the intention to be clear. We support the idea that the Bill should say what is meant and for the provisions to be consistent with previous legislation. We should like such a principle to be accepted here and in all other aspects of the Bill. I do not know how the Minister could keep a straight face when she moved the amendment and gave her reasons for doing so, having stated precisely the opposite just five minutes previously. However, we support the noble Baroness on this amendment.

Lord Campbell of Croy: My Lords, I am afraid that I do not agree with the noble Baroness, Lady Hollis,

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who will not be surprised by that because I think that the reasons given for this amendment--about being consistent with other legislation in England and Wales--are quite different from the reasons given before the three recent Divisions when it was said that the amendments were not necessary.

Although I do not expect my noble friend the Minister to reply to me now and I do not want to hold up proceedings, I should like to raise a small but important point. In relation to the equivalent Scottish clause of the Bill, Clause 4, is my noble friend able to say that the Government are happy that there is no inconsistency between Clause 4 and any Scottish mental health legislation?

Baroness Cumberlege: My Lords, I thank the noble Baroness, Lady Hollis, for her generous comments, but should point out that no Section 7 guidance is involved here.

To reply to my noble friend Lord Campbell of Croy, I understand that no amendment is needed in Scotland as local authorities in Scotland have the power to charge for their equivalent to our Section 117 services. I commend the amendment to the House.

On Question, amendment agreed to.

Baroness Hollis of Heigham moved Amendment No. 6:

Page 1, line 23, at end insert ("except where the person to whom payment is made is living alone or with another person who is unable to meet all of his care needs").

The noble Baroness said: My Lords, this amendment refers to the question of who may receive direct payments: relatives within the household and relatives outside the household. We explored the problem in Committee when a number of anomalies were raised. The Government are proposing to forbid by regulation the possibility of a disabled person employing a relative who lives in their home and paying them by direct payments. The Government are proposing to forbid by guidance--exceptions can be made--disabled people from employing a relative, such as a niece, who does not live within the household but lives, say, the other side of town.

In Committee the Government offered two arguments for extending the number of people who might not be paid with the direct payments. First, they said that they did not want to formalise informal care arrangements by paying relatives who were already offering family help. Secondly, the Minister said that the provisions offered protection for a disabled person who might not want to employ a relative and who would certainly find it harder to sack a relative than would be the case with any other employee. The Minister is right on that. Behind that lies a psychological truth which I shall share with the Minister: many disabled people receiving direct payments would prefer an impersonal employer/employee relationship which they control rather than to pay money to a family carer on whom they may depend. There is no difference between us on that point.

Having said that, however, I believe that the Government's position in their draft consultation paper goes too far and, as currently drafted, is too inflexible.

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When we explored this in Committee, we found that it produced all sorts of unnecessary tangles and complications. Although I respect the Government's concerns, I hope that the Minister will be able to accept the amendment which states that where someone is living alone or with someone else who is unable to meet all their care needs, they can employ a relative who is not a member of the household or living in the same house and pay that person with the direct payments. As I have suggested, such a person could be a niece or a brother-in-law living on the other side of the city.

There are two arguments behind our amendment. One relates to choice and the other to administrative practicalities. The Government have already conceded that local authorities may make exceptions with regard to relatives living outside the household who may receive direct payments. They may make exceptions in difficult situations, such as in rural areas where there might not be much choice. In ethnic communities there may be strong social and cultural pressures to employ only a relative within the family. The situation of someone with AIDS was also mentioned in Committee. All those examples relate to instances where it might not be possible to find someone from outside the household to act as a carer.

Perhaps I may cite another situation. I refer to the fact that somebody who receives direct payments may have fluctuating needs because of, for example, multiple sclerosis or severe rheumatoid arthritis. A relative living outside the home may be able to offer far more willing flexibility than would be possible within a formal employer/employee contract in which the carer clocks in for so many hours.

The first reason for saying that local authorities should permit disabled people to employ relatives who live outside the household for direct payments is that that will enrich and widen the choice available to disabled people of those they employ. Secondly--the practical argument--it would align the question of direct payments by local authorities with the system currently in operation within the ILF. The ILF permits disabled people to use direct payments to employ relatives who live outside the family home. The amendment would bring local authority practice into line with that of the ILF. It works well.

If we do not have the amendment, it could mean that a severely disabled person was receiving money from both sources. After all, direct payments from the local authority would go up to £200. ILF money comes in for the needs that can be purchased for the sum of between £200 and £500. One then clocks back to the local authority. Someone who needs two or three carers may well be receiving money from the local authority and the ILF. Let us say that a person's care package costs £350 a week. That means that they would be required to employ someone who is not a relative within or without the household for the local authority money but could employ a relative who lives outside the household for the tranche of money that comes from the ILF. That is silly. It means that instead of having one or two people producing continuous care, a disabled person has

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to chop and change employees in order to fit the different rules applying to the local authority and the ILF for no good reason.

Thirdly, if a relative is living outside the home and is giving up the opportunity of paid work to work for a disabled person, why should that person not be paid? As with the ILF, we believe that it might be unreasonable to pay a relative living in the home because that constitutes being part of a family. However, a relative living outside the home (niece, nephew, brother-in-law) cannot be said to be part of the immediate family in the same way. It is not unreasonable that they should be paid and not merely exploited.

I believe the Government are afraid that unreasonable pressure would be applied where the relative lives outside the home. But that can be vetted by the local authority ensuring that the social worker talks through with the disabled person, at the point when the care package is constructed, the advantages and disadvantages of employing a relative who lives outside the home. If, after going through the advantages and disadvantages, the disabled person still thinks that that is the best choice for him or her, that choice should be respected. It is not the Government's job to restrict the choice of a disabled person, providing that that choice is an informed one and public money is not being abused. Otherwise, the Government are infantilising disabled people--protecting them from the consequences of employing a relative in case they cannot sack them. It is not the Government's job to do that.

The whole point of the Bill is to treat disabled people as moral adults, able to make informed and realistic choices about whom they employ to care for them with direct payments. If the disabled person seeks to employ a relative living outside the home, as they currently do with the ILF--it is not a requirement but a right--which may be sensible not just for those living in rural areas, ethnic communities or someone with AIDS but in a whole range of circumstances that we cannot currently envisage, then disabled people's choices should be respected. I hope that the House agrees. I beg to move.

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