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Lord Clement-Jones: My Lords, I fully understand what the Minister is saying in this respect. However, he did not utter the magic word "independent". He talked about an internal system of investigation. The nub of the point is that there is being constructed a very helpful system for independent complaints by doctors,

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managers, patients groups and insurers which could be rolled out across the whole independent sector if the regulations required that they did so. But if they require that there should simply be an internal complaints system and not an independent one, there will be a different situation. I believe that consultation should take place over what kind of independent system is being adopted and not simply what kind of internal system. If the Minister does not wish to say anything further at this stage, I shall withdraw the amendment. Clearly, further discussion should take place between now and Third Reading because further assurances are required.

Lord Hunt of Kings Heath: My Lords, I am very happy to take part in further discussion. I am at one with the noble Lord in wanting a rigorous complaints procedure which can be monitored effectively by the national care standards commission. There is no disagreement there at all. My reluctance is to go into the actual details of what may be contained in such a regulation.

Lord Clement-Jones: My Lords, I thank the Minister for that reply. Some lowering of the veil is required before Third Reading in order to prevent any further amendments being brought forward. Clearly, this is a matter of considerable importance. I suspect that there is a difference in concept lurking behind the consultation intention. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.15 p.m.

Earl Howe moved Amendment No. 18:

    After Clause 7, insert the following new clause--


(" .--(1) The Commission shall have the duty to define a standard assessment procedure and a standard set of criteria to be employed by local authorities in assessing the care needs of any person being considered for admission to a care home.
(2) The Secretary of State may by regulations require local authorities to implement the procedure and criteria referred to in subsection (1).").

The noble Earl said: My Lords, we come now to an issue that I raised with the Minister in Committee but which, as the weeks go by, is becoming ever more significant for the care homes sector as a whole. It is important for noble Lords to understand what is going on at the moment. Very large parts of the care homes sector are in crisis for broadly two reasons. The first is that unless one has a business with no borrowing or a very low ratio of debt to equity, one's business is likely to be unviable at current local authority fee rates.

The second reason is the Bill and all that ensues from it, including Fit for the Future. The prospect of minimum standards is casting a pall of uncertainty across the industry. The net result of both these phenomena is that the flow of capital into the market has, for all practical purposes, dried up. That means that any attempt by a care home to borrow money to

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carry out necessary improvements, perhaps to meet some of the anticipated minimum standards, is likely to be doomed to failure. The banks are simply not lending. In fact, they are trying to withdraw from the sector altogether. That in turn means that many care home owners are trapped. They cannot borrow against their main asset, the home; nor can they sell the home because it is no longer possible to value it as a going concern when there is uncertainty over whether it will meet the forthcoming minimum standards. Therefore, many care home owners find themselves with negative equity, which creates the trap to which I have referred. The only alternative to carrying on is bankruptcy.

Once the minimum standards have been set, we shall at least be able to say that an important element of the uncertainty has been lifted. But we shall still be left with the seemingly intractable problem of inadequate remuneration from local authorities. For those noble Lords who may imagine that this is simply the usual gripe from people who feel vaguely hard done by, let me make it clear what we are talking about. Many local authorities in the face of a very tight financial climate consciously attempt to restrict the flow into care homes of patients for whose costs they will be held responsible. The policy of keeping people in their own homes for as long as possible--a worthy aim in itself--is being stretched far beyond reasonable bounds, with the result that when individuals eventually reach a care home, their degree of need--or "acuity" as it is known--is such as to make them, all too often, high dependency cases.

Many of those entering care homes today would, a few years ago, have been sent straight to a nursing home. If we seek evidence of this, beyond that which we hear anecdotally from care home owners, we need only look as far as the statistics which show the average length of stay in residential homes. The average residential stay is no longer measured in years, it is down to about nine months.

Care homes are being asked to look after people with a high level of need for personal care and often nursing care, but are not being remunerated by local authorities for the cost of that care. They are not being paid for it because the assessment process--the process by which social services assesses an individual's level of need--is being fudged. A fee is set which bears no relation to the cost of providing the care. Whereas in normal circumstances a care home would be able to absorb some of the overhead by averaging out staff costs over all its residents, some of whom might need less care than others, they cannot do this if the only clients they are getting from local authorities are the high dependency ones, and not a mix of clients.

At the moment, the system lacks a transparent way of linking fee rates with the inputs needed to serve the needs of residents and of defining those inputs, preferably in advance, in a manner that is fair to all. I am sorry to say that many local authorities out there are abusing their dominant position by threatening care home owners with sanctions unless they agree to accept clients at the rates they are told will be paid.

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That is, of course, tantamount to blackmail. The care home owner knows that unless he goes along with it, referrals to the home will cease overnight. That is the climate of fear in which many home owners around the country find themselves living. It is not acceptable and something has to be done to stop it.

What can be done? Broadly, there are two avenues that the Government should pursue. First, they should increase substantially the funding streams available from NHS trusts to recognise the cost of nursing care for high dependency residents in care homes. I am not going to draw the Minister on this point today, important though the issue is, because I know that he will not be able to anticipate the response of the Government to the Sutherland report and the Coughlan case, which we understand may be forthcoming this summer.

There is something else that can be done now. A standardised assessment procedure should be put in place which local authorities are obliged to follow, together with a standard set of criteria, so that throughout the country there is a means of ensuring that persons in equal need will be assessed similarly, regardless of the local authority that is doing the assessing. The degree of care need will be transparently defined, preferably not just by a committee of social workers, but by doctors as well. That in turn should ensure that there can be no fudge over the cost of care required for care home residents.

I am sorry to have spoken at some length. But I hope that the Minister will recognise the critical importance of the issues I have raised, and that my amendment reflects a genuine wish to see a level playing field operating throughout the country for the good of elderly people. I beg to move.

Baroness Masham of Ilton: My Lords, perhaps I may ask a question. It is probably a stupid question. If the needs are assessed as nursing needs, should the people go to a nursing home? Should not the care homes refuse to take them?

Earl Howe: My Lords, under the rules of the House I do not believe that I am able to respond, so I shall not test the patience of the House. I think that my remarks covered that point.

Lord Hunt of Kings Heath: My Lords, clearly it depends on the actual wording of the certification in relation to the specific home which has been registered. That will specify whether it has been registered for nursing care.

Perhaps I may say that I recognise the issues raised by the noble Earl, Lord Howe. As someone who used to speak at conferences of the Registered Nursing Homes Association, I understand some of the pressures which that sector has been under. Equally, I do not entirely recognise the gloomy picture which the noble Earl put forward. Department of Health statistics show that there is a steady rate of turnover in homes of around 4 to 5 per cent per annum, which suggests that people are able in circumstances to sell those homes. While some homes are closing, I understand that new ones are

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opening, and that there is some evidence that banks are lending for new developments. I do not seek to underestimate the challenges that some homes will undoubtedly face in relation to the new regulatory requirements where improvements will have to be made. But in the medium to long term we shall see a sector in which quality and standards will rise and members of the public will ultimately receive a better service. Just as we must be concerned about the health of the sector as it is at the moment, we also have to bear in mind that the ultimate outcome will be a better service for the public.

I accept the point raised by the noble Earl that people who enter either residential care or nursing homes do so only when it is essential, and that there needs to be an assessment of needs. Those needs may be complex, as he has described in terms of high dependency, or more straight forward. Assessment is very important in terms of ensuring that members of the public who enter such homes receive the appropriate care, as the noble Baroness, Lady Masham, has pointed out.

Current guidance on assessment, issued by the Department of Health as practice guidance in 1991, has clearly not led to as much consistency in assessment and service provision as is desirable. Indeed, people with similar needs living in different parts of the country, or sometimes even in the same authority, may get a very different assessment or service response. To a degree, variation in service is acceptable as local authorities should, within reason, determine their own priorities with due reference to local needs, traditions, service patterns and resources, but I have no hesitation in agreeing with the noble Earl that current levels of variation between authorities go beyond what we might reasonably expect.

In response to this problem, the Government announced their fair access to care services initiative in the White Paper Modernising Social Services. That will provide a detailed framework for assessment, including an appreciation of the risks associated with identified need. The fair access guidance will be issued for consultation in the spring and a final version for implementation is planned for the autumn. Unlike the 1991 practice guidance, it is intended to issue the fair access to care services guidance as policy guidance, which means that local authorities should, by and large, follow what it says.

The implementation of fair access to care will lead to greater consistency in the way in which needs are assessed and services determined. The Department of Health, through its performance assessment framework and the work of the Social Services Inspectorate regional offices, will monitor the implementation and impact of the fair access guidance to ensure that it has the desired effect.

While the national care standards commission might play a part in helping to monitor and comment on the impact of the guidance, it would not be for the commission to develop that guidance. It is set up for regulation and it is not appropriate to require it to take on additional tasks such as this. However, through the

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fair access to care services and the regulation and minimum standards to be set, I believe that we will achieve a much greater uniformity of approach. I hope that that will reassure the noble Earl as to how this will operate in the future.

6.30 p.m.

Earl Howe: My Lords, I am grateful to the Minister for that reply. I look forward greatly to having sight of the guidance to which he referred. This is extremely good news. I am glad that the Government share my perception that at the moment people with equal levels of need are being assessed differently and are being subject to different staffing ratios in care homes depending on the local authority they are in. That cannot be satisfactory.

If I am not misrepresenting them, the Government's view of the care homes sector is that there is currently an oversupply of places and, in particular, an oversupply of sub-standard places. Although the noble Lord did not say this in terms, I believe that their view is also that market forces will take care of this matter within a reasonable period of time. Market forces are fine provided that the market is allowed to operate. At the moment, the market cannot operate because fee rates are rigged, as I explained, eligibility criteria are fudged and local authorities ignore best value principles by favouring their own homes even though those are more expensive than private homes. On the other side of the equation, unviable care homes remain open for business as a consequence of the owners being trapped by negative equity. It is not as simple as saying that the market will contract in the face of oversupply, leaving only the sound operators at the end. Even those better operators, who have upgraded and spent a great deal of money on doing so, are under severe pressure at the moment.

I do not intend to go on. I believe that the Minister's reply was a helpful one. I look forward to seeing more of his department's thinking over the next few months. In thanking the Minister again, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 [Inquiries]:

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