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In response to an earlier debate which touched on this subject, the Minister said that the kind of care you get should depend on your care needs. That sounds very plausible. I can imagine the person writing the words for the brief perhaps even believing them as they did so. But of course that is largely a nonsense because for the great majority of people it would be possible to be cared for in their own home until they die if sufficient resource was applied. It would be possible if they had full-time care from trained nurses working eight-hour shifts. I once saw a woman aged 101 receiving such care in Northern Ireland. With

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full-time care, the doctor popping in as often as needed and the complete re-equipment of the home into a sort of mini nursing home, it could be done, but it would be unaffordably expensive. It is simply not economic to provide one-to-one care 24 hours a day to someone in that situation, but it could be done.

Equally, it is possible for people with rather low care needs to go into residential care. Some individuals prefer residential care, odd though that seems to most people. It is not a question of the need that determines this; rather, it is a question of what is best when reviewing both the expert assessment and the wish of the person themselves about where they want to be cared for. I put particular emphasis on the latter half of that remark: the view of the person themselves is terribly important. What we are doing in this Bill as drafted is to build up a terrible conflict. The person is almost bound to want to be cared for in their own home. Not only is it perhaps a nicer place to be, but everything in the home is free. The local authority, on the other hand, has every incentive to put the person into a home because then they will have to pay for their own care. If they are in their own home, the local authority has to pay for the care. I am sure that we will come back to this at some length later in the day.

It is perfectly evident to anyone looking at the figures with an ounce of objectivity that the Government's assessment of the cost of this policy to local authorities is a grotesquely unrealistic underestimate. It makes no allowance for what will certainly happen, which is that many people who at present are paying for their own care at home or not getting any care will suddenly emerge as claimants. Anyway, we need not speculate because we know what has happened in Scotland. There, the cost of care in someone's own home has doubled in just five years, leaving the original cost estimates in tatters, as will be the estimates of this Government. That is why this inequity in the treatment of people in their own homes and in care homes cannot be allowed to persist. I am not arguing that care should be free everywhere-far from it. I say that the Government should be making whatever contribution is felt to be affordable and appropriate whatever the setting in which people are receiving care.

I will add a second leg to the argument, which is as follows. We have not begun to conceive of the process that is going to be let loose by this piece of legislation. We heard about the Local Government Ombudsman and the Health Service Ombudsman already being swamped by appeals as to who should pay, but when this piece of legislation comes in with this built-in, grotesque unfairness, where will people go? Are they going to say, "Oh, I am sure this local authority officer who has come to see us is right-mum should go into a home and run down our inheritance"? Of course they are not. Today, we have personal injury lawyers stamping the land, offering their services to people who get hurt in accidents. I see a lot of their adverts because they are always on during the horseracing in the afternoon, when people are trying to look for ways to pay their gambling debts. Just as we get those personal injury adverts, up and down the country firms of solicitors will be set up seeking judicial review of every case that comes before them.

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The case of extra care homes-the second of the amendments in this group I have tabled-is an example of the kind of thing that will happen. Systems like this get gamed; we know this. People will start gaming the system to try to turn whatever accommodation they are in into something that can be described as their own home. For example, care homes might start selling the rooms in which residents live to the individual within them, so that the rest of the care can be free. It is far from clear that extra care homes will be properly eligible-it depends on the nature of the care coming in. I read the Commons debate on this matter, which went on for some time. The answer given by the Minister-Mr Phil Hope, a man for whom I have some admiration-would not convince anybody that the Government are on top of this problem. The definitional changes and the ranks of lawyers looking to cash in on human misery as a result of these provisions will be absolutely enormous.

As so often, I finish in the same place as the noble Earl, Lord Howe. We need a consensus on this matter; I believe this would include a contribution from the state to care, whether it is in a care home or care at home. We need a consensus above all, but this Bill cannot provide a consensus. That is why, in the amendments that will be tabled this afternoon and in voting at subsequent stages, we shall have to make provisions to ensure that the Bill cannot go through before there has been a general election, which may well lead to a situation where the support of a single party-perhaps I should say a single Prime Minister-is not enough to determine what the right state of the law in our land should be.

Baroness Murphy: My Lords, I have added my name to Amendments 7 and 10, and I support the words of the noble Lord, Lord Lipsey. In these amendments, we want to explore the boundaries that are proposed, the knock-on effects on other funding systems, and particularly the rationale for providing care funds only for those living at home. This was criticised widely at Second Reading, and I want to point out that three very different predictions were made then about the impact this would have on the use and costs of this Bill.

In my speech at Second Reading I predicted that financial incentives to stay put would deter people from going into residential care at the point at which it was clinically and socially desirable. There have been numerous times when I, as a clinician, have seen spouses or daughters absolutely exhausted and on the brink of a breakdown caring for an elderly person with dementia. By the way, it is usually not the activities of daily living which are the most stressful problem; wandering, emotional and behavioural difficulties and failures of recognition are far more likely to be the straws that break the camel's back. At some point, it almost feels as if you want to insist for the sake of the carer's health that a residential home place is found. If there are real financial incentives to maintaining a person at home, these decisions will be even more difficult.

Keeping people at home is an explicit aim of the Bill-a laudable one in many cases-but whenever

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one introduces financial incentives of this kind, it is remarkable how the flow of patients in and out of institutions changes.

I remind noble Lords of the major expansion of nursing homes and care homes which came about in the 1980s, the direct result of the funding of care places through individual, generous grants via social welfare budgets, which then created thousands of new residential places. One-third of business expansion scheme grants-the investment miracle of the Thatcher years-were invested in the care home sector. Care homes were, of course, basically property investments; but property companies were at first excluded from the BES initiative and so the care home sector was an attractive alternative as long as revenue was guaranteed by the Government. I used to watch the Laing and Buisson figures of the growth in residential care places with utter amazement. For a time I acted as an investment adviser to 3i because the business investment companies were so worried about how much BES money was channelled through these schemes into care homes. They were very worried about the quality of what they were investing in-rightly so, as it turned out. It was a classic case of the Government having a genuinely philanthropic policy hijacked for the benefit of the small business community to the growing frustration and disbelief of the Treasury.

It did not last long, of course. In both the USA, where expansion was similarly funded by Medicaid, and in the UK our Treasuries soon woke up to the escalating unaffordability, but here, in 2010, we have witnessed a 15-year decline of the care home sector, although with some suggestion that sheer demographic pressures are now reversing that trend again. Even small shifts in incentives can have major impacts. There has been no modelling of the impact of this Bill on other revenue streams in spite of the theoretical impact of the ADL deficits on the demand for care and the need for modelling.

I was predicting in one direction and the noble Lord, Lord Turnbull, at Second Reading, cited the care needs of his mother-in-law, pointing out that after a classic hip fracture and hospital stay, at the very moment her care needs went up from perhaps 30 hours a week to 168 hours a week, her eligibility for financial support went down. That cannot make sense. Crucially, this fails the test set out by the Minister in her exposition of the Bill when she said that those with the highest needs must receive the greatest help. It was that injustice more than the issue of costs to which the noble Lord, Lord Turnbull, objected. A financial obstacle is being erected to prevent decisions being taken which are in the best interests of the elderly person.

The noble Lord, Lord Turnbull, and I were predicting in one direction but the noble Earl, Lord Howe, made the crucial point that there is an intermediary body which is going to be the vehicle for this new funding-the local authority. If the total cost of delivering the Bill should exceed the budget, local authorities will have to find whatever extra money is required. In other words, they are being landed with an open-ended commitment, not fully funded as expressed in the famous "new burdens doctrine". The noble Earl pointed out how predictable would be the response of local authorities.

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He suggested that there would be a stampede of applications for free personal care and, when the money available is used up, local authorities will do their utmost to avoid having to take more people onto the books, and we will find pressure being placed on the elderly to move into residential care instead of staying at home. It will prove harder for people to pass the test of eligibility.

Alternatively, and perhaps additionally, in order to fulfil their obligations to those in critical need, councils will be forced to remove social care funding from those who are in lower categories of need. To the extent that this happens, it may drive some people out of their homes and into residential care, thereby serving to dilute the main benefits of the Bill, which is supposed to enable more people to avoid or delay entering residential care. I further predict that, just as used to happen, very dependent old people will end up in acute hospital beds and acute psychiatric units. I hate the phrase "bed blocking"-which means a very frail, needy, older person whose health and social care needs are being denied to them-but that is what we will see. So we have four unpredictable scenarios which have not been explored and I would like the Minister to explain what work is going on to clarify which of these scenarios is likely.

5.30 pm

Amendment 10 follows up the point made in Committee in the Commons by Andrew Lansley, who wanted to be sure that extra care accommodation would be regarded as a person's home and not residential care for the purposes of this Bill. People who live in extra-care housing have their own self-contained homes, their own front doors, and a legal right to occupy the property. Extra-care housing is also known as very sheltered housing, assisted living, or simply "housing with care". It comes in many built forms-blocks of flats, bungalow estates and retirement villages. But it can, and does, sometimes provide an alternative to a care home, and that is the nub of the problem. In addition to the communal facilities often found in ordinary sheltered housing, domestic support and personal care are also available, provided by on-site staff. Properties can be rented, owned, or part owned and part rented. The Government say that people who live in sheltered accommodation or extra-care housing are not to be excluded on the grounds that:

"The accommodation and care provided in such accommodation are not provided together but under separate arrangements made by the individual".

The problem is that the increasing numbers of these types of schemes-which I was involved in developing myself when there was lots of Housing Corporation money around-are now providing 24-hour care seven days a week in exactly the same way that care homes do. That marvellous organisation, Methodist Homes for the Aged, or MHA, has, for example, at Moor Allerton resource centre in Leeds a 20-bed extra-care scheme especially for people with dementia. It serves as a direct alternative to residential care. MHA established its housing association arm as a subsidiary of its well known care homes charity in order to benefit from the split in funding and also, admirably, from a wish to continue to provide even the most disabled older people

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with their own homes, however much they needed personal care and support. I applaud them for it.

But while the philosophy of care may be different, extra-care housing in reality provides identical personal care and nursing services. There are at present only 25,000 or so extra-care housing places, whereas there are 500,000 care home places. So maybe the Minister is not too worried about the outright favouring of the minority who find one of these schemes available in the area as an alternative to a care home. Nevertheless, does the Minister agree that, as soon as legislation of this kind is introduced, large numbers of care-service providers that currently make provision by way of a single contract with people-one that provides accommodation and care together-will suddenly find it desirable to provide different, separate contracts for accommodation and care services? In just this manner, I and my colleagues in Lewisham managed to close long-stay beds for people with dementia in Bexley and Cane Hill hospitals and provide tenanted accommodation in conjunction with the South London Family Housing Association-now part of the Horizon Housing Group-as similar to a specialist care home as to be indistinguishable, but all our residents had personal tenancies. In other words, they were indistinguishable from a residential care home. Is it not peculiar that if people are in extra-care housing and they have two contracts-one for care and one for accommodation-they are eligible for free personal care that pays their care needs, but if identical care is provided under one contract it will be charged for. I cannot see how this flaw in the legislation can be reconciled. We could end up with a distortion in the care market, with large numbers of care providers recreating their services so as to distinguish between accommodation and care. The Government, whether intentionally or not, are creating a potential loophole for people who are currently in long-term residential care who would not be regarded as being in extra-care housing. They will inevitably restructure their arrangements at the point at which they enter care in order to make themselves eligible for free personal care. The Bill does nothing to prevent this from happening. That seems to be an obvious flaw in the legislation-unless this is the intent, but I doubt it. Personally, I have always been an advocate of separating housing and support costs, but this is not the policy intention and I fear that we are going to end up with a great confusion.

Baroness Barker: I wish to speak to my Amendment 13 in this group. The noble Lord, Lord Lipsey, talked about the criteria for social care and their tendency to lead to gaming. My response to that is: whatever criteria exist for social care or NHS continuing care, there will always be somebody who endeavours to get round them for good or for ill. The noble Baroness, Lady Murphy, set out in considerable detail quite a number of government policies surrounding community care. Every one of these policies has a direct effect on the care market in some way. My small and perhaps seemingly innocuous amendment is about the distortion that I think may happen and that is that the services which local authorities currently provide for people with moderate to high needs-which enable many

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thousands of people and their carers to carry on-will go in order to meet the demands of this Bill. Over the weekend noble Lords might have read about what is likely to happen in the Isle of Wight, where local authorities will simply no longer be able to provide a number of services which have been in place, including telecare and so on.

At Second Reading I talked about the fact that back in the days before the NHS and social care were funded to the extent that they have been through this Government, the capacity of managers mostly, but also frontline staff, in social care and the NHS to bat older people back and forth between them, in order to avoid having to pick up the costs of their medicines, adaptations or care, was considerable. That has not been the case for about the past 10 years, but when the NHS is looking down the back of the sofa for money and social care is ripping up the floorboards because it has already looked down the back of the sofa, it will happen again. Older people will find themselves being pushed between one and the other. At that point, what the law says is of utmost importance. I point noble Lords to the fact that the title of this clause is: "Free provision of personal care at home". It is not free provision of care to people living at home. There is a world of difference to a social services department that has no money between those two different phrases. Does care at home mean only care in a person's home or does it mean care to a person who lives in their home? As the noble Baroness, Lady Murphy, said, how do you define a home that is eligible under this Bill? That may seem like utter pedantry but on it rests the fate of thousands of people. I want to draw to noble Lords' attention the fact that there are thousands of older people who are unable to remain living at home because they and their carers use services in their locality but not in their homes.

We need to take into account the collateral damage to services provided in the community to people who have substantial, high-care needs that keep all the older people in an area-and their carers-going. They are at risk if we are not absolutely clear about the definition. Does the Bill refer only to services in a person's home, or services provided to them as they live at home in order to keep them living at home? It may be pedantry, but it is of the utmost importance in these matters.

Lord Best: I shall speak against Amendment 10, which seeks not to apply the provision of free personal care to people in extra-care accommodation. I have to declare my interest as chair of the Hanover Housing Association, which is the largest provider of extra-care housing in the UK. Although the provision that those in extra care should receive their care free may present an anomaly, to remove-

Lord Lipsey: I am sorry to interrupt the noble Lord. The purpose of the amendment is precisely the reverse of what he said; that is, to make sure that personal care is free in extra-care accommodation.

Lord Best: Then I withdraw my objection to the amendment.

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Earl Howe: My Lords, my understanding of the amendment is the same as that of the noble Lord, Lord Lipsey. It is confusing because the Bill is presented to us in a rather piecemeal form and one has to fit the jigsaw pieces together. The Government are saying to us, I think, "Those living in residential care will not get their personal care free, but by residential care, we don't mean extra care". I think that that is how it fits together.

Much has already been said very well by other noble Lords and I shall not take the time of the Committee in repeating it. However, I return to the theme of gaming, which was raised by the noble Lord, Lord Lipsey, the noble Baroness, Lady Murphy, and, in her own way-very ably-by the noble Baroness, Lady Barker. I share her view that precision in language and terminology is of the utmost importance in this Bill.

I set aside whether the exclusion from the Bill of those living in residential care amounts to unfair discrimination-we shall come that question later when we discuss the European Convention. What troubles me is the word that the Government have chosen in subsection (2). I should like to hear the Minister explain what will stop a care home operator who currently provides residential care by way of a single contract dividing himself into two or more legal entities such that the contract from one legal entity, which relates to the residential accommodation, is separate from the contract from the other legal entity, which relates to the care services. In that situation, as the noble Baroness rightly indicated, there would in law be two providers operating side by side, one the equivalent of a hotel, the other the equivalent of a domiciliary care service. In those circumstances, what will prevent the recipient of those services claiming eligibility for free personal care?

5.45 pm

The Government's answer, as I understand it, has been that the potential loophole will in practice be closed off by the Care Quality Commission and the registration system that will be put in place. I need the Minister to explain to me what that answer means, because I do not understand how the CQC will be in a position to influence the situation one way or the other. We may well end up with a market that is very distorted, with large numbers of care providers reconstituting their services in a different legal form that distinguishes accommodation from care. As the noble Baroness, Lady Murphy, said, that after all is what extra care amounts to. We have heard that someone living in extra-care accommodation will be treated as living in their own home for the purposes of this legislation.

In practice, the effect is little or no different from care delivered in a residential setting. The legal dividing line which the Bill seeks to establish will in practice be unsustainable.

Baroness Gardner of Parkes: My Lords, I listened to the noble Lord, Lord Best, and I too was pleased to be reassured. Extra-care housing is ideal for people. Every smart investor running a care home will of course go for that, because it will be a great bonus for

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them. We should not create something that makes it more attractive; we should aim at that standard of extra-care housing for as many people as possible. We should not have this difference between accommodation in a residential home where people get all their care paid for if they are in a certain category, and another category where care would not be paid for. We are inviting such a situation with the Bill, because we are covering those who should be able to pay their own bills. I would love it if someone paid all my bills, but I would not consider myself entitled to it-I would think that I was not needy enough.

The money should be spent on those who have real need. I find it strange that we are so concerned to bring in a law that will help only an additional 110,000 people, according to the answer that I had from the Minister earlier in our debates. The points raised by the noble Baroness, Lady Barker, about the damage that might be done to the services now available, were sound. Local authorities are very concerned that instead of being able to continue the amount of help they are currently giving to the most needy, in terms of assistance and finance, help will be so enlarged as to cover those who could well afford to pay their own bills. We risk doing away with services that are vital to those who cannot pay and who may find their services reduced. I support the amendment.

Lord Sutherland of Houndwood: My Lords, the noble Lords who have proposed Amendment 7 make a very important point-that one of the great dangers of the Bill is that it drives an even deeper wedge between so-called care at home and care in residential contexts. As the noble Baroness, Lady Murphy, made plain, all the efforts of those working in detail in this field have been devoted to trying to break down a very rigid distinction between being cared for at home and being cared for in a residential institution. They explored extra care in the community, the use of residential homes for other purposes and a whole range of options, including the possibility of housing associations being involved in creating sheltered accommodation of an even higher standard. The risk is in the Bill. I hope the Minister can indicate how it will be dealt with.

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