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Care Home Top-up Fees

Volume 584: debated on Tuesday 22 July 2014

It is a pleasure to have the opportunity under your chairmanship, Mr Sanders, to debate an issue that is of growing importance and will increasingly find its way into the mailbags of hon. Members on both sides of the House. The issue is how much people pay for care in the 10,000 or more care homes up and down England and, in particular, whether the top-up payments that some residents and their relatives make to secure care home accommodation are fair and transparent. With the Department currently consulting on draft guidance for the Care Act 2014, this is a good time to turn the spotlight on these issues.

The legal framework setting out what local authorities need to do when a resident who qualifies for means-tested support enters a care home has been fairly clear for a long time. The “Charging for Residential Accommodation Guide” and the 2004 choice of accommodation directions are straightforward, at least in so far as they clarify that, if local authority-supported residents would like to move into more expensive accommodation—for example, they might want to secure a place in a home nearer their family—they can, provided that a third party, normally a relative, can pay a top-up payment, make that choice. The rules are also clear that if, for whatever reason, no care home places can be provided at the rate that the local authority would normally pay, it is the responsibility of the council, not the resident or their relatives, to pay more to secure reasonable care home accommodation.

The rules are clear. The trouble is that evidence is mounting that they are being broken. Local authorities are confused about how to apply the rules consistently, so that families can be informed about the rules on choice and choose more expensive accommodation, knowing that that will involve additional costs, while at the same time being protected from paying a top-up payment for essential care that it is the council’s responsibility to pay for and meet.

An estimated 54,000 local authority-funded adults are part-paying their care home fees. That is 28% paying top-up fees. Just over one in 10 of all care home placements involve someone paying a top-up fee.

I congratulate the right hon. Gentleman on securing the debate, because up and down the country and certainly in my constituency of Huddersfield, there is real concern about this issue. Does he agree with the finding of a recent survey that many councils do not know what is going on? It is not that it is malign; they just do not know what is going on.

That is really the thrust of this debate. Whether it is malign or not, it is ignorance, and when it comes to a local authority, that ignorance is not acceptable.

The problem is that the people I am talking about are often out of sight and out of mind. We do not know how many of the 54,000 people who pay a top-up know that a top-up is intended to allow relatives to pay a little extra for a care home place that is above and beyond the “standard” level available from the council. We do not know how many of the 54,000 people know that their council or care home should not be requesting a top-up for any care; it should request it only for a higher standard of accommodation.

Based on the evidence that I have seen, I believe that we need to examine whether the rules governing choice and charging for residential accommodation are working as intended and that we need to look again at what we can do to clarify local authorities’ responsibilities now that the legal framework is being strengthened by the Care Act. We need to get this right because top-ups look set to grow in number, not least with 35,000 more care home residents qualifying for some level of means-tested support when the upper capital threshold is increased to £118,000 from 2016. It is in councils’ interests to get it right because, again thanks to the Care Act, there will be a new appeals process for each local authority. Unless the often grey area of top-ups is sorted out, it is likely that a growing number of residents will be challenging the decisions that councils have made about care home fees. Councils can take steps to minimise the risk of legal challenges, but they need the Government to provide clear and practical guidance on what they are required to do and, crucially, what they cannot do.

I will give way, but I need to stress to the hon. Gentleman that this is a half-hour debate and I need to make quite a few points myself.

I was trying to intervene on this point only because it means so much to some of my constituents. Some of them have said that the trade association for care homes, which is a very powerful one, should have a charter of rights. As someone goes into a home, it should be there and should show the clear responsibilities and clear duties of care.

That is a very good point and one that I am sure Care England and other organisations representing care homes would want to take on board.

It is important to understand the scale of the problem. Research carried out last year by the charity Independent Age highlighted the fact that 72% of local authorities—there was a very high response rate to this freedom of information request—were unable to demonstrate that they met their legal obligations with an overview of top-up payments in their area. In other words, they were not routinely monitoring and reviewing whether third parties remained “able and willing” to make top-up payments. That is a core requirement of the existing guidance. The onus is on councils to check that families are not unwittingly making top-up payments for care that should be paid for and met by the council as part of its duties to meet assessed, eligible needs. Those payments can range anywhere from £31 a week to perhaps £131 a week. In some cases, it is probably even higher than that.

The research also found that just under 30% of councils said that they did not hold or collect information about top-up fees in their area. This was a typical quote from a council:

“As a Council we’ve never had any involvement in top-up care home fees...The Council does not know how many top-ups are in place, in any financial year”.

Perhaps most disturbing was that so few councils knew what was taking place in terms of top-up fees arranged between care homes and families in their area. Almost 80% of councils did not routinely check up on the health of top-up payments as part of their annual reviews, and 75% of councils did not signpost families of care home residents to independent advice before entering into third party top-up agreements.

Very few Members are present at the debate. What we are discussing is an enormous problem. Why do so many people not know about it? It is such a serious problem, yet that is not reflected in the number of Members here today. Why do people not know about it?

I hope that this debate will help with that. The hon. Member for Huddersfield (Mr Sheerman) and my hon. Friend the Member for Bradford East (Mr Ward) are here and will, I am sure, help to spread the news about the debate. My hon. Friend makes a good point. I attempted to get a 90-minute debate. We have a half-hour debate, and I am very grateful that other hon. Members are here, supporting me on this very important issue.

What is driving an increase in top-up payments is the key question. I think that an issue of funding is at the heart of this. More specifically, personal budgets are being set at a rate that simply does not reflect the actual costs of purchasing large numbers of care home places. My right hon. Friend the Minister will know that, in the three years from 2010, local authority baseline fees fell by almost 5% in real terms and rose by 1.8% in 2013-14. It is hard to imagine that that has not had some impact in terms of the numbers of requests for top-up payments during this period.

The problem affects large numbers of people across a wide range of local authorities. The local government ombudsman has said as much. She found Southampton guilty of maladministration causing injustice in the situation of an older woman. The council had sought, wrongly, additional fees beyond the assessed contribution, because no care home places were available within the council’s usual rate. The ombudsman published her report. She considered that that was in the public interest, because

“councils across the country are faced with similar situations”.

The LGO also carried out an investigation into a council near me, the London borough of Merton, in which a contracted private home asked a family to pay a top-up fee that the LGO says it had no right to demand. The report from the LGO serves as a stark reminder to councils that they cannot contract out their legal responsibilities. It was hoped that these reports by the LGO would stop councils turning a blind eye to care providers taking payments from relatives, on the basis that that is outside the agreed care contract. However, the practice continues to affect families up and down the country, which makes the need for today’s debate all the more urgent.

In her report on complaints in relation to adult social care, the LGO revealed that she receives complaints that

“providers have sought to charge…‘top-up fees’ in circumstances where the person’s care needs should be fully covered by public funding.”

The investigations have shown that 17% of all complaints received last year included concerns about the financial elements of care provision; that more than half of those complaints in 2013 raised issues about fees being charged where they should not be; that in 50% of these cases the LGO is upholding complaints; and, specifically in relation to top-ups, that people are

“not being given clear and comprehensive information about their financial liabilities.”

Let us not forget that we are talking about an increasingly frail care home population. The Alzheimer’s Society estimates that eight in 10 residents live with dementia or significant cognitive impairment. Given that, what is the Minister’s assessment of the LGO’s most recent report on all complaints made in 2013, which concluded that complaints about local authority social care increased by 16% and that the LGO often finds fault with top-ups being charged when they should not be? Does the Minister agree that the problem seems to be getting worse?

Soon-to-be-published research by Independent Age based on in-depth interviews with 13 councils reveals a wide variation in local authorities’ practices for arranging top-up fees, in terms of who the contract is with, the terms of the third-party agreement, what and how much information and advice is provided, and how the affordability of a top-up payment is assessed. It is essential that the regulations and the statutory guidance that are being developed in the Department address each of those issues. Perhaps the most striking aspect of that research, which I believe will be presented to the Department later this week, is that none of the councils that participated in the research had any openly agreed or consistent approach to reviewing whether third parties remained willing and able to pay top-up fees. That is a serious problem, which risks becoming bigger still when own-resource or first-party top-ups are permitted much more widely from April 2016.

There are many stories about the subject, and I suspect that other hon. Members who are present have stories from their constituencies. I want to refer briefly to two stories, one from the Alzheimer’s Society and one from Independent Age. The Alzheimer’s Society has told me that it was recently contacted by the daughter of an 84-year-old mother who has dementia and is virtually bed-bound. The mother lives in a nursing home, and the daughter agreed to pay a top-up payment of £35, but that payment keeps being increased and now stands at £75. The daughter feels that the payment is becoming unsustainable, but she is worried about the consequences of not paying and the impact of moving her mother to another care home. Families have to make such hard, emotional and often distressing choices every day.

The example from Independent Age is no less typical. The organisation was contacted by a daughter whose 87-year-old mother has only £7,000 in savings. The mother has Alzheimer’s and has been in a hospital for a month, and she has now been assessed as needing residential care for her own safety. She wants to live near her daughter in Gloucestershire, because her daughter is the only child. The council in London, where the mother lives, has explained that it will pay £441 towards the mother’s care but it has only found one placement at that rate, which is nowhere near where she wants to live. The local authority is trying to achieve a quick outcome, because it wants her to be moved out of hospital as soon as possible, and it is asking for a top-up payment as part of the process. The 87-year-old mother is being informed that she will be moved to the local home at the local authority rate, regardless of her wishes.

Clearly, the guidance on that point needs to be strengthened. Let me offer the Minister some suggestions on what might be done to strengthen the guidance on which the Department is consulting. I hope that my contribution to the debate will be treated as a formal contribution to that consultation. Local authorities must meet their legal obligations, so third-party top-ups are only ever a matter of choice, not a necessity. The best way to ensure that that happens is to make sure that all top-up agreements are agreed in the open between residents and their relatives, the local authority and the care home provider in a genuine three-way written agreement. It is good to see that that is set out in the draft regulations.

Will the Minister ensure that the guidance underpinning those regulations, to which people will refer to find out what scope, discretion and flexibility there is, states that residents should be offered more than one care home place within the amount of their personal budget? At the moment, the draft guidance simply states that at least one setting should be offered that could meet the person’s needs within their personal budget. If that were interpreted in a mean way—not all councils will do this, but I am certain that some will—the council would offer one home at the rate at which it will pay, and that would be that. In the worst case, an individual might be offered a place in a home rated by the Care Quality Commission as poor or inadequate. Provisions should be put in place to ensure that a person has a genuine choice, particularly if the home that they are offered has been rated as failing some of its fundamental standards.

Will the Minister ensure that the new framework actively enables residents to access independent information and advice, so that they can make a decision about whether to pay a top-up and what level of top-up they can afford? How will the new framework actively support residents to understand their entitlements? Does the Minister share my concern that simply calling on councils to consider

“when it is in residents’ best interests”

to signpost them to information and advice is not sufficient? Three quarters of councils do not signpost residents to independent information and advice now, so what will change unless the guidance signals that there should be a change? That is how the draft guidance is currently framed, but surely it would be better if councils routinely signposted people to information. That could be achieved by including a generic statement or section in a model agreement developed by the Department that checks with the local authority, the care home and the third party whether there has been a signpost to independent information and advice. That is a simple, honest check that could be built into the contractual arrangements. I emphasise that information and advice should be independent.

Should it not be incumbent on local authorities to review annually whether top-up arrangements remain affordable and whether people remain willing and able to pay them? Surely that should happen at the same time as the annual review of care needs and an adult’s finances. The draft guidance is too vague on that point; it states that local authorities should review top-ups “from time to time”. It should be made clear that at a minimum, the arrangements should be reviewed annually.

We have to consider the rates that local authorities pay care providers, and whether those rates really keep pace with the real market costs of care. The guidance should make it clear and unambiguous that, where a personal budget needs to be adjusted to meet an adult’s assessed eligible needs and top-up arrangements are not possible, a local authority must always adjust the amount of the personal budget and not seek a top-up to cover the shortfall in local authority funding. That point is absolutely fundamental, but the relevant section of the draft guidance merely states that the local authority should consider adjusting the amount of the personal budget. If a local authority chooses not to do so, it is breaking the law, but it is invited to consider doing something that would be unlawful. There should be no discretion.

Families are being separated. Vulnerable older and disabled people, together with their families, are not being informed of their rights. People who can ill afford hundreds of pounds in top-up fees are unwittingly paying out extra money for essential residential care that is really the council’s responsibility. That is why the guidance should be strengthened.

I congratulate my right hon. Friend the Member for Sutton and Cheam (Paul Burstow) on securing the debate. It would be wrong for the debate to be an exclusively Liberal Democrat affair, so I am delighted to see the hon. Member for Huddersfield (Mr Sheerman) in his place. This debate is, in some ways, a unique event.

My right hon. Friend raises an important issue. He provided two case studies, which almost smack of exploitation of vulnerable older people. The ratcheting up by a care home of the top-up fee for someone in the latter stages of their life who suffers from dementia is completely unacceptable exploitation of that individual, and it should be condemned.

Equally, the idea that it is suitable or appropriate to shove someone into a home far away from London but a long way from where she wants to be goes against the central principle of the Care Act 2014: the individual’s well-being. I know that my right hon. Friend is committed to upholding that principle. The issue that he raises is of real importance, and the findings of the local government ombudsman’s report from last year, to which he referred, are of real concern.

People should have a choice over the establishment in which they receive care and support. That establishment will, after all, become their home. Where the local authority is involved, it has a responsibility to ensure that the establishment meets the person’s needs without costing more than it needs to. However, another important principle, which we must respect, is that people or their loved ones should have the choice to use their own resources as they see fit. If by doing so they can improve their surroundings by having a bigger room or a better view, they should have that choice. I emphasise that that must be a positive choice on the individual’s part—something that they understand the costs and consequences of, never something that they feel pushed into.

The right hon. Member for Sutton and Cheam (Paul Burstow) put his finger on it when he talked about secrecy. There are many excellent people in this field doing a fantastic job—my mother-in-law is in a care situation—but a certain percentage of people do not know what is going on. They need to know, and it should be in the public domain.

I agree with the hon. Gentleman. He will find that the Care Act has a much greater focus on transparency, and it strengthens the legal obligation by providing that personal budgets must reflect the cost to the local authority of meeting the adult’s needs. That is a legal requirement in the Care Act, whereas previously it had been guidance.

I understand, and I am grateful to my right hon. Friend. The guidance allows local authorities to consider whether to make an adjustment to a personal budget, but guidance should not give such discretion. If it is about care costs to meet eligible needs, an adjustment should be made.

I take that point. I do not want to pre-empt the outcome of the consultation, but I am happy to ensure that the Hansard report of this debate is counted as part of the consultation exercise. The comments of all right hon. and hon. Members will be included in that report.

Although we all agree that, in an ideal world, local authorities would be able to fund a person’s chosen accommodation, that is simply not possible in every circumstance. We are in a tough financial situation, and local authorities need to take great care in how they spend their resources to ensure that they can meet the care and support needs of the whole population that they serve. There are clear rules in place on the operation of top-up fees, which we are strengthening to achieve greater clarity and force under the Care Act. It is important that everyone is aware of those rules, as my right hon. Friend said.

We are aware of concerns about top-ups, particularly the concerns raised in the research by the charity Independent Age. That is why in March 2014 the Department wrote to all local authorities in England to remind them of their responsibilities under existing regulations and guidance, let alone the rules coming in through the Care Act. We reminded them that the existing guidance is clear that a top-up fee should be sought from a local authority-supported person only where they have chosen to go into more expensive accommodations and a third party or, in limited circumstances, the person themselves, is willing and able to pay the additional cost.

The person should not be asked to pay a top-up fee where it is necessary to arrange care in a more expensive home to meet their assessed eligible needs, nor should a top-up fee be sought where accommodation is not available at the local authority’s expected rate due to a failure of commissioning. In such cases, the local authority must meet the full cost of care and should not seek to make a top-up arrangement.

Where a local authority arranges care it is responsible for the full cost of that care, including any top-up fee to the provider. That ensures that, if a top-up fee is not paid for any reason, the person can continue to receive care and support in their accommodation while a decision is made about their future care. A care home, therefore, should never ask a local authority-supported resident for a top-up fee without the involvement of the local authority, but it appears that that sometimes happens.

The local authority is responsible for the full cost of care, including the top-up, so it should not arrange more expensive care unless it is satisfied that the person paying the top-up has the resources to keep paying the fee. Local authorities should regularly review the position to ensure that a person will continue to be able to make those payments—that is another point raised by my right hon. Friend. It is in a local authority’s interest to do that, as it will be liable to pay the full costs if the person is unable to pay the top-up.

We are maintaining people’s right to choice in the accommodation where they receive care under the Care Act. As part of that we will give people more rights to top up their own fees from 2016. We would have liked to have been able do that from next year, but we need to ensure that extending the right to self top-up is sustainable and that those receiving care are not adversely affected. We are working with stakeholders to resolve those issues.

Currently, as I am sure my right hon. Friend knows, the circumstances in which people can top up their own fees are restricted. People can top up during the 12-week period only when their main or only home is disregarded, or when they have a deferred payment agreement—in effect, where they have a property to sell that can meet the cost of the top-up fee. People should be able to decide how to spend their own money, and they should be able to pay more for care if they wish. Under the Care Act we will enable people to self top-up using other assets, not just property, from April 2016 at the same time as we implement the cap on care costs that, for the first time ever, will protect people from the risk of catastrophic care costs—protection that my right hon. Friend fought for before I took over this role.

We are also strengthening the regulations and guidance on top-up fees, which will apply from April 2015. That will make the position on top-up fees even clearer and provide additional protection to cared-for people and their families. We will make further changes in April 2016 to give people greater scope to self top-up. The draft regulations and guidance currently out for consultation set out that the local authority must ensure that the person paying the top-up is willing and able to meet the cost for the likely duration of the arrangement. The local authority must also ensure that the person enters into a written agreement, thereby ensuring that all involved are fully aware of their responsibilities and any consequences should the arrangement break down. Again, my right hon. Friend referred to the written agreement in his speech. The local authority must review top-up arrangements from time to time.

“From time to time” are classic words that can be wriggled out of—they mean nothing. It is important that the guidance is clear that “from time to time” means at least annually.

I note my right hon. Friend’s point, but I will complete my comment.

The local authority must set out in writing details of how the arrangements will be reviewed, what may trigger a review and when any party can request a review. Although the regulations and guidance do not set a specific review period—my right hon. Friend’s point is now in the consultation responses, as I indicated—we expect top-up arrangements to be reviewed at the same time as the local authority reviews the financial assessment of what the person can afford to pay for their care. That normally happens at least annually, around the time when changes are made to the charging regulations.

Additionally, the local authority must make clear in writing the consequences should the top-up arrangement break down. That may result in the resident’s having to move to alternative, less expensive accommodation, where such accommodation is suitable to meet their needs. As with any change of circumstance, the local authority must undertake a new needs assessment before considering that course of action, including an assessment of health needs and having regard to the person’s well-being, which is the central principle of the Care Act. Local authorities should already be monitoring all top-up arrangements for the people they support because they are ultimately responsible for the full cost of accommodation. Local authorities should also discourage arrangements for top-up payments to be paid directly to a provider.

The new regulations and guidance under the Care Act are being consulted on at the moment, and I encourage all right hon. and hon. Members to contribute to that consultation alongside their contributions today. The consultation closes on 15 August, and we will consider all the responses that we receive. We are aware that, although our approach has been welcomed as a big improvement, there is always a desire to do more. We are continuing to engage with stakeholders and will await the close of the consultation before making any decisions on further changes.

The intention of the Care Act is to enable self top-ups in other circumstances, which is entirely right, but also to ensure that top-ups are not inappropriately used and to strengthen the rules on top-ups.

In the past 12 months I have been leading work with Demos on the future of residential care, and we will publish our report in September. Will the Minister meet me and colleagues from that commission in the autumn to discuss our recommendations?

That sounds like an interesting session in principle. I would like to attend that meeting if possible, but I cannot guarantee it at the moment because of the nightmare that is my diary.

I hope my comments have been helpful. The points that have been raised today are an incredibly important part of the consultation process.

Sitting suspended.