Skip to main content

Care Homes: Personal Expenses Allowance

Volume 707: debated on Tuesday 27 January 2009


My honourable friend the Minister of State, Department of Health (Phil Hope) has made the following Written Ministerial Statement.

There have been calls by a number of organisations for us to significantly increase the level of the personal expenses allowance (PEA). The PEA is the amount that people whose care in a care home is arranged by a local authority are allowed to keep for personal expenditure on items not covered by the local authority contract.

The PEA was introduced in 1948, and since then successive Governments have taken steps to ensure it has maintained its value. We had undertaken to consult to seek views on whether the existing level of PEA is appropriate, in order to inform consideration of the future of the level of the PEA.

My priority is to transform the adult social care system to ensure people have greater independence, choice and control over their lives. In December 2007 my right honourable friend the Secretary of State for Health announced an extra £520 million of ring-fenced funding to transform social care over the next three years through the introduction of personal care budgets.

My aim is to focus finite social care resources on measures to extend services, improve the quality of care and protect service users from abuse and neglect, because these are what we see as the greater priorities. Work we have undertaken, so far, to achieve this includes:

the dignity in care campaign, to make compassion in care one of the core values of the NHS and social care;

work to develop the first ever national dementia strategy, to improve awareness and diagnosis of dementia and improve the quality of care for people with dementia;

the No Secrets consultation about how society enables adults to be safe from abuse or harm;

Valuing People Now, a three-year strategy for people with learning disabilities, which aims to improve services for people with learning disabilities across health, housing, employment and community care services, to ensure they get the healthcare they need and the support they want to live the healthy lives and give them more choice and opportunity; and

extending the scope of the Human Rights Act to cover people receiving publicly arranged care in care homes.

The need to use finite resources to maximum benefit has removed any possibility of an increase in the PEA of more than the annual uprating in line with average earnings.

I have, therefore, decided not to consult on the level of the PEA. A part 1 equality impact assessment relating to this decision has been placed in the Library and is available at

We are committed to reforming the care and support system. The forthcoming Green Paper on the future of care and support will consider how care should be funded in the future; some different systems for funding and delivery may not include the need for a PEA.

The estimated cost of raising the PEA to £40 a week, which some organisations are calling for, is £250 million a year. None of this extra expenditure would increase the availability, choice or quality of care services or support the transformation of adult social care provision, which must be our priority for the future.