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Grand Committee

Volume 708: debated on Monday 2 March 2009

Grand Committee

Monday 2 March 2009

Health Bill [HL]

Committee (3rd Day)

Good afternoon. If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.

Clause 9: Direct payments for health care

Amendment 50

Moved by

50: Clause 9, page 6, line 18, at end insert—

“( ) Where a patient lacks capacity to consent to a direct payment, and has not nominated a person, a direct payment can be made to a suitable person, as specified in regulations.”

We now come to a series of groups of amendments which are all about a crucial part of the Bill; namely the provisions to enable direct payments to be made in respect of healthcare. Many of those amendments stand in my name, and I offer no apology for having tabled a great many detailed amendments on this subject. I promise that I will not unduly detain the Committee, because there are much more exciting debates awaiting us down the line. However, this is a very major policy change, and in this Committee we have perhaps a unique opportunity to ask the Government some far-reaching and searching questions about a policy that potentially has enormous consequences for individual patients and for providers of healthcare services.

On Second Reading, the noble Baroness, Lady Campbell, captured the attention of noble Lords with her story, and I am glad that she did. She gave an introduction to the subject that was informative and engaging. I want to start today with another story.

At the end of last week, I was sitting in my office chatting to a colleague about the fact that we were going to be having this discussion this afternoon. Someone who occasionally works in my office heard what we were saying and asked, “Are you talking about direct payments?”. When we said that we were, she said, “Let me tell you this. We have two lots of direct payments. We have direct payments for my brother, who has learning disabilities, and that is great. I use those to have respite care for him and for me. When it gets to a point when neither one of us can cope any more, he goes away and he has some respite, and so do we, and that enables the family to restore its batteries and to carry on. I also have a direct payment for my mother, who is elderly and who has a number of different health problems. It is great, because it enables us to get a carer to come in and be with her at the times when I cannot be there. Because we get a direct payment, we can use a private carer. We used to have to use an agency, but that was no use, because the agency carer could not come when we needed them, and now, because we have a direct payment, we can have someone at the times when she needs them. It is brilliant, because it enables me to go on working. But it is difficult, because when the local authority comes to see you, it tells you about the minutes—not the hours—that you’re entitled to have. However, it doesn’t tell you anything about insurance or national insurance. It doesn’t tell you anything about what to do if it does not work out with the person whom you’re working with. It doesn’t tell you whether it’s up to you as the employer to deal with it and, if you are, how you do that. There was an organisation that helped us a lot, but unfortunately it’s packed in and there’s nothing now”.

She went on to say, “In many ways, direct payments are great. They help you to do things that you couldn’t otherwise do. But I am a very strong and clued-up person and I know people who understand about all this, and I find managing this a struggle. My brother and my mother could not manage this on their own, and God help anybody who doesn’t have the help to get them through this, because—believe you me—it’s a nightmare”. That was her story, which is no more or less valid than that of the noble Baroness, Lady Campbell; it is just different. I mention it today because I think that it will help some Members of the Committee to understand why they have in front of them what appear to be an awful lot of detailed, technical and niggling little amendments. They are not; they seek to probe how this policy will work in practice in healthcare.

Most of the amendments are informed by the experience of and research conducted in social care. I remind the Committee of the genesis of direct payments. The 1993 community care Act gave care managers responsibility for purchasing packages of care for individuals who needed them. The Community Care (Direct Payments) Act 1996 gave local authorities the power to make cash payments in lieu of services to adults. Section 57 of the Health and Social Care Act 2001 made it mandatory to offer direct payments to eligible individuals; I make it clear to the Committee that, since 2000, eligible people have included those over 65 and carers for and parents of disabled children and young people, as well as people with learning disabilities and adults with physical disabilities.

There has been a growing sense that the way in which social care has been provided traditionally needs to be changed. That is not new; Members of the Committee will know from various policy papers that there has been a growing sense that we need to move towards personalisation of social care. Papers such as Valuing People in 2001, the Prime Minister’s strategy report of 2005—Improving the Life Chances of Disabled People—and the strategy for an ageing population, which came out in 2005, all point in that direction. That was underlined in the Department of Health Green Paper Independence, Well-being and Choice; if I did not tell you that, I am sure that the noble Lord, Lord Warner, would. All that coincided with the emergence of an organisation called In Control, a social enterprise—a business—that offers services to people who want to use direct payments, but has a wider agenda about redesigning social care systems towards self-directed support. Over several years, there was that growing body of thought in policy—it was beginning in practice as well—that there should be ways in which we could make direct payments a reality and set about changing the way in which social care was delivered to, and in conjunction with, the client users.

In July 2005 the department announced that it would set up a pilot programme for individual budgets—pilots in which people would be given payments to organise their own care. In November 2005, 12 pilot sites were announced. It is worth remembering as we go on to look at the research emanating from them that each of those sites had resources of between £350,000 and £400,000 from a pilot budget to enable them to be set up. Each pilot was encouraged to use tools that had been previously developed by In Control in conjunction with people who had learning disabilities. One was a resource allocation system for determining how individual budgets should be worked out.

The evaluation of those pilots, which is written up in a fascinating document called the IBSEN report, Evaluation of the Individual Budgets Pilot Programme, ran from April 2006 to March 2008. It is significant that in December 2007, before that evaluation finished, Ivan Lewis, the then Minister responsible for social care, declared that individual budgets were the future direction of social care. The IBSEN report is a very interesting and substantial piece of work in which teams of researchers attempted to get into the pilots as deeply as they could to understand what was going on. They looked at people in the pilot groups and control groups of people who were not in the pilot groups and applied different statistical analysis, not just to assess people’s stated feelings and well-being, but to see whether they could find verifiable evidence of improvement in people’s health and social well-being—for example, in their ability to manage daily life activities. The study looked at the extent to which people benefited from the process of having individual budgets, and at whether they found that process difficult or stressful. The research teams considered the impact on commissioning and on both statutory and voluntary providers. Crucially, the IBSEN research looked at cost and cost-effectiveness.

In relation to the proposals before us it is important to state that health and health budgets were no part of this. They could not be as there was no legal basis on which to do that. The pilots were solely about social care. There were people in receipt of both healthcare and social care who found it difficult and frustrating that their healthcare was subject to a completely different regime from that of their social care. The report is open about some of the limitations of both the pilots and the research. The pilots were run by local authorities which volunteered, and the report recognises that there is a tendency for those who are most keen and enthusiastic to put themselves forward. Indeed, a number of authorities had more experience of working with In Control than others.

The timetable for the pilot slipped, which meant that by the time the evaluation took place, some people had only their individual budget for a matter of a few weeks or months. Indeed, some of the people interviewed had not had their budget at all. Therefore, the timetable during which the evaluation ran was greatly condensed.

There were many key findings, but I do not have time to go into all of them. It is accurate to say that individual budgets worked for some people. The greatest recorded benefits were for people who had physical disabilities or mental health problems. On the whole, people in those client groups benefited. For others, notably older people, the findings were at best—I stress “at best”—inconclusive, and there were mixed outcomes for people with learning disabilities. That perhaps reflects the fact that older people tend to come to individual budgets at a time of crisis. They can be going along fine, and then they are hit by a stroke or a heart attack and are suddenly in a moment of trauma and vulnerability, and their ability to cope with what is going on around them is different from that of somebody who has had learning difficulties or a physical disability for many years. The report, which is highly tentative in its statements, states that,

“a potentially substantial proportion of older people may experience taking responsibility for their own support as a burden rather than as leading to improved control”.

Since then, there have been other reports. I hope that many noble Lords will have seen CSCI’s report, The State of Social Care in England 2007-08, which is a thematic research study into assessment. It arrived at very similar conclusions about individual budgets. One of its key findings was that the resource allocation system, which was piloted for use with one client group, may need to be changed. Perhaps some of the most important parts of the report were the limited findings about the potential impact upon providers of services and the acknowledgement that a great deal more research needs to be done before a system like this is rolled out.

I say all that to underline that I am in favour of individual budgets. I want to see them work. I want older people to be able to go out and buy a home-help service when their local authority does not provide one. I want carers to be able to get some help at a time that suits them and enables them to go on working. However, there are a great many unanswered questions about the way in which this policy has worked in social care and a great many more about the impact that it may have in health. That is the background to all the amendments before us.

I now wish to move on to Amendment 50. It questions what happens when somebody lacks capacity and has not made a prior statement that he wishes to nominate somebody else to act on his behalf as the recipient of his direct payment. One would conclude from the Bill that in those circumstances a person would not be able to receive a direct payment. The amendment probes that to establish that where somebody lacks capacity, to be consistent with the Mental Capacity Act, it would still be possible to nominate somebody to act as the person to whom the payment could be made.

I do not think that the noble Baroness, Lady Barker, needs to apologise at all for the number of amendments she has tabled for this section of the Grand Committee. They all appear to be based on very real concerns. I identify myself with everything that she has just said. I shall speak to my Amendment 51, which I signal to the Minister at the outset deploys the standard Committee device to leave out a passage of the Bill in order simply to debate it rather than to indicate dissatisfaction with it.

On talking to people outside Parliament in the medical community and the voluntary sector, we have a division of views about direct payments. As the Committee knows, I am very much in favour of the concept, although we need to tread carefully in introducing them, which is why I very much support the idea of pilots. I think that much of the voluntary sector would express a similar view. However, the BMA is very wary of the idea. In fact, I think that one could say that it has considerable reservations about the whole notion. It sees direct payments as making continuity of care more difficult and not easier, and fears that they will increase bureaucracy and transaction costs. While I think that those concerns are overplayed, we should not ignore them, coming as they do from the BMA. It would be helpful if the Minister would address those particular issues in his reply.

Setting those concerns aside, there is no getting away from the fact that with direct payments there is a trade-off between patient empowerment—leading to, one hopes, better outcomes—and financial risk for PCTs, which lose control of commissioning while having to pick up the tab for the services commissioned. Most enthusiasts for the concept of direct payments would say that this risk can be managed and minimised if we are careful about how the scheme is rolled out, and to whom.

Like the noble Baroness, I should like to hear more from the Minister about the kinds of people for whom the Government regard direct payments as being suitable. An example is eye care. Like pharmacists, opticians tend to be conveniently located in shopping areas and supermarkets. As we all know, optical practices already provide high-quality eye care, yet too many patients travel to overstretched hospital eye departments for relatively routine check-ups which could be managed equally well or better in the community. In Wales and Scotland, community optometrists play this sort of enhanced role in eye health services, so there would seem no reason why the same should not happen in England.

Many people with mental health problems would say that the chance to be in the driving seat when it comes to choosing and buying services is exactly the kind of empowerment which will contribute to a more rapid recovery. Of course, certain kinds of mentally ill people may not prove suitable to handle direct payments, but many will be. I therefore would be glad to hear the Minister say that mental health care will not be ruled out as an area for trialling when the pilot schemes are commenced.

From all that the Government have said, they see direct payments as being suitable for those with stable, long-term conditions whose healthcare needs are reasonably predictable. I agree with that. As we discussed at Second Reading, very often the people in receipt of direct payments for healthcare will be those who receive means-tested social care—I am thinking here of the physically disabled. Will the Minister say whether children, for example, or people who lack mental capacity and are looked after by other people, as asked about by the noble Baroness, will be excluded?

There has been a lot of discussion about maternity services. On the face of it, if we believe in choice for expectant mothers, why not empower them to buy the kind of service that they want when they give birth? However, this is one area in which things are not quite so simple, because giving birth is not always a predictable process, given the risks and complications that may arise. Will the system be able to cater for a situation in which, say, a woman who has opted for a home birth with a midwife suddenly needs to be moved to a consultant-led obstetric unit? In other words, how much flexibility will be built in to enable people to switch the service that they purchase, especially bearing in mind that the cost of two alternative services may be very different?

Finally, will the Minister clarify the extent to which those in receipt of direct payments will be allowed to use them for purchasing services that are not available on the NHS? One of the principles set out in Personal Health Budgets: First Steps, a copy of which I have here, is that having a personal health budget does not entitle someone to more, or more expensive, services. Nor does it entitle them to preferential access to NHS services. If a service is not available from the NHS locally, will it be possible for someone to buy that service from the independent sector?

I have coupled my name with the amendment tabled by my noble friend Lord Howe, and I declare an interest as executive director of Cumberlege Connections and patron of Independent Midwives UK.

I thank the noble Lord, Lord Darzi, and the noble Baroness, Lady Thornton, for the briefing meeting that they held last week, which I found very helpful indeed. I have also found very helpful the document—Personal Health Budgets: First Stepsto which my noble friend referred. At that meeting, I told noble Lords that I am strongly in favour of personally held budgets, and particularly direct payments. At Second Reading, the Minister told your Lordships that he believed that,

“the potential for personal health budgets … is significant. The opportunities they present are exciting”.—[Official Report, 4/2/09; col. 673.]

I so agree.

I was interested to hear the history of the policy, which the noble Baroness, Lady Barker, outlined. I took through the Community Care (Direct Payments) Act 1996. I remember that there was very little opposition to it, and it went through quite easily. In the intervening time, we have seen evidence of a very successful social care policy. I appreciate that it is not all wonderful, and that there are people who have found it quite challenging, but that is no reason not to go ahead with this legislation.

I have been particularly impressed by Kent County Council, whose inspirational director has introduced the Kent card. It is very similar to a credit card and has a monthly allowance that is based on the user’s needs for the service or services of their choice. The strength of the Kent scheme appears to be the minimum bureaucracy, and I understand that the county council is now having detailed discussions with Eastern and Coastal Kent Primary Care Trust to see how the card can be used as a vehicle for the implementation of personalised health budgets.

I have also read the evaluation report which the noble Baroness, Lady Barker, mentioned. She is quite right that it highlights things that have proved to be a challenge, but it also says that individual budgets were generally welcomed by users because they gave them more control over their lives and produced better outcomes for the costs incurred compared with the standard care. I am very tempted to get into a Second Reading debate, but I am not going to do that. I take the lead from my noble friend, who was trying to explore the range of people who could benefit from direct payments. That brings me to the amendment in my name, Amendment 58A, which would enable the Secretary of State to make regulations,

“as to circumstances in which a direct payment may be used to secure the services of an independent midwife”.

In the foreword to Changing Childbirth, which was a policy document for maternity services that I wrote when I was a Minister, I wrote:

“Pregnancy is a long and very special journey for a woman. It is a journey of dramatic physical, psychological and social change—of becoming a mother, redefining family relationships and taking on the long-term responsibility for caring and cherishing a newborn child. Generations of women have travelled the same route, but each journey is unique”.

I suspect that there is not one person in the Palace of Westminster and beyond who has not been touched by a midwife. There is an understanding that every mother and every newborn baby needs a midwife and, of course, some need a doctor as well.

At such a time, the relationship between mother and midwife is critical. Choice of midwife, choice of clinical care and choice of place of birth make for a more confident mother, a more successful pregnancy and birth and better postnatal care. Giving birth is not only a unique experience: it is a team effort involving mother, midwife and sometimes a doctor. If I were to write that foreword again today, I would include the father. I witnessed our son bathing his newborn baby from the day that he was born. I wondered at this tall, handsome fellow, tenderly holding in his huge hands this tiny mite, who was hardly bigger than a packet of flour, and tending him with huge confidence. Every night it is he who reads the bedtime story and he, like many other fathers, is totally involved in bringing up his son. Compared with past generations, that is a huge social change.

Fifteen years ago, Changing Childbirth did make a difference. Its three tenets of choice, continuity of health professional, and control by the woman over her care were adopted and implemented in most maternity services around the country. Its philosophy was embraced, putting the mother at the centre of care. In recent years, although that philosophy has not been eroded, its implementation has. We hear too many stories of mothers being left alone in labour and their partners traumatised by what should be a joyful experience. The problem is principally due to the shortage of midwives. Again, it is not recruitment; the service is under such pressure that midwives leave.

The impact on parents and their families of a traumatic experience is simply devastating. There is strong evidence that the emotional turmoil and distress that follows is profound and long lasting. The last official inquiry into unexplained stillbirths—the Confidential Enquiry into Stillbirths and Deaths in Infancy—found that nearly half of all unexplained stillbirths might have been avoided with better antenatal care.

At Second Reading, the noble Lord, Lord Darzi, stated that his aim was for,

“an NHS that gives people more information and choice, works effectively in partnership and has quality of care at its heart”.—[Official Report, 4/2/09; cols. 671-72.]

With regard to maternity services, we have a long way to go to recover the quality that was apparent in the mid-1990s. Where we do see outstanding quality, it is in the care given by independent midwives. The underlying core principle of independent midwifery is that the woman chooses her midwife at the beginning of her pregnancy. She is not simply allocated one. That enables a true partnership between a woman and her midwife to develop, with all the benefits that that brings. Our modern acceptance that women should give birth with total strangers just because our system of provision has evolved into an industrial model needs to be challenged. We need a more humane, supportive and essentially safer model based on the genuine continuity of care offered by independent midwifery.

Some women are able to choose an independent midwife and do so because these midwives are able to give the time and information to enable women to make their own informed choices. They choose independent midwives because they want the continuity of care, because they want to know who will be with them when they give birth to their babies, because independent midwives know about and support their intentions, and because they are with them throughout their postnatal period. They choose them, especially, if there may be complications and the woman may need extra support during her labour and giving birth. The results are self-evident. There is a much higher home birth rate—64 per cent, whereas the national average is around 2 per cent. There is a much higher normal birth rate—77.9 per cent. There are fewer interventions, high breast-feeding rates and fewer admissions to special care baby units.

In contrast to the NHS services, independent midwives can give the care that meets all a woman’s needs, including her emotional ones. Women who have had a traumatic first birth make up approximately a third of an independent midwife’s caseload, including vaginal births after a caesarean section. Women frequently comment on the importance of having time to talk through their fears and their previous traumatic birth experience, resulting in a normal, positive experience for their second and subsequent births.

In the Minister’s next-stage review, he embraced the concept of social enterprise and the opportunities for clinical leaders to deliver innovation for the benefit of users. Independent Midwives UK is now a social enterprise in the form of an industrial provident society. It stands ready to deliver services to the NHS within the tariff that a PCT invests in each birth, meeting the national choice guarantees.

We know that many midwives who are frustrated and disheartened with the current structures are keen to work in this way. Until now, there have not been the mechanisms to make this happen, but I am aware that this is changing. Commissioning by PCTs will, in future, embrace a plurality of providers to extend choice and drive up quality. This choice and quality of service should be available to as many women as possible via the NHS, so that maternity choice is not only for those with the means to pay. The Royal College of Midwives is hesitant about direct payments, but if they were linked to the maternity care pathway—that is, normal births—a component could be added based on payment by results if and when complications arose. I have no doubt that direct payments, with women voting with their feet and choosing independent midwives, is the quickest way to improve services.

In response to my amendment, I suspect that the Minister will reply that it is up to the PCTs to decide which services they will offer to individuals. I understand that. However, believing that we are at one on the need to improve maternity services, I seek that the regulations may provide for direct payments to be made for the services of an independent midwife. The circumstances need not be controversial. If the Care Quality Commission found that specific maternity services did not meet the necessary registration requirements, the Minister could then make a direction. It would at least open the door, although, I confess, not as far as I would like. I ask the Minister and his officials seriously to consider the suggestion, and to think through the means to encourage PCTs to include maternity services as part of their plans in piloting direct payments.

I was first involved in introducing direct payments 20 years ago as a director of social services in Kent, which I think was the first local authority to do so. We did this through involvement in a new care management system. I confess that we did so before there was legislation to permit us to, working on the sound principle—which is still a sound principle—that if there is no legislation to stop you doing it, you should innovate and try things. That scheme, which was initially for elderly people, has gone from success to success under my successors. As the noble Baroness, Lady Cumberlege, said, it has been expanded to, in effect, a kind of credit card, used to enable people to buy services.

The noble Baroness, Lady Barker, raised some doubts about whether direct payments always worked with elderly people. On the basis of the Kent experience, it has worked well with elderly people, for the two reasons that underpin why direct payments work. First, they give people more choice and flexibility about how to get care, what type of care and how it is tailored to their needs. The noble Baroness, Lady Campbell, made that point extremely elegantly and eloquently at Second Reading. Secondly, direct payments often enable elderly people to have flexibility of services that allow them to stay in their own homes longer than they would otherwise be able to do. That is well documented in the Kent experience, which is now about 20 years old.

The other reason why the Kent system worked well was that it was integrated into a care management assessment process. There will always be people who do not quite know what they are entitled to or how to fit together a range of services and help in the way that most meets their needs. It is important that we do not see direct payments as an isolated activity. They have to be integrated into the assessment of needs and the help people will be provided with, often by a public service of one kind or another. However, that does not mean that people do not know how to run their own lives or that they do not know what their needs are. They are coping with their conditions and have usually been doing so for quite a long time.

One reason why direct payments have not been extended across local authorities as much as they might have been is professional resistance. We must face up to that. When we introduced direct payments, not everybody in Kent thought, “Yippee! Good for the director of social services. This is a great idea. We are going to go forth and do this”. That was not the reaction. I remember some quite interesting meetings with the trade unions on this issue. There will be a question about whether the professional culture will enable some of this stuff to happen. I am not surprised by the BMA’s reservations and anxieties. I recall the BMA having many of the same anxieties about practice-based commissioning in the early days. There will always be some professional reservations about giving budgets, in effect, to patients and service users to make their own decisions, and we must take them with a pinch of salt. However, that does not get away from the fact that most direct payment systems that have worked have been good value for money and have produced a lot of user satisfaction.

The noble Baroness, Lady Howarth, who has had to leave, asked me to make a point, with which I agree. It is that direct payments sometimes cause problems when people find it difficult to conceptualise the services they need. They know they have needs in a general sense, but sometimes struggle to know precisely how to get services in response to them. That is why the direct payment system needs to be integrated into the process of assessing their needs. Pilot schemes will start to iron out some of those problems.

In taking this initiative forward in the NHS, I hope we will learn from the local government experience. I have often thought that the NHS, which, as a Minister, I sometimes found a somewhat inward-looking organisation, is rather slow to learn from local government, which has often been much more innovative in some of these areas when responding to individual needs.

My final point relates to the text of the Bill. I think the regulations about direct payments in new Section 12B were drafted by the Treasury. They seem to shut off many bolt-holes and ensure that there will be a fair amount of control over the way direct payments are used. I hope we will not get into a situation where this innovative change that the Minister and the Government are introducing is stymied by very restrictive regulations in the inevitably blurred boundary area between health and social services. That is why I quite like the look of Amendment 60A—the noble Baroness, Lady Greengross, is not here to move it—which starts to spell out in an interesting way some of that blurry boundary area. It is important that we do not end up with another area of dispute, of which there are often many and as we had over hospital discharge, between social services and the local PCTs. We need a lot of good will about how we will use direct payments, so that this does not become another cost-shunting area or an area of dispute between health and social services.

Once again, as the non-professional, I shall speak on behalf of the consumers of these services. I listened very closely to the noble Baroness, Lady Cumberlege. Something worried me about her whole contribution and perhaps the Minister will comment on what she said. In the 1980s, a row took place in Workington when the local health authority decided that it wanted to close a maternity unit. Then there were arguments about further maternity units in Cumbria. One of the objections was that people simply wanted their children to be born in a particular area because it goes on the birth certificate. It might not seem particularly relevant for us when we are considering matters of health, but where people or their children are born features on the agenda.

One argument regarding the closure of maternity units in Workington was about where babies would be born. I wonder whether, in the event that we develop a system that allows people effectively to opt out of using the local maternity unit—that is what we will do by providing a system of direct payments to independent midwives, as I understand it—we will pursue a policy that could lead to a reduction in the number of maternity units in an area, which will have consequences. If a maternity unit is taken away from an area, the distance travelled by anyone wanting maternity services is much greater. Consequently, some women might feel under pressure to have the baby at home, which may not be what they would choose. They may want to have the baby in a maternity unit, but may not want to travel a great distance or such a distance from where they live that their relatives are not in a position to visit them. This is a consumer perception of how this would work in the system.

I do not want to do anything which would lead to a reduction in the number of maternity units. It might be that I have completely misunderstood what the noble Baroness, Lady Cumberlege, was advocating. But the consequences of what she seemed to be advocating would be a reduction in the number of maternity units, along with the availability of obstetric facilities and expertise.

I agree entirely with what has been said about supporting the idea in principle of direct payments in the National Health Service, following on the model, to which reference has been made, of the efficient way in which such payments could be used in relation to social care. As is plain from the implications of Amendment 60A in the name of the noble Baroness, Lady Greengross, the main purpose of such direct payments will largely be at the interface between medical and social care, I hope. Nevertheless, I appreciate the reservations expressed by the British Medical Association. I suppose I have to declare an interest as a past president, although that was 27 years ago, and I am not in any way involved any more with the policies of the organisation. My anxieties are largely dispelled by the content of the regulations, which, if properly applied, should protect against potential abuse. However, if direct payments are to be used to cover the costs of specific items of medical care, I am somewhat concerned about the extent to which that will be based on evidence. That is rather important. For instance, can someone who is receiving direct payments from a primary care trust use those to pay top-up costs of drugs not approved by NICE?

I have another anxiety on the situation for complementary and alternative medicine. I again have to declare an interest: I chaired the House of Lords Select Committee inquiry into complementary and alternative medicine that reported a few years ago. We recommended and accepted that those forms of complementary medicine regulated by law, such as osteopathy and chiropractic, might reasonably be paid for by the NHS if the general practitioner recommended that the individual in question needed to have the services of a chiropractor or an osteopath. However, if such direct payments were held by a patient, I would be concerned if they were to be spent on so-called disciplines such as crystal therapy, iridology and radionics for which there is no evidence at all.

What control and monitoring would be undertaken of the use of direct payments in specific areas of medical care by the individual? I would like the Minister to give me some reassurance about that.

I was not going to speak until the amendments tabled by the noble Baroness, Lady Wilkins—on which, of course, I have a lovingly crafted speech—but I felt compelled to speak now because of some of the interesting and important comments that Members of the Committee have made.

I would like to add to the history lesson. Actually, the first direct payments in this country were in 1983. Four young disabled people in Hampshire decided that they wanted to use the money that was there to care for them in a residential home as their own and move out, get a home and design their own support arrangements. That was called the 1981 project. They started in 1981 and got out in 1986—it took them that long to persuade the local authority that they had the wherewithal to live the life that they chose and arrange their own care support. In those days, that was completely unheard of; we have come a long way.

I did not want the Committee to feel that I was too much of a Pollyanna about direct payments. If the noble Baroness, Lady Barker, had not told her story, I too would have told a horror story, because there are horror stories, largely when people’s support arrangements fall apart because their impairment suddenly increases or a loved one leaves them and they do not have enough hours in the day to get support in. All those things can happen; life happens. When things fall apart, you need a good local support service to help you through it. You need somebody to assist you to find a new personal assistant or look for the support that you need. Often when direct payments fall down, it is because the local authority does not have support services and does not have people there to assist you—to know how to recruit, employ and maintain your personal assistance. Also, often the advocacy and extra support for people who have extra support needs—for example, people with learning difficulties and older people—simply is not there because it is not invested in. We will need to look at that investment. However, I am getting a little confused as to whether we are talking about direct payments or individual budgets. They are different. I use direct payments; I do not use an individual budget. We need clarification of what we are talking about.

It is important that we understand that direct payments are simply a mechanism. They are not a service in themselves; that comes after the direct payment. You receive your direct payment, then you develop your service. Until you are assessed, your hours have been decided and the direct payment has gone into your bank account, you cannot begin to build your service. Again, it needs to be understood that direct payments are much more than simply handing over the cheque. That is when the real work begins, and again that is why we need decent support services, which I will talk about a little later when I support the amendment in the name of the noble Baroness, Lady Wilkins.

Clarification from the Minister of what we are discussing here would help. I thought that we were discussing direct payments as a mechanism. I also remind the Committee that the noble Lord, Lord Darzi, assured us that this will simply be a pilot, through which we begin to look at what works and what does not. So far as I am concerned, everything is up for discussion.

Before the Minister replies, I thank the noble Lord, Lord Campbell-Savours, for entering the debate. I have never heard the argument about the birth certificate before. It is a very interesting one. I was born on the north-west Indian frontier and have a birth certificate that is very strange indeed. It is quite a treasure, really. It is written on a piece of tracing paper and is signed by the Minister of People. I have never found it to be a problem.

I have a very simple line on the closure of maternity units; if women do not want to choose them, they should close. There must be something about them that really is not very satisfactory. The tremendous strength of independent midwives is their partnership with the woman with whom they are dealing. They would never force a woman to have a baby at home if she did not want to, but they give real choice, which in some areas in this country is simply not available to women. If a pregnant woman goes to a GP, that GP will say, “No way should you have a home birth”, but when the woman builds a relationship with the midwife, and the midwife and the woman are confident that home is the right place, the woman should have a home birth. The one problem at the moment is that independent midwives do not have access to acute maternity units, but that is changing; it will alter quite soon. That makes employing an independent midwife even more appealing, as the midwife follows the woman into the hospital and delivers the baby in the hospital, as well as doing the antenatal and postnatal care.

I have a quick word to say to the noble Lord, Lord Walton. I remember when we had GP fund-holding. It was very interesting to see the enormous difference that that made to complementary therapies and the number of people who went to their GP. We should remember that it was the last time that patients really had some power over their care. The GPs wanted to respond to patient choice because it affected their income. A number of people—the figures are quite startling—chose to have complementary therapies, and, so far as I know, no damage was done. As soon as GP fund-holding was done away with, those figures fell.

Lastly, I should say to the noble Baroness, Lady Campbell, that I am talking about direct payments.

I shall speak on two issues: learning disabilities, which my noble friend Lady Campbell raised; and what happened in Kent, which the noble Lord, Lord Warner, mentioned. I declare an interest as a regional nursing officer responsible for managing the closure of a large institution. We could not have effected that change without the direct payment system for learning disability clients who went to individual homes, so I fully support it.

The noble Baroness, Lady Cumberlege, spoke about independent midwives. I declare an interest as a regional supervisor of midwives for 17 years, with the implementation of independent midwives happening during that time. There were considerable problems with the implementation, but the noble Baroness, Lady Cumberlege, is right that from the mother’s point of view, it was absolutely right. The noble Lord, Lord Warner, raised a question about professional antagonism to changes. Here, we have a problem, because with the independent midwives, just as with any other midwives, the bottom line is the safety of the mother and the baby. As long as that is the bottom line, it can be a very healthy and happy outcome.

At the same time, I have sat on and chaired the professional conduct committee for what was the UKCC, where we had one or two cases where the independent midwives had acted as independent and not within the regulations. As long as independent midwives are prepared to accept self-regulation through the Nursing and Midwifery Council and the Care Quality Commission, it will be fine.

Travelling from home to hospital has to come into the equation in the assessment of antenatal care. If it is not near enough for the mother to be transferred in an emergency in the case of an abnormality happening during labour, it is the responsibility of the independent midwife to seek assistance. That is part of her role. I raise those points and ask that the Minister might take them into account when he looks at the role of independent midwives.

I support the amendment tabled by the noble Baroness, Lady Cumberlege. I must be the only obstetrician in the land who thinks that mothers have a choice at birth, and that choice includes having an independent midwife. I have said so for many years, and I have been looked at disapprovingly by my colleagues. The noble Baroness said that continuity of care during labour is of paramount importance to the mother. It is a shame that we do not have enough midwives to provide that care, either in the home or the hospital. Women will choose independent midwives for the very reason that they will provide continuity of care.

One other point that the noble Baroness made is also correct. Independent midwives have to abide by the regulations set by the midwifery council. Therefore, they are professionals, and they know that if the mother requires transfer to a hospital for care, there is no reason why they should not continue to provide that care, even if that care then requires a doctor or a consultant. The independent midwife is as much a professional as a midwife working in a hospital and is perfectly capable of assisting a consultant obstetrician to provide care if required. I support the amendment, and I hope that we will have the opportunity for direct payments to be included for mothers if they wish to have home delivery and the services of an independent midwife.

I rise to add my tuppenceworth to this debate. I very much support the amendments but, at the same time, I support direct payments. We have tended to forget that, at the moment, the NHS Act prevents any direct payments, which has meant no choice at all of people such as community physiotherapists, community occupational therapists and community chiropodists. My own service—I declare an interest as a supporter of that which I proposed—took over the scheme from Kent into a scheme in Lewisham and integrated it into our dementia services. We also successfully used the scheme of direct payments from Lewisham Borough Council, which was at first a great anxiety for social services. Again and again, I heard arguments from professionals in social care services about why direct payments would not work and why mentally ill people and their families would not be able to use this scheme directly.

This proposal will create the same sort of anxieties. The arguments that will be used will be similar to the ones proposed by the noble Lord, Lord Campbell-Savours. For example, should we allow people to buy their own toenail-clipping service? That is one of the huge arguments in services for the care of the elderly. You have to have a dedicated chiropodist doing an assessment who then comes along, looks at your toenails and allocates you so many minutes of toenail cutting. Most elderly people say, “I just want someone to come along and cut my toenails every month”. I am glad that the Minister agrees about that point.

There are opportunities to reduce costs from some of the areas that are currently organised for us. Audiology, optical services of various sorts, chiropody, community physiotherapy and other services would benefit from this sort of approach, where cost allocations by senior managers or middle-grade managers in the NHS make it very difficult for people to get the services that they need. Community speech therapy is another example. There will be arguments about this, especially if direct payments are coming from patients going outside the NHS or to another team. I have seen huge arguments between the great edifice of Barts and the London NHS Trust and community health services in Hackney about who should be allowed to look at feet and do minor podiatry operations because of the movement of one tiny budget from a hospital to a community service. I see this proposal as a positive thing and a bit of a Trojan horse to drive into areas of competition which, in community health services, have been pretty well non-existent.

I also take the point about individuals and I remind the noble Lord, Lord Warner, that there was tremendous support from the case managers in Kent for the handling of individual care budgets in the same way that there had to be in the Lewisham scheme, but that was the joy of watching case managers actually develop the skills. Enormous skill in case management will still be required to handle these cases properly and for case managers to learn a lot more about employment law, contracts and so forth with which they are not very familiar at the moment in the NHS. I strongly support this at the same time as wanting to see some of these amendments reflected in our overall scheme for the direct payment pilots that are so important.

I have hesitated over whether to speak now or later, but this debate has gone on for some time so I thought that I might chuck my questions for the Minister in now.

How will evidence-based care be monitored? The term “complementary therapy” has been bandied about but we should be clear about whether we are talking about complementary or alternative therapy. Indeed, if we are talking about complementary therapy, how will that be assessed? To comment on what was said by the noble Baroness, Lady Cumberlege, I should say that one of the difficulties is that many patients like certain things, but the trial of benefit—comparing some of these therapies against things such as going to the hairdresser—has never been done. All those things make patients feel better, but should NHS money pay for them? There may be no evidence of harm, but we need evidence of benefit if we are going to spend NHS money on something. I am not sure that anyone has died for lack of complementary therapy, but I think that patients have suffered for lack of complementary therapy given in conjunction with their mainstream therapy to support them through it. That is different from alternative therapies, and it must be sorted out.

Will the Minister say how commissioning from the voluntary sector will be worked out? How will the tariffs be worked out? How will patients who want to go to direct payments be affected if they wish to buy a service from across one of the borders—either into Scotland or into Wales? It is very unlikely that they would want to buy a service in Northern Ireland, but certainly patients who live just on the English side of Offa’s Dyke may well wish to purchase from Wales.

Another issue is the speed of allocation. If someone has been assessed as eligible for direct payment but decides not to go for it, the service is too slow and they purchase something, will they be able to claim retrospectively? Indeed, will they have some sort of appeal mechanism for the way in which they are assessed for payments?

Will there be a requirement that patients must buy an indemnity for any service that they buy, as they must for midwifery services, for example? Certainly, trust indemnity is a requirement and is part of the services that an NHS trust provides, but what if patients go outside that? What happens if the budget is overspent? If a patient buys more or suddenly has to go back into the NHS, which has been covered already, how is that worked out?

How will the tariffs be determined? The Motor Neurone Disease Association has evolved a year of care and has broken down the care requirements of patients with motor neurone disease into discrete packages, which it has also costed. It is a fantastic piece of work and a great service for anyone who is trying to provide end-of-life care. Will patients be able to mix and match? If they are, how much will they be able to mix and match, dip in and out and top up? It strikes me that the devil will be in the detail and that it will work well if it is well managed, as the noble Lord, Lord Warner, said. If it is not very carefully managed and defined, it may well fall apart and run into big problems.

I have a question, too. Will drug and alcohol services be included in direct payments? So many people are sitting in prison now and not getting the right treatment, because it comes from another budget and health or social services simply do not want to pay for it.

I asked the Minister at one of our meetings who was going to do the assessments. Again, like my noble friend Lady Finlay, I would like to know what happens if the budgets run over, which I can see happening.

Are we straying into the next set of amendments? If we are, we might miss the opportunity to seek comprehensive responses. Will my noble friend take that into account when he deals with the previous two contributions, so that we can deal with them in our debate on the next group of amendments?

I will speak as briefly as I can in support of the thrust of Amendment 58 in the name of the noble Baroness, Lady Cumberlege. In doing so, I declare an interest as a trustee of the Michael Sieff Foundation, a child welfare organisation, and as a trustee of TACT, the Adolescent and Children’s Trust, a foster care organisation. I declare that interest because it is so important for a child’s welfare that there is a secure attachment between mother and child, which must be protected. We must protect a good start. Good maternity services must protect children later on, perhaps from family breakdown and dysfunction and being lost into care, so I strongly support the thrust of what the noble Baroness, the noble Lord, Lord Patel, and others have said about the importance of continuity of care for mothers.

I visited the Albany midwife service in south London, which operates a caseload midwifery model and is similar to the independent midwives to which the noble Baroness referred. The midwives get to know the parents several months prior to the birth, providing the induction and pre-natal sessions. One midwife will work with a family until the birth of the child. She will carry a pager and, ideally, often will help at the birth, at which we found there were fewer interventions. Although this service takes place in a deprived area, it does not focus on those people who are most excluded. It was found that breast-feeding was far more prolonged and widespread, which is a positive indicator of the welfare of the child, both physically and emotionally in terms of the bond between the child and the mother. I welcome the thrust of that proposal.

When sitting in on a maternity meeting run by the noble Baroness, I remember being distressed on hearing a mother describe giving birth in a hospital. She said that the midwives changed and that she was left alone for long periods after a difficult pregnancy. From the other side, I can see that it is important to have choice. My concern is that this new model might disadvantage those who are less aware of the new options being offered to them. There is a danger of reinforcing social exclusion because the most intelligent and proactive people will seek out independent midwives. I would appreciate reassurance that there will be a means to ensure that women from ethnic minorities who perhaps have not had the benefit of a good education will not be left in the lurch. Should many mothers opt for independent services, what impact would that have on caseload midwifery? I am not sure that I have explained that clearly, but I hope that I have.

On the first day in Committee, I welcomed the reminder from the Minister that the constitution document puts great emphasis on support staff and on ensuring that they have a right to support. I take the point made by midwives about how often they work in departments where they do not get the support or supervision that they need. I am very grateful to the Minister for reminding me of the priority that the NHS document puts on supporting staff.

Direct payments for healthcare form part of a wider programme, which I announced last year in High Quality Care for All, to explore the potential of personal health budgets in the NHS. The aim is to deliver better quality care by enabling patients, if they want—that is the principle—to take more control over the way money is spent on their healthcare. The noble Baroness, Lady Barker, referred to a change in policy. I believe that empowered patients who exercise that power in deciding on the treatments they wish to receive is an improvement in policy. We also recently published details of our programme in Personal Health Budgets: First Steps, a fairly comprehensive document, which invites expressions of interest from the NHS in taking part in the pilots.

In many cases, a personal health budget would be notional or would be held by a third party on a patient’s behalf. That is permissible under current legislation and we hope the first pilot schemes of this kind will run from later this year. Here we are talking about direct payments as variations of personalised or individual budgets, including notional payments, which are permissible under law, as I said. We want to test direct cash payments to patients where it makes most sense for individuals. The powers in the Bill allow for that. Subject to parliamentary approval for the Bill and subsequent regulations, the pilot programme could be extended next year to include pilot schemes for direct payments for healthcare.

The amendments in this group are concerned with the coverage of direct payments for healthcare, including to whom and in what circumstances it is appropriate to make such payments. Amendment 50, tabled by the noble Baronesses, Lady Barker and Lady Tonge, would allow direct payments for healthcare to be made to a suitable person on behalf of a patient who does not have the capacity to consent and who has not nominated a surrogate beforehand. The Bill is drafted to enshrine the important principle, outlined in new Section 12A, that direct payments may only be made with a patient’s consent.

However, as noted by the noble Baroness, it is important that patients who are unable to give consent should not be denied the opportunity of benefiting from a direct payment. As we set out in the department’s briefing note, we intend to allow a representative to hold direct payments on behalf of a patient who is unable to give consent. The role of this person would be to act in the best interests of the patient by holding the direct payment, securing services for them and supplying information to the PCT as necessary. It is important to emphasise that the regulations to achieve this would only apply to people unable to give consent.

In those circumstances, we expect that, where a person lacks capacity, their representative is likely to be either a court-appointed deputy or a donee of a lasting power of attorney made at a time when the patient had capacity. Next-of-kin or long-term carers may also be suitable. Regulations under new Section 12B(2) would allow us to define the details—for example, to put in place safeguards to ensure that a surrogate is suitable and is acting in the patient’s best interests. This is a similar approach to that used in social care, where it has worked well to ensure that people unable to give consent or who wish to nominate another are able to benefit from direct payments. I hope that I have reassured the noble Baroness, and that she will find this explanation helpful.

Amendment 51, tabled by the noble Earl, Lord Howe, and the noble Baroness, Lady Cumberlege, would remove the specific provision for defining the scope of direct payments for healthcare. Amendment 58A, tabled by the noble Baroness, Lady Cumberlege, concerns the use of direct payments for maternity services. It would enable regulations to set out the circumstances where direct payments could be used to secure the services of independent midwives.

I have every sympathy with the desire to make the Bill as clear as possible about our intentions for direct payments. However, it is precisely for that reason that I would be reluctant to agree these amendments. As we said in our policy document Personal Health Budgets: First Steps, personal health budgets would not be right for everyone, nor in all areas of the NHS. That is especially true of direct payments, the form of personal budget that gives most direct control to the individual patient. It would not be appropriate—or even possible at this stage—to specify what services or groups of people would benefit most from personal budgets or direct payments. Instead, we want to encourage local innovation and build the evidence base through piloting. Numerous examples have been mentioned earlier: eye care, mental health—as pointed out by the noble Earl—children, chiropody and, certainly, speech therapy. All are good examples of the innovation that we very much hope that PCTs at a local level, in partnership with other stakeholders, would be encouraged to pilot.

As I said earlier, PCTs should consider where personal health budgets might have the greatest benefits for patients. Personal budgets might work especially well in areas where choice is available but where current NHS services are not meeting patients’ needs. That might be one very good driver for personal health budgets. Several service areas have been suggested by stakeholders and our policy document has listed some of them.

The department is currently running a series of regional events—I have attended at least one—to encourage applications for the pilot programme, and I would be delighted if we received applications covering all the service areas listed and many services that noble Lords have suggested today. I would certainly be very interested in proposals for maternity services, where I know that the noble Baroness, Lady Cumberlege, has a particular interest. There is plenty of evidence, not only in this country but elsewhere, where we have seen independent midwives working very well, such as in New Zealand and certain parts of England where such a service exists. I was delighted to hear the support expressed by the noble Lord, Lord Patel.

The noble Earl raised the issue of safety in a transfer to hospital in the case of emergency of a woman who decides to have a home birth. As was said by the noble Baroness, Lady Emerton—she is well equipped to answer that question—most midwives with their professional values have very sophisticated tools for assessing risk and making sure that, if a risk arises, the appropriate transfer arrangements are made in the best interests of the safety of the mother and of the child. I do not believe that direct payments, or any form of budget, should have any impact on the transfer protocol that must exist between the midwife, whether independent or not, and the hospital that might be receiving that patient at a local level.

We are keen for the pilots to explore a range of different service areas and models. However, it would be premature at this stage to specify these types of services on the face of the Bill. I have concerns that including a list could turn out to be misleading if, for example, the pilots reveal that one of the listed services is not suitable for personal budgets, but that other, unlisted, services are. We have a lot to learn here. That is the experience and the evidence base that we need to gather on the effectiveness of such a policy.

Equally, the services that are suitable may evolve over time. As the concept of personalisation becomes more embedded within the NHS and its culture, and as improvements take place in the way in which services are commissioned, it may become possible to extend personal health budgets more widely in the future.

Can I take my noble friend back to maternity services? Suppose that it can be shown that a maternity unit’s existence is threatened by the introduction of these payments in the case of maternity services. Does my noble friend believe that that should be taken into account, remembering that page 10 states:

“They will not inject more money into the system”?

So this is within the given budgets available in maternity services. I wonder how my noble friend will respond.

I fully appreciate my noble friend’s concerns when it comes to the impact of this, and that is exactly what we need to learn from the pilots and the evaluation. What is the impact not only on the individual but on the local health economy? That is all based on the types of services, the demand and the supply at the local level. Once we know the impact of that, we can address these issues and we will have a greater evidence base that we can debate at a local level with the local public and patients who are the users of such a service. As I said earlier, it would be premature to have such services in the Bill. I also have concerns about having a list, which could be misleading.

The approach taken in the Bill provides the overarching framework but at the same time the flexibility to prescribe specific details in regulation where necessary. This mirrors the legislation for direct payments in social care.

I turn to the detail of how we intend to use regulation-making powers, set out in the department’s briefing notes on direct payments, which I hope noble Lords have seen, and the department’s memorandum to the Delegated Powers and Regulatory Reform Committee, which the committee has endorsed. A few other issues have been raised by this informative debate. First, the noble Earl, Lord Howe, and the noble Baroness, Lady Finlay, asked about where to buy such services. If agreed by the care manager and the care plan, such services could be bought from the private or voluntary sector. That is exactly the ethos of the policy. Patients will be empowered to make those decisions based on the quality of the services that they receive. Secondly, what can they buy? A number of noble Lords referred to crystal therapy, which is not my area of expertise, but hydrotherapy would probably be a better example. Any intervention that will improve the health and well-being of the patient that is signed off by the care manager within the care plan would be implemented.

The noble Earl raised the issue of the transaction costs. We have said that personal health budgets, including direct payments, should be used only when the likely benefits outweigh the transaction costs. I recognise that this will not be suitable for all patients, or certainly all services, which is why we are piloting them. He also raised the issue of the BMA and I declare an interest as I am still a member, despite my interactions over the past 18 months. It is important always to recognise the concerns of continuity of care, which is the issue that has come up. The patient must always remain the continuum. The patient is always challenging us as professionals about integration of care, rather than fragmentation of care. The more we shift power to the patient from the professional, the more we will see a better response to healthcare in the future.

Going back to the speech made by the noble Baroness, Lady Campbell, on Second Reading, which was read extensively by people outside the House, will my noble friend say whether the £200 mattress would fall within the direct payment budget? The £200 mattress became the symbol of that debate in many ways.

That would probably fall within the direct payment budget of social care rather than healthcare, so the answer is yes if the care manager has signed off on it. Was my noble friend referring to healthcare?

Yes. The case was made in that powerful speech. It was a good example of how an empowered patient could receive a treatment that not only was based on her needs but saved the PCT a significant amount of taxpayers’ money.

I turn to the other question raised by my noble friend Lord Warner in relation to integration between health and social care. The answer is yes. Social care direct payments and the personal health budget should be pooled as far as practicable and legally possible. I hope that the Bill will enhance that rather than create any obstacles to it.

I am grateful for that assurance, but the mattress cited by the noble Baroness, Lady Campbell, is symbolic of this boundary area. I could see that the war of the noble Baroness’s mattress could go on in some parts of the country where the relationship between health and social services is not very good. I hope that the Minister can give us strong assurances as we go through this. People out there are under no illusions about the importance of not allowing individuals to be caught in the crossfire between two budget managers on different sides of the NHS and local government.

Page 42 of the document, Personal Health Budgets: First Steps, says:

“The ‘boundary’ between health and social care matters less to people than does getting the right services”—

as the noble Lord eloquently described and the noble Baroness, Lady Campbell, said on Second Reading—

“but too often it causes fragmentation”.

As we have said in High Quality Care for All, one of the PCTs’ duties is certainly now to have joint commissioning with the local heath authorities. We see this as one of the enabling tools that allow more pooled budgets to come together, which is the principal policy that we are trying to encourage.

The interface between health and social care is very interesting. While we are on this, I seize the moment to say that when I broke my leg last year, various people came to help me, some with a social care background, others with a health background. If they were not trained, they were not allowed to get me up on to a gutter frame to help me walk. All they had to do was give me a little push, but if they were from one discipline, that was not possible for them. If they were older women who were more practical, they said, “Of course I will help you”. That got me walking again. At a low practical level, it is important to know the difference between the two, and for there not to be such a difference between the two. It is nonsense if one is literally trying to get back on one’s feet after an illness.

Paragraph 22 on page 28 of Personal Health Budgets: First Steps, says:

“Further guidance and regulations governing the use of healthcare direct payments will be produced in due course”.

Can the Minister tell me roughly when that will be? It would be helpful to the Committee.

I am grateful for the noble Baroness’s intervention.

On the interface between health and social care, we made it quite clear in this document that individuals will have to agree their care plan with the help of staff from both health and social care. The circumstances may arise in which there are two types of budgets. We are encouraging pooled budgets, which is exactly what we need to do.

On the regulations governing the use of direct payments in health in paragraph 22, I will look into that in more detail and come back in writing with the timings of when they should happen.

A few more points were raised by the noble Baroness, Lady Finlay. Actually, there were many, many questions in a very short speech. I am sure that we will cover many of them later on, such as indemnity and budget overspend. I hope that I have addressed the evidence base. I will look into the cross-border issue and come back to noble Lords. I have no doubt that it is no different even from outside the context of personal health budgets, or if the budget runs out.

I hope that I have given Members of the Committee a summary of, and reassured them on, some of the issues that were raised—certainly in our debates on some of the probing amendments—to get more clarity. I have certainly enjoyed this debate and hope Members of the Committee are confident that the amendment can be withdrawn.

I thank the Minister for his helpful and encouraging response, particularly about the pilots looking carefully at the impact of this innovation on the wider health economy. However, I worry that momentum may be gained by this process, so I take this opportunity to raise this point one more time. I foresee a certain scenario. Some years ago, a survey of a fairly small sample of young people in care and leaving care found that a quarter of the young women in care were pregnant and that half of them were pregnant shortly after they left care. My slight concern is that one might find, for instance, that poorly educated people who are not well placed to make the most careful judgments about what is in their interests might lose out in a new system where more power is given to individual users. The Minister need not answer my question now. I just wanted to make the point one more time.

I am sorry if I did not touch on the issues raised by the noble Earl, Lord Listowel, in relation to the impact of this on inequalities. One of the six principles that we have adopted in the initiation of this programme is that personal health budgets should be designed to tackle inequalities and protect equality. We intend that there will be support for patients to manage their direct payments. We want to make sure that that is tailored to the different needs of patients that the noble Earl eloquently expressed, particularly those who are less well served by existing services. With appropriate services, personal health budgets and whatever support we put around patients will be tremendously powerful tools. For example, if we go back and look at the evidence based on choice, the areas that have the greatest deprivation in equality actually exercise the most choice. That is what we need to encourage: empowering patients to tackle some of the inequalities to which the noble Earl referred.

I have one more question. What happens if one PCT gives a direct payment to one patient and the next PCT denies it to an absolutely identical patient? Is there a right of appeal?

I will bring this discussion back. We are running pilots across the country, and it is for the PCTs to submit innovative ideas that are locally worked through with all the stakeholders at a local level: patient groups, advocacy groups, the voluntary sector and others. They will bring us the best pilots to look at, and different PCTs may have different pilot schemes. We will evaluate these and identify the evidence base. We hope that, if the right conditions are identified, we will roll out such a scheme nationally, but we will bring that to Parliament before we do so.

I thank all noble Lords who not only took part in this debate but proved my point. There is a great deal of support for this policy and a great many misgivings about how it will work in practice.

I begin by thanking the noble Lord, Lord Darzi, for answering the question that I posed in Amendment 50. I understood him to say that even if someone did not have a lasting power of attorney, it may still be deemed possible for them to have someone who could act as a recipient for a direct payment.

I want to pick up two or three key points that have run through this debate. I begin with those made by the noble Baroness, Lady Campbell. I am talking about direct payments. She made a very telling point when she said that direct payments are a mechanism not a service. That is true, but they are a mechanism that has a distinct effect on the health and social care economy.

I listened to the noble Lord, Lord Warner, very carefully. One does not have to be some kind of luddite supporter of existing provider arrangements—I am not—to have concerns about the potential impact of direct payments on provision. We will return to that at greater length in our debates on other amendments, but I simply contrast the point made by the noble Baroness, Lady Cumberlege, who said that if providers were no good they should be allowed to disappear, with some of the points raised by other noble Lords about the viability of services.

As ever, I am grateful to the noble Lord, Lord Walton, for raising a point that I wanted to raise. Far be it from me to wander into the age old, perennial argument about alternative therapies, but I want to raise a potential scenario. Let us say that, in a given geographical area, people are given direct payments and choose to have osteopathy or chiropractic rather than physiotherapy because they find it good for them. I do not think that even the noble Baroness, Lady Finlay, would get upset about that, but what if the consequence of that is that the physiotherapy unit, which also serves the needs of acute patients, becomes unviable? That is the issue of concern to some of us, and we have not answered it this afternoon. We will have to return to it in later debates.

There are other things that I could say, but I do not want to say them at the moment. I am in favour of transforming services to make them more effective for users, but I return to some of the misgivings that, I hate to say, I do not think the Minister answered. I do not think that he can answer them at the moment. Therefore, I thank him for the spirit in which he answered our questions, but the lack of detail serves to underline the problems that some of us still have.

Amendment 50 withdrawn

Amendment 51 not moved.

Amendment 52

Moved by

52: Clause 9, page 7, line 8, at end insert—

“( ) as to the manner in which the patient or (if different) the payee may gain access to relevant information;”

Amendment 52 and the other amendments in this group are in large part about information and support and the training that goes with that. I have enormous sympathy with the considerations that have prompted Amendments 63A and 69B, tabled by the noble Baronesses, Lady Wilkins and Lady Campbell, and I support the probing amendments tabled by the noble Baroness, Lady Barker. Very few patients will be able to purchase services on their own without well informed support and advice. If we want direct payments to succeed in their health outcomes and to achieve the best value for money, patients will need advice to help them to take decisions and make choices.

One of the problems that certain people foresee with direct payments is the lack of a level playing field when it comes to informing patients about the services on offer and from whom. I do not want to knock GPs, but if a patient receives advice only from a GP who is a service provider, how will that patient get a balanced picture of other, perhaps equally good, alternative ways of spending the budget: for example, via a local pharmacist? I know that the pharmacy profession is anxious about this. A pharmacist may set up in an area and invest in order to provide a first-class service, but if no one knows about it, it will cease to exist.

If we look at eye care, an example that I raised earlier that is not in the normal field of general medical practice, we need to make sure that those who advise patients about the services they can buy with their budget know about the full range of services available to those patients and which services are good. For instance, if no one tells you that you can receive eye care services in your own home, the system is falling short.

The other brief point that I wanted to make was about accreditation, which we debated earlier. To the extent that healthcare services are being provided on the NHS but by non-NHS providers, should we not encourage a system whereby service providers are kite-marked for quality? I realise that patients will not make choices entirely on their own. Nevertheless, without some form of quality assurance and accreditation system in place, the market could become a minefield in certain areas. I would be glad if the Minister could comment on that. I beg to move.

I, too, have amendments in this group. The noble Earl, Lord Howe, is absolutely right to focus attention on support, which people who are contemplating the use of a direct payment need to have. I am absolutely sure that a number of patients will need very little help at all. There will be people who might have been through the expert patient programme and know as well as, if not better than, the people engaged in their treatment what they need, and they will know where to get it and what to do with it. However, there will be others who do not.

It is quite telling that many of the amendments in this group have been put to us not by provider organisations but by representatives of quite widespread users. Amendments 53 and 54, I am afraid, reflect another failure on the part of the people responsible for setting up the pilots in social care. It was initially proposed that the pilots in social care should include people who had sensory disabilities, but when the pilots took place, lo and behold, those people had been missed off the list and never properly got a chance to have a role and a say in those pilots. We know that quite a number of people who have sensory disabilities are users of NHS services. People who have sensory disabilities have a type of vulnerability that is different from that of those with learning disabilities or people who are old. It is not that those disabilities are worthier of attention; they are simply different and need to be involved.

I have not framed the amendments in terms of risk, and I have not chosen to speak about risk overall, because one of the great benefits of direct payments is that they enable people to take risks if they choose to do so. There are particular and potential risks of abuse that have not been investigated in the pilot programmes, and we need to look at them. Amendment 53 proposes that, where there is the potential for abuse, providers must be checked and vetted. Amendment 54 is about providing training and guidance to patients and their carers if they feel that they need it to be able to manage direct payments and to safeguard themselves against potential abuse.

Amendment 69 is somewhat different. It would place a duty on PCTs that intend to make direct payments to commission advice and advocacy services. I accept some of the implicit criticism of this in some of the amendments tabled by the noble Baroness, Lady Campbell. I know that it is slightly deficient. None the less, it points up a significant issue.

I do not know whether other noble Lords go to conferences at which people, particularly those in local authorities, tell people about the imminence of direct payments and self-directed support. There is usually a very informed, zealous and passionate analysis of the benefits of individual budgets, self-directed support and direct payments. Then when it comes to the practicalities of how the system will work, it becomes a little quiet. If someone in the audience then asks about support and advocacy, it becomes very quiet indeed and sometimes silent. Sometimes the person giving the presentation says, “Of course there will be advocacy”, but when asked if they will pay for it, the answer is no. That is the key to this issue. This is one of the most essential amendments of the lot. If there is no readily available source of support, which people can use or not as required, the potential for this policy to fall rapidly and immediately into disrepute is extensive.

I give notice to the noble Baroness, Lady Campbell, that I have a point to make on her amendments when she speaks to them.

I shall speak to two amendments: Amendment 57, which I tabled, and Amendment 54. In speaking to Amendment 57, I should point out that this comes from the UNISON stable. As I have said before, I have a non-pecuniary relationship with UNISON. Its concern should be heard during a Bill’s proceedings, particularly on the viability of services, which to some extent was my case when we considered maternity services.

UNISON is very much in the front line when it comes to the implementation of the Bill in the sense that many of its members will be affected by it. That does not mean that it is bad, but we have to be sensitive about what we are doing, particularly in relation to the interests of staff. The union is concerned that the impact of the proposals on staff, such as workforce planning or accountability when a patient embarks on a course of treatment that conflicts with professional opinion, has not been sufficiently considered. The union is keen to have proper assurances that staff will be properly protected and supported when dealing with a patient using direct payments. I am sure that the Committee is well aware of the implications of what might happen, and of the circumstances.

As in social care services, while some will use their budgets to opt out of generic health services, those who cannot or choose not to do so will be left with a service that perhaps no longer has the vital critical mass of service users to make it viable. The union believes that these complex questions have not been satisfactorily addressed, and continues to be concerned that although the NHS is based on the principle of universal service, direct payments could fundamentally undermine that. My noble friend will know that the unions are following the proceedings of the Bill very closely because thousands of their members will be affected. It does not mean that the union is totally opposed in every way to the principle of direct payments, but it has considerable reservations about how they might operate in particular areas. I hope that my noble friend will deal with some of those concerns as we proceed.

Amendment 54 would,

“ensure that appropriate training and guidance is provided for patients and (if different) payees to manage their direct payments and to safeguard effectively against potential abuse”.

In the excellent document that my noble friend produced last year and which I have read several times in the past few weeks, there are references to the circumstances in which payments will be made. On page 24, there is a reference to the:

“NHS continuing healthcare … mental health services … learning disability services … maternity services … end-of-life care … and … some long-term conditions, especially where there are complex needs or opportunities to focus on preventive interventions”.

Page 31 states that,

“personal health budgets can be used for any goods or services agreed as part of a care plan that are likely to meet the individual’s agreed healthcare outcomes and would be appropriate for the state to fund”.

It talks about any goods or services that are agreed. On page 38 is a section that deals with the rights of patients to determine what they wish to purchase:

“People should have flexibility to spend the resources allocated to them to meet their needs flexibly, and in ways which reflect their own priorities”.

I presume—I am just a consumer not a professional—that there will be circumstances in which the patient argues with the person designing the care package about what should be made available, and there will be divisions of opinion. In many ways, we are absolutely dependent on the expertise of the people who are designing that care package.

The noble Baroness, Lady Campbell, in her very famous speech, which deserved a parliamentary award—it was a marvellous speech—commented that she could not get through to the person in the National Health Service what she wanted. They kept telling her that they wanted to spend £3,000 and she kept telling them that she wanted to spend £200. There did not seem to be the ability to communicate. Obviously, she is very articulate and she told them what she wanted, but they were not giving her what she wanted. Do not get me wrong; I am not against the whole idea, but I wonder whether the expertise is there in healthcare, which I would have thought is more complicated than social care, to evaluate precisely what is needed and to ensure that the patient’s care package requests are met.

I can imagine circumstances in which the patient might say, “I want a £200 mattress”. The manager might say, “It is in your care package, but we think you should have this mattress”. I cite my own example. I have a whole series of complaints, one of which is ankylosing spondylitis, which noble Lords will know is an extremely painful and disabling condition. I have three beds in three different places, all of which could have cost me £3,500 apiece if I had bought them from Adjustamatic and not Dreams, where I paid £450 apiece for exactly the same bed. Who is going to determine where the bed is bought? Will the source of the bed be determined? Mine rises and falls. I might wake up three or four times a night, and I press the buttons to change the position of my spine to relieve pain. If I had one of these packages, I might well want a particular kind of bed and they would disagree. I will not have one of these packages, because I will be one of those people who do not want to go into the system. I will rely on the health service to provide for my needs. I am just a little concerned about how that might operate in practice.

However, I am also worried about firms, such as Adjustamatic and other companies, which line up to pressure their patients to buy products and ring me up because they know from the records of firms with which I have been in contact to buy pain-relieving equipment that I have a particular problem. People who are in receipt of these payments may suddenly start receiving phone calls and be targeted by people saying, “We think this is a very good product for you. We think you should buy this. You need this massage machine or that exercise machine. You need all these so-called alternative medicines that are now on the market”.

When all this pressure is put on patients, will they be able to resist the purchase of the product, particularly in the area of pain relief for arthritis and other such conditions, rather than what the person building the care package has decided might be in their best interests? Last week, I received a catalogue from a firm called Verdict. It shows a massage seat that costs £1,299. I know that that chair can be very helpful to people who have a particular kind of pain because I have sat in one in St Bartholomew’s Hospital, and it works very well. What happens if the patient says that he wants one of those chairs, and the person producing the package thinks he does not need it? That potential area of conflict interests me.

Amendment 54 refers to abuse. I do not know what the safeguards might be, but is it possible that in a care setting someone might want the client to buy a piece of equipment for him, not for the person who is the patient being funded by direct payment? I hope that these problems will be dealt with in the regulatory arrangements that Ministers will subsequently introduce. Unless I misunderstood the amendment moved earlier by the noble Lord, Lord Hunt, I think that he was trying to relax the regime by trying not to have too heavy regulatory control over what could be acquired in those circumstances. I would worry if the concerns that I am expressing are correct. In those circumstances, there might be greater potential for abuse.

I return briefly to the issue that I raised earlier in our debate on Amendment 54, which refers to safeguarding effectively against potential abuse. What will the Minister say about complementary and alternative medicine? Let me reassure the noble Baroness, Lady Cumberlege, by making it clear that there is no doubt that osteopathy and chiropractic by well trained personnel are valuable in the management of musculoskeletal disorders of various kinds. There is also no doubt that there is a physiological basis for the use of acupuncture in certain situations and that it has a role to play. Equally, patients with certain chronic conditions, not least those with terminal illness who may for instance be dying of cancer or other conditions, get great comfort from complementary medicine such as aromatherapy, massage and similar techniques that have no direct curative or therapeutic effect but are complementary to the other treatments that they are receiving. I support all of them. On the other hand, there is no way in which direct payments should ever be used for such things as iridology, radionics or crystal therapy, which have no evidence base and should never be paid for by the NHS. How can that be prevented?

I shall speak to Amendments 63A, 69A and 69B in my name and that of my noble friend Lady Campbell. I hope that this group of amendments will help to provide a solution to the various points that have been made. I hope that it is clear that I support Amendment 69, but I believe that more than advocacy services and advice is needed because managing the direct payment is important. I was pleased to hear the strong case made by the noble Baroness, Lady Barker, in her introduction to the first group of amendments, on the vital need for support services for people receiving direct payments, and I look forward to the further point that she wishes to make on this group.

The purpose of these amendments is to ensure that the importance of effective support is recognised and built into the pilot schemes on direct payments. My noble friend’s reply on Second Reading was somewhat tentative, when he said:

“We would expect the PCTs to work with local authorities and third sector organisations to provide guidance and support”.—[Official Report, 4/4/09; col. 752.]

He said that “independent or peer advocates” may also have a role in supporting people through the process.

I urge the Minister to make it clear that effective support is an essential element in establishing successful direct payment schemes, and in doing so I again declare my interest as vice-chairman of HAFAD, which is a user-led organisation that runs a support scheme for direct payments users in social care. The social care model in direct payments has clearly demonstrated the benefits of peer support from user-led organisations. The benefits of taking control over one’s services are considerable, as the famous speech of my noble friend Lady Campbell, spelt out so well on Second Reading.

The transition of being a passive recipient of services to take control is not a simple one. As any employer knows, there are many pitfalls to be avoided, which can be serious if people do not have the right advice, advocacy and support. Managing support is crucial.

HAFAD’s support scheme has numerous examples of people who have been put on direct payments by the local authority without any reference to support but who are left to negotiate the transition on their own. Last summer, a woman faced huge bills because she had not paid any national insurance for her personal assistance or paid tax, assuming that that would be dealt with by the council. Others have faced the trauma of a threatened employment tribunal because they advertised wrongly and were totally unaware of their legal responsibilities as an employer.

Our experience at HAFAD shows that the professionals—social workers, in this case—are not aware of employment obligations and are not equipped to give this time-to-time support. The most successful direct payment scheme is in social care, where new users are put in touch with a local body of expertise that is built up by their peers who have gone through the same process as themselves.

User-led organisations give people the confidence to take up the direct payment, as too often people are put off by the notion that they will be cast adrift to do everything themselves. The National Centre for Independent Living, which has long experience in this area, supports the pilots but warns that the schemes could be ineffective if support is not available. The health pilot schemes will benefit considerably if the Minister ensures that we learn from the social care precedent and establish effective support arrangements. The right support will mean that people can maximise the use of their direct payments, greater numbers will be attracted to take part, which will help in the analysis of the pilots, and most important, there will be higher user satisfaction and the increased likelihood of people’s health aspirations being met. It is a false economy not to ensure that people have the backing of such user-led support, advocacy and advice in the pilot schemes. I hope that my noble friend will support the amendments.

In response to the amendment tabled by the noble Baroness, Lady Wilkins, I want to point out a particular problem. Some organisations, such as In Control, have a wealth of experience in this area. So, too, do other organisations, in a different way. My former employer, Age Concern, has a tremendous amount of experience in enabling older people to access services, just like any number of other voluntary and carers’ organisations. However, those organisations have a direct interest in these pilots. In Control is a social enterprise and is therefore a business, and has an interest in seeing that the pilot work well. So, too, do some of the service providers. I do not think that those financial interests, or conflicts of interest, are wrong; they are just a fact of life. In a pilot, however, they and the role that they play need to be acknowledged. I hope that the noble Baroness would agree with me that, in the design and review of the pilot, that very particular conflict of interest, which is probably not equivalent to the conflicts of interest that the NHS and local authorities have in this, is there and is picked up and reflected in the pilot programme.

I will speak briefly in support of the amendment, because we have gone over all the arguments on the importance of a support scheme quite well. There is an awful lot to learn from the 28 years of experience of setting up support to help people to become independent and to self-manage. I hope that we will truly draw on that experience in the pilot and not reinvent any wheels.

The one important thing that we have not spoken about much is advocacy in these support schemes. I do not mean advocacy simply to get the care package that you want, but advocacy to enable the organisation and the development of this different culture of self-operated care to be discussed and understood by the providers, local authorities and PCTs in the future. There is still very little knowledge about what direct payments are. You go to a PCT and talk about direct payments, and they kind of look at you, a little blurry, and say, “Ooh, isn’t that something they do in social care?”.

There is resistance, which we have already heard about, from the social care workforce. It took us probably about 28 years to persuade social workers that we were the experts in our own situation, and that this could actually be a shared approach to the development of social care in this country. I spoke to an older person, who was 70 and using direct payments, last week. She said, “Fundamentally, it comes down to doing things with people, not to them or for them”. She emphasised the “with”. We do not do this on our own; it has got to be a contract.

It is important to look at support services not only in terms of the information and advice on the nuts and bolts of employment, contracts or pay and conditions. That is all very important and has been vital. Resistance from the local social services has also been looked at, people have been talked to who have said that the people down at their day centre could not manage, and truly believed it. Those people said, “It is all right for you. You’re articulate, you’re okay, but not my people”. An element of cultural shift still has to be made.

In the IBSEN analysis, I was particularly struck by the statement that most pilot sites report major challenges in the changing attitudes and culture of care managers and other staff. That resistance was reported among the team working with mental health users and older people, which shows that we still have a long way to go.

In supporting the amendment proposed by the noble Baroness, Lady Wilkins, I would say that it is not possible to take pilots forward without support services and that it is not possible to have support services without good funding, about which we have not talked. One of the best support services for direct payments in this country is the Bristol centre for independent living. Hundreds of disabled people became effective direct payments users. The centre did not have a single issue for about six years. Then its funding was cut, and I know of two ongoing tribunals, simply because it did not recruit properly and people are floundering. I am a big supporter of the proposal and I do not think that we should look at pilots without also looking at support services, as proposed by the noble Baroness, Lady Wilkins.

On the point made by the noble Baroness, Lady Barker, I hope that the role of support services will be clearly, fully and totally analysed in the analysis of these pilots. To date, I have not seen any evidence of any conflict of interest, but I hope that their role will be clearly shown.

I shall give an example of what happened to me. I cannot leave my home in Yorkshire without my helpers. One of my helpers is pregnant, which causes problems for the disabled person. There are certain things that the helper cannot do, such as helping someone into bed, out of a car or so on. The father of my other helper had a brain operation last week, so both my helpers had to go to their homes. I had to call in an agency, which is five times more expensive. I am worried about the expense of such care. Direct payments must be flexible because things happen. Employing people is not straightforward. It has its problems, as was illustrated by the noble Baroness, Lady Wilkins.

Amendment 63A is probably the most important amendment that we have looked at today. A feature of voluntary sector organisations—I declare all my interests and involvements, which I hope will count—is that they listen to the person in front of them par excellence, which is why patients and carers seek them out and use them and they continue to thrive. They also build enormous experience through listening, so that when problems arise they can advise in a flexible way. Nor are they locked into the rigid guidance, protocols and formats that there may be in more standard organisations. It is very important that people using direct payments can obtain advice and support from outside the statutory sector as well as commission such services. Outside support will probably prove to be the most invaluable thing of all, which is why this amendment is so important.

These amendments deal with the provision of information, protection and support for recipients of direct payments for healthcare and the protection of staff providing services under a direct payment. I will address the amendments in turn, starting with those that relate particularly to information, advice, advocacy and support.

Amendment 52 was tabled by the noble Earl, Lord Howe. It introduces a specific power to make provision for ensuring that the recipients of direct payments for health care have access to relevant information. Amendment 54 was tabled by the noble Baroness, Lady Barker, and explicitly enables regulations to provide for patients or their representatives to receive training and guidance to help them to manage direct payments for health care safely and to safeguard against potential abuse. Amendment 69 restricts new Section 12D to enabling the Secretary of State to require primary care trusts to commission advice and advocacy services. Amendment 69A, which was tabled by the noble Baronesses, Lady Wilkins and Lady Campbell, expressly allows arrangements to be made with user-led organisations to support direct payments, and Amendments 69B and 63A create an expectation that voluntary and user-led organisations will be commissioned to produce advice, advocacy and other support to people using direct payments.

I entirely agree with noble Lords that patients and their representatives should be able to access the information and training that they need to make informed choices. This policy is about patients’ care and their direct payments, which are fundamental to the success of the policy. Personal health budgets, including direct payments, will succeed in giving greater choice and control only if people have information and support that is tailored to them.

In our document, Personal Health Budgets: First Steps, we said that PCTs should work alongside local authorities and voluntary organisations to give appropriate support and information to patients. One of the six key principles of the programme is ensuring that people can make well informed decisions about the care they need. Organisations that are led and controlled by people who use services and voluntary organisations may well play an important part in providing advice and advocacy and may have a wider role: for example, in carrying out assessments, acting as care co-ordinators or supporting patients in other ways. The Bill allows flexibility for that.

Information and support could be delivered in many different ways, including through existing social care systems, independent advocates, peer support, brokerage organisations or self-management courses. The best way of delivering support to patients is likely to vary between different groups and different individuals. This is something that will need to be decided locally and depending on the conditions. An overly prescriptive approach in legislation could inadvertently become a barrier to innovative practice. Instead, we want to encourage local innovation and build the evidence through piloting to show where direct payments are of greatest benefit and which forms of support are most effective.

We are talking about pilots. If the Bill receives Royal Assent, there will be draft legislation and we will consult on it. It will include all the debates that we have had today and the amendments that have been tabled. We will bring the regulations before Parliament before the pilots of direct payments start. I do not want to be prescriptive at this stage, and I hope that noble Lords agree that the approach under new Section 12B is sensible.

Amendment 53 would require that regulations be used to ensure that all providers of services for vulnerable patients be vetted and undergo mandatory checks. I start by emphasising that the safety and welfare of all patients who receive services using direct payments are obviously paramount. Clearly, patients who lack capacity to make decisions about safeguarding are an especially vulnerable group. Mandatory checks of providers provide important safeguards for vulnerable patients. However, it is important that these mandatory checks are proportionate to the risks presented. I can assure Members of the Committee that we intend to be consistent with the approach set out in the Safeguarding Vulnerable Groups Act 2006.

The department has recently consulted, in the context of direct payments for social care, on how best to ensure that a person lacking capacity is safeguarded from any potential abuse that may occur while they are receiving social care. Our thinking is that, for vulnerable patients who do not lack capacity but wish to have someone else deal with their payments, the patient will be responsible for nominating a person to receive direct payments on their behalf. Where a patient lacks capacity to consent, regulations could contain provision for payments to be made to a third party, as I explained in the debate on the previous amendment.

If the person receiving direct payment is not a family member or friend, they would have a duty to check that providers of services are properly vetted, monitored and not barred from working with vulnerable patients under the Safeguarding Vulnerable Groups Act. If, on the other hand, the person receiving a patient’s direct payments is a friend or family member, then the provider may be checked, but it would not be mandatory. I hope that Members of the Committee will agree that this is a proportionate and sensible approach to the issue of safeguarding.

Finally, Amendment 57, tabled by my noble friend Lord Campbell-Savours, deals with the issues of protecting staff who provide services funded by direct payments. As we set out in Personal Health Budgets: First Steps, the success of personal budgets and direct payments will depend on staff: those who support and agree care plans and budgets for patients; those who monitor those budgets and the conditions of individuals; and, obviously, those who deliver services. This is a lesson that came across clearly from the evaluation of individual budgets in social care.

It is likely that the development of personal budgets will require significant cultural changes at all levels of the NHS, which should not be underestimated. There may be far-reaching changes to the way in which staff work. It is vital that the pilots help us to understand fully the implications for staff, including issues such as employment status, terms and conditions, training and development, professional development, career progression, and workforce planning and development.

In social care, we know of concerns from recent research that care workers employed using social care direct payments may not have received sufficient training opportunities. In a minority of cases, there may not be full compliance with employment law. However, we also know that other people using direct payments to employ care workers are keen to see that their staff have good terms and conditions and access to training. Only if directly employed staff have terms of employment that are legal, reasonable and fair will the quality of care they deliver be of the required standards. All those who directly employ staff will need to understand their responsibilities. PCTs overseeing the pilots will need to ensure that patients and carers have the information and support they need to act as responsible employers.

All staff should be involved and engaged in steering the implementation of personal health budgets and direct payments, and in developing appropriate training required. We will therefore be looking for evidence that front-line staff and unions are engaged and supportive during the pilot selection process. I assure my noble friend that we are constantly working with UNISON at the moment to get an agreement on this. More importantly, however, both we and the unions have a lot to learn from the pilots in tackling some of these important issues. The success of the national rollout will be based on that.

I hope that I have reassured Members of the Committee that the evaluation programme will specifically look at the implications of personal health budgets for staff. Again, if the evidence from the pilots showed that there was a case for setting explicit conditions to protect staff, I would like to put it on the record that the existing regulation-making powers in the Bill would allow us to do so.

Before moving to my conclusion, a few other points have been raised. The noble Earl, Lord Howe, raised how the direct payments would be regulated. The direct payments will be consistent with the existing policy of regulation of health services, where services would otherwise need to be registered through CQC, or a practitioner would, obviously, be subject to professional regulation.

The different examples of my noble friend Lord Campbell-Savours, whether it was a chair or a mattress, made the case of why we need these pilots and how much we can learn from them. At the same time, however, the noble Baroness, Lady Campbell, also said that we can learn a lot from what we have already evaluated in social care. I hope that we can capture many of these things as we bring legislation back, rather than putting them in the Bill, as I said earlier.

I am not sure that the noble Lord, Lord Walton, was in his seat when I addressed crystal therapy, which I know very little about, in the debate on the last amendment. The whole purpose of these direct payments is to have agreement with the care manager; it should be part of the care plan. Osteopathy or hydrotherapy, to which I made reference earlier, are two good examples whereby such interventions could be part of the care plan.

My noble friend Lord Campbell-Savours also mentioned individuals or providers who may abuse this money for their own self-interest, rather than in the interest of the patient. We intend that the care plan must be agreed by the care manager, as I said earlier, but also by the PCTs, before any money is spent. I hope that inappropriate treatment will not be agreed by the PCTs. Again, I hope that we can learn more about that from the pilots.

I hope that I have given enough explanation on this group of amendments. I am sympathetic to all of them in this group: information, education and training, whether you happen to be a patient or the staff delivering that care, are extremely important. I hope that I have reassured Members of the Committee that we will capture all of that and bring it back to Parliament in regulations before these pilots are instigated. I hope that Members of the Committee will feel able to withdraw their amendments.

This has been a useful debate. I thank the Minister, in particular, for his reply.

I am still unclear about two things. How will the evaluation of the pilot be able to assess the quality of the information and support that patients have received? That will not be very easy. Patients themselves will not necessarily know how good or bad their support and information have been, so that area needs thinking about.

Can the Minister clarify to what extent patients will be employers with the legal responsibilities that go with employer status? He spoke briefly about that in his reply, but I want to be clear about it. In the field of social care, one of the things that has weighed heavily on certain people who have received direct payments is that they have suddenly found themselves in the position of being an employer, with PAYE, statutory sick pay and everything like that which a business has to contend with as a matter of routine but which an individual is not necessarily well prepared for. Can the Minster comment on that as it applies to healthcare delivery?

The evaluation issue will come up in debates on later amendments, but I will touch on it now. We will, I hope, get an independent evaluator, an academic organisation. We are also looking for calls of interest, and I have no doubt that this will include not only qualitative but quantitative appraisal of the pilots from a patient’s perspective against the evidence base to which we referred earlier.

Will patients be employers? The answer is yes; they could become employers, as I said earlier, with all the employment regulation that comes with that. We are not ruling that out of the pilots. Again, I hope that, through the pilots, we can learn not only from a patient’s perspective but, as I said earlier, through the staff’s perspective, a lot about employment roles, employment laws and staff training.

Would not the pilots collectively be a good subject for the National Audit Office to consider in a value-for-money inquiry that could be reported to the Public Accounts Committee? It would probably throw up some of the difficulties that had arisen, particularly where there might be concern about the use of public money.

That was another helpful reply from the Minister. It is probably time that we moved on. We can always come back to these issues at a later stage. In the mean time, there is a lot in what he has said to digest. I therefore beg leave to withdraw the amendment.

Amendment 52 withdrawn.

Amendment 52A

Moved by

52A: Clause 9, page 7, line 8, at end insert—

“( ) as to whether a patient wishes to use direct payments as a means of obtaining health care;”

The noble Lord, Lord Campbell-Savours, mentioned the National Audit Office. I think he will find that it is perhaps preoccupied with contemplating Armageddon at the moment; I refer to the article in last week’s Times by Mr Steve Bundred, in which he talked about the prospects for the future of funding public services—an issue that is not unrelated to the debates that we are having now.

We have taken a great deal of time over things this afternoon. I simply wish to move Amendment 52A and speak to Amendment 60, for two simple reasons: nowhere does it say that someone can refuse to have a direct payment, and I want to establish that you do not have to have lost mental capacity to exercise the choice not to have a direct payment. That is a very important thing to do, not least because, it is fair to say, there is a degree of enthusiasm that sometimes borders on overestimating the appropriateness of direct payments for people. It is important that we have on record the fact that it is legitimate for people to say, “No, I don’t want this. I just want a service, thank you very much. That will sort out my needs”. That is a very good marker, which we should put down.

Amendment 60 has a different purpose. It would do two things. First, it calls into question and seeks to probe the part of the Bill that says that the Secretary of State has the power to recover a due debt that is paid in a direct payment. It also seeks to flag up to noble Lords the fact that you cannot read directly across from social care to health. Issues arise in health that do not arise in social care. One is misdiagnosis. It is possible in social care to have different views about what people’s needs might be, but that does not arise from misdiagnosis.

I shall give a quick example. Noble Lords might remember a case a few years ago of an older gentleman who was treated for mental illness, including being subjected to ECT. It transpired after about three years, during which time he was sectioned and subject to compulsory medication, that he was not suffering from mental illness; he had Lewy disease, a degenerative brain condition—a form of dementia. That is just one small example of diagnoses going wrong. What happens if a set of direct payments have been put in place on the basis of a misdiagnosis?

I shall speak briefly to Amendments 55 and 56. An issue flagged up earlier this afternoon was what happens when the amount of a direct payment runs out. If someone is in receipt of a direct payment and then discovers that it is insufficient to pay for the healthcare that is needed, two risks arise. First, the person will not receive the care that is needed and, secondly, he or she might regard the budget as something to be adhered to at all costs and start self-rationing to keep within it. What will be done to ensure that recipients of direct payments are not put in that position, which could arise even with treatments for a long-term condition that is stable and predictable? Will the Minister confirm that the fact of a personal budget being fixed at a set amount does not mean that the NHS would not step in and either top up the budget or pay for other treatment if that was clinically indicated?

The second issue refers to clawback. How practical would it be in a given set of circumstances to claw back money that has already been paid out? How would that be done? Would it not be better to allow for unspent portions of personal budgets to be carried over from year to year if the care plan allowed scope for that?

I shall address Amendment 55 in relation to top-ups. At the briefing last week, I asked whether a person who was granted a direct payment for a nurse for three days a week and wished to employ her for another two days would be allowed to top up from their private resources. Page 27 of the Personal Health Budgets: First Steps document states that,

“people may not ‘top up’ their personal health budgets from their own resources. If, for any reason, a person wanted to purchase additional care privately, this would have to take place separately”.

Taking my example, if someone had a nurse daily for an hour and a half and decided that she wanted more services, so paid for an extra hour on the same morning, presumably that would not be separate and would not be allowed as it would be considered to be a top-up. I am in some dilemma as to when it is or is not a top-up and how can it be done separately if you are employing the same person on the same morning for an additional service that is not allowed in the care plan?

That is a particularly interesting question which my noble friend will know is being asked by a number of outside organisations. The very nature of the scheme invites circumstances in which top-up arrangements would take place.

I will go back to the issue of the position of UNISON and say a few words on my Amendment 58. UNISON feels strongly on this issue. I wonder whether my noble friend might respond. As I have already said, the union is not absolutely opposed to the principle; its opposition is centred on the potential for service reductions arising out of the proposals as they are currently set out. It recognises and supports the need for health services to be more responsive and able to provide more tailored support to some patients, but it does not believe that direct payments will be either a long-term or a satisfactory solution as currently proposed. While it is wholly opposed to a policy that could easily lead in its view to means-testing patient top-up fees for services or greater barriers to services for those who most need them, it does not feel that at this stage it is a risk worth taking, particularly at a time of tightening economic conditions.

I refer my noble friend to the words on page 26 of his document, where he refers to the fact that there are no additional resources to be made available and more money will not be injected into the system. If they cannot inject more money into the system and the budget runs out, what happens? Additional money has to come from somewhere. I presume that, in the circumstances of someone’s budget running out, additional money will have to be injected into the system, which is in breach of the principle set out on page 10 of the document. Will my noble friend explain the contradiction which is built into that statement and the assurances that we have been given from the Dispatch Box on Second Reading?

This relates to the point that I was making before about what happens when the budget goes over. It does; it has happened with me.

I think that all the points that I raised earlier have been covered in questions, so I will not cover them again, apart from one. I seek assurances from the Minister that discussions have been held with both the National Assembly for Wales and the relevant department in Scotland on cross-border issues, particularly for those people who live close to the border. Has there been consideration of whether people want to purchase from NHS Wales or NHS Scotland? What happens where care is given for patients who live right up against the border?

Amendment 52A, which was tabled by the noble Baronesses, Lady Barker and Lady Tonge, would add a specific power for defining consent to use direct payments for healthcare. As I explained earlier, we do not believe that personal health budgets would be right for everyone, or in all areas of the NHS. One of the core principles that we have outlined is that personal budgets will be purely voluntary.

Specifically in relation to direct payments, the Bill enshrines the importance of consent at the outset. The very first sentence of proposed new Section 12A gives power to,

“make payments, with the patient’s consent, to the patient or to a person nominated by the patient”.

Also, as I mentioned before, the NHS Constitution makes clear that patients have the legal right to accept or refuse treatment that is offered to them and not to be subjected to any physical examination or treatment unless they have given valid consent. I hope that the words “patient’s consent” in that first line and the rights in the constitution will reassure the noble Baroness in relation to the amendment.

I now turn to Amendment 55, tabled by the noble Earl, Lord Howe, and the noble Baroness, Lady Cumberlege, and Amendment 58, tabled by my noble friend Lord Campbell-Savours. These amendments make particular provision under new Section 12B to regulate whether patients can receive services in addition to those for which a direct payment for health care has already been made. I understand that there have been concerns on this issue from two perspectives. Some noble Lords have been concerned that patients might be turned away from essential NHS care if their direct payment runs out. Conversely, others have raised concerns that patients might spend their direct payment inappropriately and come back for more, diverting NHS resources away from other patients. I hope that I can reassure noble Lords on both counts.

First, I should emphasise that direct payments are absolutely not a matter of handing over cash payments and walking away. As we outlined in Personal Health Budgets: First Steps, there would be safeguards at several stages. To start with, we intend that personal health budgets will be offered only where there are potential benefits for the individual. There will be many patients and many services where personal health budgets will not be suitable. They will include circumstances where the patient’s needs are fluctuating or unpredictable so that it is not possible to set a budget sensibly. Alternatively, a budget might be set for only some aspects of the care pathway, not all of it, enabling the patient to receive other services in the traditional way, so having two parallel services, one paid for by direct payments and the other paid for by the NHS through the usual commissioning processes.

Secondly, there will be an agreed care plan, as I have said before, for how the personal health budget will be used to ensure that the proposed services are suitable for the patient’s agreed needs and that the budget is sufficient to pay for it. Thirdly, there should be effective arrangements for monitoring and review, looking at both the clinical outcomes and the financial elements of the personal health budget. Only then can PCTs be sure that high-quality services are being delivered, and that the patients are safe and making progress towards their agreed outcomes. Regular monitoring should ensure that any shortfall in the agreed budget or a need for a change in services or provider can be spotted promptly and corrected. If a personal health budget or direct payment proves unsuitable, a patient could be offered traditionally commissioned NHS services in the usual way.

To answer the point made by my noble friend Lord Campbell-Savours, paragraph 14 on page 26 clearly states that there will be a “contingency component” so that if the money runs out we will at least be ready to meet the aspirations of the patient. In addition, Personal Health Budgets: First Steps sets out a clear principle that no one should be denied essential treatment as a result of having a personal health budget. There should be no question of patients being turned away from NHS services if they need them. In conclusion, I am confident that the safeguards I have described should avoid problems arising in the way that some people have feared.

I now turn to Amendment 56, tabled by the noble Earl, Lord Howe, and the noble Baroness, Lady Cumberlege, and Amendment 60, tabled by the noble Baroness, Lady Barker. These amendments relate to the provision for reclaiming a direct payment from a patient. It may be helpful if I explain why we believe we need this flexibility.

The provision as it currently stands is designed to allow the NHS to reclaim money if a direct payment is underspent. I envisage that the need to consider repayment will be very rare in practice. Normally, underspend will be carried over and deducted from the next direct payment. However, it may be appropriate to reclaim it; for example, if the direct payment stops, the patient stops that direct payment or opts out of being part of a direct payment scheme. This power is important for managing taxpayers’ funds responsibly. In addition, we expect regulations to require that direct payments be paid into a separate bank account on a regular basis, possibly monthly. This means that where payments are recovered, they would usually be taken from the same dedicated account and would cover only a short period. That should avoid the risk of creating financial hardship for individuals, should such a rare case arise,

As we set out in the department’s briefing note for noble Lords, we wish the Secretary of State to be able to use discretion in exercising this power. For example, there might be cases where it would be disproportionate or inappropriate to recover payments. I agree with the noble Baroness, Lady Barker, that that might well be the case where there had been a wrong diagnosis, and that power would not be exercised. However, it is conceivable that there might be deliberate fraud by a patient, which has been touched on before, as well as a mistaken diagnosis. We would not want to rule out recovery in that situation. Misdiagnosis is only one of many potential circumstances where recovery might not be desirable. I would be reluctant to specify that in the Bill.

In the unlikely event of fraud, the Bill provides power under new Section 12B(4) for reclaiming direct payments as a civil debt. For serious abuse of the system, criminal sanctions would be available under the Theft Act 1968 or the Fraud Act 2006. Our provisions, which follow the approach taken in the social care legislation, are deliberately flexible to allow for discretion in dealing with these difficult circumstances and to ensure we can learn lessons from the pilots.

I turn to the question raised by the noble Baroness, Lady Cumberlege, about top-ups. Personal health budgets must be compatible with the core principle that NHS care is based on clinical need, not ability to pay, so top-ups will not be allowed when it comes to personal health budgets. However, we have debated top-ups on numerous occasions. If, for any reason, the patient wishes to purchase additional care privately, it will have to be taken separately and with clear accountability in line with the response that the Government gave to Professor Mike Richards’s review of additional private drugs. I doubt the issue will arise. I expect most patients to go back to their care manager and negotiate some of their extra needs if the issue arises. The partnership working between the patient and the care manager or provider that the noble Baroness, Lady Campbell, mentioned will address some of these issues. If top-ups come up, we have clear guidance from the Richards review.

In the light of these explanations, I hope noble Lords are reassured and will agree to withdraw their amendments.

I thank the Minister for his reassurances in respect of the two amendments that I tabled. I say to the noble Baroness, Lady Cumberlege: “Welcome to the world of direct payments”. The sorts of issues that she envisaged go on all the time in social care, and they will happen in health. Word will go round like wildfire that a provider is really good, and people will try to get to it, come what may. When they have done so, they will try to get the resources together to increase their time. That is what happens when you introduce market mechanisms into health—savvy people find their way round them. I listened with care to what the Minister said, but we shall see. I thank him for his response setting out the Government’s intentions.

Amendment 52A withdrawn.

Amendments 53 to 58A not moved.

Amendment 59 had been withdrawn from the Marshalled List.

Amendments 60 and 60A not moved.

Amendment 61

Moved by

61: Clause 9, page 8, line 11, at end insert—

“( ) the demographic groups in which a pilot scheme operates;”

I do not wish to spend tremendous time on this group of amendments because to some extent the point has already been made. There was wide scepticism about the nature of the pilots in social care and the extent to which they genuinely reflected the concerns of different client groups within it. Scepticism also arose from the department’s response to the IBSEN review. If one were to read the press release that went with it, one would be tempted to see the pilots as having been an unqualified success. Yet when one studies the report in detail, there is a great deal in it that shows that there are issues that are yet to be fully and adequately addressed, and there are some differences that are capable of interpretation in different ways.

My amendments are an attempt to say that when it comes to piloting individual budgets in healthcare, where there is not only a far greater number of client groups but also different categories of patients, there is a need to make sure that we have different demographic and geographic pilots that encompass all those differences. I beg to move.

Once again, I want to say a few words on behalf of UNISON. It is concerned about the spread of pilots, and it says:

“Given the huge impact that the introduction … could have on patients … UNISON is very concerned that the Bill does not outline a satisfactorily detailed pilot scheme. While we welcome the fact that a pilot process has been written into the Bill, we believe that any pilot process would need to ensure sufficient consideration by the Secretary of State before a decision … is taken. The whole piloting process will lack credibility if it is not thorough, independent, transparent and detailed and UNISON would urge the Government to give more statutory assurances that this will be the case”.

In my amendment, I argue that strategic health authorities in different parts of the country are faced with different problems. It might well be that the arrangements that apply in central London will be very different from the arrangements that exist in west Cumberland, whence I cometh, south Wales, the north-east or wherever. It is important that we get a wide spread. I hope that in replying on the amendment my noble friend will assure us that this will proceed only on the basis that there is that kind of national coverage and that every condition in every part of the United Kingdom is covered by whatever arrangement is made.

I support that amendment because conditions in a rural area are totally different from those in a large urban area. I know this very well, having been in the Yorkshire region, where you have big cities such as Leeds and sparsely populated areas such as north Yorkshire.

The amendments in this group are concerned with the design of the pilot schemes for healthcare direct payments. Amendment 61, tabled by the noble Baronesses, Lady Barker and Lady Tonge, is about the impact of the pilots on different demographic groups. Amendment 63 is about control schemes for the pilots, and Amendment 64, tabled by my noble friend Lord Campbell-Savours, would require at least one pilot scheme in each strategic health authority in England. I should start by assuring noble Lords that we will commission a rigorous scientific evaluation of the pilots, as outlined in our policy document. The pilot programme and evaluation will start later this year for models of personal budget that are allowed under current legislation: in other words, the notational budgets. Then, subject to parliamentary approval, the pilots will be extended next year to include pilot schemes for direct payments, to which the Bill relates.

The department is currently in the process of tendering for a team of researchers to carry out the evaluation of the personal health budgets programme as a whole. Our aim in the tender is to specify the outcomes that we want to measure—we have already debated most of them—not to prescribe the evaluation method. However, I have no doubt that we can learn a lot from this debate. We will be looking for innovative and rigorous proposals from bidders. For that reason, I am unable at this stage to give noble Lords exact details of how the evaluation will work. However, I reassure them that we will be looking for the most innovative bids that try to address most of the questions that we have debated.

The evaluation will be based on a wide range of qualitative and quantitative evidence, and we will draw on the lessons of the IBSEN review in social care. That examined in detail the effect of individual budgets on a range of people, conditions and social groups. As the noble Baroness, Lady Barker, pointed out, a lot has been learnt from it and we could probably do better and make our evaluation more rigorous. We are also now seeking expressions of interest from PCTs to become part of the pilot programme. Applications are due by the end of March.

The department is currently running a series of regional events. I reassure my noble friend Lord Campbell-Savours that we are going through all 10 strategic health authorities trying to engage as many PCTs as possible and encouraging them in order to get applications from across the country. I anticipate a positive response from the NHS. I saw the excitement in one of the deliberative events. We hope that pilot proposals will cover a range of services and conditions. I would be very pleased if we received applications from PCTs in every strategic health authority.

However, where PCTs do not wish or are unable to apply to be pilot sites, I do not want to force them to do so. We are looking to harness existing enthusiasm in the NHS for personalisation, rather than to impose pilots on PCTs by selection by the Department of Health. I would be reluctant for the Bill to specify a precise geographical spread, but I reassure the noble Lord that we will do all we can to encourage innovative bids from across the country.

On demographic groups, I agree that it is important to examine the effect of personal health budgets on different groups of people. Personal Health Budgets: First Steps made it clear that the evaluation would look at the impact across different groups by condition and background. This is particularly relevant because the IBSEN review of social care individual budgets revealed that not every group benefited equally. In particular, older people were less satisfied with the use of individual budgets. It will be important for the evaluation to look closely at these issues to help to understand how personal health budgets can be introduced in a way that benefits all groups. One of the challenges that we have in the next 10 years, as highlighted in High Quality Care for All, will be caring for more older people. I sympathise, but I do not want legislation to restrict individual pilot sites to looking at a particular demographic group. The current clause would allow that flexibility if necessary, but it is more likely that pilot sites would cover a range of different groups of people. It would be for the evaluation team to synthesise information from all the pilots and draw conclusions about the impact on different groups.

Finally, on control sites, I assure noble Lords that we expect the evaluation team to gather evidence from control or comparison groups. There are various ways of doing this. For example, there could be separate control sites outside the pilots from different PCTs with similar characteristics. There might be control areas within the pilot sites: for example, GP practices that do not participate in the pilot. In principle, although we believe this to be less likely, the evaluation could use a randomised approach, as in the IBSEN study. We are leaving that open, depending on the bids that we receive.

Again, our aim is to prescribe the outcomes that we want to measure, not the evaluation method. I hope that I have reassured the Committee about that. We are committed to commissioning a high quality and rigorous evaluation for the pilot programme. That assurance is backed up by the safeguard in the Bill, which we will discuss in our debate on the next group of amendments. Parliament will have to give explicit approval, through the affirmative procedure, for any future decision to roll out direct payments more widely. I am sure that noble Lords will wish to see robust and persuasive evidence at that point before any national rollout. I hope that I have convinced the Committee of the evidence and the way in which we plan the rollout, and that noble Lords will not press their amendments.

I thank the Minister for that reply. The amendment tabled by the noble Lord, Lord Campbell-Savours, is very timely and well meant. I say that for a particular reason. There are different forms of evaluation of direct payments and individual budgets. The IBSEN review is clearly the biggest, but there are others. According to the last edition of In Control’s newsletter on its website, 9,068 people had individual budgets for direct payments in social care. That is a huge increase on the year before. If one looks behind that headline figure, we begin to unravel some interesting points. Some 50 per cent of those involved are older people, but 50 per cent of the people in that group of just over 9,000 come from only three local authorities: Manchester, Oldham and Hartlepool. That is quite surprising given that it is currently a performance measure for local authorities that they should be trying to get people on to individual budgets. It is clear that not all local authorities are reporting back to In Control.

More than that, we know for a fact that, until two weeks ago, one of those local authorities was refusing FOI requests to find out how many of the people they were funding were older people, people with learning disabilities or people with mental health problems on the grounds that it was a pilot. Therefore, those data are of limited value. We should be clear when we take the potentially significant step of rolling out individual budgets to health that the data on which we do that are sufficiently robust that criticisms cannot be levelled at the programme and it cannot be undermined. This will happen at a time when budgets will be under great pressure. The data have to be robust, and we cannot allow enthusiasm to run away with us. That is part of the reason for that proposal.

I understand what the noble Lord, Lord Campbell-Savours, was trying to do. He was right to point out some of the population differences. Having said that, over the past 20 years, there have been a number of pilots in different places—the noble Baroness, Lady Campbell, mentioned some of them—but they do not quite capture all the issues. They do not, for example, capture some of the issues about which older people feel more intensely than younger people. Older people being supported and enabled to return to work is not as big an issue as it is for younger people. Yet loneliness is a very big issue for older people. That is why we must make sure that the population groups included in these pilots are as big and diverse as possible, so that the data are sufficiently robust. On the basis of the Minister’s assurances, I beg leave to withdraw the amendment.

Amendment 61 withdrawn.

Amendment 62

Moved by

62: Clause 9, page 8, leave out line 12

We continue to talk about the review of the pilots, which is one of the most important things that we will talk about today. All afternoon I have been explaining why, just in the field of social care, there has been a great deal of reservation about the way in which the pilots have been conducted. I agree with the noble Lord, Lord Darzi, that the IBSEN review is thorough and commendable research. However, it is telling that as thorough and detailed as it is, even today it has been interpreted in very different ways.

On an earlier group of amendments, the noble Baroness, Lady Cumberlege, said that it had demonstrated that direct payments were cost-effective. However, it does not quite say that. It says that measures of cost-effectiveness vary across client groups. On page 240, the review says that in social care the market may change and the impacts on costs may play out. Direct payments may in future be less cost-effective than they are now. Even with such thorough research, an awful lot is left open to question and a lot of issues are left dangling even by the researchers, because they were unable to answer them.

With that in mind, a number of these amendments have been put forward. Amendment 62 probes a part of the Bill that has caused interest across social care. The Secretary of State seems to be being given a power to revoke the pilot without reference to other people. Amendment 65 asks not only that there should be an independent review, but that there should be an independent review of all pilots. Amendment 66A reiterates the point made by various Members of the Committee today on the need to look at the impact on different client groups and to ensure that what is rolled out is applicable to all.

Amendment 67 says that the pilots cannot be moved on to further status before all of them, not just one, have been reviewed. To a certain extent, that reflects the surprise at the department’s announcement in December 2007 that individual budgets would be the way forward for social care, even before the reviews of the pilots had been completed.

Amendment 68 asks that there be a report to Parliament. Amendments 68A and 68B would address something that was raised in IBSEN research: that people should have been in receipt of direct payments for a year. There is a reason for that. In some client groups, a person’s health can change dramatically over the course of a year. One of the shortcomings, which is admitted by the researchers from the University of York, was that, in the report of the IBSEN pilot, some people had had a direct payment for only a matter of a few weeks or a couple of months, and some of them had not even had it. When looking at the impact on people’s health, and given that older people are the majority users of the health service and that the majority of those users have multiple health conditions, we need to see how this works out over a period of time, during which a proper health assessment can be made.

These amendments are tantamount to some quite severe reservations about the pilot programmes. I beg to move.

I shall speak briefly to Amendment 66, the purpose of which is simply to emphasise the importance of evaluating the pilot schemes as thoroughly and inclusively as possible. We cannot predict all the difficulties that may arise as the pilot schemes run on, but, more to the point, I would feel comfortable if the Secretary of State’s evaluation of the pilots was a closed process. There is a lot of enthusiasm out there for direct payments in healthcare, as we have heard, but a lot of nervousness and apprehension as well. It is important that we get this right. I bring us back in particular to support and advice, the quality of which needs to be evaluated as part of the overall exercise if we are to learn the right lessons for the wider rollout of direct payments.

I pay tribute to the noble Baroness, Lady Barker, and her diligence in taking through legislation. However, she implied that I had perhaps got wrong what the IBSEN report said. The report says that individual budgets,

“appeared cost-effective for social care outcomes—i.e. they produced better outcomes for the costs incurred, compared with standard care—but not for psychological well-being, with some differences between groups. IBs were cost effective for mental health service users and physically disabled people with respect to both social care and psychological well-being outcomes. For people with learning disabilities, IBs were cost-effective with respect only to social care. For older people, there was no difference in social care outcomes, but standard care arrangements remained slightly more cost-effective and people receiving these felt happier”.

Perhaps we are quoting from different parts of the same report. I am quoting from the précis that it did to ensure that people could see all the report but in an encapsulated form. I am quoting directly from the IBSEN individual budgets evaluation network.

I shall say a few words about Amendment 65, to which I have added my name. I am considerably reassured by what my noble friend has already said about the evaluation of these pilot schemes, particularly that there will be a reputable, independent, academic body that will carry out the review. Will he confirm that the department will be bound by the findings of this body and that the Government will withdraw or suitably amend certain parts of the scheme according to the recommendations of this independent report? As we have heard, many highly complex issues are involved in these schemes, and it is important that as many as possible of these are ironed out before the scheme spreads to the whole country. I deliberately did not use the term “rolled out” because it has been overused.

The evaluation team and its protocol should be well in place before the pilot starts so that it knows exactly how to conduct the study. Is that in the plan? What proportion of PCTs will undertake these pilots? Will they be involved in mounting the schemes and hosting the valuation teams?

Would it be possible for the local authority overview and scrutiny committees and county authorities to have a role in evaluating the pilot schemes? Often their reports are what I would call near to the ground. I understand the use of independent expert teams, and so on, but the danger is that these organisations are from outside and do not understand all the local circumstances. I should think that overview and scrutiny committees would have a local input role.

There are many amendments so I may take a little time to go through them. Most of them are concerned with the review of the pilot scheme for healthcare direct payments. I re-emphasise that we intend to carry out a thorough and rigorous evaluation of the personal health budget in general and of direct payments pilots in particular. We acknowledge that there are many unknowns and uncertainties, which we have debated today. That is precisely why we need to pilot them. On that same note, I made it clear in High Quality Care for All that a number of policies in that document need to be evaluated. We debated the quality accounts last Thursday. On personal health budgets, the department should and will be heading to evaluate policy as academically rigorously and independently as possible. That research will be commissioned independently by an external research group, which I hope will happen some time after the tender has gone out in March.

Amendment 62, moved by the noble Baroness, Lady Barker, would omit our current clauses which provide explicit powers to use regulations to enable us to revoke or amend a pilot scheme. Our general intention is that the pilots should be clearly defined from the start, like any other study, and should be properly evaluated as they run. We hope that there will be little need to change the scope fundamentally once the pilots are up and running. However, and I say this as an academic, there will need to be a degree of flexibility. For example, the power in regulations would allow us to adapt pilots in response to emerging lessons. We will learn a lot of lessons as the pilots are launched. We would be able to extend the scope of a pilot midway if it became clear that there were benefits for other services or for patients, or perhaps if the full effect of the pilot could be measured only if more patients were recruited.

In the last resort, we will be able to cancel a pilot scheme if the model being tested is obviously not working as intended. Being able to have the power in regulations to adapt or stop a pilot scheme is a sensible precaution, but that should not impact the academic evaluation. Even a failed pilot would tell us a lot that we needed to learn, if those rare circumstances arose.

Amendments 65 and 67, tabled by the noble Baronesses, Lady Barker and Lady Tonge, and the noble Lord, Lord Rea, require an independent review of all pilots. Amendment 68B ensures that the pilots run for a year before any decision about national roll out. At this stage, I can put on record our intention to evaluate all the direct payment pilot schemes, not just some of them. We will probably learn more from those that fail about how we can address the issues that caused that failure. We intend the personal health budgets pilot programme to run for at least three years, with direct payments being used for at least two years. The one-year requirement is surpassed by our policy.

However, it would be unnecessarily prescriptive to put these details in the Bill. For example, the current drafting requires a review of “one or more” rather than “all” pilot schemes. This wording does not signal any intention to cut corners on evaluation, but it provides a degree of flexibility. There may be circumstances where it is not appropriate to review all pilots together before a decision on national roll out is made. If one pilot took significantly longer than others to produce results relating to certain demographic groups or a certain condition, but the evidence from other pilot sites for or against direct payments was overwhelming, I would not wish to create unnecessary delay before making a decision. These pilots will deal with different conditions and different demographics. Noble Lords will also appreciate that there may be a range of pilot programmes running covering a range of services. The legislation allows us sufficient flexibility to allow direct payments for one service, while continuing to pilot others.

Amendment 66, tabled by the noble Earl, Lord Howe, requires the department to carry out a formal consultation before any review takes place. As an integral part of the review, I envisage that the evaluation team will gather the views of individuals and organisations. My noble friend Lord Campbell-Savours raised a point in relation to the overview and scrutiny committee. It will be one of the stakeholders, and I have no doubt that that academic evaluation will include it as part of its stakeholder team. I am confident that the review of the pilots will draw on a far wider and richer range of evidence than would be produced by a conventional consultation exercise.

Amendment 66A ensures that regulations require that the review evaluates the impact of direct payments on specific patient groups. At this stage, as I explained earlier, we do not intend to define the types of patients or services that would be eligible for a personal health budget, and we are awaiting the different and, we hope, innovative bids that will come in following the call.

Amendment 68 requires the Secretary of State to present Parliament with the findings of the review of the pilots before making any decision to roll out direct payments for healthcare nationally. I emphasise that before the Government can extend direct payments more widely, both Houses of Parliament must give their express approval through the affirmative resolution procedure. That is an important safeguard; it is a stronger safeguard than these amendments provide. At that stage, we will need to lay out our evidence, so that your Lordships may make an informed decision. It is not necessary to add an explicit requirement to present Parliament with the findings from the evaluation.

I turn finally to Amendment 68A. New Section 12C provides a power to extend direct payments nationally by allowing the Secretary of State to make an order repealing the limitation that direct payments may be made within pilot schemes only. New Section 12C also provides a power, at subsection (6)(b), for an order to amend, repeal or modify any provision of the 2006 NHS Act. This amendment would remove that provision.

I can understand that, on first glance, this may seem a sweeping power for the Bill to contain. However, it simply provides the power to make any consequential amendments to the NHS Act that may be necessary to facilitate the wider rollout of direct payments. It is tightly constrained by subsection (7), which makes it clear that the power may be used only for the specific purpose of making changes relating to direct payments and not for any wider reason. We believe that this is a balanced and proportionate approach, which was endorsed by the Delegated Powers and Regulatory Reform Committee in its report on the Bill.

The need to retain flexibility for the pilots inevitably means that we cannot prescribe every detail in the Bill. However, I hope that Members of the Committee will be reassured by my answers, particularly by the use of the affirmative procedure as a safeguard before any future extension of direct payments. Therefore, I hope the noble Baroness is able to withdraw her amendment.

I thank the noble Lord, Lord Darzi, for that very full response to the large number of issues raised in this group of amendments. When I moved the amendment, I should have said that I took considerable care to look at the material provided by the department, for which I am very grateful to the noble Lord. The other week, his department gave Members of the Committee a briefing on direct payments, specifically about the evaluation.

This may be known in the business as the curse of PowerPoint, because there are some very brief headings, about which I meant to inquire. What the evaluation that the department is about to commission will cover is set out and includes financial impacts. What do the financial impacts concern? Does the evaluation refer to the financial impact on patients, providers or commissioning? That is not clear. Analysing innovation and responsiveness in the provider market is also referred to. What about market failure? We know that when market mechanisms are introduced, that can bring about market failure. Part of this is designed to do that. We have not had extensive market failure in the social care world, because the pilots have been running alongside the existing system of commissioning block contract services. That might be the case for the pilot phase, but I imagine that, ultimately, it will not be further down the line.

I should say to the noble Baroness, Lady Cumberlege, that I did not seek to imply that she had not done her homework or that she was misquoting. She was reading from the summary and it is right to say that that is part of the report. It is a bit like going to the theatre and seeing the Reduced Shakespeare Company do the “To be or not to be, that is the question” soliloquy, and then not hear the rest of it.

In the full report, the points made by the noble Baroness are put into more detail and more context. The researchers are more tentative about what their findings may mean for the future: for example, when there is a more fully developed supplier market in social care, individual budgets have been running for a considerable time and no longer is block contract tendering going on by local authorities. It talks about how, if the price of an individual care service goes up, it may have an impact on the cost-effectiveness of that service, particularly if it is being provided for only one user as opposed to a large number of users, and there are no economies of scale. I am not accusing the noble Baroness of misquoting: it is just that there is a more detailed picture in the fuller report. Perhaps the noble Lord, Lord Darzi, will answer my points.

Thank you. I spend a fair bit of time teaching the Department of Health how to do PowerPoints, but this one comes from the policy strategy unit, which knows how to make PowerPoints. That is why the words used are “financial impacts”. That refers to page 58, point 20B, which states that financial impacts across the health and social care system include demand growth, doubled running costs, the costs of support and brokerage and also value for money. That is what the bullet point refers to.

Perhaps the Minister might write to me about the issue of provider failure; I do not want to prolong things now. The noble Lord will understand why there has been the concern that there has been about the pilots. The potential impact of individual budgets on the healthcare service is enormous. The pilots in social care were not able to talk about longer-term effects, such as the effects on the number of providers, choice and so on. There are still many questions to be answered. That is why I moved the amendment, and I welcome the Minister’s response. I beg leave to withdraw the amendment.

Amendment 62 withdrawn.

Amendments 63 to 69B not moved.

Clause 9 agreed.

Amendment 70

Moved by

70: Before Clause 10, insert the following new Clause—

“Choice to top-up accommodation provided under NHS continuing health care

Where it is the responsibility of the National Health Service to provide care and accommodation, or a direct payment to meet these responsibilities, under National Health Service continuing health care, the Secretary of State may direct that in cases where a person chooses to move into or remain in accommodation that is more expensive than the National Health Service has established is necessary to meet all their needs, that the person or a third party may make payments to top-up any extra hotel costs.”

I thank the Committee for being prepared to put up with a bit more of me at this time of night. I promise that I will be Trappist the next time we meet; that is an absolute promise. I am sad that we are so late in the day, because Amendment 70 is quite important. This is about continuing care payments. Noble Lords will have heard the noble Lord, Lord Darzi, reiterate the points made by the department about top-ups for drugs and its response to the Richards review. An ongoing source of contention has been the level at which the NHS provides continuing care and accommodation. It is a particular issue for older people, but it also applies to other client groups. This is to do with perhaps one of the few occasions when healthcare takes place not in an individual’s home or a hospital, but in a residential home or a care home. It is important to stress that this is that person’s home; it is where they live while they happen to receive healthcare.

The problem is that sometimes the NHS is willing to only pay a certain level of hotel costs. That means that older people in particular may not be able to go into a home that either is of a quality or a standard that they want, or is not near their relatives. The amendment seeks to establish that people who are in receipt of continuing healthcare can make a top-up to that to enable them to receive that healthcare in a home that they wish to be in, but which the NHS may perhaps not fund or not fund to that level. We are talking about a group of people whose needs are such that they cannot manage some of the more creative arrangements used by other people in order to get round their health problems because they are restricted in mobility. The amendment could make an immense difference to a small but significant group of people. Therefore, I beg to move.

I start by putting firmly on the record that the Government are committed to the NHS as a service based on clinical need and not the ability to pay—and the new NHS Constitution, as we debated last Monday, enshrines that principle.

Our position is clear on the general question of patients wishing to pay for additional private care. As noble Lords are aware, we debated the Richards review and the Government's response to it. Similarly, we have made it clear that personal budgets and the direct payments that we will be piloting may not be used as part payment for privately funded healthcare. I know that noble Lords will wholeheartedly agree that there must be no question of creating a two-tier system where those who can afford it can buy a better standard of NHS care.

However, we know that there have been concerns about a specific question relating to NHS continuing healthcare patients who want to make a contribution towards the “hotel” costs of their accommodation. From the perspective of the patient, those costs may not appear to be part of the core clinical package of NHS care, so I agree with the noble Baroness that there can be confusion among patients about whether they are allowed to pay for them. The issue was raised during the consultation on our draft guidance on secondary care and we are currently considering consultation responses.

I understand that it can be a particular concern for people who transfer into NHS continuing healthcare from the social care system, where a third party or, in some circumstances, the social care user may previously have been able to pay additional amounts towards their accommodation. Our principles are clear; no one has the right to pay for a different level of NHS care. However, I recognise that there may be a need to clarify the position on the very narrow question of “hotel” costs.

Might I raise an issue about which the Minister may not be aware? At the beginning of the National Health Service—and I remember it well because I was practising medicine before it came in—it was possible for individuals to purchase what was known as an amenity bed while continuing to have hospital care. They could pay an additional sum simply to have the convenience of a more comfortable room, for instance. It was purely for the hotel component of their care and not for anything to do with their medical care. That went out a long time ago, but this rather reminds me of that method.

I am grateful for the noble Lord’s intervention. I believe that that still happens although we may be talking about slightly different things. The issue needs more clarity. It was raised in the consultation and most of us would agree that NHS continuing healthcare is a complicated area and there are many implications to think through.

I reassure the noble Baroness that we will continue to look at this. I hope that we will be able to address the issue, although perhaps not in the context of this Bill. It is an issue that the department is looking at with great care. With that reassurance, I hope that the noble Baroness is able to withdraw her amendment.

I thank the Minister for his kind and full response. I hoped that we might have got to it quicker, but I realise that he has a lot on his plate. The issue will not go away. It will come back, and we will return to it at another time.

Amendment 70 withdrawn.

Clauses 10 and 11 agreed.

Schedule 1 agreed.

Committee adjourned at 7.25 pm.