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Residential Care: Cost Cap

Volume 767: debated on Thursday 10 December 2015

Motion to Take Note

Moved by

That this House takes note of the quality and viability of the residential care sector in the light of the Government’s decision to delay the implementation of the care cost cap.

My Lords, when I was researching for this very important debate, amid all the statistics, press coverage and reports on the cliff-edge financial state of the sector and the impact of the spending review, the one figure that most stood out showing the frightening scale of the crisis in residential care was the Care England figure of £2.16 per hour. This princely sum is the average fee paid by local authorities in England to care home providers to care for residents unable to pay for themselves. Of course, there are other ways of coming up with an average figure across the sector, but I am sure that none of them would produce a very different amount. Care England represents large and smaller scale residential care providers and, as its press release prior to the spending review put it:

“You can’t provide quality care for £2.16 an hour, no matter who you are”.

According to the Public Accounts Committee, local authorities have faced a 37% overall funding cut in real terms since 2010. They have found it impossible to raise residential care fees to try to keep pace with increasing demand and costs. Data from the residential care industry analysers, LaingBuisson, show that 1,500 care beds have been lost in England this year and that councils gave an uplift in baseline fees of just 1.9%—lower than the estimated 2.5% increase needed simply to keep pace with care home cost inflation. Out of the 166 councils providing information, 53 made no uplift in fees, and the remaining councils had either given increases below the standstill band uplifts, or fee revisions within the standstill band.

The residential care sector is home to 425,000 residents in about 18,000 homes across the UK. One in six residents is over 85 years old, an age group set to double by 2035. Care home residents have a prevalence of long-term conditions, particularly dementia, stroke and diabetes-related conditions. Many residents can have up to six comorbidities. Some 70% of residents in the top three care home providers are publicly funded which makes them especially vulnerable to continuing pressure on council budgets. It is clear, therefore, that throughout the sector self-funders of care help to keep homes viable and in operation.

There is no underestimating the blow for people with long-term health conditions, their families and the providers of care that came from the Government’s decision in July to delay implementation of the cap on liability for care costs for four years. Some 35,000 people would have benefited from the cap immediately. The Government's spending review repeated their commitment to introduce the cap in 2019-20, but with no money allocated. Nor was there a commitment to use fully the previously allocated £6 billion funding allocation for the care cap to ease the growing crisis in day-to-day social care services instead.

Prior to the spending review, there was no shortage of press coverage, providers and social care organisations pointing out the dire state of the sector to the Chancellor. There was the precarious financial state of Four Seasons Health Care—Britain’s biggest care home group providing 21,000 beds in 470 homes. It is reported to be on the brink of financial collapse, struggling with debts of £500 million. Last month it closed seven in its words “loss-making and unviable” homes in Northern Ireland. The group has a looming £26 million repayment instalment due, part of £50 million a year it has to pay to service its debts, which it is currently struggling to do.

There were also two separate joint letters to the Chancellor. The first came from the five largest providers—Bupa UK, HC One, Four Seasons, Care UK and Barchester—warning that failure to raise funding would mean that,

“thousands of older people could be left without a home”.

Secondly, a letter from 15 social care and older people’s groups, including Age UK and the Alzheimer’s Society, underlining the urgent need for more central government funding. They predicted a £2.9 billion funding gap across domiciliary and residential social care by 2020 and that,

“up to 50% of the care home market will become financially unviable and care homes will start to close their doors”.

Finally, there was the very timely ResPublica study of the private residential care sector. It warned that the funding gap specifically for older people’s residential care by 2020 would be £1.1 billion, a third of which will be the cost of the national living wage and which could mean the loss of 37,000 beds. The failure and collapse of Southern Cross two years ago affected 31,000 people. Other private providers eventually provided replacement care for them, although not without huge upset and trauma for the people involved, their carers and families.

As ResPublica points out:

“Given the perilous state of the industry, there is no private sector provider with the capacity to take in the residents who would be affected by the loss of other providers’ beds. Consequently … the worst outcome is the most likely: that the vast majority of care home residents will end up on general hospital wards”,

costing the NHS £3 billion a year.

Moreover, while public attention has been on the large-scale providers, we know that 75 % of providers are, in fact, small, local organisations—small group homes run by small teams of owners and staff or, in many of the smaller homes, just by the owners themselves. The Local Government Association estimates that for residential and homecare contracts the national living wage will cost an additional £300 million in the first year, rising to £834 million in the second. Does the Minister acknowledge that small care homes will be the first to go to the wall if the cost of the implementation is not properly funded by central government? We applaud and welcome the introduction of the national living wage—it is vital to the future of social care, but it must be properly funded.

The spending review offers two solutions to all this, under the ironic heading “A sustainable health and social care system”. The first is to allow local authorities the power to raise council tax by up to 2% in their area from next year, to bring in £2 billion a year; the second is a £1.5 billion allocation from the better care fund for councils to access in two years’ time. This, we are assured in the spending review, will be enough for councils to shore up core services, increase residential care fees and pay for the implementation of the national living wage from April next year for 900,000 care workers. But how can this limited additional funding be anywhere near enough to address the scale of the problem facing us? Can the Minister explain to the House how this can possibly make the current failing social care system sustainable?

I am sure that the Minister will come back with a string of figures on the amount of money that has gone into social care, but the fact is that the detailed analysis from the LGA, the King’s Fund, the Nuffield Trust, the private, charitable and voluntary sector providers and the patient and user organisations such as Age UK, Independent Age and Carers UK all show that this is nowhere near enough. Will he undertake to provide detailed analysis of the Chancellor’s sustainability plan for social care? How much of the better care fund allocation is new money into the system, or is it just money shuffled about the system or taken from the NHS?

Earlier this week, the King’s Fund put the amount that could be raised by councils as, at most, only £800 million per year, which underlines that areas in the north, Midlands and inner London with the greatest need for social care will lose out because they will be able to raise too little income for the increase to have any impact. Care England’s response is that the 2% addition, even if raised across all councils, would not even touch the sides of the problem. The charity Independent Age has calculated that a 10% increase would be needed to plug the social care funding gap, which would of course not be locally acceptable.

Meanwhile, Four Seasons remains in a very precarious financial state. This weekend, we saw reports of the devastating consequences for families and their elderly and frail relatives in its Northern Ireland care homes, which are to be shut down with 12 weeks’ notice. Four Seasons is on course to sell 19 homes this year, which will result in their closure, and it has 12 homes under embargo and barred from taking any new residents until the quality of care improves. Can the Minister reassure the House that an impact assessment has been made, that the situation is being closely monitored and that contingency plans are in place in the event of Four Seasons’ financial collapse? Four Seasons is also selling homes to other providers, so what checks and measures are in place to ensure that the care and well-being of residents is the top priority in such sales? Does he acknowledge that this is likely to be part of a growing trend, as the smaller group homes struggle to survive?

This debate is also very much about the quality of care in care homes and the people who are cared for, their families and carers. This is the first debate focusing on the residential care sector that we have had in this House in recent years. I am most grateful that we have such a broad range of experience and insight among the speakers today, which will ensure that the full range of key issues facing the sector can be addressed, particularly the impact of the NHS on the rest of the sector. The ResPublica report makes a very telling comment. It says that,

“the residential care system … has been overlooked as a partner in the integration of care”,

and in developing person-centred care across the NHS and social care. Its report looks to care homes becoming the agents of early intervention and the management of chronic conditions, preventing those conditions escalating and individuals funnelling in to the acute sector, swamping A&E units and local hospitals.

The NHS Five Year Forward View has a number of care home vanguards—the first time that the sector has had specific projects and funding—which reflect some of this thinking on trying to promote enhanced health in care homes. The projects have tight criteria for joint working and integration with the NHS and social care on care planning, residents’ health and the management of frail and elderly patients. In a number of areas, funding has been partly used to pay a higher fee to care homes so that they can focus on improving care standards and paying staff more, with new and extended job roles. This will mean that they are able to provide the care that ensures fewer residents are admitted to hospital or become permanent residents, rather than being able to go back into their homes after a short period of care following hospitalisation.

The recent CQC report on the state of care shows, as usual, the extent of the excellent care that takes place in many care homes across the country by trained, caring, dedicated nursing and care staff, as well as the reality and scale of the challenges that need to be addressed. The CQC’s five tests—that care is safe, efficient, caring, responsive and well-led—have been used for care home inspections since October last year, focusing on homes for residents aged 65 and over. Of the 300 homes inspected, 50 were rated good but 125 were deemed inadequate and 125 required improvement. Almost half of the homes—49%—were in breach of Regulation 18 on staffing, and a third—32%—fell short of Regulation 13, designed to safeguard service users from abuse and improper treatment.

Staff shortages in nursing and care staff, and the needs to attract the leadership and management which a good care home manager provides and make social care an attractive career for young people and people seeking work, underline the importance of the national living wage. The key training gaps identified by the CQC covered the areas of dementia care, safeguarding, mental capacity and deprivation of liberty safeguards which seek to ensure that the care provider does not restrict the liberty of vulnerable residents. Social care is failing dismally to attract new and younger people into the sector. The National Care Forum’s recent survey showed that just over 11.5% of staff employed in its member organisations are under 25, while more than half are aged 45 or older. These are all issues that the national living wage, if properly funded, can begin to address.

As a carer myself, I would like to see residential care integrated much more into the care plan for people with long-term conditions living in the community, with regular respite care planned, dated and available as part of the care pathway—and as part of the medium and longer-term planning for the person being cared for, not seen as a last resort. Carers UK testifies to how hard it is to book respite care in care homes in advance as part of a planned package of support, because the sector has too much focus on responding to emergency care and placements and cannot give a definite yes if you want a short stay on a specific date. The answer is often “Ring us nearer the time”, which of course is no good at all.

I will end with one case study from my experience as a trustee of our local carer support charity, which sums up the current situation faced in many parts of the country. One of our 73 year-old carers had cared for her husband for four years, through stroke, incontinence and then dementia. She needed a hip replacement. He went into residential care near the couple’s home while she had the operation, but when she came out she realised she could not care for him any longer. He stayed in the care home for two years, publicly funded by the council, with our carer regularly able to visit and help with care and feeding. His incontinence problems got worse and he was catheterised, but frequently pulled the catheter off due to his dementia. District nurses could not keep visiting the home, so frequent hospitalisation took place from the care home until it said it could no longer care for his needs. He did not meet the NHS continuing care criteria and stayed in hospital for months while social services looked for a nursing home near to his wife so she could visit. Finally, he is now in a step-down bed in a nursing home, a specially fully-funded intermediate placement bed at full care home costs to free up an NHS bed. The home meets his needs and his wife can visit him regularly, but he cannot stay there and must be moved in the next few weeks to a social service placement within the council’s baseline fee. The search goes on.

Social care is in dire need of a strategic, ambitious, forward-looking strategy and vision like the NHS Five Year Forward View, which has broad cross-party support and support from stakeholders, even if there is concern and scepticism about how the future plan can be delivered in the face of the realities on the ground. Dumping on councils so that they have to raise the money and then take the blame is not a strategy. As this week’s joint letter in the Guardian from the CEOs of the King’s Fund and Nuffield Trust put it, the spending review provisions are:

“another setback for people who need social care … These are sticking plaster solutions and no substitute for adequate funding”,

that social care desperately needs now.

My Lords, I am grateful to have the opportunity to contribute to this debate and to thank the noble Baroness, Lady Wheeler, for initiating it. It is my privilege, not having been here for long, to hear your Lordships on this important subject.

It is important that we are discussing this two weeks after the Autumn Statement and the spending review. I am sorry that the noble Baroness, Lady Wheeler, characterised the spending review, albeit perhaps quoting others, as she did at the end of her remarks. I think that the spending review offered considerable additional resources over the course of this Parliament. I am frank and realistic enough to recognise, not least from conversations with directors of adult social care over the past couple of weeks, that they are sufficient at best to maintain the level of local authority-funded care in circumstances where the demand continues to rise and therefore the gap between availability and demand will grow. At worst, we will be in the situation, as we have been recently, where the availability of local authority-funded care has been falling at a point where demand is rising.

The noble Baroness’s point that there is a need for strategic vision is well taken. It is not simply a matter of resources, even though they are an integral part of the issue. Some of that strategy is being implemented and more is available to us. I pay tribute to my friend Paul Burstow who was a Minister with me in the Department of Health. In the coalition Government, we led together on the preparation of what subsequently became the Care Act. It contains a very important set of measures, including the availability of assessments, additional carers’ rights, more consistent eligibility for care and the availability of universal deferred payments.

We need to go further. Social care and healthcare need to be integrated. Everybody supports that in terms of the integration of service design and commissioning, but, vital as that is, we can and must go further. Integration will only be real if and when care users are increasingly able to exercise control and choice through personal health and social care budgets. To make that real we have increasingly to aggregate the availability of personal health and social care budgets to those care users so that the service providers have an aggregated level of demand to be able collectively to respond and create a market for this.

We must also recognise that this will mean integrated providers with the NHS working with private sector social care providers and housing providers. There is enormous potential for housing providers and other services, particularly personal care services, to redesign the nature of the service they provide. For example, extra care housing providers together with social care providers are able to put together packages that work really well for people who are able to choose between different kinds of accommodation and service.

Time permits me to say one more thing which I think is really important. Much of what we already have in place is the product of the implementation of the Dilnot commission’s view. I hesitate because I may be stealing the thunder of the noble Lord, Lord Warner, and others in the Chamber who may have participated in equivalent work on prior commissions. I asked Andrew Dilnot and others to undertake that work and I think the result was important and right. We have included some of it in the Care Act. The Government have not implemented the cap on care costs and, to be frank, the cap that was intended was in my view insufficient. I continue to subscribe to the view that we should aim to implement a cap on care costs broadly in the way that the Dilnot commission recommended, at around £50,000 with a structure of assessment that means that probably no more than 40% of somebody’s assets would be depleted in the process of means-testing.

The combination of these two things would make it attractive to individuals to insure against this risk in so far as they have to meet that cost, and by taking away a much more substantial part of the risk of high-cost care over a longer period of time make it a more insurable risk for private sector insurers. Additionally, since the Dilnot commission reported we have more options in relation to pension flexibilities, and we always have housing asset flexibilities to enable these insurance products to become available if it is necessary for us to have those resources come into the system.

The original intention for the implementation of Dilnot before the election was that it would be funded out of inheritance tax and changes to opting out of national insurance. That moment has gone, but in internal discussions in 2012 from my point of view we were very clear about how this ought to be paid for, but it was not acceptable inside government. There was not agreement to do it because within the system we have discrimination against residential care in favour of domiciliary care. That creates an artificial distinction that we have to escape from, which is the exemption of the main or only home for the means test on charging for domiciliary care. At any given moment, about 120,000 people benefit from that, and £1.3 billion a year is available to them by virtue of that exemption. That is broadly speaking the amount that is necessary to construct a different proposition for people who are facing the insecurity of potentially very high long-term care costs. We need to go beyond simply enabling people not to have to sell their home to pay for care and give them the security of being able to find, as you do in so many other walks of life, the opportunity to insure against the often arbitrary effects of having to receive long-term care in old age.

My Lords, I suspect that given the difficulties facing the social care sector at the moment, particularly the residential care sector, much of this debate will focus on viability and financial problems, so I want to start with a comment about quality. Yesterday was the first anniversary of my mother’s death. During most of the preceding 11 years, she was at home, but she was also in respite care and residential care, and the care taken by everybody involved—the social services department, the domiciliary care company, the residential homes, one of which was a very small provider with the other part of a much bigger scheme, the hospitals and the intermediate care—was fantastic. I cannot fault any of the support and care she had from the whole of Dorset and all the people who my family were involved with over that 11-year period. It is worth pointing that out because too often we hear of the problems, and it is right that we focus on making sure that care is of high quality, but if we do so by ignoring care where it is of high quality, we miss out on many people’s experiences.

Dilnot was a very important point in Parliament’s history because the three major parties came together to agree that we needed to move forward together. Social care had for many years been something of a Cinderella issue, but the aspirations of Dilnot were certainly enshrined in some of the Care Act and I am very pleased that the noble Lord, Lord Lansley, wants to mark Paul Burstow’s role as Minister in making sure that much of the detail about the quality of care and the support for carers has been noted.

The problems that much of the sector faces, particularly the residential care sector, are because of the perfect storm that we now face. Much of it is financial but it is not only that. Can the Minister identify where the savings from the non-implementation of the Dilnot report have gone? The noble Lord, Lord Lansley, said that the moment when it could have been funded from other resources has gone. From looking at the spending review and some of the initial statements about next year, I understand that we are talking about probably £700 million being identifiable from that preceding amount. What has happened to it and where has it gone? It is evident that local authorities and the Department of Health are going to face major problems because of the demographics and the pressure of making sure that there are spaces available at levels that the residential system can afford if it does not have extra funding.

The better care fund, which was created by the coalition, was a step in that direction. It was a good one in that it started to change the emphasis from hospital care to residential and community care. However, despite the increase we have heard about, it is back-loaded to 2018 and 2019 and will not help over the next two years. The system is currently in major crisis. The introduction of the national living wage is also going to cause real problems for private providers of residential homes. On the announcement of the national living wage, quoted companies saw a fall in their share value. Major providers have started disposing of large numbers of homes, because they are seriously worried about how they can trade, let alone make a profit. Finally, lenders to that sector have stopped lending, because the business model is bust. If that is the case, everything that the Government are trying to do through the better care fund will be useless. More and more people will be staying in hospital because there will not be the beds for them to go to.

The local authority social care directors estimate that the current local authority shortfall will be £4.3 billion by the end of this Parliament. It is not clear from the spending review that there will be enough to fund the national living wage or demography. We know that cumulative local authority budgets have been cut over recent years, but what is less well known is the result for those authorities with social care responsibility: five years ago 30% of their funding went on social care, while it is now 35% and increasing. As a result, they have had to face tightening eligibility thresholds quite substantially, so that now only those with the most severe need can get any help at all, forcing pressure back on the primary care sector and on hospital trusts.

Members who have been involved in these debates will know that earlier in the year I spoke about one poor pensioner in the north of England who was told quite clearly that one of her legs was social care and one of her legs was her GP. She ended up going back into hospital because the social care element was not able to maintain one of the legs. This resulted in an emergency bed because the primary care would not let the nurse look after the leg with the other problem because it was not its leg. That story is easy to laugh at, but when budgets are so tight and protected, it makes people behave in peculiar ways. We have to find ways around this problem.

I have another concern. Some care providers have been told by their local authorities that they should fund the basics, like sick pay and travel between work for those in the domiciliary sector, from the profits they make from self-funders—and that they should not be expected to carry that burden for either health or local authority-funded patients. This is unbelievably facile. We need to make sure that we understand the cost of funding a residential care place. If our public sector is asked to provide it—which it must be for those in need—the funds must be available.

Of course, the demography is increasing so even without the pressure that we are seeing the situation will undoubtedly get worse. In the last few seconds, therefore, I would like to talk about a parallel. If the pressure that we are seeing in this sector was evident to people on the nightly news in the way that we have seen flooding in the last few weeks, I suspect that the Treasury would act all too quickly in making sure that emergency funds were available.

In closing, I repeat my question to the Minister. At the very least, please can we be assured that the money that should have gone into Dilnot is passed straight through to the sector this year, not just some of it during this Parliament?

My Lords, I, too, am grateful to my noble friend Lady Wheeler for introducing this debate and pointing out so clearly all the difficulties we face. It is difficult not to be gloomy and I am afraid I shall not lift the gloom. Way back in 2011, we had a harbinger of what might happen to care homes when Southern Cross failed with the loss of a large number of beds. Local authorities, which are mandated to care for their needy citizens, were left to pick up the problems; they cannot refuse to do so. Now we are starting to see more of the same, as other large providers of care homes get into difficulties. The latest is Four Seasons, as we have heard, which finds that offering this type of care is increasingly non-viable financially. As my noble friend Lady Wheeler said, it is already in considerable debt, as has been laid out in stark terms in the Financial Times. We could see the loss of many more beds and Four Seasons is unlikely to be the only one so affected.

It is not difficult to see how we have got into this situation. Government funding for local authorities has been severely squeezed and the impact is clear. Since 2010 there has been a fall of 25% in the number of people receiving social care, and the fees that care homes receive from local authorities are strictly constrained. To add to their problems, they are now faced with having to pay their staff the new living wage. Quite right, so they should—these staff have been disgracefully underpaid for the critically important work that they do—but it will cost the sector some £2.3 billion over the next four years. The net result is that care home providers are hit with the double whammy of increased costs and limited income. It is little wonder that they cannot break even. Private domiciliary care providers such as Allied Health have found themselves having to face up to the extra costs due to an EU directive obliging them to pay for journey times to and from domiciliary visits, when hitherto they have been able to get away with it.

It is not only on the supply side that there are difficulties; the demand side is difficult, too. Since 2009-10, the over-75s have increased by about 500,000, a 9.5% increase. It is not simply the increase in numbers that is problematic; the elderly are living longer with disabilities. It does not help to know that in the UK the time between the onset of disability and death is now seven years. That is seven years of dependency. That compares very unfavourably with Norway, where people suffer only two years in need of support before they die.

Of course, many of the causes of dependency lie outside the remit of the Department of Health, but public health clearly does not. While lip service is paid to prevention in all the health plans that one reads about, it is sad to discover that funding for public health is to be cut—by something like £800,000, I am told. That seems an extraordinary thing to be doing when we are trying to reduce the burden of disease. I well understand that it would be difficult for the Minister to change Treasury plans, but is there anything he can do to suggest that it would mitigate the impact on public health?

All this is leaving local authorities and hospital services to pick up the tab, and neither is in a good position to do so. The fall in government support for local authorities is supposed to be bridged by permission to increase their council tax by an extra 2% a year, over the 2% that they already have the flexibility to raise, for the next four years. However, to raise a total of 4% a year across the country consistently for several years is a difficult ask, and it will be much more difficult in poorer areas of the country.

As we have heard, they will have access to the better care fund, money transferred across from the NHS, but they will not receive much, if any, for the next two years. By 2021 they will get about £1.5 billion, and it is interesting that this transfer just about matches the extra that the NHS is due to get. So there is not much relief for the next two years. Local authorities will inevitably have to raid other budgets—but they will already have been doing so for some time, and there is little slack left in the system.

I did not want to talk about the hospital sector in this debate, but it is hard not to when we know that some 30% of beds are occupied by patients who do not need to be there. Everyone knows that. If nursing homes start closing, more patients will be admitted unnecessarily to a place quite unsuited to their needs, and there they will stay for far too long. It is certainly true that the NHS received a very welcome boost in the recent CSR. We should not look this gift horse in the mouth as it is sorely needed, but I fear that it will be only a temporary relief. As the noble Lord, Lord Lansley, said, we desperately need a more basic change in the way that we provide health and social care. It seems inevitable that we will move much more rapidly to a joined-up health and social care system, the fully integrated service that is talked about so glibly. I am not sure that it will necessarily save money—indeed, it may even cost more to get it off the ground—but that must be the way to go for the patients.

Here and there across the country, efforts are being made by innovative and dedicated managers to do just that, but they are having to operate against the grain of the bureaucracy that we have set up centrally. What progress has been made since David Dalton’s report to smooth the path to integration by government, and can we expect a more rapid uptake locally? It will not solve all the problems we face—I fear that more funding for social care by one means or another will inevitably be required—but it will go some way to improving the care of a large number of our most vulnerable people who are currently being shipped around or, even worse, being neglected completely.

My Lords, I declare an interest as chair of the Centre for Ageing Better, a new What Works centre promoted by the Government and well-endowed by the Big Lottery Fund but with full independence from both. I thank both for their wisdom in promoting it. The centre seeks to seize the benefits of the longer lives of more older people, so that we all benefit from that.

Some noble Lords will remember that two years ago this House produced a report, Ready for Ageing?, which set out the enormous opportunities of longer lives. It also made very clear that both individuals and the Government had to change to avoid a series of miserable crises—to quote roughly from it. I fear that what we said then has come to pass and we are now in the midst of a miserable crisis on social care, which I fear will only get worse.

Most of this debate will be spent talking about the immediate crisis. I am not going to do that; it has been well covered by other noble Lords. I will suggest instead that it is essential to look forward five or 10 years in public policy and public debate. The number of people aged over 85 will have increased by 17% by the end of this Parliament. In 10 years’ time, it will have increased by 40%. This is a social revolution and it matters because most formal social care is focused on those aged over 85. Another National Audit Office figure shows that 50% of those aged over 85 require some form of social care. We have clear evidence of rapidly rising demand and have experienced some of it over the past few years.

The Commission on the Future of Health and Social Care said:

“The government appears … to have no strategy whatever to tackle the rising and pressing needs for social care”.

I regretfully agree. This matters massively. We are talking about our oldest old in society and how they are treated with decency. We are talking about very fundamental things—help to get out of bed in the morning, help to wash or to bath and help to put on shoes and socks, let alone other forms of care. It is not some abstract debate about public policy.

What is needed by all of us—the Government as well—to address this? There is not time in seven minutes to give more than a very crude agenda, which most noble Lords know already. We clearly know that people wish to sustain their independence for as long as possible; therefore there is a serious question about what needs to be done and what works to sustain an individual’s independence. We all know we have to grow and support informal care. It is the foundation of care in our society and I am glad the Government are making progress on how to support carers more. We also have to use the asset of more older people and community action to address how to support more frail and ill older people. This will deal only with lower levels of need. You cannot expect some of the really heavy lifting to be done by individuals and volunteers.

That takes us to the fundamental question about what sort of supply of care we need to cope with the certain rapidly increasing demand we face. It is obvious that we need more home care because it is fundamental to making the system work well. We will need more residential care—that is a starting point. ResPublica estimates that 15% more residential care will be needed within five years. Even if it is wrong by three percentage points, it is a significant increase. We need, above all, a much bigger and more skilled care workforce to cope with more residential, domiciliary and palliative care.

Yet the consequence of local authorities, which dominate the market, being starved of funding is that we are driving down supply and weakening the ability to build a workforce for the future. There is not much sign anywhere that anybody has a strategy either for workforce and skills growth or for generating the mixed supply of domiciliary and residential care that our public will need as we go forward. That is staggering and horrific.

I shall give your Lordships one piece of evidence that shows why the care market is going south when it should be going north. Professor Martin Green, the chief executive of Care England, wrote to me this week. He said that Care England, which represents carers across all sectors, is now recommending to care providers that they should try to withdraw from the publicly funded provision of social care. That is on-the-record advice, and noble Lords already know why it has been given. It is a shocking situation.

I would like to ask why we are where we are. None of what I have said is news to good officials in the Department of Health, and it is not news to a good, thoughtful and well-informed Minister. What I have said is all known but we are not seeing action—for two reasons. One was set out very well by the noble Baroness, Lady Brinton, and it relates to the hidden misery. Hundreds of thousands of people are suffering in invisible places and, unlike the NHS, they do not have political salience. The second reason—I am not being party-political; your Lordships can see where I now speak from—is that the Ministers in the Department of Health are trapped within the Government’s fiscal and political stance. I do not deny the importance of fiscal balance but it is clearly possible to achieve fiscal balance and better care at the same time if you apply your mind to it and if you give bold political leadership. Fiscal balance is necessary but we also have to grow a market and a workforce to cope with social care.

As I get towards the end of my remarks, I ask your Lordships to consider the irony of a political stance—which many of us understand—that involves seeking to protect pensioners in a very privileged way in relation to tax and benefits. That is what has happened in our society and it is the stance of the current Government. Yet, at the same time, the Government are withdrawing funding, which means that now—and the situation will become even more serious over the next five to 10 years—hundreds of thousands of pensioners will be deprived of the support that they will desperately need in order to live in circumstances where there is respect and decency.

Trivialising matters slightly, we should ask whether many of our older people would be prepared to trade some of the highly privileged tax and welfare benefits that they now get so that they and others who are older can benefit from the required levels of support and decency. A strategy will be required, as well as consistent public funding, to ensure that those in the greatest need are properly cared for. That will require a much more grown-up debate than I have seen any sign of yet on how our welfare settlement needs to adjust in order to cope with the many more older people who will have the opportunity to live longer lives. We are obviously not facing up to the changes that we need to make in public policy but it is urgent that we do so.

My Lords, I join other Members of your Lordships’ House in thanking the noble Baroness for securing this debate. I admired her high-paced delivery of a lot of information without losing any clarity. Like the noble Baroness, I hope that this will not become a debate where we just trade statistics across the House, because in the end, as the noble Lord, Lord Filkin, has just drawn our attention to, this is about people and their lives, and therefore it is a matter that should be, and is, of great concern to us all.

If I stand in my bathroom and look out across the fields in north Bristol, I see the shell of Winterbourne View standing there as a testimony of what can go wrong with residential care when the business model is bust and the whole thing falls apart. It pains me to look at that building day by day.

Your Lordships have made it very clear, through the competence of this debate, that we have to do better. Just this morning when I turned on my radio, I heard that the Nuffield Trust is saying there is going to be a massive crisis this winter in the National Health Service, because a lot of people who are in hospital really should be in residential care but there is no space for them. We all know well—certainly, your Lordships know well—that we have an ageing population. More people now live in single-occupancy homes. People are often, sadly, estranged from or live a long way away from their families. Although I agree with the comments made this afternoon about complementary domiciliary care, we are here to talk about residential care and what that might look like going forward.

The chairman of the Commission on Residential Care, Paul Burstow, having noted, as the noble Baroness, Lady Brinton, said, that there are some very good examples of care, said:

“There are some tough messages. The brand of residential care is fatally damaged. Unloved, even feared, for most people residential care is not a positive choice. Linked in the public mind to a loss of independence, residential care is seen as a place of last resort”.

We heard from the noble Baroness, Lady Wheeler, about the Care Quality Commission’s evidence. We have heard about ResPublica, which has revealed the devastating fact that 37,000 beds will be lost between now and 2020.

I remember, back in the 1990s, when I was more closely allied to investment institutions, there was quite a move for investment institutions to invest in residential care. If I recall rightly, even the Church Commissioners looked at that. Now, we seem to be in a very different place. We have heard about Southern Cross, and about Four Seasons. I know the Minister will be concerned about this issue, but to my mind it does create a massive void in terms of how we are going to deal with it. I am not clear, as yet, from what I have heard from the spending review, that the plan thus far will be able to fill that void.

I am most grateful to the noble Baroness, Lady Brinton, and to the noble Lord, Lord Lansley, for mentioning Dilnot. The Dilnot report was a very important piece of work which I hope will not get lost. I hope the Minister will feel able to comment on exactly where we go with that.

There is a lot of anxiety, especially about documented failures in the care system. I think it was Oscar Wilde who said that biography lends terror to death. One might slightly bastardise his comment and say that residential care lends a bit of terror to those who know or feel that they might need residential care going forward. We have had Winterbourne View and Hadleigh House in Lincolnshire, and we heard the Minister this morning repeat a Statement about the terrible abdication of care in Southern Health NHS Foundation Trust. I welcome the fact that the Government and the NHS are now placing a renewed emphasis on palliative care and end-of-life services, but can the Minister assure us that it is equally essential that the priority being given to end-of-life services be applied adequately to residential care?

There is anxiety about this whole issue. Let me end where I started, by reminding your Lordships, as several noble Lords have reminded the House, that in the end this is about people. It is about the kind of care they might get, and how we face the cost of that. It is a particular anxiety, I guess, for those people who do not have what are called fat pensions or easily realisable assets to pay for their care—in other words, some of the poorest people in our land. The question remains for me: who will care for these vulnerable people when they can no longer look after themselves? We are facing a huge problem and I look forward greatly to hearing the Minister’s response to many of the questions raised by noble Lords.

My Lords, I, too, join other noble Lords in congratulating the noble Baroness, Lady Wheeler, on introducing this very important debate this afternoon.

I know all too well, through my own local authority in North Lincolnshire, the pressures the sector faces, both locally and nationally, in providing high-quality and affordable residential care. As Members of this House are aware, the first stage of the Care Act 2014 came into force last year, providing a single, modern statute that puts an individual at the centre of their own care. The introduction of a cap on care costs is welcomed by many. However, without going over ground already covered this afternoon, concerns were raised regarding the cost to public sector spending of a cap.

As a result, Her Majesty’s Government announced in July that there would be a delay until April 2020, particularly to allow further consideration on the implementation and sustainability of what will perhaps be the biggest reform of the payment of care since 1948. I strongly believe that Her Majesty’s Government wholeheartedly support reforms to assist those requiring care, and I look forward to further announcements on this.

That said, let me turn to my authority and add an important local dimension to this debate. As a local authority we have looked at the best way to implement these reforms to care and support under the new rules of the Care Act 2014. We put people at the heart of what we do and constantly work from that position to help those in need. We work hard to ensure that they remain safe and properly supported. We want to work with those who receive care and, importantly, their families to transform their lives for the better.

I am pleased to inform your Lordship’s House that North Lincolnshire continues to be a high-performing authority and we continue to develop and enhance a vast range of care and support services to meet local needs. Although the changes to the Care Act aim to give greater choice and control to those in need of support, we found that we are already fulfilling some of these duties. We said that we would increase the number of vulnerable people helped to live and receive care in the community, and we achieved this through a number of different routes.

First, we did this by increasing the accessibility to advice and information at the time of choosing a care package. We also carry out regular reviews to check progress with the individual’s care. Access to information of services is incredibly important, and the adult social care outcomes framework measured the percentage of people who found this information about services in North Lincolnshire increased from 77.4% in 2013-14 to 84.4% this year—the joint highest result in England.

Secondly, we established community well-being hubs, which offer access to services for those with more complex care and support needs, helping individuals to identify ways to improve their independence and well-being. I am pleased to say that we now have five of these hubs across North Lincolnshire as well the Sir John Mason intermediate care centre in Winterton, which I mentioned in my maiden speech such is our belief in the excellent facilities on offer there.

By working closely with health colleagues and other organisations, more people are being supported to remain living well—that is really important—for longer in their own homes and community. A great focus has rightly been placed on adult carers, with an increase in the number supported than in previous years. The noble Lord, Lord Lansley, earlier alluded to working with partners to increase the provision of suitable and adapted housing for people with complex needs. More people than in 2013-14 now have control of their own support, through a direct payment which is personal to the individual’s need. A personal budget gives people control to choose how, where and when they will be supported.

Our ultimate intention is to ensure that everyone living in a care home receives good and outstanding services across the area, and we want to work with them to achieve this. We also said that we would increase the number of vulnerable people who have real choice over their care and the support they receive. By undertaking personal assessments, again we support people to remain independent, and we make sure we personalise the approach to their care. Independent living is, I am sure, something that noble Lords would agree that many of us at times take for granted.

Furthermore, I cannot stress enough the significance of the relationships social work teams must have with individuals, their families and carers in order to understand their care and support needs, and how they would like these needs to be met. The better care fund, introduced more than two years ago, creates a single shared budget, which encourages the council and NHS to work together.

The priorities of the partnership agreement were to reduce hospital admissions, lengths of stay in hospital, delays in transfers of care from hospital and also permanent moves into care homes. To end, North Lincolnshire’s social work teams continue to ensure that people are at the heart of what we do. I hope that other local authorities, too, welcomed the reforms to the residential care sector and that they had as much success in implementing them. As we have discussed, for the first time in nearly 70 years we are presented with an opportunity to undertake a proper review of residential care. I welcome Her Majesty’s Government giving proper consideration to designing a means to support and protect vulnerable people from potentially catastrophic care costs, both in North Lincolnshire and across the country.

My Lords, I declare my interest as unremunerated president of SOLLA—the Society of Later Life Advisers. I do not know how many noble Lords had a chance to catch the serialisation of the new book, Alive, Alive Oh!, by the inspirational Diana Athill, on Radio 4 this week. Diana Athill is someone who chose to go into residential care and has never regretted that decision. There is a strong tendency, in my experience, to think of residential care as a second best—what you fall back on when you can no longer safely stay in your own home, or your relatives cannot or will not support you. That lay behind Gordon Brown’s infamous plan to make care free at home while it was still charged for in residential homes. However, that view of the world ignores the loneliness, discomfort and lack of physical support that so many old people struggling on at home experience, whereas good residential homes—the CQC rates three in five as good or outstanding—provide many things that old people such as Ms Athill value: company, comfort, care and community activities.

The puzzle for me is why more people do not opt for residential care. Fear of the unknown is, I am sure, part of the answer. But a major factor is cost. People worry that if they go into a home, the assets they hoped to leave to their children will be denuded. That is why there was almost universal support for the Dilnot report, which advocated making the means test less onerous and capping care costs. That support included the party of government, the Conservative Party. Its manifesto said:

“We will cap charges for residential social care from April 2016”.

That was the election manifesto that the people endorsed in May, and which was torn up by the Government in July. They sneaked out, on a Friday afternoon, an announcement postponing the cap until 2020. They reneged on their pledge once; can anyone in this House be confident that they will not renege again come 2020, when there are so many attractive things that they can spend money on to buy another election victory?

The Government sought to blame local authorities for this delay. It is true that local authorities were very concerned and had difficulty implementing the cap—for one reason only: the Government were setting onerous conditions on how they should implement it, without providing them with a fraction of the money that they needed to put it in place. Personally, and as an old defender of local government, one of the things that I do not like about this Government—I do not dislike everything about them—is a strong tendency to blame local authorities for things that have come about simply because central government has denied them the funding that they need.

The postponement of the cap was not the only thing that the Government did. They smuggled out the abandonment of another Dilnot proposal even more surreptitiously so that no newspaper to this day has noticed it—a proposal that is even more important and desirable than the cap. That was the raising of the cap for the means test. At the moment, you start to get some state assistance at £23,250; you get all your care paid for when you have only £14,000 left. Dilnot recommended raising that to £118,000. Before the election the Government said, “Yes, we’ll do that”, and after it said, “No, we won’t”. People who have worked hard all their lives have the prospect of seeing their wealth evaporate as they sit in residential homes. No wonder not many want to go into one.

The Government did that, but they did not drop the taxes that they imposed to pay for it. To take one, they froze the inheritance tax threshold for three years to get the costs. That raised £690 million over three years. We do not have that back now that it is not being spent on this subject; they have kept it. I have heard of stealth taxes and of death taxes, but this is the first example in human history of a stealth death tax.

Finally, we have heard a lot in this debate about underfunding. I agree that those of us who attack cuts are often guilty of not saying how the cuts that we do not want to make will be paid for. I have one suggestion where substantial sums can be raised in this field and used to improve the quality of care. I do so with a clear conscience because it is a piece of government spending amounting to about £500 million a year, for which I was very largely responsible. When I was part of the minority report of the Royal Commission on Long-Term Care of the Elderly—its distinguished chairman will speak to the House later—we wanted to go some way to meet the belief of the majority in free care for all. We therefore suggested that nursing care should be free for those who need it—strictly nursing care. There was a logic to that because nursing care is very like what you get in the National Health Service for free.

As I have gone on, in view of the shortage of resources I think that this was a rather unwise suggestion. Almost all the money involved goes to people who are rather well off; it is not like the means-tested money that goes to people who are less well off. It is indiscriminate and mostly helps the rich. So far as I can find out, because it is paid to care homes, very few people know that they are getting it anyway. If it were abolished—not for existing recipients, of course, but for new ones—the Government would save in excess of £500 million a year, which could be used to up care home fees, make them more viable and make the standards that they provide better for all our older people.

My Lords, I thank my noble friend for the opportunity to debate this important issue and congratulate her on her timing, in a week when so many relevant reports are being published.

Your Lordships will know that it has become axiomatic to say that social care is in crisis. The situation faced by care homes is an integral part of that, but I must first acknowledge the improvements in the care provided in care homes since I was first involved in this issue more than 40 years ago. We have moved a million miles away from the old pattern of local authorities providing a very low level of care, to a mixed economy of mostly private and voluntary care home owners commissioned to provide care by local authorities. Our standards are now higher. Single rooms with en-suites were unheard of in the 1980s. Now they are of a standard to which everyone aspires, although sadly, financial pressure is now leading to concerns about the quality of the care.

While we must acknowledge improvements, we cannot turn away from the problems faced by the care home sector. It is proving more and more unstable as cuts to local authority budgets bite and financial pressures lead to concerns about the quality of care and the amount of care available in the future. The delayed implementation of Part 2 of the Care Act, the new means-test levels and the increased pressure on local authorities to arrange care at the request of self-funders all contribute to the crisis. I, like other noble Lords, would like to know what has happened to the saving the Government accrued by not implementing the care cap. I am sure the Minister will tell us that. It was to be hoped that following the Autumn Statement, we might have been more optimistic but there is widespread agreement among care home providers and others that the Chancellor missed an opportunity. Indeed, it has been called another setback for social care. Of course, the major review announced by the Chancellor into integrating health and social care by 2020 is welcome, although I would be more hopeful of this if it were not the umpteenth time I have heard such a pledge over my lifetime. Indeed, in the 18 years I have been in your Lordships’ House, I do not think there has been a year when we have not had a debate—sometimes I have been sandwiched between the noble Lords, Lord Lipsey and Lord Warner, as I am today—in which better integration of health and social care was called for and promised. We are still waiting.

Councils, as we have heard, will be able to raise council tax by up to 2% to fund adult care, but not every council will be able to levy this much as their cost bases are so different and it will not be uniform across the country in any case. If every council raised it by the full 2%, this would only raise about £800 million—a fraction of the shortfall of £2.9 billion. And we still have a major problem with the relative clout of health and social care, as the noble Baroness, Lady Brinton, has reminded us. We tend to focus on hospitals and healthcare, while social care in any form is seen as a poor relation. It is news if hospitals are under pressure, much less so if local authorities are, and even less if care homes are. I, too, want the crisis in social care and the care home sector to be given as many column inches as the floods have been given this past week.

Undoubtedly, care homes will begin to close when the national living wage is introduced in April. No one disputes that this is the right thing to do but we have to recognise the strain it will put on care homes, especially the small operators. One group of providers estimates that it will cost £10 million to put their 14,000 employees on the national living wage. Care homes which provide for self-funders will no doubt put their fees up to accommodate this, but those who depend on state-funded residents have already suffered a real-terms cut of 5% in fees over the past five years. Even if councils do manage to raise more via council tax and raise fees accordingly, I fear that many homes will shut.

Nor should we confine our concerns to the private home care sector. Thousands of people in residential care are provided for through the voluntary sector, and these homes are often preferred by residents for the understanding they bring to particular conditions or particular ethnic groups. Many voluntary organisations have in fact been subsidising the care home sector for years. Financial pressures are now catching up with these organisations too as their fundraising becomes more difficult and local authority support is being withdrawn. Naturally, this will be of great concern to family carers. For many, care homes are a last resort, contemplated only when the carer is absolutely at the end of his or her tether, often after years and years of coping alone or with minimal support. I remind your Lordships that the latest assessment of what carers save the nation is £132 billion a year—the cost of another complete health service.

Sometimes, having a care home available in the background or to provide respite care, if only for a weekend or the odd week once a year, enables the carer to continue. Therefore, carers’ needs must be factored in when we contemplate the future of the care home sector. Even when the cared-for person is eventually admitted to the care home, the family carer often visits every day and spends many hours seeing to the needs of their loved one, becoming part of the care team.

Good care that meets the needs of the person being looked after can improve a carer’s ability to cope for longer periods. If care is poor, it can have a huge and damaging effect on carers as well as residents—not only directly on the amount of care they have to provide themselves, but on their emotional and physical health and their finances. If residential care becomes a less viable option in certain areas, the consequences are stark for families as well as for those in need of care.

We have concentrated today on the problems faced by the care home sector. Many will be solved by more money but we really need—as so many of us have been saying for so many years—a five-year plan for social care as far reaching as the one for the NHS: a fully integrated service with budgets and services that are not differentiated. That would be possible if the will was there but, sadly, there is no sign of this so far. I am sorry to sound cynical. I hope the Minister can convince me otherwise.

My Lords, like others, I congratulate the noble Baroness on securing this timely and important debate and on her excellent analysis. I declare an interest as a member of the Dilnot commission and I am grateful for the kind remarks made about our report in this debate. I am, naturally, disappointed that the Government have chosen to postpone until April 2020 the implementation of our proposals, which were set out in Part 2 of the Care Act 2014.

I start by asking the Minister: what happened in the spending review to the £6 billion set aside for implementation of the Care Act? As far as I can see, only about £700 million has found its way into the social care budgets.

I shall focus on the sheer unsustainability of all publicly funded social care on the path we are now set upon. This is a totally avoidable man-made crisis which has been going on for a long time. We set out in our report that social care funding going back to the 1990s—this has gone on under successive Governments—has not kept pace with the NHS, despite the fact that it was dealing with the same demographics. We said it was underfunded in 2010 by £1 billion and that things had to change. They certainly did—they got worse. Then, up to 2014-15, another £2.5 billion disappears from the social care budget. A Parliamentary Answer to me on 24 November this year by the Minister shows adult social care spending dropping from £17.19 billion in 2010-11 to £15.51 billion in 2014-15, in constant prices and with NHS transfers included. We can debate the precise figures but before we start the next financial year, there is a black hole something north of £3 billion in social care budgets for publicly funded social care. That will get worse with the arrival of the national living wage, which I support, which is estimated to cost more than £300 million in 2016-17 and more than £800 million a year by 2019-20.

What have the Government done in the spending review in response to this financial conundrum? They have promised an increase in the better care fund of about £1.5 billion. However, the small print suggests that little of this money will arrive before 2018-19. As others have said, councils will have the power to raise council tax by 2% a year from next April without a referendum. That is a great idea. However, the Institute for Fiscal Studies suggests that, even after four years, the best that will have done is to get the annual increase up to somewhere approaching £1 billion.

We also have to accept, as the Institute for Fiscal Studies has pointed out, that there will be enormous geographical variation in the way that precept is applied and in the amount of money it will produce. Will there be any smoothing mechanisms after April 2016 regarding these precepts?

Of course, councils could cut other services to fund adult social care, but they have already put £2.5 billion into social care from this source since 2010 and the departmental expenditure limit for local government is to be cut by a further—wait for it—56% by 2019-20. The Government seem to be betting the farm on local retention of business rates to plug the gap, but we will not know how much this will produce until a consultation on retention is undertaken. It looks to me as if the funding hole in adult social care gets worse and worse in the next two years.

The results of this continuing funding failure are that eligibility criteria continue to be tightened, payments to service providers shrink further and standards of services decline, sometimes dangerously. Some 400,000 people have already left local authority-brokered care over the last four to five years. Self-funders in care homes are now subsidising publicly funded residents in the same homes by up to 40% more than councils are willing to pay. Another recent parliamentary Answer to me by the Minister shows the number of registered residential care homes declining by about 1,100 to just over 17,000 between April 2010 and April 2015. Occupancy is dropping in many homes, and some sources say there are around 60,000 empty care home beds. There are plenty of beds—just no money to buy their use.

Providers are leaving the sector or concentrating on self-funders only, or on higher quality and higher-price offers. The financing models and backing of some big providers now look very fragile. You need do no more than read the financial pages to see this. There is no capacity in the system to cope with another Southern Cross failure. Will the Minister say whether these problems in the care home sector feature in the Department of Health’s risk register?

I do not have time to say much about the knock-on effect on the NHS. Some 20,000 people are now almost a permanent stock awaiting hospital discharge, and the figure can only get worse. If there is a collapse in the residential care home sector, the NHS becomes the carer of last resort. That is an inevitable consequence, and that is not the only factor for the NHS. This will eat up a lot of the resources that the Chancellor has already put, or has promised to put, into the NHS and it will knock Simon Stevens’ five-year forward view seriously off course.

Near where I live, a rather beautiful Georgian house recently collapsed because the misguided owner had hollowed it out so much. The collapse has put in jeopardy the survival of the next-door neighbour. This strikes me as a rather good analogy for what is happening to adult social care.

My Lords, I also thank my noble friend Lady Wheeler for securing this debate. When two years ago the Government committed themselves to capping the cost of care, the Health Secretary said that the policy would create,

“certainty, fairness and peace of mind”.—[Official Report, Commons, 11/2/13; col. 592.]

Both the summer postponement of the cap and our debate today demonstrate that those pledges are just a distant hope. True, the challenges the Government faced were vast. Social care was an unreformed, unsustainable system. For some, social care meant losing all their savings. For others, it meant inadequate homes, or worse. A growing number were denied support altogether.

The Care Act was a serious attempt to address these issues. It was not perfect but it put a limit on financial risk and set clear guidelines. However, five years after Dilnot, we find that 400,000 fewer people now receive social care and 1 million more elderly people have unmet needs. Care home providers warn of bed reductions and home closures. The only place where the cost of care has been capped seems to be the spending review. After all, we know that the cost of care is growing for those in need. The threshold at which you must pay the full cost of your care has now been frozen for five years. This care creep means that more and more pensioners are losing the right to any help with social care every year. Those who still qualify for some support have seen their bills increase by almost 50% since 2010.

We know that pressure is growing for carers. Since the turn of the century, 1 million more people have become unpaid carers. The number of carers doing 20 hours of unpaid work each week is up by over a third. The LSE estimates that a third of a million carers have left the workforce altogether.

We know that the burden of care is falling on our health service. Cancellations of urgent operations in the NHS have almost doubled in just two years. The reason? Patients cannot leave hospital if there is no care at home. Just last week NICE told hospitals to appoint a discharge co-ordinator to try to get patients out of NHS beds. That is money being spent in the NHS to deal with the care cuts.

We have heard the Government’s response to these growing stresses in the system. They say that councils can increase taxes, which is welcome, of course. However, you cannot fund national social care fairly with a system that allows Wokingham to raise twice as much per head as Birmingham. Next, the better care fund is being increased—but only in two years’ time. We shall wait and see. Finally, the care cap is being delayed, as many people have said, saving £6 billion. The truth is that the savings from delaying the cap will come from the assets of those in care. With no care cap, more family homes will become deferred payments for social care. Self-funders will still get no support for five years, even if eligible for help.

I accept that there are no easy answers. Many of these issues dogged the last Labour Government as well. Nor do I think you can build a strong social care system on the basis of unsustainable borrowing. Ultimately, if we want decent social care, we must pay for it. I will highlight two ways in which we could do so. First, it is bizarre that while we are making huge cuts to social care, we are increasing pensions via the triple lock. The Government’s actuaries say that the triple lock already costs an extra £6 billion a year. That is the same as the care cap. Politically, the triple lock may seem untouchable. But if those excess pension rises were used to fund social care, we would be changing only how we help our older citizens.

For a longer-term solution, we must examine the broader pensions and tax system. One consequence of delaying the care cap is that for the next five years anyone who withdraws their pension faces the risk that their nest-egg will be snatched to pay for social care. This could be the next pensions scandal. However, it also suggests an opportunity. The Government are reviewing the tax arrangements for pensions. If pension funds are to be truly flexible, surely we can encourage savers to use these savings to support their care needs. Why not make using your pension to pay for social care tax-free? To help create a save-for-care culture, we could offer younger people “care ISAs”. We could even cut tax-free allowances for the wealthy to fund incentives for people on lower incomes to save.

Finally, the Government have hinted that they might move to a “tax first, exempt later” pensions policy. This would give an immediate, if temporary, increase in tax revenue. It would make sense to use such a windfall to fund a transition to an integrated health and care service. I would be interested to hear from the Minister if such approaches are being considered in the pensions review. Clearly, finding money in an austere age requires creativity but, as my noble friend Lady Wheeler made so clear, social care desperately needs resources. Last year we agreed on the right ends; this year our ambition must be matched by means.

My Lords, I declare an interest as chair of the Social Care Institute for Excellence and as a vice-president of the Local Government Association. I want to begin, as others did, by thanking the noble Baroness, Lady Wheeler, for giving us the opportunity to have this debate. It is not only timely; many of us probably feel that it is long overdue.

I hope my new-found friend on these Benches, the noble Lord, Lord Filkin, will not be upset if I say I shall try to avoid using words such as “crises”, “disasters” and “catastrophes”, though it will not be easy on this occasion. For many of us, the condition of the care sector in this country is one of the most pressing and serious issues facing us at the moment. It has increasingly serious consequences, especially for older people with limited means. As other noble Lords have said, this is a people issue. My worry, quite simply, is that the Government appear not yet to have a convincing strategy for resolving the issue.

Others, not least the noble Baroness, Lady Brinton, have referred to the perfect storm facing the sector. The living wage—necessary though it is to raise the status of care workers—will impact on the economics of care provision. Those now in residential care tend to have multiple, complex conditions which require intensive support. The huge reductions in local authority budgets cut the number of those in receipt of adult social care by 28% between 2008-09 and 2013-14 and forced local authorities to drive down the price they were able to pay providers. What is not yet fully grasped by the great British public is that those who can afford to pay are now subsidising those who cannot. Self-funders are now paying an average premium of 40% for their care.

For all the rhetoric, the vanguards, the pioneers and the ring-fenced budgets, there is still insufficient integration of health and social care around the client. The noble Baroness, Lady Brinton, gave the example of legs. I think she will also remember the example of an assisted bath; is it a social care assisted bath, or is it a health assisted bath? How did we get into this situation?

The CQC has warned that a third of care providers require improvement, while the five largest providers have warned of significant failure in the next two years. These are the facts that have shaped the current reality. It is a reality highlighted recently by the latest survey carried out by LaingBuisson which shows that, for the first time since 1990, in the six months to March, more older people’s care beds have closed than have opened, with a net loss of 3,000 places. Every loss—every one of those 3,000 places—increased pressure on a beleaguered NHS. As the noble Lord, Lord Filkin, pointed out, those are the same facts that, this week, led the chief executive of Care England, Martin Green—a man who I know does not overstate his case—to advise care providers to start thinking clearly about how they manage their exit from publicly funded services. Already, three of the largest providers have signalled their intention to exit publicly funded home care. Meanwhile, in the last week, I have met local authority chief executives who are looking seriously at whether they need to re-enter the provider market to protect places.

This is, by any means, a serious situation, but is there a way out of it? Last year, I sat on the King’s Fund commission—which has been referred to by several other noble Lords—looking at the future of health and social care. We concluded that the current arrangements were no longer fit for purpose and that there needed to be a single budget for health and social care, with a single commissioner. After all, as the Chancellor said in his Statement in the last couple of weeks, the NHS cannot function effectively without good social care. They are interdependent. We also recommended a commitment to spend 11% to 12% of GDP on health and social care by 2025 and suggested what we felt were very practical ways for how this could be resourced, not least by rebalancing resources between the poorer and better-off pensioners. Again, others have referred to this but we felt clearly that there needed to be further investment in the social care sector. I, too, might ask: what has happened to the Dilnot money?

Last month, we revisited our recommendations a year later and reluctantly concluded that things had got worse, not better, and that there was still no coherent strategy to address the problem—not least, the need to stabilise the care support sector. Since we published that follow-up, it is true that the Government have responded by allowing local authorities to levy a precept of 2% to fund social care but, as many others have said, that is nothing like the sum needed to make good recent losses. The poorer authorities with the greatest need will of course not benefit most from that proposal. Again, the need for a convincing, comprehensive strategy is even more urgent.

I said that I would not overstate the case, and I will not. I will merely read the concluding paragraph of the King’s Fund commission’s most recent report. If we take no action, the future looks like this:

“More people in need receiving no support at all. Fewer people receiving publicly funded social care. Care home providers closing in the face of rising demand … companies that provide care in people’s own homes leaving the publicly funded market. Individuals and families who are unlucky enough to need high levels of care continuing to face enormous, and uncapped, bills. Staff shortages leading to a rise in abuse and neglect as good people”—

and they are good people, who are no longer able—

“to deliver good care. And further pressure applied to the NHS that in turn is likely to lead to declining standards of patient care”.

That, surely, is a future that none of us would wish for, but it is a future that is upon us.

My Lords, I, too, thank my noble friend Lady Wheeler for introducing this debate which, before I make my contribution, gives me the opportunity to rectify an unintended oversight on my part. In the debate earlier today on legal aid, I omitted to declare an interest as an independent member of the business oversight board of the Law Society. I would like to correct that omission now, with my full apologies to the House.

I would also like to declare for this debate that, as in the register, I am the president of the Abbeyfield charity for the provision of residential housing for elder members of the community, founded 60 years ago next year by a young man who came out of the Guards after the Second World War and felt that he wanted to put something back in. He identified that loneliness was a problem we were going to have because of the loss of our young people in the Second World War, so we started what has become a unique charity. We have 8,000 residents in 500 homes, and 4,000 volunteers. Our residents live as a family, independently within our homes, but come together twice a day for their meals. This model is unique.

This debate is about quality and viability. I would like to spend a few moments talking about quality because, as the right reverend Prelate the Bishop of Bristol said, this is really about people. I sometimes imagine what it must be like to work in a care home when we see all the bad stuff in the press, and how stigmatised they feel. Yet day by day, an overwhelming majority are trying to do a decent job working with older people. But the hidden message in the stuff we get in the press is that these are pretty depressing places.

I certainly agree with my noble friend Lord Lipsey, as I often do, about the image of residential homes too often being the wrong image. When I go into Abbeyfield homes I come out almost walking on air, because the joy in those places, and the way people feel they are living what is the end of their lives, is down to the quality of care they are receiving. It is not surprising that we have the most centenarian people of any housing or care setting. I sign letters of congratulation every month, and so far the oldest person is 110. So quality is important to the lives of these people, and being in the community is essential. We have something called Coping at Christmas, when any older person can come and have Christmas lunch and stay overnight—it is all free. It is about working in the community and it is about people.

Because it is about people, Abbeyfield decided in April last year to pay the living wage. We now have 15% less staff sickness absence and 15% less staff turnover than the average in the care sector. It is not surprising, but it shows the positive effects this can have. Of course, it is expensive and as far as we are concerned the whole sector needs to look at new models, and we need Government support to do that. The financial crisis in the sector—and it is a crisis—is overshadowing everything else good that is going on. We cannot allow that to happen.

We are building five new special dementia homes, which are leading the way. Given the financial crisis, do we go ahead and do that? We do not have any public funding—we are doing it out of our own funds. I am sure we will go ahead, but it raises questions and, as we have heard, there is less provision than there was. We have a scheme called specialist supported housing whereby retired elderly people who do not necessarily have to be in nursing care can be given specialist support, yet it does not qualify for supported housing grant. Why? It is because it is not regarded as a priority. Will the Minister consider supporting more of that? It is cheaper for government but we are not too bothered about that; more importantly, it is cheaper for us and better for our residents. It ensures that they live longer, fuller lives.

For his 95th birthday, we arranged a parachute jump for one of our residents. I could give many such examples. It is important that we do not lose sight of the fact that there is joy in the later years, and it is our responsibility to make sure that people enjoy those years.

The second element of this debate is viability. We need a development programme that addresses the issues that are challenging society, such as demographics, living longer and more people requiring such support. That means looking at different models, not just the standard model we have had so far. The Dilnot report showed the way.

We are often told in debates in this House that we have to agree to a particular policy because it was in the manifesto. Yet this was a central manifesto promise and the Government went back on it within months of being elected. That is unacceptable, and the Minister needs to answer this point. What happened to the £6 billion that was put on one side to fund this? What is it being spent on? Why cannot it be made available, even if the whole of the Dilnot cap is not to be applied?

This is an important debate that we will continue to have because the issues will not go away. They are not party political issues but issues about our community and the way we treat our older people when they retire. I hope the Minister can answer some of the questions put to him today.

My Lords, I, too, thank the noble Baroness, Lady Wheeler, for giving us the opportunity to debate these issues, but I have to add the word “again”. My noble friend Lady Pitkeathley smiles at that. She coined a lovely expression in a previous debate; she referred to “the usual suspects” turning up. They are mostly here again; one is even on the Woolsack. The usual suspects are turning up and we have some new friends who will join the band. That is a good joke, but the disgrace is that we have to keep doing it. We have been doing it for more than a decade, often on the same critical issues. I pay tribute to my noble friend Lady Pitkeathley’s analysis of the need for the integration of health and social care services. This is the nub of providing good care. It will not deal with all the financial problems, but I will come back to that in a moment. Here we are again, and I will return to this point.

I should declare an interest as president of Scottish Care, which is the care home owners’ association. I have had briefs from Care England and Four Seasons Health Care. The most chilling part of the brief from Care England has already been mentioned. The chief executive is advising his members to consider the possibility of getting out of public sector provision. That is the size of the problem, and it is frightening.

A year or two back, Southern Cross Healthcare turned up its toes and gave up. The rescue that was mounted by the community of care home owners and groups of care homes was magnificent and meant that many of the clients of Southern Cross Healthcare did not have the great worry and concerns that otherwise they would have had about where they would be the next week and the week after. It was done by the community of care home providers, yet I doubt we could do it today. My first question to the Government is, do they have an analysis of the risks of that happening, of the risk of financial fall-out in the sector for reasons already given and of the risk if people are effectively on the street? I have seen at close quarters one care home close because of a fire. It was horrendous. It was 60 beds having to be vacated virtually overnight, but the troops rallied round. However, the question is, could we do it again?

In the few minutes I have left, I want to focus on viability. There are at least two key factors for viability, in addition to the funding issue that keeps recurring. The viability factors I want to point to are a high percentage of bed occupation and how much is paid for those beds. Unless there is, first, continually a high percentage and, secondly, confidence that the contacts currently being entered into with local authority commissioners will continue in future you cannot borrow money—it is difficult anyway—and you cannot get investors to put money into the system, so there needs to be both those things as well as adequate funding.

Why are these two factors so important? There is a shortage of cash in the public sector and therefore commissioning from local authorities is falling away. The criteria are tighter, and we have to live with that, apparently. There is also a malfunction in the conjunction between social care and healthcare, as my noble friend Lady Pitkeathley pointed out. We have talked about this for 20 years. In my 15 years in this House, this has kept coming up and yet it has not been solved. Oh, there are steps being taken. We will hear about these, doubtless. But it is not being dealt with adequately.

Let me give one or two facts and figures. We all know about what is referred to as bed blocking. That is at the extreme end of the malfunction, but of course there are many people—again referred to in the debate earlier—who are in hospitals and hospital beds, who neither want to be nor need to be. As for the figures, we have had 20,000 mentioned, 30,000 mentioned; these are the real numbers. This is not good enough. Put alongside that the fact that the 10 largest care home providers in Britain have 10,000 empty beds of high quality and providing nursing care. Those two numbers suggest something, do they not? We have to deal with the problems.

Add to that the further point that a delayed transfer—a bed blocking—will fill a bed that is costing between £1,750 a week up to £2,500 or £3,000 a week, while you can get good care home provision with nursing care provided for between £800 and £1,000 a week. That is half the price. Just put all these numbers together. I am not doubting the capacity of the Minister and his colleagues to count. Indeed the Chancellor of the Exchequer deals a pretty good hand of numbers himself; he could do well in Las Vegas. But actually putting these numbers together suggests obvious ways to go. Why are we not doing that? That will not solve the whole problem but it will begin to deal with the need to provide an adequate quality of care: how people want it, where they want it and how they need it.

My Lords, I, too, thank the noble Baroness, Lady Wheeler, for allowing us to have this very long-awaited debate. There is so much to say about this issue that one hardly knows where to start. So many excellent points have been made in this debate. I think we all agree with the right reverend Prelate the Bishop of Bristol that this is about people. We must always bear that in mind.

The main point I want to make is that failure adequately to fund social care does not just impact on those people whose needs are currently not being met at all or only partly so, and their families, important though that is. This failure affects all of us now and in future. Although we will not all need social care in future, we all at some time will need the services of the NHS. The failure to deal adequately with social care is already impinging on the sustainability of the NHS and will continue to do so to an even greater extent in future unless something is done. The Government must not plan on a budget surplus by 2020 if it is at the expense of vulnerable old people in the short and long term, and the viability of our precious NHS which serves us all. It is simply not right and not logical. If they fail on social care, they cannot claim that the NHS is safe in their hands.

As the noble Baroness, Lady Wheeler, outlined, the unanimity among providers about the facts are impressive so there is no doubt about the impact social care cuts are having on services. In a recent survey from the NHS Confederation, 99 % of NHS leaders said social care cuts are increasing the pressures on the NHS and the most prominent impact noted by four out of five of them was the increased time people remain in hospital. This is not new, and many noble Lords mentioned it. For a number of years now, the Government have been alerted to this and yet spending pressures continue to be tolerated. The 2015 spending review finally recognised the funding gap but the remedies are totally inadequate. The Five Year Forward View developed by NHS England and the other NHS arm’s-length bodies is clear that plans for addressing the NHS funding gap are based on an assumption of social care services being sustained. So the ability of the NHS to make unprecedented savings in this Parliament relies on the Government addressing the social care funding gap. If the Government choose not to close that gap, they are choosing not to support the delivery of the Five Year Forward View.

As my noble friend Lady Brinton said, directors of adult social services estimate a £4.3 billion gap by 2020-21. The spending review proposals are unlikely to cover this or the inevitable additional costs of the introduction of the euphemistically named “national living wage”. I absolutely agree with the comments of the noble Lords, Lord Turnberg and Lord Lipsey, about that. Neither will it meet the future growth of demand due to our ageing population. In addition, as we have heard, the Government have back-loaded the better care fund until towards the end of the Parliament. By that time the system will have collapsed—the money is needed now.

Local authorities and social care providers are somehow expected to fill the gap. Many local authorities have prioritised social care. We heard from the noble Baroness, Lady Redfern, about North Lincolnshire. I think that many of us will want to move to Utopia, otherwise known as North Lincolnshire, before we get much older. It currently accounts for 35% of its total budgets compared with 30% at the start of the last Parliament. Spending on adult social care has already been reduced by £4.6 billion, about one-third of the budget in real terms. There is a limit, which we are fast approaching, to how long this can go on.

While all this is happening, vulnerable people are missing out. The reduction in spending has resulted in eligibility thresholds being tightened so that often only the most severe needs are met through state-funded social care. In total, around 400,000 fewer people have their assessed needs met. If they reach crisis point, they will have no choice but to turn to the NHS for support. Then they are more likely to stay in hospital for longer because it is too risky to transfer them home without the support of social care services. A social worker I know said to me recently that the problem is that social care funded by the state is used mostly by poor people who do not have a voice, and Governments therefore feel that they can get away with not doing anything. That is the impression that the Government’s failure to act has given to people out there.

I wish to raise another issue relating to the quality in the sector. I agree with all noble Lords who talked about the importance of quality, especially most recently the noble Baroness, Lady Dean. It is about the new arrangements for funding student nurses. I understand that in order to remove the cap on student nurse places—and, by the way, remove the debt from the Government’s books—the Government plan to remove their bursaries and fees and offer student loans instead. We certainly need more student nurse training places since there are already four applicants for every place. However, any expectation that hospitals would pay off the debt of newly qualified nurses who would go to work for them is unrealistic in the extreme. I am told that while there is going to be some scope for NHS provider organisations to reimburse staff for their training, it will be completely at the discretion of that organisation. The group of HR directors that I heard from said that it would happen very infrequently, due to cost. This does not mean that the occasional exceptional candidate may not be reimbursed, but, without funding through the NHS tariff to cover staff training, it would represent an exceptional cost. The expectation is therefore that private healthcare providers and care home operators would not reimburse either, but, again, could do so at their own volition.

Given that the margins in social care provision are so tight, I am concerned that those nurses who would like to work in that sector will have a problem. I cannot see any care home providers being able to offer this pay-off, yet those who provide specialist nursing services really need well-qualified nurses to supervise them or they will not be safe. It is a matter of maintaining quality. What does the Minister suggest is done about this? Following the spending review, there are so many additional costs that will already have to be met by providers of all kinds that I would be very surprised if any of them were able to reimburse a nurse’s training costs. These vital professionals cannot expect to be highly paid when they qualify, so where does the Minister think they will get the money for, in effect, an additional 9% on their income tax after qualification? This is short-sighted and will do nothing to increase the number of UK nurses, especially in the lower-paid social care service, where I anticipate the highest impact of this change. If you add all this to the announcement in the spending review that care homes, along with other providers, will have to pay the full cost of their mandatory CQC inspections, you have a system that is ready to implode.

What steps are the Government taking to ensure that the proposed 2% levy per year on council tax in the form of a social care precept will deliver the money required to ensure the right levels of social care and do so equitably? The authorities that need the most additional money have the least ability to raise it through taxes. When will self-funders get some certainty enabling them to plan for their old age? I echo my noble friend Lady Brinton in asking where the £6 billion saved from the failure to introduce all the Dilnot reforms has been distributed. It certainly has not gone into the social care budget. I am just as curious as the noble Lord, Lord Warner, to find out where this amazing disappearing £6 billion has gone. How will the Government ensure that newly qualified nurses will not be deterred from entering service in the social care sector?

Finally, I am very puzzled about one thing and I wonder if the Minister can help me. All the acute hospitals are in deficit and somehow the Government manage to bail them out. I wonder why that is when they are not prepared to bail out the social care sector. Perhaps it is because they have already spent the money and, of course, next year some of the extra money already announced for the NHS will have to go towards next year’s projected deficit as well. Perhaps it is because local authorities and private and voluntary care providers cannot spend money that they have not got and therefore it cannot be refunded. However, it occurs to me that if the Government were prepared to spend that couple of billion pounds every year doing something about social care then maybe we would not have such a big deficit in the NHS at all.

My Lords, it is a great pleasure to wind up for the Opposition and to thank my noble friend. It has been an excellent debate; a number of very challenging questions have been put to the Minister and we look forward to his response. There can be no doubt that the viability of the residential care home sector, the failure to implement Dilnot and the failure to raise the means test are causing great anxiety to thousands of people and their relatives throughout the country. As the noble Baroness, Lady Walmsley, said, the lack of viability of the residential care sector is but one part of what one has to say looks increasingly like a dysfunctional health and social care system.

When the Minister replies—because he has done it recently—he will no doubt talk about the Autumn Statement, ministerial vision and the potential of the new models of health and social care that the Government are putting an awful lot of eggs into, without, I have to say, any evidence that they will be able to enable a response to the challenges. The gap between ministerial rhetoric and reality is striking. There is no problem with a five-year forward view. This vision is described as empowering patients, their families and carers to take more control over their own care and treatment. It is a future that truly integrates health and social care, at last puts mental health on a par with the rest of the system and, crucially, prioritises prevention. That is a fine vision and, in the absence of any vision for social care, I assume it is the Government’s statement of social care policy as well.

However, it is impossible for me to see how that will happen in the context of a Government determined to bring the share of government spending down from 41% to 37% of GDP. It is always good to wait until a few days after an Autumn Statement to get the real analysis of what is happening in spending. The analysis I have seen from the King’s Fund is that for the next five years the actual growth in the health service will be 0.85% per annum. So we are just continuing the misery of the last five years. We know that the historic growth level in the NHS is 4%, and that is what is needed to meet these challenges. It is striking that, of the much-vaunted extra £8.4 billion, £4.6 billion has come from other parts of Department of Health expenditure, including Health Education England, the nurse bursaries, capital and public health. You also have to add in the £1.1 billion of pension costs due to the changes in the pension rules from next April, for which no additional money has gone into the health service.

The King’s Fund projection shows that in this five-year period social care will be left with an annual cut of 0.3% per annum. Therefore, even though it is back-loaded, it is starting off with a very challenging situation. There is then the cost of the living wage to be added to the negative growth. I cannot possibly see how the health and social care sector can meet the challenges of the demographics that it is facing, with the huge population growth that we have seen in the last 10 years projected to increase by another few million over the next 10 or 15 years, as the noble Lord, Lord Filkin, said.

When it comes to the residential care sector, there is no need for me to repeat the figures that other noble Lords have referred to, but I thought that the ResPublica report got it in a nutshell when it talked about the unsustainable combination of declining real-terms funding, rising demand, increasing financial liabilities, a funding gap of £1 billion by 2021, the potential loss of beds and, of course, the knock-back impact on our National Health Service. I had not seen the advice from Care England. That advice is very sobering indeed when it comes to the whole viability of the residential care home sector.

It seems to me that the result of all this will be that, far from the models being implemented, we will see the perverse incentives mentioned by the noble Baroness, Lady Brinton, getting worse and worse because of the tension between the free-at-the-point-of-use NHS and means-tested social care. That is why integration is so difficult. Until we get to grips with that divide, we will never achieve integration of services. As my noble friend Lord Turnberg said, NHS hospitals are the providers of last resort. If the residential care sector goes down, residents will end up in NHS hospitals. I remember those dreadful long-stay wards that NHS hospitals used to have, and I am afraid that they will be recreated unless we can sort this problem out. Many reports are coming out but one report produced today by the Nuffield Trust shows that 3.6% of patients took over a third of all bed capacity in acute hospitals, and the trust expects the position to worsen in the years ahead. That is the challenge that our system faces.

There are about 10 questions from my noble friends to which the noble Lord, Lord Prior, is being asked to respond. The first, on the positive side, was asked by my noble friends Lady Dean and Lord Lipsey. Can we increase public awareness of the importance and success of many parts of the residential care sector and the good work done by the staff? My noble friend Lady Dean gave a wonderful example of the sector working at its very best.

The second concerns the general view that, essentially, the care cap will never be implemented. Can the Minister say that it actually will be implemented, and when? Thirdly, does he agree with his noble friend Lord Lansley about the sense in going back to Dilnot’s original recommendation about the size of the cap? A number of noble Lords mentioned the £6 billion. Noble Lords look quizzical whenever it is mentioned, but that figure has appeared in government papers and projections. I think we are right to ask what on earth has happened to it.

The noble Lord, Lord Sutherland, asked what analysis the Government have made of the risk of closures. What are their contingency plans? How will we avoid the dreadful situation of very frail older people having to be moved from one home to another, which we know can have appalling effects on life outcomes? When will the means test limit be increased as promised? The Government made a deal. They made a deal with people that the care cap would come in in 2016 and that the means test would be increased. Many people made financial provision on that basis. Surely the Government have a moral responsibility here to deliver what was promised. Does anyone remember the Prime Minister saying no one would have to sell their home? What has happened to that?

There are two final things. First, my noble friend Lord Bhattacharyya asked about incentives to encourage people to build up funds for their care. What has happened to the much-vaunted insurance market? It was supposed to come to the rescue and be complementary, in a sense, to the introduction of the care cap. Finally, and overwhelmingly, my noble friends Lady Pitkeathley and Lord Turnberg and other noble Lords talked about the need for a coherent, long-term strategy. Either we go into absolute crisis in the next year or two, with huge knock-on impacts on the rest of the provision of health and social care, or the Government have to get a grip and actually start going for a long-term strategy. I hope the Minister will announce that tonight.

My Lords, I am slightly relieved—the noble Lord, Lord Hunt, said he had 10 questions but he got to only six, I think.

I thank the noble Baroness, Lady Wheeler, very much, as other noble Lords have done this evening, for securing this important debate. I think we will be having this debate fairly regularly over the course of this Parliament, and we should, because lots of ideas come out of these debates, which I can assure noble Lords are taken very seriously. I shall pick out a few points at the beginning.

Many noble Lords, including the noble Baroness, Lady Wheeler, mentioned Four Seasons, about which there has been publicity. I cannot comment on that particular case, but the CQC’s market oversight function means that it is looking at the finances of all these large care providers very closely and if it has a concern it will liaise confidentially with local authorities.

The noble Baroness, Lady Wheeler, also talked about the spending round. I think it is worth saying, despite the apocalyptic comments from the noble Lord, Lord Hunt, that this was very much welcomed by Simon Stevens, chief executive of NHS England, who felt that it was a good settlement. Although the King’s Fund, the Nuffield Trust and others have been quoted, on balance, most independent commentators feel that this was a better settlement than we had a right to expect.

My noble friend Lord Lansley made an important contribution and reminded us of the importance of the Care Act. He thanked Paul Burstow, as did other noble Lords, for his important role in that Act. He talked about integration and personal budgets, which are a very important aspect of the future strategy. Noble Lords have asked about the future strategy. Personal budgets and integration will be very important parts of any future strategy. He also mentioned the Dilnot situation. I will come back to Dilnot, if I may, a little later.

The noble Baroness, Lady Brinton, talked with passion about the care her mother had received over 10 years. This is important, and others have mentioned it as well. In her mother’s case it was a combination of domiciliary care, residential care, respite care and NHS hospital care. When it works, it works incredibly well and we need to be careful in talking about the undoubted problems in this industry, which we all know of. Many providers of residential healthcare and many staff who work in that industry do a fantastically good job. The noble Baroness referred to the better care fund, which is a big stake in the ground and is bringing together funds from the health sector and from social care. Pooling those funds is the right way forward.

The noble Lord, Lord Turnberg, talked about the dependency of the healthcare sector on social care and vice versa, and how looking at the two in isolation made no sense at all. He asked about our response to David Dalton’s report on the development of chains and more integrated care. I can tell him that three of the vanguards are proceeding very much along the lines described in David Dalton’s report. I would refer also to the devolution that is happening in Manchester, where there are some serious comings together, not just within healthcare but between healthcare and social care. Devolution, again, will be a big part of any strategy as we go forward.

The noble Lord, Lord Filkin, had a number of concerns—in particular about the future supply of a skilled workforce. I believe that the national living wage and the care certificate that came out of the Cavendish report will both be helpful in improving the opportunities for staff in the sector. He referred to the hidden misery in social care, which other noble Lords have also mentioned, and I think that it is true that the NHS, because of its greater exposure and the love that the people of this country have for it, gets the lion’s share of available resources going into health and social care, which is something that we need to be conscious of. It is certainly something of which Simon Stevens is particularly conscious.

The right reverend Prelate the Bishop of Bristol importantly reminded us that statistics are all very well but these statistics are all individual people. He said that he looked out over Winterbourne View, where there was appalling care. Of course, that was not a result of lack of resources but the result of a rotten culture in that organisation. He also talked about family disintegration. He said that residential care is sometimes regarded as a place of last resort, whereas, as we know, much residential care, far from being a place of last resort can be a wonderful place for people to spend the end of their lives.

My noble friend Lady Redfern talked about the reality of the Care Act in north Lincolnshire and filled us all with some hope that it can be made to work and that the community can come together. She talked about the five community well-being hubs in north Lincolnshire and the better care fund being used to bring together social care and healthcare, and the importance of partnership working, including housing, which other noble Lords have mentioned.

Earlier this week, an interesting speech was given by Duncan Selbie, the chief executive of Public Health England, who said that when it comes to health the NHS touches just the top of the pyramid, but, actually, health comes from employment, education, a prosperous economy and, of course, good housing. The noble Lord, Lord Lipsey, raised with me separately his views on how we might be able to reallocate some of the money currently going through CHC, which is something officials are looking at. I can assure him that it has not been lost and we are looking at it. The noble Lord is very concerned about the postponement of Dilnot. I will come back to that subject in a minute. He also mentioned “Alive, Alive Oh!”—Diana Athill’s story of when she went into residential care, and how that is sometimes a remedy for loneliness and lack of support. Of course, good homes where there are good levels of activity and high levels of comfort can be wonderful places to live.

I think the noble Baroness, Lady Pitkeathley, said that she had been working, or involved, in the care industry for 40 years, and had been in this House for 18 years. She reminded us that, looking back on what those local authority homes were like 30 or 40 years ago, many of them were terrible. The split between commissioning, or purchasing, and provision has undoubtedly been a very good thing, in the main, and things are a lot better than they used to be. The noble Baroness also reminded us that for the 18 years she has been in this House we have been talking about integration—yet in her view we are still waiting for it. I respond to that by saying that the five-year forward view is a big step towards greater integration between health and social care.

The noble Lord, Lord Warner, raised a number of important issues. I shall have to pick out some of those and write to him later. In particular he talked about the fragility of the big providers and the problems in care homes. One of the things that the CQC market oversight does is to try to identify early some of the problems that may arise, such as those that arose at Southern Cross in the past. He also said that it is one thing to identify a financial issue ahead of time, but the question is: is there the capacity in the industry to pick up the fallout from the collapse of a major provider? The noble Lord, Lord Sutherland, also raised that point.

The noble Lord, Lord Bhattacharyya, raised a number of points about the importance of the million unpaid carers. He also asked, importantly, whether we could be more imaginative about financial products—whether those be care ISAs or other savings and pension products—which could help to meet the undoubted need for more funding in this sector.

The noble Lord, Lord Bichard, who as chairman of SCIE has a profound knowledge of social care, also talked about integration. He said that a third of the places inspected by the CQC are deemed to require improvement. It is important that at least we know that fact. This has not suddenly happened. We know this now because of the CQC inspection regime, which, particularly in social care, has been very much welcomed by the industry. The noble Lord said that Martin Green was not someone who overstated his case. But I think that occasionally Martin Green has been known to overstate his case; he has certainly done so to me in the past. However, his words of warning about the local authority-funded residential care market, as distinct from the self-funded care market, are not to be dismissed.

The noble Baroness, Lady Dean, talked about Abbeyfield—a wonderful care group—and the joy she feels when she walks out of one of its homes. She also mentioned an investment in five new dementia care homes. May I write to her about the particular issue that she raised about funding supported housing? I cannot give her the answer today, but I will write to her after the debate. She also made the interesting point that since higher wages have been paid to staff, sickness absence and staff turnover have both come down. Low wages and high turnover of staff have dogged this industry for years, with all the knock-on effects on continuity of care and training, so there is quite an important message there.

The noble Lord, Lord Sutherland, referred to the usual suspects. This debate has been well attended by the usual suspects and a few others. I suspect that the band of usual suspects will grow, rather than diminish, over the next five years. He made an interesting point about the number of empty beds in the nursing home and care home sector at a time when there are so many delayed discharges or people who should not be in acute hospitals. It is overly simplistic to say that there are 10,000 empty beds in that sector so we could therefore have 10,000 patients out of hospitals who could go into those beds. The fact is that those beds are often not the right kind of bed. They do not have the right nursing care around them or they are in the wrong place. Nevertheless, there is plenty more scope for acute hospitals to work much more closely with the acute sector.

I will pick up the points made by the noble Baroness, Lady Walmsley, and the noble Lord, Lord Hunt, in my speech, but I will write to the noble Baroness on the nursing care issues in particular. I would rather do that.

First, why have we postponed Dilnot? I must say that it is a postponement. We will come back to Dilnot in this Parliament. To be completely frank with noble Lords, it was postponed because it was felt that it would be too expensive to implement it now and that it would put too much pressure on local authorities. One of the priorities of this Government is to reduce the budget deficit and start repaying the debt that has accumulated over the years. Noble Lords may not like that very much and might have a different view from that, although it was the view of the coalition Government. That is our view and that is why it has been postponed. It does not alter the fact that the Government believe that the Dilnot report was outstanding and we accept the vast majority of its recommendations. Indeed, our decision to delay those reforms was welcomed by many in the sector. The Local Government Association in particular and others welcomed our decision as a real example of the Government listening to their concerns about introducing significant reforms at a time of financial challenge for local authorities.

I think the noble Lord, Lord Hunt, said that we like to blame local authorities—he says it was not him; someone said it. On the contrary, part of the Government’s strategy is to devolve more power and responsibility to local authorities. By delaying, we allow local authorities time to focus on delivering the important reforms to care and support under the 2014 Act, which came into force on 1 April this year, putting in the necessary groundwork to implement the funding reforms as successfully as possible in 2020.

The grant funding of £146 million made available in 2015-16 to support implementation of the cap prior to delay will remain with local government. I assure noble Lords that the decision to delay implementation was not taken lightly. The recent spending review reaffirmed our commitment to implement these reforms in April 2020, making funding available in 2019-20 to help local authorities to prepare for implementation.

I turn now to quality and the workforce. Delivering the outcomes that people want and need would not be possible without a sustainable care home sector capable of delivering quality care. We are taking steps to support the sector to continuously improve in this area. Noble Lords will be aware of the Care Quality Commission’s new inspection regime and will know that we are investing £115 million this year to support the training and development of the care workforce, including a national programme of support for registered managers, who play such a vital role in ensuring the quality of care homes.

I have talked about the CQC’s market oversight role, which is an important new development, and at other times I have talked about the importance of the new vanguard programme. I refer in particular to the six enhanced health and care home vanguards, where we now see GPs doing ward rounds around care homes and a much more integrated model between healthcare and social care.

I will just say a little bit about the money. Noble Lords will know that the Government are giving local authorities access to £3.5 billion of new support for social care in 2019-20. From April 2016, councils will be able to introduce a new social care precept, allowing them to increase council tax by 2% above the existing threshold. This could raise nearly £2 billion a year for social care by 2019-20. A number of noble Lords, including the noble Lord, Lord Warner, asked about smoothing payments and we will have to address that issue. I must apologise that I do not have time to finish what I wanted to say because of all the issues that have been raised. I wonder if it would be acceptable if I wrote to all noble Lords who attended this debate with what else I wanted to say and just apologise that I am timed out.

My Lords, I thank noble Lords for their contribution. I said in my speech that their experience and insight would produce a very thoughtful and thorough debate and a comprehensive picture of both residential care and the wider social care, and that proved to be the case. It is important to develop a clear view of the role we want the residential care sector to play in integrating social care and I hope this debate has helped that, particularly across the care pathway. There were a number of speakers on that theme. We have debated these things a number of times but this is the first time we have focused on residential care and I think that has been very helpful. Many noble Lords stressed that this debate was about people. My example of my local carer was very much in that vein and other noble Lords gave examples of good care in their own experience. That is very valuable and it is well to remember that. CQC underlines that there are many well-led homes that are caring, safe and efficient with trained and dedicated nursing and care staff, but equally it gives the other side of the picture and the problems that we need to address.

I thank the Minister for his thoughtful response. He did not have a chance to reel off some of the statistics I was expecting. I was particularly looking out for his comment on the assessment from the noble Lord, Lord Warner, that we have seen only £70 million of the £6 billion that was to be introduced for the social care cap. I did not hear that but he is going to write to us and that is very welcome. I was a bit disappointed that he was not able to give us some reassurances on the monitoring that is going on of Four Seasons and other care homes. I understand the need for confidentiality but I think we need to be reassured that the Government are keeping it closely under review, particularly the issue of replacement care. On the care cap, I am glad it is still a postponement. The Public Accounts Committee has called for an urgent and clear timetable on implementation and I think the Government ought to take heed of that. In my view the overall debate has shown the clear need for a strategic, ambitious, forward-looking strategy and I am pleased the majority of noble Lords supported that. With those comments, I beg to move my Motion.

Motion agreed.