Motion to Regret
That this House regrets the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) (Amendment) Regulations 2020 (SI 2020/469) and the lack of a long-term plan to ensure the financial sustainability of care homes.
Relevant document: 14th Report from the Secondary Legislation Scrutiny Committee
My Lords, the care sector has never been more in the eye of the storm than during the Covid-19 pandemic. I pay tribute to all in the sector for the care they have given to so many people, under huge pressure and at no little risk to the workforce. As my mother is in a care home, my tribute is personal and based on first-hand experience.
There is no denying that care homes have been dealt a poor hand during the crisis, which unfortunately is consistent with the long-standing neglect of the sector. We must do better and ensure that as we come out of the crisis, we bring long-term sustainability to care homes and peace of mind to those who live in them. This SI does not aim to do that. None the less, I welcome the proposed increase in the rate that the NHS pays to care homes to cover the cost of services carried out by a registered nurse.
The new rate follows a Supreme Court judgment in Wales, with implications for England. It has also been influenced by a challenge to the 2019-20 rate and the 3.1% efficiency gain assumed within that rate. The 2019-20 rate was subsequently revised and the rate for 2020-21 is built on that revision. Can the Minister explain what efficiency rate had been built into the new rate and whether it is realistic to expect care homes to meet those efficiency savings at this time, when their costs are going well above the inflation rate?
This is borne out by many in the sector. As Richard Adams, the chief executive officer of Sears Healthcare, a small group of care homes, reported to me:
“We are seeing people coming into our nursing homes much later in their life course. Their health care needs are multiple and complex and require very specialised nursing care in order for them to be able to continue to live and to die well.”
Unfortunately, there is very little recognition of this in the contract arrangements in place with clinical commissioning groups. Will the Minister review these contracts and ensure that care homes are adequately recompensed to provide this type of care?
Of course, care homes were already under significant pressure when the pandemic hit us. Covid-infected patients were moved from NHS beds with no consideration of whether the care homes they were sent to would be able to cope. The care sector was clearly a long way down the chain of command, as illustrated by the lack of priority given to it in relation to PPE, testing and the recording of deaths. The absence of reliable figures for deaths in care homes for many weeks was indeed telling.
At times the care sector felt deserted by the Government. The Association of Directors of Adult Social Services has said that the national handling of protective equipment for care workers was “shambolic”, with early drops of equipment “paltry” and more recent deliveries “haphazard”. Martin Green, the CEO of Care England, put it even more explicitly:
“From the start the NHS was prioritised … PPE was redirected away from care homes ... There was a clear instruction to empty hospitals in March to send people to care homes despite no testing for infection.”
When it comes to funding, £3.2 billion has been made available for local authorities to help respond to the Covid-19 pressures across all services, including adult social care, but a report from Care Providers suggests that funds are not making it to the front line in some areas, with learning disability services facing particular problems. As Care England has documented, overheads are rising as occupancy falls, with serious cash-flow implications. There is a risk that providers may become insolvent and collapse, or alternatively raise fees considerably. Over the weekend Age UK reported that some residents were paying a Covid-19 surcharge of up to £150 per week to cover extra costs. Does the Minister agree that this is a massive hike, and that it is unfair as self-funders are in effect subsidising council-funded places?
Richard Adams of Sears Healthcare has stated
“Future funding agreements for social and nursing care must include provision increased costs associated with … Purchasing additional PPE … health surveillance activities … Increased costs incurred by the need to flex staff in order meet the requirements of any self-isolation … Increased training costs in relation to infection prevention and control, correct use of PPE and outbreak management.”
Does the Minister accept this?
I am afraid that the experience of care homes in the last few months reflects the neglect that the sector has long experienced, and it is a damning indictment of this country’s failure to provide a solution to the funding of long-term care. We are in a vicious cycle: after decades of reviews and failed reforms, the level of unmet need in our care system increases, the pressures on unpaid carers grow stronger, the supply of care providers diminishes and the strain on the care workforce continues—and that is before the new immigration controls are imposed on so-called low-skilled workers at the end of the year. I want the Minister to say tonight whether the Government will soon publish their proposals to deal with the long-term challenge.
I thought Philip Collins put it very well in the Times on 14 May when he wrote:
“There are three ways to fund social care. We can wrap it into the NHS and fund it through general taxation, or perhaps a hypothecated levy. We can ask the individual to pay, drawing on savings which might be mandated through a social care auto-enrolment scheme or equity released from the family home. Or we could do some combination of those two options, which is what Dilnot suggested all the way back in 2011—the individual pays”
up to a certain level
“subject to means, and then the state steps in.”
Are the Government prepared to come forward with a concrete proposal? I certainly hope so. Fudge it, delay it, and we will continue to fail to deal with the fact of ageing and consign millions of people to a worrying and often miserable old age. We can and surely must do better than that. I beg to move.
My Lords, I welcome the opportunity to debate the social care sector, and I welcome the increase in rates that the NHS and CCG commissioning authorities will pay for nursing care. I congratulate the noble Lord, Lord Hunt, and echo some of his comments about the sector. What assessment have the Government made of the financial stability of firms promising to house the most vulnerable elderly citizens of our country for the rest of their lives? Is the department looking into the financial strength of care providers, with a view perhaps to reforming how they are funded?
The Centre for Health and the Public Interest’s 2019 study of 830 adult care homes found that 18 of the 26 biggest providers had corporate structures that separate the firm running the home from the ownership of the buildings, representing an estimated £1.5 billion of leakage in fees to pay interest, profit or rent. For the biggest five private equity-owned providers, the cost of debt per bed represented 16% of the weekly fee.
These operators are highly geared with expensive debt, following a number of corporate transactions that would not be permitted in many other areas. If you promise to pay somebody an annuity for the rest of their life, there are strict financial reserving requirements to back that, but it seems that when operating a care home, there are no such financial requirements. Indeed, there is a precarious position, particularly after the recent crisis, because care home operators were not paid enough to cover the costs of keeping people in their care home by local authorities, and therefore private payers—self-funders—had to cover the underpayments.
Is my noble friend aware of the recent study which showed that councils were paying private providers less than £500 per week, but that in the same local authority commissioning groups were paying £720 per week for a home run by councils? Therefore, there are significant differences in the amount that councils will pay for the same type of care. The regulator is supposed to ensure that council commissioning offers fair rates to care providers, but they are now struggling to make ends meet, particularly with the extra costs of PPE and so on forced on them by this crisis. Could my noble friend comment on this situation?
My Lords, these fees are a perfect encapsulation of the disparity between health and social care. Prior to the emergence of Covid, the social care sector was in crisis. Since 2010, local government finance has reduced by 50%, but statutory responsibilities have not. Local authorities have had staff reductions, to the point where there are senior directors, front-line staff and very few people in between.
On 25 February, the Department of Health and Social Care guidance told local authorities:
“It remains very unlikely that people receiving care in a care home or the community will become infected … There is no need to do anything differently in any care setting at present.”
On 14 May, the Health Secretary, Matt Hancock, stated that
“right from the start we have tried to throw a protective ring around our care homes.”
The public response was incredulity, because by that time there had been 10,000 deaths in care homes in England and Wales, according to the ONS—a quarter of all deaths. I repeat the statement from Martin Green, chief executive of Care England, who asked to
“see the evidence of what exactly the protective ring consists… and when exactly they instituted this protective ring”,
“we had our PPE distribution networks disrupted to send things to the NHS”
“why we had our primary care support withdrawn from many care homes?”
Why are they still waiting for it?
On 18 May, in their Covid recovery strategy, Our Plan to Rebuild, the Government pulled another fast trick. On clinical support, the strategy states that
“the Government is accelerating the introduction of a new service of enhanced health support in care homes from GPs and community health services, including making sure every care home has a named clinician to support the clinical needs of their residents by 15 May.”
But that should have been happening already under various pieces of legislation. In truth, the NHS abandoned care homes at their point of greatest need. Nevertheless, I ask the Minister: what progress has there been towards that 15 May deadline?
It is time for the Government to stop announcing new responsibilities for local government and start listening to local authorities about what they need central government and the NHS to do, so that there can be a joint strategy to manage Covid and its lasting impact on communities. Inadequate testing, little tracking and no isolation means that care homes will not be ready to withstand a second spike. They simply will not be able to provide what these older people desperately need.
My Lords, it is a pleasure to contribute to this debate in the name of the noble Lord, Lord Hunt of Kings Heath, on amendments to the NHS commissioning rates for the provision of NHS-funded nursing care to eligible residents in nursing homes. I declare my interests as outlined in the register, in particular as a registered nurse myself.
Prior to October 2007, there were three rates for NHS-funded nursing care, which were replaced with a single band for all newly eligible residents. The small number of residents who had been in receipt of the former higher band, prior to September 2007, have been protected and will continue to receive the higher band, unless their needs reduce. Therefore, the statutory nursing care funding for the majority of those entitled has increased to £183.92. This came into force on 20 May and will be backdated to 1 April. This is welcome.
The increase reflects the recommendations of an independent study produced by LaingBuisson into the 2019-20 rate. However, the research was conducted between November 2018 and February 2019, before Covid. Therefore, the report does not appear to take into account the increased cost of PPE equipment and the nursing time associated with its use in nursing homes. However, PPE is essential to prevent the transfer of Covid-19 in nursing homes; as we know, their residents are particularly vulnerable to severe problems when infected with the virus, including in many cases, sadly, loss of life.
I understand that the proposed uplift will be dealt with by NHS England and NHS Improvement. Will the Minister clarify whether additional funds will be made available to CCGs to fund the increase in nursing care payments, or will it have to be funded from this year’s allocations to CCGs? Will the Minister also explain whether there are any plans to fund CCGs to make additional payments to nursing and care homes for the additional costs of PPE equipment and staff time associated with both the changing and using of PPE for nursing and personal care work undertaken by staff for residents—for example, to include the changing of urinary catheters and stoma bags?
I welcome the uplift in the rates for nursing care, but, in the absence of a long-term plan for funding care provision in residential homes, ask whether Her Majesty’s Government should make further extra financial provision, for at least the next year, to ensure the safe and effective use of PPE to protect residents in the light of the number of deaths in care and nursing homes attributable to Covid-19.
I thank my noble friend Lord Hunt for securing this timely debate. I absolutely agree that the long-term sustainability of care homes must be a priority for the Government both now and in the future. When will the long-promised Green Paper be published?
The pandemic has shone a fierce light on the lives of those dependent on social care. The public now understand the heroic work done by care staff, who must be rewarded with decent pay, security of employment and proper protection, with adequate PPE and access to regular testing. Can the Minister confirm that every care home has now received adequate testing kits, as promised by the Government, and can he assure me that these will be provided on a regular basis for all, with a guaranteed 24-hour turnaround time for results? Martin Green, chief executive of Care England, is clear:
“As the lockdown starts to ease … You’re going to have to have testing on a very regular basis. You might be having to test once a week in care homes.”
The Economic Affairs Committee’s radical report, Social Care Funding: Time to End a National Scandal, is still awaiting a government response. It calls for an additional £8 billion for adult social care immediately just to return it to the 2009-10 standards. Published before the pandemic, the report proved prescient by calling for proper investment in the care workforce, with a career structure which better reflects the skills required to be a good care worker and the social importance of the sector. Investment is essential now before a second surge. The Government must learn lessons from earlier mistakes and ensure that the social care sector can better protect its residents. Age UK says that residents are being charged to pay for PPE, as other noble Lords mentioned. Can the Minister confirm this?
The Health Secretary’s claim that he threw a “protective ring” around care homes already lacks credibility when research by LSE estimates that 22,000 “extra” deaths have occurred in care homes during this pandemic period. Many senior care industry figures have pointed to the decision to move some hospital patients back into care homes in mid-March, when testing was not available to them. Figures released by NHS England show that 25,000 patients were moved from hospitals to care homes between 17 March and mid-April, when the guidance formally changed to ensure that testing took place. Can the Minister confirm that, in future, no patient will be returned from hospital to a care home without being tested first?
Covid-19 has taught us important lessons about what matters and who we should value: not only our own families but those who care for them so bravely.
My Lords, I too support the long-overdue pay increase for nurses working in the social care sector. I also strongly support the regret Motion tabled by the noble Lord, Lord Hunt, who is right to draw attention to the financial instability of this deeply fragmented sector.
There are approximately 15,000 care homes in the UK, with more than 400,000 beds, run by approximately 8,000 providers. Some are very small; others provide a large network of homes. It is a mixed economy: 84% of homes are owned by the private sector, including some that are owned by private equity firms, both British and offshore; 13% are owned by not-for-profit organisations; and 3% are owned by local authorities. Funding comes from a mix of private funders, local authorities and the NHS. Despite this funding mix, care homes have been hit by a decade of cuts in social care funding. An FT investigation last summer revealed:
“Britain’s four largest privately owned care home operators have racked up debts of £40,000 a bed, meaning their annual interest charges alone absorb eight weeks of average fees paid by local authorities on behalf of residents.”
Many have argued that this debt-laden model is completely inappropriate for social care, as is one that involves paying large dividends to investors.
Many homes are already running close to bankruptcy and have expressed grave concerns about the spiralling costs of PPE and extra agency staff, as well as lost income from empty beds. It has been estimated that when bed occupancy rates slip below 87%—as many have now—operating surpluses are such that many smaller care homes quickly become unviable, particularly those with greater reliance on state-funded residents.
This virus has brutally exposed systemic weaknesses in our social care sector. The latest official figures show more than 12,000 Covid-related deaths of care home residents in England and Wales, but it has been estimated that the true figure, calculated by looking at excess deaths of care home residents in the period, could be double that. According to a recent poll, one-third of people say that they are less likely to seek residential social care for their relatives or as a future option for themselves. This brings into very sharp relief the respective responsibilities of central and local government if care home owners go under financially or simply decide to shut up shop and hand back the keys. Simply put, who is the provider of last resort?
Tellingly, that poll also revealed that the vast majority of respondents want care workers to be paid above the minimum wage. If this pandemic has revealed one thing, it is that we can no longer kick the can down the road but must take advantage of the growing public and political consensus that social care should be free at the point of need, funded largely out of taxation. There are, of course, a number of ways of doing this: general taxation, hypothecated tax, or some form of social insurance. This needs to be at the nub of both the political debate and a grown-up national conversation.
My Lords, I will talk about the financial aspects of the care home industry, and what needs to be done after the pandemic to ensure its sustainability.
There are more than 420,000 people in care homes; there are more than 22,000 care homes; and the industry generates an annual income of about £15 billion. I pay tribute to the industry, as it has performed well under the circumstances during the pandemic. We need the sector to be stable, as we have an ageing population and some people have health issues. Care homes are of varied sizes. The smaller companies are normally well managed, particularly if there is involvement by the owners. My suggestion to them would be to curtail their borrowings, be cost effective and, importantly, have adequate reserves. In my business, I have always had adequate reserves. My concern is with the larger companies, which are making over £1.5 billion in profits, with considerable amounts going to hedge funds. There may be complex intercompany structures. It is estimated that a high percentage of the care home industry’s £15 billion income is leaked and goes towards the payment of rent, dividends, loans and directors’ fees, not towards front-line care. The situation is opaque and there is reluctance to inject money into the sector, as there may be structural complexities.
Despite the high income generated by the industry, the staff are among the lowest paid workers, with a high turnover. It is hoped that the more money that goes to front-line care the better paid the staff will be. In the last 10 years, Southern Cross and Four Seasons have failed. I worry that there may be other problems post pandemic. The care home sector’s revenue comes from local authorities, the residents and the Government. The weekly amount payable per resident is normally between £600 and £800, and the NHS will pay £183.92 or £253.02 per week for nursing care in eligible cases. As there is a contribution from the state, there needs to be transparency and accountability and we must ensure financial stability. We should, therefore, perhaps consider some form of legislation to achieve this.
Finally, my own business—insurance—is properly controlled and regulated. Would my noble friend the Minister like to comment on the issues I have raised?
I too support this Motion and thank the noble Lord, Lord Hunt, for tabling it. Will the Minister explain how the 11% increase to nursing rates was determined? What consultation was held with the care sector and the NHS to determine the increase?
This SI is very straightforward and limited but, pandemic aside, it is tabled at a time of huge turmoil and instability in the sector. We all know about the issue in some care homes of private patients subsidising those supported by their local authority, either in total or in part. We know this is not fair. As my noble friend Lady Barker said, local authority funding should be adequate.
The real scandal laid bare by the Covid-19 epidemic is the delay of the care Green Paper and the lack of certainty for the sector, which was struggling financially before the pandemic. The financial model is broken. Can the Minister tell the House when this paper will be published? Its working group members are England’s experts on the subject, there have been cross-party talks about it and Prime Ministers Theresa May and Boris Johnson promised it, so when will it be published? The delay is a scandal. I feel sure the Minister will tell the House that the answer is “later”. That is always the answer.
For weeks we applauded NHS and care workers every Thursday evening to say thank you, and no one can be in any doubt about their commitment and the lengths to which many go to ensure care for those in their charge. Not many workers paid only the basic minimum wage would move into their workplace for weeks to guarantee the safety of those in their care. The professionalism shown by care workers from the UK, the EU, the Commonwealth and elsewhere is exemplary.
How would the Minister fill the places left by departing EU staff if the door to their entry were closed by the Home Office setting a salary requirement of over £30,000? The Home Secretary has suggested that we could recruit by appointing British workers, yet for the last year or so unemployment has been hovering down around the 4% mark and supermarkets pay the same sort of rate for less worry and 5% off grocery bills.
Care workers should have recognition as a profession in England. In Wales and Scotland they are regulated and professionally acknowledged. In Scotland they were given a pay rise of 3% for their work during the Covid-19 pandemic. I am sure the Minister would at least wish for parity for English care workers, as well as their recognition as professionals with their own professional body. Can he outline the Government’s thinking on care worker regulation?
My Lords, I thank the noble Lord, Lord Hunt of Kings Heath, for tabling this Motion. Covid is a callous killer for which we currently have no cure. I take a moment to offer condolences to the families and friends of all those cruelly taken from us before their time and offer a large salute and enduring debt of gratitude to all our care and front-line workers in health, supermarkets and across the piece. We owe them an enduring debt of gratitude.
Has the Covid crisis revealed the issues there are with the current CCG structure? Does my noble friend the Minister believe it is time to review the whole nature of CCGs and commissioning within health and social care, with everything possible for review laid out on the table? Does he agree that our right honourable friend Jeremy Hunt did a great service to the nation in bringing health and social care together in one department? Does he also agree that it is a pity our right honourable friend Jeremy Hunt ran out of time in getting that resource to deliver some sense of parity for social care, alongside health?
In 2017 the former Prime Minister, Theresa May, laid out in the Conservative manifesto a plan for social care. It was roundly rejected by the electorate. Was she politically naive? I do not think so—she was clear, upfront and honest. The fact of that rejection should be considered by everybody, because it leaves us in the situation we are still in, as has been said by previous speakers, years after the Dilnot review. When is the Green Paper likely to be published? How do we get to a position in which we can have that parity between health and social care across the country?
My Lords, the Government have a great opportunity because the public mood, as I judge it, is that the time for some coherent change is now. I think that the public would be prepared to pay that bit more to underwrite the changes that would guarantee the system.
There seems to be a growing consensus across parties that a significant amount of extra money will be needed. I am sure that there are plenty of arguments about where precisely that will come from, but I want to address where it goes. Nothing has frustrated me more over the last 20 years than seeing this disparity between the NHS and local authorities. Care for the elderly, as defined by care homes, has to be the provenance of the NHS. It is absurd that someone having to be released into a care home by a hospital, because they are not capable of living in their own property—whether owned or rented—and require additional support, is a health decision.
We are missing some obvious tricks. Where I live, housing is dealt with by the district council, social care by a county council. Our CCG is coterminous with the district council. What ought to happen is agreement on funding so that the district council builds housing for what I have in the past termed intermediate care. It must be housing that is fit for purpose so that people significantly delay going into a care home. It is supported living.
It is undeniably the case where I live is that old-style council bungalows—two bedrooms, very simple, very small, with a tiny garden, semi-detached or in blocks of four—are the most popular. Why? It is because they are the cheapest to live in and heat, and the easiest to clean, maintain and grow old in. If they were all fully adapted, people would be able to live in them for even longer. Families can and would want to give that support in the vast majority of cases. That is a form of care home, but I have seen so many people put into institutions when they would have thrived far more with a level of independence, if the system had allowed it.
I support the increase in pay for nurses working in the nursing sectors of care homes and, indeed, the Motion tabled by the noble Lord, Lord Hunt. Care home staff also need an increase in pay. There is a significant annual turnover in care home staff and a consequent reliance on agency staff. Many homes depend on staff from EU countries, who are less likely to be available from 2021. Both these factors point to a need for better pay for care home staff. The focus on care homes and the amazing commitment of care staff during Covid-19 has shown us all how much the country depends on them.
Care homes are under enormous financial pressure, whether they are run by charities or for profit. A report released last week by the Directors of Adult Social Services, the Care Provider Alliance and the Local Government Association estimated that care homes need an additional £6.6 billion to meet the costs of Covid-19 by September. Further, the tragically high number of deaths in care homes as a result of discharging patients from hospitals back to their care homes without being tested for Covid-19 has resulted in residential places remaining vacant. The Government have given councils £3.2 billion to fund the additional services needed, including, but not exclusively, for increasing care home fees. Using this funding, councils have indeed increased the standard rate for care homes where they fund residential places, but clearly it is nowhere near enough to bridge the gap. Can the Minister confirm that additional funding will be made available to local authorities to underpin care home finances and prevent many of them closing their doors?
There is a desperate need to resolve how residential care is funded. The consequence of constantly kicking this difficult issue into the long grass is the crisis now unfolding. For too long the care of vulnerable adults has been in the shadows. Covid-19 has thrown a spotlight on how we as a society absolutely rely on care homes for the care provided. Too many care staff and residents have died unnecessarily. Perhaps we will all now recognise that care home lives matter too.
My Lords, I thank the noble Lord, Lord Hunt of Kings Heath, for his Motion and express the Green group’s strong support for it. “Regret” is the right word to use when we are talking about policy around care homes and funding. Indeed, it is rather like the rotten onion that you find neglected at the bottom of the sack. When you peel it, the centre is rotten and the tears are flowing. This is a great gaping hole of unmet needs and human suffering.
I am picking up on points made earlier by the noble Baroness, Lady Tyler of Enfield, and the noble Lord, Lord Sheikh, about the 84% of care homes which are privately owned and what you find when you peel back the layers of that. I first got interested in these issues in 2016 when I read a brilliant report by the Centre for Research on Socio-Cultural Change called Where Does the Money Go? Financialised Chains and the Crisis in Residential Care. It exposed for the first time to full public view the way in which large numbers of care homes are owned by offshore-based companies with complex financial structures which extract 12% or even more annually in effective profit, however it is structured, while ensuring that little or no tax is paid and loading companies up with debt. All that provides care of a sort for our most vulnerable and often frail citizens while the work is done by lowly paid and often insecurely employed staff, treated with scant respect.
It is worth peeling into the onion and looking back to where this started in the 1980s. Until then, the UK had been a world leader in the provision of care, particularly for older people, but the NHS started to withdraw from that, leaving it to charitable and then for-profit providers. Some of the move had good intentions to allow people to live in the community, but the effect was a massive privatisation. The number of private residential homes rose from 44,000 in 1982 to 164,000 in 1994, almost quadrupling in little more than a decade. This shifted the costs of ill health and frailty on to individuals.
Now we have coronavirus, and again we have care home owners saying that they cannot afford to pay the costs. Is the Minister looking into what is happening and where the money is going now? Is 12% still being taken out? Are the Government looking for an entirely new, different, non-privatised, non-financialised structure?
David Lloyd George said:
“How we treat our old people is a crucial test of our national quality.”
We are failing the Lloyd George test for our elders and many other vulnerable citizens very badly.
My Lords, as my noble friend Lord Hunt said, if nothing else comes out of the current crisis, we must have a plan to bring long-term sustainability to care homes and peace of mind to those who live in them.
In February, I noted in my maiden speech to this House that the Prime Minister had announced last August that he intended to,
“fix the crisis in social care once and for all, and with a clear plan we have prepared to give every older person the dignity and security they deserve.”
This bold assertion was shortly followed by a slightly less-than-firm assurance, as he appeared to back-track on this plan—as indeed he has back-tracked on so many important matters in recent weeks and months during this public health crisis.
In August 2017, when I led the WLGA, Welsh councils won a legal dispute over who paid for nurses delivering social care in residential homes in Wales, as the Supreme Court ruled in our favour. At the heart of this decision was a grey area where, in the absence of a definitive legal position, two different systems had attempted to come forward with their own distinct interpretation of the law, and the Supreme Court ruling had wide-reaching effects across the UK. However successful we were at the time in securing health funding for healthcare in our care system, this pandemic has served only to exacerbate several underlying problems with the system as a whole, and none so important as sustainable funding for social care, now and in the future.
Wales cannot wait for the UK Government’s proposals on social care. Social care is under pressure from a squeeze on funding, an ageing population and a high staff turnover. The state spends about £1.2 billion on adult social care every year in Wales. In a statement three months ago in the Senedd, the Health Minister said that the cost is predicted to grow between £30 million and £300 million by 2023—and that is before the costs of the implications and aftermath of the pandemic are included.
A consultation on possible reforms to social care is due to start this summer, and the Welsh Government will call for honesty and a grown-up debate on increasing care costs. I recommend to the Minister that the UK Government incorporate a similar honest debate on the long-term financial sustainability of care homes.
Finally, I am very pleased to support the First Minister’s initiative that, in Wales, care home staff will get a £500 bonus as a recognition of the incredible work that they have done during this crisis. Mark Drakeford said that this payment recognises the tremendous dedication of the tens of thousands of social care workers throughout Wales—including ancillary staff, such as cooks and cleaners, as well as nursing staff—who are caring for some of the most vulnerable in our communities.
I recommend to the UK Prime Minister that he follows Mr Drakeford’s lead in showing a practical, tangible response to those workers who do so much, yet are so fiscally under-rewarded. An immediate decision that the UK Government could implement is to make this payment tax-free and reward the social care workforce in full. I believe the current position is that the UK Government have, disappointingly, turned down the Welsh Government’s request for recipients of this bonus not to be taxed. They should be able to keep every penny.
My Lords, I thank the noble Lord, Lord Hunt, for securing this timely debate. The noble Baroness, Lady Wilcox, just referred to the fact that, in his first speech as Prime Minister, Boris Johnson promised that he would “fix” the social care issue “once and for all”. That is an admirable promise, but of course not one that a single political party can fulfil. This is a huge issue that has built up over many years. What we need is total cross-party agreement on a way forward. Unless we have that co-operation, this sore will not be dealt with.
Many of the problems have been highlighted by earlier speakers, in particular the privatisation of social care in many cases, and the private equity need to take money out on a grand scale. Clearly, that is not a recipe to secure our care homes and their residents for the long term.
However, there is one thing that I believe we could do immediately to improve the lot of those who are resident in care homes. I was appalled to see that the personal allowance that residents are allowed to hang on to when they are living in a care home is the princely sum of £24.90 a week. That is not enough to allow those elderly people to indulge in the few small treats that might make their life rather better. Will the Minister consider increasing that allowance immediately so that their quality of life can be improved? It need not be a huge amount, but anything on top of that meagre allowance would clearly make a difference.
Finally, I want to put forward just one small thought—a means by which, when we are in a post-Covid era, we might improve the funding of social care homes and the lot of those who live in them. There have been several experiments in Holland in which nursery schools are run on the same sites as care homes. It works. It benefits both the children and the elderly residents. Their quality of life improves by leaps and bounds—and, of course, the nursery schools make a contribution in terms of rent. Will the Minister give serious thought to that consideration and to how it might be put into practice?
My Lords, it is a pleasure to follow the noble Baroness and I support her very powerful plea. I also support the Motion, and I am grateful to the noble Lord, Lord Hunt, for bringing it forward.
Before I address the Motion, I want to make a remark about participating physically in the Chamber. I have no inherited wealth, nor do I come from a political family. I do not live on a pension and I am not a salaried Member. I live in Scotland. I and others with a similar background continue to receive no support for staying in London if we participate physically in the Chamber. Meanwhile, salaried Ministers, the Lord Speaker, the Senior Deputy Speaker, the Labour Leader and the Chief Whip have continued to receive support for living in London since 21 April, when it was stopped for all other Members. This House should not just be for the rich, the retired or those who live in London. The Deputy Speaker said that in this debate all Members were equal. Well, the system adopted by the House administration and the commission should afford us equality, too.
I support the call for a long-term plan, for the very powerful reasons given by my noble friend Lady Jolly. The way in which our country has not supported our care home sector during this crisis has been shocking—north and south of the border. In Scotland, on 31 May the chairman and founder of the Balhousie Care Group, which operates 26 homes with 940 residents, wrote in the Herald that there had been:
“Three months of mixed messages, mismanagement and missed opportunities”
—that is, north of the border. On 21 May, the Health Secretary, Jeane Freeman, said that more than 900 patients had been released from hospitals into Scotland’s care homes. That was three times the number that the Scottish Government had said was the reality only weeks before. They were sent to care homes with no testing but only a risk assessment, and, depending on that assessment, with only seven days’ isolation. By then, 1,749 people in Scotland’s care homes had lost their lives to Covid-19.
In England, I read with a breaking heart the soul-destroying evidence to the Commons Health and Social Care Committee in which a comparison was made of how England and Wales and Germany had approached the issue. Isabell Halletz, chief executive of the German care homes employers’ association, gave the stark comparison of 12,500 deaths in England and Wales and 3,000 deaths in Germany, with patients in Germany not being able to go into a care home unless they had tested negative or had gone into isolation or quarantine for 14 days in separate institutions. She also gave a figure which should always be borne in mind when we clap what we term our “heroes working”. She said that Germany has nearly 1.1 million people working in the long-term care sector. Of those, how many have tragically died? The answer is just 42, which compares starkly with the record in England and Wales.
If we are to learn serious lessons about this crisis, we have to make sure that we do not forget that other countries have performed better. We should learn from them how they have handled this crisis.
My Lords, I express my deepest gratitude to all care workers on the front line, and my deepest sympathy to all those who have lost their loved ones. Care homes remain at the front line of our struggles to overcome this dangerous disease yet continue to experience financial disparities and low pay. I support my noble friend Lord Hunt of Kings Heath in this Motion.
I have spoken to a number of care providers operating in Cambridge, Essex, Tower Hamlets and Milton Keynes, and they acknowledge the significant support, including some PPE in the form of masks and gloves, that they have received, with some notable exceptions. Current changes proposed to payments by local authorities and government will have a significant impact on the cost of care provision. One concern is that government will cease to support businesses with over 250 employees. Will the Government reconsider this policy and the cap? Also, regarding funding support, the Government and local authorities are proposing belated infection control training for front-line staff when there are massive issues of payment and equipment shortage. The question arises: who will pay for these front-line staff to attend training? Will the Government consider providing vouchers to staff attending training?
Care providers are rightly concerned, as many have continued to fund themselves for essential PPE, including masks and gloves. Can the Minister say what progress has been made to ensure that the care sector is fully furnished with the necessary PPE, masks and storage facilities for testing, and what the timeframe is for this?
Furlough schemes have put additional stress on carers and front-line nurses, many of whom are from BAME communities, who have not been considered for additional financial incentives. I agree completely with all noble Lords who have asked that they are rewarded with increased payment and salaries, which of course should not be taxed.
In the light of the disproportionate number of deaths and impact on minority communities, what advice and support is being given to care providers and front-line, potentially vulnerable workers, to ensure that they continue their service to our NHS in safety and protection?
My Lords, I add my thanks to the noble Lord, Lord Hunt of Kings Heath, for tabling this regret Motion. It gives me an opportunity to give heartfelt thanks to staff in care homes, who have gone above and beyond the call of duty to care for the vulnerable elderly, often at risk to their own lives, and many of them are from BAME communities.
I will confine my remarks to the role of the private sector since the 1980s, when the responsibility for social care was moved from local authorities to private providers and others. Money was then readily available from banks for a business model that had government money behind it, and a growing clientele from an ageing population. Unsurprisingly, global private equity, sovereign wealth and hedge funds piled into the sector. However, what role has this corporate debt business model played in the growing social care crisis over the last three decades, the tragic culmination of which we see today, with the unacceptably high death toll in care homes? Is this a suitable model for businesses with huge social responsibilities? Does it lend itself to putting a protective ring around vulnerable people when they need it? I suggest not. Does the Minister agree that servicing debt from taxpayers’ money and from people funding their own care is not a good look, especially when the people who suffer when things go wrong are the elderly and infirm?
This pandemic has shown that, given that public money is contributing to public care, we need better scrutiny of the industry’s finances, as well as public accountability of private equity-owned care homes. Looking at the example of the Four Seasons debacle, in 2016, even as it hurtled towards insolvency, its directors were paid a total of £2.71 million, of which the highest paid received over £1.5 million. In 2019, the firm went into receivership. Who asks the questions when something like this happens in the care sector? Who are the individuals profiting, who take the money and run—leaving it to taxpayers to pick up the tab—and how do we do identify them when they hide behind complex financial structures, many of which are listed offshore? Does the Minister agree that a Government bailout for such businesses would be unacceptable?
The sector desperately needs urgent reform, and I hope that the Government will do what they have promised: bring forward a plan—this time with proper public oversight—based on open and good governance, one that really does provide care from the cradle to the grave.
I thank the noble Lord, Lord Hunt, for tabling this Motion. Along with other colleagues, I agree completely with the principles behind regretting these regulations.
I start by praising the care sector—all the homes and ancillary care staff, whether professional or family carers, who during the last two and a half months have done all that they could to care for the most vulnerable in our society, against all the odds. It is important this week, as Carers Week begins, to recognise the unpaid carers, especially the young ones, who have often provided support. I recognise that this is slightly off the topic of the statutory instrument, but it is important to understand the structural problems in our care systems at the moment.
Other noble Lords have outlined how the structural problems started 40 years ago. In 1979, two-thirds of care homes were run by local authorities or were not for profit—now, 84% are run for profit. The noble Baroness, Lady Bennett, outlined how in the mid-1980s things started to change. I can remember as a Cambridgeshire county councillor in the 1990s and early 2000s how the standards changed in care homes at very short notice. Many local authorities, which were not permitted to borrow any capital costs at all, had very regretfully to close down their care homes. That was when the surge started, in about 1995-96, and it continued through the next decade.
We moved as a country towards having a privatised system, but we did not fund it properly. Money for care homes certainly needs to be upgraded. One of the difficulties we face is that, even though we are approving a weekly rate—I know this from experience of my mother’s two and a half years in a care home—the CCG started from a position of arguing, either with the individual and their family or with the local authority, about what the amount should be. Almost standing over my mother’s bed, we had to try and fight back against the CCG representative who did not want to pay anything at all after her second stroke. We need to understand the pressure on families, particularly regarding the way this allowance is used, and recognise that it is not the true picture.
We need also to look at the extra costs that care homes are facing at the moment. Other noble Lords have mentioned that PPE costs have increased. They have not doubled—care homes are now paying five times the amount they were paying in February. We heard that PPE was diverted, and the noble Lord knows, as I have challenged him long enough about this, of concerns about whether Clipper Logistics were going to come on board. Can the Minister confirm the report in the Health Service Journal that the Clipper system is now to be used only for emergencies and is not to be the resource that the care home sector was led to believe it would be? If it is not, where on earth will individual care homes be able to access PPE at the price they used to pay before the pandemic?
Testing has also been a problem over the last few weeks. In order to keep people safe, it was important that everybody, in all care homes, was tested right from the start.
My noble friend Lady Barker and others have talked about that month between mid-March and mid-April, before the Secretary of State announced that care homes could have tests. We heard that last Friday was the date by which everyone in a care home for the elderly would have access to testing. It is good that today, the Government announced that those who have learning or other disabilities can now finally access testing, but care homes for the elderly still desperately need assurances that, as with the NHS, their staff and patients can access regular testing. Can the Minister confirm that this will now happen? Otherwise, there may be a local flare-up which, before we know it, is running rife through certain care homes again.
Many noble Lords have talked today about the importance of treating our care staff well. We know that they have gone way above and beyond the call of duty. Those who have given up life with their families and moved into care homes deserve special credit. I like the idea outlined by the noble Baroness, Lady Wilcox: the Welsh proposal to award £500 to care workers as a bonus for their considerable effort. For them, many of whom are on the absolute minimum wage, it is a significant amount, although it still will not reward them for everything they have done.
At the end of this, we must return to the long overdue Green Paper. I completely agree with all noble Lords who said that it must be cross-party. Dilnot was certainly a good starting point, but the problem with Theresa May’s proposals was that they were Dilnot upside down. I gently remind the Government that it was not the Liberal Democrats or the Labour Party that walked away from the last cross-party arrangements. My party is keen and eager to become involved, whatever we decide for the future. The Green Paper is very much overdue; it must come along quickly. We need to look at everything structural. This should not be just about who pays what for a bed. We need to review the entire system.
My Lords, I thank all noble Lords who have participated in this debate, and my noble friend Lord Hunt for allowing this small but important statutory instrument to receive full scrutiny. There has been intense scrutiny and there are many questions to be addressed by the Minister. I join other noble Lords in paying tribute to those who work in the care sector for their dedication and courage over recent times. I ask for the indulgence of the House to mark national Carers Week and to pay tribute to and recognise the essential role of family carers, who have received precious little attention so far during this pandemic. Support has been desperately hard to access, and many families feel overwhelmed and pushed to breaking point.
Several noble Lords have said that this sector was in crisis before the pandemic and has been cruelly and badly served by the Government from the outset. As the noble Baroness, Lady Barker, mentioned, some of us were waving warning flags about the need to protect this sector from Covid-19 early in the outbreak. We were told that care homes would not be affected. It took a major campaign and pressure—by the media, by my honourable friend Liz Kendall MP, the shadow Minister for Care and Older People, many organisations such as Age UK, local government, MPs from all parties and your Lordships’ House—for the Government to start recognising the terrible toll and neglect in our care homes.
The notion, repeated by the Secretary of State, that a protective ring was put around our care homes is rather insulting, given the number of deaths and the time and chaos involved in providing PPE and testing. The Minister might advise his right honourable friend the Secretary of State to stop using expressions that are patently wrong and that only serve to deepen the anger and sadness of those families who have lost, and continue to lose, relatives in our care homes.
At some point, there will be an examination of the reasons for the mortality among those in care homes, those with dementia, those with learning disabilities and those in our mental health institutions. What we have to work for is seeing that the transparency and honesty of that examination, and of the price paid, will lead to real reform in our care sector.
The statutory instrument that we are discussing concerns the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012 and makes provision for, among other things, NHS-funded nursing care. Several noble Lords have explained what all this means. These regulations amend Regulation 20 of the 2012 regulations and increase the rates for NHS-funded nursing care payment by the NHS Commissioning Board or a clinical commissioning group. Like my noble friend Lord Hunt, I welcome the proposed increase in the FNC rate that the NHS pays to care homes to cover the costs of services that must be carried out by a registered nurse. I repeat his question and echo many of the contributions today in asking: what contribution will this upgrade make to the long-term sustainability of the sector? I commend my noble friend Lady Wilcox on her strong support for reform in the sector.
According to a House of Lords Economic Affairs Committee report, as my noble friend Lady Healy said, 1.4 million older people in England had unmet care needs in 2018. The number of older people and working-age adults requiring care is increasing rapidly, while public funding declined in real terms by 13% between 2009 and 2016. When will the Government respond to that report? When will we see a new proposal for a new model of social care, as mentioned by so many noble Lords tonight? Specifically, given that this SI reached us before the pandemic, what plans do the Government have to put this somewhat battered sector on to a more secure footing in the short and long term? What assessment have they made of the impact that increased care costs resulting from the Covid-19 pandemic has had on the care home fees paid by those who are self-funding or partially self-funding?
Last month, the Health Secretary promised that by 6 June, all residents and care home staff would be tested; today, he said that care homes would only have their tests delivered. This is not good enough. The Government have been too slow to act. Care home residents and staff need to be regularly tested if we are to come to grips with this virus. We need to move swiftly to regular testing of family members, too, so that they can safely visit their loved ones. Ministers should now implement a comprehensive strategy for regularly testing more in care homes, including among the under-65s, and give social care services the priority and resources that they deserve. When will they do so?
My Lords, as expected, this has been a moving debate. Who could not be moved by the powerful testimony from the noble Lord, Lord Hunt of Kings Heath, in moving his Motion and by the many noble Lords who have given such clear accounts from the front line of our social care? I have stood at this Dispatch Box—this virtual Dispatch Box—and heard the fears of noble Lords that the social care sector is in some way overlooked. I want to reassure noble Lords that this is not the case.
The country was put on hold three months ago to protect the most vulnerable, at huge cost to future generations. The protection of care homes remains an important consideration in the ongoing lockdown. I welcome the appointment today of David Pearson, who will be known to many noble Lords, as the chair of the Covid-19 social care support task force. Finally, in planning the future of our healthcare, we will be informed by the experience of the last five months—a time when the social care system was the focus of our attention and the whole of government got to know the sector much better. I do not hide from the fact that the last few months have been tough. We may not have had the social care meltdown that other countries did, but there have been difficult times. As such, I am sure that noble Lords will join me in expressing our gratitude to the hard-working staff across the social care sector, local authorities, charities and the NHS.
We all recognise that many of the lowest paid, many of them BAME, put themselves in harm’s way to look after the most vulnerable. The noble Lord, Lord Sheikh, and the noble Baronesses, Lady Pinnock, Lady Uddin, Lady Sheehan and Lady Jolly, made these points very well. For this sacrifice the country is enormously grateful. In particular, since this is Carers Week, I give special thanks and appreciation to our nation’s carers. The noble Baroness, Lady Brinton, rightly referred to the 6.5 million people in the UK who, as the noble Baroness, Lady Thornton, rightly reminded us, are looking after a family member or friend who has a disability or a mental or physical illness, or who needs extra help as they grow older. These are heroes as much as others on the front line, and we give our thanks.
It was instructive to hear from the noble Baronesses, Lady Pinnock and Lady Jolly, about their thoughts on the potential risks around EU exit and its impact on the recruitment of social care staff. The social care sector is vital to the UK, and our future immigration system will ensure that we have access to the skills and talents that we need after the UK leaves the EU. We are continuing to support employers in their promotion of the EU settlement scheme. EU nationals have until 30 June 2021 to make an application to the settlement scheme, and I strongly encourage them to do so.
The noble Lord, Lord Hunt, introduced this debate by bringing to our attention the recently laid National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) (Amendment) Regulations 2020, which I will outline for the benefit of the House. The FNC exists so that individuals or local authorities do not pay for nursing care that is the responsibility of the NHS. My right honourable friend the Secretary of State for Health and Social Care set a national rate in legislation, and he considers it annually.
Following many representations, including in this House by the noble Baronesses, Lady Thornton and Lady Jolly, and a formal review, we increased the FNC flat rate for 2019-20 to £180.31 per person per week, an increase of £14.75. The higher rate has been increased to £248.06 per person per week, an increase of £20.29. This is an overall uplift of 9% on the rate previously set for the financial year. This is a substantial raise that adds an additional £62.4 million of funding into the sector per year, and I am grateful for the welcome from the noble Lord, Lord Hunt, and the noble Baronesses, Lady Watkins and Lady Pinnock, for this development.
The Government have also uplifted the 2020-21 FNC rate by a further 2%. The regulations being discussed today therefore amend the rates set out in the standing rules to £183.92 per person per week for the flat payment. They also increase the higher payment to £253.02 per person per week.
The noble Lord, Lord Hunt, raised the important issue of efficiency challenges. I confirm that an efficiency rate has not been built into the uplifted rate for 2019-20, nor for the 2020-21 rate; the rate was designed to reflect the average cost of nursing care.
However, we are not here today just to discuss that important but relatively small part of social care funding. I shall spell out a few basic points. The long-term financial stability of social care is an imperative for this Government. We have already acted to ensure that the social care sector is properly funded through the epidemic, with major rounds of finance announced earlier this year. Looking ahead, I reassure the noble Lord, Lord Hunt, that we are committed to reform. The manifesto made that clear and the Secretary of State has invited cross-party talks to resolve the complex issues faced, which is the right place to start the process. I reassure the noble Baroness, Lady Wilcox, whose thoughtful and moving maiden speech on this subject is well remembered on all Benches, that these will take place at the earliest opportunity, given the current circumstances. In answer to the noble Lord, Lord Hunt, and the noble Baroness, Lady Healy, that is when the Government will begin to bring forward a plan for social care for the longer term.
The Government have acted to ensure that adult social care is properly funded. At the last spending review, we announced that an extra £1.5 billion would be made available to local government for adult and children’s social care in 2020-21. This came on top of maintaining £2.5 billion of existing social care grants.
The noble Baronesses, Lady Tyler and Lady Bennett, and the noble Lords, Lord Sheikh and Lord Mann, asked about the significant extra funding that the Government had provided. I confirm that the Government expect local authorities to get the funding that they have received to the front line quickly. Local authorities should take steps to protect providers’ cash flows, including making payments on plan in advance and monitoring the ongoing costs of care. I assure my noble friend Lady Altmann and the noble Baronesses, Lady Pinnock, Lady Brinton and Lady Sheehan, that the future of funding in social care will be set out in the next spending review.
My noble friend Lady Altmann raised the financial stability of care homes. We recognise that Covid-19 is imposing significant pressures on the social care sector. We have now made £3.2 billion available to local authorities so that they can address pressures on local services caused by the pandemic, including in adult social care. In addition, in April we brought forward planned social care grants worth £850 million to further support adult and children’s social care.
The Covid epidemic targeted the old and vulnerable; it had the social care sector in its sights. The noble Baronesses, Lady Barker, Lady Watkins, Lady Sheehan and Lady Healy, raised the question of the protective shield announced by the Secretary of State. I reassure noble Lords that the care home support package published on 15 May and the £600 million adult social care infection-control fund represent the next phase of our response for care homes, using the latest domestic and international evidence brought together by Public Health England and drawing on the insights of care providers. This includes making 1 million tests available for residents and workers in care homes, providing a named clinical lead for every care home, infection-control training, the PPE portal as a temporary emergency top-up route and ensuring that every local authority is carrying out a daily review of data on its care homes. Our help to care homes has meant that most of England’s care homes have had no outbreak at all.
The measures we have brought in have created a tsunami of regulations and guidance as we address this horrible disease, and we have responded to requests for clarification from the front line. We have introduced dozens of new ways of doing things. The 16,000 care homes, which range from the big to the small and are supported by half a dozen business models, face their own HR challenges.
We have sought to move quickly and thoughtfully to bring rapid support to a disparate and decentralised care system and have brought in new resources, technologies, supply chains and even the Special Air Service. I have no doubt that, from the point of view of a care home director, it has felt like a confusing set of measures. Under difficult circumstances, there may be things that could have been done better, but I assure the Chamber that we could not have moved faster or with more commitment. The strength of our social care system is the local routes and the tailored offering of thousands of different homes—I acknowledge the persuasive arguments of my noble friend Lady Wheatcroft —but this diversity makes it challenging to implement novel solutions at pace from the centre. I thank those in central and local government who did their best under difficult conditions.
There can be no doubt that the nation’s health and social care is a major priority for this Government. This extends from the fair funding of NHS-funded nursing care and social care more broadly to comprehensive support during the pandemic and, in time, an ambitious plan for reform. We will work with all interested parties—I thank Age UK and the National Care Forum for their briefings before this debate—to make it the most secure and effective service it has ever been. I conclude by thanking once again those working in the social care sector and other front-line services in these challenging times.
My Lords, I thank all noble Lords, and the Minister for his considered response. The debate has shown the very serious situation facing many of our care homes. I heard what the Minister said about support for the social care system. However, far from experiencing a protective shield, many care homes felt abandoned by the Government and the NHS in March. They remain very vulnerable financially, and the workforce crisis in the offing because overseas recruitment will effectively come to an end at the end of this year cannot be wished away.
The Minister has reconfirmed the Government’s commitment on the long-term future. This is welcome. I also agree with the noble Baroness, Lady Wheatcroft, about the desirability of cross-party consensus. Looking back, it was a great pity when Andy Burnham’s plan was labelled a death tax by David Cameron in 2010. That has made cross-party consensus that much harder.
One thing is for sure: we owe a huge debt to care workers and carers for the fantastic work they have done over the last few months. They have responded magnificently to this huge and unprecedented challenge. We thank them all. I beg leave to withdraw my Motion.