Clause 54 - Power for local authorities to take charges on land instead of contributions
Health and Social Care Bill
9:30 pm
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
I beg to move amendment No. 316, in page 46, line 36, after `authority', insert
`or such person as the authority shall nominate'.
The amendment would write into the Bill the provision that the resident will grant to the authority or such person as the authority shall nominate a charge over the property. The purpose of this probing amendment is to find out from the Government how the arrangement will be financed. That is a sensible way of avoiding the trauma of selling a property during someone's lifetime, when it is evident that that lifetime will not be long. It may be better not to create that trauma and allow the property to be sold later, providing proper security for the local authority. However, such a charge on a property would not provide cash, and local authorities will be required to pay out hard cash to discharge their obligations.
Does the Minister propose that the Treasury should effectively underwrite the scheme so that local authorities are, in effect, in a neutral position? If that is not so, does he expect that local authorities might want to enter into arrangements with financial providers to take a charge on the property and advance money to the local authority against the accruing care home fees? Will the money come from the Treasury or from the local authority making arrangements with financial institutions? If it is the latter, would it not make sense to have a requirement in the Bill that the individual should, if required by the local authority, create a charge in favour of the institution that is funding the transaction?
My second question is about the revenue cost, given that there will be a zero interest charge. If the money is coming from the Treasury at zero interest, that question answers itself. If, however, it will come from a financial institution, how will the local authority recoup the cost of the transaction? Will that be made up to the local authority by the Minister's Department?