Care Bill [HL] — Committee (7th Day) (Continued)

Part of the debate – in the House of Lords at 9:15 pm on 22 July 2013.

Alert me about debates like this

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health 9:15, 22 July 2013

My Lords, I begin with an observation that I hope is incontrovertible: it is unacceptable for care users to be left without the services that they need, particularly where the interruption of those services, or the worry that this might happen, could badly affect their well-being and place unacceptable stress on them and their families, friends and carers. As the noble Lord, Lord Hunt, rightly observed, the collapse of Southern Cross in the autumn of 2012 highlighted the importance of this principle. Although no one was ultimately left without the services they needed, many people suffered from a considerable amount of stress and anxiety as a result of worries over whether the services that they, their friend or their relative relied on would stop being provided. At the time, there were no formal mechanisms for the Government to ensure that that was the case.

The Government are therefore introducing, through the Bill, a new system of financial oversight of the 50 to 60 providers of care and support that are the most difficult to replace. The system will provide local authorities with early warning that one of those providers is likely to fail or could fail, and will support authorities to ensure that, if a provider does fail, the continuity of care is maintained. The Care Quality Commission will assess the financial sustainability of all providers that are part of the regime, ensure that providers are taking adequate steps to tackle any risks to the sustainability of their business and support local authorities to tackle the risk of individuals suffering gaps in the services that they rely on when providers fail.

I sympathise with the arguments set out by the noble Lord, Lord Patel of Bradford, in favour of this function being undertaken by Monitor. He should be under no misapprehension: the decision about which regulator should undertake this role was a finely balanced one. This would have been a new role for either regulator. For the CQC, although its existing powers extended to some financial issues, it had not in practice used them significantly. For Monitor, this would have been an extension into a new market and type of provider with which it had had no previous experience. In the end, we came to the view that the CQC was the most appropriate body to perform this market oversight function, for three key reasons. First, this approach ensures that there will be a single regulator for care and support providers. The financial performance of a provider, whether exceptionally good or exceptionally poor, can be a leading indicator of serious quality failures. The CQC will be able to integrate quality and financial information and assess both together.

Secondly, the CQC is better placed to implement this regime because of the existing working relationships that it already has with providers through its current role. This should also contribute to minimising the regulatory burden on providers by ensuring that they have to work with and provide information to only one regulator rather than two. Thirdly, the CQC already has established working relationships with local authority commissioners. The main objective of this regime is to support local authorities in managing the failure of a difficult-to-replace provider. The CQC’s existing relationships will be invaluable in assisting it in performing this function effectively.

The noble Lord, Lord Hunt, questioned that rationale and pointed particularly to the advantages of Monitor undertaking the role, not least because of its current functions. I am the first to accept that Monitor has existing expertise in financial regulation, but it does not have experience in the care and support services market. The nature of Monitor’s licensing regime differs from this market oversight role in two key ways.

First, Monitor’s regime oversees the financial performance of very different bodies operating in a very different environment. The market in adult social care services is considerably more diverse; it is constituted predominantly of independent providers and involves different financing and funding arrangements. Secondly, the focus of market oversight is to ensure that individuals continue to receive the services they depend upon during the failure of a provider rather than to manage the failure itself. In contrast to this approach, Monitor operates a failure regime during which it may implement a special administration to take control of the provider’s affairs and directly manage the failure. Monitor’s existing expertise, although, of course, relevant, would not be sufficient to fulfil this role.

When there is a danger of double regulation, we have taken steps to mitigate it by exempting care providers who offer both social care and NHS-funded services from Monitor’s licensing regime. Regulations laid before Parliament create this exemption where the services provided are NHS continuing healthcare or NHS-funded nursing care. The exemption will expire in April 2015, at which point we will review whether it should be renewed.

The noble Lord, Lord Patel of Bradford, argued that the CQC does not have the capacity to undertake this additional role as it is undergoing structural change. The CQC and the Government recognise that improvements are needed in the way that the CQC carries out its regulatory role, and we are putting in place a range of steps to ensure that these improvements are made. Under new leadership, the CQC is overhauling its regulatory approach, and I am very encouraged by the progress it has made. It is led by a new chair, a new chief executive, as the noble Lord knows, and new chief inspectors of hospitals, adult social care and, shortly, general practice. The CQC is developing a more specialist approach to regulation that will place providers under greater scrutiny. The Department of Health is working with the CQC to ensure that it is ready to implement the system from April 2015.

The noble Lord, Lord Warner, asked how the Government will help a regulator to secure the necessary expertise to oversee providers, including the largest kind of consolidated provider. We are currently discussing with the CQC whether it will require additional financial or other support from the Government to implement this regime. We are on the case. Clearly, the noble Lord is correct that it requires specialist skills, but we believe that we can support the CQC to ensure that it has those skills.