My Lords, we should thank my noble friend Lady Kingsmill for initiating this debate, but more importantly for her work and that of her team in producing a significant review of working conditions in the care sector. The review was commissioned by Ed Miliband to see what could be done to tackle exploitative working practices in the sector and so improve the quality of care within the existing care budget. The review seeks to do this as well as produce a vision for the longer term that does not have this funding constraint. Like, I suspect, a number of noble Lords in this debate, I have an elderly relative in receipt of domiciliary care, and the messages and analysis in this report ring very true.

Care work is in crisis and care workers need to be treated fairly and to be valued if they in turn are to deliver quality services to their clients. As my noble friend has stressed, care workers are undervalued, underpaid, undertrained and underregulated. This leads to high rates of staff turnover, and for clients, constant changes in carers, erratic timings of visits, missed appointments and no continuity of client engagement. The review has been produced at a time when much else is going on in the world of caring. We are in the era of dramatic cuts to funding for local authorities; demographic change, which the LGA say has run at about 3% of the service budget for the past four years; implementation of the Care Act and the Better Care Fund; the consequences of the Supreme Court judgment that changed the definition of “deprivation of liberty”; and changes in technology that are enabling people to live more safely at home.

The spending pressures on local authorities are having a profound adverse effect on the sector. A National Audit Office report issued just last week sets out the stark facts. Real-terms reductions in government funding to local authorities for the period 2010-11 to 2015-16 amount to 37%. If council tax is included, the reduction is 25%. Moreover, local authorities with the highest levels of deprivation have seen the greatest reductions in their spending power. The NAO report shows that local authorities’ main response to reductions in government funding has been to reduce spending: in the four years to 2013-14, on employees by 15%, and on running costs by 6.7%, although they have tried to protect spending on statutory services for vulnerable people. Notwithstanding this, over the period of this Government, adult social care expenditure is estimated to fall by 8.7%. But those authorities that have been suffering the biggest reductions in spending power—the most deprived—have seen budgeted spend on adult services fall by nearly 13%. Those at the other end of the spectrum have seen a fall of just 1.2%. This is an ugly inequality, which must be addressed.

The Local Government Association’s Adult Social Care Funding: 2014 State of the Nation Report concludes that adult social care funding has been kept under some control through a combination of budget savings, the NHS transfer and at least £0.9 billion of savings by other departments. It considers the medium term to be particularly challenging, with an estimated funding gap over the period to 2020 of £4.3 billion. It also says that the Better Care Fund, to help develop better integration with health, will not provide an immediate solution. These budget pressures are undoubtedly being visited on those who need adult services as well as those who are working in the sector. In 2013-14 there was a 5% decrease in the total number of people receiving services and an increase in the number of authorities tightening eligibility criteria. Delayed discharges from hospitals are at their highest rate ever.

In terms of service levels, as my noble friend’s review highlights, there is increasing use of 15-minute visits, a practice that drives poor-quality care and exploitative working practices. The review stresses that such a limited time means that carers are simply unable to give the human interaction that service users need. We agree with this, and given the opportunity, will work with councils and care providers to bring this practice to an end.

The review also confronts us with the shocking statistic that between 160,000 and 220,000 care workers are paid less than the minimum wage. This is often due to failure to pay workers for time spent travelling between care visits; this can be made worse by incompetent management who are not always familiar with an area and arrange schedules that zig-zag across the town. Equally to be deprecated is the growth in compulsory zero-hours contracts, which create financial instability for carers and an environment in which bad employer practices are likely to be unchallenged.

We have already set out our plans to ban the use of exploitative zero-hours contracts and to improve enforcement of the minimum wage. Fines for non-payment of the minimum wage should be increased to £50,000 and we will champion the living wage through “make work pay” contracts. We have also signed up to the CQC being given an inspection role in the commissioning of care. There are other recommendations in this splendid review which we still have under consideration.

On funding, my noble friend has already shown how there is room to improve workforce planning and commissioning to generate savings. Obviously, the big challenge for the future is to raise standards and save money by the better integration of health and social care. We are committed to a £2.5 billion transformation fund that will cover both the NHS and social care and includes money to pay for 5,000 home care workers.

My noble friend Lady Kingsmill has given us a glimpse of the future and a vision of the professionalisation of care work—a cause towards which we should be proud to work.