Clause 32

– in a Public Bill Committee at 1:45 pm on 26th February 2009.

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Provision that may be made about direct payments

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

I beg to move amendment 28, in clause 32, page 39, line 44, leave out subsection (3).

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to discuss amendment 29, in clause 32, page 39, line 48, at end insert—

‘(3A) Direct payments legislation must include a prescription for any providing authority to take account of potential long term and multi-agency savings when considering what represents an “unreasonable financial burden” under subsection (3).’.

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

The clause includes provisions for, and gives powers to Ministers to make regulations about, direct payments. Amendment 28 addresses the extent to which a local authority is able not to allow a direct payment, and to what extent a disabled person can demand direct payment, because in the circumstances, the local authority will not have to pay. There is a range  of reasons, if we are being generous—excuses, if we are not—why local authorities can refuse to comply with a request for an individual budget to be converted to a direct payment, and there is a question about whether or not that gives the disabled person enough freedom to spend the money. The clause, by my reading, enables an authority to make direct payments in respect of the person securing the provision of the equivalent service, instead of their having to provide the service itself. The question is whether that, rather than giving them the money to spend, will give the disabled person enough freedom. What I want from the Minister is an understanding of the extent to which the presumption will work. If the person has their individual budget—their resource allocation—will they be able in most cases to take it as a direct payment, or will the local authority have too many reasons or excuses not to comply?

Amendment 29 addresses the provision allowing a local authority not to provide a direct payment. It considers the words

“unreasonable financial burden on the providing authority”.

The amendment, which was proposed by Mind among others, suggests that when measuring undue financial burden, one should take a proper long-term perspective. What we do not want is for a local authority to say, “If I fund a service in the current year, it may well be expensive this year.” However, it could result in long-term savings. For example, it may enable the person to be more independent, and to get back into work, which would effectively support the welfare reform agenda that both sides of the House share. Moreover, savings may accrue in later years.

When making a judgment about the undue financial burden, we want the local authority to weigh up the short-term cost against those long-term savings rather than just looking at the present-year cost and saying, “Because it is a bit more expensive this year, we won’t do it at all.” That effectively would mean giving up those long-term savings. It would be perfectly possible for the local authority to say to the Government that in return for some extra funding this year and next, there will be some long-term financial savings. That would be in everyone’s interest, affecting local government and health spending, for example.

The other issue that could influence the extent to which local authorities roll out the scheme is the funding and costs of parallel running. That came through very clearly from what Paul Davies and Liz Sayce from RADAR said in the evidence session. Liz Sayce said:

“One of the issues that has been raised with us is that it can be more costly to double-run different systems”.——[Official Report, Welfare Reform Public Bill Committee, 10 February 2009; c. 19, Q20.]

A system in which we have individual budgets, direct payments and the existing provision in one area could be more expensive than moving wholeheartedly to a system of individual budgets and direct payments for most people. In the present economic environment, the focus of all parties will be to spend resources in the wisest and most cost-effective way possible to provide sensible outcomes. We do not want to set up two parallel systems that will create extra costs and burdens. The thrust of both amendments is to look at whether Ministers have correctly assessed that, whether local  authorities will use that as an excuse for not doing such things and whether we are giving them too many tools to slow down the process. Moreover, when we are making cost decisions we must ensure that we consider not just present-day costs but costs in the future.

Real benefits can be derived from the success of the right to control. If we do all the things that I listed in clause 29, such as allowing disabled people to get into further education, higher education, employment and training to a much greater extent than today, we will find that as well as improving their quality of life and their life chances, they are also likely to be in a position to make a greater contribution to society. Hence, the cost to society will be lower, and disabled people will have a better quality of life. We should bear that in mind when we consider the Bill. I fear that we are giving local authorities too many reasons to say no, rather than giving them the reasons and incentives to say yes.

Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister 2:00 pm, 26th February 2009

I should like to ask the Minister a question about the clause, and the amendments moved by the hon. Member for Forest of Dean. I particularly want to ask about subsection (3) and what is deemed to be unreasonable. Given that we are not talking about care services or health services, but about many of the services that will be provided by external providers or by universities or colleges, what thought has the Minister given to the definition of unreasonable and how will it be determined? As the hon. Member for Forest of Dean said, there might be a high initial cost, such as paying expensive fees up front when someone goes to university or college, but there will be a long-term saving if that person contributes to society during their lifetime, particularly by paying more tax. In the context of Jobcentre Plus and some of the programmes that are being run, how will the definition of what is unreasonable be exercised?

Photo of Ann McKechin Ann McKechin The Parliamentary Under-Secretary of State for Scotland

I welcome the discussion on these amendments. There is a balance to be struck between financial accountability and sustainability, and extending the rights of disabled people as much as possible. The simple answer is that we must ensure that there is no threat to public service provision. Clearly, local authorities have statutory duties as well as duties to their electorate. The right to control is currently untested, and we want to use the trailblazers to find out how to balance both short and long-term considerations, which the hon. Member for Forest of Dean has rightly pointed out. The Office for National Statistics has estimated that for those who have a right to control, perhaps 15 per cent. more are likely to find the ability to go into work, but we need to evaluate the trailblazers over time, so that we can calculate where the long-term savings are. The clause is about affordability and is meant as a backstop to ensure the sustainability of services. It is not intended to be an artificial barrier that can be used without giving due consideration to disabled people’s rights.

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

May I press the Minister on her comment about the protection of public service provision? It is clearly important that local authorities should retain the ability to ensure the provision of public services, but if we roll this system out, the type of services that are currently provided will not necessarily stay the same. From memory, the evidence from the pilots on social  care was that half the money that is currently spent is not spent on things that the disabled person would choose to spend it on. If we roll out the system more widely, we will see—as we might see when we do the pilots—that what people choose to spend the money on will not be what it is currently spent on, so local authorities are likely to find that they will not be providing those services any more because people do not want them.

There will be a tension—we have all seen what happens if a day centre closes—but if a day centre closes because most of the people who go to it, when given the choice, would rather spend the resources on something else and do not then want to go to it, it is right for it to close. It would not be right for the local authority to say, “We want to keep the day centre open and to keep people employed there,” if the disabled people who use it do not want to go to it. I know that would bring tension and make things difficult, but we have to put disabled people at the centre, so I was a little worried by the Minister’s comments about protecting local authority provision. When given the choice, disabled people might want something quite different from what is already being provided.

Photo of Ann McKechin Ann McKechin The Parliamentary Under-Secretary of State for Scotland

The hon. Gentleman makes a fair point. He is right that there is a degree of tension because providing a day care centre involves a built cost—the capital and revenue costs of maintaining the building—and if someone wants a service provided to them in their home, or at some other location that is not owned or controlled by the council, that balance will have to be struck. That is why we want the trailblazers and the consultation process to continue throughout that period, so that we can build a body of evidence to allow us to make appropriate judgments on what regulations might be required if it is rolled out throughout the country.

The clause means that an authority will be freed from its duty to make direct payments if those payments would impose an unaffordable burden on the service or support. The Bill’s framework ensures that we can clarify in secondary legislation and in guidance what could be interpreted as an unreasonable cost. We wish not to be too prescriptive in primary legislation, but to develop workable guidelines in discussion with public authorities and disabled people.

Photo of Meg Munn Meg Munn Labour, Sheffield, Heeley

I seek to clarify this issue a little more, as I think we are dealing with two different issues. There is the point that the hon. Member for Forest of Dean made about the shift of services, and the implications for local authority services of moving money around, and there is the separate issue that any service provided by local authorities, if it were based just on people’s desires and needs, could ultimately overwhelm their budgets. Legislation, such as that covering community care, children and the matter before us, needs some protection to ensure that local authorities do not find that they are expected to pay for absolutely everyone’s wish.

Photo of Ann McKechin Ann McKechin The Parliamentary Under-Secretary of State for Scotland

My hon. Friend makes an excellent point. Obviously, local authorities must be able to provide services to those who are eligible under statutory provisions, and they must have sufficient resources available to  meet that statutory obligation, in addition to trying to meet citizens’ aspirations for the sort of service that they want in general. Their statutory duties and their ability to provide them must remain, and the sustainability of services, protecting public resources and ensuring that the right is affordable must be at the centre of the rights. There is no intention of preventing disabled people from exercising the right to control in all circumstances. Authorities will be expected to provide clear and compelling reasons for refusing a direct payment, and we will issue guidance to make the intentions of this clause clear.

Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

I want to give the Minister an example to illustrate some of the tensions that could arise when the provision is applied more widely. A case in Oldham hit the national press, and I met the people involved. A direct payment holder and his wife decided that part of the money that was given to him would be used to employ a carer to take him to watch Rochdale football club on a Saturday.

Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

Some might say that. The press picked up on that and used it as an example of someone wasting public money. It was not. His wife had an afternoon off when she did not have to care for him. The carer who took him to the football match was not interested in it, but he wanted to go to it. When moving to direct payment, such issues arise and one person’s “reasonable” may be another person’s “unreasonable”. The press—I think it was The Sun—thought that that was unreasonable. I thought that it was reasonable, but that was not the media’s attitude.

Photo of Ann McKechin Ann McKechin The Parliamentary Under-Secretary of State for Scotland

The hon. Gentleman makes a good point, and I have nothing against those who decide that retail therapy is better than going to a football match on a Saturday. The point is that carers are entitled to respite. That is the key element, not how the respite functions. There is a choice of how the respite is taken, but a carer who looks after someone 24 hours a day, seven days a week is entitled to respite. That objective incorporates the personal desires of the disabled person, their family and the people who care for them.

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

The person to whom the hon. Member for Rochdale referred was a guy called Gavin Croft, and I had the pleasure of meeting him when I visited Oldham metropolitan borough council to meet some of the people with individual budgets. Apart from questioning his judgment about which football team he supported, as the hon. Member for Glasgow, East did, the example was a good one of an agreed outcome, which was not the success of Rochdale football club, but giving his wife a respite break. That was the objective, and it was achieved at a much lower cost, so it was a much more effective use of finance than some other cases.

As the hon. Member for Sheffield, Heeley said, it is right that there should be a back-stop to prevent unreasonableness, but the Minister was right to say that the objective is achieving agreed outcomes. Nothing in  the process should drive costs higher, and the evidence from the social care pilots showed that when people were given transparency in the funding spent on them and a choice in the way the money was spent, in most cases people were realistic and motivated, and better outcomes were achieved at less cost. In terms of financial success, and in the difficult environment that we are in, the measure is a good thing and we will often get better outcomes at a lower cost than we are currently providing.

Photo of Ann McKechin Ann McKechin The Parliamentary Under-Secretary of State for Scotland 2:15 pm, 26th February 2009

I entirely agree with the conclusion reached by the hon. Member for Forest of Dean. Often, the alternative provision will be achieved at lower cost and will provide better quality. In turn, that will provide more funds for other areas of care that that person may want. Ultimately, that is our objective. We are trying to work in a way that gives us a basic framework that people know we are working within, and that, over the next few years, as the trailblazers start to succeed, allows us the flexibility to get into the detail of how this will operate in practice and establish how we are going to measure outcomes. It is not difficult in most cases to measure what those outcomes will be. An outcome where someone gets respite care that meets their individual taste is clearly more desirable that a one-size-fits-all approach. That is the aim of the Bill.

Photo of John Mason John Mason Scottish National Party, Glasgow East

Although I support the idea of more right to control—as other hon. Members do—does the Minister agree that it is a matter of balance? We need to consider the needs of the individual, but local authorities are under a lot of pressure these days and their budgets are tight. They are elected and have a certain amount of authority, so we have a duty to protect them from having their services chopped up into bits.

Photo of Ann McKechin Ann McKechin The Parliamentary Under-Secretary of State for Scotland

With the greatest respect, local authorities are there to serve the public who elect them and who reside in their area. The idea is to provide the best quality of services at the best value that can be reasonably obtained, using the services and skills of the many local authority workers, particularly in social care. The aim is also to work alongside voluntary organisations that operate within that area, and with disabled people and their families.

This is about achieving the best result for the taxpayer and the council tax payer in terms of level of service. Local authorities should not be afraid of that challenge or of co-operation. As hon. Members will be aware, in Scotland we have approached the matter in a somewhat different way in that, through the community planning partnerships, we are trying to get public agencies to work together in a better way and be more accountable to the people who pay for the services and vote for them. On that basis, I urge the hon. Member for Forest of Dean to withdraw the amendment.

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

We have had a good discussion, with a number of interventions. Certainly, from what the Minister has said so far, I am reassured that there will be some clarity about what unreasonable costs are in the regulations and guidance. It is welcome that the Minister recognises the tension that will inevitably arise as disabled people make choices about what services they want compared  with what services are currently provided. That will be one of the clear lessons of the pilots. Indeed, as those pilots are run, it might be helpful to engage with the media and explain that people will make different choices and that there will be creative solutions.

The interesting thing about the case of Mr. Croft and his wife was that—I had not seen the report in The Sun that the hon. Member for Rochdale mentioned, but it was certainly covered in other national newspapers in much more balanced way—feedback from Mr. Croft, his wife and organisations indicated that this was a good way to achieve the outcome, and if the outcome is achieved at a lower cost than that of the official way of doing it, what is wrong with it? There was more balanced reporting of that case than I had thought might occur, so I think that we can be a bit more optimistic about the way that some of this might be reported. People are more open-minded than we might think when they consider what is successful and what is cost-effective, while remembering that it has to be for the agreed outcomes that the hon. Member for Sheffield, Heeley correctly put her finger on.

With that useful debate and the reassurances that the Minister has given about the guidance and the way that the regulations will be made, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 ordered to stand part of the Bill.

Clause 33 ordered to stand part of the Bill.