John Major – 1986 Speech on Elderly Persons in Rest Homes

Below is the text of the speech made by John Major, the then Parliamentary Under-Secretary of State for Health and Social Security, in the House of Commons on 12 March 1986.

I have listened with care and interest to the wide-ranging speech of my hon. Friend the Member for Southampton, Itchen (Mr. Chope). In the time available I shall respond to as many of his points as possible. I welcome the opportunity ​ to debate this important issue, and understand and sympathise with many of the concerns that he has expressed. It is characteristic of his assiduity on behalf of his constituents that he has pursued this matter extremely vigorously over recent months. I have no objection to that, although I have frequently been on the sharp end of his activities, because few topics are more pressing to those concerned with social welfare than the provision of care for our growing numbers of elderly, especially very elderly, people. There will be an increasing number of them in society year upon year for as far ahead as we can see.

First, I wish to look at the background to the present circumstances since it is important that it is properly understood. There have been radical changes in the past few years, which have transformed the whole character and scale of the provision of help for the elderly. Historically, many people who could no longer cope on their own have gone into local authority homes, or local authorities have sponsored them in private or voluntary homes. Many others have been cared for in the long-stay geriatric wards of our National Health Service hospitals.

The new and welcome feature of the 1980s has been the substantial opening up of the private and voluntary sectors to many more people, who have been able to exercise choices previously open only to those with substantial private resources. That has occurred because of the substantial availability of high rates of supplementary benefit, which has become a major source of funding, enabling many people to be cared for in the private sector. The figures show beyond dispute the rapidity of this change. In 1978 supplementary benefit helped 7,000 people to pay their fees in residential care and nursing homes.

By 1984 the estimated figure was not 7,000 but 42,000, a sixfold increase in as many years. Expenditure too has risen sharply. The figures have been often quoted but they bear repeating. In 1978 expenditure in this area was £6 million. By 1983 it had soared to just over £100 million and the estimated figure for 1984 was £190 million. It will undoubtedly be higher in 1985.
In most ways, that growth has been beneficial. But the system was open to exploitation and abuse; and it had other features which have caused widespread concern. In the longer term, we would very much like to find a way of restoring a greater measure of responsiveness to individual need. My hon. Friend dealt particularly with that point.

More immediately, I must reiterate what I have said. We simply could not have allowed the growth that was continuing prior to April 1985 to continue uncontrolled, in the interests both of the taxpayer and of the elderly residents themselves. My hon. Friend will know that the numbers of elderly in the population are increasing, and they must be cared for. We entirely accept that and are anxious to seek the best ways of caring for them in their interests and those of the taxpayer. Therefore, it is right that we should make a comprehensive attempt to address this issue, not simply fudge it by paying ever-increasing amounts of benefits, as some people have urged on us. We need to take a comprehensive look at residential care and that is what we are seeking to do in a number of surveys that we have undertaken.

As a first step, in April last year we introduced a new structure for the payment of supplementary benefit to people in homes. Our aim was to regain control of expenditure and to relate benefit levels to the type of care ​ and the cost of care provided. The system of limits that we introduced was intended to allow reasonable charges to be met on the basis of the registration categories set out in the 1984 Act. The limits were set by reference to the best information that was available to us and for residential care homes they initially ranged from £110 to £170. I should mention that the limit for Southampton before April 1985 was £110, the same amount as the limit we set for the elderly under the new structure that we introduced in April.

My hon. Friend asked about the position of people who were already in residential care homes when the changes were made. We have provided, as he acknowledged, extensive protection arrangements for people in homes who were in receipt of benefit when the changes were made and who would otherwise have been adversely affected. Those over pension age will continue to get their existing benefit for life or until payment under the new rules becomes more favourable for them. The new limits will normally apply to those who were in homes but not claiming benefit before April 1985. However, as my hon. Friend acknowledged, in cases of exceptional hardship the Secretary of State has discretionary power to treat certain long-standing residents in a similar way to transitionally protected claimants.

My hon. Friend asked particularly about the vexed question of topping up payments, which he believes is being misunderstood, and I believe that he is correct. He asked me to spell out the position. I assume that he was referring to payments made by relatives or charities to meet the difference between the supplementary benefit payable and the homes’ charges. Such payments are not —I repeat not — taken into account when benefit is assessed. The guidance in the S manual advises local offices to

“disregard payments from charities, friends or relatives specifically intended to meet the balance of the charge to the extent that they are used for that purpose”.

That is entirely clear, and I hope that none of our local offices will misunderstand it.

But we recognised that this was the first step. When the measures were introduced, we promised a full programme of monitoring and research. We did so partly because we had an early sense of some of the difficulties to which my hon. Friend drew our attention this evening. One result of the initial feedback was an increase in the limits in November 1985. The residential care home limits were increased by £10, giving a range from £120 to £180. The limits for nursing homes, which are higher because of the more intensive care provided, were also increased by just more than £30 a week. Those substantial increases show our willingness to listen and to take action when we believe it to be necessary.

As my hon. Friend may know, we are in the process of reviewing all the residential care and nursing home limits. I listened with special care to what he said about the difficulties and problems faced by residential care home owners and residents in his constituency. We shall consider carefully the comments that he and other hon. Members have made during the review.

As an integral part of the review, we have commissioned a firm of independent management consultants, Ernst and Whinney, to undertake a wide-ranging inquiry into the costs incurred by homes of all sorts. The review will also draw on our monitoring of the arrangements since they were introduced last year, ​ information from our local offices and representations from interested organisations and individuals. Any changes shown to be necessary following that review will be introduced in July this year at the time of the general benefit uprating. Although there is a tendency to think of £120 as the limit for the elderly, assuming that a home is registered to care for them., a range of higher limits is available to residents in residential care homes that stretches between £120 a week and £180 a week.

As to the longer-term future, most people would agree that there are inherent difficulties in the present system of public funding in this area. The present duality, with local authorities and supplementary benefit as major purchasers and providers of care, has caused problems administratively and, in some cases, for the people whom the system is supposed to help. Our aim is to draw together the two disparate strands so that when someone needs care, it can be provided simply and at a reasonable cost to public funds.

The first step towards that was made with the joint central and local government working party, which was set up in late 1984 by my right hon. Friends the Secretaries of State for Social Services, for Scotland and for Wales. The working party examined the scope for improving collaboration between the Department and local authorities over financial support for residents of private and voluntary residential care homes.

In its report, issued last year, the working party made two major recommendations. The first deals with an issue which I know worries my hon. Friend—the assessment of supplementary benefit claimants’ need for care. I recall clearly the remarks of Mrs. Armstrong and the consultant geriatrician when we met in Southampton about a month ago. The working party recommended that we should explore the feasibility of extending local authorities’ existing multi-disciplinary assessments to anyone in residential care claiming benefit and of local authorities advising DHSS offices on appropriate payments. We have agreed with the local authority associations that we should carry out pilot studies to test the proposals. They will take the form of a dry run and will not affect anyone’s benefit. The pilot studies will be conducted by the social policy research unit at York university. The aim will be to explore how the arrangements would work in practice and to identify any new problems and, I trust, their solutions.

The second recommendation was that we should seek long-term solutions to the problems created by the existing parallel systems of support. We have also accepted this recommendation. We and the local authority associations have agreed to set up a further joint working party to consider ways of harmonising financial support for people in residential care homes. The first meeting of this working party will be held at the end of this month and it is expected to complete its work within a year.

As I hope my hon. Friend will agree, we therefore have a substantial programme in hand for reviewing the financial arrangements for people in residential care homes and the problems that he mentioned. In the short term, we are reviewing the current supplementary benefit limits, and in the longer term we have the pilot studies on the assessment of supplementary benefit claimants’ care needs and the joint central/local government working party.

A related issue is the dual registration of homes. A home registered with the local authority as a residential care home may also be registered as a nursing home with ​ the district health authority. We call this dual registration. Indeed, the home has to be so registered if it is providing nursing care of the kind proper to a nursing home. Residential care homes themselves are classified for registration purposes according to the main categories of dependent people, such as physically disabled or mentally disordered people, or elderly people, without attendant, exceptional disability. As I mentioned earlier, different rates of supplementary benefit apply to people in those categories, providing that they are registered in homes that are properly registered to care for them.

I hope that from all this my hon. Friend will see that we are very carefully considering the financial arrangements for residents in registered rest homes for the ​ elderly. I emphasise that a home can be registered for more than one category, and this is being made clear to local authorities, as the registration authorities, in a circular that is about to be issued, a copy of which I shall put in the Library. A home may therefore be classified to take physically disabled as well as elderly people. I hope that what I have been able to say in the few minutes at my disposal this evening will be of some assurance to my hon. Friend, to the many people who are running residential care homes and, above all, to the many residents of such homes, who may have had some uncertainty about the present arrangements.