Select Committee on Health Minutes of Evidence

Examination of Witnesses (Questions 580 - 599)



  580. Perhaps the doctor from Southampton would like to comment.
  (Dr James) Yes, I am aware of the situation in Southampton. What strikes me is that if you have a private provision and residential nursing care, and nursing homes are a private provision, then it is an open marketplace. If there are people who want to increase their prices and a health economy which needs their services, then you can almost have sympathy for it being fair game. What we are doing in Southampton, hopefully, because the residential care stock is decreasing at an alarming rate, is through public and private purchasing agreements having 240 beds of our own belonging to the social services and the PCT, so that we are not open to these market forces. I would not agree that a £50 differential is a good thing, nor would I agree that keeping people in a £250 bed in an acute hospital is a good thing either. We are the slaves of the market, if that is the way it stays.

Mr Burns

  581. Dr Morgan, you and Mr Leadbetter, both in your different ways, were saying what a problem it is, particularly in areas of high employment, to attract staff and that would be particularly relevant to London and the home counties. Do you think from 1 April next year the increase in national insurance contribution is going to help or hinder the attraction of staff in this sector?
  (Dr Morgan) That is a very difficult one to answer because it depends how you deal with the funding to go into the homes. That is going to depend on a whole set of things. I cannot really comment very much about that because I do not think it is entirely salaries here. That is what the headline is but when you talk to nursing homes there is a whole set of other things: there are the expectations of the Care Standards Agency, there is the issue that empty spaces in the homes are not covered. There is a whole set of things which are different from home to home. It is therefore very difficult to come up with a simple yes or no answer.

  582. I was not necessarily asking for a yes or no. I was wondering whether it was going to help or hinder the recruitment of staff in areas of high employment.
  (Dr Morgan) My personal view is that it will not make a lot of difference.

Julia Drown

  583. On the issue Dr Taylor was raising about the ADSS evidence talking about the health services aggressively recruiting from the nursing home market, where that is happening would it be the norm that as soon as Directors of Social Services saw that happening they would be engaging with the trusts to say that would have an impact on the whole of the economy and trying to get together with the independent sector to agree a way forward. How much would that be the norm?
  (Mr Leadbetter) It is difficult to speak for 150 local authorities. One would expect that would be a sensible course of action. It is certainly something we did in Essex and something we also did with the private sector. We used some of the £100 and £200 million to mount a joint recruitment campaign for in-house and private sector staff. That addressed not only pay and conditions, because we increased the rates, but also that working in social care was a good thing. I can tell you stories about Aldi supermarkets paying £7.50 for people to work on the tills, but we advise that social care is a worthwhile job, working for the public service is good and we are beginning to see some green shoots of change and more people coming in as a result. It is very, very early days, but my intuitive sense is that it is improving.

  584. It is improving but initially, as soon as it happens, was my question. How many Directors of Social Services would be engaging? Is your feel that half of them would be doing it, a quarter, three quarters?
  (Mr Leadbetter) It is not totally a problem throughout the country, so I would expect the majority. Remember that Directors of Social Services or their senior representatives are involved in PCTs. I would expect that it would be a matter which would come up at the PCT Management Boards. Also, most of the social service departments have close relationships with the trusts. I should be surprised if it were not something which came through the trusts.

  585. So it is a problem which should largely be able to be managed within the health economy.
  (Mr Leadbetter) Discussed if not managed and discussed in creative ways. What one might move towards is that sometimes it seems easier to recruit auxiliary nurses. So look at recruiting auxiliary nurses and have some shared tasks. There are problems with that because there is a problem with charging. There are some creative options to get round that, but there is still a question—and I put it in these terms—in that Government may have to realise that they are going to have to pay more for the same.

  586. Mr Ransford was talking about the perverse incentive that perhaps led social service authorities in the past to close homes perhaps for their own reasons. You suggest they were perhaps higher quality homes. Is that across the board? Were some of the authorities making wrong decisions or was it the authorities who were pushing right up against the capping limits at the time and could not possibly have spent another penny, or was it that they were not prepared to go to their council tax payers and say this was a service worth paying for?
  (Mr Ransford) There was a variety of reasons, probably including all of those. Like anything else, looking back, they were seen as short-term decisions. There is no doubt that some authorities were massively overstocked on residential care at the expense of other services. There is a finite budget so if you have a lot of residential care and have not invested in the capital, for a variety of reasons, or are using adapted buildings, they simply were not of benefit to potential users, whether they should be there or not. One of the major difficulties with the community care introduction with insufficient attention to the role of housing and particularly more intensive housing schemes, which we are beginning to see now but nothing like in sufficient quantity, where you can have your cake and eat it in the sense that residents get their independence and their privacy but also the benefit of community living if he or she chooses. I do not think we saw sufficient of that and sometimes resources were simply closed for budgetary reasons or for difficulties in other parts of the service. Where they were closed to re-invest in community alternatives, we saw some very imaginative schemes developing. I do not think there was the level of overall planning that we see now. Link that to some of the workforce issues you have been raising with other witnesses. Occupational therapists has been one issue which has bugged me throughout my career. Throughout the 30 years I have been in this business, we have never had sufficient occupational therapists, never. We have been moving them from hospitals into communities and back again; we have not planned that particularly. They are often absolutely crucial to ensuring people's homes get the right equipment and the right adaptations quickly. That is something which is not to do with what is happening in the supermarkets, it is to do with overall planning and professional development.

Dr Naysmith

  587. A couple of questions arising out of the evidence the LGA submitted. We have touched on a lot of related topics already but it would be worth clarifying them. You say in your submission that short-term funding exacerbates the capacity problems in the residential care sector. I am sure we can all understand that. Money is used to raise prices that are paid to care providers in order to secure extra capacity in the short term. In the longer term this creates further problems, trying to make placements at a fixed price. What evidence do you have that this is actually taking place?
  (Mr Ransford) We know that usually the people who are assessed as being able to be supported in the community have long-term needs. They might vary in intensity over time, but there is usually a continuing cost. Short-term resource will run out and the cost of that placement will need to be found elsewhere. We have lots of examples of that: partly it is demographic because people are living longer, the quality of care and the quality of treatment is supporting people's longevity, so that results in longer-term needs.

  588. I am talking really about the short-term needs and the short-term prices affecting the long-term contracts which can be negotiated.
  (Mr Ransford) We would all agree that all prices are being driven up for a variety of reasons, partly shortage in the markets, partly increased costs of providing better facilities for disabilities, more staff, better paid staff, a whole series of things force up costs. That short-term cost tends to be sustained because for other reasons people do not tend to move into any form of residential care for a short period and then move back to their own communities. Their housing may have gone, they may have other needs. Short term expenditure often turns into long-term dependence.

  589. Quite often these short-term contracts become long-term contracts.
  (Mr Ransford) Yes.

  590. It cannot be a good thing.
  (Mr Ransford) We start by looking at the needs of the individual, but the needs of the individual do not fall neatly into predictive contractual arrangements and in making a needs assessment you have to take into account not only the physical and the mental and the social needs of the individual, but their wishes and conditions as well and their social networks.

  591. You also mentioned in your evidence the conclusion of a Laing and Buisson survey that private care home providers are looking for an increase of £100 per person per week, per resident. You appear to imply that you accept this as a reasonable figure. Is that the case and what would you recommend central government does in these circumstances?
  (Mr Ransford) One answer to that is that central government provide more resources in the system. There are many driving factors but two in particular. One is that certainly in terms of what is known as spot contracting, buying a place, the contracting regime has usually been last year's figure plus some allowance for inflation. There is a whole series of other cost drivers on top of that which creates a higher rate of cost for this area of service than the general economy. The second is quality standards. Everyone is looking to provide better facilities, some of which are insisted on by the now independent regulator, the National Care Standards Commission, others of which I think we would all agree in terms of dignity and support are a right people should receive. There is no question about that but it comes at a cost. Certainly those costs have to be properly examined and rigorously addressed, but we know that most contracting has been carried out on the basis of what local authorities have been able to pay, rather than a full assessment of what the requirement is for those individuals. If you have a finite budget, you can only do two things. One is that you can restrict the amount of payment you make. Secondly, you can pay more and restrict the number of placements you make and both of those create difficulties.

  592. What I am trying to get at is whether you think £100 per week is a reasonable increase.
  (Mr Ransford) One hundred pounds will depend on the amounts individual authorities are negotiating on what is needed. It is reasonable to state that, if we are to sustain and develop a proper care capacity system of sufficient quality, that you or I would be happy to use, then there is a significant cost increase.

  593. What you are saying is that you reckon for many occasions £100 is right.
  (Mr Ransford) Yes, I could not argue that the system is going to break down unless there is a step change in the amount which is paid for care in certain circumstances rather than the age-old business of just adding a bit on for the prevailing rate of inflation.

  594. How would you make certain that this money, say you get it, is used for the purpose for which it is given?
  (Mr Ransford) First of all, we must agree on what quality standards are going to be developed for that. We cannot as agencies responsible for public money just invest with no return for the quality we receive. There have to be agreed quality standards, the providers have to meet those standards and develop them, they have to provide services for people who have substantial needs, they have to provide a proper staffing regime, they have to provide a reasonable environment. All of those have to be taken into account and calculated in a price which is seen as fair and reasonable for the commissioner and the provider.

  595. Accepting that increase, which you say is necessary, how would you make sure, if you got it, that it was spent on what it was being given for.
  (Mr Ransford) That is the real purpose of the commissioning responsibility which the placement agency, usually the social services department, has. You have to make sure that, if there is going to be a step increase in resources, all the factors which are taken into account and which drive up the quality of care are actually delivered. What we cannot afford to do is invest in the system and force up prices so we get a new norm for the same level of service. There has to be a return for the community in quality as a result of that investment.


  596. I do not know what the figure of £100 per week per resident times the number of people in such places would come to, but as far as I can see it would be a substantial amount of money. If that substantial amount of money were made available to your members to deal with this issue, would you choose to invest it in adding to the costs of residential care as opposed to looking at investing that money in alternatives?
  (Mr Ransford) No, we would have to invest in alternatives.

  597. Basically you are saying that this is not "instead of".
  (Mr Ransford) No, what I am saying is where we use residential care, in my submission for more focused cases, as is argued for acute care, making sure that residential care is used for the right people in the right places at the right time, there is an increased cost. We also need to invest heavily in a whole range of community alternatives, particularly housing, to ensure that we have the right system to avoid the perverse incentives we have been talking about.
  (Mr Leadbetter) Three points. A £100 per week increase for Essex would be £17 million. We are talking about big sums of money if you multiply that across the country. I am not saying I am against it or for it. The second point is that it should not really be rocket science to work out what exactly is a fair price for care, what the expectations are. The Scots have done it based on a model which did not look at a sufficiently wide range of homes, but what are the imperatives? Number of staff, hourly rates, planning for the future, seven years' time, NVQs, room sizes, fair return on capital, openly declared, is that 10, 15, or five per cent, negotiated with the commissioners? I believe we are entering into a very careful dance with the private sector to begin to explore that, to see whether we can engage with the Department of Health to commission some work. I know of two models: Laing and Buisson have one. Price Waterhouse Coopers have another. The Price Waterhouse Coopers model seems to come out slightly lower than the Laing and Buisson model, but we should be able to find an appropriate model. Audited accounts can be used, the commissioner can then use audited accounts to see that the money is going on care and not going inappropriately on unfair return on capital. There are ways of doing that. Finally, may I take a number of steps back to the policy area which you were discussing. There is a very interesting policy debate. Why is it that we assume people with learning disabilities or people with mental health problems live in small homes or small communities and we never debate the issue of why we consider it appropriate to place older people in 40-, 50-, 60-bedded homes and encourage providers to build bigger and better because there are economies of scale. There is an implicit ageism in some of the policy imperatives we live with and never challenge. I know that would be a huge increase in cost, but it is something which needs to be on the table.

  Chairman: You will be encouraged to know that at the last session I was told off by the independent sector for using the term "institutional care". Personally I think that is an appropriate term and I think you are making that point.

Mr Burns

  598. We have taken evidence from some in the care home sector. They feel that the partnership between them and social service departments is not working very well and they are very much the junior partner, or they are not even a partner at all but are dictated to. I was wondering what the LGA are doing to track whether it is a justified complaint and how the situation may be being improved or how it can be improved. While Mr Ransford is answering that perhaps Mr Leadbetter could think from his experiences as Director of Social Services and of the other social service departments he has dealings with around the country, whether it is a fair criticism, or it was a fair criticism but things are moving forward, or whether they are not moving forward at all and far more needs to be done to improve so there is a genuine partnership. I should have thought it should be a tripartite one with health as well as social services and the care sector on an equal footing.
  (Mr Ransford) The answer to your first question is in what you said at the end. This will only work better if all the key players see themselves as partners and work jointly on the issues and appropriate solutions to them. One of the reasons—and it has been made to me many times and I have some sympathy with it—which the independent sector gives is that it is because they are treated in the contracting regime as pure providers with no stake in the care and the style of operation and it becomes a very arid discussion as I suppose we have been having about price and suspicion and getting the best price for the arrangement in an area. That does not typify many of the arrangements I am aware of, but it is the stereotype which is built up. It seems to me of course that when you are dealing with public finance there has to be a reason for the payment made and ensuring best value for public money to the public purse. That relationship can be dealt with in a true partnership to ensure that the arrangements are made. If you do that, people accept their responsibilities and do come up with imaginative suggestions jointly about how this system is managed. Certainly all our evidence and all our experience is that the best arrangements work like that. The problem in recent years is that things have become so tight for financial and other reasons, that there has been a lessening of trust, an increase in suspicion and we have the wrong results out of it. We must not panic about this; we must take it seriously but we must not panic and we must get back to an arrangement where we have shared responses to shared problems.

Andy Burnham

  599. Being the devil's advocate, is there any cause to be concerned that it might be easier for the local authorities just to use residential care homes? It is such an easy solution all round. It is out of sight, out of mind and we can put people in there, pay the fees and no-one has to worry. Is there any reluctance or difficulty in getting people to come back into expanding home care services because it is just more awkward as a way of delivering care to older people?
  (Mr Ransford) Certainly there is no doubt that it is more difficult to provide mixed responses, community based responses which are there seven days a week, 24 hours a day in people's own homes, in own communities, provide all that appropriately and safely, rather than gathering everyone up and providing that in one place.

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