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Lord Campbell of Croy: I thank the noble Baroness for saying that. I left for Scotland last Thursday night and, as I could not do anything this morning as regards grouping because I was at an airport trying to catch an aeroplane, I made it known that, so far as I was concerned, the noble Baroness's amendments could be grouped with mine. I was surprised to find this afternoon that they had not been. I am glad that she is ready to speak on them.

Lord Carter: As regards regulation-making, my noble friend has made the point. I sometimes feel that parliamentary draftsmen have a standard clause which states that everything shall be negative and then they see what happens and what they can get away with. We have discussed this matter as regards many Bills, as the Minister will know.

The Delegated Powers Scrutiny Committee has looked at this matter and it has made this proposal, which seems to be a sensible one. In principle we are not objecting to the idea of the affirmative resolution procedure the first time round and then afterwards the negative procedure. It is a new-ish procedure and it is an intelligent use of the regulation-making power. But that is only on the general point about the regulations. The substantive one as to whether they are appropriate for this particular issue of the recovery of debt will be dealt with when we come to Amendment No. 30.

Lord Swinfen: The noble Lord, Lord Campbell of Croy, said that the clause was designed for the recovery of money which has been misused, and with that I entirely agree. I have no argument with that whatsoever. But I prefer the wording that is on the face of the Bill at the moment instead of the wording of Amendment No. 29.

What is the position where the recipient of a grant for community care actually manages things so well that out of that money he can not only purchase the community care that the local authority considers that he needs, but is also able to purchase additional services? If he uses the money to go off to the Bahamas for a holiday, that is misuse and I entirely agree with the noble Lord. If the individual is a better manager than the local authority anticipates or better than the local authority itself, he should have the benefit of it, but I entirely agree that misused funds should be recovered.

Baroness Hamwee: The noble Lord will well understand that, having lifted his drafting so comprehensively in my later amendment, I am attracted by the approach to regulation. As regards the recovery of moneys, I agree with both noble Lords. Provided that we can be satisfied that the local authority will have the power to recover money--and obviously that must be catered for--there will be many very different circumstances and probably more than we can envisage. They are matters of some sensitivity in some cases. It

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will be far more appropriate for the matter to be left to the discretion of the local authority to decide how to exercise the power.

Baroness Cumberlege: As my noble friend Lord Campbell of Croy said, Amendment No. 29 seeks to implement the suggestion of the Delegated Powers Scrutiny Committee to,

    "write into the bill the clear principle that local authorities have a duty to recover misspent money".

The Government have accepted that the power to make regulations specifying the circumstances in which local authorities may recover direct payments is unnecessary, and, as my noble friend has said, I intend to table an amendment to replace it with a general provision as the Committee suggested.

However, the Government do not accept that local authorities should have a duty to recover money which is misspent. To impose such a duty could force authorities to pursue trivial sums--a possibility which has been mentioned by the noble Baroness, Lady Hollis. Indeed, sometimes the sums expended could well be less than the cost of recovery. Giving them a power rather than a duty also gives authorities discretion to take into account hardship considerations when deciding whether to seek repayment.

There is little danger that local authorities will not require money to be repaid in genuine and substantial cases of misspending simply because they do not have a duty to do so. It is sufficient to give local authorities the power to recover the money. The government amendment will replace the regulatory power with a power enabling local authorities to recover funds where they are not satisfied that they have been spent properly.

Amendments Nos. 33 and 36 seek to implement the Delegated Powers Scrutiny Select Committee's less favoured suggestion of changing the way in which regulations are laid under subsection (5). The Government's proposed amendment will remove the delegated power, rendering this amendment unnecessary.

We believe, too, that Amendment No. 41 is also unnecessary. It seeks to enable local authorities to discontinue direct payments and reinstate services if the payments have been used improperly. There is nothing in the Bill to prevent local authorities from doing that, since the payment of money in lieu of services is at the discretion of the local authority. Subject to what I have said, I hope that these amendments will be taken in a probing vein.

Lord Campbell of Croy: I am grateful for the comments which have been made. The Department of Health memorandum indicates that the Government intend to introduce provision into the Bill which will replace subsection (5). Therefore, my two later amendments which we have been discussing will not be necessary. I am glad to have spoken about them because that is a procedure which will be useful, as has proved on past occasions with other Bills.

As regards the drafting of Amendment No. 29, I am the first to accept that it may not be perfect. The Government are going to produce their version, which I

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am sure will be much better. So I hope that any criticism which I detected of the wording of Amendment No. 29 will not arise in our debates at a later stage. If we accept the Government's proposed amendment at that later stage, then the affirmative resolution procedure will not be required for the purposes of subsection (5). We must therefore wait and see what the Government propose at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8.30 p.m.

Baroness Hollis of Heigham moved Amendment No. 30:

Page 2, line 3, leave out ("in such circumstances as may be specified in the regulations") and insert ("where there is evidence that such a payment has been spent in such a way as does not meet the specified requirements of the original care package.").

The noble Baroness said: In moving this amendment, I should like to speak also to Amendment No. 41. The amendments revisit the issue raised by the noble Lord, Lord Campbell of Croy, in his amendment, Amendment No. 29, on regulations. The Minister answered that in part, but I think that it might be worth pushing this a little further because clearly we want to allay any fears that there may be in people's minds.

I do not think that anybody disputes that we should protect public moneys against abuse or even fraud. It is clear also that if the moneys are misspent and the needs of a disabled person not met, meaning that the local authority then has to provide services in lieu, that puts an unacceptable and unfair strain on local authority resources. However, we want this to be a power, not a duty. I believe that that is the Government's position also, and that it is analogous with a local authority's powers in relation to the recovery of debts. Local authority expenditure and the disbursement of payments is perfectly properly scrutinised by both internal and external audits so I do not think that any of us need have any doubt that a local authority will pursue the recovery of moneys where circumstances make that appropriate.

However, given that we are dealing with clients who will almost certainly be inexperienced at directly employing someone or who may be confused about some of their statutory obligations, I fear that there is room for a degree of misunderstanding and we should like local authority discretion then to operate. That will involve cases ranging from hardship to misinformation about the appropriate responsibilities. The tangle or rather the discussion which the Committee had earlier about who pays VAT and who does not is but a taste of some of the difficulties that may arise.

Another reason why we want there to be discretion--again, I would very much welcome what I am sure will be the comforting words of the Minister on this matter--is that we do not want there to be the impression that the direct payments package is so tight that there is no scope for what the Government in their consultation paper referred to as "flexibility" and "reasonableness". The client and the social worker together will draw up a care package and direct payments will be made.

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Clearly, if needs change significantly and the client requires either more or less support, that care package and the direct payments must be reassessed.

However, it is also the case that a disabled person's needs may quite properly fluctuate modestly from week to week, fortnight to fortnight or month to month. That may be due to the person's state of health. If the disabled person has multiple sclerosis, he or she may move in and out of remission and may want, therefore, to spend more money one week on taxis whereas the next week he or she may want to spend more on help in the home because of being housebound. Direct payments were supposed to encourage exactly such flexibility and we do not want social workers to have a mistaken sense of probity with regard to public moneys or clients to be nervous that they may find themselves being prosecuted for misspending those moneys. We do not want such misapprehensions to be held.

As long as appropriate audit arrangements are in place, such as a separate bank account and records of receipts, that flexibility and the ability to veer between spending on taxis or on help in the home can be secured. Indeed, it is not only necessary, but desirable. It allows disabled people much more spontaneity about life, together with the ability to change their mind and to alter arrangements according to the weather, their health, appointments, work demands and personal needs. No one's life is the same each and every week--and certainly not a disabled person's life. We must therefore allow that departure from the specifications of the original care package where appropriate without either the social worker or the client feeling that that may take them into the territory of the recovery of moneys that have been misspent.

Finally, on Amendment No. 41, with which Amendment No. 30 is grouped, we are saying that where a local authority believes that payments have been abused, it may cease to make those payments and instead reinstate direct services. That is not only to protect public moneys--clearly, they must be protected--but to ensure flexibility where a client's condition or competence may have deteriorated or where the social worker suspects that there may be mishandling by a third party, perhaps a relative. The local authority may then intervene and stop direct payments in order to protect the client. We hope that the Minister will make the position clear either on the face of the Bill, by regulations or in guidance. I beg to move.

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