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Baroness Noakes: I can quite see how one could deny that it was relatively simple to sort out the charging arrangements--one would bring together two separate organisations and one would distinctly see the different service streams and charging arrangements. If one is trying to create something additional out of a care trust--that must be the aim and involves the idea that the parts are greater than the whole--one would, over time, blur those early distinctions. Early agreement, which I am sure is easy to attain, simply will not hold. The amendment is designed to reflect the fact that early certainties will not obtain after what may be a short period of time. As care trusts progress, I am not sure whether the Government have thought through the implications of mixing those two very different financial streams.

Lord Hunt of Kings Heath: I certainly would not disagree that those arrangements are not without their challenges. We now have good experience of partnership arrangements through the relevant flexibilities. Health authorities and local government are currently facing up to those issues and the evidence is that they have been able to deal with the issue of charges compared with free services in a sensible way.

There is a wider debate in this context about personal care and nursing care, and we shall presently come to it. My view is that there will always be some kind of system of charging for some social care services and I certainly hope that the NHS will always be free at the point of delivery. Given that we have those principles and that we want there to be greater partnership in joint services, we shall just have to work at it to make sure that we manage the matter in the most effective way.

Baroness Cumberlege: I want to take this point a little further. The Minister was absolutely right to say that everyone understands the issues that are involved with pooled budgets. Accountability still goes back to the two parent bodies. However, my noble friend Lady Noakes was arguing that, although that is fine as things are, what will happen when there is a new entity--a new body called a care trust--in relation to which those accountabilities will not be the same? The fact that there is a new entity is the point. I return to the comment that I made earlier; the policies have not been thought through in this regard. I do not refer to rules, although the Minister's previous reply made reference to them. We are talking not about rules but about making policy, and the policy has not been thought through. We believe that those issues will need much more working through before the Bill is enacted.

Lord Hunt of Kings Heath : The care trust is still dually accountable--to the Secretary of State, as are all NHS trusts, and to the local authority, which devolved responsibilities to it. I do not believe that that

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arrangement differs from the partnership arrangements. I still believe that it is perfectly possible for the partners, as they enter into a voluntary agreement, to be clear about the policy on charging, to be able to make that known to the staff and to ensure, as the noble Baroness, Lady Greengross, and the noble Lord, Lord Rix, require, that users of the service also understand it. The arrangement is a fact of life in health and social care, and it will be with us, as it has been with us previously. It is not beyond the bounds of possibility that people at local level can make the arrangement work.

Baroness Noakes: We currently have mechanisms that work, such as care trusts, which can, under the current framework, manage to make the differentiations that are necessary to achieve proper accountability. What gains are there in imposing a care trust regime on top of that arrangement, in relation to which we have to accept that there is much blurring of accountabilities? That happened, for example, with the creation of the Care Trust Board. I am at a loss to understand why we need these complex new arrangements if, as has been suggested, the partnership arrangements work perfectly well.

Lord Hunt of Kings Heath: The partnership arrangements have been working well. I said earlier that there are at least 40 such arrangements, with a commitment of about £300 million. Care trusts will give us a new system of governance, allowing the NHS and local government to put forward their own people to sit round the table. That is a powerful way to have quiet leadership in a particular service. It can give impetus to the whole partnership arrangement, and will build on the current success of partnership arrangements.

9 p.m.

Lord Rix: Because of my past career, I am a great believer in belt and braces. It is a pity that the Minister was unable to accept my simple amendment, which would have made the formation of care trusts clear to all at the outset. Having said that, and having listened to the Minister's assurances--and his doubts--I feel that I ought to read what he said and consult my colleagues. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 54 [Further provisions about directions in connection with Care Trusts]:

On Question, Whether Clause 54 shall stand part of the Bill?

Earl Howe: I do not intend to spend long on the clause, but perhaps the Minister can answer a couple of questions. Subsection (2) is not mentioned in the Explanatory Notes. I understand that its purpose is to enable the relevant authority to determine the level of funding to be transferred from the local authority to the care trust for the performance of designated functions. I have already made the observation that by any standards that is serious erosion of local accountability for local authority resource allocation.

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Clause 54(2)(e) grants the Secretary of State the power to direct that local authority capital assets are made available to a care trust. That might include office accommodation or other premises, computer equipment, and so on. The effect would be to deprive the local authority of the use of its own capital assets for the purposes that it chooses. Will the Minister clarify whether he is certain that such an expropriation is legally permissible?

Will the Minister also say what will happen if the financial sum that the Secretary of State determines should be transferred from the local authority to the care trust is greater than the sum currently allocated to the activities or functions that are being transferred? In other words, what will happen if the local authority is told that it must transfer more than its social services SSA to the care trust? There would be a direct knock-on effect on the level of funding available for the performance of any social care functions that had not been transferred, and potentially an effect on the entire local authority budget. What safeguards exist to protect a local authority from that situation? What will be the role of the arbitrator in a disputed situation of this kind? Is his decision binding?

The idea of an outside person coming in to decide how much money is to be transferred from a local authority to a central government department--if that is not too stark a way of putting it--is odd. Any light that the Minister can shed would be welcome.

Lord Hunt of Kings Heath: I shall do my best. Under clause 54(2), the Secretary of State will do only what is legally permissible. There are two points to make on the SSA. Clearly, in making such determination, the Secretary of State will take into account the impact that it will have on the local authority as a whole. I am not sure that using the SSA example is quite fair as the noble Earl, Lord Howe, will know that many local authorities spend above their SSA limit. I am not saying that simply because the figure was above the limit it would be necessarily wrong, especially if the authority was spending on social services. Clearly, that would be a matter for the Secretary of State to decide.

Subsection 2(e) will allow premises to be leased or rented, which I do not think will cause problems in relation to the impact on the local authority. We are talking about premises from which services are run. If the services themselves are being transferred, it would make sense to ensure that the premises are covered in the transfer.

The noble Earl, Lord Howe, is right to say that the Secretary of State can determine resources in the absence of agreement, but it is hoped that agreement would be reached. The role of the arbitrator might be helpful, but the extent to which it is binding would depend on what both parties agreed to in going to arbitration.

Earl Howe: I am grateful to the Minister. I thought that the SSA was a formula showing the amount that a local authority ought to be spending in order to deliver services adequately. If the Minister insists on a transfer

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larger than the SSA, he will have to work pretty hard to justify it, as it implies that the SSA is not an adequate formula.

Lord Hunt of Kings Heath: I was merely saying that many local authorities spend above their SSA on social services. I should have thought that in arriving at a sensible amount of money to be transferred, one needs to examine the authority's overall spend on social services. That might be above the SSA level, which is why I thought that it was not fair to pitch the point at that level.

Earl Howe: One hopes that even in the case of a directed care trust there would be some scope for negotiation on matters of this kind. But I am grateful to the Minister for what he said. It has been a useful clarification in many respects.

Clause 54 agreed to.

Clause 55 agreed to.

Schedule 4 agreed to.

[Amendment No. 260 not moved.]

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