Examination of Witnesses (Questions 420
WEDNESDAY 24 APRIL 2002
420. But the key figure clearly is how many
places we are short of, that currently are not provided for, that
we need, and do you have that figure?
(Mr Hassell) The figures we are currently short of,
I do not, no. I think what is important, of course, is, and there
is always a danger in just looking at today's situation, the (LSE)
has certainly calculated that, by 2010, I think the figure is,
8 to 10 per cent, I need to check that figure, but I think it
was 8 to 10 per cent more beds would be required. So that is worrying,
at a time when we are actually losing beds from the market.
421. But, do you accept, 50,000 is not a helpful
figure; is it not overstating the problem deliberately to
(Mr Hassell) No, I do not think it is, because, as
I said, you have 200 different markets, or 150, whatever the local
numbers are, and that is the relevant situation.
422. So, therefore, the 50,000 figure is not
relevant, because that is trying to say, nationally, we are short
of 50,000; if you are saying to me, and to the Committee, that
it varies across the country, the national figure, by your own
argument, is irrelevant?
(Mr Hassell) If you are one of the people awaiting
discharge from an NHS hospital, or you are at home waiting for
a placement into a nursing home, and there are none in your area,
that figure of 50,000 is highly relevant.
423. If misleading?
(Mr Hassell) I do not think it is misleading at all.
424. We can come on to that, because I think
this is a specific area that, as a Committee, we have got to be
absolutely certain, we have got to know what we are talking about
here, because I think we may still be talking about two different
figures and we need to be sure we are talking about the same area.
Can I pursue, perhaps with Mr Lewis, the point that indirectly
Mr McClimont referred to, that we are bogged down with this debate
about 50,000, 19,000, or whatever; there is a school of thought
that says, well, really what we ought to be saying is, moving
away from this whole idea of people entering homes, and that this
is a recognition that we have failed to offer people alternatives.
I recall talking to you, not that many years ago, about a particular
country not far from here that does not have any care homes, Mr
Lewis, that has managed to develop a system, a very effective
system, that we looked at, without care in nursing homes. How
do we get to that stage from where we are now, arguing about how
many we have lost and how many firms have gone bankrupt, and things
like this, people being made homeless?
(Mr Lewis) I think that there is a danger of us purely
counting what we think we can count, and after that discussion
I am not sure we know what we are counting, but that we concentrate
on counting beds, counting places, rather than looking at services.
And I think that, if we go back to square one and say, first of
all, that it is welcome that the emphasis on assessment, even
if it is assessment for free nursing care, but, to an extent,
and in fairness, the emphasis in the original community care legislation
and guidance mentioned the concept of multi-professional assessment
before services are being provided. I think that if we are looking
very carefully at how we best meet the needs of dependent people,
of elderly people, then we begin to put into some sort of rightful
context the services that Bill and his membership are able to
provide; and, of course, local authorities are providing the technology,
that people like Tunstall are able to provide, to keep people
independent. We then have to look at the other side of the spectrum,
which is those that are most acutely dependent, and Westminster's
submission is that there is a role for a limited number of very
specialised nursing homes that are complementary to the provision
that is within hospitals. We would not necessarily be arguing
that there should be an expansion of the old continuing care facilities
within hospitals, and, I sadly have to say, there is some evidence
that that is happening, rather than focusing how best we meet
the needs of people; and, for the most dependent people who do
not require independent interventions, the nursing homes, or the
care sector is able to provide a service. But we are not comparing
like with like, which is why if our sole argument is that we have
not got enough beds of the type that we used to have, is the case,
then I think we are on very dodgy ground. The issue has got to
be much more that there are specific roles, in order that we have
this spectrum of care. In terms of countries like Denmark, I think
it is a question of what you define is a nursing home, or what
you define is hospital provision, and, of course, they have a
much more integrated service.
425. But you are aware that Denmark passed legislation
in respect of, I do not use the term `institutional care' in a
derogative sense, Mr Hassell, I mean in terms of where people
would go and live collectively under one roof; they passed legislation.
I was interested in Mr McClimont's comments about positive justification
for admission. Should we not be doing far more of that? We have
had a traditional arrangement for children in care, that we review
those children, we require justification. And yet we have here,
and I visit quite frequently care and nursing homes, and, as somebody
who has been professionally involved, I certainly think there
are many people who end up in permanent care settings who could
very easily be assisted by the kind of provisions that Tunstall
have got, by home care, by Care & Repair. How do we get to
that stage of challenging this assumption that we have to have
this huge residential and nursing home care industry, where other
countries manage without it?
(Mr Lewis) I think, first of all, we have to look
at the routes to funding of those aspects of care, which I know
is a very big, separate subject, but while we have disparate routes
of funding then it is very difficult to bring them together. I
think perhaps the most important issue, and we mention it in our
evidence to you, is the need for there to be comprehensive assessments.
We are disappointed that the Government did not take on board
our suggestion that they should look further at the available
comprehensive assessment strategy systems that exist. As a company,
Westminster has invested in developing a system called MDS, regrettably
it comes from America, but it is a very comprehensive way of measuring
the needs, the total needs, of dependent people. The current assessment
strategy, in terms of free nursing care, is extremely limited.
If we have the right gatekeeping, if we have the right ability
to bring together the resources, whether it be from housing, whether
it be from work and pensions, whether it be from the individual,
whether it be from the local authority or the health trust, if
we have the ability to bring them together then I think that we
begin to see the opportunities of providing this spectrum of care
and recognising and reshaping the markets; because at the moment
that is what is happening, the market is being reshaped, but in
a very crude sort of way.
426. To get back to this whole issue of closures.
I have got a huge number of residential and nursing homes, although,
of course, they are one and the same thing, in the area that I
represent, so I have had to immerse myself in this, and I was
also on the Committee Stage of the Bill; now whether Mr Hassell
can steer me in the right direction, or anyone can contribute.
I recall discussing this with the Minister, John Hutton, we had
a very good presentation at the Department, where we literally
walked the square feet of the rooms, we did the whole thing, to
understand what the argument was about. And then I observed both
sides, and I got the impression from him that the homeowners had
all got together, and they said, "This will never do,"
it was all very dull and there were going to be massive closures.
Now are we aware if, following those discussions, and there was
going to be some laxity in the rules and regulations, I am thinking
for the medium-size, the small homes, has that made any difference?
Because I have told the Minister that in my area, unfortunately,
that guidance came too late, and these homes, and I am not just
talking about adaptations for lifts, and things like that, that
they have told me the guidance came too late, and they had to
make a commercial decision, and they have now developed their
homes into different things. But I wondered if any of you could
tell me whether that move by the Government, to try to meet the
homeowners' concerns, has made any impact in stopping so many
of these homes closing?
(Mr Hassell) I think that is very difficult to comment
on, because nobody actually collects that sort of information
at that sort of level. Certainly, as you know, there were concessions
over the implementation date of some of the standards, and I am
sure that has helped people. I think, if I may, actually, the
PSSRU published a report in February, which was funded by the
Department of Health, which looked at the reasons for closures;
and they cited, in fact, that local authority pricing policies
was the first reason, care standards certainly was one of the
reasons, and the cost of converting homes to bring them up to
the required standards. Changes in the type and level of demand,
which is along the lines Mr Lewis was just saying, how the nature
of services is changing; staffing issues, that is a major issue
for everyone; the property market certainly has come up for some
of them. And, of course, the overall commissioning and regulatory
environment. So there is a whole series of factors. But one has
to remember that some of these problems have been accumulating
for years, and what we are actually seeing now is a result of
underfunding over quite a few years.
427. I will not labour it any more. I just wondered
if this bigger figure, the very big figure of 50,000, was what
was expected, or these were actual closures that had taken place?
(Mr Hassell) Those closures, remember, that is a cumulative
number over five years, or so.
428. Mr Hassell, before I bring in some of my
other colleagues, you have talked about the problem of independent
sector home closures being a direct result of this issue of fees.
What is your view on the size of the shortfall, or average shortfall?
(Mr Hassell) There is a range of studies, but those
studies vary in suggesting that the shortfall per home, per person,
per week, is between £64 and £89 a week, and that if
you take the shortfall, and I believe Mr McClimont may have some
view on it, I think there are shortfalls in the funding of home
care as well, but the annual shortfall is in the region of £1½
billion, and that clearly is a huge figure, but that is exactly
why homes are moving out of the market, because they are no longer
viable. Whether you are operating a charity, or whether you are
operating a `for profit' organisation, you cannot sustain homes,
either professionally or financially, at those sorts of shortfalls.
429. What kind of assumptions are made, if it
is a `for profit' establishment, on the profit that would be made;
if you were evaluating the weekly cost to the residents, what
assumption would your members make, in relation to what was a
reasonable profit per resident, per week?
(Mr Hassell) I do not think I can actually answer
that, because, of course, at the moment, many of the establishments
are operating at a loss. There is an interesting piece of research,
I believe, coming out in a couple of months' time, which is actually
looking at the sort of rate of return that is appropriate for
this sort of business, but I am afraid I do not have a figure.
I think the issue of a profit, or, of course, surpluses, which
is the term used by the `not for profit' organisations, what is
important, of course, is that the surpluses generated by any organisation
are the funding source for future innovation, for new developments,
in services, so it is an important element in any business, whether
it is a `not for profit' or a `for profit' organisation.
430. On this point, would it be fair to say
that the experience amongst care homeowners is that, because of
the overspending by most local authorities over SSA on social
services, because of the pressures and the statutory requirements
that social service departments have to provide, particularly
in things like children's care, `care for the elderly' budgets
are squeezed at a social service local, a local government level,
and they then are either forced or use their power in the market-place
to force down the weekly levels that they are prepared to pay,
on a `take it or leave it' basis for care homeowners, which is
putting a severe financial strain on them? You then have another
situation, which is that, of course, many of these homes will
have self-funders in them, and the care homeowners themselves,
if they have had someone whose home it has been for some considerable
time, they do not want to remove them because the local authority
will not pay a realistic rate from their point of view. And so
the care homeowners will take a decision that they will allow
the person to stay in the home, so, in effect, you are getting
a kind of cross-subsidisation, or it becomes so difficult that
they turn round and say, "Is it really worth it financially?"
because of the demands and pressures upon them. And, particularly
if they are in certain parts of the country, they will see that
they own a very valuable and appreciating capital asset and think
it is just not worth their while, so they will sell up and get
out of the market. Is that a fair assumption?
(Mr Hassell) If I can comment on the latter point
you made. Firstly, I think, some people, of course, have decided,
for whatever reason, their age, or other factors, that they want
to move out of the care home market, they are unable to sell their
businesses, for the reasons we have already touched on, they are
losing money, so it is not a very attractive investment opportunity;
in some areas, of course, property prices, for the first time
in a long time, have changed, and it gives some operators a reason
to close their business. For many others though they have decided
that because of the low level of fees they are not prepared to
compromise on their standards, with a business which is not viable,
and they have simply closed down, rather than lowering standards.
I think, as regards local authorities, again, it is very difficult,
because of the number of local authorities in the country, to
comment on particular spending patterns over SSAs, but it is certainly
the view of many members, I am not so sure it is empirically proven,
but it is certainly the view, their feeling, that money is moved
around into other services rather than into care for the elderly.
There is no doubt about it that local authorities do use their
monopoly position to hold down care fees; we have certainly had
situations where increases of less than inflation, I think, the
431. And there, presumably, you are talking
about price inflation, rather than wage inflation?
(Mr Hassell) Yes, I am, yes; and I think increases
were held down to below 2 per cent, in most cases, at a time when
SSAs were being increased by over 6 per cent, if I remember. So,
yes, the authorities certainly use their market power to hold
down prices, and I think there has been some pride within local
government in doing that, but I am afraid the price for that is
being paid now.
432. The first bit is actually a question; if
I may just say something personal, then a question. Because I
was so interested in this gap of £60 to £80, at a meeting
I had a week or two ago with Independent Healthcare Association,
I did ask for some detailed figures of costs, and I do have an
extremely useful letter, that was not actually in their evidence,
with costs for residential care in the independent sector, local
authority residential care, independent sector nursing home care
and NHS hospital costs. And I think these would inform the Committee,
if I can circulate this letter, because those were very helpful
to me. The question really is to Mr McClimont. We have heard about
the shortfall, £60 to £80 in the residential care sector;
what is your shortfall? It is totally impossible, I would imagine,
for you to give us an average cost, because home circumstances
alter so much, but can you give us any sort of guidance on average
costs and average shortfalls?
(Mr McClimont) Not in the same terms, but it is easier,
actually, to aggregate, because we tend to measure, at the moment,
in hours of care delivered. Across that, we have two parts of
the difficulty. Firstly, we have a difficulty with the pay levels
of the workers concerned, and because we are constrained about
the price we can charge, we have been forced into pay and conditions
that very few of us like, I will not say none, because I am sure
there are some out there that do, but very few of us do; and I
believe there is a shortfall there of at least £1 an hour,
that we should be paying more, currently. In relation to the upcoming
standards, which are due to take effect in July, that is going
to be an incremental process, and I am happy to say also that
my evidence is now rather out of date; ongoing discussions with
the Department suggest that the regulatory waste, that I pointed
out at above about £150 million, is probably down now, in
my estimation, to about £25 million, so that is a very positive
move. And so the end result, taking into account the increase
in National Insurance, announced last week, will mean that by
about this time next year we will have a shortfall of around £395
million annually across the whole of the sector; that covers statutory
as well as the independent sector. And that, broadly speaking,
is something of the order of £2.70 per hour, on an estimate
that I would say, an average, of about £10 an hour cost,
in the independent sector.
Dr Taylor: Thank you; that is very helpful.
433. Before I bring Julia in, I am conscious
we have not involved Mr Rice and Ms Adams so far. One of the issues
that has come out of the evidence that Mr McClimont has put forward
is the way in which his organisation feels this debate, this whole
area, has been kind of hijacked by the interests of care home
providers. Would you subscribe to that view, in view of the fact
that you come at this from a very different sort of perspective?
Mr Rice, are you frustrated about the kind of nature of the debate?
(Mr Rice) I think the debate needs to broaden. Our
view would be that there are certain aspects of the debate that
are not out in the public arena and not appreciated. In our case,
it would be the deployment of technology to reduce the load on
the acute and nursing home areas, which is something that most
reports, whether they be Government, local authority, consultants,
or whatever, pay lip-service to, but do not typically explore
and develop, because we think there is a lot of scope to relieve
the pressure by using technology. So, yes, we would say, there
is always one thing that seizes the headlines, which is the issue
of intermediate care, at the expense of other parts of what is
a very complicated problem, needing an holistic and very complicated
solution, which requires a number of other areas to be debated.
434. We have had the opportunity to look at
your company twice, visiting twice; would you say that perhaps
there is insufficient awareness of the potential of the kinds
of products that you and your competitors are able to offer, in
(Mr Rice) As I said in my introductory remarks, 95
per cent of local authorities and housing associations use our
kit, so they are aware of it. Do they use it to full potential?
We think, probably about one in ten of the people, in age terms,
who could benefit from the deployment of technology actually get
it, so it is not as fully deployed as it could be. Would you like
me just to expand a bit on the benefits of technology, or would
you like to defer that for later?
435. We might come specifically to you later
on, with some more specific questions. What I was conscious of,
and it is broad, general debate at the start, I wanted to know
what your views were on the sort of overall direction that parliamentary
discussions, for example, take on this general area?
(Ms Adams) I would like to see a broader debate as
well, really. I probably would not use the term `hijacking', because
I suppose, as Care & Repair has always focused on older people
in their own homes, we have always had to be headline-grabbing.
But I do think we need to take short, medium and long-term views
of the whole issue. And the other thing that people are always
surprised about is that the sheer numbers we are talking about
are actually terribly small, in terms of the number of older people
in special needs housing; and that tends just to get lost. And
you were talking about 5 per cent of older people who are living
outside the general housing stock, and we are not taking on board
the whole trends around owner-occupation. And just as a very sort
of small thing I was dying to jump in on, you said, why is there
a tendency for people to go into residential care. I think, one
of the things we have to remember is there is a financial incentive
there, because owner-occupiers, if they are on their own, you
sell their house, and the proceeds from the house pay for the
care; whereas if you are an owner-occupier and you stay in your
own home, social services pay for that. So that is not everybody,
but we have got growing numbers of older people, with growing
levels of equity, in some parts of the country, and it is a factor
that drives that direction at a local level. Yes, there is a short-term
crisis, I think, and I think there will always be a role for some
people who are highly dependent, particularly around trends in
dementia and growing life expectancy, for having people clustered
together in some sort of accommodation, because community care
is very expensive, if you deliver intensive support, one to one,
scattered in the community; but, again, it is a tiny slice of
the population. And what is much less headline-grabbing is the
idea of preventative work, small-scale intervention, small-scale
level of support; it is just not headline-grabbing to say we should
actually have a mass programme around small-scale adaptations,
to have lifetime homes, to get rid of thresholds; but from a distant
social policy perspective, financially, for the state, it makes
much more sense, because falls are the major reason people end
up in hospital, and they do go back to their own homes, and they
often go back to their homes and they fall again. And, in terms
of our expenditure on those sorts of things, it absolutely pales
into insignificance compared with what we spend on residential
care; the total state expenditure on all adaptations across tenures
is only £220 million, and you could say that is a lot, but
it is a very small amount compared with residential care. So I
do think it is looking at a short-term crisis, longer-term planning,
a bigger vision for the future, recognising where people live,
and recognising the financial conditions that drive social policy.
(Mr Rice) Could I add a supplement to what Sue said,
on the key statistics. Falls are the leading cause of mortality
in the over-75s; 400,000 people attend A&E each year as a
result of a fall, 14,000 people die as a result of hip fracture,
and 1,000 to 2,000 beds are occupied by hip fracture; although
that is not within the bed-blocking stats. From these numbers
you can see the scale of the issue.
(Ms Adams) A million people in casualty, as a result
of domestic falls.
436. We are interested. I think it was either
Canada or Boston, where we found out that they have people going
out and nailing down the carpet to prevent people falling, which
seems a sensible thing to do, but I am not sure we do it here.
437. I can start off by saying I am a very enthusiastic
supporter of Care & Repair, because in the Bristol area it
is very active, and it is one of the best areas for
(Ms Adams) It is, yes; you have got the best.
438. And I first came across them really two
or three years back, with a scheme they had whereby GPs were allowed
to prescribe little improvements and repairs which made a huge
difference, and they are still operating very successfully. So,
a couple of months ago, they contacted me and said they were going
to launch this document, On The Mend, which is directly related
to what we are talking about now, about delayed discharges; so
I went and saw the people there and went out with them, in their
little van, and they were doing little repairs and things. And
what I was amazed about is something that you have just said,
the relatively small amount of money that they can use and they
can spend on small-scale repairs, and it can make all the difference
between getting in and out. So what I want you to tell me is,
why do you think it is that these delays occur in the system that
your organisation can help with?
(Ms Adams) The repairs and adaptations?
439. The need for them, and why cannot it just
be done quickly by, say, social services; and I am not blaming
anybody, I am just asking for why you think it does not happen?
(Ms Adams) There are two things. If we just perhaps
pick out adaptations. We have evolved a ludicrous and complicated
system for addressing adaptations in people's homes, because it
is different depending on what sort of property you live in, where
you happen to be when you get assessed. And so, just to expand
on that, you have got one stream of money if you are a council
tenant, another stream of money, potentially, if you are a Registered
Social Landlord tenant, another stream if you an owner-occupier,
you have got little pots of money in social services, you might
be assessed by a social services OT, if you are in hospital it
will be a hospital OT, and then they have to cross-refer. And
you do need a root and branch reform of that whole adaptation
system; and perhaps the whole introduction of Primary Care Trusts
and future Care Trusts might give the opportunity for that to
change. And there is a review going on between DTLR and DoH, but
my understanding is it is not quite as root and branch as I would
like to see. And so there is the whole issue around changing perhaps,
without upsetting OTs, but you also do have to look at changing
professional approaches to things as well, to make that very concrete.
In two of the seven small hospital discharge schemes that I looked
at, in Leeds and Bury, in Lancashire, as a result of this fast-track
system, the occupational therapists were going out to fewer people's
homes, they were cutting down their visits by half. And they have
done two surveys in those areas where they looked at what people
asked for, some of it is about trusting what people ask for as
well, and 14 per cent in Leeds got what they asked for in the
first place but they waited eight months for an occupational therapist
to go and tell them that they needed what they wanted in the first
place. So it is multi-faceted, it is how it is driven by money,
where the money comes from, that holds things up. It is who makes
assessments, and so I think we worked out that seven different
professionals could be involved in a Disabled Facilities Grant,
because you have got social services, health and housing, and
the Audit Commission have done a succession of reports on how
things fall down at the interface of those three places. And so,
longer term, assuming Care Trusts come on stream, it would seem
entirely logical that that is where you put adaptation money.
The sensitivity around that, of course, is, it is a mandatory
system, with an identified pot, that currently goes to housing
authorities, and there are a lot of concerns about that money
just disappearing into a global health pot. But I think we have
to look at the two things, it is assessment practicalities and
streams of money, and simplify the whole thing.