New Clause 29 - Delegation of functions relating to deferred payment agreements and loans

Care Bill [Lords] – in a Public Bill Committee am 11:00 am ar 4 Chwefror 2014.

Danfonwch hysbysiad imi am ddadleuon fel hyn

‘(1) The Secretary of State may make arrangements for any person or body specified in the arrangements to exercise on behalf of local authorities, to such extent as is so specified, any function exercisable by local authorities by virtue of regulations under section 34.

(2) Any arrangements made under subsection (1) shall not prevent local authorities from exercising the function in question themselves.

(3) The Secretary of State may pay to any body or person by whom any function is exercisable by virtue of subsection (1)—

(a) such amounts as he considers appropriate for the purpose of meeting expenditure incurred or to be incurred by that body or person by way of administrative expenses in, or in connection with, the exercise of that function;

(b) such remuneration as he may determine.

(4) Any payment under subsection (3)(a) may be made subject to such terms and conditions as the Secretary of State may determine; and any such conditions may in particular—

(a) require the provision of returns or other information before any such payment is made;

(b) relate to the use of the amount paid or require the repayment in specified circumstances of all or part of the amount paid.’.—(Grahame M. Morris.)

Brought up, and read the First time.

Photo of Grahame Morris Grahame Morris Llafur, Easington

I beg to move, That the clause be read a Second time.

I appreciate that time is short, but the new clause covers an important issue. I hope that the Minister will at least take away the points I make, reflect on them and consider introducing proposals on Report or, at the very least, meet the Local Government Association and other stakeholders. The clause would create a national body, underwritten by central Government, for a system of deferred payment agreements. It would work in a way similar to the Student Loans Company—the body that administers student finance—and would provide councils with the flexibility to opt into a national framework for deferred payments, should they wish to do so.

The proposed new clause has the support of a range of stakeholders, including the LGA, the Association of Directors of Adult Social Services, the Chartered Institute of Public Finance and Accountancy, Age UK and the  National Association of Financial Assessment Officers. The rationale to support the clause is essentially twofold. First, a national body would provide an important single point of contact and an important degree of consistency for people entering into a deferred payment agreement, irrespective of where they live. I am sure the Minister will agree that it is in the interest of the public purse and the individual that deferred payment agreements are run in the most efficient and consistent way possible. Secondly, it makes good financial sense for a bespoke body to concentrate the financial risk involved, rather than expose 152 councils to such risk.

I have a lot of information here, a detailed assessment of the financial risk to the authorities involved and the advantages of having a single body to provide such a facility, which has been prepared by the LGA but which I have not got time to go into. I will happily share this with the Minister. The proposed new clause is in response to very understandable concerns from local government and from wider stakeholders about the level of financial risk that councils will face. It improves the Bill; I do not seek to undermine it. I am sorry that the Minister is not listening. It is a key part of the Government’s proposals to manage risk and improve services for those who need them.

I hope that the Minister will take this proposal away and consider it carefully. I do not propose to push this new clause to a vote, but I would like the Minister to provide reassurances that the Government will treat the proposal seriously and will meet and work closely with LGA and ADASS. I hope that the Minister will be prepared to commit his Department to work with local government to explore how such a body could be set up and managed for the benefit of some of the most vulnerable members of society.

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health

My first response to the hon. Gentleman is that I would be happy to meet the LGA. Indeed, I would very much welcome the hon. Gentleman to the meeting—it would be nice to see him in the office. We want to ensure that deferred payment agreements are available universally throughout England, so that people are not forced to sell their home within their lifetime to pay for care. Our approach is to build on the existing local schemes that local authorities are already operating.

Proposed new clause 29 would allow the Secretary of State to appoint a body to administer deferred payment agreements on behalf of local authorities. As the hon. Member for Easington has made clear, it would be something akin to the Student Loans Company, given the clause’s similarity to the legislation underpinning those arrangements. My question to the hon. Gentleman is why does he think that this would be desirable and necessary?

First, let us should consider its desirability. Is it desirable to move delicate decisions, which can be heavily affected by local factors, such as local housing markets and the cost of care locally, away from a local organisation and put them in the hands of a national body? I cannot see that it is. Further, I do not think that it is desirable to force individuals and their families, at a point of crisis, to approach an additional national organisation and potentially battle their way through an additional layer of bureaucracy. Not only would this be stressful for the  individual and his family but it would also introduce potential delay and an extra body that money has to trickle through before an arrangement is in place. I think everyone would agree that it would not be desirable, in a time of fiscal constraint, to spend money setting up a new body, a new quango, to perform a function that many local authorities already execute. To do so would seem to me to be wasteful.

If we can therefore conclude that this amendment is not desirable, we must consider whether it is necessary. It might be considered necessary because local authorities do not have the skills to administer the universal scheme. I find that hard to believe, given that—as I have already said—many local authorities already offer their own scheme. In addition, we have also committed to providing a model agreement and statutory guidance, which I think the Opposition also suggested, and other implementation support, to help local authorities to expand their offers in line with the national scheme.

Therefore, the proposed new clause does not strike me as being necessary. Perhaps it is considered necessary for reasons of funding, but the Department has committed to funding the expansion of the scheme, including providing £110 million in 2015-16. As local authorities already operate deferred payments, any additional administrative costs would be minimal and they would certainly be significantly less than those required to set up a new body.

Perhaps the proposed new clause is considered necessary to encourage efficiency, but that is simply not the case. Clause 78 already gives local authorities the power to delegate their functions, including deferred payment agreements, and it allows delegation in a far superior way than the new clause would. It does not force a national body that is remote from local conditions and lacking in local knowledge to make decisions that it is ill equipped to make. Instead, it allows local authorities to combine their collective resources and offer a regional solution that is tailored to local conditions and that allows the administrative burden to be shared.

I am sure that this Committee will agree that delegated arrangements set out in clause 78 are infinitely preferable to the provisions in new clause 29, which further renders the new clause unnecessary. However, as I have already said, I am happy to meet the hon. Gentleman and the LGA to discuss their concerns further. To conclude, this proposed new clause is as undesirable as it is unnecessary, and I hope that the hon. Gentleman will withdraw it.

Photo of Grahame Morris Grahame Morris Llafur, Easington 11:15, 4 Chwefror 2014

I am grateful to the Minister for his comments, but I will just respond to some of them. I am grateful that he has agreed to have a meeting, so that we can consider the advantages of such a scheme. He asked, “Why?”, and the answer is that it is about managing risk from the local authority’s perspective. I did not really have time to go into that because my speech had to be truncated, but the LGA estimates financial exposure in excess of £110 million; indeed, the figure could reach £1.1 billion by 2025. Clearly, central Government can borrow from the markets more cheaply than local government can, so there are arguments about efficiency and consistency.

However, in the interests of time management and so that I do not try your patience, Mr Rosindell, I will withdraw the new clause and take up the Minister’s kind offer of a meeting.

I beg to ask leave to withdraw the proposed new clause.

Clause, by leave, withdrawn.