I quite agree with the noble Baroness. That is exactly why independent financial advisers can be so helpful. Often, the rent on the house will pay for the whole of care, and still leave the home to be handed on to the children if that is what the old person wishes.
All this underlines the fact that it is crucial that the advice comes from people who are qualified to give it—not necessarily local authority social workers, CAB advisers, regulated independent financial advisers and so on. Nor is it any good the local authority just handing out a list of people and saying, “You can go and see them and ask their advice”. For one thing, frequently there are issues of mental capacity, and the stress on an old person at this time is likely to be severe, particularly if they are thinking of going into a care home. For another, there is the general reluctance problem, and people are also often frightened by the cost of the independent financial advice that they may be seeking.
Some local authorities in these circumstances are performing heroically. I recently opened a centre in West Sussex which combines the resources of voluntary organisations, the local authority and independent financial advisers to offer a comprehensive service. It has recently relaunched its service and a local radio station, Spirit FM 96.6, has featured it in its drive time programme every weekday, which is tremendous. Incidentally, in doing this, the local authority is not acting wholly selflessly. Many people in West Sussex who have moved out of London to retire have quite a bit of resources but do not have infinite resources. If they are not well advised on how to use their resources they will run out of money and fall back on the council and its means-tested benefits to pay for their care. However, if they are properly supported, learn to use their money well and are advised of the products that are available to help them, they will not fall back on the local authority. So this, again, is a case where appropriate advice, properly structured, can save public money, not cost it.
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Other authorities are less on the ball. There is an intrinsic patchiness among social workers, who are much more likely to be au fait with what would be a nice home to send your mum to than with the detail of how to pay for it. It is their training. My wife is one. I would love her advice on the former but she would probably defer to me on the financial aspects.
Another grave problem is that the qualifications required of an independent financial adviser to advise older people are so-so, which is putting it rather highly. For example, they can sell point-of-use insurance, which is the best insurance product for many older people, with little knowledge behind them. Those who have the SOLLA qualification—I call it the gold standard, but then I would because I am proud of it—are much better equipped but there are only 1,000 of them out of the total number of IFAs in the country, which is certainly 25 or more times that.
The new Financial Conduct Authority, the successor to the Financial Services Authority, has, as far as I can tell, recently been left out of the planning for the Bill. It has not done much planning itself and, therefore, we are about to set loose on many older people who are seeking advice for the first time advisers who, to put it bluntly, hardly know what they are talking about. This situation must be gripped if it is not to end in chaos and disarray.
The points I am making and the amendments I am tabling could be dealt with in four ways: in the Bill, in regulation, in statutory guidance or in non-statutory guidance. As we are discussing the Bill now, obviously I have made proposals to change the Bill in some regards and to introduce regulation in others, but I do not have a dogmatic view as to which is appropriate. If the Minister were to say, “Yes, we accept all your amendments, which we will give in advice”, I would be delighted. It would avoid any problem that the noble Earl might have in replying.
As to my specific amendments, Amendment 83B, which is linked to Amendment 86B, I owe to the Association of British Insurers. They also have the support of the Equity Release Council, on whose advisory board I sit. The amendments seek to ensure that people receive regulated financial advice about their options, particularly self-funders. This is advice provided by properly regulated professionals and needs to take account of welfare benefits, pensions and all other sources of financial support available to the individual. The amendments also insist on local authorities not only providing the list—this deals with a point I made earlier—but on pointing people towards the adviser and making sure that they take the advice on board. Nevertheless it is, at the end of the day—there is no other way of it being—up to the individual whether they take up the offer of advice.
Those two amendments are buttressed by two further amendments. Amendment 83C, which is similar to the amendment moved by the noble Baroness, Lady Greengross, mandates that financial advice must be regulated advice and not merely independent advice. As I have said, the regulations are inadequate and need to be strengthened—but better some regulation than none whatever, which is possible under the independent advice formulation in the Bill. People will be asking their uncle what they should do about paying their care, and uncle may not be an expert.
Amendment 86G distinguishes the circumstances in which an authority may say, “Go and see an independent regulated financial adviser”, and it lays down a time limit in which it must do it. So it cannot hang about and leave it to be done when it can.
Amendment 86D provides that local authorities should meet the costs of a first consultation with an independent financial adviser. In fact, most advisers, certainly SOLLA advisers, offer a free first consultation. However, there is still a risk that fear of the costs will prevent people from taking financial advice. Moreover, it is slightly odd that this, which is virtually a public function, should be provided by financial advisers free of charge. Many of them do not sell any products or obtain anything that they can charge for as a result of the contact. As we need a great many more properly
accredited financial advisers operating in this field, it would seem sensible to increase the financial incentives for them to do so.
My other two amendments, Amendments 86B and 86F, I owe to the charity Independent Age, which leads for the Care and Support Alliance on advice and information. The amendments give legal force to an important government study. The Cabinet Officer’s study, Barriers to Choice Review, reported this year that official information available from the local authority is often limited to statutory services and misses out vital support which is available from the voluntary sector. It recommended:
“Giving local authorities a duty to signpost social care users to where they can access independent advice and support”,
which is the thrust of the amendments.
This goes wider than financial advice. For example, people may need to challenge or complain about a decision made by the local authority. I suspect there will be a great deal more of that in the future now that these decisions are crucial to when you reach your cap. A local authority may recommend a care home which is cheap but which an old person or their family does not regard as adequate for their needs. They need independent advice to help them fight their corner. The amendment does not go as far as to use the “advocacy” word—that might be a bridge too far in today’s climate—but it tiptoes in that direction. Quite apart from the benefits it brings to older people, it is an essential element in providing the right kind of support that they need.
I conclude where I started. We cannot exaggerate the importance of this process. It involves a great many different parties—the Financial Conduct Authority, the independent financial advisers, the organisations that accredit them, the voluntary sector and local authorities—all playing their part and working together in the holistic way that is so essential to care. If we do not crack this one—and I know the Minister and his officials are willing to listen on this because they have said so repeatedly—and nail down a system which can provide that holistic advice, this marvellously designed post-Dilnot edifice will not stand in the winds of the real world and the complexities of the situations which many old people face. I hope that, not only today but in the months going forward, we shall have constructive dialogue with all those involved until we have designed a system of information and advice that is up to the hefty task that is being placed on it.