My Lords, in moving Amendment 145, which appears in my name, I will also speak to Amendments 146 and 147. I thank the noble Lord, Lord Howarth of Newport, who has swung behind these amendments since Committee, and I also very much thank the noble Baroness, Lady Tyler of Enfield, for her support for Amendment 147.
As we discussed at some length in Committee, all of these amendments address predatory finance in the care sector. We keep seeing more and more reports, whether from “Panorama”, Tortoise Media or the Financial Times, that there is a huge unfolding scandal in this area.
9 pm
I note that, in Committee, the noble Baroness, Lady Altmann, said that there is a problem with companies
“taking advantage of some of the most vulnerable people in our society without … oversight or controls.”—[Official Report, 4/2/22; col. 1159.]
In his response, the Minister provided some suggestions for how these oversights were being provided for—but of course the fact is that we have a huge problem. As was set out in Committee and in other debates in your Lordships’ House, we have very many cases where 16%—up to 20% in places—of the return is being taken out of the cost of care.
In Committee, the noble Baroness, Lady Thornton, said that the current system is “wholly dysfunctional”, and Amendment 146, which calls for a review, seeks to deal with that issue in particular. I would love to hear that the Government see that as a great idea and that they will step forward today—I am not expecting it, but one lives in hope.
Amendment 145 picks up an issue with financial assistance. Something quite new and perhaps surprising that is introduced in the Bill, and that has had very
little discussion, is the fact that the Government can provide financial assistance to care home providers in a way that has never happened before. My amendment in Committee said that this could not be used to repay debt. The Minister quite rightly pointed out that there was an issue where, if a care home wanted to pay, say, a debt that it owed to the local linen service for washing its linens or similar operational costs, that would potentially be a reasonable form of rescue. What was intended to be addressed was, as the amendment now says, debt incurred outside the business’s normal day-to-day operations, interest on debt—we know that those are the kind of financial instruments often used to extract these extraordinary rates of return—and paying dividends to shareholders.
During the Covid pandemic, we saw the payouts that went to care home providers that were, at the same time, paying very significant dividends to shareholders. There was considerable public shock and anger about that, and this addresses a similar kind of situation.
If the Minister says to me that the wording I have come up with in this amendment does not quite meet the demands, I will accept that that might well be the case; this is perhaps a first effort at it. But does he really think it is right that money paid for rescue goes to dividends or debt that is a product of financial engineering?
Responding to this in Committee, the Minister said that there would be the “usual scrutiny and safeguards” around spending public money—I think that we could all feel the House drawing a deep breath and being terribly reasonable at that point by not reacting. I point out that we seem to have reports—perhaps not daily but certainly weekly—from the National Audit Office expressing grave concerns about the way in which public money is being spent. These are after-the-fact reports that do not seem to ever have any impact, so we need to stop this public money flooding out.
Finally, I will pick up another of the Minister’s points in Committee. He said:
“Maintaining quality and high standards is vital”—[Official Report, 4/2/22; col. 1161.]
and that that is the Government’s focus. It is utterly impossible to maintain high standards and top levels of quality if 16% or 20% of the money being paid is going into profits—it clearly cannot be the best possible quality.
We are at a point where we have had considerable debate and expressions of support for these amendments on addressing these issues. In your Lordships’ House, we may perhaps not be ready to push a change into law at this moment, but an issue is being very much highlighted here, and I hope that we see some movement from the Government. We will see movement in a similar and related area on Wednesday, with the economic crime Bill—a sudden last-minute rush, reacting to public pressure—and it would be nice to see the issues being raised in these amendments dealt with in a more orderly way, in the manner of an orderly review, to actually fix what is very clearly a problem with the funding of our care sector. I beg to move.