The following amendments have been selected: amendments 1 and 2 in the name of Darren Millar.

I now move on to item 8, which is a debate on the Holtham report on paying for social care, and I note that Members are not present in the Chamber. [Interruption.] Well, that's fine, then. If a Member of the Government will move the motion, then I'm happy to proceed. I take it that's within order. Are you happy to formally move the motion, or do you want to speak to it, on social care? Oh. There we go. 

Apologies.

I thought perhaps at the start of a new year we might have managed to have all got in on time. Therefore, we will once again say now we move to the debate on the Holtham report on paying for social care, and I will now ask the Minister for Health and Social Services to open the debate—Vaughan Gething.

Motion NDM6906 Rebecca Evans

To propose that the National Assembly for Wales:

Notes:

a) the pressures on social services arising from austerity and population change;

b) the report commissioned from Professor Gerald Holtham, 'Paying for Social Care'; and

c) that an inter-ministerial group on social care has been set up by the Welsh Government, the work of which is being informed by the Holtham report.

Motion moved.

Thank you, Deputy Presiding Officer, and my apologies for being stuck in another meeting, when I thought the clock had plenty of time, and it did not, and I apologise to Members who have been waiting for the debate to start. But I am pleased to have this opportunity to open the debate and move the motion on the paper, centring upon Professor Gerry Holtham's report on paying for social care. The report and the economic analysis, commissioned by the Welsh Government, were published in June. Members will recall a social care levy was one of four new tax ideas to emerge from the national debate about new taxes in summer 2017. How we meet the costs of caring for an ageing population is a challenge relevant to every constituency in Wales and, indeed, the very many nations like ours with an ageing demographic profile. 

We have made enormous progress in improving healthcare and tackling illness, which is helping us to live longer. Equally, we're making significant improvement in the provision of social care, taking forward the approach set out in the Social Services and Well-being (Wales) Act 2014. The nature of social care in Wales today seeks to be co-productive, based on what matters to people, by promoting prevention and early intervention. Whilst social care is changing and improving, the challenges of an ageing population are inescapable. That is why we are committed, as a Government, to developing new funding models to support the future costs of social care. This commitment is at the heart of the work of the Government's inter-ministerial group on paying for social care, which I will now chair, taking over the work of my colleague Huw Irranca-Davies, and I should say that that was ably done and it leaves us in a good place.

Professor Holtham's report, which this debate centres on today, has been key to informing our early thinking. More broadly, the report is serving as a catalyst to refocus the wider debate around paying for care, and this, of course, includes direct engagement with our partners in local government. A social care levy is the approach that Professor Holtham has suggested, and his advice requires careful consideration alongside all other options, including insurance-based models. This approach may soon be considered in the context of the long-promised UK Government Green Paper on social care and potential proposals for a UK-wide system of paying for care.

Before I return to Professor Holtham's report itself, I want to say a few words about social care and the vital work that our social services do today to keep vulnerable adults and children safe, to help people to remain independent and to live fulfilled lives and to improve their well-being outcomes. The decade of austerity that we are living through and our diminishing resources mean that local authorities are facing pressures across all aspects of social services provision. The Welsh Government budget in 2019, the day-to-day revenue spending, will be 7 per cent lower, or £1.2 billion lower in real terms, than in 2010-11 on a like-for-like basis. Despite that challenging environment, spending in Wales on social care for older people has been protected in relation to our overall budget. There was a 13 per cent increase in cash terms in social care funding between 2010-11 and 2017-18—almost three times the rate of increase in the Welsh Government's overall budget. Wales has a higher proportion of older people than England, but, even allowing for that, spending per person over the age of 65 in 2017-18 was 23 per cent higher in Wales than in England—up from around 8 per cent higher in 2010-11. It should not, therefore, be a surprise that we will not support the first Conservative amendment that tries to shift blame away from Tory austerity. We will, however, support the second amendment.

The final budget for 2018-19, which we will debate next week in this Assembly, includes a further £7 million to raise the capital limit for residential care to £50,000 from this April. From April, people will be able to keep more of their hard-earned savings before having to contribute towards the cost of their care. This is the most generous threshold of any country within the United Kingdom. This Welsh Labour-led Government promised Wales that we would more than double the capital limit in this Assembly term, and we have done just that.

Official population forecasts add further impetus to the debate about how we pay for care. The forecast suggests a rapidly ageing population over the next 10 to 15 years that would increase demand upon our services for older people and place pressures on already stretched budgets. The population of over 75s in Wales is likely to increase by more than 40 per cent by 2030 and by more than 70 per cent by 2040. And the number of people living to be over 85 is projected to more than double by 2040, and that, of course, is something to celebrate, but is also something to plan for. It is against these forecasts and the anticipated increase in demand for social care that Professor Holtham proposed a levy on income to help pay for care. The proceeds from the levy would help fund the immediate costs of care for older people, with the remainder being placed in a ring-fenced fund and invested to help cover expected increases in the demand for care for future generations.

Our key objective in bringing this debate today is to invite Members' views on Professor Holtham's model and, in particular, to explore the four fundamental questions that Professor Holtham raises in his report. Firstly, he asks whether the social care levy should be earmarked or hypothecated to meet the social care costs. Now, hypothecation can, of course, reduce overall budget flexibility, but his report suggests that proceeds should be ring-fenced to help increase public acceptability of a new tax. Secondly, Professor Holtham asks whether the social care levy model should be based on the contributory principle: so, should a record of payments into the scheme be required to enjoy the benefits? Such a system could create higher administrative costs, but he also concludes, though, that the system should be of the collective type, where benefits are offered unrelated to the scale of a person's contributions. Next, he considers how fairness to those on different incomes and age cohorts could be assured. With Professor Holtham's model, the levy rates would vary between 1 and 3 per cent. They'd be higher for older people initially, as they would pay in for shorter periods, and that would enable an element of intergenerational fairness, but such a system would come with administrative cost.

Finally, he asks: should the scheme be pay-as-you-go, or should revenues be paid into a fund and invested to meet future demands? Professor Holtham makes the case for a funded approach. An initial age-related tax with rates of 1 to 3 per cent, declining over time to 1 per cent, could potentially support a 20 per cent increase in care spending per person for older people and accommodate the forecasted effects of ageing to at least 2040, but this is only possible with adequate investment returns and if collection and administration costs are kept reasonable. 

These are, of course, all important questions. As Professor Holtham himself explained both to the Finance Committee and to the inter-ministerial group on paying for social care, his assessment is based on a number of assumptions that we will need to properly consider and to take a view to inform our policy formulation. 

I really do welcome the views of Members about all the possible models of paying for social care in the future, as well as those fundamental questions posed by Professor Holtham in relation to a social care levy. I hope that today will be the start of a more informed debate between parties, not just within the Chamber, but outside it, and, indeed, potentially within other committees of the Assembly. We will need maturity and commitment across political parties to deliver on this challenging but unavoidable agenda. We will look to make progress, with a clear and focused plan to take this work forward. There are no easy answers to the challenge of paying for care, as the delayed UK Government Green Paper shows, but, together, I'm confident that here in Wales we can develop an approach tailored to our needs and fit for purpose now and in the future.

Thank you. I have selected the two amendments to the motion, and I call on Janet Finch-Saunders to move both amendments tabled in the name of Darren Millar. Janet.

Amendment 1—Darren Millar

Delete sub-point a) and replace with:

'the pressures on social services arising from poor local government settlements and population change;'

Amendment 2—Darren Millar

Add as new point at end of motion:

Recognises the need for a more integrated approach to the provision of both health and social care.

Amendments 1 and 2 moved.

Thank you, Deputy Presiding Officer. It is surely common knowledge that adult social care services in Wales are facing unprecedented levels of pressure and are struggling to meet the growing financial and social demands of an ageing population. As our former Older People’s Commissioner for Wales, Sarah Rochira, noted to the Finance Committee, social care support is a critical lifeline, helping vulnerable citizens to maintain their own independence. However, this lifeline is straining at the seams to keep up with current demand. For example, data from the ONS shows that over 800,000 of our 3.1 million people living in Wales are now aged 60 or over, with around a third of these aged over 75—this being only set to increase in coming years. Also, Wales currently has the highest rate of long-term illness in the UK, which is the most expensive aspect of NHS care, having previously increased from 105,000 to 142,000 between 2001 and 2010. As a result, pressures on adult social care services are fully expected to rise by about 4.1 per cent every year. Fully funding these pressures would require an extra £1 billion by 2030, according to the Health Foundation. At the current levels in investment and support, this is simply unachievable. As the Finance Committee Chair acknowledged, these pressures have led to a funding shortfall. The Welsh Government continues to underfund vital services. The promise of an extra £60 million, given in the 2019 budget, is nothing more than a drop in the ocean of need. As Welsh Conservatives, we believe too that a better spending use could be made by looking at some of the reductions of wasteful spend by this Welsh Labour Government. One only has to look at the special measures implemented now against the Betsi health board, where £10 million have been spent, and yet, in three and a half years, we've seen no improvement. How much better that spend would have been had it been put into a social care budget and given to our local authorities? Not only do local authorities already spend over £550 million on social care for the elderly, the WLGA now predicts that there will be an extra £344 million-worth of added pressure on social care services by 2021-22. These are eye-watering and very worrying figures.

Besides the lack of direct funding, the Government have repeatedly mismanaged funds that could have been used to improve the quality of social care services. What benefits can be drawn for those people requiring these vulnerable services from the £221 million spent on uncompetitive enterprise zones? Also, has it not been 18 months since the £100 million automotive park at Ebbw Vale was announced? Yet we still do not see any foundations laid or a single job brought about by this so-called investment. Indeed, this is becoming quite routine from this Labour Government.

The funding gap has extended to the point that adult social care investment needs to rise by 4 per cent every year, increasing the spend to £2.3 billion. And this is according to the Health Foundation.

Now, in contrast, the UK Government is due to publish a Green Paper covering a wide range of issues, reflecting their broader vision for a sustainable system of social care. This would be implemented through areas such as workforce planning, backing the sector with £2 billion of investment between 2018 and 2021 to get the right people into the right roles, or considering a more holistic and person-centred care service.

In his most recent report, Professor Holtham puts forward the case for a social care levy. However, as the Finance Committee has advised, and this will be debated again tomorrow, the Welsh Government will need to be able to justify how any funds raised will be used and to demonstrate their impact. Other areas of caution include his admission that further research is almost certainly needed to prevent a reliance on highly provisional figures as well as managing the impact of issues of complex and costly administration, or let's look at the concerns raised by Age Cymru about hypothecation of financing, worrying that money would be diverted by the whim of Ministers like the national insurance fund.

Despite these worries, the fundamental message remains the same—the adult social care service in Wales is creaking. Those working in our care sector are under immense strain and our services are facing a growing demand and increased financial pressures.

I believe, and I understand and agree with you, Minister, that we need to look at this really holistically, really maturely, and I think that it is prudent for us now to work forward, collectively, across the political barriers and we really do need to start having some serious and some tough talking as regards taking our social care funding requirements going forward. Thank you. 

I'm pleased to take part in this very important debate. Social care provision—surely, as has been announced, the challenge is great and it demands priority, and the Holtham report is a valuable contribution to that debate.

I don't know if I mentioned in the past that I've been a GP for about 35 years, but I've also been a past trustee of Crossroads Caring for Carers as well, so, exposure to the demands of my patients requiring social care has been great and continues. Now, obviously, people are living longer, largely due to the success of the NHS, despite some vilification from some corners. Okay, we've got clean water and some better housing as well, but the recent increases in life expectancy have come about because of the NHS. Two hundred and fifty people in the UK in 1950 celebrated 100 years of age, 2,500 celebrated 100 years of age in 1990, 13,700 celebrated 100 years of age two years ago. Yet, just focusing on financing the current, stretched social care system would betray our elderly population too, and is a very limited response to the challenge that we do face.

One of the reasons why I'm a fan of a Labour politician, Aneurin Bevan, is that he managed to create a coherent national health service with salaried nurses, doctors, physios; contracts; terms of employment; training; and all the rest when faced with the mishmash of health delivery in the 1930s, which was part public provision, part private provision, part charitable provision, with nobody really in overall charge and people missing out on healthcare in droves. He overcame huge vested interests and brought the NHS into being as a coherent stand-alone service, despite opposition from doctors.

Fast forward over 70 years and when you look at the social care system, it's like health was in the 1930s, with part public provision, part private provision, part charitable provision. We need to create a national care service in the same way that Aneurin Bevan faced down opponents who were saying, 'It's going to be too expensive, it's going to be far too complicated, doctors don't want to lose their private practice, local authorities losing their role.' Huge political will brought about a truly national health service, free at the point of delivery, from general taxation, with all our health risks pooled together. We need to take Aneurin Bevan's inspiration and vision and create a national care service in this twenty-first century.

Just talking about finance is limited and cold because we're dealing with people here—frail, elderly, vulnerable people. Shouldn't we make care better? Pay care staff more, employ them in a national service with terms and conditions, train them and register them, exactly like the NHS. A national care service with parity of esteem with the national health service. A national care service financed out of general taxation, just like the NHS. Care free at the point of delivery, just like the NHS. No distinction between free nursing care and, in the future, free personal care. There is a distinction now, personal care is means tested and charged for. Imagine such a revolutionary scenario with no division between nursing and social care. 'But we could never afford it,' people will say, forgetting that 80 per cent of social care costs today are paid for by Government, are publicly funded now—80 per cent is already paid for.

Imagine the uproar if you attended your GP today and you were told that you would need complex, expensive healthcare and that you would need to sell your house to fund it. Imagine the uproar, people on the streets protesting, topical questions in the Senedd, no doubt, but we accept people having to sell their homes to fund long-term social care with hardly a whimper. A social care levy would not reorganise the care service or stop you having to sell your home to fund care either.

Let's just stop—my final point—looking at social care as just a cost. We've had several speeches over recent months from Labour benches about the foundation economy, and social care is right there in the foundation economy. It's recognised with the NHS as a driver of economic development, especially in rural Wales, with 80,000 jobs in the NHS and a similar number in social care. The NHS is recognised as an important economic driver in terms of employment and higher than average salaries in areas where job prospects are often bleak. The same would apply with a national care service employing carers in a national service all over Wales, guaranteeing employment and decent salaries in areas of Wales with little alternative employment options and with care support workers no longer on zero-hours contracts, poor pay and little training. So, any discussion, to close, about social care should not just be about costs. There's an economic development opportunity here as well, and an economic gain, indeed, potentially outweighing those costs. Diolch yn fawr. 

I think this is a very important debate and, hopefully, the first of many, because it's a very complex subject. Before Christmas, I visited all the care homes for the elderly in my constituency, and by and large I was very impressed with the quality of the care that these homes provide and the dedication of their staff. My particular interest was prompted by the fact that one of the homes in my constituency had to close its nursing beds last month because the quality of the nursing provision was simply not good enough. I have to say that it is a good example of how Care Inspectorate Wales does work as a system to ensure that poor care is rooted out, and of the consistency with which the district nurses followed up the concerns that had been raised and flagged up the failure to improve. So, the leadership of this home took the right decision in closing these nursing beds, but, obviously, the lack of leadership that had initially led to the poor care is something we should all be concerned about. In this case, all of the residents were able to find suitable alternatives, but as the care system becomes more and more constrained, that could prove much more difficult in the future.

Talking to the staff, it's perfectly clear to me that wages for social care are simply quite inadequate. This is a really complex job, which requires huge dedication. It's completely unacceptable that people are doing this important job, looking after frail elderly people, and they're being paid less than the living wage. I mean, it's—.

The bidding system that operates in Cardiff guarantees that wages stay low, because for each individual who they want to place in a residential place, they will invite all tenders. The citizen may have chosen a particular home, but if it's not the cheapest then they have to find the money, either from their own resources or somebody else amongst their loved ones, to pay for the top-up between the lowest and the cost of the home that they wish to go to. So, those who don't have those sorts of resources don't have any choice at all. I think that's not a very comfortable way to ensure good care is rewarded and poor care is driven out.

One of the matrons I met said that she felt so underpaid that she was thinking of resigning in order to campaign for decent wages for social carers, and I think she's absolutely right. She says, 'It's okay at the moment. The group of elderly mentally infirm people I am looking after at the moment are fine and jolly—easy to control. In the past, I have gone home black and blue from people who violently assault me.' It's obviously not the fault of the patients, but it's a good example of how you really do need very, very skilled care when it comes to people who have completely lost sight of what are normal social norms. 

So, I think we could, and we should, put pressure on our local authorities to only commission services from providers who recognise trade unions, because this situation is never going to change if individuals simply say, 'I'd like to be better paid for the job I'm doing.' They'll simply not be called back—there will be other people who they will replace them with.

We talk of procurement to achieve these objectives in other areas of responsibility, and we should be doing that in the case of social care as well. But, I fully recognise that local authorities are operating with a finite pot. If we increase wages to a decent wage for people in social care, it will lead to local authorities having to raise the bar of the criteria for people to get residential care. That, in turn, will then put even more pressure on the health services. Hospital beds will fill up with people who can't any longer live at home but aren't able to find anywhere that's able to provide them with decent care in the community.

I'd like to see a complete sea change in the way we look at this. I'd like to see much more imagination, creativity and community involvement in the way we deliver social care. I'm disappointed that we haven't been able to make progress on the Buurtzorg pilots, which I've heard very disappointing reports about. I'd be very interested to hear what the Minister has to say on how he thinks that is going, because that is one of the ways in which we can ensure that the community at large—that the citizen can be involved in their own care, as well as their carers and the community at large. At the moment, we have a completely top-down system that doesn't allow for that.

I'm pleased to follow a thoughtful speech on this important subject from Jenny Rathbone. I agree with her about the wages that are paid to those who work in nursing homes. For the last 18 months of her life, my mother was in a nursing home—she'd been incapacitated by a stroke and couldn't do anything for herself at all. I was amazed at the commitment of the staff who looked after her and the others in her home on the poverty wages that they were being paid, and the long hours that they worked. I was absolutely astonished at what we got for what the service cost, and I do think that most people, if they could afford it, would be prepared to dip into their pockets to raise more money for those who work in social care of this kind, to put them on more than the technical living wage. That's one of the many important topics that we're going to have to grapple with in the years to come.

I'm going to continue along these consensual lines, because I do think, as the Minister said, we need to have maturity in this debate. It shouldn't be a political football. There may be disagreements, of course, about which is the best way forward, but I don't think that we should treat this as a kind of a party political dogfight issue just to score points for the sake of them, because it's a problem that has its own in-built intractability which we've got to cope with, whoever is in Government, and all of us in all parties. And as I approach my seventieth birthday myself, I'm of course keenly aware of what may lie ahead. I'm in the fortunate position where I could afford to pay for social care, but of course there are millions and millions of people in our country that can't, and it's desperately important for us to put in place now—and as quickly as we can—a sustainable system for the future that would give people dignity and respect in old age, in vulnerable years, when it's impossible for them to look after themselves.

I commend the Government for bringing this debate forward today and, indeed, for commissioning the Holtham report, which I think, broadly speaking, does show the way forward. It's a mature appraisal of the situation, and the facts are really quite stark. In the executive summary of the Holtham report, it's worth pointing a couple of these things out. The ratio of over-70s to those aged 20 to 69 is going to rise by the early 2040s from 23 per cent to 37 per cent, so that's a 50 per cent increase within the population. The demand for spending on social care is projected to rise by over 85 per cent by 2035 at 2016-17 prices, so that's a 20 per cent increase in spending per head and an increase in numbers requiring care of over 55 per cent.

And so, even if the UK economy and the Welsh budget grows at 1.5 per cent a year faster than care costs, spending a constant proportion of the budget on care will lead to a real increase in funding of only about 30 per cent of what we need. So, there is going to be a growing gap between what is needed to be spent and what is projected to be spent if we just keep things as they are.

In 2007-08—compare the figures today with those years—those who are over 65 has increased by 16 per cent in the population, but of those who are over 65 and in social care, the numbers have actually gone down from 14.9 per cent to 12.9 per cent. Now, part of that may be attributable to improvements in healthcare or greater effectiveness and efficiency in the way the care system works, but it's much more likely to be that health needs that are currently needed are not being met, and that is something else that we have to try to cope with in the years ahead.

So, I do believe that there is a great deal of goodwill across parties to find an acceptable solution. Whether it's the way forward that Dai Lloyd suggested of having an NHS model for social care, I'm not so sure, because I think the real problem we've got here is that despite all the arguments about austerity, that isn't really the problem. The problem is we're going to have to give higher priority to spending in this area, which means, because resources are finite, that we're going to have to downgrade some other areas of spending in the years to come, or else we won't be able to pay the bills. After all, we've doubled the national debt in the last eight years, and we're in a much worse situation today for meeting the problems of recession in the future than we were at the last financial crisis in 2008.

So, these problems are not going to go away. We're going to have to be brave and disappoint some people in order to benefit others, but I do think that the growing problems of paying for social care do deserve to have a greater priority within the Government budget, both within the UK and, indeed, in Wales.

Before making some remarks or comments about the report by Professor Holtham itself, I'd like to make a few remarks about my experience and my impressions of the care that's provided at present. In my constituency, before Christmas, and at other times of the year, I've seen great care being provided to people in care homes in my constituency by people who are on very low wages, but they do it because they see that role as a calling for them, or a vocation for them. I see a lack of beds locally for people who can't afford to pay for their own care. I see departments of social care in local authorities not being able to pay for the kind of care that they'd like to provide for people across Wales. Somehow we have to aim for the kind of sustainable system that all of us want to see.

Yes, the demographics are changing, and the costs are going to rise as we have an older population, but the basic question here is: how can we share that cost across society and ensure that everyone contributes towards that additional cost, rather than leaving the people who can afford to pay for their own care—people who are very fortunate, like the majority of us here in the Assembly—leaving us to pay while leaving other people who can't afford it to hope that a new system is introduced? We have to have a new system, and I'd like to see a different culture. I agree greatly with Jenny Rathbone that we need more of a community flavour to the care that we provide for people, and introduce much more co-operative systems for providing that care in our communities. So, we need a cultural shift, but we also need a policy change as well.

I'm very grateful to Professor Holtham for providing his ideas about one model that we could be looking at. We need to think outside the box, because the challenges are going to grow so much in the years to come. I have a number of doubts about the model that he recommends. It's not clear to me whether it's a levy being recommended here to take the place of the costs that people pay for social care at present, or an additional source of funding. If we're talking about introducing a levy and asking people to keep on paying for their own care, well, obviously that's something that we have to realise is a political challenge to have to sell to people. On the other hand, if what we have here is a levy that's supposed to pay for all the costs emanating from the public purse at present, I think possibly there is a lack of clarity regarding the financial figures that are mentioned in the report. He's talking about £550 million as the social care cost—that cost in truth is £750 million, but it just happens that £200 million of that comes in costs from people. So, the figure that is central to this proposal from Professor Holtham is rather unclear. Maybe the Government could explain whether they understand that this is a levy to replace costs or to create an additional fund. Is that what it is?

And, the figures relate to social care for people under 65 in this report. There is a lot of demand for care for those who are under 65—sorry, this report deals with over-65s. There is the issue also of the years that we will be waiting for that fund to pay out. What is the Government's view in terms of how we would pay for care now while we're waiting for that fund to reach the point where it would be able to pay out?

Finally, returning to the comments made by Dai Lloyd, it says a lot, I think, that it has taken us decades since we established the NHS for us to reach this point where we think, 'Well, how can we have a care service as well?' And maybe, in all seriousness, what we should be doing is not talking about how we're going to create £400 million annually for social care, but how we can look forward and look ahead to creating billions more for a health and social care service. And the fact that we are discussing the social care element in isolation here shows me that we are much further than we should be away from thinking of an integrated service for the years to come.

But, as I said, I'm grateful to have this paper and I'm looking forward to a broader discussion tomorrow in the wake of the Finance Committee's report.

I'd like to thank Professor Holtham for producing yet another insightful report, which will help inform one of the biggest decisions facing our nation: how do we pay for social care? No-one can deny that this is a pressing concern. Social care is in crisis, as the health committee has pointed out. The current level of funding is insufficient to meet current demand, let alone future need. The Welsh Government blames austerity. The opposition blames the Welsh Government. But both are right. Austerity has led to unsustainable cuts, but the way the cuts have been implemented lies firmly at the Welsh Government's door. Local government has cut social care to the bone in recent years, yet they have been allowed to build up massive reserves. Health boards have been allowed to mismanage their finances, and they are not alone. Our Welsh Government bodies have also hit the headlines in recent months as a result of financial mismanagement. Nobody wins in this blame game. And while politicians bicker over whose fault it is, people in desperate need of social care suffer. One thing that all sides agree on is that future demand will outstrip our ability to pay for social care.

Wales is facing massive demographic upheaval in the coming decades. The number of working age adults will be outstripped by the numbers of retirees, and the numbers of people living with long-term chronic illness is set to rocket. Therefore, we need to ensure that we plan for the changes coming, to ensure that we have sufficient funding to provide great quality social care and ensure that whatever the source of that funding, it is equitable.

Gerry Holtham's report gives us one idea for how we pay for care, but it shouldn't really be up to us, the politicians, to decide, because we need a national conversation about the best way to pay for care—a way that is acceptable to all. I personally don't believe that raising income tax is the answer, but then again that's not up to me. The Welsh public has a right to decide what would be the most fair and equitable method of paying for social care. Do we cut other areas of spending? Do we raise income tax? Should we increase national insurance? Would a new social care insurance be the answer? All options should be open for discussion, and whatever the most supported option is, that should be the option we take forward. Our job now is to start that conversation, to facilitate it and ensure that everyone has an opportunity to partake.

However we decide to pay for social care, we have to ensure intergenerational fairness and ensure that funds raised are used to pay for front-line social care, not more local government bureaucracy. As Dai Lloyd stated, it isn't just about finance; it is about how we deliver the care. Can we use a more holistic approach in our delivery? How can we improve the care received and how can we ensure our carers feel valued and that they receive the proper training? We have a crisis looming, and we need to decide as a nation how we meet it. Diolch yn fawr.

The Llywydd took the Chair.

Just a very brief contribution from me as Chair of the Finance Committee, just to express disappointment that the Government has decided to proceed with this debate today, because, as we've already heard earlier, we are to have a debate tomorrow on the cost of caring for an ageing population, which is a report compiled by the committee on this very same topic. I did ask the Government to consider being more innovative in the way that we deal with this situation, and that we could merge, perhaps, the two debates into one, or that we could have one after the other, so we can have a more meaningful, rounded debate, rather than having two separate debates. Unfortunately, the Government decided not to take that approach, so I just want to put on record my disappointment in that regard, and the fact that we have missed an opportunity, because now we will have the same debate, involving the same people, probably, on the very same issue, just 24 hours after this debate. So, it is an opportunity missed, and, indeed, I don't think it's the most effective or efficient use of our time in this Assembly. It's just a missed opportunity.

Now, when the history of the fifth Assembly is written, I think it is our willingness to use our powers over taxation that will mark a clear dividing line, a dividing line that shows the political maturity of this Parliament, a sign of our commitment to use all the tools at our disposal and a promise to the Welsh people to do all we can to create a more prosperous Wales. Nowhere is this clearer than in the ambitious raft of potential new taxes the current First Minister unveiled back in October 2017, and crucial among these is the suggestion of a levy to fund social care. But we must be under no illusion: the challenge to provide the appropriate social care to meet the needs of our society is a considerable one, as I think every speaker in this debate has actually mentioned so far.

Now, around a third of local government spending in Wales is allocated to social care for over-65's, and if you speak to any council leader, they will impress upon you that this is their biggest concern about budgets moving forward. And population trends suggest that this burden is only set to grow. Numbers aged over 65 will increase both absolutely and proportionally over the next decade and the numbers needed in care could increase by a quarter. An ageing population, combined with rising costs and increasingly complex and chronic conditions, will pose economic challenges. The Health Foundation noted in 2015 that Wales spent nearly £400 per person on social care, and that's excluding children and family services. They also estimated that costs would rise by over 4 per cent a year over the next 15 years, and that would mean that by 2030-1 we'd be spending an additional £1 billion on social care in Wales.

Determining a workable solution within the straitjacket of austerity also poses problems. I won't be supporting the first amendment. It misses the very obvious point that our budgets are constrained by the spending decisions taken at Westminster. In turn, this constrains the budgets that can be passed on to local government. If our budget had kept pace with the growth in gross domestic product, Wales would have £4 billion extra to invest in local government, social care and other services, but despite these pressures, the Welsh Government has continued to prioritise social care. For example, the 2019-20 budget contains an extra £50 million to alleviate the frontline pressures on local government.

It is clear that the failed Westminster orthodoxy of austerity is impinging on our ability to provide current and future demands. However, the problem is more deep-rooted than this. Even if our economy and budget grew at a faster rate than the cost of care, we would still face a spending gap that we'd need to bridge. We, therefore, need to seek evidence-based solutions that meet the challenges and Professor Holtham's report provides a critical contribution to this debate and road-maps one solution. Holtham explores the arguments and the various models of determining a sustainable and fairly funded outcome, but his conclusion is clear: raising a specific levy to pay for a specific outcome would meet public concerns, especially if such a levy is age and income dependent and contributory with the social security system stepping in to help those who need it. Holtham also powerfully explains why a funded system would be more efficient than a pay-as-you-go system. Rates could be smoothed and equitable between generations. Hypothecated outcomes would provide cast-iron guarantees for hypothecated input and it could potentially offer wider economic benefits acting as a community fund to promote national growth. As Holtham notes in conclusion, a funded contributory scheme could provide a viable solution to the problem of funding social care in an era of demographic change. Such a scheme would meet shifts in the age profile of Welsh citizens. Again, it would also be self-sustaining.

There will be questions that require further deliberation, of course, but this offers one pragmatic solution to what is the most critical of future needs: ensuring that we meet the care needs of current and future generations and doing so in a way that enshrines dignity and the very best standards. Moreover, Holtham provides a solution that seems to have a certain consensus behind it—in my party, at least. Our recent leadership election certainly generated a range of brilliant ideas from all candidates, but one area where there was a significant amount of agreement was in terms of Holtham and a social care levy. I look forward to these ideas being taken forward.

The Minister to reply to the debate—Vaughan Gething.

Thank you, Llywydd, and I'd like to start by thanking Members for their contributions this afternoon. Today's discussion has helped to continue, if not open, a debate that we do need to have on paying for social care. And our aim in bringing this debate today is twofold: to continue to identify the issues and implications in respect of options for the long-term financing of social care costs and to start to develop a platform from which we can build a wider consensus around a potential solution or solutions. And as I've said, there are no easy answers and there are no quick wins, but I'm heartened today that a number of the views expressed in the debate converge on a consistent drive to address this agenda, because there is a clear need for a nationwide debate on what a high-quality and sustainable social care sector in Wales looks like. And that, of course, means continuing to progress our agenda to integrate health and social care to deliver improved outcomes and experience. All parties in this place were, of course, involved in helping to commission the parliamentary view that we then accepted and built upon, and is central to our 'A Healthier Wales' agenda—the joint long-term plan for health and social care here in Wales.

But the debate, moving forward, about social care should rightly include options on finance, including taxation, and we will consider existing research and previous work. And as I said earlier, the debate has to acknowledge the role that local government have because they provide and commission much of the care that we have discussed today. Other providers and people across different parties will also need to be involved, and I do want to highlight that in that conversation with local government, it is taking place across different political leaderships: Conservative-led, Plaid Cymru-led, Independent-led and Welsh Labour-led councils are all part of the discussion that we wish to have, and are having, including with the Association of Directors of Social Services. It takes on board the point that Vikki Howells made—that when you talk to local authority cabinet members and leaders, their No. 1 concern about the future finance is actually about social care and education, the two big blocks of spending, and how they'll manage to maintain spending in this area, not just from a financial point of view but, actually, for the quality of care that they wish to see provided in their local communities. So, we are committed to taking account of new thinking and any creative approaches that exist, particularly as we do develop new models of care—to continue to promote a preventative approach, to make full use of new and existing technology to help people remain as independent and supported in their own communities as possible.

And there will of course be questions about how much we expect to raise in new revenue. So, not simply how we use the revenue that we have now but how to raise new revenue and what that would, or should, provide. And there are questions raised and a number of comments about what we are seeking to do. To replace revenue or to raise new revenue? We want more revenue to be available. I'll turn to some of the comments made—I won't be able to address each and every one—but we do have this debate about whether we get stuck into just talking about underfunding vital services. So, I say a £1.2 billion cost is the minimum cost of austerity—just keeping pace with inflation, not keeping up with GDP. We are then blamed by other parties. We respond by saying that in three successive general elections of championing austerity, we won't actually get to address the challenges that we have, either within Wales or the rest of the United Kingdom. There are choices to be made within our budget, and we have made choices, because there is no consequence-free choice to be made. We chose, within a diminishing overall budget, to invest more into our NHS, and that has consequences on every other budget line that we fund. There's no point pretending that that hasn't happened. But for social care, if we cannot generate extra revenue, then we accept that we'll have a diminishing amount and quality of care. So, this isn't simply about raising extra revenue to maintain a service; we want to raise extra revenue to maintain but also to improve a service. So, it's not just about keeping pace with demographic challenge. And our biggest concern, of course, is that social care has always been means-tested, where the NHS, since its creation, has not. And many of our citizens whom we represent are surprised that social care is means-tested—at the point at which they need that social care, they're surprised that they have to go through a form of means test.

Now, I recognise what Dai Lloyd said about wanting to have a national care service and the broader point about improving services for the citizen—the citizen who requires dignity in the care that they take part in and receive, but also dignity for the member of staff delivering that care. I was very pleased that, within the debate, a number of Members made the point that they have seen social care taking place, they've visited people and had their own personal experiences, and they're impressed with the quality of care that our staff are providing, and often staff who are not very well paid. For the challenge, I agree, is not simply a question of finance, but we do need to move ahead with new funding models if we are going to meet demographic and quality challenges for the future.

As I stated earlier, Llywydd, we will oppose the first Conservative amendment, but support the second. I thank Members for their contributions today and look forward to carrying on this conversation to inform our options to develop the financing of the future costs of social care here in Wales and I genuinely do look forward to being able to do that within my own party, but across different parties and different partners within and outside this place.

The proposal is to agree amendment 1. Does any Member object? [Objection.] I will defer voting on this item until voting time.

Voting deferred until voting time.