Item 4 on the agenda this afternoon is a statement by the Minister for Health and Social Services: update on the work of the inter-ministerial group on paying for social care. I call on the Minister for Health and Social Services—Vaughan Gething.

Thank you, Deputy Presiding Officer, and thank you for the opportunity to update the Chamber on the work of the inter-ministerial group on paying for social care.

There is broad concern over the quality and sustainability of social care, both here in Wales and across the wider United Kingdom. If we are to have a meaningful conversation about the future of social care, then we have to consider seriously the quality and reach of social care, together with the funding that it requires, and how we raise this. Social care is a significant budget pressure for local government. Despite the reality of a decade of austerity, budgets have continued to rise annually by around 5.5 per cent over recent years. Across each area of Wales, with each different political leadership, there is a recognition in local government of the scale of the challenge.   

This Government has prioritised social care by making it one of the six priorities in our national strategy, 'Prosperity for All'. We've delivered on our manifesto commitment to raise the capital limit for residential care to £50,000. In Wales, we offer the most generous allowance in the UK for the savings and other capital that a person can keep without using those to fund their care. But we believe that we do need to go further. That is what the inter-ministerial group has been considering.

The existing pressures on social care are very real. We have considered Professor Holtham's proposals for a social care levy designed to meet the needs of an ageing demographic. However, pressures exist across other demographic groups, including for working-age adults as well as for older people. Recent research that the inter-ministerial group commissioned from LE Wales highlights uncertainties in projecting future expenditure needs for social care.

Using five illustrative scenarios, LE Wales estimates the need for additional funding over the next three years could range from £35 million a year for 2020 to 2023 to an additional £327 million a year by the same point. And these amounts are projected just to maintain, not extend, current provision.

As I said, we want to go further. Our ambitions for social services in Wales are to keep pace with people's needs and expectations. This will inevitably require additional resources and investment.

In previous debates, we've all recognised the amazing work done by social care staff up and down the country, delivering vital care in our communities. We've discussed the need to drive up the quality of care and the vital role it plays in helping people to live quality lives, independently, in settings that meet their needs and expectations.

Social care free at the point of need is an aspiration that many of us share. However, we currently estimate that providing just free personal care and accommodation in a care home is likely to cost over £700 million a year in addition. Our view is this would be well beyond our ability to provide, and it would not, on those figures, address staff terms and conditions. Therefore, our focus has been on developing funded options that are sustainable and deliver better quality care.  

With this in mind, the inter-ministerial group has considered a number of areas where investment could have the greatest impact, whilst looking to build on existing initiatives and policies. This includes: exploring new models of care; possibly offsetting elements of social care charges; and a consideration of how to deliver service quality improvements from investment in the social care workforce. 

There is widespread recognition of the importance that our workforce plays in the quality and effectiveness of social care. However, the pay and terms of employment don't reflect this. The result is in an estimated annual 30 per cent turnover in the domiciliary care workforce. In my view, it is important that we identify as a priority what we can do to tackle retention and improve continuity and the quality of care. This should also support our approach on the foundation economy and fair work. 

We are already driving a number of new models of integrated health and social care through the transformation fund that I announced as part of 'A Healthier Wales', our long-term plan for health and social care. We'll be drawing on the learning from transformation fund projects.

The group is keen to deepen the benefits of our integrated care fund, where the capital programme has strengthened the link between good-quality housing and good health and well-being outcomes. We're exploring the development of new models of housing-related care with the aim of keeping more people independent and out of residential care and acute care for as long as possible.

As I said, we already provide in Wales a generous charging framework, but we recognise the need to keep on improving what we offer. The inter-ministerial group is exploring options around: the introduction of funded non-residential care; a contribution towards the cost of residential care for those who pay the most; and the provision of funded personal care for anyone eligible.

Taking forward any or all of the options that I've just summarised will require investment over and above the resources required to maintain current service levels. We have previously debated the possibility of raising taxes in Wales to generate resources for social care. We need to be confident of delivering a sustainable funding solution that works for Wales.

So, the group has not limited its thinking. We've considered the joint work on the funding of social care by the select committee on health and social care and the select committee on communities and local government in the last UK Parliament. We've also reviewed the available evidence of international models. These illustrate the challenges in establishing a new funding model for social care. Where countries like Germany and Japan have well-established models of funding social care, or models of long-term care insurance, these were based on a clear acceptance of individual contributions for social care insurance.  

We have a deep-rooted respect and support for our national health service and remain protective of access to free healthcare at the point of need. The established international models reviewed require changes to remain viable and have restricted benefits for social care or raised financial contributions. This would imply that, if we were to raise taxes to fund an improvement in social care, we would need to align closely with the specific outcomes we want to achieve to deliver a sufficiently flexible and sustainable solution. 

There are real choices here for the nation. Building a consensus around the need for change and the nature of that will be fundamental to delivering reform for the future. I'm keen to continue this conversation today and beyond with Members, with committees and wider stakeholders to help inform our direction of travel and to build a picture of our collective vision for the social services that we want for the future of Wales. 

In the run-up, Minister, to the general election your Labour leader Jeremy Corbyn stated in his election bid that Labour would develop a system of free social care in Wales. It is now clear, however, from this statement that you have u-turned already on this and that your solution is to introduce a tax here in Wales.

I would like to thank the Minister for acknowledging the uncertainties in projecting future expenditure needs for social care. This is undeniable. The cost is predicted to grow between £35 million and £327 million a year by 2022-23, which is a huge variation, and makes it that much harder to identify the figure actually needed and to how to fund it going forward.

I would like to share an important message that I hear from those delivering and receiving social care, and they say this: we need to invest more in prevention and early intervention. Too often, things are allowed to—. There's a lack of access to available services, and too often money from the health budget and the social care budget is going in at a very high level when things have reached almost crisis point. Actually, if there were better prevention models, if there were better intervention models, and if money was going in at that lower level, you could assist and support more people at a more reasonable cost, preventing this high-end cost that ultimately arises when people end up in crisis.

According to 'The "Front Door" to Adult Social Care' report by the Wales Audit Office, local authorities are preventing social care demand, but information, advice and assistance—IAA—are not consistently effective. They say themselves they have found a postcode lottery on preventative community services. They also say that regional partnership boards don't always necessarily have the right commitment and buy-in from, on most occasions, our health service, despite our local authorities working really hard in social care departments on very fixed budgets that are not allowed to go into deficit. They find that the regional partnership boards, in some instances, are little more than a talking shop. This, to me, sounds like an ineffective system, so what consideration will you give to making the system we currently have more efficient by putting strong prevention and intervention measures first?

Prevention, of course, is one of the underlying principles of the integrated care fund. Your statement notes that the group is keen to deepen the benefits of the ICF. So why then, tell me, of the 493 projects supported by the ICF in 2018-19, did around 60 per cent of those not continue to receive funding in 2019-20? As a businesswoman, that tells me that the project shouldn't have been started in the first place, or there were excellent projects that you have failed to continue funding. That is not a good way of actually moving forward. This is an important point because, whilst the draft budget provides £130 million into the ICF to help regional partnership boards, the auditor general himself has remarked that there is little evidence that successful projects were being mainstreamed into core budgets.

So, question 2: how can we be sure that the £130 million would not be better spent through a fair distribution of that money between Wales's 22 local authorities, allowing them to lead on prevention and integration and cutting out this ridiculous, costly bureaucracy and financial incapability, because of the money being so ring-fenced and tied to these boards?

Before considering a levy or a tax to our people in Wales, I believe that we need to acknowledge that an extra £1.9 billion will be coming to the Welsh Government following increased health spending in England by the UK Government.

Also, as part of my spokesperson's role within the Welsh Conservatives, I have been proud to work with care home proprietors across north Wales, and I've challenged Betsi Cadwaladr University Health Board in an effort to secure fairer CHC fees. So, with that, will the inter-ministerial group explore the potential benefits of the Welsh NHS making more finance available to support the social care sector?

What has come through to me is that people are fed up. They're fed up with budgets in health boards being allowed to grow and grow in debt and deficit, yet local authorities are bound to deliver a balanced budget. Quite often, as a result of people stuck in beds in the health service, when they really should be in their own homes or in the respective care surroundings that they need, too often money that should be spent by the health board is actually being picked up by our already-cash-strapped local authorities.

Are you winding up, please?

I will, yes.

Finally, from reading your statement, it seems that whilst you could be sailing towards a tax, I do welcome the fact that your group has explored new models of care. If that is the case, I would ask that you kindly place a greater emphasis on alternatives such as the Buurtzorg model. It has revolutionised community care in the Netherlands and has seen overhead costs reduce by 25 per cent. Would you at least, Minister—? You don't often agree with me on anything, but would you agree with me that that model is worth consideration by your Government? Let's look at a model that actually we can look at to be more effective, more beneficial to those who need it, more manageable, and not have to introduce an overburdensome tax to the people of Wales. Thank you.

Thank you for the series of comments and questions. I don't want to be overly unkind, but there are a number of factual challenges in the statements that were made by the Conservative spokesperson. It is, of course, the case that Jeremy Corbyn is not the Prime Minister. Labour didn't win the last election. We got a real shoeing at the last election; there's now a Conservative UK Government. The idea that we are therefore going to be held to the last UK election manifesto when we can't possibly influence it is beyond parody. It's a bit of an embarrassing statement for Janet Finch-Saunders to start off with.

It's also worth pointing out that I can see the Chair of the Health, Social Care and Sport Committee in here and we recently had a debate on district and community nursing, which considered the Buurtzorg model and the work that the Government is already doing. There was an agreement within this Assembly term on further investment in district nursing, looking at principles from the Buurtzorg model and how they might be applied within Wales. So, we're deliberately increasing our investment in district and community nursing. So, far from this being a new issue, it's actually something that, through the whole of this term, you'll have heard in this Chamber and in the committee and in the report. To be fair, you may not have been in the Chamber at the time, but we've talked about it on several occasions and I'm glad to help to bring you up to date on that.

In terms of the cost pressures, the cost pressures range that I outlined, Deputy Presiding Officer, when you look at what 5.5 per cent over the last seven years or so that is going—the amount that, across local authorities, they are putting into social care, well that's actually nearer the top end of the £30-odd to £300-odd million range. There's a really big cost pressure that, despite austerity, political leadership of every shade is responding to. Independent-led councils, Welsh Conservative-led councils—so, your colleagues Sam Rowlands and Peter Fox, they are making those choices as well—together with Plaid Cymru and Welsh Labour-led councils, they're all responding to the reality of the increase in pressures. 

We could do broadly what you say and say, 'Just make it more efficient, try to develop some new models and carry on.' And that's a choice. It's a choice that we could make as a country. If we do that though, we have to accept, if we want an honest and mature debate, that that means that there'll be extra pressures on other budgets and it almost certainly means cuts in other areas of expenditure. Now, that's an honest choice that we could all make, but that would be the choice that we would be making. If we really want to see an improvement, we've got to consider the amount of funding that goes into it. At the last UK election, the Conservatives pledged to put £1 billion extra into social care, but that was actually money that they'd already announced. So, actually, there isn't new money that's going to come, arriving from May onwards; we've apparently already had it. It's been passed on in local government budgets through the RSG to local government. And that is only just about keeping pace with where we are. In fact, the NHS Confederation in England said that that funding pledge was well short of what was required—not Labour politicians, but people who are providing health and social care across our border.

We do want to see more efficiency in services, so we do want to see a transformation, we want to see reform and prevention going into how we look at the future of social care, but we also have to address the issue of funding. If we want to improve the quality and the reach and safeguard the dignity of social care, then we've got to have this serious and honest conversation about funding. And that's what we're prepared to do.

I don't want to leave unaddressed issues about the integrated care fund. Part of the reason why some ICF projects don't proceed is that they're piloting and trying new ways of working. And when we often have these debates here, your colleague, Angela Burns, regularly says to me, 'You have to be prepared to go and run projects that may not always succeed. If you're refusing to take any risk, you're not really trying something new.' And you can't then say on the other hand that it’s outrageous that not all of those projects have gone ahead. There will be different reasons why partners on the ground have looked and decided to proceed or not proceed. And actually, across local government, there's widespread support for the ICF and the way that it's worked, the way it’s brought different partnerships together, including health together with different parts of local government, the third sector, and other providers.

And you can't have it both ways on funding when it comes to health consequentials. Your party have regularly said, 'All the health consequentials should go directly into the health service—don't direct them or transfer them anywhere else at all.' We've actually gone well beyond that, and this Government, over the whole of this term, has put a lot more into the health service then direct consequantials that we've had from UK settlements. If you then say you want us to take more money into social care, well, we know we'll have a different debate about money that hasn't gone into the health service. And you can't have it both ways.

We—I—have made a choice to put £30 million last year, from the health budget, into social care. This year, I made the choice to put it up from £30 million to £40 million from the health budget into social care, because we recognise the pressures. So, we're doing the responsible and the right thing already, but the debate about the future should really be an honest and a grown-up one, and that's what I desperately want to see; not to try and have it both ways, but to be honest about what is available. And when we go out to further consultation with more models, we'll be open about that and about the basis of the funding questions for them, so people in this Chamber and beyond can look honestly at what's possible. We don't have a fixed view in the Government about what the exact future models of social care should be, or indeed how they should be funded, but I do hope that, over the coming months, we'll have a deal more maturity than we've heard thus far in the Chamber today, and I look forward to hearing what other parties have to say.

I'm not entirely sure what you've announced today, to be honest with you. Maybe you can give us a bit more information about this conversation that you're keen to start today and what form that conversation might take. There are references in your statement to all sorts of international models for paying for care. I read it that you want to have some sort of conversation, as I say, about raising a tax or perhaps a levy to fund social care, but given the long lead-in time for UK Government to agree to the devolution of any new taxes, I think, perhaps, you're happy enough to just keep on kicking that particular can down the road for a while longer.

You're quite right to say, of course, that there is concern about the sustainability of care as a whole—the care that we'll need to provide for our ageing population in future. And you know what? Given the narrative around concern about the cost of providing social care in particular, I can understand why it would appear to make sense to think of some sort of fund, perhaps, to build up to pay for that in future, but I think there are some real flaws in that. We can have a conversation about it, as you say. But we think that the question isn't about finding money for social care; the question is about paying for health and care services in the context of an increasingly older population in future. That means funding for the NHS and funding for social care and funding for good housing and tackling poverty and so on, amongst a whole host of other public services that are needed. The clear gap, I think, in funding, isn't social care, per se, or the NHS, or the other services separately; it's that lack of investment in services that prevents people from becoming ill in the first place and requiring NHS and social care. If we are to build funds—and I think we do need to think differently about models for the future—I think perhaps we should be thinking in terms of building up a transformation fund to get us to that care service that is fit for the twenty-first century and beyond, indeed. 

In response, actually, to some comments made by the Conservatives' spokesman, I think we can't just build the future of Welsh health funding on what we hope a UK Government might decide to spend on health in England in years to come. I think, based on the track record of successive Conservative Governments, their willingness to cut services deeply makes me nervous about hanging in there with a begging bowl for decisions on the NHS in England to be made. 

I'll come on to just a couple of questions. I have sympathy with the Minister's view that we need an honest conversation about the level of taxation paid. I believe it's a matter of principle that the best way is to fund care, both NHS and social, from general taxation, but I would strongly argue also that, if the Government does intend to raise taxes to fund health and care services, you'll only find support for that if, in exchange, there aren't going to be charges still for people who need those services. For example, that they would not have to sell their homes as well. 

A couple of claims were made in your statement. The statement claims that free personal care and care home accommodation could cost £700 million a year, but the accounts for local authorities—recent accounts—show that they've raised only £163 million from charges for social care for over-65s. Of course, you would also have to account for behaviour change, with self-funders moving into the funding, but the gap is still rather considerable. The Barker commission estimated the cost of providing free social care for those with moderate and critical needs for England would be £5 billion, which would translate to Wales as being around £250 million. In fact, LE Wales's own research in 2014 estimated this cost, which included under-65s as well, to be around £350 million. So could you explain why the figure you use is so considerably different to other estimates? A cynic would suggest that you're trying to undermine the case for social care free at the point of need whilst in the same breath claiming to aspire to that. Linked to this, you've stated that the research conducted by LE Wales on the additional funding needs required to maintain existing services by 2022-23, which is not far away, range from between £35 million and £327 million. That seems to me to be an extraordinarily wide range, so perhaps you could explain to me that wide gap in more detail. 

I'll just deal with the last point first. The research that we've had done, we're going to publish all of it fully before Easter and we expect then for the final to-ing and fro-ing between civil servants and LE Wales to allow us to do that. It will show the range of different assumptions that you make, from the most optimistic about the most minimal level of increase, that's where you get the £35 million, to, if you like, the maximalist position in terms of the impact of the growth. There are a number of different scenarios, but actually tracking what's happened in the last seven years, that 5.5 per cent rise is much nearer to the top-end scenario. So I don't think that the £35 million is the most optimistic; I don't think you're going to see that founded in reality, certainly not within what's happened in the last seven years. 

When it comes to the estimates we provide for what different scenarios might produce, for example the £700 million figure in terms of fully funding personal care and accommodation costs, we'll, again, publish all the reasons why that is. So it's not about wanting to make it an unaffordable and unachievable aspiration, but to say 'At this point in time, is this achievable or not?' And that's because of the advantages we have in getting civil servants and others to do that work. So we'll debate openly and it'll be put out into the field, because obviously we don't have a fixed view in the Government about what the exact model future social care should be or, indeed, the exact funding mechanism to try to lever more resources into our system. And that's where we'll be genuinely trying to have an open conversation from Easter onwards, and that's why we've made offers of technical briefings to both the Finance Committee and the two committees, and I think both Chairs are in the room—the Children, Young People and Education Committee will have an interest, together, I'm sure, with the Health, Social Care and Sport Committee—and to make available a briefing from the civil servants who are doing this work to say, 'Here's how we get to these figures, here are the different assumptions, and here's a go at asking the public some open questions about what they want and how they value it.' It's about the balance between improving social care and extending what we have, or just keeping what we have, the choices that will mean, and then what that means about what they are or aren't prepared to pay.

The most generous investing would be that if we all had the funding we needed without having to consider that, but I don't expect there to be a Green Paper any time soon; we've been promised a Green Paper for most of the last decade at a UK Government level. But there are real questions to consider about the impact, together with the rest of the UK system, because what I wouldn't want to see is that we try to provide a benefit to people in Wales and that's clawed back in a different way through the benefits system. So, we do need to think carefully about how to design something that would make sense and deliver an improvement in care for people. And, I think, on that, there isn't much difference between us, but it's about how we could get there. 

We've also taken seriously the point about, if we were to go down the line of suggesting there could be a tax rise, we'd have to think about how that could actually be linked directly to an improvement in the care that people receive, to be able to set out clearly what the offer would be if there were further income raised through taxes of any sort. Now, I say 'if' because, as I say, the Government doesn't have a fixed view. But it would be important to be able to understand not just the public view on that, but how you're going to link the two together. I think that's important in terms of people accepting that there really is something for something rather than another way for politicians to take money off them for no particular benefit. 

When it comes to health spend, I'm proud of the fact that we've got a Government where we have invested, despite austerity, more than we've had in terms of consequentials. The gap now is that, on average, we spend 9 per cent more than the UK average on health and social care in Wales, and we are taking steps to provide money to join the system more together, to have integrated models of health and social care together. But the way that the systems are funded is different. Social care is means tested, and many people are pretty horrified when they find out about that and they rub up against the system. So, it is a different system, so we do need to look at the funding around social care as a different matter to healthcare. Now, if there was a uniform way of funding it all, well, we could look then again about how that's organised in a different way, but I don't think a reorganisation is the answer to all of the challenges that we face. 

And I do want to just be clear that the focus on prevention is absolutely there—from the parliamentary review, to the 'A Healthier Wales' response, to the work we're doing with the transformation fund, prevention is absolutely a central focus on what we're looking to do in reforming and improving health and social care services—and, also, to give the assurance that we have maintained contact with the local government family, and will continue to do so across party. So, I and the Deputy Minister will openly brief local government cabinet members when they meet in their social services policy group. We'll meet them in the spring and over the summer, and I definitely want to hear from them the realities of actually having to make some of these choices in local government, together with the sorts of answers in terms of quality, reach and funding that they're prepared to support. 

Can I thank the Minister for his statement, and commend the approach of having a conversation, although I would urge some urgency in the conversation, because we've been talking about these things for over 20 years now? I can remember a commission for the long-term care of the elderly reporting in the year 2000 about various things that we're still discussing now, and there's been no work in the meantime. So, while commending the approach, I do think we need some urgency and fleetness of foot. Because it was Aneurin Bevan who removed the fear of paying for healthcare individually by effectively making everybody pay. Regardless of your risk, regardless of your health status, regardless of your personal usage of the healthcare system, everybody pays through general taxation: the nation pooling its collective risk to free the individual from paying for that risk individually—in other words, not having to sell his or her home to pay for healthcare as a result. 

We've accepted that for healthcare, and people wouldn't expect, having a conversation with their GP, that I would have to balance the cost vis-à-vis why they should sell their home. We don't have that conversation in health; we have it for social care, though, because, in contrast, people pay for social care individually. Huge costs can be incurred. Your home is at risk, and people have had to sell their homes to finance their long-term social care, because the risk is borne individually, and, therefore, the costs are paid individually, not by the whole nation as a collective.

That's why I think we need a national care service, financed by general taxation, exactly like the NHS, and with national terms and conditions for fully employed staff as well. Let's look at care exactly like we look at health, because, after all, 80 per cent of social care costs now, today, are paid for by public funds. They're publicly funded now—80 per cent of social care costs are publicly funded now. So, Minister, can you confirm whether any type of social care levy will transfer the financial risk from the individual to the nation? And is not your home still at risk with any type of levy or funding that's targeted at a group of individuals, as opposed to everybody? Isn't your home still at risk when paying a social care levy?

After all, in closing, Aneurin Bevan's victory against all odds, including medical opposition and huge vested interests saying it was too complicated, too hard, and too expensive, exactly like we're saying now about social care—that's what Aneurin Bevan faced down at the time, by sheer force of political will, which is why I'm such a fan of his. His victory was to remove the fear of paying for your individual healthcare. We face the same challenge with paying for social care individually today—some of us sooner than others. Thank you.

Well, indeed. And some of the drivers in the conversation have been about the predictions on the demographics of the population, which were talked about at the start of devolution. And I recognise there are a number of original Members in the room now, but it's a topic that's been going on, a conversation about what that means in terms of public services. And we're seeing that pressure in the health service; we see the pressure also in social care. It's why the Health Foundation estimated a couple of years ago that the cost would be on average 4.1 per cent. Actually, as I've said, local government is putting more than 4.1 per cent into their social care budget already. So, there's a real pressure and real challenge.

But it is difficult, because you have got to think about how you raise the money, what you get in return, and what that means—not just for the benefits system, but there are challenges about any sort of way to generate extra income. Because there are challenges about inter-generational fairness, on the one hand. If you're nearing retirement age, or expecting to receive social care because of your age, as opposed to children, a young person, or a working-age adult who still needs social care, then you may well say, 'I've paid into the system all my life, and this is what I expect to receive in return'. Whereas, if you're in your 20s, at the start of your working life, you may say, 'I don't expect to receive the benefit of this for some time to come'. And there's a real challenge about what is fair between generations, as well as between people who pay taxes, people who receive care. And there's a challenge about the current means testing environment and reality of social care.

So, we've capped some of the costs that people would pay for domestic care costs; we chose to do that. And that's taken away some of the fears that some people have about paying for care. But we still have challenges. We want to do more. It's not just about whether we have a vision that we'd like to have social care funded like the national health service, but about our capacity to do so. And that's an honest conversation we should have. And when we provide more information in the technical briefings and the conversations from the spring/Easter onwards, I think we'll be able to have that conversation with more facts in the field for all of us to look at. And I think that will be a good thing.

But to improve staff terms and conditions—we could spend lots of money on doing that, and that might improve the quality of care, it might reduce the churn in the workforce, but that in itself won't extend the reach of social care as well. So, these are all choices we'll need to make, and to be clear sighted about them as we make them.

Thank you very much, Minister. Thank you.