Social Care - Health Committee Contents

2  The present social care system

11.  Before we turn to examine the shortcomings of social care and current proposals for reform, it is important to understand the nature and broad characteristics of the present system. In this chapter we consider:

—  What are social care services and who are they for?

—  Who is responsible for social care services?

—  How is social care funded?

—  What duties and powers do local authorities have?

What are social care services and who are they for?

12.  Traditionally, social care needs have been identified by classifying people according to:

—  frailty or infirmity relating to age;

—  physical disability;

—  learning disability (developmental disorders involving intellectual impairment, e.g. Down's Syndrome);

—  functional mental illness (involving a disorder of the mind, e.g. schizophrenia or bipolar disorder);

—  organic mental illness (resulting from physical impairment of the brain, e.g. dementia or brain injury).

Social care services have conventionally sought to meet care and support needs through publicly provided or commissioned residential and non-residential services, the latter including domiciliary care, meals-on-wheels and day centres (see Annex 1).

13.  In recent years, however, these ways of understanding and organising social care have been strongly criticised by people who use services themselves. Traditional services, and categorisations of people who use services, have been recognised as often unhelpful, and even counterproductive, in addressing people's actual needs and preferences. In response to this critique, and reflecting shifts in political thinking about public service delivery, new approaches to providing social care have been introduced as part of "personalising" care and support (this is explored more fully in Annex 2).

14.  The Department of Health (DH) now uses a broad "enabling" (as opposed to prescriptive) definition of social care as:

the wide range of services designed to support people to maintain their independence, enable them to play a fuller part in society, protect them in vulnerable situations and manage complex relationships[8]

Since 1997, some groups of people who are eligible for social care have been able to choose to receive Direct Payments, i.e. cash sums that they can use to meet their needs, in lieu of non-residential services that are publicly provided or commissioned. These payments are often used to employ Personal Assistants (PAs), who help in a wide range of ways with care and support needs. Further innovations that allow greater choice and control for people who use services are also being rolled out, notably Individual Budgets and Personal Budgets, (giving people control over the budgets allocated for their care and support, without necessarily receiving cash payments). At present, these alternative modes of social care provision only exist on a relatively small scale, but they are seen as having the potential to transform beyond all recognition the landscape of social care, as we discuss in detail in this report.

15.  Official data returns for adult social care in England show that in 2008-09:

—  a total of 1.78 million people received care and support;

—  1.54 million people received non-residential care and support;

—  319,000 people received residential care services;[9]

—  86,000 social care clients received a Direct Payment;

—  28,000 carers of adults aged 18 and over received a Direct Payment.[10]

16.  This publicly-organised social care is modest in scale compared to the very large amount of care and support provided by "carers", i.e. people who provide unpaid, voluntary care and support, such as spouses, partners, family members, friends or neighbours.[11]

Who is responsible for social care services?

17.  Adult social care falls within the statutory remit of the 152 Councils with Adult Social Services Responsibilities (CASSRs),[12] an arrangement that dates back to the National Assistance Act 1948.

How is social care funded?

18.  In 2008-09 total gross current (i.e. non-capital) expenditure on Personal Social Services (PSS)[13] amounted to £16.1 billion.[14] This represents an increase of over £791 million on the 2007-08 figure of £15.3 billion (approximately 3% in real terms).[15] Overall gross expenditure on adult PSS rose in real terms by 57.4% between 1997-98 and 2007-08.[16] This is in contrast to spending on the NHS, which doubled in the same period; however, social care is funded on a different basis to the NHS, through a mixture of local and (mostly non-ringfenced) national sources, as we explain below.


19.  Most funding for social care comes from central government through the (non-ringfenced) Revenue Support Grant (RSG).[17] Central Government also pays specific grants, which are now mostly included in the Area Based Grant. The RSG allocation for each council is calculated using Relative Needs Formulae (RNFs). The RNF for older people's social care takes account of social structure, area costs, levels of deprivation and numbers of older people (particularly the "older old", aged 80 or over).

20.  Overall, total Aggregate External Finance (AEF) for local authorities (i.e. all moneys distributed to them by central government) rose by 4.2% in 2009-10. The AEF increase for 2010-11 will be 4%; grants to local government will then have risen in real terms by 48% since 1997-98.[18] However, it is clear that, given the current state of the public finances, settlements for some years thereafter will be much less generous.


21.  A substantial proportion of social care spending comes from finance raised by councils themselves. The Local Government Association (LGA) told us that in 2008-09 councils' combined net contribution to social care spending amounted to £5.3 billion (i.e. 32.9% of the provisional total gross current expenditure), with some councils spending more on social care than the value of their entire RSG.[19] Councils do, though, differ significantly in their willingness and ability to raise revenue for this purpose. Most of the funds raised locally for social care come from levying Council Tax, subject to the constraints imposed by the Government's power to "cap" Council Tax increases.[20]

22.  Local authorities have a good deal of choice in how they spend their available funds, subject to the government spending cap,[21] as well as requirements on spending ringfenced government grants and meeting statutory obligations (which only apply in limited ways to social care). There are many competing claims on council budgets and the amount spent by each local authority on social care will to a large extent reflect how much priority it is given.

23.  Councils can offset significant amounts of their gross expenditure on social care by levying charges on some people who use services, subject to the constraints imposed by national rules. This is discussed further below.

What duties and powers do local authorities have?

24.  Local authorities have certain statutory duties and powers regarding: the provision of information; the assessment of need for social care services; and the provision of support to people who meet local eligibility criteria.


25.  Councils have a legal obligation to provide information about non-residential services. In cases where people are not able to access council-arranged services, local authorities are expected to signpost appropriate alternative provision.


26.  Each CASSR has a statutory duty to carry out an assessment of a person's "presenting needs" for social care services in certain circumstances.[22] There is also a duty to notify NHS and housing support authorities, and to invite them to take part in the assessment process where it appears there may be a need for their services. In addition, carers aged 16 or over who are caring for a person aged 18 or over who uses social care services are entitled to a separate assessment of their ability to provide, or continue to provide, care.


27.  Councils have the discretion to determine which needs are "eligible needs", i.e. which level of need will qualify a person to receive care and support. Since 2003, eligibility has been assessed by councils according to a set of four standard threshold criteria, laid down in mandatory Fair Access to Care Services (FACS) guidance (see Box 1). This was issued by the DH partly in response to concerns about the perception of unfair and unjustifiable variations between local areas (often referred to as a "postcode lottery").

Box 1: Summary of Fair Access to Care Services standard threshold criteria
1)  Critical - where life is in danger, or serious abuse or neglect has occurred or might occur;

2)  Substantial - where abuse or neglect has occurred or might occur, or the individual is unable to carry out the majority of personal care (i.e. activities such as washing, dressing, going to the toilet, eating, etc.) or domestic routines and there is no-one available to assist;

3)  Moderate - where the individual is unable to carry out several personal care or domestic routines, or several of their family and social roles;

4)  Low - where the individual is unable to carry out one or two personal care or domestic tasks, or one or two of their family and social roles.

28.  The FACS guidance does not:

—  prescribe which needs should be regarded by councils as eligible;

—  require councils to make identical decisions about a particular person's level of need (should someone present for care and support in more than one council area); or

—  prescribe what services should be available to people with similar levels of need.


29.  Where eligibility criteria are met, councils have a duty:

to provide residential accommodation for persons aged 18 or over who by reason of age, illness, disability or any other circumstance are in need of care and attention not otherwise available to them.[23]

In addition, councils have the power under the 1948 Act to arrange or provide non-residential services as they think appropriate for adults:

who are blind, deaf, or dumb, or who suffer from mental disorder of any description, and other persons aged 18 or over who are substantially and permanently handicapped by illness, injury, congenital deformity or such other disabilities as may be prescribed by the Minister.[24]

There are also some statutory obligations in this regard under the Act and subsequent legislation. In respect of each person for whom care and support are to be commissioned or provided, a written Care Plan should be prepared.

30.  In providing non-residential care and support, councils are required to offer Direct Payments in lieu of any social care services to meet the assessed needs of people, provided they have been assessed as willing and able to manage Direct Payments (either alone or with support). Direct Payments cannot be used for:

—  services provided directly by the local authority itself;

—  permanent residential accommodation;

—  employment of a spouse/partner or co-resident family member;

—  any spending that is not intended to meet the assessed needs of the person using the service.


31.  Unlike healthcare, social care services are subject to means-testing and charging. This particularly affects services for older people, where £1.8 billion (20% of gross expenditure) was recouped in client contributions (made up mainly of charges)[25] in 2008-09 (compared to around 6% of gross expenditure on services provided to working age adults).[26] The regimes under which this occurs differ between residential and non-residential services, as we outline below.

Means-testing and charging for residential care

32.  There are statutory national rules, which originated under the 1948 Act, concerning means-testing and charging for residential care services.[27] Each local authority has a "standard rate"[28] it will pay when it places a person in residential accommodation, according to the type and level of care needed. This sum covers personal care and "hotel costs" (i.e. accommodation, food, laundry, etc.).[29] The council is required to carry out an assessment of the resident's financial means (both assets and income), charging them such sums as they are liable to pay.

33.  The means test relating to assets covers cash, investments, property (including equity in the resident's own home) and other capital. For the first 12 weeks after entry into a care home, the value of a person's principal property is not included in the means test (i.e. it is "disregarded"). Thereafter, it is included, except where a current spouse/partner or other qualifying person[30] continues to live there, in which case it continues to be disregarded.[31]

34.  A person with total (non-disregarded) assets worth more than a given capital threshold (this is uprated annually and in 2009-10 stands at £23,000) receives no public financial support. In this case, the resident must pay the full standard-rate amount for their council-arranged care (i.e. pay a 100% charge); or they can choose to make their own private arrangements (usually known as "self-funding"). The resident will only qualify for public support when the value of the assets has been spent down to the level of the disregard threshold. This often means that property has to be sold and much of the proceeds spent on paying for residential care.

35.  People with assets below the £23,000 threshold (in 2009-10) receive public support, but are required to pay almost all of their "assessed income" in charges. All pension income (both state and private)[32] and most social security benefits[33] are included in the assessed income. For people with assets below the £23,000 threshold and above a lower capital threshold (this is also uprated annually and in 2009-10 stands at £14,000), a "tariff income" is assumed from capital above the lower limit. Currently (in 2009-10) the rate for this is set at £1 per week for every £250 or part thereof.[34]

36.  The only part of assessed income that does not have to be paid in charges is a modest weekly Personal Expenses Allowance (PEA); this figure too is uprated annually and in 2009-10 stands at £21.90.[35] The DH states that the PEA "is intended to enable residents to have money to spend as they wish, for example on stationery, personal toiletries, treats and small presents for friends and relatives".[36]

Means-testing and charging for non-residential care

37.  Councils have the power to means-test and charge for non-residential care as they see fit, within the Fairer Charging guidelines issued by the DH in 2003. These state that any capital threshold for the purpose of means-testing for domiciliary care should not be lower than that for the residential care means test (as outlined above). Equity in a person's principal property (i.e. the value of their home) cannot be included in the means test for non-residential care, in contrast to the means test for residential care.

38.  The guidelines also specify that a user's assessed net income after care charges must not fall below a minimum threshold; and they forbid charging a minority of people who use services who fall into certain categories. There is a great deal of variation between local authorities in their operation of charging for homecare services. A small number of councils choose to provide free services for all or for certain groups of people. Some charge a flat rate (i.e. it applies to all, irrespective of relative ability to pay) to those who fail the means test; this is a highly regressive policy, imposing the greatest relative burden on those who are relatively worst off. Most councils, however, levy "stepped" charges, with a series of means thresholds to take account of relative ability to pay.

39.  As this chapter has shown, the social care system is complex and confusing. This system is likely to come under increasing pressure to meet people's needs as a result of anticipated changes in demand and costs. In the next chapter we consider the evidence for this and its implications for the future of social care.

8   Department of Health, Our health, our care, our say: a new direction for community services, Cm 6737, January 2006, para 1.29. Adults social care helps people aged 18 and over. The term "community care" was widely used in the past to describe social care but it is less common now, although it remains embedded in social care legislation. Back

9   These are provisional data. There is an element of double-counting within and between the categories of non-residential and residential care recipients, as some people will have used more than one type of service during the year; the total figure for all care recipients (1.78 million) does not include any double-counting (Health and Social Care Information Centre, Community Care Statistics: Social Services Activity, England - Councils with Adult Social Services Responsibilities tables, provisional, 2008-09). Back

10   HC Deb, 18 January 2010, col 115W Back

11   The term "informal care" is often used to describe this, but it is not universally accepted. Back

12   CASSRs are enumerated as follows: Unitary Authorities (55); Metropolitan Boroughs (36); London Boroughs (32); County Councils (27); the City of London Corporation; and the Council of the Isles of Scilly. Back

13   The term "Personal Social Services" mainly encompasses social care, but also includes other services. It is generally considered anachronistic but remains in administrative use. Back

14   Provisional data from the National Adult Social Care Intelligence Service, Back

15   Health and Social Care Information Centre, Personal Social Services Expenditure and Unit Costs, England Provisional 2008-09; cf. Q 3 Back

16   Health Committee, Public Expenditure on Health and Personal Social Services 2009, HC (2009-10) 269-i, Table 34b Back

17   RSG is paid as part of the Formula Grant, along with National Non-Domestic Rates (a business tax that is levied nationally and then allocated to local authorities on a capitation basis. Back

18   Calculation by the House of Commons Library, using data from the Department for Communities and Local Government Back

19   Ev 26 Back

20   Central Government allocations to local authorities are adjusted (by means of calculating Relative Resource Amounts) to take account of local authorities' differing abilities to raise money from local taxation on account of varying local taxbases. The Government has deemed that, in 2009-10, any Band D Council Tax increase of more than 5% is excessive. Back

21   The Government's capping regime limits budget requirements (i.e. spending financed by Formula Grant and Council Tax). In 2009-10, authorities' requirements have been deemed excessive if they set an increase of more than 4%. Back

22   The circumstances are where: the person appears to be someone for whom social care services could be provided; and the person's circumstances may need the provision of some social care services. Back

23   National Assistance Act 1948, section 21 Back

24   Ibid., section 29 Back

25   Client contributions also include a small amount of revenue raised through sales and fees. Back

26   Provisional data from the National Adult Social Care Intelligence Service, Central government allocations to local authorities are adjusted, by means of the Low Income Adjustment in the Social Services for Older People RNF, to recognise authorities' differing abilities to raise income from charges. Back

27   These rules are now embodied in the National Assistance (Assessment of Resources) Regulations 1992 and the Charges for Residential Accommodation Guide. Back

28   This is also sometimes called the "usual cost". Back

29   Nursing care provided as part of a package of care in a nursing home is paid for by the NHS. Back

30   Other qualifying persons are: a person under the age of 16 whom the property owner is liable to maintain; a close relative over the age of 60; a close relative under the age of 60 who is disabled; or an estranged partner who is a lone parent. Back

31   Councils also have discretion to disregard the value of a property if a carer is still living in it when the owner moves into a care home. Back

32   Half the value of a private pension is disregarded if it is being paid to a spouse or civil partner who is not living in the same care home. Back

33   The mobility component of Disability Living Allowance is excluded from the means test. Back

34   The tariff income formula is not intended to represent any actual rate of return that could be obtained from investing or depositing capital at current interest rates. It is an administrative device for setting user charges applicable to people with a certain level of assets. Back

35   A resident would only be completely absolved from paying charges if their income were below the level of the PEA; but this should not happen if Pension Credit is claimed from the Department for Work and Pensions. Back

36 Back

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