Long term funding of adult social care Contents
The combination of rising demand and costs in the face of reductions in funding has placed the social care system under unsustainable strain. In its present state, the system is not fit to respond to current needs, let alone predicted future needs as a result of demographic trends. After successive attempts at reform the social care Green Paper must be the catalyst for achieving a fair, long-term and sustainable settlement. Failure to do so will undermine the effectiveness of the welcome recent announcement of an uplift in NHS England spending.
Spending on social care needs to rise to: meet the funding gap for the provision of social care by local authorities in 2020; provide the additional funding to meet future demand; meet the care needs of everyone, whether critical, substantial or moderate; and to improve the quality of care delivered, which includes ensuring the stability of the workforce and care providers.
Future spending on social care
The following principles should inform and direct the forthcoming discussions about how to reform social care and how to raise the additional funding needed:
- Providing high quality care
- Considering working age adults as well as older people
- Ensuring fairness on the ‘who and how’ we pay for social care, including between the generations
- Aspiring over time towards universal access to personal care free at the point of delivery
- Risk pooling—protecting people from catastrophic costs, and protecting a greater portion of their savings and assets
- ‘Earmarking’ of contributions to maintain public support
Costings of future provision of social care need to begin with a clear articulation of what good care looks like and costs for both older adults and working age adults—simply extending the current, inadequate provision of social care to more people is not a tenable long-term position.
We support the provision of social care free at the point of delivery as a long-term aspiration. In principle, we believe that the personal care element of social care should be delivered free to everyone who has the need for it, but that accommodation costs should continue to be paid on a means-tested basis. This should begin by extending free personal care to those deemed to have ‘critical’ needs. However, particularly for younger adults, it is essential that social care is viewed more holistically and funding for ‘preventative’ social care for adults with moderate social care needs is reinstated.
Raising additional funding
There is a clear need for increased funding for social care. Given the scale of the additional funding likely to be needed, a combination of different revenue-raising options will need to be employed, at both a local and a national level.
- There should be a continuation for the foreseeable future of the existing local government revenue streams. In 2020, these funding streams should be enhanced through 75% business rate retention used to fund social care rather than the replacement of grants the Government is proposing to introduce. In the medium term, there should be a reform of the council tax valuations and bands to bring them up-to-date. In the future, as other funding streams develop, the contribution from council tax and business rates to social care funding could reduce, allowing councils to better fund other important services.
- Local government funding will only ever be one part of the solution for social care, and it is clear that extra revenue will also need to be raised nationally. We heard strong support for the principle of earmarking contributions—it was felt that establishing a visible fund that is clearly, transparently and accountably linked to spending on social care is key to gaining public acceptance for this measure. We therefore recommend that an additional earmarked contribution, described as a ‘Social Care Premium’, should be introduced, to which employers would also contribute. This can either be as an addition to National Insurance, or through a separate mechanism similar to the German model.
- To ensure the accountability desired by the public, we believe that the funding derived from the Social Care Premium should be placed in an appropriately named and dedicated fund. The fund should be regularly audited and required to publish its spending and accounts. Following our principle of fairness between generations, we recommend that those aged under 40 should be exempt from the Social Care Premium, and that it should also be paid by those over the age of 65.
- Specific consideration should be given to setting a minimum earnings threshold for the Social Care Premium—to protect those on the lowest incomes—and to lifting the maximum threshold for such payments. Consideration should also be given to including unearned income, for example pensions and investments, in contribution calculations, as well as reforms to ensure that self-employed people pay equivalent contributions.
- There should also be consideration of the means for assessment of need and a mechanism for increasing the required premiums to meet changes in demand over time. Wherever possible, these mechanisms should be independent statutory bodies to remove the short-term political cycles and decision-making from the process.
- As a further development, the principle of having an earmarked fund that the public could see is for social care could be extended to funding of the NHS, providing a consistency and coherence to the link between social care and the NHS, underpinned by closer working and integration at a local level. In the long term, we believe there is a strong case for reimagining this as ‘National Health and Care Insurance’.
- In order to remove the catastrophic cost of care for some people, and to spread the burden more fairly, we also recommend that a specified additional amount of Inheritance Tax should be levied on all estates above a certain threshold and capped at a percentage of the total value.
Health and social care integration
Health and social care are highly interdependent. While it will not of itself generate funding to address the social care shortfall, further integration has the potential to improve outcomes and we recommend that local attempts to better integrate services continue apace. There is a strong case for the local delivery of social care, which brings the important benefits of links with housing and other local services, as well as local accountability. Given the interdependencies between the provision of health care, social care, and also public health, we also recommend that in its discussions of future funding settlements the Government should consider all these in the round.
The mechanism for achieving consensus
There has been failure in the past to make progress on reform and a cross-party approach on reforming social care funding is now essential. The concept of a cross-party parliamentary commission currently has the support of more than 100 MPs from all English political parties. As a proven mechanism for building and maintaining political consensus on difficult issues, and following other unsuccessful attempts at reform, we strongly recommend that a parliamentary commission offers the best way to make desperately needed progress on this issue and that it should use the principles and proposals set out in this report as a basis for proceeding.