Ready for Ageing? - Select Committee on Public Service and Demographic Change Contents

Annex 11: Changing how we pay for health and social care? (see paragraphs 24 and 28 to 30 of the report)

192.  There is a serious public funding gap in social care in England, despite the fact that under current systems, massive costs for social care can also fall on the individual.[278] In response to the Dilnot Commission's report, the Government are proposing to raise the asset limit at which people must pay for all their care to around £123,000 in 2017/18 prices.[279] The Government are also proposing that individuals should not be called upon to pay more than £75,000 in 2017/18 prices in reasonable care costs over their total time receiving care.

193.  We consider that the Dilnot Commission's proposals are far from a panacea for social care funding. The Government have estimated that the costs of their proposals in response to the Dilnot Commission will be £1 billion a year by the end of the next Parliament (i.e. 2020).[280] The major gainers will be the relatively better-off, who will be protected from depleting their housing assets;[281] and those who immediately gain will be the generation who have benefited from increases in housing wealth on an unprecedented scale over the past half-century (see Annex 7).

194.  The main advantages of the Dilnot Commission proposals were that they made clear to individuals the need to plan for the likely costs of long-term care, put a limit on the risks that individuals face, and would encourage the private insurance and pensions sectors to enter this market. The Committee considers that the Government's response to the Dilnot Commission proposals is a welcome step in the right direction, and necessary, but it will not be sufficient. The proposals are primarily concerned with redistributing the costs of care. They do not bring extra funding into the system to tackle the current funding crisis, avert the tightening of eligibility criteria for care access, or address the problem of expanding need in the coming decades—although we acknowledge that this was not the task given to the Commission.

195.  We have already argued (in Annex 7) that those who have benefited most from the housing boom should make a fair contribution to the rising costs of their own care. We consider that enabling people to access the value locked up in their homes through equity release will be crucial to helping older people to fund the care costs they may face.

278   The Dilnot Commission estimated that while a quarter of people aged 65 will need to spend very little on care over the rest of their lives, half can expect care costs of up to £20,000, and one in 10 can expect costs of over £100,000. Fairer Care Funding - The Report of the Commission on Funding of Care and Support, July 2011. Back

279   Adult care services provided by local authorities are funded partly by central government, partly by revenue raised locally and partly by fees charged to users. The age of an authority's population and other factors affecting local need for services are taken into account in determining the size of the central government grant. People with savings and assets over £23,250 currently pay in full for local care services (and those with assets in a band lower than this threshold have to run down those assets to help pay for care); someone receiving care in their own home does not have their housing assets taken into account, but in residential care they do unless a partner or dependent is living in the relevant home; an assessment of the individual's income will also determine what charges the local authority makes for its services. Back

280   DoH, Policy statement on care and support funding reform and legislative requirements, 11 February 2013. Back

281   Fairer Care Funding - The Report of the Commission on Funding of Care and Support, figure 11, July 2011. Back

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