Paying for care: back to square one?

The need to address the financial consequences of the success story that is our ageing population is universally acknowledged. But the government’s decision to breach an explicit manifesto commitment by delaying reforms to social care funding (phase 2 of the Care Act 2014) until 2020 again demonstrates the apparent inability of successive governments to make headway on this issue.

The fact that there have been at least four independent reviews or commissions, four consultations, and five white and green papers over the past 17 years pays testimony to how much effort has been expended to so little effect.

It is to the credit of the coalition government that, from the outset, it recognised the ‘urgency’ of addressing social care funding, set up an independent commission chaired by Andrew Dilnot, and to the surprise of many, went on to commit both legislation and new money to implement its central recommendations from 2016. 

The Dilnot reforms, however modest, did seem like a breakthrough and commanded impressive support right across the social care sector. They offered some protection to people facing very high or ‘catastrophic’ care costs, more generous means-test thresholds and free care for disabled people entering adulthood with eligible care needs.

So why the about-turn? There were genuine concerns within local government about the challenge of implementing a technically difficult and complex set of changes in the toughest financial climate in living memory. Worries about the deteriorating financial position of social care were fuelled by the £1 billion extra cost of the national minimum/living wage announced in the summer budget. Unsurprisingly the Local Government Association had asked for a delay of two years to allow more time for implementation and address these issues with government. But postponement to the end of this parliament makes it almost certain – as ministerial co-architects of the changes Paul Burstow and Norman Lamb have argued – that these reforms will not happen. In effect they have been abandoned, not postponed.

It was always clear that the reforms were aimed at the question of ‘who pays’ – striking a fairer balance between the individual and the state – not how much money the social care system needs. The Dilnot Commission itself said that additional funding was ‘urgently required’ to address growing needs, a conclusion reiterated more recently by the Barker Commission. It is disappointing that the coalition did not use the Dilnot reforms as a stepping stone towards addressing these bigger funding challenges through a longer term roadmap for reform as we argued at the time. But scrapping the reforms will make this much harder, not easier as some have argued, for at least three reasons.

First, it reverses the landmark principle that, for the first time since the creation of the NHS in 1948, the state places a limit on how much people should have to pay for their care. The cap and means-test thresholds could have been made more generous later on as resources allowed.

Second, it creates at least 80,000 losers – the people who would have benefited both from the cap on care costs and improvements to the means test. Less publicised casualties of the delay include a new duty on councils to help self-funders arrange their own care, and a new appeals system.

The most critical consequence is that the money the government, in the 2013 Budget, had committed to find to pay for the reforms (from changes to inheritance tax thresholds and national insurance) has been lost. There is no commitment to reinvest this money in social care – £2.4 billion a year by 2025, £6 billion in total over the next five years. As things stand, the postponement adds not a penny to beleaguered council care budgets. Instead the case for additional money for social care will have to start all over again in the autumn spending review. Social care will have to take its chance in HM Treasury negotiations, at the mercy of more swingeing cuts to unprotected local government budgets.

So, while the government has set out a clear agenda and £8 billion of new investment for the NHS, its decision leaves it with no plan for social care other than to reconsider the zombie policy of private insurance which has gained no traction despite ministerial efforts to persuade the insurance industry otherwise. Funding reform has gone backwards five years. To everyone who works in or uses health and social care services, this should be a deeply worrying asymmetry. It underlines the compelling case for a single ring-fenced settlement for both the NHS and social care that recognises the inter-dependency of these services and the needs they meet. To demonstrate that it remains genuinely committed to social care reform, the government should ensure that a sum at least equivalent to the cost of implementing the Care Act is identified through the autumn Spending Review.

Keep up to date

Subscribe to our email newsletters and follow @TheKingsFund on Twitter to see our latest news and content.

Comments

#544334 Sarah Reed
MD
Many Happy Returns

On the money Richard (no pun intended).

#544335 Dave Shields
Chair, Southampton Health & Wellbeing Board
Southampton City Council

There is something deeply suspect about the length in the 'delay' in implementation and the timing of this announcement. I also fear that the few moderately progressive reforms ushered in by the coalition government are now starting to be rolled back in pursuit of a very different agenda. I'm very worried.

#544337 Melanie Henwood
Independent Research Consultant
Melanie Henwood Associates

It's a deeply disturbing development, and certainly the timetable for 'delay' suggests this vital matter of paying for long term care has yet again been kicked into the long grass. As I argued in The Guardian last week, the cap itself would in many ways have been more apparent than real since most self funders would run out of time before they reached their cap http://www.theguardian.com/social-care-network/2015/jul/13/why-the-cap-o...
However, it is also about everything else that will not happen - the easing of the means-test, and the new responsibilities to provide information and advice - which will again leave people forced to find their own way through the system. The reasons for LGA and others asking for a postponement are obvious with funding being so tight, but without major investment in social care, councils will still be running to stand still (or worse). It's the betrayal of a principle to share costs and risks, and to remove the fear of penury, which will hit the older population especially. There were major flaws with the capped cost model as it had been developed, but casting it aside offers no hope for those needing care now or in the future. The Minister of State's letter to the LGA seems to be clinging to the expectation that the financial services sector and pensions industry will still step in to fill the void with new products, but nobody else believes this is plausible or expects it to offer a way forward.

#544341 Geoff Hodgson
Editor
Caring Times magazine

I'm sure the Government will allocate as little extra to social care as it thinks it can get away with. From a policy maker's perspective, the system is not broken at all – it works for most people. It costs them, sure, and relatively few people won't inherit as much as they thought they might, but I don't think anyone will worry much about that, apart from the few so affected. But a two-tier system is evolving apace and capacity shortage in the north will begin to bite before long.

#544342 Richard Humphries

thanks to all of you for these comments. I can't comment on the party politics of this Dave but I worry that we may be returning to a default narrative that social care is primarily an individual/family responsibility with the state offering a very residual safety net for the very poorest. Melanie I enjoyed your Guardian piece. It raises the concern that even if the national living wage is funded through the spending review, there will be little if any extra to address the overall underfunding. Geoff I think yours is a good challenge but I'd question that "it works for most people". Speaking from personal experience it didn't work for me & my family earlier this year and there is good evidence about how badly people are let down by the system and go without essential care that would be unthinkable if it were a health care need.

#544344 Guy Patterson
Freelance research consultant

Depressing stuff.. As for those 'less publicised casualties', I thought that at last self-funders were going to see themselves as having a place within the system, rather than being eternally diverted away from it. I also looked forward to the prospect of this group being 'on the system' and therefore better equipped to contribute to the system as far as possible. I say this having discussed the cap with senior managers in ASC recently, who for the most part seemed to welcome the prospect of being able to engage with self-funders in a more meaningful way, despite reservations about workload, misgivings as to cost etc etc..

#544369 Mike lauerman
Retired
Self

Sorry if I am a bit late to this party. It does though seem akin to the dance of the seven veils. A tantalizing glimpse of what might be is whisked away just as it seems within our reach. Who in any government will have the guts to stand up and say this is in the' too difficult to do box' ? Sadly I doubt it will be resolved in my life time.
As Richard knows I am not usually so negative but this topic seems to frighten the horses.
I so hope I am wrong.
Mike

Add new comment