Social care funding: a roadmap for the future

In February in response to the Dilnot Commission, the government announced a new funding model for adult social care, the latest development in a long history of debate about this issue. Ahead of a paper from The King’s Fund about social care funding, we talk to Richard Humphries, author of the paper and Assistant Director in the Policy team, to ask what more needs to be done.

'The government’s commitment to a new funding model is an important milestone on the way to a sustainable settlement for social care in which costs are shared fairly between the individual and the state,’ says Richard. ‘This is a principle we have long argued for, as far back as 2006 when we commissioned Derek Wanless to look at the challenges facing social care over the next 20 years.’

The changes mean that, from 2016, an individual’s contribution to their care costs will be capped at £72,000 and the means-tested threshold for residential care will rise from £23,250 to £123,000 worth of assets. Together, these reforms will mean more people will receive public funding for their care costs and there will be a clearer framework that will enable people to plan ahead.

A major commitment

Richard argues that we shouldn’t overlook the significance of this commitment by the government: ‘This is the first time in the history of the welfare state that a government has accepted the principle that the state puts a limit on how much people should have to pay towards their care costs. It moves social care a little bit closer to the way the NHS is funded because when we use NHS services we don’t have to worry about catastrophic health care costs.’

The government’s commitment, coming at a time of economic austerity, was a surprise to some, as Richard explains: ‘Because of the delay between this announcement and the Dilnot Commission report in 2011, many feared that the thorny issue of social care funding was yet again in the infamous long grass, particularly in the most daunting public finance climate in history, so we should welcome these proposals.’

However, challenges remain and Richard’s forthcoming paper on social care funding aims to explain where we are now and set out what more needs to be done in the future.

The long road ahead

‘In the short term, implementing the changes will be tricky,’ explains Richard. ‘It will involve separating the costs of care from the costs of accommodation and the complicated business of working out how much of their own money people are spending. This will be a lot of extra work for local government at a time of deep spending cuts.’  Richard suggests it could be a hard message to communicate too: ‘Many people are largely unaware that there is currently no limit to what they might need to pay for their care costs; explaining this to those people will be a tough public relations challenge; they could perceive the changes as an additional burden not an improvement.’

The Dilnot reforms answer the question about how we share costs between individuals and the state but Richard’s paper will focus on bigger questions: what kind of social care system are we trying to fund and how are we going to do that in the future? ‘It’s important that we dispel any rumours that implementing the Dilnot reforms means that the social care problem is solved; it’s an important milestone, but not the destination. For many the issue is not protection from care costs but not being entitled to help at all.  We need to think about where the money comes from to meet the increasing costs of the success that is an ageing population, with more of us living longer but with longer term health problems. Our Time to Think Differently programme has highlighted these pressures; for example, by 2030 the number of older people with care needs is predicted to rise by 61 per cent.’

The paper will also consider the relationship between the social care system and the NHS, arguing for a single, strategic assessment of the funding needs of both systems, and a stronger focus on outcomes through integrated budgets based on patient and service users’ needs. ‘In the paper, we argue for closer integration between the social care and health,’ argues Richard. ‘It’s impossible to look at social care resources without looking at the NHS and vice versa, and we need much closer alignment of how money is used across that boundary.’

The paper, which is due to be published in the summer, sets out four key priorities that would together act as a roadmap for social care reform. ‘My aspiration is, that by clarifying our current position and outlining future options, we can move the debate to the next stage and start to address the fundamental questions about social care funding that are outstanding.’