How do you solve a problem like social care funding?

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  • Posted:Wednesday 31 July 2019

A podcast about big ideas in health and care. We talk with experts from The King’s Fund and beyond about the NHS, social care, and all things health policy and leadership. New episodes monthly.

With the recent Conservative leadership contest and Boris Johnson’s inaugural speech as Prime Minister, social care funding reform is firmly back on the political agenda. In this episode, we look back at previous attempts at reform and explore why this has proved so challenging for successive governments. Helen McKenna speaks with Sir Andrew Dilnot CBE, Chair of the 2010/11 independent commission on the Funding of Care and Support, Emily Holzhausen OBE, Director of Policy and Public Affairs at Carers UK, and Sally Warren, Director of Policy at The King’s Fund.

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HM: Helen McKenna
AD: Sir Andrew Dilnot
EH: Emily Holzhausen
SW: Sally Warren


HM:    Hello, and welcome to The King’s Fund Podcast, where we talk about the big issues and ideas in health and care. I’m Helen McKenna, I’m a Senior Fellow here at The King’s Fund and I’m going to be your host for today’s episode. 

Today, we’re going to be talking about an issue that is considered by some to be the greatest unresolved public policy issue of our time, social care funding. Why are we going to cover that today? Well, it’s salient for many reasons, first because as a country we still haven’t managed to reform the system. Second, the topic came up quite a bit during the recent Conservative Party leadership content. And, third, Boris Johnson who is now our new Prime Minister, said that it’s going to be one of his main issues in his first speech after taking office. 

I’m joined by three fantastic guests, who I’m going to ask to introduce themselves, and explain their interest in this topic, starting first of all with you Sir Andrew Dilnot.

AD:    So, I’m Andrew Dilnot. I became interested in this a long time ago when I was working at the IFS, which is where I worked for the first half of my career. I sat on a couple of committees, one for the Rowntree Foundation, I think and, but I hadn’t thought about it for a while, until 2010 when I had a phone call one day from a man called David Bean, how was then the Director General for Social Care at the Department of Health, saying that the Government was planning to set up an independent commission and I would be interested in chairing it. So, from 2010 to 2011 the summer of both those years, I spent a year working on this, during which time I met your other two guests who I shan’t introduce because that would be stealing their thunder. We reported in July 2011, and I’ve been trying to get it over the line ever since. 

HM:    Thank you, and Emily Holzhausen, can you tell us a little bit about who you are and your role, and also your particular interest in social care funding?

EH:    Yes, thank you very much. I’m the Director of Policy and Public Affairs at Carers UK and my interest and involvement with social care dates back about 25 years, when I worked for the National Federation of Women’s Institutes, and at that time we did the biggest ever survey of people who are providing unpaid care, mainly women in rural areas, and since then working for the charity which represents unpaid carers … It’s a foundation, it’s a fundamental part of people’s lives that is so often not recognised and not seen, and the debate is not explored enough. So that’s what I hope we’re going to do today, and that’s certainly what I hope the Government is going to do too. 

HM:    Fantastic, thank you. And, Sally, you’re our new Director of Policy here at The King’s Fund. If you could tell us a little bit about where you’ve been before coming here?

SW:    Thank you Helen. Yes, so I joined at The King’s Fund last month as the new Director of Policy and that’s on the back of around 20 years’ experience of working in central and local government on a range of health and social care policies. So I was really excited about the chance to be able to come to The King’s Fund and bring all of that different experience together, to think about how we can improve health and care. 

In terms of social care specifically, about 13 or 14 years ago, I first started working in Adult Social Care, and was completely bitten by how important the sector is, but how undervalued it is, how it can make such a transformational impact on people’s lives when done well. So, I’ve, for better or worse, been involved in more green papers and white papers for governments of different persuasions that I’m going to count today, including commissioning Andrew Dilnot’s formal commission, and then leading the government response to that. 

So, I bring to today a lot of experience and understanding of how government has grappled with these issues over the last 10-12 years. 

HM:    Fantastic, I was just totting up the number of years combined of experience in social care around this table, and I think I’ve calculated it’s around 49, close to 50, so immense level of expertise around this table, so really fortunate to have you. 

AD:    We look really young though?

HM:    Of course, of course, yeah [laughing]. Okay, so let’s start with, what’s the problem? So, Sally, perhaps I can come to you first. The King’s Fund has been saying for some time that reform of the social care system in England is urgently needed. Can you run us through briefly why we’re calling for this, and what are our main concerns?

SW:    So, the social care current model is very different to what the general public understand it to be. So, in the UK we have an NHS that’s free at the point of use and most people think that is how social care is structured; it isn’t. What we have is a system that means if you have a particular level of need for social care and a particularly low level of assets, you get state funded social care. For everybody else, they need to pay for their own social care, be that when they’re a working age adult or in older age. 

That has led to two different types of problems with the social care system, both of which are crisis that need to be fixed. The first is the amount of state funding available for that safety net, for those people with high levels of needs, and low level of means, has seen real funding squeezes over the last few years, and that’s meant that the quantity and quality of care there is now too low. So, there’s an immediate issue around how we fund and support that safety net. 

But normally when people are then talking about how we should structure and change reform, what they’re really talking about is that set of issues around, is it right that individuals should pay for social care or should it be structured in a slightly different way, with individuals and the state sharing responsibility. The reason it’s a problem is that it’s very hard to predict what your social care needs might cost you. So, you may be lucky enough and not need any social care or only a few thousand pounds. You might be really unlucky and have dementia in later life, where your social care costs could exceed even £100,000, so it’s very hard for you predict. And it’s also because the public believe it to be free, really shocking to the public when they reach the stage of needing to pay for care, to be able to find the resources to do that. So, there’s a real issue around people not understanding the system and when they do understand it, feeling it’s very unfair. 

HM:    And, Andrew I’d like to hear from you. Given you did review and make recommendations back in 2011 for reform, what’s happened since, are we in a different place now?

AD:    I think it probably has got worse. The funding of the means tested system has become less generous, there’s less money in real terms going in now, than there was in 2010. That would be feasible to manage, if the number of elderly people needing care had been falling. Of course, it hasn’t been falling - the number of older people, and this is a wonderful thing, has been growing - because we’re living longer. So, at the same time as the level of funding for the means tested system has been declining, the demand has been increasing, but we’ve got fewer people getting help, and that’s because the eligibility threshold and what’s available has got tighter and tighter. 

So the means tested system is in more of a mess and for the rest of us, the mess has also got worse because we’re still completely uncertain about what social care any of us will need, and the availability of private sector care and the cost of it has got worse, because private sector providers are being squeezed by the lack of availably of public sector funds, so they’re under enormous pressure. 

Something that’s worth remembering is the problem is not just a problem that affects the people who need social care. It affects the people who are trying to work in that industry or invest in that industry. Working in that industry where there are wonderful, caring, loving people has become more and more challenging, and being an investor in that industry has become something that, well if you suggest you’re thinking of investing in that industry, people might start looking at you and wondering whether you need help of a different sort. 
HM:    And, Emily, I’m really intersted to hear from your perspective. What would you say the problems are with the current funding model, from a service user and carer perspective, because you’re obviously coming into contact and thinking about those issues in your work?

EH:    Yes, it’s really clear when you work with disabled people and older people and their families, that the system is a total mystery. It’s so fragmented that to find your way through is incredibly complex. And the means test has become tighter in real terms, the capital levels have not gone up, so the amount of savings that you have - that you have to call on - has actually increased. Because of this situation, and because of the challenge around also prevention services as well, disabled and older people are going without and they’re going without important services. I was just looking at some of the comments for example. We do a survey every year of between 6 and 8,000 people, who provide unpaid care, and there are lots of comments about people’s care being cut, even though needs have stayed the same or increased, and they’re different for every family. For example, one can’t find sufficient support for her son, and she’s had to give up work. Another has said that all domestic support for their family member has been taken away. Domestic support is really important. To have a clean house, a tidy house that you live in, those sorts of vital services are being withdrawn, and the core services too, on making people feel a) families are having to make up some of that shortfall. Some really important research from Age UK has found that 1.4 million people are now doing without services and, it’s also true of disabled people as well. Some of the things that you might say are fundamental human rights, are not necessarily being fulfilled. 

So, it’s quite often a private matter as well. We are all different, and this impacts on people in different ways, and that’s why actually we were pleased that Prime Minster mentioned that social care was an important issue for him, in his first speech, because it has been too much on the margins. To see it in the mainstream is really important; people who can become very marginalised, they need to be treated as a priority. 

HM:    Andrew, I want to talk about the commission you chaired back in, I think you were asked in 2010 and then made the recommendations in 2011, if I’m right? And that was on the Commission of the Funding and Support, which became known obviously as the Dilnot Commission. Tell us a bit about how and why the commission came about and also, what the main recommendations were that you made.

AD:    So of course, I don't know exactly why the commission came about, but I think essentially it came about because they’d been a long history of trying to get something done about this. There was a Royal Commission in 1998. Nothing in the end followed from that, and that’s very unusual for a Royal Commission. A Royal Commission is meant to be the way that you actually get things done. Nothing happened. 

In the run up to the 2010 Election, the then Labour Government with Andy Burnham taking the lead on this, as the Secretary State for Health I think, had some plans in place, so what it wanted to call a ‘National Care Service’, and that seemed to be making some progress. It looked as though there was some element of cross-party agreement about that, but then when the Election campaign got going, politics intruded. The Conservative Party made a decision to be critical of the Labour Party proposals and labelled them as being something that would lead to a death tax. 
As it was, there was a coalition Government elected, as part of the coalition agreement there was some text, which made it very clear that the coalition partners felt very strong that social care needed urgently to be addressed, so they would set up a commission. So, our commission was set up. 

Our conclusion was that there was reform needed to both elements of the system. We did need to get proper funding of the means tested system, and some reforms to the precise way in which it works, but we also needed to put in place a system that would give the population as a whole, much greater certainty, and as well as giving the population much greater certainty, would put in place a structure where providers and producers could also be more innovative and have a better life. 

Our suggestion was that the state didn’t need to take on the whole of the risk, which is what the state does in the case of the NHS. We found that most people thought it wasn’t unreasonable that they should take some responsibility for their own social care, they were ready to plan for that, but that we should have the state take the risk if you’re one of the unlucky ones. So, our recommendation was that the state should put in place a cap on individual liability and say that if you’re one of the unlucky ones and you needed somewhere between £25,000 and £50,000 of social care or more, the state should step in and take that responsibility. So, individuals would be left with the £25-50,000 pounds of their care need. Beyond that the state would take responsibility. 

It was a recommendation for social insurance, collective provision, with a relatively large excess. In the first 18 months we had a lot of warm words, and all parties said it was a jolly good idea. Nothing much happened. I’d almost given up on getting it across the line, and I did what must have been, I don't know the 100th or 150th talk about it at the House of Lords, and three or four peers, I think they probably were all women, and all Lib Dems, came to me and said, “Well, why hasn’t this happened?” and I said, “Well, because there hasn’t been enough political leadership”. 

I think they went off and spoke to Nick Clegg and said, “Come on, this really is something that needs to happen”. And, Nick Clegg was persuaded, and Nick Clegg becoming persuaded helped David Cameron become persuaded and then we had both the Prime Minister and Deputy Prime Minister saying, “We’ll do it”. I think that was, this is probably early 2013. 

SW:    It is. February 2013. 

AD:    And, then legislation went through, and the Queen signed the Bill, and in politics 101, you learn that once the Queen has signed the Bill, you’re over the line. That was just before the 2015 General Election, so there was an agreement at that point to implement recommendations. Less generous recommendations than we’d gone for, but at least implement the structures in April 2016. Then after the 2015 General Election, the then Chancellor of the Exchequer first postponed it, and then said, “We’ll postpone it till 2020”. 

HM:    You were so close to getting it through? I mean it was on the statute book, it was through. I was going to ask you, we’re eight years on, what were the stumbling blocks because we’re still not there. You’ve kind of recounted them already, and I guess I’m hearing the politics were essential, the politics were also a problem, and then there was an election that got in the way. Was there anything else that you would say was a major obstacle?

AD:    I think the major obstacle is almost always the money and honestly, lack of strong support from the Treasury and strong support from the Prime Minister. In the immediate aftermath of the 2015 General Election there was anxiety about the public finances. Honestly, these amounts of money are not very large, and I think it was much more a concern about expanding the envelope of Government activity, than a concern about the precise amounts of money that were involved. The Treasury liked it, and it wasn’t a very high priority for the Prime Minister. 

Then we had the complete debacle of the 2017 Conservative manifesto, when it seemed like a good idea at the time to some people, to invent a new policy almost on the back of a cigarette packet, a few days before a manifesto and we saw how that all ended. That ended in terrible disruption. 

And, since then there’s been a promise of a Green Paper, but I think it had become a politically toxic thing for the Prime Minister and so we weren’t able to get it over the line. 

HM:    Sally, I know that you were actually on the other side of the fence while Sir Andrew Dilnot was doing this work, and I think were part of commissioning it in the first place. So as a civil servant, you worked with so many of the secretary of states who have been trying to achieve reform. What’s your view as to why it’s been so difficult for successive governments to make any real headway here?

SW:    I think it’s a really good question, Helen. My perspective fundamentally comes back to the point that nobody understands the system. So, when propositions are put forward by Government, the public and particularly the media more often than not, compare them to a free NHS, as opposed to comparing them to what the current model is.  

So, quite often, any proposal which is about how the public could structure their own co-payment in a different way, is portrayed as, this is a government now forcing you to pay for social care when you all thought it was free, so that lack of understanding means that proposals can be really easily misconstrued and presented in very unhelpful ways. That then creates those political flashpoints where it is obviously very attractive to political parties to think, I can score a point here, because they’re not in Government, they’re not having to grip with the really challenging aspects of this policy. 

That for me, I think, was always the real dilemma. The experts, when you’ve spoken to Ministers for long enough, they can understand the problem, they can understand the pros and cons of different options and they can then feel the best way forward is XY or Z. But actually, it doesn’t often survive first contact with the public and the media. 

HM:    And Emily, is that your take as well? Is it something that we need to really bear in mind when we’re doing reform?

EH:    Yes, I think it is. So, when Andy Burnham, a Secretary of State for Health was looking at all this work with social care, an enormous amount of public engagement was done, and in actual fact they were sunk by easy headlines and politics, which ran away. Whereas, in fact, the ground work had been well prepared for understanding how the public wanted to go and what the public was prepared to do. Given the fact that we’ve seen all parties involved in this really, we should be seeing something come forward that really is understood by the public, and really makes a difference. 

There’s so much understanding within the sector and so much of cohesion actually, between us in the sector, and some really interesting reports that have come out recently, from different sides of the political spectrum, that are looking at this in a way that I think we’ve come to a more collective view than perhaps we ever had done. 

HM:    So, there’s some reason to be optimistic then?

EH:    Campaigners are always optimistic. 

HM:    Thinking about some of the options, rather than going into the different options in detail, one of the key questions that is always worth asking is around eligibility, so who is eligible for care, and what’s included in the offer? Emily, in your role at Carer’s UK, you must think a lot about what matters when it comes to designer a new model. Can you tell us a little bit about the key issues you think about then?

EH:    In terms of eligibility, what really matters is some kind of flexibility in the system, because we are all different. People that use terms like ‘personalised care’ - it’s really, really important that we get a good mix for people, that we get a range of services that fit people’s needs and they’re able to fit them around their particular lives. And, when you see that work in practice, it’s absolutely transforming for those people, and their friends, and their family. So, those sorts of things when we’re constructing a system, is really important. 

The more hoops that you make people jump through, the harder it gets. A system that pulls risk, that actually has got a bit of a broad open door, is very important, so people don’t rush to get services generally. It tends to be a crisis purchase, so it’s not an issue of floodgates. Quite often people talk about care as an, “Oh well, if we let people have this, then we’ll open the flood gates, and everybody will be asking for it”. In actual fact, that’s not true, and so I think people need to be bolder about how that looks, and what people get. 

When we look at the NHS and what’s free at the point of delivery, certainly when we talk to carers, models, which pull risk, and make things free at the point of delivery for example, are just much easier to access. Very often people feel guilty about taking up a service or doing something and they shouldn’t be made to feel that, if they need to have it. So, you get better take up, you get better use of it, which actually works very well in favour or prevention agenda. 

HM:    You mentioned Emily, risk pooling, Andrew, it would be really good if you could talk us through what is risk pooling and how does it work?

AD:    So risk pooling is really an idea that says, there are some things which we know are going to happen, so unless I die tomorrow I’m going to need food, and I’m going to need housing, and I’m going to need clothes, and so I plan my life to make sure I’ve got enough money to deal with all of those. Then there are some other things which might happen tomorrow, are quite unlikely to happen to tomorrow, but if they happen, would cause me a big problem. So, it’s possible that tomorrow my house will burn down. It’s possible that tomorrow I’ll have a terrible car crash. Do I approach those things in the same way as I approach food, that is I make sure that I’ve got enough money for them, if they haven’t? Well, not at all, I don’t save the many hundreds of thousands of pounds I might need if I had a terrible car crash or if my house burnt down. 

What I say is, I look round and I say to all the rest of the population, look some of us, this is going to happen, most of this it’s not, so why don’t we each pay the average amount that is needed, and then if we’re the unlucky ones we get that dealt with. That’s how we should deal with social care. 

It’s just possible that one of the four of us will need an awful lot of social care, it’s quite unlikely. We think about 1 in 10 people need more than £100,000 but if you need more than £100,000 you might need half a million, or between a couple, you might need a million. Is it sensible for us to try to save up for that? No. The sensible thing is, to pull the risk, to ensure it. So why don’t we just buy some private insurance?

Well, we can’t because there isn’t any private insurance available and the reason there isn’t private insurance available is that while any of us could go and buy health insurance for next year, if we went to a health insurer, and said to them, “I’d really like you to tell me a fixed premium for my health insurance in 40 years’ time?” They’d laugh, because we just don't know what the costs will be, and that’s why there’s no private insurance available in any serious way in this country or any country in the world. 
The only way that we can pool the risk, is through the State, and if you’ve got a moment, I’ll give you the long list of countries where a voluntary insurance mechanism works… It’s not terribly good radio, that is the end of the list of countries where voluntary insurance works.

And, there’s nothing to stop it working except that it can’t wok, so we have to do this through the State. 

HM:    Fantastic and a really good summary there, thank you Andrew. So, Sally as well, there’s also the important question of how you raise the money. Can you just briefly talk us the through key options that people should be aware of?

SW:    Yeah, so I think there’s two different aspects of how you raise the money. There’s one around how do you support individuals to be able to make choices around how they meet their own personal responsibility. So, if you have a model that’s based on any form of shared responsibility between the individual and the State, the individual needs to think through how they can fund themselves up to the cap or up to a co-payment or pay a levy. And, there you need to think about - there may well be different solutions available for different generations. 

So, somebody who is, for example, 40 may well be able to start to put aside a small amount of money every month, much like pension savings, which would build up to an appropriate level of resource by the time they need care in 30 years or so. But if somebody has already reached retirement age and therefore made all of their savings plans for retirement, they can’t suddenly find an extra way to be able to put some money aside, so they might need to think about, what’s the total wealth they have and the total assets they have available to them, and how might they be able to use their resources. And that’s where some products like equity release have tended to be used by that kind of generation. 
I think one issue around how do individuals meet their own personal responsibility. The second issue is obviously then, if the State is going to be a more generous offer, in this system, it’s how do you pay for that as well? So how do you raise the necessary money through taxation? And, obviously depending on the type of tax lever you use, that can put the burden of that onto different parts of society. You then need to think in total about both what’s the beneficiaries of the policy and who is paying for the policy, to then be able to look across the piece and say, is this a progressive or a regressive policy, so you need to look at both the offer and the revenue side as well. 

HM:    So, just thinking ahead, we’ve now got a new Prime Minister in Number 10, and he has said that fixing social care will be one of his top priorities. There are rumours that his plan is going to be centred on a voluntary insurance model. Andrew, what’s your view and what would you be recommending if you had the ear of the new Prime Minister?

AD:    My view on a voluntary insurance model is, it’s hopeless, there isn’t a voluntary insurance model anywhere in the world. There’s nothing to stop there being a voluntary insurance model somewhere in the world, except that it doesn’t work. So, advocating something which could perfectly well happen, but hasn’t, and hasn’t happened for very, very good reasons, is just not plausible. So, my assumption is, that those, the rumours which they certainly are, I assume those rumours are simply wrong, and that something much more sensible will be proposed. 

I think much more plausible is that some version of collective provision is what’s being talked about. I’m sure that’s what advisors, both civil service and political will be suggesting. And, then the critical question I think now does become, how does that look generationally? 

One of the things that’s happened over the last 10 years, is there’s a sense that the older population is doing well, relative to the younger population. That’s true, and something we should celebrate, but it does also mean that if we were introduce reforms here, I think it would be perfectly appropriate for a significant part of the burden of paying for those reforms to come from the older population. 

So, my hunch and expectation is, that that’s one of the key questions that’s going on at the moment, but also that in the slightly more fiscally relaxed world that Mr Johnson and his colleagues feel they’re in, there’s a reasonable chance that they’ll feel able to commit to increases in spending in this area without necessarily having nailed down exactly where all of the money will come from. 

HM:    And, Emily from your perspective, what would you want a new funding model to look like?

EH:    If we were to tell the Prime Minister we would definitely say that some kind of collective contribution is important, and if I just talk about some people within our membership, they really need a system that they can rely on, and that collective responsibility is quite important. Now, you might look at slightly different things for slightly different ages. It’s very important that those with the least means in society are still able to live an equal and fulfilled life, however long that life is. I would also say to the Prime Minister, be very clear that beyond next April, we are in funding crisis, and local authorities need a cash injection over the short term, so whilst looking at the medium to longer term, don’t forget what we’ve got literally around the corner. We’re coming up to winter and winter pressures that is something you really need to have on your agenda. 

HM:    And I think that’s really important. In this episode we focused on the funding model, but there’s also this separate and very important issue, around the lack of money in the system, right now. As you say Emily, the system is currently under resourced, we’re seeing high levels of unmet need, and social care providers are really struggling to manage. Sally, just from your perspective, how important is it, that social care gets more money in the spending review and what are the consequences on the system if that doesn’t happen?

SW:    I think it’s absolutely critical it gets more funding. So, we’ve seen the local authority funded social care sector be really squeezed over the last eight, nine years. The consequences of that has been an increase in unmet need, a real challenge for providers, to be confident about the quality of care they’re providing, and a real extra pressure on family carers. 

If there isn’t an injection of cash to local authorities from next April, I think politicians need to be really honest that that burden, that is falling on individuals and on families, will continue to increase. We will see unmet need increase and that the consequence on the NHS, for example, will start to build up. So, I think if they’re not prepared to put the money which is so desperately needed, there has to be a really honest conversation about the consequences of not funding that desperate need at this stage. 

HM:    Given the history of political failure around making reform happen, and this really is the million-dollar question, what do you each think needs to happen to get social care reform over the line? Which one thing would you say is the critical ingredient if you were speaking to the new batch of politicians that have come into the Government?

AD:    I think it’s the Prime Minister and the Chancellor of the Exchequer both believing that they’ve got to do it. 

EH:    I think it’s important to listen to the people that have got a lot of experience in this debate and to look at where the popular options lie, where it can be funded. So, things like taxation, things like collective funding is possible, and would even up the balance between NHS and social care. 

SW:    So, I think it’s some form of cross-party consensus because we’re talking here about creating a model that individuals can make decisions about today, about their financial planning, about things that won’t happen to them for 30 or 40 years. So, individuals have to be confident that the decisions they’re making now, the system will be broadly similar when they come to need it. If we have political parties with clear preferences for very, very different models, that will undermine individual’s faith and confidence for the decisions they’re making today. So, I think it would mean, whilst you might be able to get legislation through, and start to implement it, I think it would mean overall, it would fail to achieve the success we’d like to see in reforming social care. 

HM:    Thank you, well I hope the Prime Minister and his new Cabinet take heed. That’s it from us, thanks for listening, and thank you to our guests, Sir Andrew Dilnot, Sally Warren and Emily Holzhausen. As always, please subscribe rate and review us on i-tunes, and if you have feedback or ideas for topics you’d like to hear covered in future episodes, then please get in touch, either on Twitter at @TheKingsFund or my account, at @helenamacarena. Hope you can join us next time.