What we think
The social care system is not fit for purpose and is failing the people who rely on it, with high levels of unmet need and providers struggling to deliver the quality of care that older and disabled people have a right to expect. These combine to place great pressures on families and carers. The Covid-19 epidemic has exacerbated many of these problems, including increasing levels of unmet need and further destabilised the already fragile care provider market.
Politicians must be honest with the public about the shortcomings of the current system and the costs of reform. Our research shows that people have very little understanding of how social care operates and even less understanding of how it is funded. When given more detailed information about how social care works, they overwhelmingly agree that reform is needed.
Short-term funding pressures must be addressed urgently to prevent further deterioration, while a simpler and fairer social care system should be phased in over time. This should be based on the principle of ‘risk pooling’ – money raised from the population as a whole should fund the cost of those people who need social care. More public funding should be provided to create a better functioning social care system that meets people’s needs more effectively, but the cost of care should still be shared by the state and the individual.
There are a number of options for reforming social care funding, all of which have advantages and disadvantages. A successful approach to reform that would deliver a system that better meets people’s care and support needs should involve:
- reform of the means test so that more people are eligible for free or subsidised social care
- a cap on the costs of care to protect people from the very high costs of care some people face
- an improved preventive care offer to support people with lower levels of need.
Reform to funding and eligibility must go hand in hand with wider system reform of social care that sees quality improved, reforms to improve the operation of the social care market, better integration with the NHS, and a strategy for expanding and supporting the workforce.
Unlike most of the NHS, publicly funded adult social care is not free at the point of use. Instead access is restricted to those with the highest needs and lowest assets. Complicated rules to determine eligibility for publicly funded services create a complex system that is difficult to understand. Social care also differs from the NHS in that it is run by local authorities, who typically commission private sector companies or voluntary sector organisations to provide services.
The social care system has long been under-resourced as local authority budgets have failed to keep pace with the demographic pressures of rising numbers of older and disabled people with complex care needs. Between 2010/11 and 2014/15, significant reductions in local authority funding led to cuts to social care budgets. While budgets have risen again over the past few years, in 2019/20 funding has only just returned to the levels of 2010/11 despite increasing demand.
Underfunding has forced local authorities to restrict eligibility to those with the most substantial care needs only, while nationally means test thresholds have not been increased in line with inflation. As a result, while more older people are approaching local authorities for support, fewer are receiving it, although there has been a small increase in the number of working-age adults getting long-term help who now account for nearly half of the total adult social care budget. The long-term impact of Covid-19 on care needs is not yet known, though the pandemic – at least initially – resulted in increased levels of unmet need.
Those who are not eligible for publicly funded services have no protection against the very high costs associated with long stays in residential care. In the absence of a viable private insurance market the Care Act was supposed to bring in a ’cap on the costs of care‘, but this section of the legislation was never implemented. As such around 1 in 10 people aged 65 or over face care costs of £100,000 or more.
Many local authorities also pay providers less than they need to deliver quality care, leading some to hand back contracts or go out of business, threatening the supply of publicly funded care to the people who need it. The Covid-19 pandemic has increased the risk of provider failure, particularly among care homes. This also results in a system that relies on cross subsidy between care home residents paying for themselves and those who are funded by their local authority. This cross subsidy can be significant: on average, a self-funder’s place costs around 40 per cent more than one paid for by the local authority.
Together, these issues mean that many older and disabled people who need help with basic tasks such as washing, eating and getting dressed are forced to rely on family, pay for care themselves – or are unable to access care at all. Although the primary impact is on service users and their families, this has knock-on effects on the NHS and other services.
In the past 20 years there have been numerous failed attempts to find a way forward, including 12 White Papers, Green Papers and other consultations about social care in England as well as 5 independent reviews and commissions. Successive governments have put off fundamental reform of the system, opting instead for short-term measures. The current government has promised to bring forward plans for reform but has not yet done so.
By comparison, some other countries have managed to successfully implement funding reform. For example, Japan and Germany have introduced compulsory insurance for social care to complement their systems of health insurance.