A fork in the road: next steps for social care funding reform

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The costs of social care funding options, public attitudes to them – and the implications for policy reform


This paper pulls together new financial modelling, public perceptions work and policy analysis to identify the problems with adult social care in England and outline options for its reform. It does not aim to make firm proposals or recommendations but rather to identify and make explicit the advantages and disadvantages, impact and consequences of adopting one option over another. It concludes that reforming the current system will be expensive, but that if reform is chosen, England is now at a clear 'fork in the road' between a better means-tested system and one that is more like the NHS; free at the point of use for those who need it.
 

While we have not set out to suggest the answer in this work, it does help lay out the groundwork for a solution. We have set out viable options for change, to aid those in government to make the progress that is so desperately needed.

Current funding pressures

There has been concern about the system of publicly funded social care in England for more than 20 years. The report finds that additional revenue will need to be raised for adult social care services even without a major change in the model of delivery. Social care is facing high growth in demand, which is projected to rise by around £12 billion by 2030/31, growing at an average rate of 3.7 per cent a year. At the same time, we project growth in spending on social care of just 2.1 per cent a year. This would leave a funding gap of £1.5 billion in 2020/21 and £6 billion by 2030/31, at current prices.

Alternative models

The paper models the costs of a number of options: maintaining the current system (at 2015/16 levels) and keeping pace with projected demand pressures until 2030/31; restoring the system to the level of quality and access that existed in 2009/10; introducing a ‘cap and floor’ model, similar to the Conservative Party proposals at the 2017 general election; and introducing free personal care (FPC), similar to the model in Scotland.

Funding options

The additional funding required for all these models could be raised in various ways. For example, adding 1p to all rates of National Insurance (NI) by 2030/31 would raise enough to fund introducing the cap and floor model. Combined with the (problematic) option of means-testing winter fuel payments, this could be enough to introduce free personal care. Alternatively, adding 2p to all rates of income tax, or 3p to VAT, would be enough to improve access and quality close to the levels observed in 2009/10.

A rise in general taxation could be delivered through a hypothecated tax for social care. Our research into public attitudes indicated support for its perceived transparency but a key weakness is that any 'take' would rise and fall with the economy, rather than being aligned to changes in need or demand. Implementation would also be a major challenge.

A key question for government is whether, given the need for additional tax revenue will be required to protect the range and quality of care services, it is better to aim for a larger increase in taxation to be able to provide a superior model of care to those facing the burden of the cost. Then, if additional funding is raised, would this be more effectively used to increase access under the current system, or to change the system to address fundamental concerns over equity, complexity and/or protection from catastrophic costs?

Public perceptions and attitudes

The public has little understanding of how social care operates and even less understanding of how it is funded. Although some people have direct or indirect experience of arranging social care, this does not give them insight into the system as a whole.

Many people think the current funding system is more generous than it actually is, with many assuming social care will be free when they need it. Any proposed solution that is not free will be viewed negatively while this remains the case. When people are given more detailed information about how social care works, they recognise that there is a significant problem and believe the current system is not fit for purpose.

Most people in our deliberative events favoured the idea of the state having most responsibility for funding social care. In our quantitative polling, most people (55 per cent) favoured options where responsibility was shared, namely ‘means tested’ (30 per cent) and ‘means tested and capped’ (25 per cent), whereas 41 per cent favoured ‘the government (paid for by taxes)’.

To find and implement a solution to social care funding, public understanding needs to improve and awareness-raising measures must be part of any implementation. Mistrust of government, however, means a traditional education campaign is unlikely to be enough. Instead, a real social movement for social care is needed.

Policy implications

Sustaining the current system will be expensive. Wider reform might cost even more but may be better value.

‘Doing nothing’ is not a safe option and is no longer the easiest one. Demographic pressures, growing public concern and a system at ‘tipping point’ all mean action is politically essential.

To support reform, people need a better understanding of the problems, but politicians are not best placed to provide it. A coalition of organisations, with cross-party support where possible, is required.
 

Read more in the full report >


The Health Foundation has published a supplementary paper alongside the main report which focuses specifically on social care funding options.

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Comments

Kate

Comment date
18 May 2018

Do the funding projections for FPC and cap/floor assume the same quality and eligibility criteria (in terms of needs assessment) as 15/16? If so, do you also need to model the costs of restoring quality/eligibility to 2009/10 at the same time as introducing funding reforms like cap/floor? As presumably at the moment your future costings for reform don't take account of improving quality of care/stablising the provider market (arguably both essential in any reform package). Or have I misread the detail? Otherwise, a really interesting report.

Simon Bottery

Position
Senior Fellow, Social Care,
Organisation
The King's Fund
Comment date
21 May 2018

Yes, you're right. Our costings for 'improving the current system' are based on restoring levels of access and quality in 2009/10 and 2015/16 respectively. The 2015/16 option just stops the system from declining any further while the 2009/10 option would make a genuine difference but does nothing, by itself, to resolve issues likes catastrophic cost. We make the point that we need more agreement on which problem(s) we most want to resolve in order to decide how best to spend any additional money.

Daphne Canham

Position
Person PPG,
Organisation
,
Comment date
21 May 2018

I do not know what social care is, I am 84 years old with COPD, Osteporosis and diverticulitus.
I live on my own, my chilren are 150 miles away. I have had three stays in hospital over the last 5 years. Each time I was discharged with no help at all. I have had to spend thousands for care.
The last time I was in hospital I was discharged on Christmas Eve 2016. It cost me £3000 for three weeks in a nursing home . It is fortunate that I was able to do this. So your report is incomprehesibe to me. Perhaps you can explain what social care is

Hong-Anh Nguyen

Position
Information Centre Manager,
Organisation
The King's Fund
Comment date
23 May 2018

We did some work last year which explained social care through four videos and you can find them on our website here: https://www.kingsfund.org.uk/projects/what-is-social-care
Age UK's website also has clear and accessible information on social care and they can provide support and information in this area: https://www.ageuk.org.uk/information-advice/care/social-care-and-suppor…
If you are looking for further support, we'd also recommend contacting Independent Age who are a charity who provide free and impartial advice: https://www.independentage.org/about-us/how-we-help

Leslie

Position
Chair of Trustees,
Organisation
Reading Mencap
Comment date
26 May 2018

My small local charity supports people with learning disabilities so we know what social care is and what it isn’t, which is free. If you are unable to work, as 94% of people with learning disabilities are not, and you need care and support to live in the community, then you must resign yourself to the fact that you will probably be living on the Minimum Income Guarantee of £151 per week, after any rent costs, plus any mobility allowance you may have, unless you get support to claim your true Disabilty Related Expenses, which you probably won’t. If you still live with your parents or relatives, who are most likely elderly and possibly frail, forget getting any allowance, in this means tested system, to help your family to pay towards the cost of the upkeep of the accommodation, because you won’t get it. Families will have to pay for any additional room you need, like an extension to the house or conversion of the garage for living space, or to repair the additional damage you may cause to the furnishings, fittings or decoration because you are a bit heavy handed on your environment. But as the Green Paper won’t actually include people of working age who have disabilities because no one cares or knows about them, that won’t be a problem will it?

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