The government acknowledges that the current system feels unfair to those not eligible for support; is too complex; is overly focused on high-level needs rather than prevention; and creates wide regional variations in services.
It also appears to be unsustainable – already it is only those in severe need who are helped in many areas, and with increases in the number of older people and adults with disabilities the position is set to deteriorate significantly over the next few years. The government also argues that public expectations of care standards and the degree of choice individuals should enjoy are increasing, which will place further cost pressures on services.
Together these factors are seen as building a case for 'radical reform'.
Improving the delivery of social care
In its vision for a National Care Service in England the government sets out the following six elements that anyone using the service should be able to expect:
- access to prevention services
- a national assessment
- a joined-up service
- appropriate information and advice
- personalised care and support
- fair funding.
Many of these are framed as policy aspirations and are not accompanied by particular policy prescriptions or mechanisms for change.
The government also proposes the establishment of an independent body to provide advice on the effectiveness and cost-effectiveness of different types of care and support. This would be the equivalent of the National Institute for Health and Clinical Excellence (NICE) for social care.
The Green Paper suggests that any future funding system must be 'fair, simple and affordable'.
Two of the options outlined are immediately ruled out: individual payments with no state contribution are dismissed because many would not be able to afford to pay for their care, and full state funding through taxation is rejected on the grounds that it would place too much of a financial burden on the working population.
The government favours a partnership model, in which a basic tax-funded contribution by the state, possibly combined with contributions from individuals organised through either a voluntary or a compulsory – termed 'comprehensive' – insurance system.
Partnership model – state contribution
Everyone who has needs that qualify them for care and support would be eligible to have a certain proportion of their care needs funded by the state through general taxation. The government suggests that this would be means tested, with most people receiving funding for a quarter to a third of their costs, while those less well-off would receive more, and the least well-off would be eligible for fully funded care, as is currently the case.
For example, if the average care costs during retirement are £30,000, the state contribution might cover £8,000 – £10,000.
The government predicts that most disabled people of working age would have all their costs covered by this state contribution as most people in this group have comparatively low incomes.
Although the affordability of the state contribution is not discussed in any detail, the government does suggest that some funding might be drawn from integrating Attendance Allowance (a benefit for 65+ year olds with disabilities) into the state contribution of the partnership model. Detailed costings are not provided.
The Green Paper suggests there might be two ways in which the level of contribution might be set:
- a fully national system, under which the government would determine how much funding individuals with particular levels of need should receive. There could be adjustments to take account of regional variations in cost
- a part-national, part-local system, under which everyone would still be guaranteed to have a proportion of their costs met by the state, and that same 'level of support' would be available to someone wherever they lived in the country, but the precise amount of funding available to the individual would be set locally.
Partnership model – individuals' contributions
As well as the basic partnership model the Green Paper sets out two further options that are intended to set out ways in which individuals can be helped to provide for the portion of their care costs not covered by the basic state contribution.
Insurance – This option would involve the state working with private insurance companies or establishing its own scheme, into which individuals could pay in return for their care costs being met should they require care. The individual's contribution could be made as a lump sum or by instalments before or after retirement, or via their estate after death.
The government suggests that the costs might be around £20,000 to £25,000 to cover the potential average of £30,000 worth of care costs for over 65s. The insurance scheme would not be available to those born with care and support needs (and not financially eligible for full costs under the state contribution) as it is based on insuring against future risks.
Comprehensive – This option would involve everyone over retirement age paying a means-tested amount into a compulsory state insurance scheme, in return for their care being fully funded. The government suggests that the means testing could be adjusted so that most would pay a set amount and so that they are clear about how much they will need to contribute, with only those on very low incomes or with few assets paying less or nothing. The way in which people contribute could be flexible, as with the insurance option.
The government estimates that individuals would have to pay around £17,000 to £20,000 into the scheme. The government proposes that disabled adults of working age should also be eligible for fully state-funded care under this policy, but the Green Paper implies that there would not be a corresponding contribution requirement.
The government states that a 'large proportion' of funding for the comprehensive scheme would come from general taxation. What this might cost, and whether this is affordable, are not set out.
Accommodation costs: 'universal deferred payment'
None of the options include accommodation costs, on the grounds that these apply to everyone irrespective of care needs. To help cover the costs of board and lodging in residential care (which could be in the region of £12,000 a year) the government proposes to set up a 'universal deferred payment' scheme, which means that these costs can be paid after death. These schemes are already offered by some local authorities.
What happens next
The consultation period for the options set out in the Green Paper runs until mid-November 2009. The government has committed to setting up a 'national leadership group' made up of individuals and groups with expertise and experience in social care with the aim of sustaining the momentum for reform and creating a forum for resolving disagreements.
A White Paper is promised in 2010, though the government does not state whether it aims to do this before the general election.