Sam Barrett on recent proposals to solve the social care crisis

Sam Barrett on recent proposals to solve the social care crisis

Improvements in healthcare and living standards mean life expectancies are on the up in the UK. But, with many of these extra years likely to be in poor health, the government needs to find a fair way to fund social care that ensures everyone is able to access the support they need in later life. 

Although a series of recommendations have been put forward since the Royal Commission in 1999, the scale of the issue means the government is still looking for a viable solution. Most recently, in the March 2017 budget, it announced that it would publish a green paper on social care to kick-start a public consultation. Two years on, and the publication date has been put back from summer 2017 to “at the earliest opportunity” after the revised date of “before April” came and went.

Fixing the crisis 

With the number of people requiring care continuing to rise, social care funding remains a topic that other organisations are less nervous about exploring. The latest to put forward its suggestions is the Centre for Policy Studies, which published its ‘Fixing the care crisis’ report at the end of April. 

This report, which was authored by former work and pensions secretary Damian Green MP, looks to secure the future funding of social care while also plugging the current funding gap. Central to his proposal is a new universal care entitlement. This is modelled on the state pension and would provide a weekly payment to cover the costs of a basic level of care in the home, or care and accommodation if residential care is necessary.

Entitlement would be determined by the local authority through a needs assessment, in keeping with the current system. Individuals would also be able to top up the level of care they received if they wanted more than the basic model.

Mr Green also proposes three different approaches that could be used to plug the immediate funding gap. In order of preference, these are: taxing the winter fuel allowance, diverting savings from the spending review, and imposing a one per cent national insurance surcharge on the over-50s. 

Although Mr Green says this approach would generate sufficient revenue, critics have questioned his maths.

“The £2.75bn that is mentioned in the report is just for the shortfall, and it is well short,” says Steve Webb, director of policy and external communications at Royal London. “A similar approach has been in place in Germany for many years to cover social care funding, and the rate has steadily increased.”

His view is echoed by The King’s Fund, which says that a figure double that outlined in the CPS report would be closer to what is required to plug the immediate funding gap.

Looking at how the German care funding system has evolved helps to put some context around the CPS recommendations. The system introduced statutory long-term care insurance in 1995 to cover basic care costs for the elderly and disabled people of working age. This is funded through taxation, with the rate initially set at 1.7 per cent, split between the employer and the employee. Pensioners also pay into the fund, at a lower rate.