The u-turn forced on the Conservatives during their GE2017 campaign, together with a lack of understanding as to the causes of the social care funding crisis, have contributed to the Dilnot cap now being presented as a solution. The CHPI research team explain why this is not the case. They write that social care requires a significant injection of public funds to move from being a residual public service to one which enhances the lives of older people. Until then, the crisis will continue to worsen.
The debate about social care funding during the 2017 General election was one of the many oddities of the campaign. Not only did the furore about the “dementia tax” u-turn potentially undermine the Prime Minister’s offering to older voters and her overall credibility, it also revealed a media almost entirely ignorant of the harsh reality which local authorities, older people and their families now face as a result of current national social care policy. In addition, none of the 3 main parties even came close to recognising this in their manifestos or to providing anything approaching a solution.
The excessive media focus on the possibility that older people may have to sell their own homes in order to receive care at home missed the central point that social care is in crisis because of a lack of public funds. Leaving aside the £6.5 billion a year spent by the taxpayer on social care for younger people (i.e those under 65) the percentage spend on social care for older people is less than 0.6% of GDP – that is, it is currently less than the amount spent on the overseas aid budget (0.7%) and on defence (2%). On top of this, since the spending review in 2010 the local authority social care budgets have been reduced by around 9% due to central government cuts.
As many families and carers up and down the country know, getting access to publicly-funded social care is extremely difficult – at a time when the population is getting older and the needs of the older population are becoming more complex an estimated 400,000 fewer older people received social care services over the last 5 years.
In addition, in order to make money go further, local authorities have limited the amount that they pay to the mainly for-profit care sector, which has resulted, over time in a decline in quality and care companies going bankrupt. Around 25% of care homes are currently deemed inadequate, whilst care staff often get paid below the minimum wage, and are expected to deliver highly intimate home care services to older people in 15 minute time slots.
Publicly funded social care has now become a residual service. Local authorities have nowhere near the amount of money to deliver a service which enhances the health, wellbeing and independence of older people, and also prevents them from entering unnecessarily into the acute hospital sector. In fact, the last government legislated for national rationing criteria which restricted social care only to those deemed to have ‘substantial’ care needs. As a result, anyone whose care needs fall outside that definition is left to rely on their families or fend for themselves – irrespective of their ability to pay. Yet, even though local authorities have reduced social care provision to such a residual level, they don’t even have enough funds to provide this – it is estimated that local authorities will need around an additional £2.5bn a year by 2020 just to provide care for those most in need.
It is this rationing of social care on the basis of need rather than ability to pay which many media commentators and analysts overlooked during the election. Despite the furore over “death taxes”, it is highly likely that the extension of the means test to include housing wealth – as is currently the case for residential care – would have a limited impact on the numbers of people who would have to pay for their own care.
What is clear from all of this is that the Dilnot cap which all 3 main parties now appear to support is not the answer to the social care funding crisis as it promises no extra funds to raise the coverage of publicly funded care. Indeed, the idea of capping the liability of individuals and families so that they are not subject to so-called “catastrophic” care costs in old age was based on the policy assumption that there would be no substantial increases in public expenditure to expand the provision of social care for older people.
Instead, the solution to additional funding was thought to lie in the private insurance market – insurance companies would be incentivised to offer affordable insurance cover to older people as they would know that their liabilities would be capped to no more than £72k for each older person (or policy holder) who needed a substantial amount of care.
Once an individual (or their insurance company) had paid £72k for their care, the taxpayer would then pick up the rest of the bill. In addition, Dilnot also proposed that the amount of an individual’s wealth which could be taken into account when determining whether they were eligible for state care should be capped at £100k – thus protecting the inheritance of those whose parents had built up significant amounts of housing wealth but had been unfortunate enough to have needed care in old age.
The Dilnot cap – which the last coalition government put on the statute books, but never introduced – is, however, hugely costly, highly inequitable, and would do little to address the current difficulties faced by older people in accessing publicly funded social care. The Department of Health impact assessment of the policy in 2013 found that it would benefit 100,000 mainly wealthy older people; it would amount to a taxpayer transfer from the state to this group of around £2billion a year; it would cost around £200m to administer; and would require the additional assessment of 500,000 people (on the basis that means and needs tests for all potentially eligible older people would have to be undertaken).
This huge expense – which is more than all major parties committed in their manifestos to giving to the NHS – would not expand publicly funded coverage to include those who had moderate needs as the policy assumes that access to publicly-funded care would be restricted to those with substantial needs. Nor would it lead to an increase in the amount that local authorities could pay social care providers – it would, in effect, lock in the current level of quality into the system. Nor would it prevent the looming collapse of the care home industry and now also some home care providers. In fact, the only benefit which the impact assessment could claim to deliver was “peace of mind” for mainly richer older people.
It was the previous Conservative government who realised that this policy had too many costs and too few benefits and so refused to introduce the legislation introducing the cap. It was also because the cost benefit analysis weighed so firmly against implementation that the policy was excluded from their manifesto – the Prime Minister and the Health Secretary indeed made this case during the election. But, because of the lack of media understanding and the u-turn forced on the Conservatives during the campaign, the Dilnot Cap with all of its problems is now back on the agenda and being presented as the solution to the crisis in social care.
However, until all 3 major parties recognise that social care requires a significant injection of public funds to move from being a residual public service to one which enhances the lives of older people – and which pays care workers a decent wage – the crisis will continue to worsen.
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This was written by the CHPI research team. Contact: Colin Leys.
Featured image credit: Pixabay/Public Domain.
Research commissioned by the BBC “reveals a huge shortfall in the number of beds available.Increasing demand from an ageing population could see that grow to more than 70,000 beds in nine years’ time.”[1]
61% of people are cared for in their own home.[2] So, as I commented above, if just one in ten of informal carers are deterred by the proposed changes then we will need to find a further 100,000+ residential care places.[3]
[1] http://www.bbc.co.uk/news/uk-40791919 ,2 August 2017
[2] Ibid.
[3] Based on the informal carers’ cohort of 1.3 million that provides > 50 hours of care per week
I’d agree that the problem with the debate around social care is that it tends to focus on how policy should change rather than why social care has been chronically underfunded for decades and why the ‘intensification’ of care has accelerated since 2008.
In an era of endless austerity, core salient welfare institutions have tended to be protected while marginal ones suffer significant cuts. There are two main processes that protect on-going welfare spend. Core programmes like the NHS or the basic pension are protected by the power of current and potential policy takers. Where a policy area is more marginal secondary protection can also come from funding institution strength … the BBC, Universities (while student loans continue) and German long-term care provision (funded by mandatory social long-term care insurance) are all strong self-funding institutions. All have enjoyed rising funding despite the pressures for austerity.
UK social care lacks a strong funding institution and has suffered on-going retrenchment. This institutional failing needs to be addressed.
The question we should ask is whether or not people are being selfish about what they should receive from the State? Should people just accept that State funding has to have priorities which may not include supporting those who can potentially afford to pay but which involves selling their assets. After all, the person in need of care may keep their house and receive funding for their care but after their death, how will there children pay this debt when they have to consider their own care needs? The answer is to sell their inheritance to pay for the costs of their parents care. Should we expect those who inherit to have more than one house as a result, a house which they may or may not need, depending upon their own circumstances? I am not being harsh, merely questioning our own motives and expectations of what the State should really provided. After all, national insurance was introduced as the safety net. Should we just accept this? Just like we should accept that the State provides the basic safety nets from free education for those up to 18 years but not beyond, NHS care for those illnesses which are the fault of other human interventions e.g. obesity and alcoholism. Tax should be paid based upon fairness e.g. those who earn more than others should pay a larger proportion but no more exploitation.
Below is an alternative approach to current policy;
http://barryedwardsandassociates.com/elderly-care/
This was a comment posted a few months ago on the above blog. I would be interested to hear your comments.
Best regards,
Barry Edwards.
[…] it is highly likely that the extension of the means test to include housing wealth – as is currently the case for residential care – would have a limited impact on the numbers of people who would have to pay for their own care.
Please would you be kind enough to provide the sources on which you relied and how you arrived at your conclusion?
The proposals for the so-called ‘dementia tax’ were actually the only domestic policy in the Conservative manifesto to which I could respond positively – and then there was the U-turn! The Dilnot cap would only ever protect richer estates. Modest estates would have little or nothing left over after paying £72,000 for the deceased’s care. Protecting a minimum legacy, rather than setting a cap, would have been fairer, and so would treating domiciliary care costs in the same way as residential care. Social care of the elderly should be expensive, because it should be adequate at the least. Using general taxation to support the asset-rich is contentious, and will become more so as the age-distribution of the population becomes more top-heavy. To spread the risk of social care costs more fairly among the population, perhaps a fairer solution would be to increase, rather than reduce, inheritance tax? There is, of course, no guarantee that wealthier people will not deliberately dissipate wealth during their (our) lifetimes, or use clever advisors to minimise their (our) estates’ liability, but this is true of all taxation.
There are around 6.5 million informal carers; > 1.3 million provide > 50 hours of care per week.[1] Many of these carers are sons or daughters, often giving years of their lives, so that their parents can remain at home where people tend to be happiest. For this they might receive £1.77 per hour[2] with the local authority (eventually) providing up to two hours of respite per day in the form of call(s) by care workers (@£15 per hour, typical rate negotiated by SS with the domicilliary care agency; £20 per hour for private cliients). The light at the end of the tunnel for the son/daughter is the prospect of inheriting the property to offset their losses (loss of opportunity, salary, promotion etc) incurred while caring.
Therefore, the (?aborted) Tory social care proposals seem likely to deter this cohort of carers. Consequently considerably more elderly people will enter residential care (think Cat D prison with carpets). A place at an adequate[3] care home w/nursing costs around £1,000 per week locally. It is already difficult to find suitable places – some have waiting lists – so imagine how much costs will rise with increased demand + (deservedly) higher wages[4] + staff shortages, e.g. substantial reductions in the 90,000 EU27 care workers.[5]
The average house price in the UK is £220,000.[6] Future care costs (see above) suggest it will not take that long to run that down to the £100k(?) limit. And if the the elderly person is still alive, then presumably the state will step in. If the elderly person survives the move to a cheaper (grotty) care home that is still going to be more expensive for the state (particularly because poorer care leads to hospital admissions) than had the person been cared for primarily by an informal carer.
[1] https://www.carersuk.org/news-and-campaigns/press-releases/facts-and-figures
[2] ibid.
[3] The 25% inadequate figure in the post is not disputed
[4] I know of a young care worker paid about £9 per hour that does PEG feeds (i.e.a nursing task)
[5] NIESR, Dr Heather Rolfe
[6] https://www.gov.uk/government/news/uk-house-price-index-hpi-for-april-2017