The Government’s announcement it will delay by four years the introduction of a cap on people’s liability for costs of social care is just the latest in a long line of failures to resolve the challenge of paying for long term care. Melanie Henwood examines the issues and concludes that all bets are off for an early resolution of this enduring dilemma.
The challenge of how to pay for long term care, particularly for increasing numbers of frail elderly people, has exercised successive British governments for many years. The central issue concerns the balance of individual and collective responsibilities, and whether the risks of needing care should be shared more widely rather than allowed to lie where they fall. The dilemma is probably the clearest manifestation of the inconsistencies and inequities that result from the separation of health and social care that has characterised the system since 1948.
For all the rhetoric about integration and seamless care, it remains the case that people needing long term care that is judged not to be primarily a ‘health need’ will find themselves having to contribute to the costs of support, and for some people the costs will be both unlimited and potentially catastrophic. Hopes that the wide ranging 2014 Care Act would finally resolve matters by introducing a model of ‘limited liability’ have been crushed by the Government’s decision to delay implementation of the second phase of the Act due in April 2016 for four years. Many commentators see this less as a delay and more as a death knell.
The recent history of long term care reform is both repetitive and inconclusive, with the issues being endlessly examined, recommendations made and reforms faltering. The recent volte-face is just the latest example of a familiar pattern, and the history of these developments is worth exploring.
Soon after taking power in 1997 New Labour established a Royal Commission on Long Term Care which reported in 1999 recommending that the costs of personal care should be met “according to need and paid for from general taxation.” Despite Labour’s commitment in opposition to reforming the funding of long term care, this was a step too far. The government response took more than a year to be published, by which time it was clear that reform of this scale was out of the question. The NHS Plan of 2000 stated that free personal care “would not be the most effective targeting of resources.” Other changes were introduced, including more investment in intermediate care, and an easing of the means test, but these were largely irrelevant in addressing the core issue of paying for residential care.
It wasn’t going away. Ten years after the Royal Commission, Labour brought forward a Green Paper with proposals for a ‘National Care Service’ that would be “fairer, simpler and more affordable for everyone.” A White Paper followed in 2010 in the very last days of the administration with a familiar commitment to “high quality care, free when people need it, for generations to come.” Even more familiar, was a commitment that at the start of a new Parliament a returning Labour government would “establish a commission to help to reach consensus on the right way of financing this system.”
The defeat of New Labour in 2010 meant that the ambitions of the National Care Service were neither tested nor realised. But wait! The incoming Conservative-Liberal Democrat Coalition in May 2010 issued its ‘programme for government’ signalling that it too understood “the urgency of reforming the system of social care to provide much more control to individuals and their carers, and to ease the cost burden that they and their families face.” Treading the by now very familiar path, the Coalition announced it would set up a Commission on long term care to consider a range of ideas including a voluntary insurance scheme or a partnership funding model, as had been advocated by the Wanless Report four years earlier.
The subsequent report from the Dilnot Commission on Funding of Care and Support in July 2011 stated unequivocally that the current funding system “is not fit for purpose and needs urgent and lasting reform.” Furthermore, it “is confusing, unfair and unsustainable”. The main recommendation on funding reform was to ‘cap’ the lifetime contribution to adult social care costs that anyone should make (a figure of £35,000 was proposed), together with a significantly increased asset threshold for means-testing people in residential care.
The Government’s response to Dilnot came in a White Paper a year later, presenting ‘a vision for care and support’ which was the foundation for the subsequent Care Act of 2014. The cap on lifetime costs had risen considerably from the Dilnot threshold, and was set by the Coalition Government at £72,000.
The Conservative Party 2015 Election Manifesto restated the commitment to capping costs, and to introducing this part of the Care Act from April 2016. Just two and a half months after the election, on 17 July a written statement announced the postponement of the cap, together with the raised capital threshold. The introduction of an appeals system for care and support that was to have been established in 2016 is now “being considered as part of the wider Spending Review.”
Coming so soon after the Care Act received Royal Assent, and after months of detailed scrutiny in committee, the Government’s realisation that “a time of consolidation is not the right moment to be implementing expensive new commitments such as this” may seem surprising. This was, after all, legislation developed in coalition and the austerity context was well known. However, a letter from the Local Government Association to the Secretary of State on 1 July 2015 raised concerns about implementation of Phase 2 of the Care Act reforms in the light of the growing funding gap in adult social care and suggested a delay. The caveat for the LGA was that “the money earmarked for the capped cost system instead put into the social care system itself.” Be careful what you wish for. While the government has accepted the delay argument quite readily, it has so far said nothing about putting additional resources into social care. It is probable this will be considered within the wider Spending Review, but nothing can be taken for granted.
Meanwhile Labour leadership hopeful (and former Health Secretary) Andy Burnham has also waded into the debate. In a return to Labour’s ideas for a National Care and Health Service Burnham has pledged that he would establish a ‘Beveridge-style Commission’ to consider how to pay for social care, including the option of a compulsory care-levy. The Commission would also consider other major challenges including higher education tuition fees and helping people get on the housing ladder. One option for funding that would be on the table is a levy on people’s estates (a so-called ‘death tax’), which Burnham has previously favoured as the way forward but which Labour failed to endorse in the last two manifestos.
The situation with long term care in England is unresolved. Despite years of debate, extensive analysis, inquiries and commissions a solution remains out of reach. There are no easy answers here; any change will have major cost implications and there will be winners and losers. However, the current impasse is the worst of all worlds; a way forward had been agreed, albeit that it was imperfect and the idea of capped costs would – in practice – have been more apparent than real, and this has now been ‘postponed’.
For people needing long term care – or fearing that they might in the near future – this is a return to the dread of catastrophic costs or of being left with inadequate care. It is a brave government that reneges on a major pledge so early in its tenure, but it will take a far braver one to finally resolve this major question of our times, how to pay for social care in a way that is equitable, affordable and sustainable.
Melanie Henwood is an independent health and social care research consultant.
(Featured image credit: William Murphy CC BY-SA 2.0)
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