John Austin is a former Labour MP 1992-2010, was a member of the Health Select Committee 1994-2005 and is now a Friends Trustee.
Friends Trustee John Austin considers the funding challenges faced in Social Care.
In a previous article “Who pays for Care?” I wrote about the problems facing care providers and funders and the divide between health and personal social care. Both major political parties have acknowledged the problems in funding a sustainable care service; but neither, when in office, has resolved the issue. And the General Election of 2017 generated more heat than light. Remember the controversy in that election over the so-called “Dementia Tax”? This was about how much of a person’s assets should be taken into account in determining how much they should pay for both residential care and care at home. It became a political football, resulting in the Prime Minister’s original proposals being withdrawn with the assurance of a cap on how much individuals would have to pay and the promise of a public consultation (Green Paper).
Publication of that Green Paper was originally promised for summer 2017, and subsequently revised to the end of 2017. It was then announced that it would be published in summer 2018, in time to be incorporated in the Report on Long Term Funding for the NHS published later that year, but this did not happen. A new publication date of autumn 2018 was announced, later tweaked to “before the end of the year”. In December 2018 the Government announced a fourth delay, saying it would be published “at the first opportunity in 2019”. In January 2019 the Health Secretary promised publication by April 2019, but at the time of writing this in April, there is still no sign of it.
In the meantime there has been a great deal of speculation and suggestions about what should be included, and the Government has indicated that it will contain a variety of proposals for provision of care as well as funding.
The County Councils Network has called for the introduction of a cap and a more generous means-test “to ensure that no-one is faced with catastrophic care costs”. Care is currently means-tested and the Government has confirmed that its consultation options will include a capital floor [i.e. means-test] and an absolute limit [i.e. cap] on the amount people can be asked to pay. In advance of the Green Paper consultation, however, the Prime Minister has said that an “absolute limit” on lifetime social care charges would be introduced and this has been confirmed by the Health and Social Care Secretary.
The Green Paper will also consider an insurance model for paying for social care. The Government recognises the need for a contribution from taxation but says, “we cannot rely only on the taxpayer to support the growing cost” and has rejected the idea that care should be funded wholly from taxation. The Government has also indicated that the Green Paper will look at the interaction between health and social care and suggests better integration between the healthcare and social care systems. It will also examine the relationship of social care with housing.
In June 2018, a joint report on the long-term funding of adult social care was published by two House of Commons Select Committees (Housing, Communities & Local Government, and Health & Social Care). This report argued that the personal care element of social care should be delivered free to everyone who needs it, whilst accommodation costs [for care home residents] should continue to be paid on a means-tested basis.
In view of the delay in publishing the Green Paper the Local Government Association (LGA) decided to launch its own consultation last summer. The paper ranged much wider than funding but it referred to a £6bn funding gap and offered the following suggestions for consultation:
From the responses the most popular suggestion by far was to increase National Insurance.
With regard to the other options, if the Government includes the idea of a Social Care Premium in its Green Paper, it would need to be clearly explained with examples of impact as it is a complex issue. A similar proposal for a German model of a social care tax on the middle-aged has been put forward by financial consultants Hymans Robertson which suggests that a 2.5% income tax on over-40s could raise £15bn every year. With regard to taxing universal benefits, although there may appear to be no logic in winter fuel allowance and free TV licences being tax free, I suspect there would be great resistance and political backlash if these were to be means tested or taxed – as there would be if a means test were suggested for free bus passes. Householders will have recently received their Council Tax bills, which included an additional premium for adult social care to make up for central government cuts in funding. I suspect that further Council Tax increases are likely to prove unpopular and would raise relatively little additional money.
Following an article by Gordon Brown in the Daily Mirror in June last year, suggesting an increase in National Insurance to fund the NHS and social care, the Mirror commissioned a ComRes Poll which showed a massive 82% in favour.
The political row and U-turn over the “Dementia Tax” in 2017 showed how difficult it is to have a rational debate during an election campaign. The reports of the House of Commons cross-party Health and Local Government Select Committees show that it is possible to reach consensus on some of the crucial issues, so hopefully the Green Paper will be issued soon, the consultation completed and a consensus reached long before the next scheduled General Election in 2022.
Whatever solution is reached, one thing is certain; no matter how generous the funding, there will remain a need for organisations like the Friends and Small Acts of Friendship to provide that little extra in helping to support those in need.
Acknowledgment for information from House of Commons Library
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