Billions Needed To Restore Social Care System

A House of Lords Committee urgently recommends the Government to inject £8 billion into social care in order to restore the service to an acceptable standard and introduce free personal care over a 5-year period.

The Economic Affairs Committee published its report ‘Social care funding: time to end a national scandal’ this month which reveals a chronically underfunded social care system which needs an instant cash boost to revive it.

The findings found that publicly funded social care support is dwindling due to decreasing budgets which has forced local authorities to limit the numbers of people who receive public funding.

Funding is £700 million lower than in 2010/11, despite Age UK recording a record high as approximately 1.4 million people aged 65 or over have had basic needs unmet such as getting dressed, washed or out of bed.

More than 400,000 people have fallen out of the means test, which has not increased since 2010. In order to have the quality of care which people received in 2009/10, the Government would need to spend £8 billion, according to an estimation made by The Health Foundation and King’s Fund.

If the person requiring social care resides in England and have assets or savings worth more than £23,250 (£50,000 in Wales), they will usually have to pay for their own residential care home fees. However, if their capital is less than these figures, they will usually be required to make a personal contribution based on means-testing. The means test includes savings, income, and property.

This means social care is seemingly free when needed but many are expected to make a substantial contribution towards their personal social care. Furthermore, national social care funding is distributed unevenly across local authorities.

Due to a shortage in funding, local authorities are having to pay care providers significantly lower amount for local authority-funded care recipients than self-funded care recipients, meaning the care providers who look after a much greater percentage of local authority-funded care recipients are fighting to keep afloat.

To address the disparity, the Committee suggests introducing free personal care, much like the NHS, so the persons entitled to social care would get help with washing, dressing, and cooking.

Those persons who live in residential care homes would still pay for their housing and support with less basic needs such as housework or shopping. Those already getting care in their own homes would of course not pay for accommodation but may well persuade care users to pursue vital help with personal care earlier than they would have.

According to the Health Foundation and the King’s Fund this proposed system would cost £7 billion per year, which is only £2 billion more than the Government’s 2017 “cap and floor” proposal.

In order to gain additional funding for social care, the Government would need to recoup the money mostly from general taxation. The money could then be spread across the local authorities by using an impartial funding formula.

Lord Forsyth of Drumlean, Chairman of the Economic Affairs Committee, said:

“Social care is severely underfunded. More than a million adults who need social care aren’t receiving it, family and friends are being put under greater pressure to provide unpaid care, and the care workforce continues to be underpaid and undervalued.

“The whole system is riddled with unfairness. Someone with dementia can pay hundreds of thousands of pounds for their care, while someone with cancer receives it for free. Local authorities are increasingly expected to fund social care themselves, despite differences in local care demands and budgets. Social care funding has decreased most in the most deprived areas. And local authorities can’t afford to pay care providers a fair price, forcing providers to choose whether to market to those people who fund their own care or risk going bankrupt.

“Fixing under funding is not difficult. The Government needs to spend £8 billion now to return quality and access in the system to an acceptable standard. Fixing unfairness is more complicated, but the Government has ducked the question for too long. They need to publish a White Paper, not a Green Paper, with clear proposals for change now. We think that change should include the introduction of free personal care, ensuring those with critical needs can receive help with essential daily activities like washing, dressing and cooking.

“Our recommendations will cost money, but social care should be a public spending priority. By 2023/24, the NHS funding will have increased by £20.5 billion per year. This is more than the entirety of local authority adult social care expenditure.”

The Association of British Insurers (ABI) has also warned the Government that the elderly face a financial crisis because they have not planned for future social care costs. According to a new report conducted by ABI, nine in 10 retirees will be confronted with selling their homes or using their life savings to cover the costs of their care, due to not preparing for later life. ABI believes a huge widespread campaign is required to create awareness of social care funding in the public domain, along with incentivisation to encourage people to plan in advance for future costs.

The insurers said that incentives for social care should be targeted at those who have savings of more than the means test threshold (£23,250), but less than £200,000 – this group makes up approximately 37% of people in England aged over 50.

Within that target group, the majority (90%) aged 65 to 79 have paid off their mortgage and own their own home and 50% of these have over £300,000 tied up in their home’s value.

Many key conclusions and recommendations have been made in the Economic Affairs Committee’s report. Nevertheless, one thing is for sure repeatedly slapping a plaster over it and delaying urgent action will not help and only exasperate an already desperate situation.

The Committee’s top recommendation to the Government is to immediately increase funding by £8 million to reinstate levels of quality and access to those services once observed in 2009/10.

To read the Committee’s full report click here.

Do you think the Committee’s recommendations will restore the social care system?

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