Approaches to social care funding: new report

February 16, 2018

A working paper has been published by the Health Foundation and The King's Fund on approaches to social care funding and the implications of different funding options.

The working paper sets out interim findings from their project looking at the funding options for social care in England.

Social care faces a number of challenges including a growing funding gap, increasing demand for services from an ageing population, and no long-term workforce strategy. There is a widespread acceptance that the current system for funding social care is in need of reform, and a Green Paper on care and support is expected from the Government later this year.

Against this backdrop, the working paper considers five different approaches to funding social care for older people in England. The paper does not make a recommendation, but sets out the implications of each of the funding options. It is the first output of a wider project looking at social care funding, which is due to publish its final reports in May.

The paper looks at the following options:

  • Improving the current system.
  • The Conservative Party’s proposals at the time of the 2017 General Election (a revised means test and a cap on care costs).
  • A single budget for health and social care.
  • Free personal care.
  • A hypothecated tax for social care.

These models were chosen to reflect the solutions most commonly raised in the debate around social care funding, and are not a comprehensive list of possible models.

After a review of relevant literature and engagement with two stakeholder groups, a framework was developed for exploring these options, and to identify the key strengths and weaknesses of each.

The conclusions of the paper include:

  • There is scope for making small improvements within the current system, and this approach would recognise the great difficulty successive governments have faced in achieving major reform. However, it would not address many of the fundamental problems with the current system, including the downward trend in the numbers receiving publicly-funded care. Nor would it protect people against 'catastrophic' care costs.
  • The Conservative Party’s proposals would have, for some, resulted in a more generous system than the one currently in place. However, there are real concerns around implementing and operating such a complex system.
  • While a joint health and social care budget might support progress towards more integrated care, it will not in itself address the differences in eligibility between the two systems, or generate additional revenue for health or care.
  • Free personal care would mean increasing the Government’s 'offer' on social care. However, given this would require an increase in public spending, there is a question as to whether this would be the best use of additional funding for social care.
  • A hypothecated tax may help gain public support for raising additional funding for social care. However, this would represent a significant shift from the existing system, and could exacerbate the lack of alignment between the health and social care.

The project’s final three reports, expected in May, will also include research into public attitudes to social care, and demand modelling for the future.


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