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Wanless – A decade on
Are we on the right track?

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Q. A decade on from the publication of the late Derek Wanless’ seminal review of social care funding, Securing Good Care for People – taking a long term view, are we any further forward?

A. Richard Humphries, Assistant Director, Policy, The King’s Fund

There was an interesting back story to the Wanless Review. Although the Treasury had previously commissioned Derek Wanless to review NHS spending, it had refused to act on his recommendation that a similar exercise should be carried out for social care – on the grounds that the issues had been examined in a Royal Commission six years earlier.

Instead, The King’s Fund stepped in and asked him to conduct an independent and comprehensive review of the provision of social care for older people, to find a sustainable, long-term financial settlement. It would examine the key factors driving demand for social care, and the likely costs over the next 20 years and how these should be paid for.

His 300 page-plus report was published in 2006 along with a battery of supporting papers. By any standard, this was a thorough and meticulously researched examination of the issue. The central idea was a partnership model of funding in which the costs of care would be shared in a fair and transparent way between the individual and the State.

Significant effects

Looking back, the Wanless Review had two significant effects. The first was to generate a strengthening consensus around the principle that the costs of care should not fall exclusively on the individual or the State but be shared in a fair way – the concept of a ‘partnership’ approach. Until recently, this has dominated mainstream policy thinking about funding options.

A second impact was to rejuvenate political interest in how to fund the growing care costs of an ageing population, with a commitment in the 2007 Spending Review to ‘undertake work to look at reform options and consult on a way forward’. This set in train a series of policy developments culminating in the 2009 White Paper Building the National Care Service and cross-party talks in the run-up to the 2010 General Election. But the outgoing Labour Government ran out of time, and cross-party talks, to secure consensus on funding, collapsed in acrimony amidst the so-called ‘death tax’ row, about the idea of levying a charge on people’s estates after their death as one option for paying for care.

The newly-elected coalition Government was quick to pick up the gauntlet, saying that it understood ‘the urgency of reform’ and went on to fulfil its pledge to establish an independent commission to review options, including voluntary insurance and partnership models. But the terms of reference of the Commission on the Funding of Care and Support, chaired by Andrew Dilnot, were limited to considering how costs should be shared between the individual and the State, not the overall quantum of resource that good social care would require.

This did not stop Dilnot warning that the inadequacy of existing budgets would have to be addressed as well. The Commission’s proposals for a cap on care costs and a more generous means-test thresholds were accepted, albeit with the cap set at a higher level. The underlying thinking was that State protection for very high ‘catastrophic’ care costs would stimulate a private insurance market for the majority of less expensive care.

The Treasury even went so far, in the 2013 Spending Review, as to indicate how the reforms would be paid for. But this apparent, if limited, progress was to prove a false dawn. Mounting concern about pressures on local authority budgets led to an announcement in July 2015, that the reforms would be postponed to 2020. ‘A time of consolidation is not the right moment to be implementing expensive new commitments such as this,’ wrote Care Services Minister, Alistair Burt, referring to the £6bn cost the changes would have incurred over the next five years.

The prospects for funding

So, where does that leave the prospects for social care funding?

Despite commitment in the 2015 Spending Review that the measures will be implemented, there are fresh fears that, once again, the issue has returned to the long grass.

If circumstances last year were not ‘the right moment’, in the words of the Minister, to implement the Dilnot reforms, it is difficult to see what will be different in 2020. Although by then local authority social care budgets will have been boosted by an extra £1.5bn, for the next three years, they will be reliant on the uncertain and variable proceeds of the new social care precept, depending on how many councils choose to levy it. The back-loaded nature of the Spending Review settlement ensures that for the next two years, social care spending is set to fall further in real terms.

With the full effects of the so-called National Living Wage kicking in by 2020, it is doubtful that protecting better-off people from catastrophic care costs will be prioritised over the deepening funding shortfall – which we estimate will have reached between £2.8bn and £3.5bn by then.

NHS and Social Care

There is a bigger set of issues arising from the growing recognition of the inter-dependence of the NHS and social care. An ageing population, in which younger people with disabilities are living longer, will demand different models of integrated

care in which services are better co-ordinated to meet a mixture of physical health, mental health and social care needs. This poses fundamental questions – of efficiency, equity and effectiveness – about the traditional separation between healthcare that is free at the point of use and social care which is heavily means-tested and rationed.

The Barker Commission has called for a new settlement in which funding of the NHS and social care, and entitlements to both services, are more closely aligned, through a single local ring-fenced budget for both services.

It is not surprising then, that 2016 has seen a fresh call for a cross-party commission to seek consensus on how health and social care is funded in the future. But arguably, of all the causes of social care’s financial woes, a lack of independent reviews is not one of them. History continues to repeat itself. The ground has been extensively covered by the Royal Commission on Long Term Care in 1999, the Wanless Review in 2006, the Dilnot Commission in 2011 and the Barker Commission in 2015. It is striking that all four reviews recognised that future care needs would require predominantly public funding and that private funding alone would be neither adequate nor fair.

In contrast, a consequence of the Government’s spending plans is that public spending on social care as a proportion of GDP is falling – to less than 1% of GDP by the end of this Parliament. That puts us on par with Eastern European countries.

this state of affairs is simply not sustainable for much longer

The default policy framework is that individuals and families are responsible for funding their own care needs, unless they are very poor and have very high needs. Wanless’ idea of a partnership approach, in which there is an explicit framework for sharing the costs in a fair way between the individual and the State, is receding further into the distance. England is one of the few advanced countries that has not carried out major reform of long-term care in response to social and demographic change.

With rising levels of unmet need, increasing pressures on unpaid carers and the NHS, and real fears for the viability of care providers, this state of affairs is simply not sustainable for much longer. A particular perversity arising from the Government’s apparent reliance on private rather than public funding is that outcomes are likely to be worse for every pound spent. Resources will be focused on reactive, crisis-driven and more costly interventions, at the expense of services that prevent longer-term needs and promote independence.

The future of social care

In Securing Good Care for Older People, Derek Wanless wrote, ‘At the heart of the issue should be a debate about what social care will do in the future. How will it help people? What outcomes should it aim to achieve? Who should it help?’

Ten years on, these fundamental questions, about the purpose and founding principles of a modern social care system, are as pertinent as they were a decade ago. Yet achieving a coherent, credible and costed political response to what must surely be one of the most pressing public policy challenges of our generation, remains as elusive as ever. And there are no signs of that changing any time soon.

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