The social care green paper is supposed to be proposing (amongst other things) ideas for the future funding of social care, but with it now expected at ‘the earliest opportunity’, proposals for reform are being put forward by others. Independent Age has been campaigning for social care for older people to be free at the point of use, and The Centre for Policy Studies has put forward another suggestion from Damian Green MP.
Green states that his starting point is that social care should be ‘free to all at the point of use, regardless of circumstances’ and outlines four principles that he believes social care funding must achieve.
The first of these is simply that more money must be provided for social care. The second calls for fairness across generations and medical conditions, and Green is clear that the funding system should ‘avoid burdening working-age people’ who shouldn’t have to put money aside for their own care in the future as well as paying for the care of older generations.
The third principle states that more reasonably-priced care should be made available, as well as increasing the amount of retirement housing, and the fourth is that the system should secure public and cross-party consensus.
The main suggestion in Fixing the Care Crisis is to move social care funding towards a pension-like system.
Under this, people would be given a certain amount of money towards their care, regardless of their financial circumstances, and would also be able to take out an additional insurance that would allow them to top-up their care to improve their options, with examples in the report including ‘larger rooms, better food, more trips and additional entertainment’.
This system would see social care become a nationally-funded service, meaning local authorities would not control the amount of money spent on each person’s support.
Universal Care Entitlement
The part of this funding system that would resemble the state pension is the Universal Care Entitlement.
Green proposes that this would ensure everyone received a certain level of care in any setting. Each type of care would have a cost attached to it and people’s needs would continue to be determined by local authority assessments. Everyone who had eligible needs would be entitled to the amount of money it would cost to meet those needs, whether or not they could afford to pay for this themselves.
Green notes that there will be a transition period, when more money will be required to pay for people who are already using services under the current system, at the same time as bringing the new system in.
To combat this, he makes three suggestions: taxing the winter fuel allowance, which would mean the winter fuel allowance was added to each person’s taxable income and it would not be made available to higher-rate tax payers; using savings from other parts of Government to plug the funding gap; and asking all those aged 50 and over to pay an additional 1% National Insurance – this should be considered only as a last resort, says Green.
The next part of the proposal is to encourage people to take out a social care insurance to fund a Care Supplement. This would fund the ‘additional’ costs, such as better food and more trips out.
This would differ slightly from the current pensions system, as the idea is to pay a set level upfront for products ranging, for example, between £10,000 to £30,000.
Depending on the level of product you took out, you would have a certain level of care guaranteed to you when you needed it, on top of the level of care already guaranteed by the Universal Care Entitlement.
As with other insurances, the insurers would be able to offset the costs of people who needed a lot of care with the people who had insurance but didn’t need care at all. This would mean that the rates were not set according to family histories or medical testing.
Green anticipates needing to encourage people to take out this insurance but states that ‘in the long term, we would hope and expect that saving for the Care Supplement would become the norm’.
Improving quality and cost
The final area of Green’s report involves improving the quality of care and reducing the cost. One key part of this is increasing the amount of retirement housing available, which Green states is lower-cost and more effective than some other types of support.
He also states that local authorities are ‘wary of importing too many older people because they can see their care costs mounting up’ over time.
However, he argues that his proposed model would negate this, as the funding responsibility wouldn’t lie with each local authority, so they would be inclined to build more retirement properties. He also suggests that investors would be more likely to see these as viable investments, because providers are guaranteed a certain payment for each person. The role of the local authority would become a supervisory one.
Green’s report states that this system would spur the whole sector to improve; would help to keep prices of care low, as profits would be made in providing the additional services paid for by people’s Care Supplements; and would offer peace of mind for the public. CMM
Over to the experts…
Could this model be a solution for funding social care? How could it help with supporting younger adults? What will be the impact on local authorities?