MPs call for Social Care Premium to fund personal care for all

June 27, 2018

The Housing, Communities and Local Government and Health and Social Care Committees' joint report calls for a Social Care Premium as a sustainable funding solution for adult social care.

The report calls for the introduction of a Social Care Premium, either as an additional element of National Insurance or with the premium paid into dedicated not-for-profit social insurance fund that people would be confident could only be used for social care.

To ensure fairness between the generations, the premium should only be paid by those aged over 40 and extended to those over the age of 65, with the money being held in an independent, dedicated and audited fund to help gain public trust and acceptance for the measure.

Individuals and employers should pay a new contribution into a dedicated fund set aside to help pay for the growing demand for adult social care and implement funding reforms, with the current system ‘not fit to respond to the demographic trends of the future’, says the report Long Term Funding of Adult Social Care.

The report by the cross-party Committees describes the social care system as 'under very great and unsustainable strain'. Ahead of the Government’s Green Paper, which is now expected in the autumn, it highlights the urgent need to plug a funding gap estimated at up to £2.5bn in the next financial year, before introducing wider funding reforms at both a local and national level to raise extra revenue with a long-term aspiration of providing social care free at the point of delivery.

The Committees say that the personal element of social care, such as help with washing, dressing and eating, should eventually be delivered free to everyone who needs it, although accommodation costs should continue to be paid on a means-tested basis. Recognising that this reform is unlikely to be affordable immediately, the Committees recommended that it should begin by extending free personal care to people deemed to have 'critical' needs.

Extra funds will also need to be raised to extend the care to those with moderate needs as well as those with substantial and critical needs and to provide sufficient resources to ensure the stability of the workforce and financial viability of care providers.

The Committees acknowledge that the challenge is not just addressing the existing funding gap but to meet future need. They recommend that an independent body should be tasked with modelling requirements and providing the Government with two-yearly forecasts.

Further funding reforms outlined in the report include levying an extra amount of Inheritance Tax on estates valued above a certain threshold and capped at a percentage of the total value. This would enable the pooling of risk and prevent catastrophic costs to those receiving long-term care.

At a local level, the Committees are calling for reform of council tax valuations and bands and for local authorities to be able to use new funding from additional business rates retention in 2020 to fund social care rather than as a replacement of grants from the Government.

Reflecting the importance of public engagement in decision-making about this issue, as a key part of the inquiry, the Committees commissioned a Citizens’ Assembly, with a representative sample of nearly 50 members of the public asked to consider how best to fund social care with the results feeding into the inquiry. Assembly members were taken through a process of learning, deliberating and decision-making which enabled them to tackle difficult questions about where funding for social care should come from. The Assembly’s findings are reflected throughout the Committees’ report.

The report says engaging with all those receiving social care, carers, relatives and care workers, as well as the wider public, will be critical in ensuring public support and calls for a cross-party parliamentary commission to take forward the proposals and build and maintain political consensus.

The report is based on six principles for funding social care that the Committees recommend should underpin the development of social care policy.

  • Providing high-quality care.
  • Considering working age adults as well as older people.
  • Ensuring fairness on the ‘who and how’ we pay for social care, including between the generations.
  • Aspiring over time towards universal access to personal care free at the point of delivery.
  • Risk pooling – protecting people from catastrophic costs, and protecting a greater portion of their savings and assets.
  • 'Earmarking' of contributions to maintain public support.

Leave a Reply

Please Login to comment
  Subscribe  
Notify of