Saving social care: a fair funding settlement for the future

November 13, 2017

A new report from Independent Age and IPPR looks at saving social care and creating a fair funding settlement for the future.

Adult social care services have experienced major reductions in spending, which is increasingly having severe consequences on the frontline, including rising numbers of older people going without the care and support they need.

These pressures are likely to increase as demand for care grows ahead of available funding, this is likely to result in a £2.7bn funding gap by 2020/21 and £9.5bn by 2030/31. It's important that the Government must now come up with a long-term sustainable solution to this funding gap.

A new report from Independent Age and the IPPR proposes that the Government should ensure that any solutions are simultaneously sufficient to fill the gap; inter and intra-generationally fair; and politically-achievable.

The report has looked at four options – means-testing Winter Fuel Payments; scrapping the Triple Lock on pensions; raising National Insurance Contributions and increasing Inheritance Tax – and measured them against these three criteria.

It concludes that changes to benefits are unlikely to raise enough money to fill the funding gap in isolation. They are also are more likely to be regressive. Added to this, changes to benefits often garner less political support than tax rises (for example National Insurance and Inheritance Tax) which generally raise more money and are more progressive. The report suggests that an increase in the National Insurance employer main rate by 1% would immediately raise £5bn.

However, this does not mean any of these options, including a change in National Insurance, are an easy sell. It says that the public are sceptical that the funding gap in social care should be filled by increases in taxes or a reduction in benefits. The Government must overcome this scepticism – resetting the terms of the debate – if it is to deliver the funding and reform the social care system so desperately needs.

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