In this blog post PSA Commission on Care researcher Dr. Nick Taylor reflects on what happened to 2011 Dilnot report on fairer care funding and looks at the issue of care funding in the post-Brexit context.
The funding of adult social care appears to be in a more uncertain state than ever. This month it was reported that Theresa May’s new director of policy, John Godfrey, had made comments last year to the effect that wealthy pensioners should downsize or remortgage their homes to fund their care costs. This suggestion stands in direct contrast to Jeremy Hunt’s pledge to protect older people from the need to sell their home to pay for care, which was one of the main tasks the Dilnot Commission considered back in 2011.
Five years on from the publication of the Dilnot report on the funding of care and support then, are we back to square one?
It is not just the suggestions from Mr Godfrey that should lead us to ask this question. Dilnot’s main recommendations – the cap on individuals’ social care costs, the raising of the means tested asset threshold – are nowhere in sight. They appear buried so deep in the long grass that experts are asking whether they will “ever see the light of day”. The cap, due to be implemented this year in April, was postponed by the last government until 2020. The funding gap in social care meanwhile, which has direct consequences for pressures in health services too, has grown to £1 billion per year.
Perhaps the problem with the Dilnot recommendations was that there was never any solid plan, or political consensus, for how they were to be funded. The Commission’s remit was more focused on the balance between the individual’s and the state’s burden. It was assumed, without a great deal of evidence, that a market for insurance would appear to cover the cost of care up to the point at which the government took on the majority of costs. Funding the state’s contribution to adult social care, however, was an unsettled matter.
Dilnot himself suggested that pensioners could start paying national insurance to meet the £2bn a year costs to the state – the first policy to earn the title of “granny tax”. Liberal Democrat Paul Burstow, Minister of State for Care Services from 2010-2012, recommended in 2013 that the lifetime cap be raised to £60,000 and government costs be paid for by cuts to Winter Fuel Payments for wealthier pensioners and establishing a capital gains tax at death. Labour’s Andy Burnham repeatedly proposed an estates tax of 10-15%, which was branded a “death tax” each time it was considered. Interestingly, Conservative MP John Redwood argued that if the money could be found for the cap then it would instead be better spent improving the quality of care home services than protecting the inheritances of those able to afford care.
Surveys indicate that the public are fairly evenly split between favouring a social care system funded by government through taxation (48%) and individuals paying what they can (25%), or up to the new proposed threshold of £72,000 (22%) with the government picking up the remainder. It is questionable, though, whether or not the elusive cap as currently conceived would really provide a fair and sustainable policy anyway; it doesn’t include accommodation costs, so people could still be paying up to £140,000 before they even reach it, and it would only cover 8% of men and 15% of women entering care at the age of 85.
The problem of finding a sustainable and fair solution to the funding of adult social care has been compounded by years of austerity too, especially at the local government level. Between 2009/10 and 2014/15 there have been real terms cuts of 17% in local authority spending on social care for older people. Recent research has shown that measures designed to counteract the effect of austerity on social care – the council tax precept and the Better Care Fund – will not be sufficient, and that the sector will face an estimated £4.3bn funding shortfall by 2020.
Brexit could also deliver fresh trouble for entrenched problems in adult social care. A more restrictive immigration regime would exacerbate the recruitment woes in the sector, themselves due in great part to underfunding. In some local authorities, especially in London, EU migrants account for between 20-22% of care workers. It would be extremely harmful if Brexit fuelled this vicious circle of austerity and increasingly exclusive immigration policies.
If we are back to square one, perhaps it is an argument that emphasises the enormously positive value of care that is needed most. Research by the Women’s Budget Group presented by Jerome De Henau of the Open University at the PSA Commission on Care’s recent London event argues that public investment in care makes both economic and social sense. Such investment would effectively be self-funding too, because of the boost to jobs and the improvement in skills and productivity and health.
That the Dilnot recommendations may never see the light of day will be frustrating for many. But the limited coverage of the latest cap proposals and the cuts to local authorities suggest the need to open up a longstanding but urgent debate anew. If the Government can be convinced of the economic and social value of investing in care, and if ideas for individual contributions can be designed in a way that is fair and equal, then there is some hope behind being back at square one.