Adult social care in England: Possible reforms?

Tim Jarrett

In his first speech as Prime Minister in July 2019, Boris Johnson said: “we will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve.”

Reforming social care funding has been an issue for successive governments in recent times. Why hasn’t an answer to this issue been found before? How do people pay for social care at present, and what proposals might the Government put forward now?

How is adult social care currently paid for?

Unlike treatment for health conditions, adult social care is not usually entirely free at the point of use. Often, people are unaware of this until they or a friend or relative need social care.

Social care isn’t only needed by older people. Many working-age adults require social care. Half of the £21 billion spent annually by English local authorities on adult social care goes on working age adults, according to the Institute for Fiscal Studies.

In order to qualify for funding support from their local authority, people in need of social care have to pass a means-test. Even if they do qualify, they are still required to contribute their income and welfare benefits towards the cost.

Who is eligible for social care funding support?

If a care home resident has capital (which may include the value of their home) of less than £23,250, they are eligible for local authority funding support. Even then, they are expected to contribute towards the cost from their income. If their income exceeds the amount a local authority usually pays for a care home place, they may not receive any financial support from a local authority.

Local authorities can devise their own charging rules for people receiving care at home. These rules can’t be less generous than the rules for care home residents however.

The value of the person’s main home is always excluded from the means-test when care is provided at home.

There is no limit on the contributions people can make from their capital and income to fund their own social care – even if they are eligible for local authority funding support. This means some people can face cumulative bills of many thousands of pounds over their lifetime. Furthermore, the burden does not fall evenly across the population; it can be difficult to predict who might need social care, or the level of care they might require, which itself can change over time.

Only people whose needs are primarily health related are exempt from paying for social care. The NHS meets their health and social care bills in full.

Social care funding reform: a well-trodden path

Successive governments have introduced several Green and White Papers looking at social care funding reform. There have also been two Government-appointed independent commissions: the Royal Commission on Long Term Care for the Elderly and the Commission on the Funding of Care and Support, who reported their findings in 1999 and 2011 respectively.

Despite numerous ideas and proposals, the issue remains unresolved.

What’s holding up reform of social care funding?

Where should the balance lie between individuals and local authorities paying for social care? And how much should they pay? These questions have been subject to extensive research. Charities such as Independent Age and think tanks like the King’s Fund have suggested solutions, but the problem seems to be an absence of Government funding to implement proposed reforms.

For example, the Royal Commission proposed free personal care; the then Labour Government rejected it for England and Wales because it would incur “a very substantial cost, both now and in the future”.

Similarly, in postponing the Commission on the Funding of Care and Support’s proposed cap on lifetime social care charges and a more generous means-test, the Conservative Government said in 2015 that, given it was a “time of consolidation”, it was “not the right moment to be implementing expensive new commitments such as this”.

The May Government’s proposed Green Paper

Theresa May’s Government postponed the introduction of a funding cap and a new means-test for people needing social care July 2015. In March 2017 the May Government announced a new Green Paper which would set out options for the future financing of social care.

A number of options for inclusion in the Green Paper were confirmed by the Government or reported in the media at the time, including a more generous means-test limit, a cap on lifetime social care costs, insurance and other ideas.

However, the model gaining most support from external bodies recently is free personal care, which was adopted in Scotland in 2002. Further, the Labour Party announced in September 2019 that if it came to power it would introduce free personal care for the over-65s.

The May Government said that the Green Paper will cover broader issues including health and social care integration, the role of carers, and technological developments. For more information, the Library has produced a briefing paper about the proposed Green Paper.

When will the Green Paper be published?

The Green Paper was originally due for publication in summer 2017. This was the first of five Government-set deadlines for its publication that have been missed.

The current official position is that it will be published “at the earliest opportunity”, a phrase first used in December 2018.

However, it was reported in the press that Boris Johnson’s Government will abandon the publication of a consultative Green Paper and instead publish a White Paper setting out the Government’s new policy on social care. The continuing uncertainty could affect how people save for potential social care bills, and investment by private companies who provide the majority of social care services. It also means that people in receipt of social care continue to face mounting bills, with the key means-test parameters unchanged since 2010.