Reforming social care funding has been an issue for successive governments in recent times.
In contrast to health care, social care is not generally provided free and only the poorest in society are eligible for support towards the cost – something that many people do not realise. Changes to create a sustainable funding system have often been proposed, but reforms have not followed.
Why hasn’t a solution been found? What has the impact of the inaction been? And will reform happen?
This Insight refers to the situation in England only.
The current system
If care home residents have total assets less than £23,250 (which can include the value of their home), they can be eligible for local authority funding support. Even then they are expected to contribute their income, including their pension, towards the cost.
For people in other settings (such as domiciliary care), local authorities determine their own means-tests, which have to be as generous as the care home means-test. Only if someone’s needs are primarily health-related are both their health and their social care needs paid in full without means-testing.
Adult social care is not just for the old: local authorities’ adult social services spend as much on those aged under 65 as on those over 65. But it is particularly difficult to anticipate social care needs for individuals as they grow older: some may only need limited home help, while others incur extremely high care costs in a care home.
Social care policy reform: Promised but postponed
The then Labour Government established the Royal Commission on Long Term Care. Its 1999 report criticised the means-test approach – which prevails today – saying that to “rely on income or savings … is not efficient or fair due to the nature of the risk and the size of the sums required.” The Commission contended that “long-term care is a risk that is best covered by some kind of risk pooling.”
While some of the Commission’s proposals were accepted, such as free nursing care, its key proposals for a significantly more generous means-test and free personal care were both rejected by the then Government.
One of the first acts of the Coalition Government was similarly to establish the “Commission on the Funding of Care and Support,” chaired by Sir Andrew Dilnot. Its July 2011 report proposed a more generous means-test, and also a cap on lifetime social care charges “so that everyone else is protected from extreme costs.”
The Care Act 2014 legislated for the introduction of a cap, which gained cross-party support, but its introduction (along with the more generous means-test) was deferred in July 2015 (and subsequently indefinitely postponed) by the incoming Conservative Government led by David Cameron.
Will there be a social care Green Paper?
Notwithstanding the publication of two Government-commissioned independent reviews in the past two decades, the May Government said in its March 2017 Budget Statement that it would publish a Green Paper for consultation on options for how people paid for social care. Despite being originally slated for publication in the summer of that year, five Government-set deadlines for its publication came and went.
When Boris Johnson became Prime Minister, in his first speech in July 2019 he said: “we will fix the crisis in social care once and for all.”
However, the Conservative Party’s manifesto did not mention a social care Green Paper and its proposals provided little detail on how social care funding would be reformed.
The impact on social care: Frozen in time
The means-test limit has been frozen at its current rate since 2010. Similarly, the amounts someone should have left over after contributing towards their social care cost have remained unchanged since 2015.
The uncertainty about the nature of possible reforms may be affecting care homes and domiciliary care providers, who are predominantly for-profit private sector providers. The lack of clarity might mean that investment decisions are being postponed.
What next? Will reform happen?
Despite appointing independent commissions to produce answers to how people pay for their social care, neither Labour nor Conservative governments implemented their recommendations.
In postponing the Dilnot Commission’s proposed cap on lifetime social care charges, the Cameron Government said that, given it was a “time of consolidation,” it was “not the right moment to be implementing expensive new commitments such as this.” The Labour Government’s rejection of the free personal care proposal had similarly cited its “very substantial cost.”
It seems therefore that budgetary concerns are trumping political will for change, perhaps due to a lack of public desire for change caused by a lack of understanding of the system. Sir Andrew Dilnot said at a November 2019 conference: “the amounts of money involved are not massive [relatively] … We’ve had 20 years of depressing levels of inactivity … We should just get on with it.”
- Social care: Government reviews and policy proposals for paying for care since 1997 (England), House of Commons Library
- Adult social care: the Government’s ongoing policy review and anticipated Green Paper (England), House of Commons Library
- Social care: paying for care home places and domiciliary care (England), House of Commons Library
- Social care: Announcements delaying the introduction of funding reforms (including the cap) (England), House of Commons Library
- Social care: how the postponed changes to paying for care, including the cap, would have worked (England), House of Commons Library
Insights for the new Parliament
This article is part of our series of Insights for the new Parliament. This series covers a range of topics that will take centre stage in UK and international politics in the new Parliament.