Fixing Social Care: The Fundamental Choices

As the Government prepares to unveil its long-awaited plan for social care, a new report by the Centre for Policy Studies weighs up the three leading options for social care reform, ranking them by cost, political feasibility and impact on supply.

‘Fixing Social Care’, co-written by Jethro Elsden and Alex Morton, finds that, of the options being considered, a pension-style model would be most cost-effective, while also increasing supply and meeting the increasing demand for social care. It would also better protect people’s assets and benefit a greater number of hard-working families.

The CPS’s preferred model, developed with Damian Green, former DWP Secretary and First Secretary of State, would see the state guaranteeing a reasonable level of care and accommodation, with individuals strongly encouraged to top up their provision beyond that via insurance – paying for what they want while the state covers what they need.

By 2040, the number of people needing help with daily activities is expected to increase by 67% to 5.9 million. This is expected to rise to 7.6 million by 2070.

In 2019, the Prime Minister made it a priority to fix social care, pledging to stop people having to sell the family home to pay for care, yet significant steps are yet to be made. The CPS’ proposed model meets this commitment.

The think tank argues that recent increases in funding for social care announced by the Government have helped to shore up the sector in the short term, but are only a stop-gap measure.

A capped cost model, as proposed by the Dilnot Commission, would reduce the number of people needing to sell their home to pay for their care – but not eliminate the problem completely, as they would still have to cover daily living costs of around £12,000 a year. They would have to contribute up to the cap as well, with calculations including the value of their home. It is possible to make this more politically attractive – but only by making it more expensive.

The fully nationalised system, advocated by Labour, could cost around £14 billion each year, but the cost would be absorbed, through general taxation, by those of working age – exacerbating intergenerational unfairness. It would also result in people receiving different levels of care, and result in the state paying for what people are currently doing privately.

The Rt Hon. Damian Green, former Secretary of State for Work and Pensions and First Secretary of State, said:

“The failure to address social care properly has become a national embarrassment. It should be near the top of the Government’s post-Covid agenda.

“Using our successful pensions system as a model, combining a universal entitlement with strong incentives for millions of people to make their own extra provision, is the most practical route to a stable and well-resourced social care sector.”

Report co-author, Jethro Elsden, said:

“It is now urgent that we reform the social care system. The coronavirus crisis has underlined how precarious the current funding situation is. We cannot continue to go on talking about reforming the system but never getting round to actually doing it.

“If the social care sector is going to remain viable and begin to create the extra capacity to meet rising demand, both for domiciliary and residential care, then we urgently need to reform the way the system is currently funded.”

 

 

 

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