The Prime Minister promised yesterday to fix the problems in social care. But with large unmet care need, a demoralised and understaffed workforce and individuals forced to pay huge costs out of their own pockets, these problems are immense. Did his government’s announcement yesterday rise up to the challenge?
The government did announce measures that will limit care users’ out-of-pocket costs. A cap of £86,000 on care costs will be introduced from October 2023, and additional support will be given towards costs up to the cap to those whose assets fall below £100,000. This is considerably less generous that the Dilnot Commission’s central recommendation of a cap of £46,000 in today’s money. It would still leave those with modest asset levels of around £150,000, such as homeowners in the North of England, facing the risk of having to use up to half their assets to pay for care. It is also questionable whether such a high cap will achieve the objective of stimulating innovation and improving the quality of care offered in the market. People will not choose more expensive care that is not covered by the cap unless they are confident they will be able to afford it for as long as it is required. With such a high cap, it is likely that only the richest would be able to commit to paying more for better or more innovative care.
In our report yesterday we proposed a proportional cap by which no one would have to use more than 15% of their assets towards the cost of care. This approach would be both a fairer way of insuring people against catastrophic costs and a means of raising the quality of care, and enable a greater number to pay more for better quality care.
Those with modest assets still face the risk of having to use half their assets to pay for care
Note: Assumes total lifetime costs of £150,000, annual assessed care costs of £26,500 and income just sufficient to pay for hotel costs.
Source: TBI calculations.
Other than the cap, though, there was little additional funding for social care in yesterday’s announcement, at least in the short term. Of the £36 billion in additional spending announced for the next three years, only £5.4 billion will be going towards social care and around half of that represents the cost of the cap. The remainder will go to the NHS. There will therefore be little additional funding to support the 1.5 million people with unmet care needs and family carers bearing huge responsibilities with little or no support. Indeed, the Health Foundation has estimated that an additional £1.6 billion a year will be required by 2024–25 just to keep up with growing demand for care services, so unmet need may even continue to grow.
Moreover, with the cap and higher capital limit bringing more people into the publicly-funded system, pressure on provider finances will continue to grow. Currently, self-funders cross-subsidise those receiving LA funding – the Competition and Market Authority found that in 2017 self-funders pay 41% more than LAs, representing an underpayment of £1 billion a year – so if more people are receiving LA funding, there will be less money for providers and more may pull out of the publicly-funded market. The government did not announce what would happen beyond 2024–25, but it is hard to imagine that there will be a large-scale transfer of funding from health to social care so most aspects of the social care crisis will rumble on.
Some seasoned observers of policy in this area might have the feeling that they have seen this movie before. In 2013, the then-Health Secretary Jeremy Hunt announced a similar policy for capping care costs and a higher capital limit, but no additional money for the rest of the system. Spoiler alert: the cap was never implemented. Growing pressure on the system meant it was impossible to bring more people into the publicly-funded system. Could the same happen again?