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A fork in the road: next steps for social care funding reform

18 May 2018

The costs of social care funding options, public attitudes to them – and the implications for policy reform.

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Ahead of the Government’s proposed Green Paper on social care, this Kings Fund report considers various options for funding care in the future:

  1. maintaining the current system (at 2015/16 levels) and keeping pace with projected demand pressures until 2030/31 - minimal disruption to the administrative system and no transition costs but would need extra funding or fix problems including issues around complexity and fairness
  2. restoring the system to the level of quality and access that existed in 2009/10 – would need even greater investment than 1.
  3. introducing a ‘cap and floor’ model, similar to the Conservative Party proposals at the 2017 general election – this protects people from having to sell all their assets or facing catastrophic lifetime care costs but creates ‘winners and losers’ – more people would receive state-funded residential care but fewer would receive funding for domiciliary care.
  4. introducing free personal care (FPC) for all older people, like the model in Scotland – removes one of the systematic barriers to integration with health and although it is more expensive than 3, it is not more expensive than investing to restore access to levels seen in 2009/10.

The main emphasis of the report is on older users of the care system.

“This does not mean that services for working-age adults do not require attention, and indeed additional funding. In fact, the opposite is clearly true. However, as described in our interim report, we see no alternative to continuing a largely tax-funded option for providing care for younger adults, so have not explored alternatives. It remains vital that the social care system works for all adults with social care needs, and so our projection of the associated demand and costs for the future include spending on all adults, which changes when alternative approaches are applied to services for those aged 65 and older.”

Funding

Funding options for these models could be from:

  • Adding 2p to all rates of income tax, or 3p to VAT, would be enough to improve access and quality close to the levels observed in 2009/10.
  • Adding 1p to all rates of National Insurance (NI) by 2030/31 would raise enough to fund introducing the cap and floor model
  • Adding 1p to all rates of National Insurance plus means-testing winter fuel payments could be enough to introduce free personal care

A key barrier to reform is public perception of the social care system. The proposed ‘cap and floor’ model, contained within the Conservative manifesto has already suffered strong opposition (dementia tax) and may have contributed to the election result.

The report says that people need a better understanding of the problems, but that politicians are not best placed to provide it. A coalition of organisations, with cross-party support where possible, is required.

A fork in the road: next steps for social care funding reform