The Government spends some £140 billion a year on services for older people. The bulk of this pays for pensions and other welfare benefits, and NHS care. Just six per cent goes towards meeting the social care needs of older people.

If you were starting with a blank sheet of paper, would this look like the best balance of spending to ensure quality of life, dignity and respect in older age? Is spending so little on social care relative to health and cash payments meeting the needs of older people?

Is it the most efficient use of taxpayers’ money when we know that restricting social care leads to the NHS being an – expensive – service of last resort for those who need help?

The 2012 Budget confirmed that public spending austerity is with us until at least 2017. In this climate, the Government cannot afford to duck these issues.

Like so many others, we urge the Government to approach the reform of social care and its funding with the urgency it deserves

Ahead of the Government’s long awaited White Paper, the Nuffield Trust has published a paper on funding social care, reflecting on the recommendations of the Dilnot Commission into funding care and support. Like so many others, we urge the Government to approach the reform of social care and its funding with the urgency it deserves.

In the short term, finding a way to help more of the people who need support but fall under the increasingly restrictive eligibility criteria has to be a priority.

One option is to look again at the NHS budget. Despite the pressures on funding, the NHS is on track to deliver a surplus in 2011/12, as it has done for a number of years. The expected surplus this year is currently £1.5 billion.

The 2010 Spending Review established the principle that health funding could be earmarked to support projects that met individuals’ care needs and could also be spent on services that reduced avoidable use of the NHS.

There is a good case – in terms of need and efficiency – for using some of the forecast NHS under-spend to fund an additional transfer to social care. This would ideally go on expanding coverage to those currently restricted from using publicly-funded care and to support further preventative work.

We also recommend that the Dilnot proposals – which would place a cap on the amount individuals pay towards their lifetime care costs and introduce more standardised eligibility for social care across the country – should be at the heart of any programme of longer-term social care reform.

The challenge then is how to fund the Dilnot recommendations and bridge the ever growing funding gap.

Whilst we support capping social care costs, this measure will benefit better-off older people. Meeting the needs of the vulnerable is the most pressing priority and so we put forward the case for setting the cap on the life-time costs borne by individuals at £50,000 rather than the £35,000 suggested by the Commission.

This would allow more public money to be spent on ensuring that eligibility for publicly-funded social care for the least well off was as wide as possible.

Looking to the medium term, our analysis also suggests that there are three main options to fund social care. All would need to be considered and debated with the public:

  • shifting more resources from the NHS to social care on a sustained basis;
  • reducing some of the welfare payment for better-off older people (these include universal benefits such as the winter fuel allowances) and using the savings to pay for a reformed social care system; and
  • targeted tax increases aimed at the better-off older people whose wealth would be protected by a lifetime cap.

Government is often very wary of discussing funding options. In the case of social care it is vital that we have an open debate.

The Dilnot Commission looks to offer a better deal for older people than the current mix of services, but in the end the public needs to take a view.

Would older people be willing to give up some of their present income and benefits for a social care system which met more of their needs and protected them from the very high costs of care (assuming they had assets above the means tested threshold)?

Reform of social care also needs to focus on improving the quality of care. It will be very difficult to make a convincing case for additional funding either by Government or individuals if care is viewed as poor quality and unable to treat people with dignity.

This blog was also published on the Public Finance website.

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Comments (1)

I disagree with this report, wealthy pensioners who have savings should not be taxed again and lose their bus passes, winter fuel. You have to remember here we pensioners never lived off welfare. What you need to do is tax the footballers more do they only pay 18% tax on their huge wages?. Reduce the welfare benefits more, lets say we have the same welfare benefit as Europe that would then free up loads of money and stop the migrants coming here for our generous welfare system. Pensioners who have no savings are subsidised by the pensioners who own their own property and have savings. The person who wrote this report should look at themselves in the mirror and look at other ways to pay for care. I remember when care was free in the council homes. The more money you need for care the private companies put their fees even higher. Live is never fair.

Pauline Simpson
30 May 2012

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