Ducking the social care funding question: the long-term impact on the NHS

Blog post

Published: 13/07/2012

That the Government ducked the question of social care funding should have come as a surprise to no one.

Of course, the long awaited White Paper on social care and draft bill contained much to be welcomed. Individuals, families and carers will clearly benefit from standard eligibility criteria to access care nationally and the freedom to move without losing access; more personal budgets and better information could help make choice a reality and efforts to raise the quality and quantity of the workforce are overdue.

But there were few concrete announcements about money: an extra £300 million to support ‘better integrated care’ and a new capital fund worth £200 million (which are in any case are dwarfed by the estimated £2 billion cost of implementing all of the proposed measures over 10 years).

The crunch question was whether the Government would accept any of the recommendations of the Dilnot review and commit to funding them within a specified timescale. It committed to two important ideas, but kicked the hard political decisions about how to fund them until at least 2015.

The first, to allow universal deferred payment schemes from 2015, will probably need only modest Government support. These schemes, which already operate in only a few areas, allow people to borrow money from local authorities to fund their care, which is then reclaimed from the value of their homes when they are eventually sold.

The most important commitment – to the idea of capping individuals’ liability for the costs of catastrophic care and extending the means test – carries a much bigger price tag, potentially running into several billion pounds a year within a decade, depending on where the cap and thresholds are set.

Dilnot suggested this should be set at £35,000, while in our recent analysis of the funding challenge for social care we suggested the level should be £50,000, thereby bringing down overall costs to the public purse.

The Government has promised to ‘explore’ the question of where the levels are set, alongside the vexed question of who pays. On this latter point, the Government suggests the idea of a ‘voluntary or opt in’ funding system, so that those who choose to pay in will get protection from the state.

This voluntary approach will carry some risks, namely that the better off will simply choose not to participate.

In our analysis we pointed out that since the Dilnot proposals disproportionally benefit the better off (by preserving more of their assets), it means that any potential funding solutions, such as taxation or changes to the benefit system, need to be tilted towards the wealthier sections of the older population. A voluntary system potentially undermines this.

Making the political case for greater public contributions for social care is going to be an uphill task in any case. Many people still do not understand that they might have to pay a substantial amount towards the cost of their care in old age.

Horror stories in the media about the neglect of older people at the hands of state funded carers – whether in care homes or in people’s own homes – undermines confidence in the quality of state-funded provision and could make it harder to convince people to pay for more for it.

Many people are also sceptical about what happens to any increased contributions to the public purse: there may be an argument to consider a hypothecated tax, as a way of reassuring older people that any increased contributions from them will not simply disappear.

It will also be hard to convince people to pay more if they think there is still waste in the system. There needs to be a thorough analysis of the £140 billion which is already spent on older people: how efficiently is it spent?

Whatever else happens, it is unlikely that the problem will lie down quietly and by 2015 there may be much more public pressure on politicians to take some difficult decisions.

Local authority budgets are under such pressure, and more people are no longer eligible for any help at all. This will result in more suffering: much of this will be absorbed by the stoicism of individuals and families, but eventually, inevitably, it will spill over to the NHS, in the form of emergency hospital admissions and increased workload for primary care.

Our recent analysis showed that local authority funded care home residents had fewer hospital admissions than those receiving high intensity social care support in their own homes – lending further support to the argument that cuts to social care budgets may lead to increased costs to the NHS.

This measurable impact on the NHS may well galvanise the politicians, but it will be cold comfort for those who find themselves shuttling between underfunded social services and an overstretched NHS.

Suggested citation

Thorlby R (2012) ‘Ducking the social care funding question: the long-term impact on the NHS’. Nuffield Trust comment, 13 July 2012.