Social care reform: what is the vision?

Social care has been in the news this week, but what is the vision for it? With the sector having seemingly never been so prominent in public and political discussions, Natasha Curry and Nina Hemmings once more ask the key questions.

Blog post

Published: 31/07/2020

Reports in the media this week have been drip-feeding some tantalising glimpses of what might be going on behind the social care reform scenes in central government.

There has been talk of a tax on the over-40s, suggestions of a rise to national insurance, and speculation over a lifetime cap on costs. There have been mentions of individual insurance to cover costs, and even hints of a wholesale shift of social care responsibilities into yet-to-be-formed NHS integrated care systems.

While those of us hungry for any movement on social care may be tentatively hopeful that this could finally be the moment that reform actually happens, after over 20 long years of hopes being repeatedly raised then dashed, the big questions we need to focus on are: What is the vision? What is it that we, as a society, want from a care system? Do we just want to tinker at the edges to prop up what we have, or do we want a different system?

The Secretary of State this week hinted at an ambition for social care that extends beyond previously narrow framings of reform centred on protecting people from selling their homes to pay for care. Instead, his speech pointed to aspirations for a system in which “everyone”, no matter their age, gets “the care they need”. A nod to prevention, oversight and accountability, and to recognising and rewarding carers, were welcome additions.  

Looking back at the history of failed social care reform, the debate has all too often started and ended with funding. Inevitably, as the Secretary recognised, any meaningful reform to the care system will require more money to be raised from the electorate. But to gain public support, people need to know what they are paying for, how much funding is needed and how costs will be shared.

Clarity of vision

Our previous work looking at the care systems of Japan and Germany have highlighted there is no perfect system. Instead, each is the product of a set of complex negotiations and compromises that reflect social, cultural and political dynamics. But what underpins both is a vision and clear principles around which public and political support was built.

In Germany, the vision was based on social solidarity – guaranteeing access to a minimum level of care for all, regardless of age, means, postcode or condition – with ambitions to extend and expand benefits as it developed. A standard needs assessment and schedule of benefits across the country ensures consistency and fairness for all.

Japan based its system on Germany’s but started out with a different vision – an ambitious, generous system that would not just care for people but also promote independence, wellbeing and prevention. Like Germany, consistency of benefits and eligibility embedded a sense of fairness but, unlike Germany, Japan restricted access largely to people aged 65 and over.

Two different contexts, two different sets of priorities. Two different visions but each, crucially, designed to build public and political support. And both built upon existing, long-standing and familiar infrastructure.

Fair and sustainable funding

Once the vision is in place, attention can turn to funding. The various options available in England have been well rehearsed. The next step is selecting an option (or combination of options) that will meet the costs of the reformed system, and allow the vision to be realised.

Four tests for a social care funding system:

1. Does it raise money now and in future?
2. Does it pool risk?
3. Is it fair?
4. Is it understandable?

The funding systems of Japan and Germany, although different, are both based on risk pooling. Everyone pays in, so that everyone can benefit and no one is faced with catastrophic costs. Both systems raise money now and in the long term; are mostly well understood by the public; and reflect what is considered fair in their social and cultural contexts.

In both countries, monthly contributions taken from income (and shared with employers) are paid into a ringfenced national fund. Retirees continue to pay in the full contribution from pensions income. In Germany, people begin to pay in on starting work, but in Japan contributions start at 40. The fund in Japan is also topped up from general taxation.

Neither country opted for a system that is completely free at the point of access, and both are grappling with the complexities of managing public expenditure while protecting individuals from very high care costs. Japan has opted for a monthly cap on individual costs, while Germany is currently debating how best to limit the burden of costs that fall on those with high needs.

Our government will have to make a set of complex decisions: balancing transparency with flexibility; weighing up the relative merits of raising revenue from income or wealth; deciding the extent of state coverage versus individual liability; and considering which option will work both now and in 2040-50 when demographic pressures bite.

Stabilise the market and don’t forget the staff

A system is not just about the money that goes in but also about delivery of services, and it is clear that problems in the English care system extend beyond just lack of funding.

Any effective reform needs to consider which services are needed both now and in future, how they are delivered and who delivers them. Provider market reform was a central plank of system redesign in Germany and Japan, with both countries seeking to drive quality, competition and stability by implementing consistent national provider payment processes that take account of current and future cost pressures.

Although both countries acknowledged a likely shortage of formal care staff, neither adequately anticipated nor planned for the acute workforce pressures they now face. We must not make the same mistake, and instead must ensure that the workforce is an integral consideration at every stage of reform. This must also consider the pivotal role of informal carers and the support they need.

Social care’s moment

Covid-19 has been a distressing time for those involved in social care, but it has pushed the need for reform up the political agenda and on to the front pages.

Never has social care been so prominent in public and political discussions. There is a groundswell of support for reform that presents a rare opportunity to achieve tangible change. Covid-19 has been a tragedy but it would be a further tragedy if this chance was wasted. This is the time to set a bold new ambition for a care service fit for the 21st century.

Suggested citation

Curry N and Hemmings N (2020) Social care reform: what is the vision?”, Nuffield Trust comment.