MPs call for £7bn annual increase in social care funding as a starting point for reform – doing nothing ‘no longer an option’

The Health and Social Care Committee is calling for urgent and sustained investment in social care to resolve the crisis in funding, exposed by the Covid-19 pandemic. Its report Social Care: Funding and Workforce calls for an immediate increase to avoid the risk of market collapse.

The headline £7bn figure, however, is a starting point and would not address the growing problem of unmet need nor improve access to care, with the full cost of adequate funding likely to run to tens of billions of pounds. MPs recognise these substantial increases come at a time of severe financial pressure however the gravity of the crisis facing the social care sector demands this response.

The Report backs the introduction of a lifetime cap to protect against catastrophic care costs as originally proposed by the Dilnot Commission and endorses further consideration of free personal care. The current means-tested system is described as unfair, confusing, demeaning and “frightening for the most vulnerable people in our society, and their families”.

Action must be taken to improve the pay and recognition given to social care workers, establishing a clear career path that is more effectively aligned with the NHS. Transitional arrangements must be put in place to ensure the recruitment of social care workers from overseas for as long as is necessary.

Health and Social Care Committee Chair Rt Hon Jeremy Hunt MP said:

“The pandemic has held up in lights the brilliant and brave work done by the social care workforce - but the real thank you they want is not a weekly clap but a long term plan for the crisis in their sector.

“In this report we look at one element of that, namely the funding pressures, and conclude that the government must use the spending review to raise the annual adult social care budget by £7bn by the end of the parliament as the starting point for a wider series of reforms. Whilst that is a significant sum, it would not increase access or quality of care.

“However it would meet demographic and wage pressures as well as meet the catastrophic care costs faced by people with dementia or other neurological conditions. To address wider issues the sector needs a 10-year plan and a people plan just like the NHS. Without such a plan, words about parity of esteem will be hollow. We owe it to both the staff and families devastated by loss to make this a moment of real change.”

ENDS

KEY CONCLUSIONS AND RECOMMENDATIONS:

• Social care reform package must be brought forward before end of financial year
• Additional £7bn per year by 2023/24 a starting point for increase in social care funding
• Implement lifetime cap on care costs at £46,000, the level specified in Sir Andrew Dilnot’s original report
• Government should publish 10-year plan for the social care sector
• Sustainable funding settlement to provide competitive pay for social care workers to ensure parity with NHS staff

A full list of conclusions and recommendations can be found in the attached Report

Funding breakdown:

The Report does not examine how the £7bn would be funded but recognises the challenges involved and the need for innovative thinking to address them.

The increase in annual funding of £3.9bn by 2023/24 would meet demographic changes and planned increases in the National Living Wage for the social care workforce.

Care costs cap:

The Report endorses a lifetime cap to protect people against catastrophic care costs. It calls for the cap to be set at £46,000, the level specified in Sir Andrew Dilnot’s original report, which will cost around £3.1bn by 2023/24.

Implementing the cap on care costs would allow resources to be focused on the most severely affected people and remove injustice in which certain types of extreme care costs are covered by the NHS while others including care for those with dementia, motor neurone disease or many neurological conditions are not covered by the social care system.

Improving access to care:

The £7bn annual increase would not result in any improvement in access to care which is urgently needed. Unmet need is a major problem in social care as a result of local authorities restricting funding for social care to those with the most severe needs, meaning people who might previously have been eligible for Government funded care having to self-fund, rely on family, or go without. Age UK believes 1.4 million older people are not getting the care and support they need, up by 19% in two years.

The Health and Social Care Committee believes that access to care would be improved by the introduction of free personal care as recommended by previous select committee reports from both the Lords and the Commons, which it continues to endorse as worthy of consideration.

Profound unfairness:

The current system was found to perpetuate a profound unfairness as a result of some conditions being ineligible for basic social care. A patient diagnosed with dementia in his sixties found himself without financial support leading his wife to tell MPs: ‘It is like picking up a random card from a pack and saying, “Oh, you’ve got this particular one. Tough. That’s the disease the NHS isn’t going to pay for.”’ The call for reform echoes the findings of Lord Forsyth, Chair of the cross-party Lords Economic Affairs Committee whose report on the funding of social care was published last year.

Social care market at risk of collapse

An immediate funding increase is needed to avoid the risk of market collapse caused by providers withdrawing from offering services to council-funded clients to focus exclusively on the self-pay market. Local authorities’ limits on how much they pay the mainly private companies who provide services have led to an increasingly unstable market with growing numbers of providers going out of business or handing back contracts. The Report finds the care home market is reliant on a significant cross subsidy between care-home residents paying for themselves and those who are funded by their local authority with on average, a self-funder's care home place costing around 40 per cent more than one paid for by the local authority.

Homecare sector:

Funding shortages were found to have an impact on the commissioning relationship between local authorities and social care providers, particularly by creating a "pay by the minute" model which was said to have an adverse effect on social care workers' ability to provide the best possible care.

Need for parity with NHS staff:

The Report found more than a fifth of care workers receive only the National Living Wage with 1 in 5 of those under 25 paid less. It calls for the next Spending Review to ensure a sustainable funding settlement that would provide competitive pay for social care workers and ensure parity with NHS staff. The Government should also bring forward plans that would support the improvement of employment conditions for the workforce, including reducing the over-reliance on zero hours contract and improving the provision of sick pay.

Workforce recognition:

Frontline care workers dealing with challenges of Covid-19 told of feeling a lack of recognition during the pandemic in contrast to that given to NHS workers.

The Government is urged to work with the sector to streamline the training of social care workers, improve routes of entry to the profession and improve career progression for existing social care workers. The plan should include proposals to improve alignment with training for NHS staff and to improve the professional recognition of social care staff.

Transitional Immigration arrangements:

The Committee calls on the Government to ensure that transitional arrangements are in place to ensure that social care workers can continue to be recruited from overseas for as long as it takes to build sufficient resilience in the domestic supply of social care workers. It supports the view of the Migration Advisory Committee that building this resilience will depend on improving pay and other workforce issues in social care. MPs express concern that lower qualified social care workers and those without qualifications will not be eligible for the new NHS visa. The Report recommends the Government to accept the MAC’s recent recommendation to add senior social care workers to the shortage occupation list.

Background:

Social care in England is not free for all who need it. People with savings over a modest threshold, or owning property need to use savings and potentially sell their home to fund their care.

The total cost of care for people living with dementia is estimated typically at £100,000, rising to as much as £500,000. It is estimated that one in ten over 65s will pay more than £100,000 for their care.