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With more than 1 in 20 care home residents
having died from coronavirus, the need to fix the crisis in
social care is more acute than ever.
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New analysis from the Centre for Policy Studies
compares the leading models for social care
reform.
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It finds that the system proposed by the Dilnot
commission would be the cheapest but least politically
palatable, as many people would still have to sell their
houses, contrary to the promises made by the Prime
Minister.
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The paper argues that the pension-style system
proposed by MP for the
CPS is the most viable and sustainable long-term, with the
state providing a basic level of support with individual
contributions on top (similar to both the state pension and the
successful system in Germany).
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This would also do most to spur greater
provision of care capacity and retirement housing to meet
surging demand, something the current system fails
on.
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Nationalising funding for the system, as
proposed by the Labour Party, would be by far the most
expensive, and would hit younger generations the
hardest.
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However, the report stresses that there is no
perfect answer - any viable plan will involve uncomfortable
trade-offs and higher spending.
As the Government
prepares to unveil its long-awaited plan for social care, a new
report by the Centre for Policy Studies, the leading centre-right
think tank, weighs up the three leading options for social care
reform, ranking them by cost, political feasibility and impact on
supply.
‘ Fixing Social Care’, co-written by Jethro Elsden and , finds that, of
the options being considered, a pension-style model would be most
cost-effective, while also increasing supply and meeting the
increasing demand for social care. It would also better protect
people’s assets and benefit a greater number of hard-working
families.
The CPS’s preferred model, developed with , former DWP
Secretary and First Secretary of State, would see the state
guaranteeing a reasonable level of care and accommodation, with
individuals strongly encouraged to top up their provision beyond
that via insurance – paying for what they want while the state
covers what they need.
By 2040, the number of people needing help with daily activities
is expected to increase by 67% to 5.9 million. This is expected
to rise to 7.6 million by 2070.
In 2019, the Prime Minister made it a priority to fix social
care, pledging to stop people having to sell the family home to
pay for care, yet significant steps are yet to be made. The CPS’
proposed model meets this commitment.
The think tank argues that recent increases in funding for social
care announced by the Government have helped to shore up the
sector in the short term, but are only a stop-gap measure.
A capped cost model, as proposed by the Dilnot Commission, would
reduce the number of people needing to sell their home to pay for
their care – but not eliminate the problem completely, as they
would still have to cover daily living costs of around £12,000 a
year. They would have to contribute up to the cap as well, with
calculations including the value of their home. It is possible to
make this more politically attractive – but only by making it
more expensive.
The fully nationalised system, advocated by Labour, could cost
around £14 billion each year, but the cost would be absorbed,
through general taxation, by those of working age – exacerbating
inter-generational unfairness. It would also result in people
receiving different levels of care, and result in the state
paying for what people are currently doing privately.
The Rt Hon. , former
Secretary of State for Work and Pensions and First Secretary of
State, said:
“The failure to address social care properly has become a
national embarrassment. It should be near the top of the
Government’s post-Covid agenda.
“Using our successful pensions system as a model, combining a
universal entitlement with strong incentives for millions of
people to make their own extra provision, is the most practical
route to a stable and well-resourced social care sector.”
Report co-author, Jethro Elsden, said:
“ It is now urgent that we reform the social care system. The
coronavirus crisis has underlined how precarious the current
funding situation is. We cannot continue to go on talking about
reforming the system but never getting round to actually doing
it.
“If the social care sector is going to remain viable and begin to
create the extra capacity to meet rising demand, both for
domiciliary and residential care, then we urgently need to reform
the way the system is currently funded.”
ENDS
