Fixing the Care Crisis

Social care is one of the most controversial topics in British politics – but one that urgently needs to be addressed.

In a new report for the Centre for Policy Studies, the Rt Hon Damian Green MP – who as First Secretary of State commissioned the Government’s social care green paper – puts forward a bold and comprehensive proposal to secure the future of social care.

‘Fixing the Care Crisis’ argues that the current system is financially and politically unsustainable, opaque, unfair, and actively discourages local councils from investing in social care and housing for older people.

With the number of over-75s set to double from the current level of 5.3 million in the next 40 years, the need to address this problem is – as the King’s Fund warned only days ago – moving from urgent to critical.

The paper sets out that any reform of social care needs to:

• Provide sufficient funding to plug the gap created by an ageing population
• Be fair across generations and between individuals, ensuring that no one is forced to sell their own home and ending the ‘dementia lottery’
• Increase the supply of care beds and the provision of retirement housing
• Secure public and cross-party consensus

It argues that the care system should adopt the model of the state pension – with the Government providing enough support for a decent standard of care via a new Universal Care Entitlement, while encouraging and incentivising people to top up this provision from their savings or housing wealth via a Care Supplement.

The result of this is a sustainable system likely to be supported both in Westminster and beyond – not least because it protects councils from the soaring costs of care. It also fixes the warped incentives introduced by the reforms of the 1990s, which by handing councils responsibility for care costs led to new care home provision stagnating.

‘Fixing the Care Crisis’ demonstrates that the Care Supplement will be affordable and attractive to millions of those reaching retirement age, ensuring a steady flow of private wealth into the care home system.

It also suggests a range of methods to fill the immediate funding gap in the social care system, estimated at approximately £2.75 billion. These include, in decreasing order of preference:

• Taxing the winter fuel allowance
• Diverting savings from the Spending Review
• Potentially imposing a 1% National Insurance surcharge on those over 50

An annex has also been produced which contains information on various different social care systems around the world, it can be downloaded here.

Centre for Policy Studies - Monday, 29th April, 2019