10 things you should know about social care reform in England

A fork in the road, published jointly by the Health Foundation and The King’s Fund this month, pulls together new financial modelling, public perceptions work and policy analysis to identify the problems with adult social care in England and outline options for its reform. Find out more:

1. Only people with assets below £23,250 currently qualify for any publicly funded care

The current system in England provides public funding only to people with the greatest need and the lowest means. A person will not qualify for any level of public funding until their assets are below £23,250 and will not receive full funding until their assets are below £14,250. If someone requires care in a residential or nursing home, their assets are likely to include the value of their home.

2. Quality and access to care have not kept pace with growing need

The means test thresholds for eligibility for social care have not increased in line with inflation, making fewer and fewer people eligible for public funding each year, even though the number of people in need of care is growing. In real terms, public spending on social care has fallen. Between 2009/10 and 2015/16, spending by councils on social care per adult resident fell by 11%. The early part of the decade saw a 26% reduction of the number of people receiving publicly funded social care services.

3. Doing nothing is no longer the easiest option

With the population over 75 set to double, demand for health and care is projected to rise dramatically over the next 30 years. ‘Doing nothing’  is not a safe option. Demographic pressures, growing public concern and a system at ‘tipping point’ all mean that action is politically essential. The report finds that additional revenue will need to be raised for adult social care services even without a major change in the model of delivery. 

4. Low public awareness and a lack of agreement are blocking progress

Findings from the British Social Attitudes survey reveal extremely low understanding of how social care operates, with 34% believing the government pays. Our research shows that this lack of public understanding combined with a lack of agreement within government about what should be done (despite political consensus on the need for urgent action) are major barriers to progress. 

5. Every option is going to cost money

Our report models the cost of a number of options: Maintaining the current system, which sees fewer people receiving publicly-funded care every year, will lead to a funding gap of £6bn by 2030/31. Returning to levels of access and quality last seen in 2009/10, before the current period of austerity, would increase the gap to £15bn.

More fundamental reforms would also significantly increase the cost of social care. Introducing free personal care for all older people with needs above the current threshold would be an extra £14bn. Introducing a ‘cap and floor’ model, similar to the Conservative Party proposals  at the 2017 general election, which would protect people from having to sell their homes by implementing a cap on the lifetime costs of care, would require £12bn. 

6. The government also has to choose between local or national funding approaches

The government faces a difficult decision in practice and principle about how much to centralise and ring fence funding for social care. If we moved from the current set up of local funding, to a national system, how would we deal with the fact that councils have chosen to set different council tax rates to fund different service levels? Should local areas have responsibility and discretion over public services? Or should service access be same irrespective of where one lives?

7. The funding gap will probably need to be met through taxation

Our report explores how the additional funding required for all these models could be raised in various ways. For example, adding 1p to all rates of National Insurance by 2030/31 would raise enough to fund introducing the cap and floor model. Combined with the (problematic) option of means-testing winter fuel payments, this could be enough to introduce free personal care. Alternatively, adding 2p to all rates of income tax, or 3p to VAT, would be enough to improve access and quality close to the levels observed in 2009/10.

8. There is public support for a dedicated social care tax

A rise in general taxation could be delivered through a hypothecated tax for social care. The findings of in-depth research into public perceptions of social care funding, carried out by Ipsos Mori to inform our report, show that most people would prefer a dedicated tax to stop the money being diverted elsewhere. Options that include the possibility of people selling their homes to cover care costs, as exists now, were found to be deeply unpopular.

9. Reform is partly about design and a lot about engagement

From our research into public perceptions, we know that many people think the current system is more generous than it actually is, assuming social care will be free when they need it. Any proposed solution that is not free will be viewed negatively while this remains the case. However, when people are given more detailed information about how social care works, they recognise that there is a significant problem and believe the current system is not fit for purpose. 

10. Social care reform is at a fork in the road

Our report concludes that reforming the current system will be expensive, but that if reform is chosen, England is now at a clear ‘fork in the road’ with a choice between a better means-tested system and one that is more like the NHS; free at the point of use for those who need it.

The government’s forthcoming green paper has an opportunity to try and build wide consensus on which direction reform should take, and lead to real progress and improvement. To find and implement a solution to social care funding, public understanding needs to improve and awareness-raising measures must be part of any implementation.

This article draws on event content from a joint event hosted by the Health Foundation and The King’s Fund on 16 May. The event featured presentations from the Institute for Fiscal Studies, The King’s Fund and the Health Foundation.