How Should We Pay for Adult Social Care?

It is expected that the UK government will publish a Green Paper shortly on the future funding of adult social care in Britain. Government spokespersons have said that it will be released before Parliament goes into summer recess on 20 July. Green papers are official consultation documents produced by the government for discussion both inside and outside Parliament, when a government is considering introducing a new law, but are unsure of the public’s reaction to a particular policy.

This cautious approach taken by the government comes in the wake of the Tories disastrous manifesto commitment at last year’s general election, which pledged to fund adult social care by requiring users of the service to pay for care with equity held within their homes, should they own one. The policy idea was said to be the brainchild of Nick Timothy, one of the prime minister’s special advisers, and apparently not even discussed in Cabinet before hand.

It was a bit of a back of a fag packet plan, which when I first heard about it I thought was a very un-Tory like policy, and very risky to just spring on the electorate at a general election. It almost certainly cost the Tories votes and contributed to the government losing its majority in Parliament. Timothy was duly sacked as an adviser.

There is broad agreement amongst politicians and health care professionals that this issue does need to be sorted out. This year the gap in funding, which has been caused by the Tories austerity agenda resulting in deep cuts to local authority funding, has only been partially addressed by allowing local government to raise council tax (by 3% without having to win local referendums), but this is just a quick, partial fix.

With an ageing population, the problem of funding adult social care will only get worse in the future. Estimates of the future cost vary, but is in the range of an extra £2 to £4 Billion per year by 2019-20, and rising thereafter, depending on the quality of care. Council tax payers can’t be forced to pay this extra amount, so some kind of central funding needs to be devised to meet the increased demand.

Ahead of the Green Paper, two reports have been published which look into funding options. The Institute for Public Policy Research (IPPR), in a report co-authored with former health ministers Lord Darzi and Lord Prior, advocates raising National Insurance contributions by 1p in the pound from next year. In addition to supporting the NHS, it would enable an increase in social care spending from £17bn to £21bn by the end of the parliament, the report claimed.

Separately, a report by The Health Foundation charity and Institute for Fiscal Studies (IFS) for the NHS Confederation also called for tax increases amid increasing numbers of people aged over 65 and those with long-term medical conditions. An annual increase of 3.9% in public funding for social care would be required over the next 15 years to meet future needs.

IFS director Paul Johnson said that with other areas of funding already squeezed the only way forward was to get more money from taxpayers, but warned the Government would have to overcome the ‘tyranny of the status quo’.

The government is likely to resurrect the option of using the value of people’s homes with some level of threshold limit, but it will be just one option. But for younger people, who will require social care themselves one day, and are less likely to have property assets because of the astronomical costs of buying a home in many areas, so this needs to be addressed too. The idea of some kind of social care insurance, perhaps just for younger people, is likely to be proposed also.

I think that it is very unlikely that higher earners will have to cover all of the costs by raising the top rate of income tax, because the Tories just don’t do that sort thing, even if the fairness of this is obvious to most people, but we will have to wait and see.

Personally, I think some kind of tax rise, perhaps ring-fenced for adult social care will have to happen, but I see no reason why higher earners should not shoulder more of the burden than the less wealthy, but I am a socialist after all.