Funding social care

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Ahead of today's Backbench Business Committee debate on the funding of social care led by Sarah Newton MP, ePolitix.com has garnered the opinion of key stakeholders.

Member Response: Age UK

We are spending a grossly inadequate amount on care and support, from both public and private sources combined.

There are an increasing number of people in late old age, yet since 2004 net spending on older peoples' care has risen by just 0.1 per cent in real terms, a total of £43 billion. This figure is dwarfed by real spending on the NHS which has risen by £25 billion.

This has created huge pressures in the care system: tighter eligibility requirements; variability in support across the country; inadequate help for people living in their own homes; under-funded care homes; and the sidelining of preventative spending. As a result levels of unmet need are rising and families are being forced to take on a greater burden. There are 2 million older people in England with care-related needs and 800,000 receive no formal support from public or private sector agencies.

This comes on top of long-term grievances regarding a means-tested system which asks many people to meet almost all the costs of a care home. The result is a lottery. Some people never need to use care services and pay nothing while others lose almost their entire life savings; and in between too many people are put off using support services they clearly need.

For Age UK Dilnot's analysis represents a fair, balanced, affordable and reasonable approach to reforming social care. It acknowledges that the current system is underfunded and that better targeted resources need to be made available.

Member Response: Association of British Insurers

The insurance industry is uniquely placed to assist with a programme of social care reforms and relieve some of the burden off the state. The industry, through its products and advice services, can help people fund their share of the care partnership.

Insurers are interested in understanding the level of need that exists for social care and how financial products can help people to meet those needs. The level of need is impacted upon the proposals from The Law Commission, Dilnot Commission and the Government.

The ABI wants to work with policymakers to help create sustainable funding solutions for the future which lead to a more resilient and better financially protected society. We have been developing policy and actively engaging with key stakeholders on long term care provision, protection products, and through our savings and pensions work. We are ready to support the Government, and are currently co-leading one of six work streams as part of the Caring for our future engagement.

The ABI is seeking cross-party support for reforms, which will help us and the public have confidence that we have a system that will last the distance.

Member Response: Chartered Insurance Institute (CII)

The Chartered Insurance Institute believes that a lasting long-term care (LTC) settlement is long overdue.

The final report by the Commission on Funding of Care and Support was an important step forward but there remains much work to be done. Its proposals (if implemented) could help prevent self funders spending the majority of their assets paying care home fees. The proposals could also provide improved incentives for the development of financial products such as immediate needs annuities.

However, on its own, a new funding model cannot resolve the chronic problems of a lack of consumer awareness and engagement which will, if left unresolved, deter people from adequately protecting their assets through financial services as they grow old.

From the CII’s perspective, there are three areas in particular where more effort must be made to reverse these detrimental behavioural trends.

• Political consensus on the LTC funding model is crucial. Government and opposition must do their best to provide certainty about future rules – making cross party support for the eventual settlement vital.
• Trust is a key issue and the industry must embrace reforms such as the Retail Distribution Review which is aimed at improving levels of confidence around the distribution of financial products and services.
• Education and easy access to understandable information. We would reiterate the call for a government–led education campaign to raise awareness about LTC and back Dilnot’s proposals in this area.

There is clear consensus that the current funding system is outdated. Now all interest groups must ensure that the momentum for reform created by Dilnot is sustained, and a new lasting settlement formed which delivers much improved financial security and peace of mind for our elderly.

We published a report in September entitled: Who cares? The implications of a new partnership to fund long-termcare which can be found here.

Member Response: Richard Humphries, senior fellow, The King's Fund

It's good news that there are more of us and we are living longer, but the economics of how we pay for care hasn't caught up. All political parties agree something must be done but consensus has proved elusive. The King's Fund has long argued that the most sustainable and fair approach is for costs to be shared in partnership between the individual and the state . This is reflected in the central recommendation of the Dilnot Commission for individual costs to be capped to a maximum amount, beyond which the State would pick up the bill.

Removing the fear of catastrophic costs would especially help people with relatively modest means who are hardest hit by the current means-tested system. Alongside other key proposals - including more consistency in assessment and eligibility and better information and advice - Dilnot offers a credible framework, as the warm reaction from care sector and charities testifies. There is much detail to be worked through and the fiscal climate is hostile. But intensifying pressures on care budgets will leave more people without the support they need and create knock-on pressures for the NHS - which will not work properly without a better resourced social care system. The key question is not ‘can we afford Dilnot?' but how can we afford not to.