The Government is putting in excess of £40 billion (and counting) into the NHS and social care. More money into the first aid camp at the bottom of the cliff instead of building a fence at the top. At the same time the Government has reduced the income of older people by stopping the free television licence and reneging on the triple lock which will inevitably increase demand upon health and social care absorbing much of the additional money. There appears to be a lack of understanding by Government of the correlation between income and demand upon the NHS or that 4/5ths of the expenditure of the NHS goes on older people.
The proposed “cap” of £86,000 on the amount one can spend on social care will benefit the better off in that those without sufficient savings will still have to sell their houses to pay for their care. And the Integrated Care System, also contained in the Health and Social Care Bill, places greater emphasis on commissioning a mixed economy of care than it does on providing integrated cost effective services for those in need.
This more detailed article considers what might have been the outcome were this money to have been put on the State Pension to pump prime raising it to at least 60% of national average earnings, which would still be lower than are state pensions in much of Europe but, which would:
- enhance the quality of life of older people (and it should be remembered that the state pension counts against one’s tax allowance and therefore 20% of this additional expenditure would be clawed back through income tax from those older people with occupational or private pensions);
- reduce demand upon health and social care;
- enable those older people who need long term care to pay more by handing over their income up to the cost of the care home, less their personal allowance, as they do now but with the other savings identified disregard both their savings and house – benefitting both rich and poor, and;
- through other consequential savings ease the tax burden on working people.
Clearly it would be a hard political sell and could not be done without also doing something about the low paid, those on income support and the 3.9 million children being brought up in poverty, three-quarters of whom have a parent in work.
* Chris Perry is a former Director of Social Services for South Glamorgan County Council, a former Director of Age Concern Hampshire, a former Non-Executive Director of the Winchester and Eastleigh Healthcare NHS Trust and a former presenter of an award-winning public affairs programme on Express FM.
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21 Comments
The crux of the issue is to get a clear answer to the question ‘whose responsibility is it to pay for the social care costs of (mainly) elderly people who are no longer physically able to look after themselves?’ Should the burden of providing social care fall, initially, on family? If social care can not be provided by family – or family refuses – should the financial burden of paying for others to provide that service fall on the the individual themselves if they have assets that could be used to finance the costs or should the financial burden fall on everybody else’s families by being paid for from general taxation? As I see it, the whole point of a cap on what an individual has to pay for their own social care is designed to protect inheritance wealth for the benefit of the family who may be unwilling or unable to care for their elderly relative – is it fairer that everyone else’s families should pay more in taxes to protect the inheritances of these families? Personally, I don’t see why low paid workers should be paying more National Insurance so that millionaires can pass their wealth to family members…
Brad Burrows. Could I suggest you read the longer article, appended, from which you will see that this is a win win situation at less cost which could reduce the tax burden for working people.
Hi Chris. I don’t think I am disagreeing with you. I was trying to point out that the current proposal to have a cap at £86k is designed to protect the wealth of wealthier individuals requiring care so as to allow it to be passed on when they die – and that this is fundamentally unfair as the cost of this will be borne by increased taxes for everyone else. The interesting thing about the wealthy elderly is that their need for social care is unlikely to be reduced significantly by increasing pensions as they already have enough financial resources to meet their needs. (Even those who are ‘asset rich but low income’ can meet their need by using equity release schemes.) That said, pensions should be increased and this would particularly help some of the poorer elderly to avoid needing social care provision, resulting in significant savings for the State which currently picks up most of the cost for this group of people.
Brad Burrows: Thank you for clarifying that for me. I am hoping to get a debate going and comments on the “whole systems approach” advocated in the longer article (accessed by clicking the orange wording). And thank you for starting that debate. Much appreciated.
Brad Burrows is right. As a comfortably off pensioner – own house, good degree paid for entirely from public funds, occupational pension, bus pass, winter fuel allowance etc – I feel VERY lucky. I especially feel this when I see someone in their twenties struggle onto a bus, with a push chair, and have to pay a fiver for themself and their oldest child.
We need a genuine, financially sound and compulsory system of tax, rising linearly with income, not in any artificial bands. Abolish the separate National Insurance. Increase Income tax. Have a modest wealth tax – on people like me, not just the very wealthy. Increase sales tax on high end things like cars, fridges and televisions while reducing it on the cheaper items.
Give all pensioners a decent basic pension and abolish all the silly allowances, given out as sweeteners that are expensive to administer.
Clearly the prevention of the need for care is crucial for all.
The amount paid to provide an individual with care should be linked to their ability to pay and the wealthier you are the more you should contribute. The emphasis should not be on what remains when the buffers are reached. It should be on at what point finacial contributions from the state begin.
Agree with David.
@ David Garlick “The amount paid to provide an individual with care should be linked to their ability to pay and the wealthier you are the more you should contribute”.
Would you apply that principle to treatment on the NHS ? In particular, do you regard physical infirmity/incontinence/ MND and dementia as solely the responsibility of the NHS ?
Ianto Stevens: could add if you carry on working like myself you are exempt from 12% for National Insurance from taxable earnings and pensions, it’s bizarre. Great for the likes of me but is it equitable?.
Even get free swimming at the Leisure Centre!!!!! The oldies go 3, 4, 5 times a week!!! What a financial savings.
What fun getting old? With all these worthy and well thought out suggestions on how to solve the mighty problems in funding the old and infirm if and when such help is needed, I would suggest that a reliable lawyer, accountant or financial adviser be approached to give the applicant the necessary advice to avoid any minefield that might occur in a particular course of action to the unsuspecting pensioner, if you can afford such advice that is, or is it me??
I would very much welcome Chris Perry’s views (pros and cons) on a National Care Service outside the for-profit contractual system we have very largely got at the moment.
This report ADASS from LA Directors of adult social services advises “A SNAP SURVEY of the state of social care services in England has revealed a rapidly deteriorating picture of hundreds of thousands of older and disabled people left waiting for help despite record increases in care being provided to people in their own homes.”
“ADASS is calling as a priority for action to raise the pay and status of care work and put it on a professional footing in the long term.
The findings suggest, however, that immediate steps must be taken to stem the loss of care workers to other sectors to ensure services can be maintained. ADASS is urging the government to fund a £1,000 winter retention bonus for all staff.”
“Over the past six months, 48 per cent of directors have needed to respond to a care home closure or a home provider going out of business.”
“Forty-two per cent of directors have experienced failure of a home care provider, affecting an average 50 people due to receive care and support in their own homes.”
The LGA https://www.local.gov.uk/about/news/lga-responds-adass-snap-survey-state-adult-social-care says “We face a huge recruitment and retention crisis in the care workforce, with more than 100,000 vacancies and leaving hundreds of thousands more without essential support.”
In another report LGA they compile a list of things that providers say could be most helpful in alleviating workforce capacity pressures this winter
The links Joe Bourke posted reaffirm the extremely poor position all the social services find themselves in at present, one particular problem that keeps coming up is that the caring professions are treated and respected so poorly and paid badly for such an important job that anyone of us, whatever age, might be grateful for anytime in our lives.
Not sure from the above how many people have read the appended article ? If not, I would ask that you do, please? I am keen to get a debate going to test the validity of the costings I have arrived at.
Surely anything which enhances the lives of older people, reduces demand upon health and social services, sorts out the social care crisis and eases the tax burden on working people should be welcomed?
To answer David Raw’s point I would certainly favour more in house directly managed services. The voluntary sector has a unique position to play in innovation and pioneering new approaches. This is better achieved by grant aid than prescriptive contract.
I have alway found it difficult to reconcile the private sector making a profit out of services which are 100% funded by public money unless the public sector dose not, or cannot, provide.
@Chris Perry: You say: “I have alway found it difficult to reconcile the private sector making a profit out of services which are 100% funded by public money” An obvious response to that is: Do you find it hard to reconcile people earning a salary by working on things that are 100% provided by public money? After all, making a profit often isn’t that different from earning a salary: It’s still a payment for doing something. It’s just that profit comes from being contracted to do something rather than being a direct employee, and may go to an organisation (group of people) rather than a single person.
To me, it seems odd to be happy with someone earning a salary for providing a service but at the same time to object to someone (or an organisation) making a profit for providing a service.
Chris,
Spain appears to be home to one of the more healthy of the world’s populations https://www.rd.com/list/spaniards-healthiest-in-world/
The secret seems to lie with following a Mediterranean diet; eating plenty of fruit and vegetables; close family ties with different generations living under the same roof or in close proximity and good old fashioned walking.
I was really hoping for a debate around my far reaching proposals, and costings, in the attached article which are not confined to paying for social care. However a number of respondents have expressed the view that those who can afford to pay should do so.
We are not talking about the mega rich here but ordinary hard working people. Not sure how many of you have tried to look after a parent with Alzheimer’s or Dementia and have experienced the sleepless nights, fear of wandering or leaving gas taps on, and the pain of not being recognised, only in the end to have to give in and experience the guilt of their parent going into a home. They can then lose much of their inheritance. Where as someone whose parents are a joy to the end keeps all of theirs.
The need for social care strikes at random. Normally in this kind of random situation everyone takes out insurance – some claim – some have no cause to.
I’m afraid I don’t think the main proposals in this article add up. Your more detailed article suggests that if the Government diverts the extra money for the NHS/social care into pensions instead, then “£5.4billion would put £435 per year on the State Pension which is not a great deal – but it would be a start“. But the problem is – even if your figures are correct – that extra £435/year on the state pension is unlikely to make any significant difference to the amount of social care needed – so the Government will have spent that £5.4bn, but then STILL needs to find the money to fund social care. You mention malnutrition and people not able to get out as contributing to demand for health/social care, and yes, they probably do – but only very marginally. By far the biggest driver of the need for social care will be people being in poor health and living on their own, or being incapacitated in ways that demand more skilled help than family are able to provide. Giving people a bigger pension will NOT significantly reduce any of those causes of social care demand. Indeed, in some cases it might even marginally make things worse – for example by contributing to obesity leading to diabetes.
Giving pensioners more money and a better life is a very good cause and you’re right to champion that. But if you want to reduce demand for social care (also a very good cause) then you need to start looking in detail at what the drivers of social care demand are, and allocate resources to specifically tackling those drivers. Just handing more money to people (however nice that may be) isn’t going to achieve that.
Chris,
you need to consider the extent of future liabilities i.e. unfunded obligations that stood at £6.4 trillion as of 2018 with annual state and public pension payments of £256 billion at a 4% discount rate https://www.ftadviser.com/pensions/2021/02/09/uk-govt-pension-liabilities-surge-1-3trn-in-3-years/ These are fixed obligations that together with currently low debt service costs allocate £300 billion of public spending before any other expenditures are met. To double state pensions that figure would climb to £400 billion just on the current pensioner numbers and much higher as the number of pensioners grow.
Former pensions minister Sir Steve Webb said ““The state pension system and the pensions of nurses, teachers and civil servants are based on a set of promises which tomorrow’s taxpayers will have to honour,”.
“The affordability of these massive promises depends on the size of the UK economy in the future. What these figures are telling us is that we are now less optimistic about the size of the UK economy, which means that the burden of meeting these pension promises is much greater than previously thought.”
Adult social care is not only for the elderly. Around 50% goes to meeting the care needs of adults below retirement age.
@ Joe,
“you need to consider the extent of future liabilities i.e. unfunded obligations that stood at £6.4 trillion as of 2018”
Future liabilities have to be “unfunded” because they can’t be funded. Funding from our POV is the accumulation of Government IOUs (££). This makes sense for us but it doesn’t make sense for a Govt to save its own IOUs.
@ Chris,
“The proposed “cap” of £86,000 on the amount one can spend on social care will benefit the better off in that those without sufficient savings will still have to sell their houses to pay for their care.”
What else would you expect from a Tory govt?
As Brad Barrows says: “the current proposal to have a cap at £86k is designed to protect the wealth of wealthier individuals requiring care so as to allow it to be passed on when they die – and that this is fundamentally unfair as the cost of this will be borne by increased taxes for everyone else.”
Except that it’s not really everyone else. It’s mainly younger working people who may well not be in a good financial situation themselves. Rents aren’t cheap.
We do, though, need to recognise that many older people don’t require much if any social care at all. Many of us will expire quite suddenly one day after feeling quite well the previous day, or perhaps after just a short illness. As you say yourself: “The need for social care strikes at random. Normally in this kind of random situation everyone takes out insurance”
Govt could set up such a scheme. We, or rather or beneficiaries, would lose whatever proportion is calculated to be necessary from our estates on our demise in return for guaranteed social care. This could be about one third? Just my guess. Some of our beneficiaries will end up paying more than we’ve used. Some of us less. But, that’s the nature of insurance.
Some would call it the return of death duties and they would be right! This scheme would answer the points made by David Garlick and David Raw. Yes, the rich would pay more. And yes, social care would still be ‘funded’ from taxation. If you want to look at that way, that is!
Surprised that no one picked up on my proposal to bring all relevant statutory bodies together into new unitary authorities based on the old County Council, or Police Authority boundaries, in order to achieve common geographical boundaries, common funding streams, shared lines of accountability, and economies of scale. Returning health and the police to local democratic scrutiny.
Simon R (re the private sector) my definition of “profit” is surplus after all salaries have been paid. And there is often a larger pay differential between the lower and higher paid than there is in the same publicly managed services. That is not to say that the private sector does not have a part to play. I mentioned in the article one of the collaborative projects we had with the private sector – and there were many more.