In July 2019, Boris Johnson said that he would “fix the crisis in social care once and for all”. Since last summer we’ve had a new health and social levy to raise money for reform, a white paper setting out the government’s 10 year ‘vision’ for the sector, and reforms to the way in which care is funded, including the introduction of a cap on individual care costs. So does all of this add up to fixing the social care crisis?
One glaring failure of the current system is the unfairness in how we pay for care. We currently face a care cost lottery, where how much care we end up needing depends largely on luck, and there is little we can do to plan ahead for those care costs. In other areas of our lives we pool our risks through insurance (in healthcare through the NHS), but in social care there isn’t this option.
The £86,000 cap on care costs and more generous means tested support to be implemented in October 2023 is a fix for this. A cap was recommended by the 2011 Dilnot Commission, legislated for in the 2014 Care Act but plans to implement it were ditched by the Cameron government in 2016. Last September the government announced the cap was back on, with its implementation funded by the new health and social care levy.
Controversially, the government said it wanted to amend the Care Act to change the way that costs were counted towards the cap, saving money by reducing the protection that poorer households have against catastrophic costs. Despite considerable opposition from MPs - including a backbench revolt - and rejection by the Lords, the amendment eventually passed, leaving us with a version of the cap which is not as progressive as Dilnot and the Care Act intended.
Nevertheless, a cap on care costs is a major step forward and focuses a relatively small amount of the levy on helping fix a problem which has bedevilled governments for at least two decades. Over the longer term a cap could be transformative, creating a more universal social care system (everyone is covered by the cap), and helping us to meaningfully plan ahead for later life. And because the level of the cap can be changed, future governments could reduce it to provide a more generous offer in the future.
The cap fixes an important aspect of the system. But the crisis in social care is far broader than this.
The cap fixes an important aspect of the system. But the crisis in social care is far broader than this. During the decade of austerity, spending on social care was cut so that by 2019/20 age-adjusted spending per person was 12 per cent lower than it was a decade earlier. As a result, unmet need and pressures on family and friends providing unpaid care have grown, leaving many people in desperate need. Downward pressure on the fees local authorities pay for care has left providers in a perilous state with many handing back loss-making contracts. Add to this over 100,000 workforce vacancies, with many of those working to provide the care we depend on being poorly paid and facing poor terms and conditions.
These problems have not been fixed. Improving access to and quality of care, addressing workforce and provider market issues will require further government action and, crucially, extra funding. Disappointingly, last year’s Spending Review provided barely enough money to keep pace with demographic pressures and provided virtually nothing for addressing the other challenges. This is despite the new money being raised by the levy, with barely a fifth going to social care reform over the next three years. We estimate some extra £9bn is needed in 2024/25 to meet rising demand, make some inroads into reducing unmet need and increase prices paid for care so that providers can improve people’s quality of care and raise wages. At 0.5 per cent of GDP this is surely a price worth paying to fix the social care crisis and create a system which we can be proud of.