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Contribution to the consultation on:
Care Support and Independence;
The case for change – Why England needs a new care and support system


September 2008


It is widely agreed that we need a radical change in how we pay for and deliver care and support services and it is positive that this is explicitly stated in the title of the Green Paper.
[1]  In this response, I concentrate on the central issue of whether to have a care and support system with a strong ‘universal’ element or a model based on means-testing. 

On page 10 of the Green Paper, the question is asked “What should the balance be between targeting government resources at those who are least able to pay and having a system that supports those who plan and save”.  This is critical - if the system is to work it has to be one that people can understand.


In January 2008 the King’s Fund published The Future of Care Funding; Time for a Change,
[2] the work of a coalition of 15 organisations from across the long-term care system, gathering the views of people with direct experience of the system.  The King’s Fund found that 90% of their participants rejected the use of a means test to determine whether or not an individual receives any state-funded care.  This support for a stronger ‘universal’ element, determined by care need rather than wealth or income echoes the recommendations of the 1999 Sutherland Royal Commission[3] and the 2006 Review by Sir Derek Wanless[4]. 

The Royal Commission recommended that the state should pay a fixed flat-rate contribution towards care costs, which might or might not be in line with actual fees.  Living and housing costs should continue to be means-tested and that is what is now happening in Scotland (Scotland does not have free universal care, as is commonly supposed). 

Seven years later, the Wanless Review also recommended a system of co-payment.  Under the Wanless “partnership model” two thirds of the bill for a service covering basic care is paid for by the Government and the rest paid equally by the state and the individual.  Those in poverty would see their 17% share of the social care bill funded through the benefit system.  The underlying principle, fully in line with Beveridge, is that everyone in assessed need of care should be entitled to some state support irrespective of wealth or income.

In 1999, the Royal Commission pointed that our system means that:

Help is available to the poorest but the system leads to the impoverishment of people with moderate assets before they get any help. There is a degree of fear about the system which is of concern in a modern welfare state.  It is riddled with inefficiencies.   The time has come for it to be properly modernised.

In a recent article on this issue, published by the Joseph Rowntree Foundation[5], it is pointed out that one in three people will require care and the average bill for a four-year stay in a home is projected to rise from £112,312 to £223,476.  The funding of social care is inherently complex but crucially, under a co-payment partnership model, the rules for the amounts contributed by the individual and matched by the state are clear.   Co-payment would cost the tax-payer more than means-testing but it would achieve better outcomes in return, including:

·                 increased fairness, ensuring the care needs of those who, for example, suffer from Alzheimer's disease are recognised and met just as much as of those who require less care;

·                 people of modest means do not lose their homes and assets after their death as payment for their care whilst alive;

·                 earlier intervention with more people helped to stay in their own homes and fewer people (hopefully none) in inappropriate residential care;

·                 removal of fear from the system;

·                 a lower burden on the NHS with fewer emergency admissions;

·                 a lower administrative burden;

·                 an increase in saving with more money spent in the economy during retirement;

To conclude, the public money that must be spent to create a new system should be spent on underpinning an agreed universal state contribution (so that risk is pooled amongst the whole population) rather than, for example, on tax incentives for insurance which would only pool risk amongst the people who participate.  A system based on means-testing will not fulfil the remits, set out in the Green Paper, of fairness, simplicity and a system that people can understand.  The independent bodies that have looked in detail at these issues concur that adopting a co-payment model with a known, universal contribution by the state is the most viable way forward.  Such a shift in policy would need cross-party support but it would be a change to be proud of.






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