Consultation on a National Care
Service (November 2009)
The Government recently consulted on their proposed National Care Service
(NCS). A copy of my submission is pasted below. I concentrate on funding
issues and I am advocating a National Care Insurance, hypothecated for care, that people
would pay on retirement if they had the means to do so.
I agree with the Government that it would be unfair to fund the NCS
through general taxation as the burden would predominantly fall on the current generation
of young working people who have not had the advantages of free university education and
affordable mortgages that people of the generation about to retire have benefited from.
SUBMISSION TO THE CONSULTATION ON:
CARE SUPPORT AND INDEPENDENCE;
Shaping the Future of Care Together
LYNNE JONES MP November 2009
I welcome the Governments
proposal for a National Care Service (NCS), at the heart of the reforms proposed by the
Between 2008 and 2032 the number of
over-85s is projected to double to 3.1million (Office of National Statistics, 2008). Taking this trend into account and looking at the
failings of our current system, there is no doubt that we need a radical change in the
system for paying and delivering care and support services.
On page 95 of the Green Paper, the
Government sets out the remits it wants the NCS to fulfil:
We want to build a National Care Service that is
universal, fair, affordable, clear and helps people to live their lives the way they want
The Government has put forward three
possible funding models for the NCS: Partnership, Insurance or Comprehensive. In this submission, I give my reasons for favouring
the Comprehensive option.
I also comment on the proposal to
integrate sources of support, for example, some disability benefits such as Attendance
In January 2008 the Kings Fund published The Future of Care Funding; Time for a Change, 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 Kings
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 and the 2006 Review by Sir Derek Wanless.
As I pointed out in my response to
the 2008 Green Paper The Case for Change, if our
social care system is to work, it is critical that it is one that people can understand. I am very pleased that the current Green Paper has
made this a central requirement. If the NCS is to
fulfil this requirement it is essential to avoid any funding system that introduces
The Comprehensive Model
the comprehensive proposal in the Green Paper. This
proposes that everyone over state retirement age in need care and support would receive
this free in accordance with their assessed needs.
The income foregone from the abolition of means testing would be made up by
means of a compulsory contribution into a state insurance scheme by everyone over
retirement age with the resources to do so.
Paper suggests that people could pay in different ways, in instalments or as a lump sum,
before or after retirement, or after their death if they preferred.
individuals under a scheme of this sort, the Green Paper gives a figure of around £17,000
to £20,000 for the lump-sum contribution, compared with the £31,700 figure for the
average cost of the care a 65 year old might need in their lifetime.
Assessment of the
Whilst an exact figure on the proportion of those currently in
care homes whose care is fully funded is not available, we know that, at 1 April
2009, around 59% of care home residents were wholly
or partly funded by local authorities or the NHS . It is likely that
the majority of these residents are fully funded given the difficulties that people with
moderate care needs and the ability to make some form of financial contribution have in
accessing local authority care under the current system.
So long as
the threshold for payment was not lowered in real terms, the poorest people, who make up
the above estimate, would not be required to pay. The
Green Paper sets out two options for assessing the level of comprehensive payment people
with greater means might have to pay.
suggestion is that the size of a persons contribution could be set according to what
savings or assets they had. The second
suggestion is that people, other than those with low levels of savings or assets, could be
required to pay a single set lump sum figure.
I am concerned at the lack of detail in the Green
Paper on this crucial point. The Green
Paper does not go into the range of wealth of people retiring at the time the Scheme is to
be introduced, to help assess the impact of the £17,000-£20,000 set figure. The Impact Assessment models the scheme from 2014
and the Government needs to provide detailed
modelling with projected income figures for that date onwards.
In deciding how we assess the
contribution, it is vital that we do not allow
means-testing to shape the system. The
set figure payment would comply with this condition. Everyone with an income above the threshold, would
know what they have to save for. The £17,000
to £20,000 figure might not seem unreasonable to someone who receives a large lump sum on
retirement who could then have peace of mind that this is all they would have to
contribute. However, given that most people do
not have non-housing assets at this level, I am wary of a system that might allow the
state to demand a large lump sum from people as they are about to retire and there are
also concerns about fairness. The lump sum for
people just above the exemption threshold will be a larger proportion of their assets than
for wealthier individuals who could well afford more than £20,000.
To avoid means testing at the point
of need but to ensure account is taken of ability to pay, I would suggest that the exemption on paying
National Insurance for people over state retirement age is removed and the ceiling removed
completely. This could be limited to the first
years of retirement, say 10 years, when people are generally better off than as they get
older. The threshold for payment could be set
at the same level as for income tax, which is higher than for non-pensioners. In return, there would need to be a binding
commitment that all funds raised in this way would be used to supplement the funding of
the National Care Service and not used for general government expenditure including
by designating the contribution as National Care
Such a system would not preclude the
option of a one-off payment. It should be possible to allow people who prefer to
pay a lump sum premium to do so, with the assessment based on the net present
value of the NCI contributions they would have been expected to pay. Conversely, a person who was asset rich and wished
to defer payment until they died could be asked to pay a higher lump sum from their
estate. This would have to be by means of
a legally-binding charge on the estate.
In support of a Comprehensive
For the Comprehensive model to work, it would be necessary to
set national standards of care delivered locally eg through Care Trusts made up of
partnerships between the primary care trust and the relevant local authority. We need a national comprehensive service, rather
than one where local government decides on eligibility.
We know from work done by the Commission for Social Care Inspection (now
part of the Care Quality Commission) that there is a trend of councils tightening their
criteria determining who is eligible for care. A national system on eligibility is needed to remove
the sharp divide between those in full care and those with less severe care needs, who
Currently, Local Authorities set limits on the amount they will
pay which often will not cover what care homes/service providers consider an economical
cost. Some care homes have used fees from
self-funders to subsidise fees charged to the local authority. I am currently in touch with a constituent who is
self-funded but the money is running out and the fees she is being charged are higher than
the Birmingham City Council maximum.
The Comprehensive model would allow
the pooling of risk amongst the whole population to create a system that is
straightforward and fair and that would avoid unexpected high costs to some and the kind
of problems illustrated above.
Such a model would achieve the following positive
removal of fear from the system;
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 would not lose their homes and life
savings in payment for their care;
earlier intervention with more people helped to stay in their
own homes and fewer people (hopefully none) in inappropriate residential care;
a lower burden on the NHS with fewer emergency admissions;
a lower administrative burden;
A clear system of comprehensive entitlement, that people
understand is also more likely to stand the test of time because people will know what
they could lose and will fight to hold on to it, should the NCS be threatened by a future
When systems are complicated it is
much easier for unsympathetic future administrations to undermine provision, without the
public or even politicians realising the implications until it is too late. An example of this was the undermining of benefits
through the State Earnings-Related Pension Scheme (SERPS) which came into effect several
years after the legislation making the changes was introduced. If the principles of entitlement to the NCS are
clear, simple and understood by all, as with the NHS, it will be easier to defend as a
Rejection of the Partnership
In this model, the responsibility for
paying for care would be shared between the Government and those needing care and support. The Government provides between a third and a
quarter of the cost, but covering a higher proportion of the cost for people on a low
income, with the least well-off getting their care for free.
Those with high care needs, for example, long term residential care, may
still have to pay high contributions.
The Partnership model fails the
Governments test of simplicity as it would require an extensive means-testing system
at its centre, with all the problems this brings. The
model would impact negatively on pensions policy, penalising people who save for
retirement but end up with high care costs. In
addition to the disincentive to saving people would enter old age with a feeling of
insecurity, with no clear knowledge of what they could expect to pay for social care.
The model would also waste money on
the high administration costs necessary for a complex mean-test based system.
The Partnership approach also fails
the fairness test. It discriminates against
women as their care costs are likely to be higher due to greater longevity. The average lifetime expected cost of care for a
female at the age of 65 is £40,400 compared to £22,300 for a man of the same age.
The model is also favours people who
have low or no care costs and penalises those who save but are unfortunate enough to end
up having high care costs. The level of care
that people need is a matter of luck and a just society should not seek to penalise those
who have the bad fortune to require high care costs. The
Green Paper itself states:
some people who needed high levels of care and
.need to spend their savings and the value of their homes.
Our social care policy must change so
that people are no longer forced into this position (even if deferred payments after death
were allowed as suggested in the Green Paper). For people who
own their own homes but have limited other assets, the fear of either having to sell their
home or not being able to pass this on to their children is a major worry. It is time to move away from a system which allows
the impoverishment of people with modest assets.
Rejection of the Insurance
The suggested Insurance
approach, provides for an entitlement to a share of care costs from the state, like
the Partnership model but with a further element of insurance, facilitated by the state
but paid for by the individual, to cover additional costs.
This model would only pool risk amongst the people who participate and would
leave those who do not with the possibility of facing high care costs, as in the
Those who do not participate and do
not have the resources to pay care costs would still have to be supported by the state,
thereby penalising those with low incomes who contribute to the Insurance model - why
bother if the state will pay anyway? The
scheme is also effectively compulsory for anyone who wants to save with any assurance that
they will not have to pay out for high care costs from their savings. Therefore it is more logical to have a
comprehensive model that includes everyone and genuinely pools risk.
People of Working Age
Concerns have been expressed by
groups responding to the Green Paper that the implications for those of working age are
unclear, with the Governments funding options focusing on those over 65.
However, I think that the
Governments focus on people of retirement age is reasonable, as the age at which a
person needs care does affect their ability to contribute to the system. People who are disabled or in need of care from an
early age, over and above that which can be funded through Disability Living Allowance
(DLA), will not be able to contribute as in the comprehensive model for people who need
care later in life. In reality, most people under retirement age with care
needs have these entirely funded by the state. Therefore,
in the interest of simplicity, it would be better to abandon all means testing from the
system. It is important that DLA and
eligibility to it, under current rules, are retained.
However, it would be reasonable to incorporate DLA into larger care packages.
Possible Integration of Disability Benefits
I agree with the Governments
analysis in the Green Paper that, whilst benefits like Attendance Allowance (AA) are
highly valued, for good reasons, by those who receive them, there is unfairness in the
system caused by having separate funding streams for social care and disability benefits. Older people currently have to apply separately for
the two sources of support, undergoing different needs assessment processes and this can
result in some people not applying for support when they are entitled to it.
I am encouraged by the
Governments statement indicating a clear understanding why benefits like AA are
valued by those who receive them:
that disability benefits are popular because they provide a universal entitlement which
does not depend on where a person lives, they provide a cash budget which can be spent on
the services someone wants, and people often use them to support lower-level needs in ways
that help them to stay independent and well for longer rather than developing high levels
Despite such positive statements in the Green Paper, the
suggestion later on that benefits like AA could be integrated into a new and as yet
un-designed system has caused anxiety amongst those who will be affected. A number of concerned constituents have contacted
me about the proposal.
One constituent in particular wrote to me in detail explaining
how she uses her Disability Living Allowance to help offset the increased costs of living
with a disability, such as a cleaner, buying ready meals as she is often unable to cook
for herself, taxi fares and the costs of doing her supermarket shopping online and having
it delivered. She explained that none of these
things were available via Social Services as she had been assessed and denied support and
she fears losing the control she currently has to spend her DLA on the things that she
decides help her. She
does not want to have her budget decided by a social worker.
On DLA, I am aware that the Secretary of State for
Health, Andy Burnham has categorically stated on 22 October 2009:
have now ruled out any suggestion that DLA for under-65s will be brought into the
new National Care Service
However, my constituents point still holds for
those in receipt of AA. If the disability
benefit proposal is to go ahead in relation to AA or any other disability benefit, it is
crucial that people who now receive financial benefits to pay for additional needs as they
see fit, will be able to continue to do so and that this cash will only be subsumed into
large comprehensive care packages for people not able to manage such expenditure
On receipt of my constituents letter, I asked for
assurances on these points from DWP Minister, Jonathan Shaw MP and I welcome the commitment I received in his response dated 3 November:
is important to note that we will only make changes to disability benefits if we are
certain that by doing so we can better support disabled people, and in a way that draws on
the best features of current disability benefits where everyone can have a cash
budget to spend on the services they want..
Although I accept the principles that have been laid out, the
main difficulty with assessing the current proposal is the lack of detail provided. For example, will all passport benefits
currently dependent on receipt of disability benefits that may be integrated into the new
system be covered by the explicit statement on relevant
benefits in the Green Paper:
the outcome of the consultation, we want to ensure that people receiving any of the
relevant benefits at the time of reform would continue to receive an equivalent level of
support and protection under a new and better care and support system."
Whilst the above statement is very welcome, I am
concerned that there is no commitment in respect of people who might have otherwise become
entitled to disability benefits after any change, other than the Government's commitment
that the system will be 'better'. The Government must ensure that people entering the
system after these reforms are not disadvantaged compared to what they would have been
entitled to under the existing system.
I urge the Government to provide more detailed proposals as soon
as possible to allow more detailed scrutiny of how the Governments aims on this
policy point can be achieved in practice.
I support the call by Age
Concern and Help the Aged for the
it a legal right that all disabled older people will be able to get money to help them pay
for the extra care they need because of their disability.
I accept that there is a case for integrating universal
disability benefits with social care funding streams where the existence of separate
funding streams is causing people to lose out - but - the current national, transparent
and legally enforceable criteria governing social security benefits must not be lost.
Any changes must benefit those who would have qualified in
future as well as current recipients.
The Comprehensive model is the only
one of the three funding proposals for the NCS that would allow the pooling of risk
amongst the whole population to create a system that is straightforward and fair and that
would avoid unexpected high costs to some. We have a National Health Service that delivers
excellent care at a cost that compares well with that in other welfare systems and at
substantially lower cost than systems based on private insurance. It is time we had an equivalent National Care