Barker commission proposes tax rises to pay for social care overhaul

3 Sep 14
An independent commission examining reforms to social care funding has called for some care to be made free at the point of use as part of a host of reforms to provision, paid for by charging National Insurance on the earnings of pensioners.

By Andrew Pring | 4 September 2014

An independent commission examining reforms to social care funding has called for some care to be made free at the point of use as part of a host of reforms to provision, paid for by charging National Insurance on the earnings of pensioners.

Social care costs

The Commission on the Future of Health and Social Care in England, established by The King’s Fund, also reiterated its call for health and social care funding to be merged to provide a simpler pathway through ‘the current maze of entitlements’.

The commission, which was established last June, said the way health and social care are currently organised and funded ‘creates confusion, perverse incentives and much distress for individuals and families’.

Chaired by Kate Barker, the final report called for reforms to ensure that care was organised around individual needs regardless of diagnosis, with a graduated increase in support as needs rise, particularly towards the end of life.

As well as calling for a single, ring-fenced budget for the NHS and social care, with a single commissioner for local services, the commission stated that social care for those whose needs are currently defined as ‘critical’ should become free at the point of use. This should be extended to those whose needs are defined as ‘substantial’ when the economy improves.

These reforms would end the confusing distinction between social care provided in residential care homes and NHS Continuing Healthcare, which is provided free of charge in nursing homes – a huge source of frustration under the current system.

To pay for these changes, the report argued wealthier people and older generations – the main beneficiaries of the changes – should contribute more to the public purse, which could then be used to meet the costs.

As well as requiring people working past state pension age to pay National Insurance at 6%, current provision of a free TV licences and the winter fuel payment for all pensioners should be limited to those receiving pension credit.

Commission chair Kate Barker aid that the prize of reform was ‘a more integrated service, a simpler path through it, more equal treatment for equal need, a better experience for people who need care and their families’.

She added: ‘Our proposals would continue a system where costs are shared between the private individual and the state but with the taxpayer carrying a heavier load of that cost than at present. The cost of a more generous settlement, though large, can be afforded if phased in over time.’

According to the commission, for other assessments of need, a system in which the costs of social care will be shared between individual and the state should be phased in over time to provide fairer, more consistent entitlements to social care.

As the more generous elements of the new settlement are phased in, the report also recommended a 1% increase in National Insurance contributions paid by those over the age of 40, plus an increase of 1% in NI contributions of those earning more than £42,000 a year.

Responding to the recommendations, CIPFA chief executive Rob Whiteman said that the report was ‘very timely given the material pressures we are facing in the funding and delivery of health and social care’.

He added: ‘CIPFA welcomes the tangible proposals in the report for funding health and social care, in particular the options around extending means testing and payment.

‘However we believe any new proposals must also address the long term issues facing the public finances. Without other measures, such as broader local tax raising powers, ring-fencing is not a sustainable solution in the wider context of tighter public spending. Indeed ring-fencing could as an unintended consequence squeeze still further other areas of public expenditure, for example skills, defence and criminal justice which are also under increasing pressure.’

A Local Government Association spokesman said local government leaders had already highlighted the need for a five-year, fully-funded programme to enable the full integration of the commissioning of adult social care and health.

‘The recommendation to introduce a single, local commissioner would do away with some of the unhelpful distinctions between social care and the NHS, allowing councils to be more flexible around the individual needs of people,’ he added.

‘The report’s suggestion that the single commissioner could be Health and Wellbeing Boards is a positive step and something that the LGA has called for in its ‘100 days’ campaign. We now need to have a sensible and open debate about the proposals in the report to bring in more money and the implications for health and care, including how the system is funded.’

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