The Care Bill is a good start when it comes to reforming long-term care funding. But joining up health and social care budgets is the next vital step
The postwar creation of the modern welfare state set up two structures that still define our current situation. The first is the National Health Service which, in principle, offers health care free at point of delivery. The second is the provision of other relevant benefits, including care services deemed to fall outside health care. This care is not free at point of delivery and is constrained by the fact that it is means-tested and, being provided by local authorities, is not a national service.
Within this structure, there has been a huge demographic shift in the shape of the population. Governments have ducked this issue for the past 15 years. It is clear that ‘something must be done’.
And at last, with the Care Bill, which had its second reading in the Lords on May 21, something is being done. But it is no more than a good start. It is good that there is a commitment to having a national strategy and policy and that the government has started to face up to demographic change.
The Bill draws on the 2011 reports of the Law Commission, Adult social care, and the Commission on Funding of Care and Support, chaired by Andrew Dilnot.
The fundamental recommendation of the Dilnot Report, that a cap be put on the cost of care for any one individual, has been accepted. All credit to the government, and therefore also the Treasury, for accepting that the risks involved in the frailties of old age should be shared. By the standards of the past 15 years, this is revolutionary stuff.
Of course, the fears of the Treasury are already being realised. There is inevitably a chorus of voices pointing out that there is less to this than meets the eye. Dilnot’s proposal included the possibility that the cap might even be set as low as £35,000. In the event, the cap will initially be set at £72,000, with the possibility of payment deferred until the eventual sale of the recipient’s house.
Councils also point out vigorously that there is already a shortfall in funds. They estimate that current cuts to the adult care budget amounts to £2.68bn – or 20% of previous provision. Care home owners often subsidise council-sponsored residents from charges on those who are self-financing.
Of course, we are in the worst financial crisis in living memory, and account has to be taken of that. But that has perhaps created false expectations in this sector of the population. Equally important is the implicit bet that a cap on care costs will stimulate a strong insurance market.
The government must accept that when we stabilise our national financial prospects, the only rational response to the huge demographic change will be a reordering of priorities.
One change that cannot wait till then is the need to gain maximum efficiency and effectiveness from the huge sums already being spent. There have been two major Bills relevant to this in successive parliamentary sessions. The first, now the Health & Social Care Act, was, despite its title, almost wholly concerned with health care. The second current Bill is largely concerned with social care.
There’s the rub. There is a legal, financial and administrative fissure running through our society’s attitude to provision of care. Yet, for the individual frail elderly and their carers, there is no such gulf. The 1999 report of the Royal Commission on Long Term Care for the Elderly, which I chaired, quoted the standing joke about how to distinguish between a ‘health bath’ and a ‘social bath’.
As both that commission and its successor under Andrew Dilnot pointed out very firmly, a bringing together of health and social care budgets is essential if we are to maximise value for money in this massive and increasing spend. There are some good pilots taking place. The message is clear: combining budgets improves administration; it improves the effectiveness of spend: but most importantly it has potential to vastly improve the quality of care.
Lord Sutherland chaired the Royal Commission on Long Term Care for the Elderly. He is speaking on redesigning the welfare state at the CIPFA conference on July 9–11. This article was first published in the June issue of Public Finance magazine
