‘Care should be free with dedicated insurance pot’

27 Jun 18

Middle aged, older people and employers should pay into a dedicated social insurance fund that would cover free social care on a universal basis, MPs from across the political spectrum said today.

In a joint report, the health and local government committees called for the creation of a ‘social care premium’ payable by those aged over 40, including those over 65.

This premium could operate as an element of national insurance or a standalone fund. Either way, the money should be held in an independent, dedicated and audited fund, which would help gain public trust and acceptance for the measure, the MPs said.

Over time, the fund would pay for the personal elements of social care, such as help with washing, dressing and eating, the report recommended. However, accommodation costs should continue to be subject to means testing.

In the short term, free personal care should be offered to those with the most “critical” needs.

An independent body should also be established to model future social care needs and provide the government with two-yearly forecasts.

Clive Betts, chair of the housing, communities and local government committee, said local reforms to ease pressures on councils would not be enough to meet the challenge of providing social care for everyone.

“We heard during the inquiry that people would be willing to pay more if there was an absolute guarantee that the extra money would go on social care,” he said.

“Given the huge funding gulf, the government should now take the opportunity to build both a political and public consensus around the need for a new social care premium to secure a fair and sustainable system in the long term.”

Health committee chair Sarah Wollaston added: “It is time for decisions to be made about how [care] costs are shared.”

She highlighted that the committees had taken on board the feedback of a citizens’ assembly convened to consider the trade offs on how to fund social care.

The report also called for reform of council tax valuations and bands and for councils to use funding from additional business rate retention to pay for social care rather than as a replacement for government grant.

An extra inheritance tax levy on estates valued above a certain threshold should be introduced to help pool risk.

Glen Garrod, president of the Association of Director of Adult Social Services, said a long-term funding solution for social care was “essential”.

He said: “We fully support the committee's focus on the protection of social care in its proposals and emphasis on the public need to see future funding as equitable, transparent and fair.”

Izzi Seccombe, chair of the Local Government Association’s community wellbeing board, said: “This report reflects the bold and radical decisions that need to be made if we are to solve the irrefutable crisis in funding adult social care.

“All funding options should be up for discussion and a cross-party approach, backed by public engagement, is vital if we are to build consensus on how to future-proof the wide provision of reliable, high quality care.”

The government last week announced that the long-awaited green paper on adult social care was being delayed until the autumn so its publication would coincide with that of the NHS plan.

This is being drawn up in response to the prime minister’s commitment of £20bn in extra funding for the health service.

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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