The Crisis in Social Care: the road to nowhere

8 Feb 2019 Nick Garbutt    Last updated: 8 Feb 2019

Power to People, the expert panel review of adult social care in Northern Ireland called for the authorities to start a public conversation about how services should be structured and funded.

This is yet to happen. Meanwhile research from The Health Foundation and Kings Fund shows exactly why this is important and how difficult the crisis engulfing social services will be to resolve.

It also demonstrates just how out of touch policy makers are with public opinion, how little most people understand about social care, why that matters and what needs to be done before progress can be made.

A companion paper  looks at how other wealthy countries are responding to what is a global crisis and concludes that there is no quick fix anywhere. Whatever is done to alleviate the situation involves painful and unpopular choices. These have to be confronted because the current system is broken and starting to collapse. This is politically impossible unless and until the general public understand both the gravity of the situation and the implications of the various reform options.

Fundamental to this is that the vast majority of people have no idea how current arrangements are funded and generally assume that social services are the same as health services and are free at the point of delivery. They only find out the reality when they need care services themselves.

To reprise. Demand for social care and health care is rising faster than the public funds that are being made available to spend on them in all four countries of the UK, leaving a large and growing funding gap.

This is because people are living longer and is exacerbated by the “baby boomer” generation reaching pensionable age. This doesn’t just mean that there are more pensioners, but also that there will be fewer people to support them in retirement. In 2016, there were an estimated 308 people of pensionable age for every 1,000 working-age people. By 2037, this is projected to increase to 365 people.

The report estimates how that translates into cost, UK-wide. It projects a rise of  £12bn by 2030/31, based on growth of 3.7% a year. At the same time, spending on social care is expected to go up by  just 2.1% a year. This would leave a funding gap of £1.5bn in 2020/21 and £6bn by 2030/31, at current prices.

Given that the current system is failing the report also looked at what it would cost to return to the levels of quality achieved back in 2009/10. This option would increase the funding gap to £8bn in 2020/21, and £15bn in 2030/31.

These are very big numbers. Researchers looked at how other countries were meeting similar challenges. The country with the oldest population is Japan. It has introduced radical reform. Up until 2000 all social care was seen as a purely family concern. This led to all sorts of problems not least carers, usually women, being unable to work. Single older people became especially vulnerable. Hospitals were under severe strain with many older people taking up beds when they were capable of living independently if care packages were available.

The solution was the Long Term Care Insurance Scheme, partly funded by mandatory insurance for everyone over 40, and partly by the state.

On turning 65, people become entitled to wide-ranging social care support, from home-based help with cooking and dressing to residential respite, intermediate and permanent care. Unlike our narrow definition of 'social care', long-term care in Japan includes some nursing and medical care for long-term conditions. It is proving popular

Germany also has mandatory health insurance. This does not just cater for existing need. Some of the contributions are being put aside to help fund increasing need after 2030.

However Germany and Japan are exceptional. There are no other examples of radical reform – everywhere else changes have been incremental. They are also more likely to occur as a result of the general state of the economy rather than to improve social care.

The Report states: “As the demand for health and social care grows steadily and progressively rather than in sudden, highly visible jumps, there can be political inertia, which prevents change to existing funding arrangements beyond relatively minor adjustments. That is a circumstance that affects all countries.”

We are not alone. In the past two decades there have been many reports and recommendations on how to solve the crisis. Yet nothing has really changed.

There have even been two political initiatives, one from Labour in 2010 and one from the Conservatives in 2017 (dubbed the Death and Dementia Tax respectively). Both prioritised protecting people from potential financial catastrophe in cases of having to sell their house and sacrifice all their assets in order to fund care.

These were extremely unpopular and were abandoned despite being an improvement on the current situation.

The report concludes that this was because of a widespread fundamental misunderstanding. “Many people think the current funding system is more generous than it actually is, with many assuming social care will be free when they need it. Any proposed solution that is not free will be viewed negatively while this remains the case.”

When its researchers carried out deliberative discussions with members of the public they reported that misunderstandings were so widespread that there was a pervading sense of anger when the current situation was explained to them.

In the UK each country has autonomy to set their own limits on the value of assets that a person can have while still qualifying for public funds. That ranges from £23,250 in England and Northern Ireland to £26,500 in Scotland and £30,000 in Wales.

They found universal public resistance to the notion that anyone should have to lose assets, especially their homes, to fund care. There is a common belief that National Insurance contributions fund social care, which therefore should be free. This applies just as much to younger people as older ones, despite the growing generational wealth gap.  

There can be few better examples of what can happen when public policy is not understood by the public. Unless and until there is much greater understanding meaningful reform seems impossible.

However there is a general realisation that both health and social care need more money. In Germany and Japan this is being addressed by mandatory insurance. Yet both those systems already funded health by insurance. That is not the case in the UK. It is hard to see such schemes being popular here, especially given the general belief that social care is, or should be free.

What is gaining traction is the idea of a dedicated health and social care tax (the technical term for this is hypothecation). This has never been adopted by any other country. The closest we have to it in the UK is the TV licence.

The benefit of such a tax is that it is transparent. The downside is that it would be vulnerable to downturns in the economy – so if we went into  recession tax receipts might not cover the health and social care budget.  There is a risk that available funding is driven by the state of the economy rather than demand.

For all that it is popular and would be a good way to raise public awareness for the need for more funding.

But even if we can agree on a mechanism for raising more funds we still have a fundamental dilemma. The report says: “we are at an important fork in the road on social care policy between targeting funding at those with the lowest means, as in the current system, or providing some level of service to everyone. One route of reform therefore points towards retaining the current means-tested system but making it fairer and probably more generous. This has the advantage of being cheaper …”

This is an extremely important debate. Unfortunately we can’t even have it until the authorities both here and across the UK spell out the unpalatable truth about the current system. We cannot have reform unless people are told just how broken social care currently is.

There is another issue too. Public trust in government is low. Therefore the report calls for a “coalition approach”. This would involve charities, system leaders, the NHS, user groups, academic institutions, think tanks working together to draw attention to the issues involved.

That is precisely the sort of approach suggested by Power to People. It cannot wait for a new government to form, it needs to start now.


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