Adult Social Care: Long-term Funding

Sarah Wollaston Excerpts

Thursday 28th June 2018 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

I begin by thanking the Backbench Business Committee for allocating time today for me to present the Housing, Communities and Local Government Committee and Health and Social Care Committee joint report on long-term funding of adult social care.

In 2017, the then Communities and Local Government Committee undertook a lengthy inquiry into adult social care. We concluded that spending on social care would need to rise significantly in the coming years, and that after successive failed attempts at reform, political parties across the spectrum needed to be involved in the process of reaching a solution. With that in mind, we returned to the issue in a joint inquiry with the Health and Social Care Committee, aiming to identify funding reforms that would be supported by the public and politicians, and to feed its findings into the Green Paper. I thank all members of both Committees for the constructive role they have played, and particularly the Chair of the Health and Social Care Committee, who is so knowledgeable on these matters and with whom it has been a genuine pleasure to work on this inquiry.

To find out the public’s views on how social care should be funded, we commissioned a citizens’ assembly, which I understand is the first held by the UK Parliament. Following a process of learning, deliberating and decision making, which took place over two weekends in April and May, a representative sample of nearly 50 members of the public was asked how best to fund social care. We have listened carefully to the assembly members’ views. They have been vital in informing our thinking, and are reflected throughout our report. We have taken the unusual step of specifically addressing our recommendations to both sides of the political divide, asking that both Government and Opposition Front Benchers accept them.

What are the challenges facing social care and what funding is required to address them? The critical state of social care and the very serious consequences for people who receive care, and those who do not, and their unpaid carers and families, as well as the NHS, is well documented. The evidence was clear that the combination of rising demand and costs combined with reductions in funding to local authorities has placed the social care system under very great and unsustainable strain.

Despite the welcome additional funding provided by the Government in recent years, local authorities face a funding gap of around £2.5 billion in 2020. This has been confirmed by the National Audit Office, the King’s Fund and the Nuffield Trust, as well as the Local Government Association. The consequences are extremely serious and widespread, leading to people going without the care they need, and the time and quality of care not being sufficient for many who receive it, leading to unpaid carers having to step into the breach and placing significant pressures on care providers and the care workforce.

A witness to the inquiry, Sir Andrew Dilnot, chair of the 2011 Dilnot commission, told us that the system was consequently now at risk of “fairly significant disaster”, which were very strong words indeed. We concluded that considerable extra funding in the order of many billions of pounds would be needed in the coming years for the following reasons.

We need to fill the funding gap that I just referred to and we then need to provide additional funding to meet future demand. The personal social services research unit at the London School of Economics projects that spending on both social services for older people and younger adults will more than double by 2014, even without the improvements to the service that we suggest. It is also important to meet the care needs of a wider group of people—not just those whose needs are critical or substantial, but those who have moderate needs that are currently largely unmet. Age UK estimates that around 1 million who need care currently do not get it. Finally, and very importantly, we need to ensure that the care provided is good care from a stable, well-paid and well-trained workforce and viable care providers.

The difficult question for the Government and the Opposition to grapple with is where the additional funding for adult social care and social care for people of a working age with disabilities should come from, what it should be spent on, and how the care should be delivered. On care provision, we are strongly of the view that the responsibility for the delivery of social care should continue to rest with local councils at a local level. Social care provision should not, however, be seen in isolation. There is a need for better integration at a local level particularly within the NHS, as well as housing services. After all, most people receiving care get it in their homes. Integration should be seen not as a matter of bureaucratic convenience, but as a way of improving the care that individuals receive. The integrated care partnerships and health and wellbeing boards have an important role to play in that.

Our citizens’ assembly members expressed strong support for a social care system that, like the NHS, is free at the point of use. We acknowledge that this would increase costs substantially and be unlikely to be affordable immediately. We believe, however, that it is an ultimate objective for the personal care element of social care to be delivered free to everyone who needs it, and that accommodation costs should continue to be paid on a means-tested basis. This direction of travel should begin with the extension of free personal care to those deemed to have critical needs.

Now for the important question: where should the funding come from? Given the scale of the additional funding that is likely to be needed, which I have explained, we recommend that a combination of different fundraising measures are needed at local and national levels. At a local level, there should be a continuation for the foreseeable future of the existing local government revenue streams. We recommend that, in 2020, this funding is enhanced through using the additional revenue from 75% business rate retention, rather than the Government’s proposal to use the money to replace grants such as the public health grant. In the medium term, we recommend a reform of the council tax valuations and bands to bring them up to date. As other funding streams develop, the contribution from council tax and business rates to social care funding could fall, allowing councils to better fund other important services.

However, local government funding will only ever be one part of the solution for social care, given the scale of the challenge. It is clear that extra revenue will also need to be raised nationally to be spent on local provision. The citizens’ assembly was strongly in favour of any extra taxation being earmarked, wanting the clear assurance that the money raised would be spent on social care. We therefore recommend that an additional earmarked contribution, described as a “social care premium”, should be introduced, to which employers, as well as employees, would contribute. For fairness, it would be paid on earnings above a threshold and with the current national insurance limit lifted. We suggest that this premium could either be as an additional element to national insurance, which would ensure the accountability desired by the public and the citizens’ assembly, to be placed in an appropriately named and dedicated fund, and regularly and independently audited, or be paid into independent insurance funds, similar to the German model.

We strongly believe that a funding solution must fall fairly between generations and therefore recommend that those aged under 40 should be exempt from the social care premium, and that it should also be paid by those who are still working after the age of 65. We also recommend that a specified additional amount of inheritance tax should be levied on all estates above a certain threshold and capped at a percentage of the total value. This is intended to avoid the catastrophic costs for some individuals, who currently have to lose the vast majority of their assets, including their homes, to pay for care costs. It would pool the risk and spread the burden more fairly, a key recommendation of the citizens’ assembly. My view is that, if everyone who can afford it pays something, no one should have to lose everything.

After successive attempts at reform, the forthcoming social care Green Paper must be the catalyst for achieving a fair, long-term and sustainable settlement. It also ought to recognise the care needs of those of working age with disabilities, as well as the care needs of the elderly. To ensure that, we recommend that our work should now be taken forward by a cross-party parliamentary commission.

I say, on behalf of both Select Committees, to Government and Opposition Front Benchers that if we, on a cross-party, cross-Committee basis, can unanimously reach difficult decisions and make clear recommendations, can they not do the same? Use our proposals as a basis for building the wider consensus that we need to create a long-term, sustainable funding solution for those who need care now and in the future.

[Dr Sarah Wollaston (Totnes) (Con)]

I thank my co-Chair for the dedicated work that he has put into this joint report, as well as all members of both Committees and our wonderful supporting Committee teams. Like him, I thank not only all those who took part in the citizens’ assembly and those who advised and supported them, but the very many people, and their loved ones, who depend on social care, who wrote to us and whom we visited on our Committee visit. They told us moving stories about the level of unmet need and the consequences, both for themselves and their families.

The situation could not be more stark. As we approach the 70th anniversary of the NHS next week, would my hon. Friend say more about the impact on the NHS if we fail to address the unmet need in social care?

[Mr Betts]

I thank the hon. Lady, the Chair of the Health Committee—I think on this occasion, my hon. Friend, because we have worked on a friendly basis on this inquiry. She is absolutely right. One of the important recommendations is about trying to extend the scope of care provision to include those with moderate needs. If we provide care for them, it is quite likely that we will stop them getting into the substantial and critical phase and ending up in hospital in the first place. In terms of the NHS, it is about stopping people getting into hospital by getting them proper care and having care available for people in hospital, so that they do not have delayed discharges. In those two ways, that can be beneficial. Of course, we can also join up services. Can the NHS district nurse who goes into someone’s home and looks at their needs not assess their care needs at the same time? Can we not get that sort of joined-up approach?

It was remiss of me not to thank the staff, as the hon. Lady did, and I will name Laura and Tamsin. The work they did on this was exceptional. To produce a report of this quality in the time available was absolutely first-class, and we should congratulate them on it.