Martin Knapp, Professor of Social Policy and Director, Personal Social Services Research Unit, London School of Economics and Political Science

This article forms part of the LGA think piece series 'Towards a sustainable adult social care and support system'.

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A mature public debate

Any recommendation for new financing arrangements for adult social care is likely to be a red-top editor’s dream and a taxpayer’s nightmare. Arrangements that, on careful reflection, are reasonably fair and efficient, that are affordable today but also sustainable over the longer term will still be easy to criticise in the media or ballot box. (Think back to previous ideas that were quickly dubbed ‘death tax’ and ‘dementia tax’.)

One obvious reason is that few members of the general public – and maybe few journalists – fully understand how social care is organised, delivered or funded. Many people think it is like the NHS - free at the point of use – and are horrified to learn that they might have to pay for their care when they get old. Yet there is also widespread aversion to paying higher taxes in order to finance a collective solution.

I had the privilege of acting as expert lead for a recent Citizens’ Assembly on social care. The Assembly was commissioned by two Select Committees (Health and Social Care; and Housing, Communities and Local Government) and brought together almost 50 people who were collectively representative of the English adult population. Over two weekends they learned much about social care, discussed many policy issues and expressed their preferences on financing options through a series of votes.

The results of their voting are not yet in the public domain. What can be reported, however, is the enthusiasm of Assembly participants to engage in quite deep discussion about what are undoubtedly complex issues. Of course, a Citizens’ Assembly is an unreal environment, but it showed that – given the opportunity to understand how the social care system currently operates – so-called non-experts really do have quite strong and informed views about how it might be improved.

This, I think, is the key to how the public debate about social care in England must be approached. For example, new financing arrangements that shift the balance of payment more towards collective responsibility will need a concerted campaign to convince people that it is good to pay higher taxes.

On the other hand, recommendations to shift more responsibility onto individuals – asking those who use social care to pay a higher proportion of the cost – will require different efforts. Among other things, there may be a need to reassure individuals that they don’t face having their most valued assets wiped out to pay their care bills, or risk losing their inheritance because of their parents’ care bills.

At a more detailed level, what are the options?

Redirecting funds from existing programmes doesn’t look like a complete solution. Abolishing or means-testing some universal benefits such as winter fuel payments is unlikely to generate enough revenue. Anyway, those programmes were set up for a purpose, and getting rid of them risks creating new social problems. Similar sentiments apply to suggestions to require employed people above state pension age to pay National Insurance: it would generate at most £1 billion and might discourage some older people from working when the general policy thrust is the opposite.

Even if the preferred policy was to shift more funding responsibility onto individuals themselves, there would surely still need to be growth in tax-based funding of social care. This is because of the growing number of people who will not be able to afford to pay for their own care.

But how will the electorate be persuaded to pay higher taxes? Perhaps it is time to introduce some form of hypothecated tax. Although generally disliked by economists for being too restrictive, earmarked taxes might be the most palatable option politically.

This could take the form of a higher council tax precept or an earmarked supplement to income or inheritance tax. It could alternatively be an adjustment to National Insurance to create what some people are describing as ‘social insurance’ - although use of that term in today’s social care debate is not always accompanied by much detail on how it would actually work in practice. Its main attraction sometimes appears to be that it doesn’t sound like a tax.

The common assumption running through these particular suggestions is that people would be willing to pay higher taxes if they knew that the money would be protected for social care. Indeed, hypothecation helps to raise public awareness of the issues facing the sector. In some sense, hypothecation might also make government more accountable.

In relation to private financing, policy recommendations will have to specify whether there is a ‘payment cap’ to limit the amount an individual contributes to the cost of their care, and/or an ‘assets floor’ below which all care is free. These are fundamental considerations.

Equally important would be to create an environment in which individuals can find skilled, reliable and trustworthy sources of advice about different financial products. These include equity release schemes and various forms of annuity that allow individuals to draw from their housing or pension assets. Too many people have grown suspicious of ‘independent’ financial advice. Long-term care insurance doesn’t look like viable.

To state the blindingly obvious, any suggested policy must command widespread public support. But this means that our media and our elected politicians must engage in the debate in a mature, informed way. They need to support the public debate, not polarise it through misinformation or political point-scoring. Social care deserves nothing less.

Martin Knapp
Professor of Social Policy and Director, Personal Social Services Research Unit, London School of Economics and Political Science