Anita Charlesworth, Director of Research and Economics, The Health Foundation

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

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One in four older people need help at home to continue to live independently or move into residential or nursing home care. Despite the importance of social care services in maintaining dignity and quality of life, public understanding of the system is limited, and there is a lack of clarity about the current offer. People often struggle to distinguish between social care and the NHS. That lack of knowledge is particularly pronounced when it comes to funding; just under half the public (47 per cent) think social care is free at the point of need, when in fact it is means tested.

As the Health Foundation and The Kings Fund’s recent analysis shows, the social care system is at a fork in the road.  Funding fell in real terms by 11 per cent between 2009/10 and 2015/16. This has left the system struggling to meet rising demand as the population ages with an increased level of chronic disease and frailty. Funding constraints mean that 400,000 fewer people receiving help and there are growing concerns about the quality of care and viability of providers.

Although social care is a poorly understood service, worries about the system are filtering through to the public. Net satisfaction with the service is falling and is now just 23 per cent. More than half of the public expect services to deteriorate.

It is not surprising then, that there is widespread agreement that the system is not fit for purpose. The government’s promised green paper is imminent and expectations are high.

The challenge for social care funding is that, while the problems of the current system are clear, the solutions are far from straightforward.

This is probably why despite a dozen or more commissions, green papers and proposals for reform over the last 20 years, the English social care system has remained largely the same.

The challenge is so large that there is less consensus on which of the ‘burning platforms’ for reform need the greatest attention. If some additional funding is available, it could be used to improve access and quality for people under the current system, to address the declines in both since austerity began to bite in 2010. But the cost is large. Even if the government did nothing to improve quality, eligibility or the terms of the means test, the pressures of the ageing population and rising need from younger adults mean funding would need to rise by close to 4 per cent a year over the next decade.

Local authority resources are not expected to keep pace and there will be a funding gap of around £6bn by 2030. Restoring the social care system to pre-austerity levels of quality and access more than doubles the projected funding gap (£15bn).

Sustaining the current social care system will be expensive. Wider reform to address the strongly perceived unfairness of the means test would cost even more. A majority of the public believe social care should be funded either by government or as a shared responsibility between the individual and state. The current system is therefore widely seen as unfair, particularly as deliberative work with the public shows that people’s attachment to their homes is a very prominent dimension of perceived fairness. People of all ages felt it was very unfair for government to take into account the value of people’s homes under the existing model.

In the 2017 general election campaign, the conservative party set out a model of reform which would include a ‘cap’ on the lifetime costs of care and a ‘floor’ to ensure users would always retain at least £100,000 of assets. This cap and floor model also proposed including property assets in the means test for both residential and domiciliary care, rather than just for residential care. These reforms would create a more generous system for some and provide protection against catastrophic care costs. But including property wealth in the means test would mean fewer people who live at home would receive publicly funded social care. These reforms are complex, they are also expensive, adding £4billion to the funding pressures faced by the social care system by 2020/21.

If reforming the means test is expensive and complex the alternative may be to replace it with a system of free personal care, such as operates in Scotland. This was ruled out by the then labour government after the 1999 Sutherland Commission. The modelling undertaken by the Health Foundation and The Kings Fund confirms it would add substantially to the cost pressures faced by social care. A system of free personal care modelled on the Scottish approach would add £6billion to funding pressures by 2020/21. This is substantial, at around £2billion more than the cap and floor. Any reform to either make the means test fairer, or replace, it is going to have a hefty price tag attached.

The Care Quality Commission characterise the social care system as at a ‘tipping point’. The unpalatable truth for government is that whichever way it turns there is a substantial funding pressure which can’t be met within current projections for local authority spending.  Doing nothing to social care still adds billions as the population ages. Reform even more.

Given the economic outlook and state of public finances, there are hard choices ahead for the government. The most critical issue is which attributes of a reformed system should be prioritised; fairness, value for money, quality and access, clarity and ease of use? There is no ideal system. Making these trade-offs is hard at the best of times. But at the heart of the messages from work on public attitudes is an unpalatable truth; if genuine public support is needed for systemic and sustainable reform, there will need to be a painful process of revealing to the public just how broken the current system is.

Anita Charlesworth
Director of Research and Economics, The Health Foundation