Social care—the huge, unloved, frequently neglected arm of Britain’s welfare state—has been put under the spotlight as never before by Covid-19. It started with the move to protect the NHS by emptying hospital beds to cope with the huge surge of cases that was to come. Thousands of patients untested for the virus were discharged to care homes. With that came a desperate failure to provide personal protective equipment fast enough, let alone tests for the coronavirus. There have since been perhaps 20,000 deaths in care homes in England alone, along with more deaths among those receiving care at home, who include not just the elderly but people with learning and other disabilities. It should not be forgotten that around half the social care budget is spent on adults of working age.
But with those grim statistics has come a focus, for once, on the low pay and lack of status of the sector’s staff, and a recognition of the heroics that many have performed in the face of enormous odds. The social care workforce numbers around 1.5m, roughly the same size as that of the NHS. But it is so much less visible, so much less valued. And, as the endgame of Brexit approaches, it is worth noting that around 250,000 of them are non-UK nationals, with no one, even now, clear what the final impact of breaking with the European Union will be.
It is almost 30 years since the last big reform of social care in England (Scotland is different and not covered here). But the judgment of the author of those reforms, Roy Griffiths, that social care is “a poor relation; everybody’s distant relative, but nobody’s baby” still has a horrible ring of truth. So now that the pandemic has highlighted the problems of social care as never before, we are going to fix it, right? Sadly, that would not be a sensible wager.
Social care reform is one of the great public policy failures of the past generation. Why? Perhaps in part because it is not actually one big problem, but at least three. Who pays for it? What do people get for that? And how and by whom should it be provided? Worse, there is no perfect answer to any of these questions. All solutions will require compromise at a time when there is not a lot of compromise in the air.
Before Covid, the debate around social care usually started with the one part of the problem that the pandemic has not highlighted: who pays for it? This coming spring, it will be a full quarter-century since Stephen Dorrell, the Health Secretary in the dying days of John Major’s administration, launched a consultation over the funding. Since then there have been over a dozen green and white papers, one Royal Commission, and the inquiry by the economist Andrew Dilnot—on the basis of which the coalition government actually legislated, before pulling the plug. In his first speech as Prime Minister, Boris Johnson promised to “fix the crisis in social care, with a clear plan we have prepared.” And still we wait and wait and wait…
Why is it all so hard? Partly thanks to history. The modern origins of what we now call social care lie in the National Assistance Act of 1946. Its opening sentence—passed in the same years as the legislation that established the NHS—boldly claimed to “abolish the poor law.” But it didn’t quite. The NHS remains largely free at the point of use and open to all, with entitlement to treatment still essentially dependent only on a clinician’s judgment that you need it. Social care, by contrast, remains first needs-tested, and then means-tested—the shadow of the infamously stringent poor law relief lingers on.
Individuals require a very high level of need (loosely defined in legislation) potentially to qualify for taxpayer assistance. Only potentially, because the next step is for your assets to be factored in. Until your savings are down to £23,250 you are on your own. The council may provide your care, but it can charge for it, even if you have assets worth somewhat less than this. Entirely free help only kicks in when your assets are down to £14,250. The rules, and especially their interaction with social security, are so complex that even a long article like this can’t explain them. But there is a crucial—certainly politically crucial—issue over housing. If you’re cared for at home, the value of that home is ignored. Go into residential or nursing care, however, and the value of your house is taken into account—which contributes to the great anguish over inheritance as, on top of whatever lifetime savings may have disappeared from the bank, the value of the family home can also be eaten up by the cost of care.
Splitting the bills
This, then, is the first of the big three problems. Where should the balance lie between the individual and the taxpayer in paying for care? The options that have been canvassed are almost limitless. Back in 2009, Andy Burnham, now Mayor of Greater Manchester but then Health Secretary at the fag-end of Gordon Brown’s government, proposed a National Care Service, to sit alongside the NHS. Free personal care, both at home and in a home, paid for by a limited, earmarked, levy that people could pay at age 65 or have reclaimed from their estate on death. Instead of consuming virtually all of some people’s savings and assets, while leaving others untouched, everyone who reached what was then the state pension age would have contributed. The Conservatives dubbed that a “death tax” and put up posters of a tombstone with the letters “RIP OFF” on it. Eight years later, Theresa May attempted to sell an incomplete version of the Dilnot reforms (explained below) with the twist that the value of the home would be taken into account in the targeting of domiciliary as well as residential care as a nod towards making the sums add up. It was—in similarly intemperate language—branded a “dementia tax” by Labour. An enforced U-turn soon followed, contributing to the loss of May’s parliamentary majority; another reminder of how the politics conspires against getting anything done.
May’s proposal aside, most Conservative proposals have tended to focus on various “partnership” schemes: mixing private insurance with somewhat more generous public provision. Take out private insurance and the state—the taxpayer—will allow you to retain more of your assets. The problem here is that there is no real private insurance market for social care—it remains, as Dilnot pointed out, the one big risk in life that is effectively uninsurable. Without a cap, the huge costs involved for those needing long years of care—which can amount to £250,000 and more—and deep uncertainty about how many more will incur such costs in an ageing population, thwart any commercial interest in covering this liability.
Then there are social insurance approaches, such as those adopted in Germany and Japan. Everyone—or, at least everyone over, say, 40—pays a social insurance levy in order that those who need it receive state assistance. Whatever their advantages, such schemes take time to mature and have proved more costly than expected.
Whatever solution is preferred, it will need to take on—right at the start—an argument that has helped ditch past proposals. Namely that any reform of the financing will provide more to the better off, and will thus be accused of being “regressive.” Labour MPs have levelled this charge against Tory proposals in the past, and Conservative MPs against Labour ones. “Regressive,” and indeed “progressive,” are used here in the way they are in economics—which does not chime with how the words are used elsewhere. A tax, for example, is regressive if it places a smaller burden on the rich than the poor. A service is likewise progressive in economic jargon if the better-off pay more and the least well-off pay less—or, as in the case with social care currently, the least well-off get something for free, but the better off have to pay for it.
[su_pullquote]“Social care remains, as Dilnot pointed out, the one big risk in life that is effectively uninsurable”[/su_pullquote]
But viewed through this particular economic lens, the National Health Service is decidedly regressive: those who could afford to pay for it do not have to. And yet we as a country appear remarkably proud that the health service is open to all, with care being provided on the basis of clinical need alone, irrespective of ability or inability to pay.
When it comes to social care, however, two sets of values clash—and it is important to note that they clash within political parties, as well as between them. In the Conservative Party there are those who believe that the purpose of savings in old age is to care for oneself, and if that destroys inheritance, so be it. But there are equally Conservatives who are committed to the principle of inheritance. In the Labour Party, while there may be more who instinctively believe in more communal provision of social care, there are also those who understand the natural desire of parents to leave something to their kids.
The one thing split parties can still agree on is to sock it to their opponents, and so end up with MPs on each side opportunistically charging any reform emanating from the other as unacceptably “regressive”—when the plain fact is that any reform to the financing is bound to be that. Indeed, if you want a truly “progressive” system then… do nothing. The current one tightly targets help on the least well-off, since you are on your own until you are down to your last £23,250. The much better-off can do without the help; the least well off get their care free. It is all those in between who are left sorely exposed, a real social problem which—in everyday rather than economics language—it might be described as progressive to tackle.
Dilnot sought to bridge these divides. Essentially, under his proposal, in its final legislative form of the Care Act of 2014, people would always keep £100,000 of their assets. They would, however, have to meet the first £72,000 of their costs (assuming they had these resources on top of the £100,000 allowance). This sounds a huge sum. But because the taxpayer would be covering the long tail of very high costs for those in care for a long time, the hope was that the insurance industry would develop products to cover costs up to this £72,000 cap. The Dilnot plan was not without its problems. Individuals would need to get their care needs assessed early, and re-assessed as those needs increased, in order to keep track of their approved expenditure up to the cap—and some may struggle to understand that. But Dilnot did offer a compromise, providing more taxpayer assistance to prevent people facing ruinous costs, without expecting the taxpayer to foot the whole bill.
The crazy thing is that these proposals are already on the statute book. A government truly serious about tackling this part of the social care challenge could implement them tomorrow as a first step towards “fixing” social care.
Cut-price compassion
Doing so, however, would only solve one part of this three pipe problem—namely the balance between the individual and the taxpayer. The other two issues are the quality of care and its organisation.
Quality first. Funding for social care has never been generous. But after 2010, thanks to austerity, social care budgets were badly squeezed and funding is still not back to where it was then. The level of need required to qualify has risen in many authorities. Other impacts include the now notorious 15-minute visits for those receiving care at home, which may allow for only one basic task (such as help with showering, the toilet, cooking, getting changed or anything else) when several may be needed, and which can leave those with dementia utterly bewildered. Then there is low pay, zero-hours contracts when many employees would prefer something different, and council fees for the homes which are often below what it would cost to stay at a cheap hotel chain, let alone provide any care on top. That is hardly conducive to quality.
Homes struggle to stay in business on the local authority fees, and so they charge more—40 per cent more on average—to those who pay for their own care. Like the eating up of a lifetime of savings by care home bills, this cross-subsidy could be called “progressive”—the better off are subsidising the least well off—but it naturally leads to deep resentment from those who pay.
Sharp suits, blurred lines
The third big problem might be dubbed organisation, though it is a multi-faceted one, involving relations with the NHS, commissioning, and provision. It is perhaps the toughest of the nuts to crack. The NHS, despite the incredibly complex structures introduced by Andrew Lansley’s 2012 Act, remains just about recognisable as an organisation. Social care is not. It is hugely fragmented.
There are 152 local authorities who buy care in from some 18,000 organisations, with 34,000 establishments that include care homes, home care agencies and providers for adults of working age. And all this started out separately from the NHS commissioning of care for “clinical needs.” In more recent years, in the best places, health and social care have worked more closely together. But the fact is that for huge numbers of individuals with—say—dementia or severe arthritis, there is no clear line between the social or personal and the medical aspects of the problems they face, and this separation of services can create disjoints and confusion.
The social care providers range from a small number of larger corporates, who collectively host a mere 12 per cent or so of the care home places, to—quite literally—single home operators, and anything and everything in between. Every shape and size of outfit is found in both the for-profit and charitable sectors, and across both the domiciliary and residential operations.
To understand how this has arisen, a little history is again needed. Social care provision has always been a mixed economy. Back in 1946, there were many fewer older people and their life expectancy was shorter. There were genteel private residential homes for the better off, and some limited voluntary or charitable provision. Councils were the dominant employers of home helps, and some retained residential places in the old workhouses. Much long-term care back then, however, took place in the often grim, geriatric “back wards” of hospitals, where many of the least-well off spent their final years. As late as the 1980s the NHS still had around 50,000 “long stay” beds. Much of this old infrastructure was in desperate need of updating. But in the late Thatcher era, the NHS lacked the capital to do that.
From the 1950s on, councils started to build care homes. But at the end of the 1970s, the era of the first great modern waves of public-sector retrenchment, efforts to pass on the growing bills began to reshape the way this worked. First, cash-strapped charitable homes discovered they could get social security to pay for their poorer residents. Private homes soon took advantage of that too, and shortly afterwards both councils and the NHS realised that they could escape the cost of care by handing it over to the independent sector, paid for by social security. The bill for that rocketed from £10m in 1979 to £2.5bn by 1992. By then, a quarter of a million residents were having their care paid for by social security. All the incentives were for people to go into care homes, whether or not they would have preferred to be cared for at home, and indeed would have been better supported there. The bill, and the buck-passing, was becoming unsustainable. So following the Griffiths report, the social security cash was transferred to local government on condition that officials assessed where it was best to support people, and whether hopeful applicants required such support (the needs test). In keeping with the tenor of the times, there was a second condition that local government then used a large chunk of that cash to commission services, buying them in through outsourcing, rather than using a directly employed workforce to provide them. Independent sector provision mushroomed, while the remaining NHS long stay beds withered away.
[su_pullquote]“For huge numbers of individuals, there is no clear line between the personal and the medical aspects of the problems they face”[/su_pullquote]
The net effect has been that provision is almost entirely in the private sector, with next-to-no public capital investment in this area for decades. Almost all the money to build or refurbish homes has had to be raised from the markets—via banks or private equity. At one extreme that has produced the small number of private equity-backed, debt-laden corporates, run by highly-paid executives seeking big returns in the hope of tidying up the business and selling it on, when, in a labour-intensive sector, there are few true economies of scale. Southern Cross went bust in 2011 and Four Seasons, one of the biggest providers, appears to be in apparently endless financial trouble. That business model does not feel right for social care. But the total reliance on private investment combined with the misery of the low council fees makes life hard for many smaller undertakings, including the not-for-profits. And in this privatised and fragmented landscape, there is no single voice for social care, limited mutual aid and—as the pandemic has highlighted—a desperate lack of good data about what is going on across the sector.
No one of any influence is proposing nationalising social care provision, and yet the splintered delivery makes co-ordination difficult. It also complicates relations with the NHS, where arguments persist about who should pay for those with the most demanding needs. Families are left bewildered. As Marie, a social care manager who was a long-distance carer for her elderly mother, told the Barker Commission back in 2014, “I have a social work qualification. I know how the health and social care system is supposed to work, but I was powerless to influence mam’s care at a distance. Nothing was joined up.”
This leads some, with tidy minds, to propose either that the NHS takes on the commissioning of social care, or that local government takes over a chunk of NHS commissioning—the community side of the service, so to speak. But to try either would launch a political war that should daunt even a government with an 80-seat majority. Social care is the largest single local authority budget and local government would bitterly resist its removal while arguing that giving it to the NHS would lead to a “medicalised” model of care, while muddying its more or less sacred “free at the point of use” approach. Stripping the NHS of community commissioning—for example primary care, community nursing and the like—would merely create another boundary between community and hospital services. Not only that, there is no guarantee that having a consolidated single budget for medical and social care would, on its own, help. There is one in Northern Ireland, but it still has many of the same challenges. Best to build on the progress being made, pre-pandemic, in the current NHS-led plans for Integrated Care Systems, where, in some places at least, care is being much better co-ordinated.
Finally caring?
All this helps explain why reform has proved so difficult. There are conflicting principles and views here. Should we protect inheritance, or require those with assets to pay for their own care? Should we take on the decades-old culturally ingrained NHS/social care divide? In which case, in which direction? Should we revisit the highly privatised care economy by balancing it better, perhaps by providing some public sector capital, which, right now, is cheap?
The fact that the issues are hard, however, has long ceased to be an excuse for inaction. As things stand, vulnerable people can be left without the sort of help that we would all like to think we will be able to rely on in our old age. All three of our problems contribute here—the jigsaw delivery can leave people confused and caught in the cracks; the stringent “needs test” can deny or severely ration care for those who are still frail; and, anxieties about what the means test will do to a family’s finances can result in the decision to seek care being postponed. Things that might help on all three fronts are easy enough to envisage. The Dilnot reforms are on the statute book in the form of the Care Act. There are plenty of examples of better integration of health and social care round the country that could be built on. Just getting some more money into social care would, undoubtedly, improve its quality.
But the crunch does, of course, come with the money. So should the taxpayer pay more to have a better social care system? And, if so, how should the money for that be raised? The Treasury—understandably enough—is always wary of an extension of this arm of the welfare state when increasing pensioner wealth, and an unchanging means-test with thresholds frozen in recent years ensures that the rising costs of care for the growing numbers of elderly falls far more on private than on public funds. But the effect on family carers does not enter its economic calculations. Not fully factored in either, as campaigners point out, is the risk that public-sector penny pinching can sometimes produce problems for the state longer term: if people received support earlier, then later heavier demands as they age might be postponed, and some hospitalisations would certainly be avoided.
Nonetheless, the fact is that we would be talking billions of pounds upfront to restore the present system even to where it was before austerity, and many billions more to reform the funding system. It is the cost, as much as anything, that has for so long stopped successive governments from acting.
There are plenty of options around for raising the substantial funds required—including innovative ones such as charging a low rate of capital gains tax on house sales. But all are likely to require those past pension age contributing collectively in one way or another. For older voters, like everyone else, the certainty of taxes today weighs more heavily than the risk of ruinous costs tomorrow. And the elderly vote.
In the lengthy post-Covid queue for resources, social care will be just one part of it, and not necessarily at the top given the NHS demands for cash to tackle what are now huge waiting lists, the need to help those thrown out of work in a changed world to retrain, and many other imperatives. The politics of this remains hard. Should Covid-19 finally trigger long-needed reforms to social care? Absolutely. Will it? Don’t bet on it.
