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Damian Green sets out plan to fix social care

April 29, 2019

In a new report for the Centre for Policy Studies, Tory MP Damian Green MP – who as First Secretary of State commissioned the Government’s still to be released social care green paper – has proposed a new funding mechanism.

‘Fixing the Care Crisis’ argues that the current system is financially and politically unsustainable, opaque, unfair, and actively discourages local councils from investing in social care and housing for older people.

With the number of over-75s set to double from the current level of 5.3 million in the next 40 years, the need to address this problem is – as the King’s Fund warned in late April – moving from urgent to critical. The paper sets out that any reform of social care needs to:

  • Provide sufficient funding to plug the gap created by an ageing population;
  • Be fair across generations and between individuals, ensuring that no one is obliged to sell their own home and ending the ‘dementia lottery’;
  • Increase the supply of care beds and the provision of retirement housing;
  • Secure public and cross-party consensus.

The paper argues that the care system should adopt the model of the state pension – with the Government providing enough support for a decent standard of care via a new Universal Care Entitlement, while encouraging and incentivising people to top-up this provision from their savings or housing wealth via a Care Supplement.

The result of this, says the paper, would be a sustainable system likely to be supported both in Westminster and beyond – not least because it would protect councils from the soaring costs of care. It is claimed that it would also fix what it terms “the warped incentives introduced by the reforms of the 1990s, which by handing councils responsibility for care costs led to new care home provision stagnating”.

Fixing the Care Crisis demonstrates that the Care Supplement will be affordable and attractive to millions of those reaching retirement age, ensuring a steady flow of private wealth into the care home system.

It also suggests a range of methods to fill the immediate funding gap in the social care system, estimated at about £2.75bn. These include, in decreasing order of preference:

  • Taxing the winter fuel allowance;
  • Diverting savings from the Spending Review;
  • Potentially imposing a 1% National Insurance surcharge on those aged over 50.

“The crisis in our social care system is one of the most pressing issues our country currently faces,” said Damian Green.

“It causes acute problems for the wider NHS, with 1.98m delayed transfers in 2017/18 for those moving out of NHS care. The Conservative Party has an urgent need to show that it has ideas about vital domestic policy issues such as this.

“That why I propose a wholesale change in our approach to social care, mirroring the state pension system with the introduction of a Universal Care Entitlement and Care Supplement. By combining this new system with an increase in funding we will be able to tackle this most intractable of political dilemmas fairly and responsibly.”

Robert Colvile, director of the Centre for Policy Studies, said social care had been an intractable issue because it was so hard to come up with a system that is fair to everyone.

“Damian’s proposals would pass all the key tests,” he said. “The system would be sustainable, there would be protection against the ‘dementia lottery’, no one would have to sell their own homes, everyone would have access a decent level of essential care, and those who paid-in more would get access to extras such as bigger rooms or more frequent excursions.

“This issue has been politically toxic, but we need a solution that commands consensus. I urge politicians from all parties to consider these proposals extremely carefully.”

Dr Amanda Thompsell, chair of the Faculty of Old Age Psychiatry at the Royal College of Psychiatrists, said the report drew attention to the “obvious and inconvenient truth that the current arrangements for social care are as well as being opaque and unfair (in particular for older people with dementia or indeed any long-term mental illness) are financially unsustainable”.

“This report should be studied by anyone who cares about older people, and all those who expects themselves one day to become old.” said Dr Thompsell.

Damian Green

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