On 2 July, the IFoA Social Care Working Party hosted a hybrid roundtable event of social care experts at Staple Inn, London. We had broad representation from the IFoA, ABI, Age UK, Alzheimer’s Scotland, Care England, Equity Release Council, The Health Foundation, Nuffield Trust, LSE, My Care Consultant, and Partners in Care and Health (ADASS/LGA).
The discussion focused on the areas of:
We kicked off the roundtable with some scene setting, presenting some recent IFoA research as well as our planned focus on how to improve the quality, collection and analysis of social care data to enable more informed social care policy making, and social care preventative measures to improve patient outcomes.
We then moved on to a facilitated discussion around some set questions. The key points made are below. It was a brilliant sharing of ideas from the spectrum of social care policy experts – I’m sure you’ll find the discussion interesting and enlightening.
Tom Kenny, Chair of Social Care Working Party
Tom Kenny: The rapidly ageing society and funding shortfall. This has led to a system in crisis, which is expected to get worse without action. A huge reliance, perhaps over reliance, is placed on unpaid carers: about 5 million based on the last census.
Jim Boyd: The need for political support for contentious decisions across generations which will be unpopular with one or other cohort of people.
Rob Yuille: The disconnect between health and social care systems and workforce/pay issues.
Prof Raphael Wittenberg: Workforce is the biggest challenge, both paid (employment numbers, flexibility, pay and career progression) and unpaid. Geographical dispersal of families and rising state pension age may mean that the proportion of people able to provide care for their parents will decline. Smaller families mean caring responsibilities on a smaller number of children. At the same time, a study by LSE shows there is a wish to care for parents, if possible, especially if needs are moderate.
Fiona Fan: Lack of awareness or dismissal of the need for an insurance solution.
A: Unmet need. The prospect of catastrophic cost is what has driven the 2 commissions. Agreed on workforce. Suggestion this was down to funding levels available to councils as you don’t see supply shortages in private markets.
Natasha Curry: Gap between the level of need and resource. Lack of political prioritisation, potentially due to low public awareness on social care, so not the buy-in to raise extra revenue/prioritise.
Social care policy reform proposals tend to focus on only one part of the system, but each change to one part of the system has a knock-on effect on other parts. Other countries are looking at the system more holistically and putting in the building blocks for fundamental reform. Need a strategic plan.
Mohamed Elsheemy: Workforce and productivity, lack of data, policy uncertainty, and child-free generations.
Jacqueline Berry: Intergenerational fairness. Proposed a people’s assembly to think long-term, a sovereign wealth fund and a wealth tax ringfenced for social care.
B: Workforce vacancies (50,000), LA budget constraints (down 40%). There is no one-size-fits all approach. Lack of understanding what social care is.
C: Demographics, funding, social care workforce not sufficiently valued or rewarded.
No strategic plan on how to structure social care and long-term care in Scotland. Care homes are predominantly market-led (private) so no control over that. High eligibility criteria result in difficulty accessing support until there is a crisis. Free personal care in Scotland is not free; everyone still pays for accommodation and living costs which can be £1200 to £2000 a week. Those receiving a personal care contribution towards care home fees are no longer eligible for Attendance Allowance.
D: Health and care partnerships in integrated care systems are not operating in the way they should. It is difficult for people to access care and advice, carer support, preventative care. Councils are restricted by their budgets. Political discourse has focused on catastrophic costs rather than thinking about other parts of the system. The cap won’t make a great deal of difference to most people. Need to fix recruitment and retention and access to support. We focus a lot on large care providers, but many of the smaller providers are extremely vulnerable. Provider stability has a big impact on older people.
John Jackson: Sustainability of workforce funding. Councils in England now face a funding gap of £6.2 billion over the next 2 years (LGA white paper). The public sector funding gap is £1.5 billion (Care England report). If you put 2 leaking buckets together (NHS and social care), they still leak. There is no strategic plan. The public debate is ill informed. If looking long-term, we would be looking at a very different model.
Jim Boyd: The growing number of childless couples and possible decline in the number of unpaid carers.
Tom Kenny: Between 1972 and 2072 the number of over 85 year olds will increase from 0.9% to 7%. The proportion of working-age population will decrease over the same period from 49% to 43.2%. OBR estimates social care costs will increase from 1.2% of GDP to 2.4% by 2070. For a budget to be sustainable, taxes need to rise or government spending reduce by 10.8%. If this were an insurance company, the regulator would be saying it needs to make provision for this gap.
A: Problem with the word ‘sustainable’. In Treasury terms, this about spending more of the national income on social care. But have you got the revenue stream to cover it? Agrees with IFS that there is not an honest conversation about this. NHS has had a 1% GDP increase in funding over 10 years (IFS). The amount is relatively small. Either people need to spend more from their private purse or in taxation.
Tom Kenny: 1% of GDP may seem small, but it can be the straw that breaks the camel’s back. Although health care spending is increasing, the quality of healthcare has been cut back. Social care is already in crisis. How do we get policy makers to have an honest conversation in a short-term political system?
John Jackson: Percentage of GDP spent on social care fell between 2010 and 2020. Those who did get care got reasonable care, but providers are unhappy, unpaid carers are unhappy, workers are unhappy.
Natasha Curry: We need increased funding but also to look at how the money reaches the social care system. At the moment, small pots with strenuous reporting requirements do not enable councils to think long-term.
John Jackson: Most of the funding is from local taxes. State contributes around 25%.
Jim Boyd: Need to look at the structure to deliver care. Referenced Damien Green (Chair of APPG on Adult Social Care) that a basic level of care has to be funded through taxation but with an option for people to top-up care, which could stimulate a market for insurance etc. Increasing tax on the working-age population to cover increasing costs on older generations results in issues of intergenerational fairness. Allowing people in old age to live in poverty is unacceptable, so we have to find other alternatives.
C: The system is already in crisis and unsustainable. There is no political discourse on what type of system we want in Scotland. The last was Theresa May in 2017, which was branded as a ‘dementia tax’. The crisis has both an economic cost (cost on NHS) and human cost. Alzheimer Scotland report calls for an honest discourse on the cost of social care and a dialogue with the public on what sort of system we want and how we would want to pay for that. Alzheimer sufferers face disproportionate charges and do not have the nursing care for their complex needs. Any other terminal illness would be funded through NHS. Social care spend for dementia needs to more than double.
Interest in a state-supported insurance scheme.
D: More could be done around prevention and ageing well to reduce the need for social care. Frailty can be reversed. Levels of unmet need require more investment in the voluntary sector. Delayed discharge and return due to needs not being met in the community impact the NHS. Need to move away from acute to primary community care.
Tom Kenny: What are the key enablers? Dilnot saw the cap as an enabler.
Rob Yuille: There have been political expectations that a cap will create a market, but ABI members have been wary of that: a market will not dovetail with a cap due to political risk of it changing. There is a role for insurance and financial services, but need to be realistic about how big that role is. The state will never cover everyone’s care costs and people will need help to use assets. Referenced ABI work with Pensions Policy Institute on different generations and inequalities of wealth and income. At the moment, property wealth is the main way people will pay for care. Over time, more will be renting, incomes from DB will be lower as fewer people will have DB pensions. More people will have DC pensions that they may be able to use for care, but are unlikely to be sufficient. Demand for insurance is limited. People need help to navigate the system.
Jim Boyd: Use taxation for a base level of care with the ability to have top ups. This could be through an insurance product. Property has a role. People can be supported to stay in their properties for longer and more safely. However, discussions need to start early enough so provision by the time of retirement. Before Covid, the government was working to remind people that care is not free. Needs to be more joined up.
Jacqueline Berry: In 2022 to 2023, £20.5 billion was spent on adult social care. The Health Foundation estimates an extra £8.3 billion will be needed by 2032, bringing it up to a total of £30 to £40 billion with inflation. This could be in part paid for out of disbursements from a sovereign wealth fund, raised by an extra 2p on NIC for employers (raising £18 billion per year), removing tax relief from higher earners (£8 billion) and 1% tax on assets over £10 million.
Need to raise consumer awareness. My Care Consultant provides an care navigation service. Offer to make it available to local authorities. Advice needs to be independent and guided. Age UK fact sheets are tailored to people who have some knowledge. Most people don’t know what they don’t know and in what order.
Need to personalise the issue. Asked by Fiona, when do financial advisors speak about social care?, she replied: with those with critical needs and when discussing cash flows. First contact with social care is usually on hospital discharge. Most have not heard of immediate needs annuities, unless themselves in a caring role.
Rob Yuille: Only a small percentage of people get financial advice. Potential role for employers to provide greater access to financial solutions to assist their employees to access advice and guidance and/or respite care to support their role as unpaid carers.
Natasha Curry: In 2021, France established social care as the fifth pillar of the welfare state, although it is not clear how it should be funded. Japan and Germany present social care as a whole of society benefit. In Japan, the over 40s pay into a scheme accessible to the over 65s. In Germany, all pay in on starting work under the principle of solidarity and fairness. The discourse is not about people not wanting to lose their house.
In Germany, they have a basic allowance and people are expected to contribute. They tried really hard to introduce an insurance product, but there was only a 4% uptake so it was abandoned. Now they have a basic allowance and a cap. People think, why take out a product I might never need? Agreed with Tom that insurance might need to be compulsory for it to work.
D: Insurance solutions are unlikely to work if people don’t see a better care system at the end of it. Work on improvement and availability of care before an insurance product. People need to trust the product will deliver the support they need.
John Jackson: Unanswered question: should people who have money pay for their care? Where does all the wealth sit – older people? Current arrangements may be right.
Jim Boyd: Should we increase tax/NIC on the working young to support wealthy older people? Those who can, should be encouraged to pay. It is estimated that people over 50 own 70% of the private property in Britain (£2.5 trillion in non-mortgage equity is owned by people over the aged of 65). Property has to form part of the solution to support domiciliary care, by funding simple adaptations and new technologies or additional care to meet unmet need. This will enable people to live independently for longer in their own homes, which most want to do. Releasing property wealth can also fund care insurance products, such as an immediate needs annuity.
Some suggestions about the role of property wealth to address unmet care need as set out in Equity Release Council’s report ‘Solving the social care funding crisis’
Jacqueline Berry: Property is treated differently if home care or a care home. There needs to be continuity. If you can solve that, that could help drive equity solutions.
John Jackson: Baby boomers may be the best generation in old age. Question how distribution of housing wealth will change over generations.
C: The upper capital limit in Scotland is £35,000. You don’t have to be wealthy to reach that limit. Younger people paying now expect to benefit in the future.
Social care spending – 50% of current spending is on younger people (0 to 64).
Workforce – the way you treat the people working in social care is a reflection of how important we as a society think social care is. It is questionable if, as a society, we treat people working in the social care with the respect they are due, for example paying them appropriately, work conditions.
Gap between need and resource for social care is possibly due to low public awareness of the situation in social care and as a result a lack of political will to address the problem.
