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The age-old problem of care funding

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The best things in life are not free, as the ever-expanding ranks of the nation’s elderly discover when they have their needs assessed.

Projections about England’s rationing-plagued adult social care system predict a surge in demand over the next two decades with an aging population needing more and more support.

The government predicts the number of people aged over 85 will double during that time, and that a£6bn funding deficit will emerge from the additional 1.7 million people expected to need care compared to now.

'Unfit for purpose'

The current system is widely recognised as being unfit for purpose. Ever-tightening eligibility criteria have seen some local authorities offer services to only those residents with ‘critical’ needs, while others are left housebound and without the assistance
of home-helps.

The government is convinced radical change is required. Last week, Prime Minister Gordon Brown launched a consultation document designed to kick-off six months of public debate about how the nation pays to look after the elderly.

A green paper on funding adult social care is expected early next year and changes to the current system will have a considerable impact on local government. Proposals for a national, centrally funded and more consistent system of provision could significantly reduce councils’ role and the money they receive. Conversely, more focus on services geared to local needs could do the reverse.

'Whole public' debate

Whatever preferred model emerges in the green paper, the government’s drive to provide personal budgets for adult social care whether for the elderly or the disabled by 2011 is not up for debate. However, at the heart of the consultation is an attempt to gauge what people expect from care packages, and how much they are prepared to pay for it.

The more cynical may argue that the whole public debate is a ruse to remind people that old age is going to hit us increasingly in the pockets. Others insist that it is a golden opportunity to lay the foundations of a secure care system.

There is no doubt the burgeoning ranks of people who fund their own care are often getting a poor deal at present, mainly because they are poorly advised and often over-charged.

Local authorities’ future role could involve not only continuing to assess people’s care needs, but giving solid advice to those who are offered no further assistance after a means test, according to John Dixon, president of the Association of Directors of Adult Social Services. He said the consultation was long overdue and was crucial in shaping the future of a system that is currently not working. The council’s role would be as a ‘trading standards’-style watchdog, making sure local care services are up to scratch and fairly operated, he added.

Everyone should have a universal entitlement to some level of free care, even if it is just proper counselling about how to find their own private provider, Mr Dixon said.

“It’s about providing quality advice and working with local organisations wherever we can,” he explained.

David Rogers (Lib Dem), the Local Government Association’s chair of community wellbeing and health, agreed councils should at least be the “democratic voice of service users”, holding contractors to account.

But he said he was suspicious about how far any national standards could cut councils involvement in social care out of the loop. “The LGA is always arguing that local services are best, and it could well be that there is some kind of minimum entitlement that could be locally increased,” he said.

It is hard to see central government being willing to take the responsibility of directly controlling social care funding, Cllr Rogers added.

But not all agree. Some claim the differing qualification criteria between local authority areas as a relic from the pre-welfare state age that only a national system can solve.

“We still have a legacy of the Poor Law, where we have parish rates and relief being delivered by the local parish which is the local authority,” said Ray Jones, professor of social work at Kingston University and St George’s, University of London.

“We need to move from this system to a national system that’s consistent and fair,” he said, admitting he did not support the motives behind setting up a six-month pre-green paper debate. “I think the government is being very timid,” Prof Jones said. “It would seem that there are political concerns not to come up with any proposals in case they are seen as politically damaging.

“The government is falling back on a consultation on a consultation what it is choosing to do is have a pre-consultation before it publishes its consultation in the form of the green paper.”

Probably the thorniest issue in the funding debate is the extent to which people may continue to have to sell their own assets to fund care.

The government claimed it was keen not to penalise people for saving and making sound choices about their futures. But having to sell a family home that was once perceived as an heirloom to pass onto children and grand children to fund care is now a fact of life for many people.

Nevertheless, a report earlier this year from industry body Counsel & Care found a willingness among people to pay for their care so long as charges were fair and transparent.

In February, thinktank the International Longevity Centre UK published a report arguing the case for national care fund to support people’s long-term needs.

The fund would operate on the principle that at a defined age say 65 adults would be required to contribute a means-tested sum to cover the costs of any social care they may need during the remainder of their lives.

It could either be paid in full in advance, in instalments with interest, or deducted from their estate with interest when they died, thus utilising part of the value locked into people’s homes without necessarily requiring the sale of their property.

The exact amount of any lump sum, and the level of care that would be afforded in return, would need to be fixed. A single payment of£15,000 has been used as a base for the model.

James Lloyd, head of policy and research and the report’s author, said one of the things he would be keenest to see in the upcoming consultation was an indication of how much people would be willing to pay as a one-off payment.

Mr Lloyd was upbeat about the scope of the consultation, and the role it will play in shaping the future of adult social care.

“The political parties are aware of the need for major reform, and would be willing to consider root-and-branch reform of the system, so this will perhaps be a once-in-a-generation opportunity for genuine blue-sky thinking,” he said.

Whatever happens over the next six months, it is unlikely the public will provide the government with a solution to the problem of funding social care.

But it will doubtless warn thousands, if not millions, of people that social care does not operate on the principle as the NHS, that is before they find out the hard way.

Key consultation questions

  • Should the system be the same for everybody, or should the way government funding is allocated be varied according to certain principles?

  • Should there be one system for everyone, or could distinctions be made between the needs of the elderly and those disabled at a younger age?

  • What should be the balance between helping those least able to pay and supporting those who plan and save?

  • Which is more important: local flexibility or national consistency?

  • What should the balance of responsibility be between the family, the individual, and the government

Models of social care reform from around the world

  • German social care reforms have seen people offered cash payments to support informal carers (pictured left)

  • Japanese reforms have aimed to promote formal, organised services so that primary carers particularly daughters shoulder less responsibility for the care of the elderly

  • Many US states are encouraging people to take out private long-term care insurance; however take-up has been relatively low

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