MPs Call for Social Care Premium to fund personal care for all

27 June 2018

The Housing, Communities and Local Government and Health and Social Care Committees' joint report calls for a sustainable funding solution for adult social care.

The Committees' report

Citizen's Assembly

A ‘Social Care Premium’

The report calls for the introduction of a ‘Social Care Premium’, either as an additional element of National Insurance or with the premium paid into dedicated not-for-profit social insurance fund that people would be confident could only be used for social care.

To ensure fairness between the generations, the premium should only be paid by those aged over 40 and extended to those over the age of 65, with the money being held in an independent, dedicated and audited fund to help gain public trust and acceptance for the measure.

Individuals and employers should pay a new contribution into a dedicated fund set aside to help pay for the growing demand for adult social care and implement funding reforms, with the current system ‘not fit to respond to the demographic trends of the future’, say report into Long term funding of adult social care report.

The report by the cross-party Committees describes the social care system as "under very great and unsustainable strain". Ahead of the Government’s Green Paper, which is now expected in the autumn, it highlights the urgent need to plug a funding gap estimated at up to £2.5 billion in the next financial year, before introducing wider funding reforms at both a local and national level to raise extra revenue with a long-term aspiration of providing social care free at the point of delivery.

Personal care for all

The Committees say that the personal element of social care, such as help with washing, dressing and eating, should eventually be delivered free to everyone who needs it, although accommodation costs should continue to be paid on a means-tested basis. Recognising that this reform is unlikely to be affordable immediately, the Committees recommended that it should begin by extending free personal care to people deemed to have 'critical' needs.

Extra funds will also need to be raised to extend the care to those with moderate needs as well as those with substantial and critical needs and to provide sufficient resources to ensure the stability of the workforce and financial viability of care providers.

Future funding

Clive Betts MP, Chair of the Housing, Communities and Local Government Committee, said:

"The social care system is in a critical condition and there is an urgent need for more funding both now and in the future to ensure people are properly looked after. While we have set out steps to ease the financial pressure on local authorities delivering the service, reforms at a local level will not be enough if we are to rise to the challenge of providing high-quality care for all those that need it.

We heard during the inquiry that people would be willing to pay more if there was an absolute guarantee that the extra money would go on social care. Given the huge funding gulf, the Government should now take the opportunity to build both a political and public consensus around the need for a new Social Care Premium to secure a fair and sustainable system in the long-term.

The Government must also consider social care in its wider context and ensure a proper joined up approach with other services such as public health and housing."

Sarah Wollaston MP, Chair of the Health and Social Care Committee, said:

"We can no longer delay finding a fair and sustainable settlement for social care. Too many people are being left without the care and support they need and it is time for decisions to be made about how the costs are shared.

This report from MPs across the political spectrum also draws on the informed views of a Citizens’ Assembly in setting out our recommendations to Government. Doing nothing cannot be an option."

The Committees acknowledge that the challenge is not just addressing the existing gap but to meet future need.  They recommend that an independent body should be tasked with modelling requirements and providing the Government with two-yearly forecasts.

Further funding reforms outlined in the report include levying an extra amount of Inheritance Tax on estates valued above a certain threshold and capped at a percentage of the total value. This would enable the pooling of risk and prevent catastrophic costs to those receiving long term care.

At a local level, the Committees are calling for reform of council tax valuations and bands and for local authorities to be able to use new funding from additional business rates retention in 2020 to fund social care rather than as a replacement of grants from the Government.

The Citizens’ Assembly

Reflecting the importance of public engagement in decision-making about this issue, as a key part of the inquiry, the Committees commissioned a Citizens’ Assembly, with a representative sample of nearly 50 members of the public asked to consider how best to fund social care with the results feeding into the inquiry. Assembly members were taken through a process of learning, deliberating and decision-making which enabled them to tackle difficult questions about where funding for social care should come from. The Assembly’s findings are reflected throughout the Committees’ report.

The report says engaging with all those receiving social care, carers, relatives and care workers, as well as the wider public, will be critical in ensuring public support and calls for a cross-party parliamentary commission to take forward the proposals and build and maintain political consensus.

Principles for funding social care

The report is based on six principles for funding social care that the Committees recommend should underpin the development of social care policy.

  • Providing high quality care
  • Considering working age adults as well as older people
  • Ensuring fairness on the ‘who and how’ we pay for social care, including between the generations
  • Aspiring over time towards universal access to personal care free at the point of delivery
  • Risk pooling - protecting people from catastrophic costs, and protecting a greater portion of their savings and assets
  • 'Earmarking' of contributions to maintain public support

Further information

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