The Committee found that publicly funded social care support is shrinking, as diminishing budgets have forced local authorities to limit the numbers of people who receive public funding. Funding is £700 million lower than 2010/11 in real terms, despite continuing increases in the numbers of people who need care. More than 400,000 people have fallen out of the means test, which has not increased with inflation since 2010. The Health Foundation and King's Fund estimate that to return quality and access to levels observed in 2009/10, the Government would need to spend £8 billion.
Social care funding is unfair. People receive healthcare free at the point of use, but are expected to make a substantial personal contribution towards their social care. In addition, national funding for social care is distributed unequally across local authorities.
The funding shortfall has meant local authorities are paying care providers a far lower rate for local authority-funded care recipients than self-funded care recipients, and those care providers with a high proportion of local authority-funded care recipients are struggling to survive.
To address unfairness in the system the Committee proposes bringing the entitlement for social care closer to the NHS by introducing free personal care, which would include help with washing, dressing or cooking.
Those in care homes would still pay for their accommodation and assistance with less critical needs like housework or shopping. Those receiving care in their own homes would not have to pay accommodation costs, which may encourage care users to seek essential help with personal care early. This model would cost £7 billion per year according to the Health Foundation and the King’s Fund, only £2 billion more than the Government’s 2017 "cap and floor" proposal.
Additional funding for social care should come from national government which should raise the money largely from general taxation. The money should be distributed to local authorities according to a fair funding formula.
Lord Forsyth of Drumlean, Chairman of the Economic Affairs Committee, said:
"Social care is severely underfunded. More than a million adults who need social care aren't receiving it, family and friends are being put under greater pressure to provide unpaid care, and the care workforce continues to be underpaid and undervalued.
"The whole system is riddled with unfairness. Someone with dementia can pay hundreds of thousands of pounds for their care, while someone with cancer receives it for free. Local authorities are increasingly expected to fund social care themselves, despite differences in local care demands and budgets. Social care funding has decreased most in the most deprived areas. And local authorities can’t afford to pay care providers a fair price, forcing providers to choose whether to market to those people who fund their own care or risk going bankrupt.
"Fixing underfunding is not difficult. The Government needs to spend £8 billion now to return quality and access in the system to an acceptable standard. Fixing unfairness is more complicated, but the Government has ducked the question for too long. They need to publish a White Paper, not a Green Paper, with clear proposals for change now. We think that change should include the introduction of free personal care, ensuring those with critical needs can receive help with essential daily activities like washing, dressing and cooking.
"Our recommendations will cost money, but social care should be a public spending priority. By 2023/24, the NHS funding will have increased by £20.5 billion per year. This is more than the entirety of local authority adult social care expenditure."
Key conclusions and recommendations
- The Government must increase funding by £8 billion to restore levels of quality and access to those observed in 2009/10. This should be its top priority.
- The Government should introduce a basic entitlement to publicly funded personal care for individuals with substantial and critical levels of need. Accommodation costs and the costs of other help and support should still be incurred by the individual. The Health Foundation and the King's Fund estimate this would cost £7 billion if introduced in 2020/21.
- To avoid catastrophic accommodation costs, the Government should also explore a cap on accommodation costs.
- The Government should adopt a staged approach to providing the additional funding recommended by this report. It should immediately invest £8 billion in adult social care, then introduce free personal care over the next five years. Free personal care should be available universally by 2025/26.
- Additional funding should be provided as a government grant, distributed directly to local authorities according to an appropriate national funding formula which takes into account differences between local authorities in demand for care and ability to raise funds from local taxation.
- Funding social care should be approached in the same way as any other funding pressure. We recommend that social care is funded largely from general taxation.