Features: August 7th, 2009

Cordelia Brand

The UK system for providing care and support for the elderly is inadequate. A Green Paper highlights the challenges faced by the current system and the need for radical reform to develop a national care service that is fair, simple and affordable for everyone. The author highlights the weaknesses of the current system and describes the options for radical change.

The government published a green paper “Shaping the Future of Care Together” in July 2009. It sets out a vision for a new care and support system. The green paper highlights the challenges faced by the current system and the need for radical reform, to develop a National Care Service that is “fair, simple and affordable for everyone”.

With the green paper, the government sets out a number of consultation questions and asks everyone to provide their views about how they think government can make this vision a reality and develop a care and support system fit for the 21st Century.

The consultation will run up to 13th November 2009.

Need to change the system

The green paper argues that there are “significant weaknesses in the current system”. There are wide variations in the standards and quality of care and support offered by different local authorities. Such “postcode lotteries” are worsening as funding struggles to keep pace with demand. People are living longer and because of this there will be more older people needing care and support, people who are born with a disability are also living longer. As the population ages more people need care and support putting huge pressure on existing services.

The paper discusses what people should expect from such a system, how the system should work and how it should be funded.

What are expectations?

The paper identifies six elements that people should be able to expect from a National Care Service:

• Prevention services

Identified as providing the right support to help the individual stay independent and well for as long as possible.

• National assessment

So that wherever you are in England you will have the right to have your care and support needs assessed in the same way, you will have a right to have the same proportion of your care and support costs paid for wherever you live.

• A joined up service

Meaning that all the services that are needed will work together smoothly and you will only need one assessment of your needs to gain a whole range of care and support.

• Information and advice

So that you can understand and find your way through the care and support system easily.

• Personalised care and support

Based on your personal circumstances and need.

• Fair funding

Which is expressed as “help with paying for your care and support needs”, and a promise that “your money will be used wisely to fund a care and support system that is fair and sustainable”.

Meeting expectations

The paper discusses the way in which these expectations may be achieved and stresses the need for a”better joined up working between health, housing and social care services and the disability benefits system”. The aim is for a wider range of services to be made available backed by a system better able to identify needs and ensure they are matched. Also to provide new and better care and support services between various national and local government strands, such as those providing benefits, care, health and housing.

The green paper proposes radical changes to the way care for the elderly is to be funded. The three options for paying for the National Care Service are:

1. Partnership – splitting the cost of care between the government and the person using the services. The government would pay a set proportion of the costs for example a quarter or a third. The government would pay more for people who have less money or more care needs and the poorest people would pay nothing. Even well off people would get some help.

2. Optional Insurance – the costs would be shared between the government and the person using the services and the insurance would be used to help people pay their share of the costs of the services they use.
Most people would have to pay something for the insurance and an indication of the costs people might need to pay is given at £20,000 – £25,000. The payment could be made in several different ways, in instalments or as a lump sum, before or after retirement while they are alive, or they could choose to pay after they die. This system allows people who buy the insurance to know that once they had made their contribution and paid for their accommodation the costs of their care and support costs would be met. This way, they would be able to preserve the rest of their wealth to pass to their families.

3. Comprehensive – under this compulsory system, everyone over retirement age who had resources to do so would be compelled to pay into a state insurance scheme. If a retired person needs care and support services in the future the National Care Service would pay for it. Everyone who needs care would receive it free. The size of people’s contribution could be set according to what savings or assets they had, so that people who were less well off would pay less. The paper estimates the costs that people would have to pay to be around £17,000 to £20,000. In order to pay for the comprehensive systems the proposal is that the government would put in the money we already spend on care and support and some of the money we already spend on disability benefits. The individual could decide to pay during their working life, during their retirement or after their death.

Two alternative ideas were rejected: a scheme whereby everyone pays for themselves (ruled out because it would leave too many unable to afford any care) and an entirely tax funded scheme (rejected because it places too heavy a burden on people of working age).

The government is not proposing to make new public funding available, but has proposed to end a disability living allowance for elderly people – which is not a means tested benefit – to free up £6.1 billion that would then be returned to the budget for means tested social care.

One important point is that the government funding and insurance payments would go only towards the cost of care, accommodation and food costs would have to be met separately by the individual. As well as care and support costs, people entering residential care would have to pay for their accommodation costs, and their food and lodging and these costs could be substantial. The paper seeks to justify this on the grounds that, “although there will always be a role for the state to play in helping people with low income and assets, we believe it is fair to expect the majority of people to meet these costs themselves”.

Radical changes in prospect

In conclusion, the green paper proposes some radical changes to the current system, outlines a new National Care Service, and proposes a “universal deferred payment mechanism, allowing residential care and accommodation costs to be charged upon a person’s estate when they die”. However, the downside of these proposals is that Elderly people could find that they are bound to pay £20,000 towards a care system that they may never need.

Cordelia Brand is a Partner at Howard Kennedy.www.howardkennedy.com