WBG media statement for Government social care announcement

The Women’s Budget Group welcomes the recognition by the Government of the need to address the crisis in social care and the proposed focus on collective funding for collective provision.  However, the proposed reforms do not go far enough, still leaving millions of people with unmet care needs or burdened with high care costs.

They contain little or nothing for social care in the short term, because money from the rise in NICs will instead fund a short term boost for the NHS.

Raising national insurance contributions is not the best way to pay for social care.  We are calling instead for investment in a universal, high quality care system that meets the needs of all.

Anyone might need care at any age, because of a disability or health condition. Social care supports people who need care to exercise choice and control in their everyday lives. But the current underfunded system is very restricted in the support it provides, forcing people to pay for care privately, to rely on family members and friends – who take on excessive unpaid caring responsibilities – or to go without the care they need. At least 1.5 million older people in England are living with unmet care needs as a result.

What is the government proposing?
The Government’s commitment at the last election was that no one should have to sell their home to meet the costs of care. This has led them to adopt a ‘cap and floor model’.

The proposals aim to protect people against extreme care costs, but they do not go far enough. Social care funded entirely by the state will still be restricted, while everyone else will either have to pay £86,000 on their care before they receive any state support, or they will have to spend down their savings until they are eligible for means-tested care.

Moreover, there is no mention in the proposals of how levels of access and quality in social care, not to mention pay and conditions for social care workers, will be improved. These are urgent issues that need to be addressed now. An estimated 1.5 million people aged 65 and over have unmet care needs (15% of this population). ¹ For younger adults needing care, 18% aged 18 to 64 reported having a disibility with only 3% receving formal or informal care. ² Further the care recivied is often irushed and inadequate, 85% of domiciliary carers reported not having time to have a conversation with care recipients, and 74% believe they do not have time to carry out dignified care. ³

We need  a high quality universal care service.
The proposed plans are unambitious and fail to address unmet need, high care costs and an undervalued and underpaid workforce (formal and informal). Meeting the multiple and complex needs of everyone that requires care, as outlined in the Care Act 2014,  cannot be done through cost-cutting reform. It requires significant investment to create a high quality universal service.

We propose a new high quality universal care service.

• A universal care service should ensure that people’s needs are met in a way which supports wellbeing and self determination. This means going beyond a focus on personal care to cover other activities of daily life including buying and preparing food, maintaining relationships and taking part in the life of the community.
• A universal care service should provide care of high quality. This means a well trained workforce with decent pay and conditions. In Sweden, Norway and Denmark, for example, care workers are paid around three quarters of the average pay of nurses. Better rates of pay and improved condisions would address the problems of high turnover in the sector, which currently have a damaging impact on the quality of care.
• A universal care service should aim to reduce reliance on unpaid care which leaves millions of unpaid carers facing high levels of stress, difficulties staying in paid work and at increased risk of poverty. Increased formal care could free unpaid carers to spend time with the person they care for

A universal care service would begin with a set of measures that are implementable in the short term:

• making social care universally free at the point of need, by abolishing the means test;
• widening the availability of social care, by ensuring the universal application of the national eligibility criteria set out in the Care Act; and
• improving working conditions, including introducing a sector minimum wage in line with the Real Living Wage .

It would move towards:

• widening the availability of social care further, by changing the national eligibility criteria set out in the Care Act to cover a wider group of people who need care; and
• improving care quality by providing improved training for all social care workers and increased wages in line with iincreased qualifications.

In the initial phase this would mean annual investment of £44bn (£28bn more than the current £17bn spent on long term care). In the longer term, a wider definition of needs and improved quality would lead to higher take up, which we estimate could cost an additional £30bn.

This would bring UK spending on social care in line with that in Sweden and Norway as a share of GDP.

We calculate that such investment in a universal care system would stimulate the economy to generate over one million jobs overall, many of which would be filled by people previously unable to take employment because of caring responsibilities.

The increased direct and indirect tax revenue generated by that additional employment would cover 28% of the universal care system’s costs, reducing net costs.

 Funding social care by raising National Insurance Contributions (NICs)
We believe there is a fairer way to fund social care. This is because, as they currently stand NICs are more regressive than income tax – with a lower threshold at which payments start, and a higher rate threshold beyond which employees pay a lower rate.

We welcome the increase in dividend tax by 1.25% but there is still a significant gap between tax on income from earnings and income from wealth.

Instead we would like to see the net costs funded by progressive taxes, such as income tax, capital gains tax and wealth taxes.

This short statement precedes a longer comprehensive report on a proposed universal social care system to be published by the Women’s Budget Group and the New Economics Foundation in late September 2021.

For further information, please contact: Dr Mary-Ann Stephenson: maryann.stephenson@wbg.org.uk / 07957 338582/ Director