Alan Johnson on the care funding crisis

24 May 2017

As writer and former government minister Alan Johnson quits as an MP, he writes a plea to politicians of all parties who would govern after June 8: gather your courage and fix, finally, the issue of funding social care.

My last constituency engagement after 20 years as an MP was to open a refurbished care home close to Hull Royal Infirmary. As I explained to the assembled gathering of staff, builders, care-home owners and local councillors, there could be no more important occasion upon which to depart the political stage.

When that care home was first built in the 1950s, the elderly in need of care that they couldn’t afford would be safely deposited with the local authority. Councils owned and ran the vast majority of homes in which residents lived out the last few years of a life expectancy much shorter than it is today.

The good news for society as a whole, that people are healthier and living longer, is at the core of an issue that became a problem 25 years ago and, because of failures by governments of all political persuasions, has become a full-blown crisis today.

The number of people aged 85 or over, the age group most likely to need care, is rising faster than the population as a whole. The overall adult population grew by 10% between 2001 and 2011 with the number over 65 growing by 11%; but the number aged 85 or over rose by almost a quarter during the same period.

In politics ‘crisis’ is a word devalued by its over-use. During this general election the public will hear it used many times and attached to issues as diverse as education funding and local bus services. In the context of adult social care, however, there can be little doubt as to its accuracy. In the past few months alone, Age UK has said the system is moving from crisis to collapse, a report by Oxford University has concluded that problems in adult social care have led to an unprecedented increase in mortality and the Red Cross has described it as a ‘humanitarian crisis’.

Politicians have long ceased to pretend that the situation is under control, a whole series of independent reports having told them what they perhaps didn’t want to hear.

A Royal Commission in 1999, the Wanless Social Care Review in 2006 and, most recently, the Dilnot Commission of 2011 have all concluded that (to quote Sir Andrew Dilnot himself), ‘the current adult social- care funding system in England is not fit for purpose and needs urgent and lasting reform’: it is ‘confusing, unfair and unsustainable’, its processes ‘complex and opaque’.

(Scotland went off in a different direction after the Royal Commission, deciding that personal care should be largely funded by the taxpayer, but their own independent review last year found that to be unsustainable as well.)

So Labour, Conservative and (because Dilnot was commissioned by the coalition government) Liberal Democrats have all been warned that a solution to this problem represents the biggest domestic political challenge of our time, and yet all three main parties have managed to find some long grass into which to kick these substantial reports. Few of the recommendations have been implemented and as Health Secretary for two years I must share responsibility for this shameful failure to take any meaningful action on the wealth of independent advice that we were all so good at commissioning.

Why has this problem been allowed to fester? First, this is one of those longer- term issues, like the state pension age and nuclear energy, where cross-party consensus is essential if the solution isn’t to be derailed by changes of government.

The second and related problem is that politicians need to take some potentially unpopular decisions to find the new funding streams to resolve this problem.

Although it’s traditional, when discussing intractable issues of this kind, for somebody to insist that it isn’t all about money, I’m afraid that in respect of adult social care, it is. Local authority funding will have fallen by 80% in the ten years up to 2020 and, under current arrangements, councils that have long ceased to be the main providers of social care still have responsibility for its funding. Central government grants for this purpose are not ring-fenced. As the highly respected and independent Kings Fund has said, ‘the fundamental cause of the problems in adult social care is inadequate funding’.

With no central control, the amount and quality of care on offer fluctuates according to postcode and perversely the amount spent on this profound and growing problem is actually less in real terms than it was at the beginning of the decade. All three main parties know that Dilnot (and Wanless before him) was right in saying that this crisis demands new funding streams.

As I write, the manifestos have not yet been published. The acid test of whether a political party is serious in its approach to adult social care is if it builds a plan for action rather than a platform for yet more rhetoric.

Dilnot came up with sensible and workable proposals as to what needed to be done to tackle the twin core issues of the means-tested threshold (currently set at around £23,250 of assets), above which an individual cannot access any help to fund their care, and the amount of care that an individual who passes this threshold should be expected to fund themselves. The latter is currently unspecified and potentially unlimited but Dilnot put it at 90%, which he wanted to reduce to 30%. So his central recommendations were that the threshold be increased to assets of £100,000 with a proposed lifetime individual contribution to care costs of £35,000, beyond which the state would pay.

The coalition government said they would introduce a modified version of this but not until 2020. The current Government recognised that the system couldn’t limp on that long and proposed that additional funding could be provided through a modest council tax precept.

Unfortunately, the money raised was exceeded by the welcome introduction of the National Living Wage, which cost councils £220 million more than the precept had raised. Everybody recognises, including the Government, that we are currently tinkering with temporary palliatives ahead of the nationally funded solution that all political parties agree is needed.

Dilnot wasn’t asked to make recommendations on where the money should come from, but he has been vociferous lately in pointing out that the universal winter fuel allowance costs around £2 billion and that this is the amount he identified as being needed to provide a properly funded, national adult social-care system that is sustainable and fit for purpose.

He has also drawn attention to the fact that while many people now work beyond the age of 65, national insurance contributions still cease automatically at that age. Why? What earthly reason is there not to pay a work-related tax when the individual is still at work?

Other suggestions as to how the money could be raised include abandoning the ‘triple lock’ by which pensions rise in accordance with average earnings, inflation or 2.5%, whichever produces the highest amount. Like the winter fuel allowance, this universal provision gives taxpayers’ money to people who don’t need it. With the safety net of pension credit still in place, surely it’s safe to return to a formula of linking state pension increases to average earnings.

Nobody who has examined this issue believes that local authority funding of adult social care on the current basis is sustainable or desirable. This issue can get lost in dry statistics, but in reality it’s about the elderly woman stuck in a hospital bed because there is no satisfactory provision in her community. It’s about the disabled man unable to receive the help he needs at home to wash and bathe, the care home that closes, the dementia assistance that vanishes. It’s about all the things that make our society civilised but that can suddenly disappear because of age and infirmity.

A European politician once said, of some apparently intractable political problem, that all politicians knew how to solve it, they just didn’t know how to get re-elected once they had. I believe that the public is ready to make the decisions required. It is not true, as a junior Government minister suggested, that the problem has arisen because of a failure by the public to look after our elderly; by far the biggest providers of adult social care (37.5%) are family and friends.

Neither is it necessarily true that pensioners are keen to hang on to universal payments despite the obvious disparities of our social-care system. Some remarkable work by Saga demonstrates that whereas many of the measures mentioned above that could provide more money are initially unpopular, they become much more acceptable if the public is reassured that the cash will go towards providing better care for the elderly.

In my view Dilnot provided the answers. The central question at this election is: do the main political parties have the courage to act upon them or do they intend to simply ask the same questions yet again?

For the major parties’ manifestos, click on the following links:

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

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