Experts set out the principles and practice for future success in Politeia’s Funding Elderly Social Care.
Publication: 11th July 2020
PDF: Paying for Elderly Social Care: What Principles? What Aims?
Elderly social care has moved to the centre of the political stage, put there by the high death rates that swept through care homes during the Covid-pandemic. The NHS policy of discharging potentially Covid positive hospital patents into care homes without testing will be subject to an official enquiry, but now the focus is on funding and possible reorganisation. Pressure has mounted for the government to ‘do’ something, with NHS chief executive, Simon Stevens, and Labour Party leader, Keir Starmer, joining the clamour.
But, as the authors of Paying for Elderly Social Care: What Principles? What Aims? show, funding social care involves serious choices about principles and policy. As Sheila Lawlor, Politeia’s director and a historian by background, explains, there is no ‘one size fits all’ solution. Britain led the world in pioneering contributory systems to meet life’s unpredictable costs, and social care is such a cost. The sector is very diverse, with different types of care for the different needs of the elderly in a post-industrial economy. Most people live at home all their lives, a minority (under 5 per cent) in care homes, some of which are registered to provide nursing care for people with medical conditions. How should this diversity of need be met?
All the authors agree that the system should promote the incentive to save, and it should be sustainable over the longer term. Colin Wilson, Deputy Government Actuary, explains that, by contrast, the current system does not promote incentive and saving, and it is ill equipped to cope with higher numbers of older people. For the future: the system should incentivise savings and the pooling of risk. It should be sufficiently flexible to cope with the unexpected. What matters are ‘the key principles…more than specific fine tuning…to ensure…an appropriate balance of costs and risks within and between generations’.
Melanie Powell, Senior Lecturer in Economics at the University of Derby, explains that certain factors affect costs: growing demand, labour market limitations, productivity, public budgetary constraints. While the government’s role and its implications for demand and supply can be assessed from the perspective of market failure theory, people’s behaviour can be considered from the perspective of behavioural economics – which in turn suggests certain options to ‘nudge’ or ‘shove’ policy. Powell argues that there is a strong case for mandatory social insurance or tax payments directly linked to social care provision and for starting policy action now.
Stephen Hammond MP, a former health minister, explains that ‘what needs to be solved is little disputed – the scale of needs … [the] supply and how to pay to meet need’. Whereas medical social care could be aligned geographically with local health and mental health with an obligation for joint working, he warns against a ‘monolithic structure called the National Health and Social Care Service’. He continues:
…ever greater centralisation often brings unnecessary bureaucracy, lack of accountability and lack of responsiveness. There might be something to learn from more devolved systems of provision existing in other countries. A national social care body could be established with a relatively streamlined and lean central structure, but with control devolved to local trusts with more autonomy for provision and funding…aligned geographically with local health and mental health with an obligation for joint working…
Hammond proposes a scheme for social care insurance through auto-enrolment, modelled on the success of auto-enrolment for pensions, and he explains the practical steps needed to make for success.
Commenting on this publication, Sheila Lawlor, a co-author, adds: –
‘There will be no popular win for a government pledging what cannot be paid for, or for rushing headlong into an ill judged one size fits all model, least of all under the outdated, nationalised NHS model. Britain led the world through the early 20th century in developing affordable schemes based on contributory insurance to cover for the unexpected, unpredictable and un-costed circumstances of life, based on principles of contribution, affordability, incentive and sustainability.
The authors of ‘Paying for Elderly Social Care’ make practical proposals aligned with proven principles for funding social care, stability of supply and a modicum of structural change that works with the grain of people’s instincts, not against. As the UK steers its economy to recovery, policy in social care, as elsewhere, should promote the incentive to work and save, so people have the means pay their way.’
Paying for Elderly Social Care: What Principles? What Aims? by Colin Wilson, Melanie Powell, Stephen Hammond and Sheila Lawlor is published by Politeia, 14a Eccleston Street, SWW 9LT.
Colin Wilson, Deputy Government Actuary
Melanie Powell, Senior Lecturer in Economics, University of Derby
Stephen Hammond, Member of Parliament for Wimbledon and former Minister of State for Health (2018-2019)
Sheila Lawlor, Director, Politeia, 0207 799 5034, firstname.lastname@example.org
Politeia: Annabelle Newman, 0207 799 5034, email@example.com