A social care shake-up?
Follow @pwc_ukgovBy Michael Kitts, Partner, PwC
Yesterday saw the Government respond to the Dilnot review that a year ago made proposals to change the way in which social care was provided, and crucially, paid for. Expectations were high. Dilnot had generally been well received at the time and made some far reaching recommendations for change. But even in a year things have moved on considerably. Austerity continues to bite. The Euro crisis has shaken the foundations of financial robustness across the whole of Europe. The UK economy continues to trip along the bottom of growth projections. And, critically, projections of what care might cost and what funding may be available in the future don't make encouraging reading. So, rather than fully embrace Dilnot, the government has made some progress but held back on much.
The biggest gap is probably around funding. A cap on personal costs of social care had been mooted as recently as this week but whilst this has been indicated in principle there is little detail on how that might work, at what level it might be set, when it might take effect, and critically, how costs over any cap would be funded. Sustainability in funding care costs is the killer point. And with every week and month that this is not resolved, the challenge becomes potentially tougher. People are getting older - by 2033, a tenth of the population will be over 75 - and the demands they place on the social care regime are becoming greater. And this is against a backdrop of local authority budgets reducing by almost 30% over 4 years, and for many authorities, the budgets for social care dominating medium term financial strategies – our latest survey shows that social care is continuing to make the largest contribution to savings plans. The increasing gap between what's available and what's needed has to be tackled quickly.
The government's thinking on a deferred loan scheme is one option. And certainly many elderly people would see the prospect of not having to sell their homes to fund care costs as a positive. But the scheme needs to be worked through. And of course it's only likely to be helpful for those with personal equity that can be used later to repay loans.
Average household equity is calculated by some to average £200,000 but there will be significant variations and many people in rented accommodation local authorities will probably be expected to administer the loan schemes. This needs thinking through carefully - local authorities are already facing significant welfare benefit changes and cash flow and debt recovery implications will also be important. Care will be needed immediately but loans may take time to effect. They would certainly take effort to recover. Other alternatives need to be explored to help people get peace of mind on their future care - perhaps drawing upon equity but other options around insurance schemes and risk sharing need development. Few would think about starting their pension when they're ready to draw it. The same 'future provision' thinking needs to be encouraged for care costs.
National standards on access and the ability to take assessments and agreements with you have to be welcomed, helping address some of the much coined 'post code lottery'.
Local authorities can't wait for further deliberation. And we know they're not... Authorities need to take action on managing demand as well as supply of services. Better modelling, forecasting and management information is needed to support earlier intervention, and prevention. Along with improving integration with local NHS services to prioritise interventions that can "prevent, postpone and minimise people's need for formal care and support". In my experience, serious inroads can also be made into the cost of provision, in the way in which services are commissioned and managed, and the how effective the processes underpinning them are.
None of these is a panacea but while the thorny issue of overall funding continues to be deliberated, it's incumbent on all to minimise the costs of care that actually need funding. The relationship between citizen and state also needs to change. For too long there has been an expectation that the state would pay for everything on an almost limitless basis. As for pensions, most now recognise that relying on the state may not fully provide for the future. There has to be a shift of expectation. To one where individuals start to take more personal responsibility for their own well being in the future. Of course the public sector still has a key role to play, and this is particularly true for the less well off and the vulnerable. But by all of us taking a little more personal responsibility, where we can, the limited funding available to the state can be applied to those who really need it. So, yes there's more the government needs to do to think through its proposals. And there's more for local authorities to do to make sure costs of care really are minimised, and to administer any loan schemes. But there's also more we all need to do to think about our futures and how the support and care we might need to maintain our quality of life can best be provided for.
Contact details
Email: Michael Kitts
Tel: +44 (0)1509 604025
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