Cost of free personal care

Free personal care has been offered in Scotland since 2002. Under this model, personal care is provided to anyone aged 65 and over based on need alone, rather than ability to pay. The assessment for receipt of personal care includes personal hygiene, continence, diet, mobility, counselling, simple treatments and personal assistance.

The approach varies depending on whether an individual receives personal care in their own home, or in a care home:

  • Those receiving care in their own home are not charged for any personal care services. The package offered varies on a case-by-case basis. The net expenditure on domiciliary care services for older people in 2015/16 was £196 per week per person in 2018/19 terms. Of this, £161 was spent on free personal care.
  • For those who receive care in a residential home, the local authority contributes to the cost of their personal care (at a flat rate), directly to the care provider. As of April 2015, this contribution is £171 for personal care, plus an additional £78 per week for nursing care services should they need them. This payment does not cover accommodation costs, which are subject to a means test.

Given that personal care is available to anyone who needs it, Scotland has had to scale back its offer since its introduction in 2002. When free personal care was first introduced, domiciliary care included ‘mopping and shopping’; since 2002 additional care of this nature (housework, laundry, shopping or lunch clubs) is charged for. Free personal care provides a minimum level of social care to all people in need, regardless of their level of income, savings and assets.

We estimate that the introduction of free personal care would cost an additional £4.3bn, based on 2015/16 data. In addition, we estimate that the number of people provided with publicly funded domiciliary care and residential care both increase as a result of free personal care. The remainder of this chapter explains how we arrive at this figure.

Method

We took multiple approaches to estimating the cost of free personal care – each provided a similar estimate. To estimate the cost implications of introducing free personal care in England, we have made use of Scotland’s free personal care numbers. Free personal care in England would involve offering care not just to those in need who already receive residential or domiciliary care, but to everyone – it would also increase demand for social care services.

Domiciliary care

In Scotland, 46,910 people receive free personal care in the home, which is 4.8% of the Scottish population aged over 65. The cost of free personal care provided in the home was £161 per person per week in 2015/16, which is an annual cost of £8,363. Free personal care in Scotland is a more restricted version of publicly funded domiciliary care than that in England, where the average annual cost is £10,898. The version in England is a slightly more comprehensive service, including housekeeping, which free personal care does not cover.

In England, 349,131 people received privately or publicly funded domiciliary care in 2015/16, of whom 100,746 were privately funded (see Table 2). This was 3.5% of the population over 65. If we assume that the difference in the proportion of people receiving care in the home is due to unmet demand, then we might expect this figure to rise to 4.8% on the introduction of free personal care. If the same level of care remains available, the costs associated with this would be £5.2bn – a £2.5bn increase to the cost of domiciliary care. However, if it was restricted to the same free personal care services covered in Scotland, of £161 per week the increase would be £1.3bn.

Residential care

People living in publicly funded residential care homes in England already receive personal and nursing care as part of their package. The introduction of free personal care would therefore not affect this group.

However, under this model, people aged over 65 receiving privately funded residential care would receive a financial contribution towards their free personal care. In England 149,671 people paid for their own residential care in 2015/16 – 1.5% of the population aged over 65. Free nursing care is offered on the basis of additional need beyond personal care, at £78 per week. In Scotland 9,890 people are paying for their own residential care costs and receiving free personal care contributions, of whom 61% are receiving the additional nursing care. We estimate that the cost of providing free personal care to privately funded residential care users in England would be around £231 per week, or £12,020 per year. This would lead to an additional cost of £1.8bn.

We estimate the cost of introducing free personal care in England, without transition costs, would have been £4.3bn per year in 2015/16 (in real terms).

Table 8: Estimated change in costs for free personal care, 2018/19 prices

Current system

Free personal care

Estimated change

Domiciliary care

£2.7

£5.2

£2.5

Residential care

£3.4

£5.2

£1.8

Assessment and other

£1.5

£1.5

Total

£7.7

£12.0

£4.3

Note: ‘Assessment and other’ costs are those associated with the financial assessment anyone must undergo if they apply for public funding. In addition, there are costs associated with care reviews and case management.

Alternative estimates of cost

Public Expenditure Statistical Analyses

Public Expenditure Statistical Analyses (PESA) is an annual publication of the national public spending on social care for older people, both in total and on a per capita basis for each of the UK countries. The Scottish social care system, with the exception of free personal care, is very similar to England. A simple estimation of the cost of introducing FPC in England would therefore be to apply the per capita cost of old age social care to the population of England aged over 65.

By simply applying the Scottish model for ‘Old Age – Personal Social Services’ to the population aged over 65 in England, there is a cost increase of £6.7bn. This is a movement from a spend of £819 per head to £1,513 per head. This figure includes the cost of the more generous means test bands in Scotland of £16,000 and £26,000.

Commission on the Future of Health and Social Care

The Barker commission estimated that free personal care ‘for critical and substantial need’ would cost an extra £3.1bn on top of the current system in 2015. The commission also estimated that if free personal care was made available for people with ‘moderate need’ as well as ‘critical and substantial’, it would cost an extra £7.9bn each year.

Range

We therefore estimate that introducing free personal care for people aged over 65 in England would cost between £3.1bn and £6.7bn, with a central estimate of £4.3bn.


¶¶¶¶¶¶¶ In this analysis, we assume that there is the same level of underlying need for social care in the English and Scottish older populations; in reality, there are likely to be differences.

******** If the net cost of domiciliary care in Scotland was applied (£196 per week), the cost increase would be similar at £2.2bn.

†††††††† In England, 1.7% of the population aged over 65 are in receipt of publicly funded residential care. In Scotland, this figure is 2.1%. This difference could be a result of different levels of need, but also the means test in Scotland is slightly less stringent (£26,000 and £16,000 including housing assets, as opposed to $23,250 and £14,250 in England).

‡‡‡‡‡‡‡‡ Free nursing care is currently provided by the NHS, so this may not require new public funding from taxation, but rather a movement of funding from the NHS’s budget (worth around £525m in 2015/16 in 2018/19 prices; for more see: https://www.whatdotheyknow.com/request/chc_fnc_and_agency_expenditure_2

§§§§§§§§ See: Scottish Government. Free Personal & Nursing Care Information. Available at: http://www.gov.scot/Topics/Statistics/Browse/Health/Data/FPNCInfo

¶¶¶¶¶¶¶¶ (£181+£82)*61.2%) + (£181*38.8%) = £231. This is the weekly cost of privately funded residential care users who receive free nursing care support, according to Scottish free personal care data. The £171 and £78 figures for personal and nursing care have been adjusted to 2018/19 terms.

********* Adjusted from 2012/13 in the Barker report to 2018/19 real terms here.

††††††††† The Barker Commission Report considers social care need in terms of the fair access to care services (FACS) guidelines.

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