Discussion

The case for changing the model for publicly funded social care is strong, and widely accepted. But one of the major barriers to change is the additional funding that would be required. This would need to be met through additional taxation, reductions in benefits or other public service budgets, or through increased public borrowing. The case for additional investment in a public service is always challenging, but more so in the current context of the government looking to reduce the national public deficit.

Despite this, extra central government funding has been made available through the IBCF, while councils are now allowed to raise additional local revenue through the social care precept. The recommitment to a social care green paper in the 2017 Conservative Party manifesto, and the change in remit for the renamed Department for Health and Social Care, also highlight the increasing priority of social care for p colicymakers.

Yet, our projections show that even continuing with the current model of care would require additional investment above our estimates for the budget, to close a funding gap of around £1.5bn in 2020/21 and £6.1bn by 2030/31. Improving or changing the model could increase the gap to between £11.9bn and £15.4bn by 2030/31.

Providing this increased level of funding would allow providers to keep pace with demand and cost pressures, but would not allow for any improvements in care. There may be some scope for reducing pressures through improvement in the productivity with which services are provided, although this is likely to be marginal. It may also only help stabilise the current market, rather than result in any observable improvements.

Even with higher growth in productivity, additional funding would still be required for substantive improvements. This could be found from other areas of public spending, or additional borrowing. But with other services already facing further cuts, and the government committed to reducing the national budget deficit, it is likely that additional taxation will be required. We have shown that even continuing with the current system presents a challenge that cannot be addressed with a straightforward tax increase in the long run. Rather, a suite of changes to taxes and benefits is needed. How this is done depends on a number of trade-offs on the amount required and how it is to be raised. Decisions include:

  • finding a balance between protecting those with the lowest personal resources and protecting people from catastrophic costs
  • continuing with the current level of provision, restoring past levels of eligibility, increasing the number of people eligible, or moving towards a more universal approach, as provided by the NHS for health care
  • how the relative contributions of working age and older people towards paying for care are defined
  • whether funding is raised against people’s income or their wealth.

There are no clear solutions to these challenges; each requires substantial compromise. It is therefore critical to engage the public to make sure that decisions are made in the best interests of public values. Supporting work by the Health Foundation and The King’s Fund has included a series of public engagements to support these key decisions, with findings available in an accompanying report. The implications on policy of combining the options discussed in this report with public opinion on social care are discussed in a jointly published paper.

Conclusion

Our modelling shows that additional revenue will need to be raised for adult social care services even without a change in the model. Failing to do so could lead to a decline in access and quality of services, which would likely lead to a fall in quality of life for many people, as well as additional costs for other public services, particularly the NHS.

There are two key questions now facing policymakers and government. The first: given that additional tax revenue will be required to protect the range and quality of care services, should there be a small increase in taxes to allow for the current levels of access and quality to be maintained, or a larger increase to provide an improved standard of service? And the second: would this improvement would be better done through additional funding for the current model, or through changes to the model of care to better suit the needs and preferences of the current and future population?

Previous Next