What would the Conservatives’ proposed funding of social care mean for adults with learning disabilities? Most don’t have this scale of capital or own their house although we’ve had shared ownership models and some parents leaving them their house or providing a house… However parents and family carers do age and if they live long enough may need care themselves.
So assuming they have housing or capital, how would this impact on people and /or their families?
To my mind the proposal anyway is deeply flawed, unlikely to assist LAs desperately trying to make their books balance, as the continued cuts bite – worst as we know in the poorest more deprived areas. Might this actually raise money though?
It seems to me there’s no glimmer of hope in this. The main gainers could be those with property and the rich ofcourse, but the main losers are likely to be the Local Authorities on whom the burden will fall to manage the very heavy additional administrative burden, probably be expected to raise what they need from these charges and will have to manage the fall-out on the care market as the self-funders come to the LA to fund their care, given the limit on care costs from a cap. If there hadn’t been a cap, maybe the LA could have bought the house for £100k on the death of the person and increased their housing stock, or maybe it would have encouraged their families to gift the house across to the person, so it wouldn’t be lost in care fees for the parents’ older age!
What will the costs be on LAs of administering the charges, and what will the impact be on the market?
Elderly people in residential care live on average for 2 1/2 yrs – the median being 15 months – as they tend not to go in until it is too costly to care for them at home – so mostly 85 and over. Hence current deferred charges collections on their house should not shift too far into the future so it’s not too burdensome for LAs to manage this debt. However, including the home care market means managing a changing valuation of the property across many years as people supported at home may live for many many years receiving care – and before they go into a care home. Ofcourse depending on the cap, the LAs might do this financial assessment, track the valuation across the years and then end up finding the person has reached the capped amount on their ongoing payments – particularly if they are younger disabled adults! However one guesses that this will be complicated by the cap being uprated annually…
If you therefore add on a cap on total care charges, this is going to massively increase the costs on the Local Authorities – not only on the reduced income from those currently paying charges for their home care services based on the far lower figure of £23500 , but also because they will have current and future self-funders coming to them so as to limit their spend and so maximize what they leave in their inheritance.
At the moment people with significant resources don’t go through the LA, because they would have to pay the full charge, so LA would now have the additional costs of social workers to assess their eligibility for care, and their financial contribution, and track their spend for when they reach the ceiling. Not only this but as is really clear from the market analysis (see Laing and Buisson quoted in the government briefing below), self-funders are paying well-above the LA rate for care and this is subsidising the LA placements which are below the level needed for companies to continue in business. The extent of subsidy also varies across the country but is significant so the impact will be higher in some areas than others.
So this move to cap charges is either going to cost the government a lot of money to keep the market working and engaged (probably more than they collect), or it will result in unprofitable businesses leaving the market….. and LAs already poised to be unable to meet their statutory duties, going bust. The care home system is already creaking from the fee squeeze, national “living” wage (NLW) increases and the social care workers’ recruitment crisis (likely to be further exacerbated by Brexit), but this could well break it as hedge fund-driven/investor funded private care services can no longer yield the percentage needed for investors and they switch to another sector.
In the end, this won’t be manageable and probably won’t raise the money needed. The people who’d benefit will be those who would normally not go to LA and buy their care direct.
One would have thought the way to manage this fairly and with least administrative burden on hard-pressed LAs would have been to raise inheritance tax and/or other taxation to be able to use directly instead of additional charges with all the complexity of administration and unintended destabilisation of the market consequences. This would impact fairly according to means and be directed into services, as opposed to being diverted into unwieldy administration and debt management!
Government think again! If you are returned into Government and are pledged to deliver this, this maybe the worst mistake you could make in terms of value for money and impact on social care and the market. It’s difficult to see what wriggle room you have though without another U-Turn….and I shudder to think of what impact this might have on the lives of other vulnerable adults, such as adults with learning disabilities. Presumably, they’ll be told their (statutory) needs have further shrunk as the LA can no longer pay for their proper support….and redefines what will “best” meet their needs.
Notes from House of Commons Briefing Paper number: 07463 20 February 2017
- Private payers pay 43% private pay premium on average often for exactly the same room size and service
|As the table below from LaingBuisson for 2014 demonstrates, the pool of self-funders varies region-by-region:15
|Yorkshire and the Humber||42%|
|East of England||45%|
|Northern Ireland & Isle of Man||16%|