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The Actuary The magazine of the Institute & Faculty of Actuaries

Elizabeth Feltoe: What next for social care?

Long before the credit crunch took hold, social care was generally accepted to be in crisis. Poor quality services, a chronic lack of investment and an under-appreciated workforce led to criticisms that it was failing to deliver care and support for the people who need it most.

The state of the economy is the defining issue of the times — but while the period of economic, political and personal insecurity continues, so too will the growing need for social care and support. The UK has an increasingly ageing population — over-65s now outnumber under-16s for the first time and generally, people are living longer. By 2017, it is expected that nearly seven million older people will struggle to walk up a flight of stairs, and more than one million people aged 75 plus will find it very difficult to get to their local hospital. The growing need for care and support services will run alongside increasing downward pressure on public spending. By 2013/14, public spending is projected to have fallen by £37 billion (Green Budget 2009, Institute for Fiscal Studies, 2009).

A political conundrum
Politically, social care seems to be in the ‘too hard’ basket. There are rumblings from Labour regarding their policies for the future and promises of a Green Paper which will look at options. However, there is the question of ‘how green is green?’ There is no guarantee of a White Paper or legislation following the Green Paper, so it could simply drop off the agenda before a general election.

More needs to be said by the Conservatives about their policy planning in this area. The Liberal Democrats meanwhile have proposed a universal minimum entitlement, which could be topped up by individual contributions matched by the state. A political consensus is urgently needed, but it is difficult when the parties themselves seem unable to decide what to propose for the future. In challenging financial and political times, what will happen to older people needing care and support? How can we improve the quality of life for our ageing population?

The options
One option is to increase taxes so that the state can provide the services. Yet we have a lower proportion of working people to retired people than ever before, and there is a question about placing the financial burden on younger generations who are already struggling to get onto the housing ladder, pay into a pension and pay off student loans. Alternatively, we could release capital from existing sources — property, shares or savings — or tax people at particular points in their life. The money could be paid into a specific ring-fenced fund for care, or added to the general pot of taxation. Another option is to put a heavier emphasis on the role of the individual and their own responsibility by making sure they can afford care services when they need them.

From a fiscal perspective, essentially it boils down to three options: more money from the state, more money from the individual or a combination of both. Around 1.25 million people — mostly family members — provide more than 50 hours of care per week through informal care networks (Carers UK, Facts about carers, 2009). Removing the disincentives and barriers to caring, increasing income replacement benefits, providing respite services and, most importantly, giving an option not to care, must surely form part of the solution to the future conundrum of care.

Where to from here?
We need to understand the importance of addressing this issue now so that future generations of older people can live independently. We also need a new funding settlement which balances the state’s responsibility to care for the most vulnerable in society, alongside a wider recognition that individuals will also need to contribute financially to their own care and support. One thing is for certain, without drastic improvements, the future looks deeply challenging for our older population.

Elizabeth Feltoe is a senior social care policy officer for Age Concern and Help the Aged