The Future Funding of Care and Support

The future funding of care and support

TUC submission to the Dilnot Commission

Introduction

This document presents the TUC's response to the Commission on Funding of Care and Support's 'Call for Evidence.' It has been written after consultation with the main unions representing workers in social care and taking into account the views expressed by unions generally, and by retired and disabled trades unionists when producing the TUC submission to the last government's 'national debate' on care and support and our response to 'Shaping the Future of Care Together.'

The TUC is the voice of Britain at work. With 58 affiliated unions representing more than six million working people from all industries and occupations, we campaign for a fair deal at work and for social justice at home and abroad. We negotiate in Europe, and at home build links with political parties, business, local communities and wider society.

The TUC appreciates the importance of the Commission's task and we are grateful for this opportunity to contribute to its work.

Summary

This document covers issues directly related to funding social care. Unions have substantial policies on such issues as workforce development and equalities; we would be happy to provide more information on them if the Commission would find this helpful.

The TUC believes that the social care system that social care should be underpinned by the principles of respect, equality and independence.

Cuts are making it more difficult to establish an adequately funded high quality social care system.

The TUC agrees with the Commission's description of demographic trends that are likely to increase the cost of social care. We do not agree that older people will necessarily continue to be (on average) better off than other age groups; problems with personal, occupational and state pensions make it likely that this trend will reverse.

Poverty and inequality increase the demand for social care. It seems likely that these problems will get worse over the next few years.

The TUC believes that the 'postcode lottery' is one of the major weaknesses of the current system.

There is too much means-testing in the current system; unions object to means-testing on principle.

The TUC agrees with personalisation provided it is genuinely voluntary and does not lead to the casualisation of employment in the care industry.

The TUC supports the creation of a National Care Service, free at point of need and paid for from general taxation.

Unions do not support relying on private insurance to fund social care. The experience of the USA - where a large majority has no alternative - is that most people remain uncovered and trust to luck that they will never need social care.

The TUC believes that local authorities could have an important role in a National Care Service, with responsibility for delivery and for quality. We believe, however, that a national framework for assessment and eligibility would be the heart of a National Care Service and that local authorities should not be able to deviate from such a framework, except where there are local variations in costs.

TUC policy on the future of social care

Some TUC policies are beyond the scope of the call for evidence. We believe that a high quality social care system depends on well-paid, well motivated and trained staff. This has implications for the necessary level of funding, and we can present further evidence on such as issues as training, staff involvement, pay and conditions if the Commission would find it useful.

Unions believe strongly in equal treatment for service users of all ages, of black and ethnic minority and white disabled people and for people with physical impairments and mental health problems. The funding system should make provision for different access arrangements to achieve equal service delivery.

Principles for reform

We have argued that social care should be underpinned by the principles of respect, equality and independence. We believe that the work of informal carers and paid workers should be recognised and supported and that the social care system should promote the access to the workplace and the wider community of disabled people and other service users.

There is obvious common ground with the Commission's criteria of fairness and choice and the principles of promoting the well-being of individuals and families and recognising the valuable contributions of everyone involved in care and support (p. 20 of the call for evidence).

The impact of cuts

Social care is already underfunded, and is being hit by the cuts to council budgets with many councils reviewing and tightening their eligibility criteria. Although the government has increased some resources, we doubt whether this will compensate for the removal of ring fencing; the quality standards that are achieved now are threatened by cuts. There are so many examples of this we are spoiled for choice, but if we limit ourselves to examples that emerged in the week before the deadline for responses to the call for evidence we have:

• The National Housing Federation reporting that

Women fleeing domestic violence, pensioners who rely on support to help them live independently at home and people with mental health problems are amongthe groups who could be left to fend for themselves as a result of significant cutbacks in the services they rely upon.

• Shropshire Council closing the Grange day care centre in Shrewsbury;
• Government concerns that local authorities are already cutting their Supporting People budgets; and
• Disability and children's services being cut in Cambridgeshire.

Opportunities and challenges facing the system

In other sections, we argue that demands for higher quality services and for decent standards for all users will tend to lead to a bigger social care budget. We agree with the Commission's description of the demographic forces that will tend to lead to increased need for social care.

We would, however, caution against relying on the current reality that older people tend to have more wealth than younger people. Defined benefit pensions are disappearing, public sector pensions are being made much less generous and the shift from uprating in line with the Retail Price Index to the Consumer Price Index will tend to reduce the value of state and public sector pensions. It is not reasonable to assume that the proportion older people able to pay for their own care will continue rising. As the Pensions Commission put it, 'the state plans to provide decreasing support for many people in order to control expenditure in the face of an ageing population and the private system is not developing to offset the state's retreating role. Instead it is in significant decline.'

Poverty, inequality and the funding of social care

The degree of need for social care is, to some extent, socially determined. The individuals who are likely to need help from social care services are those who are poor. As the Social Care Institute for Excellence has reported, 'it is accepted that families living in poverty are over represented as users of some children's and families' services, including those of an involuntary rather than voluntary nature.'

When we turn from individuals to social need, the degree of inequality is almost certainly a determining factor. The Equality Trust has pointed out that, among richer countries, differences in health outcomes are very closely related to differences in income inequality: the more unequal a country is, the worse its outcomes. This association certainly applies to mental health; as the World Health Organisation put it in a report drawing heavily on British evidence, poor mental health is

'both a cause and a consequence of the experience of social, economic and environmental inequalities. Mental health problems are more common in areas of deprivation and poor mental health is consistently associated with unemployment, less education, low income or material standard of living, in addition to poor physical health and adverse life events.'

The optimistic conclusion to be drawn from this relationship is that alleviating poverty and inequality across society would reduce the cost of generous social care provision. Unfortunately, poverty and inequality seem likely to grow, at least in the near future and this will have long-term consequences for spending on social services.

Problems with the current system

The TUC agrees with the last government's Green Paper on 'Shaping the Future of Care Together' that one of the problems afflicting current social care provision is the absence of a consistent national framework. Local authorities interpret the guidelines in very different ways; whilst not strictly a funding issue this does lead to a 'postcode lottery' that has serious funding issues. In particular, the level of need that qualifies for services and the contribution required from individuals varies a great deal from one Council to another.

Means- and needs-testing is a major issue for unions. We object to means-testing in principle. The confusion of provision can mean that means-testing in social care is particularly unfair: some people receive no care, some have to run down their savings and resources until they have very little left and some receive no care until their needs are extreme.

We agree with Commission that confusion about just what people are entitled to is a significant issue. For many families confusion and/or uncertainty significantly increase the stress they face at what is often already a very difficult time.

Personalisation

Unions have pressed on us the importance of support and recognition for both informal carers and paid staff, whilst at the same time acknowledging the primacy of the interests of those being cared for. We believe that the goal should be a system in which any of us would be happy to be employed, act as an unpaid carer or receive care.

Disabled trades unionists have impressed on the TUC the importance of disabled people's long march to independence and the importance of having control of the care they receive.

Retired trade unionists have insisted that personalisation should not be imposed on people who receive care services. Many people, especially older people, do not want to be responsible for managing their care package.

Care workers have told us that working in a direct payments system can be rewarding but that they also want pay levels and conditions of service (such as paid holidays, pensions, maternity leave and pay and sick pay) that are at least as good as those provided by local authorities.

These goals are compatible. Personal budgets need not be compulsory and arrangements can be put in place to give care service users access to HR support from public authorities. But this will not happen by accident and it is by no means a cheap alternative.

A National Care Service

The TUC supports the creation of a National Care Service, with entitlement based on need, provided free of charge and paid for from general taxation. We believe that the 'NHS model' is the simplest and most equitable and progressive basis for providing social care. This model is also supported by the National Pensioners Convention and we are aware that the United Kingdom Homecare Association is consulting its members on adopting the position that that

'anyone assessed as needing care should be entitled to a basic, minimum level of care from public funds. UKHCA believes that this 'basic' package of care should be high-quality care and funded to a level that would include the option to use regulated care services.'

It is difficult to divorce the discussion about the funding model from the overall structure of the service; the funding model is likely to determine the type of system. The search for a system that allows people to live as independently as possible and with dignity implies a call for generous funding. Our call for investment in the training and education of well-paid and independently represented staff also implies a high-investment model for the Service.

These considerations of expense have profound implications. Any system that provides social care on a means-tested basis will leave some people paying twice - paying for themselves and for those too poor to follow suit. The more closely it comes to the standards necessary to achieve the principles and criteria it has set out the more expensive it would be for people in this position. Many would genuinely be unable to do so and would almost certainly press for savings - which would translate into low standards.

We believe that a National Care Service, providing care at such a standard that only a small minority would want to use an alternative (and have the money to afford it) could generate support for the level of taxation necessary to fund it. Although a generous social care system would still be just as expensive, the pressure to provide a lesser service for the undeserving poor would be reduced because most people would recognise that they could be among the people facing cuts.

The well being of a country is intimately related to the nature of its welfare state, and a non-means-tested universalist approach brings important advantages. As the World Health Organisation has noted:

'Generous universal social protection systems are associated with better population health, including lower excess mortality among the old and lower mortality levels among socially disadvantaged groups. Budgets for social protection tend to be larger, and perhaps more sustainable, in countries with universal protection systems; poverty and income inequality tend to be smaller in these countries compared to countries with systems that target the poor.'

The last government's 'national debate' on care and support uncovered a great deal of popular support for a National Care Service. The only reason people were willing to accept that it was unlikely to be introduced was a belief that political opposition would be too extreme. As the summary of the national debate puts it:

'Free at point of need was seen as desirable and the most appropriate model, but many felt that it is unachievable, and a form of co-payment was perceived to be the best compromise solution.

'Taxation was seen as the most equitable solution but there was also recognition that this is unlikely to be politically acceptable.'

Most participants seem to have believed that, politics aside, 'funding through taxation is the most equitable solution and that a collective approach to funding would help pool risk and ensure that individuals were not left unable to pay for their care and support.'

When participants were asked to consider who should bear the burden of the likely increase in the cost of social care their strong preference was for the whole of society taking up the burden:

Who should pay more in the future?

Everyone in society	82%
Individuals who need care and support service	8%
Families of individuals who need care and support services	8%
No answer	2%

As is so often the case in public discussions about social justice, a great deal depends on the way in which the question is put. The terms of the national debate - which emphasised the growing costs of social care - are very likely to have led participants to assume that what they wanted was unrealistic. An important framing element is the leadership given by politicians - by the options they include and exclude they indicate the size of the realm of the possible.

If this country did not have a National Health Service, we would undoubtedly be told that creating one was unrealistic and that the taxation needed to pay for it would be prohibitive. As it already exists, we accept that a decent service has to be paid for and politicians proposing large cuts soon find they are unpopular. A decent National Care Service, once established, would attract the same support.

An insurance model

An insurance model could allow people to top up whatever level of care was provided publicly through insurance (which might be voluntary or could be mandatory). This would have the advantage of making it more likely that people would know how much they would be likely to pay for future care costs. However, given the evidence of state pensions, with very few individuals able or willing to make additional contributions, it is difficult to see how people would be persuaded to contribute to voluntary insurance for social care. They would mean that people who do not take out insurance could potentially face the risk of high costs later in life. It would also be highly divisive, placing a stark division between those able and unable to afford insurance.

In previous discussions of funding options for social care, private insurance has produced the most vehement opposition from trade unionists. Insurance relies on relating premiums to the level of an individual's risk. This means that disabled people, members of some ethnic groups, women and workers with atypical employment contracts (such as temporary workers) or certain employment patterns (such as some shift workers) would all have to pay higher premiums. This characteristic of private insurance is not only objectionable in itself; it would tend to force the highest costs on those least able to pay them, as all these groups have below-average incomes.

We also have grave doubts about the ability of the private insurance market to meet the needs set out in the call for evidence. As the Royal Commission noted in 1999:

'Left to grow without intervention, there seems little reason to think that private insurance will become more important in the UK than it has become over a 14-year period of development in America. At present only 4% - 5% of Americans have taken out LTCI, while 10% - 20% could afford to do so and 80% - 90% could not afford the cost in any event. Marketing through employers and partnership schemes with State Governments have been introduced in America and equity release products are available. According to expert witnesses, and the evidence cited earlier to a Senate committee, private insurance is not now, and is unlikely to become, the major way of funding long-term care in America. ...

'The Commission conclude that private sector solutions do not and in the foreseeable future, will not offer a universal solution. Even schemes for partnership can make only a limited contribution. Inevitably, of course, people may consider one of the many schemes available from the private sector to be worthwhile for them provided they can pay the premiums. Overall however, the funding problem cannot therefore be solved by the private sector.'

Should care be organised nationally or locally?

One of the most progressive elements of the last government's proposals was the national framework for assessment and eligibility and we hope that the new government will continue with this approach. It is essential if we are to eliminate the huge variation in entitlement from one part of the country to another that has so upset many members of the public. Where care system users opt for individual budgets or direct payments, for instance, it is very important that they should receive similar levels of support across the country, with any variations only related to local variations in costs.

A necessary corollary of this approach is that while some level of local autonomy is to be encouraged, local authorities must not be allowed to break with the national rules on assessment and eligibility. Unions do not believe that a system in which Councils could still set the actual amount of funding someone would receive could still be called a National Care Service - which is the goal at which we aim.

It would still be possible, in such a service, for local authorities to receive funding and hold responsibility for the delivery of social care services, giving them an important role in overseeing the quality of provision.