ad presentation to lga summit 13th july[1]
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Conclusions and recommendations of the Commission on Funding of Care and Support
4th July 2011
Fairer care funding
Conclusions and recommendations of the Commission on Funding of Care and Support
The Commission’s remitThe Government asked the Commission to recommend:
– how best to meet the costs of care and support as a partnership between individuals and the state;
– how people could choose to protect their assets, especially their homes, against the cost of care;
– how, both now and in the future, public funding for the care and support system can be best used to meet care and support needs.
Setting the context
Conclusions and recommendations of the Commission on Funding of Care and Support
The number of older people is increasing
0%
20%
40%
60%
80%
100%
65-69 70-74 75-79 80-84 85+
Growth in the number of older people in England 2010-2030
Conclusions and recommendations of the Commission on Funding of Care and Support
Flexible societies are good at adaptingProportion of UK population aged 65 and over
0%
5%
10%
15%
20%
25%
1901 1921 1939 1961 1981 2001 2021
Conclusions and recommendations of the Commission on Funding of Care and Support
We are four times richer than in 1948Gross domestic product, UK
£0bn
£200bn
£400bn
£600bn
£800bn
£1,000bn
£1,200bn
£1,400bn
£1,600bn
1948 1958 1968 1978 1988 1998 2008
Conclusions and recommendations of the Commission on Funding of Care and Support
Social care is one element of state supportPublic spending on older people in England 2010/11
Social security benefits
Social care
NHS
£0bn
£50bn
£100bn
£150bn
Conclusions and recommendations of the Commission on Funding of Care and Support
Care costs are uncertain and can be very highExpected future lifetime cost of care for people aged 65 in 2009/10
£0k
£50k
£100k
£150k
£200k
£250k
£300k
0% 20% 40% 60% 80% 100%
Problems with thecurrent system
Conclusions and recommendations of the Commission on Funding of Care and Support
Funding has not kept up with demandExpenditure and demand: older people’s social care (2009/10 prices)
Expenditure
Demand
£6.0bn
£6.5bn
£7.0bn
£7.5bn
£8.0bn
2005/06 2006/07 2007/08 2008/09 2009/10
Conclusions and recommendations of the Commission on Funding of Care and Support
People face high costs in the current systemMaximum possible asset depletion for people with £150k residential care costs
5% 25% Median 75% 95%
£0k
£25k
£50k
£75k
£100k
£125k
£150k
£175k
£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k
Assets on going into care
Max
imum
pos
sibl
e as
set d
eple
tion
Percentiles of housing wealth
Conclusions and recommendations of the Commission on Funding of Care and Support
Some people can lose most of their assetsMaximum possible asset depletion for people in residential care
5% 25% Median 75% 95%
0%
20%
40%
60%
80%
100%
£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k
Assets on going into care
Max
imum
pos
sibl
e as
set d
eple
tion
Percentiles of housing wealth
£150k lifetimecost
£100k
£75k
Capping the cost of care
Conclusions and recommendations of the Commission on Funding of Care and Support
A cap removes the risk of very high costsExpected lifetime costs for people going into care in 2010/11, by percentile
£0k
£50k
£100k
£150k
£200k
0% 20% 40% 60% 80% 100%
Conclusions and recommendations of the Commission on Funding of Care and Support
A cap removes the risk of very high costsExpected lifetime costs for people going into care in 2010/11, by percentile
£0k
£50k
£100k
£150k
£200k
0% 20% 40% 60% 80% 100%
Conclusions and recommendations of the Commission on Funding of Care and Support
And offers significant asset protection Maximum possible asset depletion for people with £150k residential care costs
5% 25% Median 75% 95%
0%
20%
40%
60%
80%
100%
£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k
Assets on going into care
Max
imum
pos
sibl
e as
set d
eple
tion
Percentiles of housing wealth
Current system
£35k cap
Conclusions and recommendations of the Commission on Funding of Care and Support
But we also need to reform the means testThe effect of extending the means test on the amount of support people receive
Currentsystem
0%
20%
40%
60%
80%
100%
£0k £25k £50k £75k £100k £125k
Conclusions and recommendations of the Commission on Funding of Care and Support
But we also need to reform the means testThe effect of extending the means test on the amount of support people receive
Reformed system
Currentsystem
0%
20%
40%
60%
80%
100%
£0k £25k £50k £75k £100k £125k
Conclusions and recommendations of the Commission on Funding of Care and Support
Extending the means test helps the poorestMaximum possible asset depletion for people with £150k residential care costs
5% 25% Median 75% 95%
0%
20%
40%
60%
80%
100%
£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k
Assets on going into care
Max
imum
pos
sibl
e as
set d
eple
tion
Percentiles of housing wealth
Current system
£35k cap
Conclusions and recommendations of the Commission on Funding of Care and Support
Extending the means test helps the poorestMaximum possible asset depletion for people with £150k residential care costs
5% 25% Median 75% 95%
0%
20%
40%
60%
80%
100%
£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k
Assets on going into care
Max
imum
pos
sibl
e as
set d
eple
tion
Percentiles of housing wealth
£35k cap with extended means test
Current system
Conclusions and recommendations of the Commission on Funding of Care and Support
The reforms reduce the costs individuals face
Initial level of wealthMaximum spend on care
£40,000
£50,000
£70,000
£100,000
£150,000
£9,000
£12,000
£18,000
£28,000
£35,000
Conclusions and recommendations of the Commission on Funding of Care and Support
General living costs− People in residential care would need to
make a contribution towards their general living costs (such as food and heating).
− People have to pay these costs if they live at home.
− Believe this contribution should be fixed - recommending between £7,000 and £10,000 p.a. (as the maximum possible contribution).
The cost and impactsof reform
Conclusions and recommendations of the Commission on Funding of Care and Support
All spending: £697bn
Conclusions and recommendations of the Commission on Funding of Care and Support
All spending: £697bn
NHS: £103bn
Conclusions and recommendations of the Commission on Funding of Care and Support
All spending: £697bn
NHS: £103bn
Social security for older people: £85bn
Conclusions and recommendations of the Commission on Funding of Care and Support
All spending: £697bn
NHS: £103bn
Social security for older people: £85bn
Education: £61bn
Conclusions and recommendations of the Commission on Funding of Care and Support
All spending: £697bn
NHS: £103bn
Social security for older people: £85bn
Education: £61bn
Defence: £44bn
Conclusions and recommendations of the Commission on Funding of Care and Support
All spending: £697bn
NHS: £103bn
Social security for older people: £85bn
Education: £61bn
Defence: £44bn
Social care and disability benefits for adults: £27bn
Conclusions and recommendations of the Commission on Funding of Care and Support
All spending: £697bn
NHS: £103bn
Social security for older people: £85bn
Education: £61bn
Defence: £44bn
The cost of reform: £2bn
Social care and disability benefits for adults: £27bn
Conclusions and recommendations of the Commission on Funding of Care and Support
Who benefits from the reforms?Public expenditure on social care, by income quintile
£0.0bn
£0.5bn
£1.0bn
£1.5bn
£2.0bn
£2.5bn
Bottom 2 3 4 Top
Reforms
Current system
Conclusions and recommendations of the Commission on Funding of Care and Support
Who benefits from the reforms?Additional public expenditure as a proportion of income, by income quintile
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
Bottom 2 3 4 Top
Other recommendations
Conclusions and recommendations of the Commission on Funding of Care and Support
Improved assessments− For lasting reform, we think there needs to be an
improved eligibility and assessment framework.
− We are calling for:
− national eligibility threshold;
− portable assessments; and
− the Government to develop a new, more objective, assessment scale as the basis for the future system.
Conclusions and recommendations of the Commission on Funding of Care and Support
More coherent and aligned care and support− The whole care and support system should
work better together.
− Supportive of integration between health and social care
− Want to see better alignment of assessment processes between social care, disability benefits and health.
− Recommending AA is re-branded, to make its purpose clear.
Conclusions and recommendations of the Commission on Funding of Care and Support
We are recommending other reforms including:
− A major campaign to improve information and advice
− Better information and needs assessments for carers
We think there is potential for innovation in care delivery models to really develop (e.g. extra care housing).
We also think there will be an opportunity for the financial services sector to help people with their contributions.
Thank you