Social Care Premium urged to fund personal care for all

Two Commons committees have released a joint report urging for a sustainable funding solution for adult social care, including a call for a new tax on over-40s to help pay for elderly care for all.

The Housing, Communities and Local Government Committee and the Health and Social Care Committee call for the introduction of a ‘Social Care Premium’, to be paid by those aged over 40 and extended to those over the age of 65, either as an additional element of National Insurance or with the premium paid into dedicated not-for-profit social insurance fund that people would be confident could only be used for social care.

With the current system ‘under very great and unsustainable strain’, the MPs emphasise the urgent need to plug a funding gap, estimated at up to £2.5 billion in the next financial year, before introducing wider funding reforms at both a local and national level to raise extra revenue with a long-term aspiration of providing social care free at the point of delivery.

Recognising that ideal reforms that the personal element of social care be delivered free to all who need it remains unlikely to be affordable immediately, the committees recommend that it should begin by extending free personal care to people deemed to have 'critical' needs.

Further funding reforms outlined in the report include levying an extra amount of Inheritance Tax on estates valued above a certain threshold and capped at a percentage of the total value, as well as reform of council tax valuations and bands and for local authorities to be able to use new funding from additional business rates retention in 2020 to fund social care rather than as a replacement of grants from the government.

Clive Betts, chair of the Housing, Communities and Local Government Committee, said: "The social care system is in a critical condition and there is an urgent need for more funding both now and in the future to ensure people are properly looked after. While we have set out steps to ease the financial pressure on local authorities delivering the service, reforms at a local level will not be enough if we are to rise to the challenge of providing high-quality care for all those that need it.

“We heard during the inquiry that people would be willing to pay more if there was an absolute guarantee that the extra money would go on social care. Given the huge funding gulf, the government should now take the opportunity to build both a political and public consensus around the need for a new Social Care Premium to secure a fair and sustainable system in the long-term. The government must also consider social care in its wider context and ensure a proper joined up approach with other services such as public health and housing."

Sarah Wollaston, chair of the Health and Social Care Committee, said: "We can no longer delay finding a fair and sustainable settlement for social care. Too many people are being left without the care and support they need and it is time for decisions to be made about how the costs are shared. This report from MPs across the political spectrum also draws on the informed views of a Citizens’ Assembly in setting out our recommendations to government. Doing nothing cannot be an option."