After much pressure over many years it seems that very soon the government will announce plans to reform the nation’s broken social care system and bring about a sustainable Long Term Care plan..
It has been stated that the basic method of funding this will by means of an increase in National Insurance contributions.
There has been speculation about the contribution rates that about 25 million working people in the country will have to pay.
It has been said that the Sajid Javid, the Health Secretary, wants 2% contributions, that Rishi Sunak, the Chancellor, wants 1.25% and the Prime Minister, Boris Johnson, 1%. The reality is that the lower the contributions, the less beneficial the new plan will be. This means that one of the main purposes of the scheme, to provide for the costs of Long term Care without having to dispose of your home or other assets in order to do so, is diminished.
At present, it is broadly the case that if someone needing care has capital of £23,250, then they will have to fund all their care costs.
The Dilnot Commission, which the Prime Minister is reputed to favour, recommended that people with means would pay for their own health care up to a lifetime cap of what would now be about £45,000. After that the state would pay all costs.
However, in Guernsey, in the British Channel Islands, their scheme involves no cost to the individual being cared for at all. This seems a far better example to follow:
Guernsey’s existing scheme be the answer to the UK’s Care Homes Could funding crisis
Being aware of the successful Guernsey scheme for funding elderly social care, I sent the Prime Minister details of it in July 2019 after he took up office. Copies were also sent to all the opposition parties.
Unfortunately, all that has happened since then is promises that something would be done, with the issue simply been put off and put off. Meanwhile the broken social care system we have becomes worse.
The Guernsey scheme details have also been sent to a number of key charities and political bodies, and there has been support on the basis that it is the best one available, is simple, easy to manage, no means testing, is totally fair, and has proven that it works.
Many have campaigned to reform our very broken elderly social care funding system for years.
The key problem area from the government’s point of view seems to be concerns about the funding of the costs involved in setting up a successful scheme, especially as people are expected to live longer in the future. Some of the media have had articles entitled “Care crisis is a bullet that needs biting now,” and “ Fixing social care today is as vital as setting up the NHS was in 1948.”
The need to have a whole resolution, not a partial one !
The Prime Minister and the Cabinet need to have the courage that Guernsey had back in 2003, face the problem and have the vision to overcome any hurdles which appear to stand in the way.
So far there have been proposals that there should be a sort of halfway house, where people do not have to sell all their assets and/or property. Boris Johnson has stated he would like to see a lifetime cap on the costs of care, say £45,000, with the state stepping in to pay the rest.
However, what do such partial measures achieve except put off the day for a complete resolution?
They were not involved with the setting up of the NHS and should not be with this major issue.
This could be a grand achievement for the government with what should effectively be seen as an extension and integration of the NHS with social care.
It is hardly likely that the Opposition would oppose such a proposal.
The problems with the current broken system
There has been much concern in the media generally, especially recently, about the burden of Residential and Nursing Home costs for the UK’s elderly.
These costs are not only very heavy, they are also charged in an unfair way.
Those who for one reason or another have not any saving to pay for care home and nursing costs, have such costs paid for by their Local authorities. Those who do have savings are required to use them to pay for their care costs. The unfairness is such that those with assets and savings even have to sell their homes to pay for their care home coasts, if they exceed £23,250.
This policy has resulted in thousands of elderly people who have been thrifty and saved, having to use all of their savings to pay for their Care and Nursing Home costs. Many have had to sell their own homes, which they had hoped to pass on to their families.
This is a policy which discourages savings and which encourages people to fritter their saving away, in the knowledge that if they need to go into residential care, that they will not have to fund it.
What is the Guernsey scheme?
In Guernsey, one of the British Crown Dependencies, this scenario does not exist.
The Guernsey answer has been at our doorsteps for years, but has just not been noticed.
Since 2002, they have had a Long Term Care Benefit ( LTCB) scheme which provides for the costs of long term residential/nursing care in their local care homes.
Guernsey adult citizens simply pay an additional social security ( national insurance) contribution of about 2% on top of their normal contributions.
This means that all Guernsey residents are entitled to free residential and nursing care in the local care homes.
There is no means testing as it is a universal benefit paid for by the additional social security contributions.
All those who quality for this benefit have to do is to pay their state pensions towards the costs, with the government funding the difference. No one has to sell their home, their assets or give up any savings.
There are some variations, such as if a claimant wants to stay in a higher standard home, they have to fund the difference of the extra cost.
The scheme covers all types of residential care, whether it is standard residential, nursing care or mental disability care. The costs can vary tremendously but they are still met by the scheme.
It has been very successful in Guernsey and has ended the misery caused by forcing people to sell their homes and their assets.
There needs to be the will to just get on and get this done!
This scheme can work across the UK and it just needs the will to get on and do it.
In Guernsey, it has of course had some teething problems.
Guernsey has a mixture of state run and private Residential Care and Nursing Homes.
Some of the private Homes do not participate in the scheme or just partly participate.
One reason for this is they believe the scheme’s levels of support for the different types of care should be increased.
However, these are all issues which are part of a review of the scheme being undertaken by the Guernsey government.
The need to learn from Guernsey’s experience and teething problems
The main factor which needs addressing is the funding levels.
The pool of money available is running out due to more people living longer and this has meant the scheme costs have been much more than estimated when it was first set up.
It is likely that the contributions will have to increase by to maintain the levels of funding and/or that the Guernsey government will have to put in more central funding.
The citizens of Guernsey, having seen how effective the scheme is, are likely to back paying increased contributions rather than have limitations such as means testing put into the equation.
What the British government need to do is to look at the example set by Guernsey and essentially follow it.
Guernsey is a microcosm of the UK
The Guernsey example is exactly the template to follow because they have had nearly twenty years’ experience of it. Guernsey is also effectively a microcosm of the UK, with a population of about 68,000 compared to the UK’s 68 million.
It is pretty obvious that with people living longer the funding needed is going to increase.
Time to bite the bullet on elderly social care
It is estimated that the extra costs of funding elderly social care would be about £10 billion.
It is estimated that families pay about £14 billion for social care, and that they pay about 60% of social care costs, with local authorities providing the rest.
The time for the government to commit to this extra funding is actually now, as the public accept the need for vast expenditure for the benefit of the health and welfare of the nation. Well over £700 billion has been spent on dealing with the coronavirus issue, so £10 – £30 billion on elderly social care is just a pittance in comparison.
In fact the government providing the core of the funding for such social care can be viewed as part of the fight against coronavirus, its current and future variants.
It is a fact that the elderly and vulnerable are those most at risk from covid-19 and other variants.
To invest public money in a NHS integrated social care system will improve the efficiency and use of resources, so that there are not issues such as bed blocking and other pressures.
Prior to covid-19, the government and the public had a more cautious approach to the expenditure of taxpayers money. Now there is a realisation that such expenditure is sometimes absolutely necessary, and this is the approach which now needs to be taken with elderly social care. The contribution levels of approximately 2% on national insurance contributions would be seen by the public, as in Guernsey, as a worthwhile contribution to their own future welfare care as well as for others.
The Guernsey scheme, when compared with others, is unbeatable
It is remarkable that the UK government, who have been investigating long term care issues for years, have simply paid no notice to the success of the Guernsey scheme. The Guernsey scheme is far better than anything proposed in the UK so far, and its merits are its fairness and that it works.
Guernsey did indeed face some opposition when proposals to set it up were put to the Island States ( Parliament), and these were based on objecting to the contributions.
I know because I was an elected Member of the States of Guernsey at the time and a passionate supporter of this innovative answer to Care Home costs.
In the UK there will be opposition to the proposed costs, which could be in the region of another 2% on national insurance costs. These contributions could be less if reasonable government funding was put in, but delay in dealing with this issue will only make it worse. In Guernsey, the government has had to fund the difference otherwise the contributions would have to increase to about 3%.
Guernsey scheme also provides for care in own homes
Guernsey already is ahead of the game and bringing about cohesion in care for the elderly, whether it is care in people’s own homes or care in a residential home.
They are aware that providing care in people’s own homes is generally more cost effective and economical than care home care solely. More and more home care services are becoming available at no cost to those concerned.
The same needs to be the case with home care services in the UK. There has to be a standard of both and residential care services which are equal across the home nations, with no postcode lottery at work.
This is an issue which could make the new Prime Minister very popular if he made sure this issue was resolved at long last.
The Prime Minister should not be over concerned about some Tory MP’s who maintain that it would break the 2019 Election manifesto pledge the Conservatives made about not increasing Income Tax, VAT or National Insurance Contributions, because they also promised to bring forwards proposals to fund social care. It could also be argued that such proposals are effectively a new means of raising revenue ( as is the case in Guernsey).
The public are well aware such proposals have to be funded in the same way that the original setting up of the NHS needed funding.
There is also the fact that the costs of dealing with the coronavirus crisis have dwarfed the costs of funding social care. The public expects this to be resolved, even if it results in additional costs for both the government and them.
Resolving this issue simply cannot be put off any longer. This should ideally be a UK wide scheme as the Scottish one is inadequate too.
Anthony Webber
Independent Political Commentator
Former Member of the States ( Parliament) of Guernsey, 1991-2004.
07824 444604
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