With Tipping Point Looming, Government Set To Unveil Plans To Tackle Social Care Crisis
Long-awaited plans to reform social care are set to be announced as early as this week, prompting concerns over tax increases to pay for the crisis.
Prime Minister Boris Johnson is rumoured to be unveiling the plans with a National Insurance increase – a break in the Conservative manifesto not to raise taxes. The rumour has angered many MPs, healthcare and care funding experts, given it pushes a disproportionate cost onto the lowest earners.
It’s also expected another £5.5bn will be made available to the NHS to tackle the backlog and to face the upcoming winter pressures, in part caused by the pandemic.
It’s reported Boris Johnson, Chancellor Rishi Sunak and Health Secretary Sajid Javid have been discussing the plans, but are yet to reach a full conclusion on how to solve the care crisis.
Care funding experts at Irwin Mitchell say the move is a long time coming, but the devil will be in the detail once the plans are announced.
Expert Opinion“Given the significant pressure placed on the NHS and the increase in government borrowing during the pandemic, it’s unsurprising that a tax hike has been proposed. However, increasing National Insurance is a spectacularly unpopular method to raise the staggering sums needed to reform social care.
“There’s a number of reasons to reconsider: it would break the Conservative party manifesto commitment; it’s likely to affect low income earners the most when it’s this demographic that finds it the hardest to save for later life; and it seems a large proportion of the funds raised may be used in preference to support the NHS, meaning that the care fee cap may be too high for most to afford in any event.
“Proposals that might be more easily digested were examined in our report published with CEBR in February 2020, specifically the Government could expand the existing automatic pension enrolment with tax incentives to provide a long-terms savings scheme accessible at the point of care need.” Stewart Stretton-Hill - Senior Associate Solicitor
Irwin Mitchell’s report with Cebr identified the care crisis ‘tipping point’ to be 2029, unless the Government intervened with a social care plan. The report estimated that the average worker should be saving £575 per month more than they currently are in order to be able to fund their retirement.
The Local Government Association estimated in 2018 that adult social care services would face a £1.5 billion funding gap in 2019/20, increasing to £3.5 billion in 2024/25, should nothing be done to intervene.
Stewart continued: “Despite being long-overdue, the details of the social care reform are still, sadly, lacking.
“Are we looking at the recommendations from the Dilnot report, published 10 years ago, finally being implemented or reinstatement of the, apparently, abandoned ‘care-fee cap’ under the Care Act 2014? At present we do not know but the details have been promised, again, later this year.
“We eagerly wait to see what the full recommendations will be and whether they’ll go far enough in solving the care crisis we’re facing as a nation.”
Irwin Mitchell's team of experts will be discussing the proposed social care reforms at the upcoming Later Life Conference on 12th October. Sign up here.