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Saving social care: A fair funding settlement for the future

Adult social care has been cut substantially since the onset of austerity. This is increasingly having severe consequences on the frontline including rising unmet need and pressures on quality and safety. These pressures are likely to increase as demand for care grows ahead of available funding, resulting in a £2.7 billion funding gap by 2020/21 and £9.5 billion by 2030/3.

Government must now come up with a long-term sustainable solution to this funding gap. Any solution must be:

  • sufficient
  • fair
  • politically feasible.

Our analysis shows that changes to benefits (e.g. means testing Winter Fuel Payments or scrapping the Triple Lock) are unlikely to raise enough money to fill the funding gap in isolation; are more likely to be regressive; and often garner less political support than tax rises (e.g. National Insurance and Inheritance Tax) which
generally raise more money, are more progressive, with more people willing to consider them as an option (particularly true for National Insurance).

However, this does not mean any of these options are an easy sell. The public are sceptical of the idea that the gap should be filled by increases in taxes or a reduction in benefits, partly because many have lost trust in politicians and have accepted the argument that extra funding can be found by making less difficult choices (e.g. efficiency savings or a reduction in tax avoidance). Government must overcome this scepticism – resetting the terms of the debate – if it is to deliver the funding and reform our social care system so desperately needs.

KEY FINDINGS

Adult social care has been cut substantially since the onset of austerity, cumulatively totally 17 per cent of spend from its peak in 2009/10. This is increasingly having severe consequences on the frontline including: significant increases in unmet need; a greater reliance on unpaid carers; strains on quality and safety; growing gaps in the workforce; and greater precarity among providers of care.

These pressures are likely to grow in the coming years without a long-term funding settlement. This is because our growing and ageing population will put more and more pressure on social care budgets, with a forecast funding gap of £2.7 billion in 2020/21 and £9.5 billion in 2030/31 just to maintain existing provision. This gap will be even larger if the government decides (as it should) to expand and improve provision.

In looking to fill this funding gap, government should ensure that any solutions are simultaneously sufficient to fill the gap; inter and intra-generationally fair; and politically achievable. This report has looked at four options – means testing Winter Fuel Payments; scrapping the Triple Lock on pensions; raising National Insurance Contributions and increasing Inheritance Tax – and measured them against these three criteria.