Fixing social care in England is a true test of Labour’s ambition
PHILIPPA RUSSELL’S son, Simon, has spent his life defying the odds. Born with fluid on the brain, he was one of the first children to have successful life-saving shunt surgery. He surprised his doctors first by making it out of his teens, then by living to 35. Today he is 60, and the expectation is that he could live into his 80s. That prospect should fill Dame Philippa with joy. Instead she is frantic with worry.
Simon has always had learning disabilities. But last Christmas he became seriously ill. He is currently living in a nursing home which costs £36,000 ($47,000) a year. Dame Philippa, who is 86, frets about who will support him once she is gone; to give him the care he needs she will probably have to sell his small house. “We must give you lots of vitamins,” Dame Philippa’s daughter tells her. “We’ve got to keep you alive to keep getting your pensions.”
How to care for the vulnerable and the elderly is a challenge facing every rich country. Yet as Richard Humphries, author of a book called “Ending the Social Care Crisis”, observes, England has handled the task particularly badly. (Social care is a devolved matter in Britain; Scotland, Wales and Northern Ireland are far more generous.) Its system offers a safety-net that often fails to cover essential needs; a lottery where the unlucky are exposed to catastrophic costs; and a workplace that badly undervalues its carers.
Successive governments have shied away from confronting this mess. Boris Johnson, unexpectedly, came closest with his plan for a (now-ditched) health and social-care levy. Whether the new Labour government has the mettle to do so will be perhaps the truest test of its character.
Underfunding is at the root of the problems. Social care is provided by local authorities, the bits of government that have been hit hardest by austerity. The largest share of their funding comes from council tax, a regressive levy based on outdated property values that councils cannot raise by more than 4.99% a year without triggering a vote among local residents. A recent survey found that in the most recent fiscal year, almost three-quarters of local authorities had exceeded their budgets for adult social care.
With money so tight, spending is rationed in two main ways. The first is to restrict access to care, in stark contrast with the universal ethos of the National Health Service (NHS). To be eligible for publicly funded care, Britons must have only the most meagre assets left. The threshold of £23,250 for residential care, which includes the value of their home, has been frozen since 2010 (it would be around £34,800 in today’s money). They must also have severe support needs and be able to navigate a bureaucratic maze.
There are some other ways for people to get help from the state. Attendance allowance, a non-means-tested benefit, covers some of the costs of personal care for pensioners with disabilities. The NHS pays for nursing care in care homes and, arbitrarily, social care for a few whose health issues are caused by accident, illness or disability. But getting that usually requires legal challenges and huge amounts of luck.
The most obvious sign that things are going wrong is that fewer people are receiving publicly funded care (see chart). The number of people aged 65 and over rose by 745,000 between mid-2016 and mid-2022. But since 2016 the number of over-65s receiving care has fallen by 8% to 543,000, with almost half that number still waiting for an assessment.
The second way councils control spending is to pay fees to providers that fall short of the true costs of care. Clients in residential homes who fund their own care are estimated to pay around 40% more than publicly funded residents: in effect, they subsidise the stinginess of the state. It is hard for providers to make the sums add up. “We’re held together by goodwill and glue,” says Mike Padgham, who runs a small group of care homes in North Yorkshire. In 2022-23 profits for care homes fell to historically low levels.
The market for providing care at home, partly because it is cheaper, is more buoyant: in the five years to 2023, the number of registered providers of domiciliary care rocketed by 53%, to almost 13,000. But it is poorly regulated, and there are concerns about the quality of some new entrants.
Some of those whose needs are not met by the state have relatives who can look after them. An estimated 5m unpaid carers pick up the slack where the system does not; their support is worth an estimated £162bn a year, according to Carers UK, a charity. Those who have to fund their own care often find that it can be astronomically expensive. The government’s own estimates are that one in seven people aged 65 and over will pay more than £100,000 for their care. Because no one knows how long they will need to be looked after, it is impossible for them to plan for how much they will spend.
The precariousness of this system extends to social-care workers, too. Boosting the minimum wage has increased pay somewhat but has also eroded the premium commanded by experience. Skills for Care, a charity, finds that workers with five years’ experience only earn an extra six pence more per hour than rookies do. Hardly surprising, therefore, that the turnover rate in the industry is 28% and that vacancies are tough to fill.
Recent governments have relied on migrants to plug some of these shortages. In the year to March 2023 some 70,000 care workers came to Britain on a special health-and-care visa extended to care workers in 2022. If that influx felt uncontrolled, the last Tory government’s response, to ban care workers from bringing dependents, was ham-fisted: in the quarter to June visas fell by 81% compared with the previous year, which is bound to worsen labour-market gaps.
Labour is planning a different approach to make social-care jobs more palatable. An employment-rights bill planned for the autumn is likely to include a fair-pay agreement for care workers, collective-bargaining rights and fewer zero-hours contracts. Technocratic solutions of this sort can alleviate some problems. Joining up data with the NHS—something the health service aims to do with a new federated data platform—would make the sector more efficient. Better-aligned financial incentives for councils to invest in prevention and supported housing would keep more people out of hospital and care homes.
But the real problem is money: higher wages for care workers, for example, risk worsening the squeeze on their employers without more funding. And money is something that Rachel Reeves, the chancellor of the exchequer, is reluctant to dish out. In July the new government scrapped a plan that would have spread the risk of catastrophic overspending across the population by raising the floor at which people are eligible for public funding to £100,000 and capping people’s lifetime care costs at £86,000. The plan, a diluted version of a proposal first made by Sir Andrew Dilnot, an economist, back in 2011, was not perfect but it had at least been legislated for.
There are rumours that Labour will establish a royal commission to find another way forward. For now, however, it is back to square one. Ultimately, the sector needs a long-term funding settlement. Social care should be an “enabler for the lives we want to live”, says Dame Philippa. Successive governments have failed to deal with the problems she and her son face. Labour has yet to show it will be any different. ■
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