Archived decisions

Appendix 1

Green Paper Response

The County Council strongly welcomes the Government's consultation process ahead of a Green Paper to look at the future funding issues for social care. Accordingly, it has been keen to gather a wide range of local and informed national opinion in order to provide feedback to the government on both funding issues and the approach to personalisation which will form the other main plank of the forward social care agenda. In order to achieve this full assessment, the Council set up a Commission with the aims both of helping to develop its own local response and informing the national debate.

The Commission's Conclusions on Funding Issues

The report of that Commission is attached. It is fully supported by the County Council, and addresses the questions asked in the Green Paper consultation, as well as developing other related themes. It sets out the full reasoning behind a set of recommendations with a direct effect on the financial framework, which may be summarised as follows:

· That the Government sets out a Universal Offer for adult social care that has the following characteristics:

o Access to information, advice and supported self-assessment for all, regardless of level of need or financial situation;

o Links to other local services that promote health and well being, such as housing, and equipment adaptations;

o Multiple points of access to good quality and reliable information, advice, advocacy and self-assessment.

· That social care is free for up to eight weeks for those in need of urgent social care and who are either at risk of admission to hospital or are awaiting discharge from hospital

· That the Government increases the level of the savings and capital disregard from £22,250 to £50,000.

· That in the long term there is a fundamental shift in the means testing of social care to a means test that is:

o Common across all types of care, i.e. breaking down the distinction between the means test for residential and non-residential care;

o Separated from the assessment of need and the entitlement to support for the planning and arrangement of care.

· That a national Resource Allocation System (RAS) is developed incorporating the principles of independent living. This must combine a consistent and portable framework for allocating resources and assessing need, with scope for local variations to enable response to the diversity across local authorities.

· That the RAS is used as an assessment of the publicly funded net contribution to a care and support plan, rather than triggering charges, thus replacing the current charging regime.

· That the Government abolish the Charges for Residential Accommodation Guide (CRAG) regulations and introduce a single consistent approach across all types of social care, that takes people's means into account.

· That public services invest in targeted early intervention and preventative services, aimed at those most at risk of losing independence and needing care.

· That a longer-term evaluation is undertaken of the financial impact and quality of life improvements brought by early intervention and prevention programmes.

· That the performance targets for Primary Care Trusts (PCTs) are reviewed to incorporate measures that give them an incentive to invest in preventative services, for example hip replacements.

· That the Government actively encourage PCTs to use the power to transfer resources to promote a range of preventative and early intervention services across both health and social care.

That the Government remove the overlapping benefits rule and enable people to obtain Carers Allowance in addition to the State Pension, protecting the income of carers over the long term when they have given up work wholly or partly to provide care during their working life.

· That the Social Care Reform Grant be extended for a further seven years, so it becomes a ten-year plan similar to the NHS Plan to support transitional funding.

· That Primary Care Trusts receive a similar grant for the same timescale to enable them to implement personalisation.

· That a duty is placed on universal public services to plan their services with the needs of disabled and vulnerable people and their families and carers in mind. This should directly involve people who need social care and their organisations and be reflected in mechanisms such as Comprehensive Area Assessments and Local Area Agreements.

· Access to a national funding pot to support the career development and training of care workers regardless of their work setting or employer.

An Alternative Worth Investigation: Limiting Liability

The Commission recommended lifting the level at which a person's total capital resources disqualify them from any state assistance towards residential care costs. But they did also consider another means of changing the balance between private and state payments to increase the current perception of fairness in the system. This option proposes to limit the maximum liability of any individual to total residential care costs, for example to 3 or 4 years.

It is important to make the best use of individuals' wealth in contributing to care costs. That means not only improving contribution rates where feasible, but also doing so in ways which cause the least difficulties to people. For many, the key in this respect is to make the best use of their housing property. The problem at the moment is that for residential care this source of wealth is accessed, but in ways which are often perceived to be unfair. For domiciliary care, on the other hand, it is difficult for people to utilise this source of wealth. It is suggested that a combination of measures could tackle both the problems:

· First, restrict the maximum liability of any one individual for their care costs. The principle would be that individuals would be liable for only a limited period of care costs once they have reached the given level of independently assessed dependency. The `cost clock' would then start ticking and after, say, three or four years, the public purse would take over all costs for all clients. The key to such an arrangement would be that, rather in the manner of spreading insurance risk, only a small proportion of clients would survive to require significantly more than (say) four years of such care. The Commission's local assessments suggested that up to 25% of entrants to residential care may remain in the system for three years or more, and that four years may be more realistically affordable, but this really requires wider research . At an individual level, this is a risk which is very hard to deal with. On a collective level, the costs (if the maximum period is set correctly) should be relatively affordable.

· Second, encourage equity release and deferred payments schemes as means of realising property values in advance - either during domiciliary care or while one partner is in residential care and the other still living at home. Equity release in the context of a limited liability should be an attractive product for the market to provide. Deferred payments provide an alternative / complementary approach which can be directly implemented by local authorities, i.e. to accumulate debt against the income from future sale of a property. But this is probably another area - like contribution/charging regimes - in which the policy benefits of local discretion may well be out-weighed by the advantages of having one unified scheme which can be publicised and understood by all on a national basis.

The County Council suggests that this approach is worthy of fuller examination and costing by the Government in a way which is not feasible at a local level.

Overall Cost Factors

The Council is conscious that the Commission's recommendations will increase the total cost of social care at a time when budgets are already under severe pressure due to demographic factors and the availability of public money may be constrained - at least in the short to medium term - by the overall economic position. Certainly that makes it more important that the Government exploits its national-level ability to compare the costs and benefits of different options. That includes the possibility of accepting that - even with the co-payment options being pursued - the tax system will have to be adjusted to accept that higher proportion of public spending must go on social care.

However, the Council is also mindful of the potential for enhanced spending to reduce long term pressures by:

· Making a more efficient use of public sector resources across both local government and health

· Preventing people needing help as quickly or as extensively as they otherwise might have done

· Enabling them to make better choices which mean their own resources last longer and

· Providing individuals with more incentive and ability to plan for their own longer term care needs at an age where they are able to do so.

The element of potential `invest to save' involved needs to be taken into account in the overall assessment.

It is also relevant to remember that, in the context of health spend running at 10 x social care spend but with social care spend having proven links to reductions in health spend, there may be a win-win situation in some shifting of investment. It follows that a 1% transfer of health spending to social care spend would increase social care budgets by 10% and that should in turn have a transformative effect on some areas of health spending.

Another key issue in assessing future cost issues will be how markets react to personalisation, and to what extent proactive commissioning policies can help to control costs in this context. These issues are considered further in the Commission's report.

An additional finance issue will logically follow on from the introduction of a `universal offer' as set out above: namely, that it will be necessary to review of the social care factors which lie behind the Government's formula for grant distribution. That is because the current model is based on allocating residual amounts per head after allowing for deprivation factors, whereas it will become more logical to set an amount per head as a primary factor in order to reflect the requirement to make a universal offer.

The Balance between Local and National factors

One matter on which the Commission's report says relatively little is the balance between local and national solutions. That is because the Commission aspires, through the development of a `Hampshire model', to take forward as much as possible locally on the grounds that it wishes to advance the agenda so far as possible. However, the Commission also recognises that the introduction of national solutions will be the more effective - or only feasible - approach in some areas.

Several factors are relevant to judging which aspects of possible change are best set nationally and which are best left to local discretion. The national level has the advantages of consistency which enhances portability and increases the ease with which national campaigns can enhance understanding. There may also be benefits in some services from facilitating the potential for cross-authority action. In some functions there is a case for being seen to deliver the same level of service across the country on grounds of equity and facilitating joint service approaches which would improve the ability to generate economies of scale.

On the other hand, the whole basis of local government is that there should be flexibility to respond to local needs through action differentiated to suit local circumstances. That is particularly likely where choices of spending level are involved, as the Government does not fund authorities on the basis that they will all spend comparably. Clearly, the more specific is the funding support for a particular level of activity, the less that is an issue, but as the Government recognises, hypothecation is not good for local responsiveness and demographic accountability.

Those considerations lead to three possible levels of action:

· Consistent national prescription;

· National framework, but allowing local discretion within it; and

· Fully localised action.

Given the need to balance local assessments of what is best for an area with sufficient national consistency to avoid accusations of an inappropriate `postcode lottery', the second of these tends to be the Council's preferred approach, though the appropriate position may vary somewhat around that as follows:

· Limited period of liability for residential care costs: national as that would enable savings plans/insurance products to take this into account consistently

· Level of means tested contribution required for a given level of service - whether residential or otherwise - including level of capital disregard: national framework, possibly with some local discretion.

· Possible offer of a period of free social care - preferably national if that can be funded. Some limited range of services might be developed locally if that is not feasible, but that would be a far less satisfactory approach.

· Operation of Resource Allocation System (RAS) to meet individual needs: national framework with local variation in application (to allow for different policies, markets/prices, priorities and budget situations across the country)

· Assistance for carers: national framework with local discretion (allowing improved nationwide arrangements to be publicised but local economic circumstances to be reflected)

· Universal offer of information, advice and advocacy: national framework with local discretion, as this very helpful for awareness and consistency purposes while maintaining necessary local budget flexibility

The Council hopes these thoughts, together with the detailed Hampshire Commission paper, will prove a useful contribution to the green paper debate, and looks forward to seeing how this agenda is taken forward.