Social care sector in dire need of urgent reform, says Cass Business School academic

The government’s proposals to use council tax to raise money for social care is a short-term sticking plaster according to Professor Les Mayhew, an expert on social care funding from Cass Business School. It is by no-means a long-term solution for a sector which is in dire need of urgent reform.

Professor Mayhew’s new report in partnership with the International Longevity Centre – UK (ILC-UK) suggests that means testing for social care should be replaced by a fairer and simplified approach.

The Cass research proposes a new approach in which a person’s savings and income would be treated on an equivalent basis. Capital limits would also be scrapped and replaced by personal limits based on a person’s wealth. Under the new method there would be no need for a cap on care costs.

The new approach suggests financially rewarding people for saving towards their care. Ideas to do this include new accredited savings vehicles which would be disregarded for means testing purposes and the introduction of ‘care saving accounts’ which could help to bring new money into the system. This would be in the knowledge that savings or additional income would not be used as an excuse for reducing state support as is presently the case.

The government’s plans to allow English local authorities to raise council tax bills by an extra 6% over the next two years to pay for social care will be unveiled later by the Government. The proposals, announced by Communities Secretary Sajid Javid, will give town halls the power to add a 3% levy to bills in 2017/18, and an additional 3% in 2018/19.

Professor Les Mayhew, author of a new report on social care funding and a Professor of Statistics at Cass Business School, said:

“The government’s proposals to use council tax to raise money for social care is a short-term sticking plaster, but for a sector which is in dire need of urgent long term reform. What we need is to change the fundamentals of the system – and how we means test social care and encourage people to save for their care is an incredibly important part of this process.

“In our recently published report we argued that because of the postponement by government over introducing previously announced proposals until 2020, this has provided a window of opportunity to review the proposed means testing formula and cap on care costs. Given the current backdrop of fears over future funding and cost of an ageing population, it is sensible to consider whether there is a better way before these proposals are implemented.

“There is a desperate need to bring new money into the social care system but existing proposals will not deliver this. I hope the government will take a serious look at our proposal which contain incentives to encourage saving and treats income and assets more logically and fairly. By replacing a complex jumble of limits and thresholds they simplify means testing and make it easier to understand.

“With the looming social crisis it is vital that long-term we can bring money into a system that can no longer be supported by council tax or central government funding alone. Reforming the means test is key to this.”