The Prime Minster has today announced long awaited plans for the funding of the English adult social care system.
This move has been proposed on several occasions by the governments of David Cameron and Theresa May. The present government’s December 2019 election manifesto promised to reform social care but didn’t give any details of how that was to be achieved.
Today’s announcement confirms that extra funding will be achieved via an increase in National Insurance contributions of 1.25% from April 2022 onwards, rather than further contributions from higher rate taxpayers. It comes after yesterday’s promise of extra funding for the NHS to tackle backlogs created by the COVID-19 pandemic. People of a pensionable age who are still working will also have to pay this extra National Insurance contribution. There will also be a cap on lifetime individual contributions.
However the majority of the monies raised by the tax raise will be used initially to support the NHS in the first 3 years, although during this period the social care sector is due to receive an additional £5.3 billion per year. After the NHS backlog is cleared, the government say the majority of this funding will be spent on social care.
In his statement to the House of Commons announcing the plans, the Prime Minister referred to the COVID-19 pandemic having highlighted problems in social care, saying at the outset of the pandemic that there were 30,000 patients occupying hospital beds that could have been better cared for elsewhere. However, we have constantly seen that the process of discharging a patient from a healthcare to a social care setting is very complex, and many factors may affect the speed at which they can be discharged from hospital, not just the amount of funding available. Today’s announcement should not be seen as a quick fix to the complex problems the sector faces.
With the general population living longer and a larger number of adults requiring social care, especially in later life, funding is clearly desperately needed. Arguably the lack of investment in the sector over many years has contributed to a rise in claims and statutory investigations against social care providers. Whilst care providers and their insurers will of course welcome today’s announcement, it will take a long time in our view for any noticeable difference to be seen in the sector on a day to day basis, and for the effect on the claims market to trickle through.