Childcare voucher founder suggests paying for care homes with social care vouchers

John Woodward, founder of Busy Bees Nurseries and the pioneer of childcare vouchers, believes a social care version of this system, plus a 'care ISA' could "form part of the jigsaw of options" for the social care funding crisis.

Mr Woodward has called for more innovative ideas on raising cash for social care if the sector is to survive, saying: “We have to have the courage to make change if we want to save adult social care.”

Mind the funding gap

He has pitched his idea to the government ahead of the social care green paper which is due to be announced in November. This much anticipated document will according to the government “ensure that the care and support system is sustainable in the long term”. The green paper has already been delayed a number of times.

Mr Woodward set up one of the first childcare voucher schemes twenty years ago and says it has helped over 600,000 parents with their childcare costs.

Now he wants to replicate the scheme to fund residential care and home care across England.

With people with assets of over £23,250 in England having to fund their own residential care and councils struggling to pay for those under the threshold, Mr Woodward believes social care vouchers would "give families back the control over their care choices, with the flexibility allowing them to make decisions based on what’s best for them, not what they can afford".

He added: “Adult social care vouchers would allow taxpayers of all incomes to set aside only what they can afford and accumulate enough over a working lifetime that they do not have to be out of pocket when they need social care, and do not have to make painful decisions such as selling their home to fund services they desperately need.”

Under the scheme, eligible tax payers would pay a portion of their salary (up to £100 per week suggested cap) to fund either their own, or a dependant’s care throughout adulthood. The vouchers could be flexibly accrued or deducted and would allow multiple tax payers to contribute to a single individual’s care.

Suggestions of more tax ‘will be shut down’

Mr Woodward says that despite the government’s attempts to think up ideas, he isn’t surprised they are “being shot down.”

“It’s the reaction I have come to expect when major changes are proposed. People are afraid of change, and so bad situations are allowed to worsen until serious crisis sets in, as we have seen at Northamptonshire.

“If you look at anything which is government or local authority based, it is very difficult. I am not criticising them. I sympathise, but what they can’t do is just mess around with a few little things to solve the problem.”

In July, the Local Government Association (LGA), fed up with waiting for parliament to release the social care green paper, decided to publish a green paper of their own. Suggestions included a 1p rise in national insurance or income tax, means testing for universal benefits (such as the winter fuel allowance and free TV licences), and a one per cent rise in council tax rates.

Whilst Mr Woodward accepts this ‘green paper’ was a good PR idea to highlight the plight of the LGA, which are bearing the brunt of social care funding, he doesn’t think the solutions offered brought anything new to the table.

He says: “My concern was, it didn’t really open up into some of the bigger things that might be possible. Number one is somehow there’s got to be more money in the system, now I imagine that’s a scary subject for politicians and local authorities because if anybody suggests that people have got to be made to pay more tax, it means it will be shut down.”

Cash ISAs could work ‘in tandem’ with vouchers

Many of the social care funding ideas currently in circulation are to do with extra taxation. Mr Woodward believes some extra taxation may be necessary, but this could happen side by side with other more ‘unusual’ ideas, rather than being one large umbrella solution.

The government has recently been considering the idea of a tax-free care ISA, whcih fits into Mr Woodward's vision of a funding system with more emphasis on personal choice for the individual.

He says: “This could form part of the jigsaw of options for funding adult social care. Payments into an ISA are made after National Insurance and tax deductions, and an adult social care vouchers would be a system of non-taxable salary sacrifice, so there’s no reason they can’t work in tandem to solve the care crisis.”