Tory MP's plan to fix social care suggests over 50s pay £300 a year

Damian Green, former Cabinet minister, has put forward his funding reforms for the social care system, which includes a mandatory one per cent National Insurance surcharge for everyone over 50.

His report for the Centre for Policy Studies, ‘Fixing the Care Crisis’ claims the current system is financially and politically unsustainable, opaque, unfair, and actively discourages local councils from investing in social care and housing for older people.

His proposals include the state providing a Universal Care Entitlement, which could then be topped up by private support for those who want it via a Care Supplement. This would be funded by taxing the winter fuel allowance, diverting savings from the Spending Review and imposing a one per cent National Insurance surcharge on those over 50. He added that the surcharge would be a last resort.

In his paper, Mr Green, who is chair of the All Party Parliamentary Group on Longevity, says ‘the issue of how to provide social care for older people has troubled governments of all parties for nearly two decades’.

‘The situation is urgent – and will only get more serious in the decades ahead’

Mr Green believes any government reform must abide by four key principles. It must provide more money for social care and ensure it is spent wisely. It must be fair across generations and between individuals, ensuring that no one is forced to sell their own home and end the ‘dementia lottery’. In addition it needs to increase the supply of care beds and the provision of retirement housing and importantly secure public and cross-party consensus.

His report states that extra funding is needed to stabilise the system and ensure everyone has access to a reasonable standard of care. But he adds ‘in the longer term, we need to bring more private money into the system – not least to fund those who want more extensive or expensive care provision beyond the state-provided entitlement.

‘We therefore argue that people should be able to purchase a Care Supplement – something similar to an annuity or insurance policy – which ensures that money for more expensive care is available if needed. This money could come either from people saving small amounts across their working life; through the payment of a lump sum upon retirement, either from savings or existing pension pots; or via equity withdrawal from people’s homes, which could potentially be realized through downsizing or a deferred payment when the property is sold.’

'Hard to come up with a system that is fair to everyone'

Robert Colvile, director of the Centre for Policy Studies, spoke out in support of the report, saying: “Social care has been an intractable issue because it is so hard to come up with a system that is fair to everyone.

“But Damian’s proposals would pass all the key tests – the system would be sustainable, there would be protection against the ‘dementia lottery’, no one would have to sell their own homes, everyone would have access a decent level of essential care, and those who paid in more would get access to extras such as bigger rooms or more frequent excursions.

“This issue has been politically toxic, but we need a solution that commands consensus. I urge politicians from all parties to consider these proposals extremely carefully.”

Dr Amanda Thompsell, chair of the Faculty of Old Age Psychiatry at the Royal College of Psychiatrists, said: “As an old age psychiatrist, I welcome a report that addresses seriously an issue that is central not just to our social care system but to also to our NHS.

"It should be studied by anyone who cares about older people, and all those who expects themselves one day to become old.”

However the County Councils Network had a mixed response to the report with Cllr David Williams, its spokesman for adult social care, saying: “Local taxes will continue to be part of the solution, but changes to national taxation, insurance options and mean-testing benefits should be honestly debated as potential solutions and we need the government’s green paper to genuinely tackle the difficult questions.”

He added: “We do not believe a national funding solution requires a downgrading of the role of councils in social care. For any social care reform is to be successful, it will be imperative that social care remains a local service, with councils having the financial track record, commissioning expertise, and local accountability that the health service does not necessarily have."

'Overly-simplistic arguments'

He also accused the report of presenting "overly-simplistic arguments on why there is insufficient residential properties across the country", saying: "It neglects to outline that in the rural areas with the highest proportion of elderly residents, the social care local authority is not the planning authority; nor does it touch on the fragile nature of local care markets.

“The report is right to outline the dearth of retirement properties, but proposes the wrong solutions."