Social care revamp: Pressure on to find money

Elderly person Social care in England needs to be revamped, an independent review says

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The government is under pressure to consider tax rises and further spending cuts to find the money to pay for the overhaul of social care.

An independent review has recommended individual costs be capped at £35,000 - a move which would cost £1.7bn a year.

Ministers have said they will consider the proposals, but the Treasury is known to have reservations.

However, both the Dilnot Commission and campaigners are preparing to keep the pressure on in the coming months.

Commission chairman Andrew Dilnot is urging ministers to act quickly and consider ways extra funds could be found.

After launching his report on Monday, he said he wanted to see the government come forward with a white paper by Easter, paving the way for the introduction of the new system by the end of this parliament.

'Build momentum'

Meetings are now being planned with officials about how his proposals would work in practice.

He is said to be confident that he will be able to win the argument and wants to use the next few months to "build momentum" around his plans.

The money question

  • Councils spend just over £14bn a year on social care
  • The Dilnot Commission's proposals would require an extra £1.7bn a year - a figure which would rise along with the ageing population
  • This could be found by making cuts elsewhere. The NHS has already been pinpointed as it has a budget of over £100bn and many of its services overlap with social care.
  • Alternatively, £3bn a year could be raised through getting those who work past the normal retirement age to pay national insurance contributions or through an across the board rise of 0.25% in contributions
  • Increasing the basic rate of income tax by 0.25%, VAT by 0.5% or reducing pension tax relief would bring in £2bn a year

In a warning to ministers, he said if they did not act before Easter the commission's feelings would move "quickly to disappointment".

His case is being strengthened by having widespread support from charities - some of whom are involved in delivering social care services.

More than 20 charities, including Carers UK and Mencap, immediately put their names to a joint statement calling for action.

It said: "It is now vital that government sets out a clear timetable for change and does so quickly."

Many of them will also be seeking talks with government in the coming months.

A number of options are being put forward for finding the money.

These include taking money from other departments as the £1.7bn represents just 0.25% of total government spending.

Some argue a precedent has already been set for this as the NHS is earmarking £1bn a year from its £100bn-plus budget by 2014 to boost services which overlap with social care.

Start Quote

The government now needs to act on Andrew Dilnot's proposals. Delay would be indefensible”

End Quote Michelle Mitchell Age UK

It will also be argued that improving social care will help save the NHS money as fewer people will need expensive hospital treatment if they get better access to social care.

However, raising more through taxes or the benefits system will also be put forward.

An analysis from Age UK setting out how this could be done has already been handed over to the Treasury.

It includes suggestions such as making those working past the normal retirement age pay national insurance contributions. This would raise £3bn a year.

Alternatively a 0.25% rise in contributions across the board would make a similar amount.

Meanwhile, £2bn could be found by either increasing the basic rate of income tax by 0.25%, VAT by 0.5% or reducing pension tax relief.

Solution 'must be found'

For any of these to happen, cross-party support would almost certainly be needed.

The Labour party has already indicated it would be willing to enter talks.

But doubts still remain about the appetite for change.

In his official response to the Dilnot Commission, Health Secretary Andrew Lansley said the proposals would be "carefully considered".

But he acknowledged they would involve "significant cost" and need to be balanced against other funding priorities.

A spokeswoman for the Treasury refused to be drawn on any of the suggestions.

But she said officials would welcome "constructive engagement from all stakeholders".

Michelle Mitchell, of Age UK, said: "The government now needs to act on Andrew Dilnot's proposals. Delay would be indefensible."

And Richard Humphries, of the King's Fund health think-tank, added: "A solution must be found.

"What we are talking about is a relatively small proportion of government spending."

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