27 July 2021

Raising National Insurance to fund social care isn’t enough – we need a comprehensive ten-year strategy

By Robert Kilgour

We’re living longer. According to ONS data, life expectancy at birth is now above 80 years, and many of us will live well into our eighties and nineties. That’s the good news. As a consequence, many of us will at some point need to access social care. And nobody deserves less than a dignified, decent life in their final years. Draining all of your personal savings to pay for the costs of care, as happens now, cannot be sustainable. 

The – as yet unconfirmed – government policy to increase National Insurance Contributions by a penny in the pound to fund care would be a welcome source of funding, if it is – and is seen to be – fair and equitable. Earning pensioners should also have to pay, whether through an expansion of the National Insurance system or another form of contribution. 

To avoid targeting younger, lower paid employees, the increase in contributions could perhaps apply only to those aged above 30 or 35. It is not beyond the capabilities of the Treasury to design such a system.

An equitable and comprehensive form of financing via increased contributions would provide an increase in funding that the sector desperately needs, as the needs of an ageing population grow. But relying purely on additional money is far from enough. We need a long-term strategy, and we need to hear it from the Government now. 

To build a stable and long-term viable social care system, Care England have established five principles to which any long-term settlement for social care must adhere: Sustainability, Meaningful Life, People, Integration and Innovation and investment. The need for that settlement is clear. It is now coming up to ten years since the Dilnot Commission and progress has been painfully slow. Without real and sustainable financing, achieving the other aims and thus delivering meaningful social care reform will be impossible. But it would be a good start. 

The care sector has a whole range of problems that merely plugging the social care funding gap will not automatically resolve. We are seeing a net loss of care beds each year despite the growing need, with the loss most acute for local authority care beds. Increases in provision are largely confined to privately funded residents just as demand rises across the board. 

The proposals outlined by the Dilnot Commission were a positive step, and I hope this increase in National Insurance contributions will support a broader implementation of the Dilnot report. A higher payment cap, perhaps of £100,000, and exemption for the family home would surely counter the majority of criticisms aimed at the Dilnot proposals. This should form the basis of a ten-year social care settlement, similar to the NHS funding deal. But the new policy needs to address broader issues as well. 

Staffing costs have risen at all levels, with nurses, carers and agency personnel all in short supply at the same time as bringing in additional staff from abroad has become more difficult. There aren’t enough candidates for vacancies, and even increased pay hasn’t been able to attract talent. Covid-19 has shown that we should pay our carers decently – but there are just not enough new recruits. 

We need a proper, ten-year workforce strategy which includes training, bursaries, and increased support for vocational studies. Caring is a demanding, but highly rewarding, job: the end goal is a workforce of well-paid, well-trained staff. This is not optional. At current rates, we’re set to run out of sufficient carers sooner rather than later. 

A government-appointed Elderly Care Czar could help coordinate the work of various Government departments, business and local authorities. I wouldn’t envy any appointee, but there is a clear need for better coordination. The system, as it stands, is far too disjointed. Integrating health and social care would also definitely help, and I’m pleased that this seems to be the Government’s aim.

One final, and important, point. Social care is currently devolved, with England, Wales, Scotland and Northern Ireland all adopting different approaches to the issue. But a rise in National Insurance Contributions would apply to all of the United Kingdom. Will the resulting funding be distributed equitably, and will there be a coordinated strategy across all four of our nations? Politically, this seems difficult, but it is absolutely necessary if we are to deliver the best level of care for our elderly. 

We need a comprehensive strategy, so that, in old age, we can live meaningfully and with dignity. This additional funding from the Government through National Insurance Contributions is a start, but it needs to form part of a long-term plan. This has to include training staff, coordinating actions across the UK and abiding by the basic principle of care: that we all deserve to live out our lives in dignity and joy.  

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Robert Kilgour is executive chairman of Renaissance Care and founder of Scottish Business UK.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.