How to fix the social care crisis

In his letter to opposition parties inviting them for talks on social care reform, Health Secretary Wes Streeting told them they have a “once in a generation” opportunity to tackle one of the most intractable issues in British politics.

Streeting warned the party leaders that “the country is paying a heavy price for the failure to reform adult social care”, according to the letter seen by The i Paper.

Those cross-party talks will begin next month, ahead of the commission chaired by Dame Louise Casey starting work in April.

Representatives from the Conservatives, Liberal Democrats, Reform and the Greens will sit down with Streeting and Casey to start negotiations and help set the terms of reference for the commission.

While all UK-wide parties have been invited, the commission and its proposals will apply to England only. However the Health Secretary will write to the leaders of the SNP, Plaid Cymru and the Northern Ireland parties to keep them informed of the discussions.

In his letter to opposition parties, Streeting said the first phase of the Casey Commission, to report next year, “will recommend tangible, pragmatic, and cost-effective solutions to lay the foundations for the National Care Service”.

This National Care Service will not be full nationalisation, however – the Health Secretary told the Commons this week it would involve both state and private provision.

The commission will report directly to Sir Keir Starmer, The i Paper understands – one of the key demands of Sir Andrew Dilnot, who said on Wednesday that any reforms risked failing unless they had the oversight of the Prime Minister

There has already been criticism from opposition parties and the social care sector that the timeline for the Casey Commission – with a first report on urgent changes needed due next year, but full reforms not scheduled until 2028 – is too long and also risks running into a likely 2029 election campaign, leaving hopes of a cross-party consensus impossible.

Yet all sides say they want to be constructive going into the talks and want to act in good faith.

Politically speaking, the cross-party talks offer opposition parties the chance to shape government policy, as well as advertise to their own voters – and ones they’re trying to win over in 2029 – where they stand on an issue that affects nearly every family.

For Nigel Farage’s Reform in particular – which is trying to broaden its electoral appeal and become the leading force in the opposition – the social care talks are a chance to show that they are a multi-issue party, a source said.

So, despite the row over the timeline, could there finally be an end in sight to years of “failure” over social care?

Funding

There is already cross-party consensus on one thing at least: all sides agree that the current funding model – where state-funded care is means tested and often forces the elderly to sell their homes – needs reform.

A proposal for an £86,000 cap on the costs of care for an individual, either in their own home or in a care home, was recommended by the 2011 Dilnot commission and introduced onto the statute book twice by the previous Conservative government.

The cap was supposed to be introduced in October this year, but Chancellor Rachel Reeves scrapped it last July, saying that the arrangements for funding it had not been put in place by the previous government, and was therefore currently unaffordable.

Given there was already some cross-party agreement on the cap, it is likely that this remains on the table for future reform and could be one option on which the parties could find common ground.

Another funding option is a form of social insurance. Streeting said on Sunday that a social insurance model was “genuinely worth Louise Casey looking into”.

This could either be a state-funded insurance system, similar to models in Germany and Japan, where it is mandatory to pay into a scheme, or a private insurance arrangement where people can opt in to set aside money for care in older age.

Both of these systems would be controversial, however: mandatory social insurance would be seen as another tax, which would be electorally problematic for any party that backed it, while a system of private insurance is unlikely to get the backing of Labour, Lib Dems and Greens.

There are also doubts about whether there would be a sufficient market for private insurance, as working age people may not want to fund care they would not necessarily need.

There may be better hopes of cross-party consensus on some form of ring-fencing of general taxation, known as hypothecation.

The Health and Social Care Levy, proposed by Boris Johnson’s government in 2021, would have increased national insurance by 1.25 percentage points to raise £12bn a year specifically for the NHS and social care. It was scrapped by the Liz Truss government in 2022.

Reintroducing this levy, or ring-fencing general taxation in some way, could be supported by Labour, Lib Dems and Greens but might be resisted by the Tories and Reform.

Lib Dem sources said they were not going into the talks with any firm proposals on a new funding model.

Reform has made clear they want to see more funding for social care – although do not say how this would be paid.

Their 2024 election manifesto called for more “flexibility, tax incentives, VAT breaks and less waste”.

They also called for a simplification of funding through a single stream, instead of the split between NHS and local authorities.

In their 2024 election manifesto, the Conservatives pledged to go ahead with the cap on social care costs.

Now that the party is under the new leadership of Kemi Badenoch, who has made it clear she is not ready to propose a new policy agenda, it is uncertain whether they would back a cap, social insurance or another funding model.

However shadow health secretary Ed Argar has insisted the Tories want to engage positively with the talks.

He told Radio 4’s The World At One last week he wanted to help “grasp that nettle [of reform] and try to work together to achieve a consensus, constructively engaging, to find a way forward”.

Free personal care

State funding of the cost of an individual’s care at home is an idea that could gain traction in the talks, say insiders.

It is already policy in Scotland, as well as for people who live in the London borough of Hammersmith and Fulham.

Those in favour say it keeps people at home, rather than having to sell up and move into a care home – which is more expensive for whoever is paying – and fits around their daily lives, giving them greater independence.

Individuals are assigned their own personal care budgets, which are set according to their needs rather than their ability to pay.

Yet it is less ideal for those who need a higher level of medical and care support, and if people need to move into a residential home those costs are not fully covered.

The policy is backed by the Lib Dems and the Greens, who will be proposing it in the cross-party talks.

It is expensive, however: it would likely cost billions of pounds a year and would not deal with those who require the most intervention.

Workforce

A major issue for Labour, the Lib Dems and the Greens is improving the pay and conditions for care workers, who are among the poorest paid in the country.

Lib Dem leader Sir Ed Davey in particular has called for more support for unpaid carers, who are a significant but unrecognised part of the sector.

This would include paid carer’s leave and a statutory guarantee of regular respite breaks.

The Lib Dems have also called for a Royal College of Care Workers to improve recognition and career progression, and introduce a higher Carer’s Minimum Wage.

A Lib Dem source said: “We want to make sure unpaid carers are a massive part of the way of thinking about social care more broadly.

“It is an issue that Ed is really passionate about. Ed has already spent a lot of political capital on the social care issue through the election campaign.

“We are going to keep going on it – Ed sees it as his role to keep the social care issue on the agenda as much as possible.

“The Lib Dems are not going in with a funding demand. The whole funding model is why we need the cross-party talks.”

The Greens also want to see increased pay for carers and a career structure, as well as a system of at-home free personal care.

Green MP Ellie Chowns said: “The social care system in England is in crisis, with over 400,000 people waiting for care and 150,000 vacancies in the care workforce.

“Successive governments have failed to address this, and it’s time for bold action. The Green Party believes care should be a right, not a privilege.

“A properly funded social care system is essential for dignity and independence in later life, and to ease pressure on the NHS. Greens are ready to bring compassion, dignity, and fairness to the heart of the care system.”

The Labour government has pledged an expansion to the carer’s allowance – although the Lib Dems and Greens want it to go further – and better pay for care workers through fair pay agreements.