23rd July 2012

Partnership: Social Care White Paper - July 2012

The Government finally gave an update onthe state of Long Term Care funding and issued its long awaited White Paper on 11 July. Expectations were high following the Dilnot Report so it is probably unsurprising that the lack of specific proposals caused controversy.

In overview, the principle points included:

• Our own 2 year political and media campaign to ensure that all self funders receive specialist financial care fees advice was recognised by the creation of an expert working group. This will involve the Government, financial services sector and local authorities to explore how links with pensions and specialist financial advice can be included in the comprehensive care information on offer.
• The principle of a cap was agreed by the Government but no actual figures or spending plans to fund that were included. The fear is that even with a cap, many consumers do not understand what that means - ie: it will only cover personal social care costs, it will not cover all the costs of care and therefore, even when agreed, some additional funding will still be required.
• Funding plans for the proposals have been deferred until the Comprehensive Spending Review in 2013 – resulting in fear that they may now be lost in the ‘long grass’.
• Consumers could well be lulled into false sense of security and think that they will receive funding support imminently! In reality, it has never been more important to get professional care advice.

Commenting, Chris Horlick, Managing Director, Care at Partnership considers the benefits - and potential downsides of each of the main points:

On Financial advice for all

"The founding of the expert working group to explore the role of specialist financial advice as part of a comprehensive care information offer is an important step in our campaign to ensure that all self funders receive this critical advice.

"The White Paper’s recognition that local authorities must provide a comprehensive information and advice service will hopefully transform the shocking survey which found that out of 53,000 self funders who went into residential care in 2010, only 7,000 received appropriate advices¹. It is hardly surprising that 1 in 4 self funders² run out of capital and fall back on the Local Authority for funding - which potentially also means having to move to a different room, shared accomodation or even a different home at a time when they are most vulnerable.

"Providing pathways to specialist care fees advice offers Local Authorities practical and effective ways of ensuring that self funders – who are among some of the most over-looked and under-served in the care system – are best able to retain control, choice and dignity and meet the costs of care.

"We look forward to working closely with Government on the expert working group."

On the plans for a Cap on Care Costs

"There is a significant danger, that Dilnot’s proposals may inadvertently lull self payers into a false sense of security.

“Many may believe that the Government will pick up all their care costs once they have paid the first £35,000³ of their social care costs. However this is simply not the case.

“For those in residential care the Government will only meet personal social care costs and not hotel costs and general living expenses. This is fundamental as these costs are “typically two or three times as large as personal care and nursing costs taken together⁴

"Others may also think that their contribution to hotel costs is limited to ‘general living expenses’ of £7,000 to £10,000 a year. However fees for many quality care homes can be £50,000 p.a or more.⁴ This exceeds significantly the standard allowed by local authorities - requiring individuals to top up the difference from other sources. Few consumers appear to be aware that they will have to meet these additional costs and are unlikely to plan for them.

"Partnership estimates that were Dilnot’s proposals implemented in full, a typical policyholder in an average residential nursing care in the South of England, who would have previously have paid £170,000 over a four year period (the average for one of Partnership’s policyholders) will, after Dilnot’s proposed £35,000 cap, still have to pay nearly £150,000. This means they will still have to pay over 80% of their total care costs - a significant amount of money.

"Partnership estimates it will take roughly two and a half years to reach a cap of £35,000, while the average life expectancy in a residential care home is 2 years 3 months.

“It is not scare mongering to suggest that those who have currently entered residential care with an average life expectancy of marginally over 2 years could well receive no benefit, even if Andrew Dilnot’s proposals are accepted at a cap of £35,000. It is also likely that the cap may well be higher than £35,000.

"I am extremely concerned that all funding proposals have been relegated to the Comprehensive Spending Review. This means that it is unlikely that we will see any concrete funding proposals until 2013 at the earliest,” cautioned Horlick.

"However, with a General Election expected in 2015 it is unlikely that these will be implemented given the extreme political sensitivity surrounding this issue. Accordingly I worry that Consumers will be lulled into false sense of security – and think that they will receive funding support imminently – they may not. It has never been more important to get care fees advice."

On the Social Care White Paper

"We applaud the aspects of the Social Care White Paper which provides a clear, modern and effective framework for the provision of adult social care services, where previously there had been a disconnected system which found its antecedents in the Poor Laws.

"This has created parallel and disconnected systems for those supported by the state and those supporting themselves financially. It has also worked against financial planning and insurance solutions being used to improve outcomes for those going into care. I support this coherent series of proposals as the Government seeks to address current inequalities in the broken care system."

Care Funding Options

Partnership is a leading provider of Care Funding plans for those individuals who need to fund their own care costs. Our comprehensive adviser microsite provides full details of the size of the market, the need for financial advice and the six main options most clients have to pay for their own care.

• The size of the funding gap 
• The need for financial advice
• Paying for Long Term Care
• Back to Latest News

Sources: 1: Laing and Buisson / Oliver Wyman research for Partnership; 2: Local Government Intelligence Unit;  3: The final cap has not yet been agreed and may be more or less than this; 4. A typical quality care home in the South of England costs nearly £50,000, although many can exceed this. See average costs of a care home for details of this and the individual regions. 

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