Squeezing the rich pensioners

When Andrew Dilnot published his proposals on funding social care, he envisaged that a better, fairer system would require extra funding from public expenditure, and observed that since older people would be the principal beneficiaries, it would be preferable if this was raised by taxes which older people contribute to so that not all the cost would fall on the younger population.

Since then, a variety of ideas have been floated from a range of different quarters.   But the discussion has also become conflated with views about intergenerational fairness as the Government tries to bear down on public spending, and comments about the ‘generosity’ of some universal benefits received by pensioners.   There has long been a rumble of complaint that rich pensioners receive the Winter Fuel Payment.   Frank Field waded in, arguing that before we find more money for older people, we should be looking at the poverty and the shortage of opportunities for children.   The Lib Dem think tank CentreForum published a paper looking at the tax reliefs available to older people and their exemption from National Insurance if they are working over State Pension Age.   Now, in the margins of the Lib Dem and Labour Conferences, the appropriateness of pensioners’ benefits has again bubbled up, though the Coalition Agreement specifically protects these till 2015. Continue reading “Squeezing the rich pensioners”

Worth waiting for? The Draft Care and Support Bill

As the Law Commission first began work on its review of adult social care in 2008 it seems reasonable to describe the new draft Care and Support Bill, based on the Law Commission’s recommendations, as ‘long awaited’.  So has it been worth waiting for?

Throughout its work the Commission was adamant that it did not intend to reduce the rights of older and disabled people who need care and support.  That the Law Commission has largely achieved its aim does in itself deserve praise, not to mention a sigh of relief that essential rights have not been swept away.

The Law Commission’s recommendations were never intended to be revolutionary. The aim of the exercise was primarily to consolidate existing legislation. This meant both bringing together successive acts of Parliament and proposing a new structure for regulations and guidance issued under the new act. Guidance will also be pulled together into a single code of practice, a huge improvement on the current mass of guidance, good practice guidelines, and guidelines produced by third parties.

There are, however, some dramatic and welcome new proposals in the draft bill;

  • A general duty to promote the wellbeing of service users will become the underlying principle used as a basis for interpreting the rest of the legislation;
  • People who do not meet eligibility criteria will still have rights to advice and information;
  • Carers will, for the first time, have the same rights to services following assessment as care service users;
  • There will be a new national framework for eligibility for care and support (the White Paper also promises a new minimum threshold for eligibility by 2015 although this is not in the draft Bill)
  • There will be improved transition arrangements for service users who move from one local authority to another;
  • Legislation to safeguard adults at risk of abuse.

Continue reading “Worth waiting for? The Draft Care and Support Bill”

Keep calm, but note the warning

Whilst social care reform proposals remain bedevilled by an inability to find a funding solution, the Office for Budget Responsibility (OBR) has published its annual Fiscal Sustainability Report.  As last year, this warns of the age-related risks to public finances in the longer term – which, to the OBR, is 50 years.

Its big picture forecast is of rising costs on health and pensions, offset by falls on public sector pensions, and of shrinking revenues from parts of the existing tax base especially oil and gas and (because of globalisation) corporation taxes and VAT. It expressly does not call for more fiscal tightening in the medium term – the period in the Treasury’s sights to 2017 – but it concludes that “governments would be likely to need some replacement sources of revenue just to keep the tax burden constant, let alone to meet the costs of an ageing population”.

Comparing 2016/17 with 2061/62, the OBR sees:

  • health spending rising smoothly as the population ages from 6.8% of Gross Domestic Product to 9.1%;
  • state pension costs increasing from 5.6% to 8.3%;
  • social care costs growing from 1.1% to 2%;
  • gross public service pension payments falling from 2.2% to 1.3% – or in net terms (including contributions) from 1.7% to 0.9%.

The shortfall in tax revenues are even less easy to project, but could amount to 2% of GDP or more.

These percentages translate into big money – in today’s terms, 1% of GDP is about £15bn. But it is striking how modestly social care features in these estimates. And of course, all the calculations are based on what we are doing today and cannot reflect any significant change in public habits and behaviour, or indeed scientific breakthroughs, such as finding a cure for dementia.

Meanwhile, what do we know about the public’s attitude to paying higher taxes for better public services? The picture is often contradictory. Polling by MORI shows that in 2010, 58% of the public supported cutting public services to pay off the national debt, but by June this year, that had fallen to 46%. The British Social Attitudes Survey, covering the years 1998 to 2009, showed a falling appetite for spending more on welfare benefits for the poor if it led to higher taxes: different age cohorts hold different views (with older generations being more supportive), but nearly half the baby-boomers, for example, supported this proposition at the beginning of the period, but only a third by the end. There has been a slow but steady shift from supporting a society which emphasises social and collective provision of welfare towards encouraging individuals to look after themselves – the balance is now 51:49.

The row about social care reform, of course, is that people probably would do more to look after themselves if the reforms gave them a credible platform to do so. That was the whole point of Andrew Dilnot’s proposed caps, which we now learn the Government agrees with in principle. If we look at the OBR’s rather gloomy forecasts we cannot have these proposals too soon, both for social care per se and for getting more efficiencies into the health service. Kicking these decisions into the long grass is not going to make the OBR any less gloomy next year.

Read Age UK’s briefing about the Governments proposals for social care reform

Find out more about our Care in Crisis campaign

Care Can’t Wait

Last week, Age UK presented Number 10 Downing Street with a petition signed by over 130,000 people calling on the Government to end the crisis in social care.  The size of the petition means it is likely that Parliament will be required to debate this important issue, bringing the needs of older people who are being let down by the care system to the forefront of all MP’s minds.

David Gower, who shared his personal experiences of social care in support of Age UK’s Care in Crisis campaign, attended Number 10 Downing Street to present the petition. He said ‘We need reform because we need to be able to help those who are unable to help themselves and there are many members of the United Kingdom’s citizens in this unfortunate situation. We do not and cannot afford to have a crisis where people at the moment are brought home from hospital, dumped in their flats and told to get on with it. It’s time to change right now.’

The next month is set to be critically important for all our futures, whatever our age.  Having been beset by delay upon delay, the Government has indicated that it will finally publish the Social Care White Paper either this Summer.  A Draft Bill will be published hard on its heels before the end of this parliamentary session in July.

Legislation and reform is urgently needed.  Social care provision is now at breaking point as chronic under-funding, a conflicting and confusing legal framework, and an ageing population have created a crisis in social care, betraying some of the most vulnerable people in society today.

But this historic opportunity to provide root and branch reform and funding for social care comes at a time of austerity measures, and serious economic uncertainty.

Ministers have indicated that the White Paper and Draft Bill will mainly deal with reforming and simplifying social care legislation, which will go some way to ending the iniquitous postcode lottery of care provision experienced by thousands of older people across England. 

But it is the issue of how to fund social care that remains the most critical, and most divisive.  Cross party talks have been underway since January 2012. Ministers and their civil servants will have engaged in long, hard discussions with the Treasury on the future direction of funding. 

It’s not clear at this moment in time, whether consensus has been reached, either within Government departments or across the political parties.  The Government has said that it will publish a funding progress report at the same time as the White Paper.  Age UK is hoping that the progress report will contain a positive response to the Dilnot Comisssion’s recommendations for a maximum £50,000 cap on the cost of an individual’s care, which will protect older people from the sometimes catastrophic costs.

Funding and reform of social care is one of the key challenges for this Parliament, and indeed this generation of politicians. 

Even set against the austerity measures, there are positive choices the Government can make.  Funding and reform of the current social care system will help older people stay healthy and independent for longer and reduce the pressures on the National Health Service. 

At this critical moment, Age UK is therefore urging the Government to use the White Paper, the Funding Progress Report and Draft Social Care Bill, as the foundation stones of a sustainable, and fair social care system.  After 25 years of political prevarication, resulting in trauma and loss for hundreds of thousands of people, it is now time to resolve the crisis in care, and guarantee dignity for each and every one of us.

Watch a video of David Gower explaining why he is supporting Age UK’s Care in Crisis campaign

Find out more about our campaign

The Queen’s Speech

This blog was contributed by Camilla Williamson, Public Affairs Adviser in Age UK’s Public Affairs team.

In advance of the Queen’s Speech Age UK was clear that the most important single element for older people was the social care bill. While a draft bill on social care is some progress, the announcement of legislation now would obviously have been far better. Social care is in crisis – the system is chronically under funded and in urgent need of reform. Without this, too many older and disabled people will be left in desperate circumstances: struggling on alone, many living in misery and fear. With a predicted increase in demands on the system, this situation is only likely to worsen. It is therefore vital that the Government ensures that following the consultation on the draft bill, legislation to reform social care, alongside funding reform, is introduced as a matter of urgency.

On other matters related to people in later life, we were pleased by the announcement of a Pensions Bill to reform the State Pension, creating a fair, simple and sustainable foundation for private saving. We welcome the proposals of the single-tier pension and are very supportive of the aims. However, as proposed, current pensioners would not benefit from any improvements to state pensions. The Government must not forget the 1.8 million older people who are in poverty now.

The Financial Services Bill offers the opportunity to ensure the financial services industry provides safe, fair and accessible products and we believe the Bill should be strengthened to ensure the FCA and Government have the tools they need to address market failure and establish a marketplace in which firms compete to provide all types of consumer with the products and services they need.

The Government also announced a Small Donations Bill which will provide a top-up payment similar to Gift Aid to charities that receive small cash donations of £20 or less, enabling them to claim 25p for every £1 collected in the UK, on up to £5,000 of small donations. This will make a particular difference to smaller local Age UKs and Age UK friends, which as independent charities rely on these kinds of donations to help them to provide a range of support to people in later life.

Find out more about how the legislative programme relates to people in later life

Read our full government and stakeholder briefing