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Lack of direction: Govt’s guidance on long-term care advice falls short

The Government is being urged to set out best practice guidelines for local authorities amid fears current rules will not encourage the public to seek information and advice on long-term care funding options.

Policymakers have proposed introducing a requirement for councils to signpost those funding their own care costs towards financial advice.

Getting it right will have big benefits for service users, councils and advisers, who could receive a flood of enquiries from prospective new clients. But providers, thinktanks and advisers say the Government’s current guidelines are too broad and will not encourage self-funders to engage.

‘Real risk’

The advice requirement was debated during the passage of the Care Act but will be set out in statutory guidance for councils.

A draft of the guidance, currently under consultation, says councils “should provide a service…that facilitates access to the full spectrum of financial information and advice – from basic budgeting tips to regulated advice – to ensure that people within its area who would benefit can access it.”

The Government says the guidance should make clear councils must be able to “explain the benefits” of financial information and advice to self-funders and that, although local authorities may not wish to make a direct referral to an IFA, they should “actively help direct a person to a choice of adviser”.

Partnership head of corporate affairs Jim Boyd says the guidance does not go far enough and should include examples of best practice so councils “understand what that looks like and what is expected of them”. “We’ve been campaigning on this for years so we are thrilled it is there,” he says. “But the drafting is sufficiently broad that there is a very real risk local authorities merely direct an individual to a website or a directory.”

Best practice

Boyd points to Nottinghamshire County Council as an example of best practice. In 2012, NCC started working with Paying for Care, a non-profit organisation set up by Partnership and around one in four self-funders in the county now use the service. Currently, those with assets over £23,250 must fund their own care although this will increase to £118,000 from April 2016.

Nottinghamshire spends around £9.5m a year funding the care of people who have exhausted their savings and now rely solely on the council.

NCC service director Paul MacKay says the council has saved around £1m over five years by raising awareness of care funding issues.

“We know that by doing nothing, fewer than 10 per cent of people are having a discussion about how they pay for long-term care,” he says. “We were at around 7 per cent about five years ago but, through the awareness work  we have done and by referring people to Paying for Care, we are now up to 25 per cent and some of those are seeing financial advisers as a result.”

West Sussex County Council, in conjunction with Age UK and the Society of Later Life Advisers, has established Carewise, a panel of regulated advisers to whom the council directly refers self-funders in need of advice.

Gordon Tate, an adviser at Rath-more Financial, is on the panel. He says: “In terms of business for us it is a bit like buses. We get no referrals for a while and then loads at once.”

Other councils, including Oxfordshire County Council and the London Borough of Barnet, direct self-funders to an organisation called My Care My Home, a wholly- owned subsidiary of Shaw Healthcare. It provides information and literature on funding long-term care and can refer people to regulated advisers.

“Cultural differences”

The International Longevity Centre is working on its response to the guidance consultation but care funding advice director Nick Kirwan says some form of best practice should be included in the final version.

He says: “There are differences in the culture between public and private sectors and people who work in social services don’t always feel comfortable referring people to the ‘bad, profit-making lot’ in the private sector. To overcome this, local authorities will need quite detailed processes in place to make sure people get the help they need on paying for long-term care.”

Kirwan says the Paying for Care model used in Nottinghamshire could work because it would act as a buffer between the public and private sectors.

He adds: “But it could also be a panel of advisers who meet certain conditions, such as giving the first half an hour free, that certain topics will be covered in that time and there will be no commitment to continue after that period.”

The Association of British Insurers also believes some form of best practice should be provided. A spokeswoman says: “It would mean all local authorities can benefit from the experience of those authorities who are already successfully working with not-for-profit organisations and regulated advisers to support the needs of their residents.”

Apfa director general Chris Hannant says he was “surprised” the draft guidance did not include a requirement for council to be “proactive” in this area.

“When the legislation was going through Parliament, ministers said councils should be proactive in helping people get advice when they need it,” he says. “I don’t know why they have softened it. It may be that is still the intention and this changes with the consultation. We will certainly be pushing for that.”

Shadow care minister Liz Kendall says: “It’s critical that people aren’t left to navigate a complicated system by themselves. Unfortunately, it seems that is exactly what the Government’s changes look set to deliver.”

However, Strategic Society Centre director James Lloyd says the need for advice varies across the country’s 152 local authorities and so it would be best to allow local authorities to develop their own approach.

He says: ““It is more applicable in some parts of the country than in others so that might be why the Government is wary of obliging loads of councils in the north with a relatively low wealth population with new duties that will just tie them up and waste time.”  

Expert view: A prize worth fighting for  

Nick Kirwan International Longevity Centre ILC

The Department of Health is consulting on the draft statutory guidance that will support the introduction of the Care Act. One section of the consultation the industry will be scrutinising is the guidance for local authorities on referring care self-funders to regulated advisers.

Today, most care self-funders go nowhere near their local authority. At present, only an estimated 7 per cent of self-funders find their way to a regulated adviser. All this could change when the cost cap starts in April 2016, along with a planned public awareness campaign. This will encourage self-funders to go to their local authority because, until your local authority assesses your care needs, your cost “meter”
won’t start ticking.

Getting people to local authorities is only half the journey for care self-funders. Local authorities will also need to help them get regulated financial advice on meeting the cost. Without it, many will needlessly run out of money and fall back on means-tested financial support. However, experience shows that social workers do not always feel comfortable referring people to the private sector. To overcome this friction, local authorities will need to have robust processes in place and focus on outcomes.

The current draft could go a lot further to help local authorities get their new responsibilities right. This could be by including examples of what good practice, processes, and outcomes would look like. If we can grow the number of care self-funders that currently get financial advice from 7 per cent to 70 per cent, we would transform the long-term care market, help protect tight local authority budgets and ensure great consumer outcomes in the process. Surely that’s a prize worth fighting for.

Nick Kirwan is care funding advice director at the International Longevity Centre

Timeline

  • May 2013: Care Bill published with requirement for councils to provide information on how to access independent, but not necessarily regulated, advice on long-term care funding
  • July 2013: Government rejects Lord Lipsey amendment to require councils to provide information on how to access “regulated” financial advice
  • October 2013: Lord Lipsey tables fresh amendment calling for guidance to set out how local authorities should “facilitate” access to regulated financial advice for those likely to benefit from it. Health minister Lord Howe rejects it but says statutory guidance for councils on the legislation will require local authorities to take a “proactive role” in facilitating access to regulated advice.
  • May 2014: Bill receives Royal Assent
  • June 2014: Government publishes consultation on statutory guidance for local authorities that would require them to advise people how to obtain information on the full spectrum of financial advice and information on care funding if they would benefit from it

Adviser views

Lorreine Kennedy Carematters

Lorreine Kennedy, head of care fee advice, Carematters

I work with Paying for Care and we get flurries of referrals but then because the people working in social services are so busy it goes to the back of their mind for a while and referrals drop off. Without clear guidance, councils are not going to refer enough people to get the advice they need.

Ray Tammam Fairstone Financial Management

Ray Tammam, IFA, Fairstone Financial Management

The Government must listen to the feedback on the guidance. More and more people are going to need care and the more people get proper advice about how they fund it, the less the Government is going to end up picking up the bill.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 17th July 2014 at 9:21 am

    I still don’t understand the government’s refusal to countenance the idea of allowing tax relief on premiums to LTC insurance plans. £200m AP with tax relief at 20% would only cost the Exchequer £40m p.a. and quite possibly save it [the Exchequer] very nearly as much if not even more than it would cost. Insurers could protect themselves against people applying for such cover on behalf of already infirm elderly relatives simply by stipulating an upper age limit of, say, 70, maybe less. For families that fail to plan ahead, well, tough.

    The present system is a deeply unsatisfactory mess.

  2. Julian

    There is no point in the Government providing tax relief on LTC insurance plans – ignoring the fact they no longer exist (currently the only LTC product is an INA) even if they did it wouldnt encourage people to buy them. The only thing the Gov. can do and now belatedly has done is to create an environment in which Financial product providers develop products for this market. These products will all be dual benefit arrangements i.e. provide a benefit only one of which is care fee related thus improving its marketability. A BPR/LTC product has already been launch by Ingenious. A WOL/LTC product will be launched within the next two months and a Penion annuity/LTC product is being developed by at least 2 companies for launch next year. So it is not such a mess honest

  3. Tony Mudd ~ Could you refer me to the research which has concluded that tax relief on the premiums for simple LTC insurance plans ” wouldn’t encourage people to buy them”.

  4. Julian – I can explain if you define what you mean as simple LTC insurance plans

  5. Tony Mudd ~ So you don’t even know what it is that you’re saying wouldn’t encourage people to buy them?

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