The economic affairs committee in the House of Lords has called on the government to immediately spend £8bn on social care to help stem the crisis.
A report published today on social care funding makes several recommendations to end the lack of money in the system.
It finds publicly funded social care support is shrinking, as diminishing budgets have forced local authorities to limit the number of people who receive public funding.
The report points out funding is £700m lower than 2010/11 in real terms, despite more people in need of care.
It also highlights that more than 400,000 people have fallen out of the means test, which has not increased with inflation since 2010.
Similarly the Health Foundation and King’s Fund estimate that to return quality and access to levels observed in 2009/10, the government would need to spend £8bn.
The funding shortfall has meant local authorities are paying care providers a far lower rate for local authority-funded care recipients than self-funded care recipients, and those care providers with a high proportion of local authority-funded care recipients are struggling to survive.
To address unfairness in the system the committee proposes bringing the entitlement for social care closer to the NHS by introducing free personal care, which would include help with washing, dressing or cooking.
Those in care homes would still pay for their accommodation and assistance with less critical needs like housework or shopping. Those receiving care in their own homes would not have to pay accommodation costs, which may encourage care users to seek essential help with personal care early.
This model would cost £7bn per year according to the Health Foundation and the King’s Fund, only £2bn more than the government’s 2017 “cap and floor” proposal.
Additional funding for social care should come from national government which should raise the money largely from general taxation. The money should be distributed to local authorities according to a fair funding formula.
Economic affairs committee chairman Lord Forsyth of Drumlean says: “Social care is severely underfunded. More than a million adults who need social care aren’t receiving it, family and friends are being put under greater pressure to provide unpaid care, and the care workforce continues to be underpaid and undervalued.
“The whole system is riddled with unfairness. Someone with dementia can pay hundreds of thousands of pounds for their care, while someone with cancer receives it for free. Local authorities are increasingly expected to fund social care themselves, despite differences in local care demands and budgets.
“Social care funding has decreased most in the most deprived areas. And local authorities can’t afford to pay care providers a fair price, forcing providers to choose whether to market to those people who fund their own care or risk going bankrupt.”
He adds: “Fixing underfunding is not difficult. The government needs to spend £8bn now to return quality and access in the system to an acceptable standard. Fixing unfairness is more complicated, but the government has ducked the question for too long. They need to publish a white paper, not a green paper, with clear proposals for change now.
“We think that change should include the introduction of free personal care, ensuring those with critical needs can receive help with essential daily activities like washing, dressing and cooking.”
Aegon head of pensions Kate Smith has called for a “firm decision” from government in response to the funding report.
She says: “Social care is one of the great domestic policy challenges facing the country, particularly as our population ages and the strains on both local authorities and the health service become more apparent.
“The Lords’ call for greater funding and a basic entitlement to publicly funded personal care provide a much needed prompt to government to start making firm decisions about how to tackle these challenges. It is interesting that the Lords have ruled out an insurance based system, which would be a difficult sell to individuals who will not know in advance whether such a policy will provide them with value.
“While the report adds to the debate as to how to tackle this thorny and politically difficult issue, what is really needed is a firm decision from government which provides people with certainty about what they might be expected to pay towards later life care. Without this it is difficult for people to plan adequately for their retirement and people are left with a big unknown hanging over them as to what their savings might need to be used for and whether they will be able to leave an inheritance to their families.”