Free personal care for older people could cost an additional £6bn over the next decade, researchers have found.
A join report published today by the University of East Anglia, the London School of Economics and Political Science, and the Pensions Policy Institute shows that making social care free at the point of use for older people with at least moderate needs would add an additional £5.8bn to public spending by 2035.
The report comes ahead of the long-awaited green paper on social care, due to be published by 21 December, according to NHS England’s chief executive Simon Stevens.
Most expensive scenario
Looking at different options for reforming adult social care, the report authors found that a system funded on the same principles as the NHS would be the most expensive option, adding an extra £3.9bn by 2020 and £5.8bn by 2035 to public spending.
However, they also said that it ‘would enable some of those whose needs are not currently deemed high enough to receive publicly funded care to do so in future’.
They added: ‘Public spending on long-term care for older people is much lower than on state pensions but will be affected more by substantial growth in the numbers of the oldest pensioners.
‘The long-term care funding debate has raised concerns about the adequacy of the level of publicly-funded services, given that access to publicly-supported services has been increasingly restricted to only those with the highest care needs.’
According to the authors, the private cost of social care will rise from £10.1bn to £18.9bn between 2020 and 2035.
Capping the costs
The cost of social care currently depends on a person’s level of need and the financial assets they have. According to NHS England, people who have savings of more than £23,250 and own a property, are not eligible for their local council to pay towards the cost of their care.
In 2011, a Government review led by the economist Andrew Dilnot showed that the implementation of a £35,000 cap on the amount an individual pays for their care would be ‘most appropriate and fair’.
The report authors estimate that a similar cap (£36,000) would lead to a public spending increase of £2.1bn by 2020, rising to £3.6bn by 2035.
They said extra public spending on long-term social care is likely to come from ‘additional income tax for older people or national insurance contributions on the earnings of people aged 65 and over’.
‘Although we haven’t made future projections of revenue raising options, the revenue required to fund the additional costs of the highest cost scenarios in 2020 is 60-80% of what might be raised from an additional 1p on the basic rate of tax for all taxpayers,’ the authors added.
