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NHS surplus should be used to fund social care

And rich elderly should be taxed more – says report

Jo Carlowe

Tuesday, 29 May 2012

The government should use the NHS surplus to plug the future funding gap in social care.

The Nuffield Trust in its report ‘Reforming Social Care: Options for funding’, published today, outlines its policy response to the government which is set to publish a White Paper and draft Bill on the future of social care. The White Paper will set out the Government’s response to the recommendations from the Law Commission (2011) but is expected to shy away from fully addressing proposals put by the Dilnot Commission on Funding of Care and Support.

“It is imperative that the Government’s planned White Paper addresses the underlying funding gap. Failure to address social care funding will put vulnerable older people at risk and increase pressure on the NHS,” said Nuffield Trust Chief Economist Anita Charlesworth.

In the Nuffield Trust’s report it suggests the funding gap could be plugged by raiding the NHS Surplus – given that NHS primary care trusts are currently projecting an underspend of £1.5 billion 2011/12.

“The Department of Health should consider using part of this for further transfers to social care,” the report states.

However, it goes on to say that alone this is not enough. Additional recommendations include minimising the cost of the Dilnot recommendations by opting for a higher level of caps; generating more productivity from existing social care services; and exploring options for redirecting elements of the health and welfare budgets into social care.

Estimates produced for the Dilnot Commission suggest that even without reform, spending on social care will have to rise from £14.6 billion in 2010/11 to £23 billion by 2025/26.

It suggests that the Government urgently needs to begin a dialogue with the public about how social care will be paid for in the future.

The think-tank also moots the idea of tax rises – with wealthy older people asked to carry more of the burden.

“The Government should consider shifting resources from the welfare payments currently received by better-off older people, to fund long-term reform of social care,” says the report, “It should also explore whether some of the health budget could be more efficiently spent on preventative social care. If the costs of social care cannot be met within the overall sum of state support to older people, some form of higher taxation may also need to be considered.

“This should be guided by principles of equity – between generations as well as between people with differing levels of income and wealth. In particular, the Government should explore options to direct the burden of any tax increases onto wealthier older people.”

The report comes as the government is still finalising its plans for reforming the way people pay for care in their own homes and in care homes.

A White Paper is expected to be published next month.

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