A pension-style funding model would be the most cost-effective solution for reforming adult social care, according to a report by the Centre for Policy Studies (CPS).
In its ‘Fixing Social Care’ report, the CPS’s preferred model would see the state guaranteeing a reasonable level of care and accommodation, with individuals strongly encouraged to top up their provision beyond that via insurance – paying for what they want while the state covers what they need.
The CPS said the model, developed with former Work and Pensions Secretary and First Secretary of State Damian Green (pictured), would better protect people’s assets and benefit a greater number of hard-working families while increasing supply and meeting the increasing demand for social care.
“The failure to address social care properly has become a national embarrassment. It should be near the top of the Government’s post-Covid agenda,” said Green.
“Using our successful pensions system as a model, combining a universal entitlement with strong incentives for millions of people to make their own extra provision, is the most practical route to a stable and well-resourced social care sector,” he added.
The thinktank co-founded by Margaret Thatcher compared a pension-style system with two other funding models: a capped cost model as proposed by the Dilnot Commission, and a fully nationalised system.
The CPS said the capped cost model would leave people having to cover daily living costs of around £12,000 a year. They would have to contribute up to the cap as well, with calculations including the value of their home.
“It is possible to make this more politically attractive – but only by making it more expensive,” the CPS said.
The fully nationalised system advocated by Labour could cost around £14 billion each year, the CPS estimates.
“The cost would be absorbed, through general taxation, by those of working age – exacerbating intergenerational unfairness. It would also result in people receiving different levels of care, and result in the state paying for what people are currently doing privately,” it added.
