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Westlake Legal Group > Welfare Reform

Damian Green: Greater funding for social care requires a frank discussion with voters about priorities

Damian Green is MP for Ashford, and is a former Secretary of State for Work and Pensions.

Whoever the new Prime Minister is (full disclosure: I’m a Boris Johnson supporter), they will need a lively domestic agenda to complement the final throes of this stage of Brexit. Which will mean tackling some of the burning injustices which were identified but not addressed by the outgoing administration. The grasping of social care must be an urgent priority.

For many years social care and its funding has been one of the most difficult subjects in British politics. In 2010, the Labour proposals were condemned by Conservatives as a Death Tax, and Labour were out. What goes around comes around, and in 2017 our own ideas, more generous than the existing system, were badged the Dementia Tax, and dreams of a large majority disappeared overnight.

It is one of the most personal issues possible, as many individuals suddenly find themselves having to provide a decent quality of life to a loved one with no proper guidance about how to do it, and what their entitlements are.

At the same time it is financially demanding. Essentially, the vast majority of people agree that we need to spend more on social care. Simultaneously, they are insistent that they should not themselves pay any extra tax. We need a serious national conversation about this (not staring in mid-campaign) and must face up to some unpalatable truths.

The current social care system is unsustainable not just financially but politically. It is too often opaque to those trying to understand it, with no apparent logic to the conditions which receive free NHS treatment, and those which do not. It is also apparently unfair in not rewarding a lifetime of prudence. Those who have saved feel that their savings will simply disappear, while those who have not saved receive the same level of care.

Less well-known is the fact that funding social care out of council tax means that local authorities are reluctant to allow too many care homes to be built. An ageing population means that already more than two fifths of council spending goes on social care. This figure will only increase over the years, so councils are fearful that all their other services will be swamped by the rising demands of the social care system.

The failures in social care put unnecessary extra pressure on the NHS. Indeed, the new, generous funding plan for the NHS depends on the assumption that we develop a social care system which keeps people out of hospital longer and discharges them in a smooth and timely fashion.

I recently published a paper for the Centre for Policy Studies “Fixing the Care Crisis” which dealt specifically with the problem of care for older people. There is at least as big a problem for working age people who need care, but let’s deal with one problem at a time.

A new system will need to meet four objectives. It will need to provide enough money to cope with an ageing population. It will need to be fair across generations and between individuals, ensuring that no one has to sell their own home, and ending the “dementia lottery”. It must lead to an increase in the supply of care beds and retirement housing. And ideally it should secure cross-party consensus.

We should look as a model to the pension system, where the basic State Pension has been increased significantly, while at the same time most people save additionally through their working years to provide comfort and security in old age. Auto-enrolment has been a great cross-party success story, encouraging millions more to save towards extra security in old age. The benefits will not come for decades, but they will be huge when they arrive.

Similarly, just as the basic State Pension has been improved in recent years I believe we should offer a Universal Care Entitlement, offering a better level of care both for homecare and residential care. For those who need residential care this would cover the core residential costs. Needs would be assessed locally but the money would come from central Government. This would take away the pressures on local councils.

Will this involve extra money? Of course it will. My estimate in the CPS paper is that providing decent care in this way would involve an extra £2.5 billion extra a year immediately, with increasing amounts as the demographics change over the years. Others put the figure higher. This is serious money, but not a big problem for the Treasury to find to improve a vital service. Any suggestions for an increase in tax or National Insurance will be controversial, as I have found, but politicians need to be honest about this. If the public want extra spending, the Government will have to raise more money to pay for it.

In addition, we need to find an acceptable way to allow those with the capacity to improve their own provision to do so. This would come through a Care Supplement, a new form of insurance designed specifically to fund more extensive care costs in old age.

This is analogous to the private pension system, which sits alongside the state system. It would allow people to buy insurance at the level they can afford to provide peace of mind. It would not be compulsory, (as pension auto-enrolment is not compulsory) so could not be stigmatised as a Death Tax or Dementia Tax. People could save for it over many years or make a one-off payment (possibly using equity release) at a suitable time in their lives.

These ideas would take the burden of social care funding away from local authorities, and even more importantly offer certainty and security to the increasing numbers who will need social care in old age. No one would have to sell their house and see their inheritance disappear. Everyone would have the chance of receiving better care. Fewer people would be left unnecessarily in hospital beds as they wait for social care to be available.

None of this is easy and it will take political courage. But it absolutely necessary if we are to provide peace of mind and security to frail elderly people who richly deserve it.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Mark Harper: Our social care policy should be more ambitious

Mark Harper is MP for the Forest of Dean, a former Chief Whip, and former Minister for Disabled People.

When social care is discussed in the media or in Parliament, the conversation almost always focuses on the needs of older people. What is not widely known is that just over half of the adult social care budget in England is actually spent, not on older people, but on working age adults with some form of disability. And I am going to talk about both.

A lot of the discussion on social care for older people is about how it is paid for, that is to say how you split the cost between the individual and the taxpayer. That is because many older people will have accumulated significant assets by the time they need social care, and it is reasonable that the cost is shared between them and the taxpayer. The debate is about the balance between the two.

For the last two years, the Government has been talking about how to fund social care. However, the Dilnot Commission in 2011 confirmed that the public agreed that the cost of social care for older people should be shared between the individual and the taxpayer.

We have already put down the foundations for some of the recommendations from Dilnot in primary legislation with the Care Act 2014. All that remains is to draft the secondary legislation to put the figure for the cap in. This could be done very quickly – taking action beats more talking.

Britain has a proud record of being a leading country on enabling disabled people to be more independent and get into work. I am familiar with this policy area because I was the Shadow Minister for Disabled People for almost three years, between 2007 and 2010, and the Minister for Disabled People between 2014 and 2015.

In our 2017 general election manifesto, we set out an ambition to get a million more disabled people into employment over ten years. That is the right direction of travel, but I would like to see us be more ambitious about both the destination and the speed with which we intend to reach it.

I have a suggestion: perhaps we should re-adopt the commitment we made in our 2015 manifesto that ‘we will aim to halve the disability employment gap’. The Social Market Foundation has said that the 2015 commitment would see between 200,000 to 500,000 extra disabled people in work compared to our 2017 promise. In the interests of transparency, I should explain that, as the Minister for Disabled People in the run up to the 2015 election, I may have had a hand in drafting said manifesto commitment myself!

The Social Care Green Paper offers an opportunity to set out some of the Government’s thinking and some of the options it has for action for working age adults with some form of disability. Publishing it would kick off the necessary debate about the right solutions. The Government would have an opportunity to listen to valuable feedback from disabled people, expert organisations involved in this field and the wider public. It would then be able to set out specific actions it is going to take, legislating where necessary. The sooner we begin, the sooner we can see real change taking place and the sooner disabled people will feel the benefit.

I chair the All Party Parliamentary Group (APPG) on Learning Disability, and recently chaired a joint meeting with eight other relevant APPGs to talk about what we wanted to see in the Green Paper. This meeting was attended by a number of disabled people and campaigners for change. A summary of the meeting will shortly be sent to the Health and Social Care Secretary.

One clear theme that emerged was to see better joined-up working between the social care, health, and welfare systems. There is quite a lot of support available already, but it does not always work well together as a package. For example, if someone acquires a disability, the rest of their life (their work, their family) keeps going at the same pace but things can go wrong because the support they need, like social care, home adaptations, and financial help, do not get going quickly enough.

The funding of social care for working age adults is very different from funding social care for older people, as they often have few, if any, assets. Any kind of means testing for social care support for them runs the risk of creating further barriers to getting into work.

Looking at the system overall, there may be areas where an increase in spending is required but that may lead to savings elsewhere. For example, more resources available to enable somebody to work is likely to lead to better health outcomes as well as that person making a financial contribution to the public finances.

Conservatives want to enable disabled people to live their lives as independently as possible to reach their full potential. We should be ambitious about our commitments, so I would like to see us improve our goal for getting more disabled people into work, reverting to the better target we had in our 2015 general election manifesto. We need to see more effective joined up working between the social care, health, and welfare systems. To that end, publishing the Social Care Green Paper now would kick off the necessary debate. There are millions of disabled people in our country who will welcome us gripping this issue and making rapid progress to deliver real improvements to their lives.

And for those older people needing social care, swift implementation of a cap as recommended by the Dilnot Commission would lead to a much fairer system.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Ryan Shorthouse: How to add contributions and incentives to benefit payments

Ryan Shorthouse is the founder and Director of Bright Blue

Back in the nineties, Kevin the Teenager was first introduced on TV, screaming “its so unfair”. He’s stayed in popular consciousness ever since, particularly for long-suffering parents. And that adolescence angst about fairness, in truth, never really leaves us.

Throughout our lives, even in infancy, we intensely monitor – are deeply affected by – whether we and others are treated fairly. And this is associated with proportional, rather than equal, outcomes. Most of us think that rewards in life should derive from – and differ according to – efforts. A recent study by Yale University scientists, based on experiments with babies and children, show that fair inequality is favoured over unfair equality.

Attitudes towards the welfare system, which we all pay for as taxpayers, are especially vociferous. The public, sadly, are largely suspicious and condemnatory of the current benefits system.

Perhaps this is partly because benefit entitlement is – even under the new Universal Credit that is gradually being introduced – determined almost entirely on the basis of need. Those who have worked for longer, paid more in tax, will receive the same amount from the state in straitened times as someone who has hardly worked at all.

A strong safety net is not something those on the centre-right should sniff at: it is essential for the popularity and functioning of our market economy and liberal society. This is because people inevitably fall into poverty. Businesses fail. Jobs are lost. Relationships break down. Trouble happens, basically – and it can happen to almost all of us. Indeed, it’s been estimated that a third of us will live in poverty at least once in an eight-year period.

Over the past decade, working-aged benefits have been deeply and disproportionately cut. But if the welfare system is to be suitably resourced in the future, the public need to believe it is fair. Three reforms, which Bright Blue advocated in our report Helping hand?, could help.

First, people who have worked for longer should be entitled to more financial support when they come to rely on the welfare system, through a contribution supplement that is added to their Universal Credit payments.

This supplement should also be added to statutory maternity and paternity pay. The current support new parents receive from the state is a measly £145.18 per week, resulting in low-income women returning to work sooner than they’d like and many men put off from taking time off all together.

Second, claimants should be financially compensated for any late payments of Universal Credit by the Department for Work and Pensions. Most claimants have to meet certain conditions on job preparation and seeking to be entitled to benefits. If they don’t, their benefits are sanctioned. Fair enough. As Bright Blue’s recent research showed, benefit claimants themselves tend to support this.

But this rule ought to be reciprocated. There should be obligation on the Department for Work and Pensions to pay claimants their regular Universal Credit payments on time, especially as claimants now receive their benefit payments monthly, less frequently than before. If government doesn’t do this, as evidence shows is the case with a significant minority of claims, it should face consequences too. Claimants should be granted financial compensation, if an independent investigation finds the Department for Work and Pensions at fault, which to some degree should mirror the amount that claimants lose if they are sanctioned.

Finally, there should be more carrots, not just sticks, for claimants meeting the conditions of receiving benefits. If jobseekers are going that extra mile to get a job, the government should recognise and reward them. For those who put in the hard yards but keep hitting a brick wall, Work Coaches in jobcentres should be able to grant them a little more cash.

Even more radically, those who show extraordinary effort should be entered into a nation-wide lottery, with a handful of claimants having the chance to win a £1,000 prize.

Sometimes, no matter how much they try, some people face bouts of bad luck. They need and deserve extra support through our welfare system.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Universal Credit. Noble aim, thorny problems. But if it’s to work properly, it must be paid for.

ConservativeHome spoke yesterday to Conservative MPs in marginal seats about Universal Credit.  One particularly switched-on Parliamentarian told us that food banks in his seat hate the new payment and that job coaches love it.  He said that the former claim that it pushes people into debt, homelessness and destitution.  And the latter counter that makes it easier for them to help benefit claimants move into work and get better-paid jobs.

Both perceptions can be true.  It was never going to be easy to make a major change to the system which is reliant on people reporting changes to their income in real time – and new computer systems to enable this to happen.  This helps to explain why Universal Credit, originally intended to be fully operational by 2017, will now not be so until 2023.  The payment poses particular challenges for claimaints migrating to it from what Ministers call the legacy system.  Last autumn, the Resolution Foundation calculated that 2.2 million families were expected to gain under the system and 3.2 million to lose, with single parents especially adversely affected.

The Government has chucked transitional relief at Universal Credit.  Ministers argue that claimants can take on more work to increase their income.  Philip Hammond announced more support and an increase in work allowances in last autums’s Budget.  But the bottom line is that too many people are being paid late: last summer, the National Audit Office said that it a fifth of those expecting their first full payment were in this position.

A Commons vote is due on transferring three million claimants from the old to the new system.  David Cameron had a small majority, but his Government was vulnerable to defeat on welfare-related and many other issues: remember George Osborne’s U-turn on planned changes to tax credits.  Theresa May has none at all.  A handful of backbench protesters could sink the change.  Amber Rudd thus had little alternative but to postpone the vote, and has duly done so.  She will now seek Parliamentary approval for a pilot scheme that transfers just 10,000 people from the old to the new system.

The operation of Universal Credit is complex, but the politics are simple – or straightforward, at any rate.  The Universal Credit system is the brainchild of Iain Duncan Smith’s work in opposition at the Centre for Social Justice.  It has a visionary aim: to roll six benefits into one, make the system more simple and flexible, and improve incentives to work.  Writing on this site last autumn, Alok Sharma, the Employment Minister, complained of the three cliff-edges in the legacy system that deter claimants from seeking work, and reported that 86 per cent of people on Universal Credit are actively looking to increase their hours, compared to just 35 per cent of people on Jobseekers Allowance.

If you are going to appoint Duncan Smith as Work and Pensions Secretary, as Cameron did in 2010, you cannot do so without allowing him to room to implement his scheme.  And if you are going to do so, it follows that the Treasury must take the funding consequences on the chin.  It didn’t.  Think back to that Osborne tax credits U-turn.  The reason for Duncan Smith’s resignation in 2016 was precisely that the then Chancellor was not prepared also to reverse planned savings to disability benefits (which in turn impacted upon Universal Credit).

Amber Rudd is the fifth Secretary of State for Work of Pensions to hold the post since he left – a turnover rate of about one every six months.  She has started by doing what every new Cabinet Minister should do if confronted by a policy problem: namely, to promise that she will listen and learn.  There is more to this than the usual bromides.  Rudd is particularly sensitive to the position of women in the system.  She will campaign for more money for the system: Downing Street’s Brexit-driven weakness may thus well be Universal Credit’s gain.  That she is on broadly the same wavelength as the Chancellor over EU policy can’t do her cause any harm.

Writing on ConservativeHome last autumn, Tom Clogherty of the Centre for Policy Studies identified what new money could do to help realise Duncan Smith’s goal: a report from the think-tank, he said, “advocates bold action on Universal Credit, suggesting that the taper – the rate at which benefits are withdrawn against each pound of post-tax earnings over any work allowance – should be cut from 63p to 50p. This would give a huge boost to the lowest earners, while also giving them a strong incentive to increase their hours and make progress in the workplace”.

Separately, senior backbenchers and former ministers are piling on pressure for an end to the benefits freeze.  A coalition of five former Secretaries of State, ranging from Nicky Morgan to David Davis, made the case last year.  Davis said that the freeze contradicts “the basic Tory notion of having a robust safety net and an effective ladder out of poverty.”  Rudd can be expected to make the same case in private.  Whatever your take, one thing is certain.  If Universal Credit is to be introduced in the first place, it must be paid for.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com