Back to drawing board on social care

Radical reform of the social care system in Wales could be one of the first casualties of there now being different governments in Westminster and Cardiff Bay. Andrew Lansley MP, the new Conservative Secretary of State for Health, has a completely different view on social care and the role of the state to the Deputy Minister for Social Services in Wales, Gwenda Thomas AM. This could pull the rug from under the Welsh Government’s Green Paper on reforming the funding of social care. Does it have to be this way?

Social care is poorly understood, undervalued and under funded. If you were involved in a sudden accident or developed a serious condition, you would expect the NHS to look after you and nurse you back to health. Regardless of whether you were living in Bangor or Barry, Pembrokeshire or Prestatyn, your expectation of the health service would be the same. You would expect it to be free and for professionals to do everything they can to make you better.

But, what if you are not going to recover? What if you develop a long term chronic condition or are elderly and need help at home? In these circumstances a local authority can provide you with a package of care. However, it can be extremely difficult to know what you are entitled to. Each local authority has different charges and a different assessment. Someone could be judged to have moderate care needs and be given a care package in one local authority, whilst in another the same person might not be given anything. In Wales 82,000 people receive local authority funded social care.

In Summer 2009 the UK Government Green Paper on reforming social care in England ruled out using general taxation to fund free personal care. Instead, it considered voluntary insurance, compulsory insurance and a partnership model where the state would pay a percentage of the costs, if the individual paid the rest.

However, this Green Paper only applied to England. When the Welsh Government began to consult on its own Green Paper in November 2009, the message from Ministers was that they wished to link in very closely with what was being proposed in England. The Welsh Green Paper states:

“Whilst the Welsh Government is responsible for the social care system in Wales, the levers to change the system for paying for care are largely the responsibility of the Westminster Government, and the existing legal framework covers England as well as Wales.”

The Green Paper only explored the funding options already being considered by the UK Government. There was no attempt to explore any specific Welsh ideas. It also proposed that a new social care system should be an England and Wales model.

The future of social care in Wales was therefore tied to the success of proposals in England. While they were supported by the outgoing Labour Government, in the run-up to the election the Conservatives branded the compulsory insurance option a ‘Death Tax’. Instead they suggested giving people the option of insuring themselves against the costs of residential care by paying £8,000 on retirement.

Where does that leave social care reform in Wales? It is time to go back to the drawing board. In the first instance we should unpack the statement from the Welsh Green Paper about the ‘levers of change’ in the system resting with Westminster. Social Care is a devolved area, with ‘Social Welfare’ one of the 20 devolved fields in which the National Assembly has competence. In order to exercise these powers the Government would have to introduce a Legislative Competency Order or legislate directly following a Yes vote in the forthcoming referendum. Nonetheless, if it wants to, the Welsh Government can make laws in this area.

If significant reform is not going to be developed on a UK basis, then it is time the Welsh Government examined the tools at its disposal to reform the funding of social care. There are broadly two options:

• Insurance The Welsh Government could pursue the voluntary insurance option considered in the Green Paper. It could encourage multi-national insurance companies to develop specific social care insurance packages for Wales, perhaps with a degree of subsidy or underwriting from the state. As long as the insurance industry was supportive, this could work.
• Social Care Precept Although the Welsh Government is not permitted to raise its own taxes, it could introduce legislation to reform Local Authority finance, and introduce a ‘Social Care Precept’ on top of the normal council tax bill to fund social care.  Such a precept would operate in the same way to the Police Precept and would be collected by local authorities. Households could be charged a uniform rate or the precept could incorporate council tax bands with people in larger houses paying more.

The Welsh Government’s own advisory group reported in June 2009 in favour of the second option. As it stated:

“Our strong preference for a new model of paying for care is one which is funded by payments from everyone in society, according to their ability to pay, primarily over the course of their working life. We recognise that the main options for achieving this would be increasing general taxation, or establishing a new social insurance fund or National Care Fund to which most people would be expected to pay.”

If it went down the line of a social care precept on council tax, the Welsh Government would need to establish a National Social Care Authority, independent from Government, to manage the spending of the funds raised by the precept. The Authority would be tasked with funding the social care needs of the population. It would manage the level of the precept increasing if social care needs increase and lowering it if costs go down. Based on council tax figures from 2009 a 10-15 per cent precept on council tax would raise between £100 and £150 million to fund free personal care for everyone who needed it, regardless of age.

Whereas at the moment individuals are accessed by their individual local authorities for support, in this model, it would the National Social Care Authority that was responsible for assessing and funding social care, leaving individuals to purchase services from their local authority, the voluntary sector or private sector.

Such a move would be controversial. However, if politicians are serious in their aspirations to give free personal care to everyone in Wales, then there has to be a cost. If the scheme were funded out of the Welsh block grant, substantial savings across existing Government programmes would have to be found. The only alternative is to bring additional funding into the system. In the absence of powers to raise income tax, VAT or Corporation Tax, a Social Care Precept would be the only realistic way of bringing new money into the system.

Over the last 11 years the social care systems in Wales and England have gradually diverged. Personalisation, encouraging individuals to manage their own care packages with personal budgets was a major priority for the last UK Government. However, in Wales the vast majority of people let their Local Authority manage their care package.

At the same time the Law Commission for England and Wales has been consulting on proposals for a new single piece of statute codifying decades of overlapping pieces of legislation. The resulting draft bill could make the social care system less complex for service users, Local Authorities and private agencies, and recognise the important role of carers. However, desirable though these proposals may be, they do not take into account diverging social care policy in Wales. In its Review of social care the Law Commission argues:

“We provisionally consider that the vehicle for our reform should be a unified adult social care statute covering both England and Wales. Whilst there are difference in the law that applies in England and Wales, we do not believe they are currently such as to require separate statutes for each country.”

This simply ignores that social care is a devolved field and the Welsh Government has already started to reshape the law in this area through the Social Care Charges (Wales) Measure 2010 and the Proposed Carers Strategies (Wales) Measure. The Law Commission’s proposed Social Care Statute would simply overwrite Welsh Laws and replace it with a unified system for England and Wales.

The Welsh Government needs to defend the diverging social care agenda in Wales and work with the Law Commission to implement a separate social care statute for Wales, rather than one for England and Wales. The prospect of a single Welsh piece of legislation, passed by the Assembly, that would encompass previous Acts and Measures would greatly improve a complicated system setting out the role of service users, carers and the state.

The Law Commission has failed to take into the account the fact that both governments are committed to a referendum on primary law making powers next year, and if successful, the National Assembly will have the power to make laws in every area covered by the its Review. Following a referendum the Welsh Government should take on board the recommendation by Professor John Williams of Aberystwyth University of establishing a separate Law Commission for Wales set out in the Spring 2009 edition of Agenda.

Whilst many people would broadly accept the recommendations of the Law Commission, it is essential that the outcome is a single statute for Wales resulting from a Measure passed by the Assembly, rather than an English statute with Wales ‘bolted on’.

Schedule 7 of the Government of Wales Act 2006 allows the Welsh Government to reform both the funding  and the structure of social care. The solutions we need will require politicians to take bold steps that some will find controversial. But it Wales wants to see the state fund social care then the money would have to come from either a reformed council tax or through substantial savings elsewhere in the Welsh block grant. A precept on the council tax is surely the best way forward.