In his first speech as Prime Minister on 24 July 2019, standing outside No 10, Boris Johnson made a promise to the public: “I am announcing now – on the steps of Downing Street – that we will fix the crisis in social care once and for all with a clear plan we have prepared.”
There was no suggestion of what that policy would look like back then, aside from an aim to protect those in fear of “having to sell your home to pay for the costs of care”, and “to give every older person the dignity and security they deserve”.
In the Conservatives’ general election manifesto pledge later that year, there was scarcely any more detail. It promised to make the £1bn of extra funding announced that year annual, committed to seeking a “cross-party consensus” on reform, and guaranteed “no one needing care has to sell their home to pay for it”.
Three Queen’s Speeches, two years and one global pandemic later, we are finally seeing this plan begin to take shape.
After whisperings began before parliament’s summer recess of a rise in national insurance to fund social care, the briefings started back up again the moment MPs were about to return to Westminster.
Announcing the official plan in the House of Commons on Tuesday 7 September, Boris Johnson fleshed out the idea: a 1.25 percentage point rise in national insurance to raise £36bn for three years of investment.
The majority of this would be spent on the NHS, with £5.4bn to pay for care – funding improvements to the sector and a care cap of £86,000 (the maximum amount a person will pay for their care in their lifetime), and a tapered asset floor of £20,000-£100,000 (the threshold for the value of your assets you’re allowed to keep, below which the state will begin paying for some means-tested care).
This 1.25 per cent levy will initially be rolled into national insurance, with workers across the board paying the same rate. This means that the vast majority of the population who earn between £10,000 and £50,000 a year will see their national insurance payment increase by around 10 per cent; those earning over the £50,000 threshold will see less of an uptick.
Ultimately, this levy will hit lowest earners the hardest, with those on £24,000 expected to pay an additional £180 a year.
While Johnson insisted in the Commons that his national insurance hike would be “progressive”, a concern among Tory and opposition MPs alike is that it would mean ordinary workers paying to protect the inheritances of the wealthy.
As Rachel Cunliffe wrote in the New Statesman when these plans were first mooted, “Boris Johnson’s social care plan would leave the poorest subsidising the wealthiest.”
Although the Labour leadership has avoided putting forward its own alternative social care reform plan, party figures from across the political spectrum have suggested taxing wealth to contribute to the funding – by equalising capital gains with income tax, for example.
The campaign group Tax Justice UK argues: “Raising national insurance, while leaving wealth largely untouched, is the wrong way to fund social care.”
The government has extended the 1.25 per cent tax rise to dividends, which will largely affect wealthier people with investments, and to earned income by those aged over 65. But as yet, there have been no announcements to increase taxes on other sources of income, such as buy-to-let property.
Although working pensioners will pay into this particular national insurance rise, dubbed the “health and social care levy” by the government, increasing national insurance hits working-age households hardest – as the New Statesman demonstrated this week – because young people earn the lowest wages and are less likely to own property or other assets.
The south of England, where incomes are higher, is also less likely to see a hit to disposable income than other areas from this tax rise.
Yet the argument that this plan would simply mean the young paying for the old is misleading. Almost half of social care users are under the age of 65.
In 2019-20, local authorities received over 1.9 million new requests for support: 1.37 million of those for people aged 65 and over, and 560,000 for working-age adults.
In the past five years, the number of working-age adults requesting social care support has increased by 12 per cent.
Working-age social care demand is rising and will continue to rise, partly because of an increase in the life expectancy of people with learning disabilities on a par with those without. According to former Disability Rights UK researcher Evan Odell, who has spoken to the New Statesman about this trend in the past, 70.9 per cent of the long-term working-age social care budget in 2019 was being spent on learning disability support.
Related to this, an increasing number of people with learning disabilities will outlive their parents, or will still be around when their parents are no longer able to care for them; this means increased need for state provision.
Working-age social care needs are also rising because of advances in medical treatment, which are saving people from dying of injuries, illnesses and genetic conditions – but also leaving them in need of long-term care. Along with an ageing population, this rise has added pressure on to local authority social care budgets, meaning councils have had to cut back spending in other areas in attempts to meet these rising costs.
Since austerity was introduced by the coalition government in 2010, cuts have fallen heavily on local government budgets, with spending on councils in England cut by roughly 21 per cent between 2010-11 and 2018-19. Central government funding to councils has been cut by 38 per cent (from 2009-10 to 2018-19) overall. This is all while the cost of delivering social care – the legal responsibility of councils – has been rising.
Social care spending has only just risen above its 2010 level, despite this increasing demand.
There is concern that the current plans stand to benefit the wealthiest in need of care, at the expense of improving the quality of the sector as a whole.
“The cap on care costs – which will consume nearly half of the funding – will protect people from the very high costs of long stays in residential care, but setting it at £86k means it will help relatively few people,” says Richard Murray, chief executive of The King’s Fund health think tank.
“There is a real risk this will leave inadequate funding to bring about meaningful change in areas such as workforce, access and quality.”