£1.5bn won't solve old age funding crisis

UK adults bury heads in sand as costs mount and state support dwindles

Sajid Javid delivered his maiden spending review speech on Wednesday (Reuters)

You know it really must be an insane week in Westminster when an event that usually prompts supplementary sections in the national press barely gets a line.

And yet in among the painfully off-topic rhetoric from chancellor Sajid Javid in his maiden spending review speech on Wednesday, there were a few solid details to cling to in a political climate so dizzying we’re starting to feel quite sick.

Cling to them we must, because while the members of the Houses and their entourages continue to occupy this weird, sunlight-deficient world of green leather and red lines at the exclusion of all else, beyond it, real life has to operate.

Many legislative plans to help ease the financial lives of millions of Britons have toppled soundlessly into the yawning Brexit chasm that leaves precious little time to debate anything else.

Critical issues that once formed the backbone of manifestos have been left to rot. Those affected by them appear voiceless. Even more so than they were before the dark days of post-referendum UK.

We have to spend, save and try to plan for the future – whatever that looks like and however long it lasts.

So it is a relief to learn from that speech this week, no doubt drafted and redrafted extensively, that the government is to release an extra £1.5bn of short-term funding to help support local council social care in the coming fiscal year.

Of course, it’s a drop in the ocean. The House of Lords has reported that the system would need £8bn to simply restore services to 2010 levels.

Last month, figures from the Ministry of Housing Communities and Local Government revealed councils are now spending more than £16bn a year on adult social care. It sounds like a lot but they have made £7bn of cuts since 2010 and have to slice a further £700m away this tax year.

Carers UK estimates there are 1.2 million adults in the UK who aren’t getting the care they need, including 43 per cent of the over 80s who need help with daily activities.

“When you factor in cuts in public health spending, a 45 per cent fall in the number of district nurses since 2010, and the boom in the population aged 65 and over, you can see the incredible pressure on social care,” notes Sarah Coles, personal finance analyst for Hargreaves Lansdown.

“Councils have made billions of pounds worth of cuts at a time when more people need more care than ever.”

In fact, the Office for National Statistics recently forecast that one in every four people will be aged 65 and over in less than two decades. That’s up from around one in six people in 1998, and one in five in 2018.

Rachael Griffin, financial planning specialist at Quilter says: “As society ages, it heaps additional pressure on the already-creaking social care system. Some estimates suggest that the costs of care for older people will double between 2020 and 2035.

“Local authorities have to meet the cost of funding care for an ageing population, recovering what they can from those that fail the means test, as well as relying on local tax revenues and central government funding.

“The increasing financial pressure of funding care in an ageing society will force more local authorities to put the microscope on our finances in an effort to unearth more recipients of care that have the means to pay.”

In short then, while we continue to wait for a green paper the government promised us two years ago that would set out a sustainable long-term plan for social care fund, make no mistake that the burden of cost lies firmly at the feet of the individual.

Figures from Fidelity suggest caring for an elderly relative costs an average of £5,545 a year.

To be clear, that’s not the cost of a residential care home, which can come in at £1,800 a week.

That’s just the typical financial impact on an adult for looking after a vulnerable adult on an informal basis – either in care costs or in lost earnings.

With almost a third of all UK adults having to look after elderly relatives, a fifth have taken time out of work, more than one in 10 have cut their hours and another one in 10 have had to quit their job altogether.

The numbers are huge, the chances of needing help are growing and state funding is stretched to breaking point. But most of us haven’t given it a moment’s thought, including a quarter of those already in their 70s who don’t know how they will meet care costs.

Millions still expect the state to cover it.

“We need to arrive at a new, fair and sustainable deal on social care funding which will allow people to understand and plan ahead for their contribution should they need care,” says Steven Cameron, pensions director at Aegon commenting on this week’s “sticking plaster” of a cash injection.

“Fixing this huge problem area must be a priority for government and the millions of families awaiting a new deal while struggling week by week to provide care and dignity to elderly relatives.”

The Money Advice Service provides information about long-term care funding, including any financial support you may be entitled to.