Chapter 4

Analysis of the Current Funding System

This chapter describes the current funding system and analyses it against the theoretical framework which we set out in the previous chapter. It sets out aspects of the system which in our view are unsatisfactory.

4 Having set out a theoretical framework in the previous chapter, and concluding that long-term care was most efficiently covered by some kind of risk pooling, we looked at the current funding system and how it works. In particular, we considered the efficiency of coverage and the value for money offered to individuals and to the nation as a whole. We also had in mind the values we set out at the end of Chapter 1. Out of these values we constructed the following framework for analysis of any funding system (see overleaf):

FRAMEWORK FOR EVALUATION

1. Fairness

• Does the funding system fulfil the reasonable expectations of older people?

• Are older people whose health is undermined by chronic disabling illness treated in the same way as those suffering from more acute illnesses?

• Does the system penalise those who made their own provision and reward those who did not?

• Is the balance of funding between the individual and the taxpayer fair?

• Will the burden remain a fair one for future taxpayers given the forecast increase in numbers of the older people?

• Does the funding system encourage informal caring?

2. Maximum choice, dignity and independence

• Are older people given adequate choice about the care they receive?

• Does the system encourage the avoidance of premature or inappropriate admission to residential care?

• Does the funding system allow the most appropriate care for the individual?

• Is the dignity and independence of individuals compromised by the funding mechanisms?

• Does the funding system offer consistent standards of care?

• Is the system comprehensible to and navigable by the individual?

3. Security, sustainability, adaptability

• Can older people rely on the funding system to provide what they need at a point when they are vulnerable?

• If things go wrong, can the individual do anything about it? Who is ultimately responsible and accountable?

• Will the funding system remain affordable?

• Can the funding system respond to new patterns of care e.g. increased domiciliary care or other different types of care?

4. Quality and Best Value

• Is the funding system biased towards particular forms of care, whether or not they are appropriate for the individual?

• Does the funding system favour one sort of care provider rather than another, regardless of quality, appropriateness, effectiveness or best value and quality?

• Does it offer acceptable and appropriate standards of care?

• Does the system provide best value overall?

Following some general remarks, we apply this framework to the current system and identify what needs to be put right.

THE CURRENT SYSTEM

4.1 The current system is particularly characterised by complexity and unfairness in the way it operates. It has grown up piecemeal and apparently haphazardly over the years. It contains a number of providers and funders of care, each of whom has different management or financial interests which may work against the interests of the individual client.

4.2 Time and time again the letters and representations we have received from the public have expressed bewilderment with the system - how it works, what individuals should expect from it and how they can get anything worthwhile out of it. We have heard countless stories of people feeling trapped and overwhelmed by the system, and being passed from one budget to another, the consequences sometimes being catastrophic for the individuals concerned.

WHAT DO PEOPLE GET NOW?

4.3 The current system of state provision for long-term care, based on the means test as explained below, is financed on a "pay as you go" basis. This means that current taxation pays for the care of those in the system now. The overall cost of current provision is about £7.1bn a year for the NHS and Social Services and £4bn for what people spend themselves. Some of this is underpinned by an estimated £6bn of Social Security benefits - there are no definitive figures which match all elements. The figures on spending, insofar as we can estimate them, are set out in Chapter 2 in Table 2.2.

4.4. The uncertainty as to the figures is in itself a cause for concern. No-one really knows just how much public or private money goes to support older people in long-term care. Despite our best efforts in the time available, we have been unable to shed definitive light on this matter. In the future this will no longer be acceptable. We recommend that the Government should ascertain precisely how much money, whether from NHS, Local Authority Social Services and Housing budgets, or from Social Security budgets, goes to supporting older people in residential settings and in people's homes. (Recommendation 4.1).

4.5 Similar problems are encountered in tracking exactly how benefits are used within long term care, as was illustrated in Chapter 2. The Department of Social Security (DSS) has no operational reason of its own to want to know whether or not benefits such as Attendance Allowance or Disability Living Allowance are used to buy care. It is enough for them to know that benefits are being paid out to people who are entitled to them. However, we have heard of many instances where Local Authorities asked people to claim these benefits and then recovered the money in charges. Clearly some parts of these benefits go towards paying for long-term care. If the Government are determined to see policy develop in a proper way across the boundaries of departmental competence, and that total public money which pays for long-term care is used to good effect, as part of the work in Recommendation 4.1 a proper assessment should be made of the amount of benefits, including Disability Benefits which come back into the system to pay for care.

4.6 Services provided by the National Health Service are generally free at the point of use. They are paid for from NHS budgets financed mostly by general taxation (a small amount being top-sliced from the National Insurance scheme to reflect the "NHS" element in National Insurance contributions). Local Authorities are responsible for assessing the need for "non-health" domiciliary care or residential care. There is a wide variation between authorities in the application of charges for care at home: some charge a small flat rate, some charge full costs, some apply a variety of means tests. This adds to the uncertainty and the sense of injustice felt by individuals. Local Authorities do however, apply a consistent national means test for residential and nursing home care charges, the effect of which we discuss in paragraph 4.15. Some are flat-rate charges which affect the poorer proportionately more, others are means tested.

NHS Care

4.7 Although the NHS tries to treat more people by treating them more quickly, older people can take longer to recover from treatment. They may require care which may not be seen as a medically active intervention but is necessary to enable them properly to recover. This could be help from a nurse, convalescence, or rehabilitation. The number of NHS long-stay beds has reduced by 38% since 1983 (a loss of 21,300 beds), and the number of private nursing home places has increased by 900% (an increase of 141,000 beds). Whether this increase in private beds represents a real need will always be difficult to tell, as some of the demand could have been created by the increasing availability of social security payments to pay for places in homes from the early 1980s to 1993. The availability of this money to pay for independent home places has helped to develop the independent care sector.

4.8 Only 8% of these additional private nursing home places are paid for by Health Authorities and Health Boards. The rest are paid for by individuals, or by Local Authorities. The total saving to the NHS over this period, also taking into account the cheaper nursing home beds funded by the NHS as a substitute for long-stay hospital beds, was considerable. Some of this cost will have been shifted onto the Social Security system and may be covered by the Social Security transfer payment from 1993 to 1996. It is difficult to tell, but there remains a lingering suspicion that, in order to concentrate its resources on acute care, the NHS has been increasingly reluctant to provide long-term care for older people. The Department of Health have been unable to help us clarify this point. We recommend that the Government should conduct a scrutiny of the shift in resources supporting long-term care since the early 1980s, and should consider whether there should be a transfer of resources between the NHS and social service budgets given changes in relative responsibilities (Recommendation 4.2).

Care arranged by Local Authorities

4.9 On discharge from hospital, people are entitled to an assessment by the Local Authority, who decide what ongoing care they need. In practice, assessments are based on locally set criteria, so that the type of care a person receives can depend on where he or she lives.

4.10 Care is also charged for in different ways. We have commented on the variety of different mechanisms for charging for care at home. These charges accounted for some £160m in 1995/96 in the United Kingdom (£200m in 1996/97). Some are for what might be defined as "care" such as help setting up in the mornings: some are for what might be termed "living costs", such as meals on wheels. The Audit Commission for England and Wales is undertaking a review of charging for home care, and the Government have commented on the need for consistent charging in the recent English Social Services White Paper⁽²³⁾.

Help from public funds with residential care and nursing home fees

4.11 Where a local authority arranges residential home or nursing home care (includes care in homes owned or managed by a local authority) on the basis of need they are obliged by law to determine what financial contribution the individual concerned should make towards the fees. This is often referred to as the "means test". In practice everybody makes some contribution because everybody has sufficient income to do so. Local authorities work out the contribution by applying a standard set of national rules to the calculation of income and capital. These largely mirror the rules of the Social Security Income Support scheme.^(iv) The objective is that after making their contribution towards the fees, people will be left with at least the amount of their personal expenses allowance^(v), often called "pocket money".

4.12 Most income is taken into account in full; for example Retirement Pension or payments of Income Support. In some cases, people will be expected to pay the full fees because their income, ignoring any capital, is high enough to enable them to do so and still leave them with their personal expenses allowance.

4.13 Where an individual has capital assets of £16,000^(vi) or more the rules are simply that he or she has to pay the fees in full.

4.14 In all other cases where people have capital of less than £16,000 they will be expected to make a financial contribution towards the fees. In these cases both capital and income are taken into account. If capital is less than £10,000 this is ignored as is any income it produces. If capital is between £10,000 and £16,000 the actual income is ignored, but for each £250 ^(vii) of capital an income of £1 per week is assumed. This is called the "tariff income" and we refer to it again in Chapter 6. The aim of the tariff income is that a person should spend some of their capital towards the fees. As capital is spent the tariff income falls, rapidly at first and then more slowly. The tariff income is added to the rest of the person's income for the purpose of calculating their contribution to the fees. Total assessed income is then compared with the fees; after deducting the personal expenses allowance, the balance is the contribution which the person must pay. The local authority pays the rest.

4.15 In our view, the effects of this system are anomalous. A person with assets between £10,000 and £16,000 will be asked to pay up to £24 per week, or £1,248 per year from those assets. Someone with assets above £16,000, will need to pay fees of on average £275 per week in residential care or £350 per week in a Nursing Home, to the provider, (normally nowadays in the private sector), unless or until assets fall below £16,000 when the state may again provide some help. A recent report by the Joseph Rowntree Foundation⁽²⁴⁾ highlighted that in many cases authorities do not monitor an individual's assets, so that many people may have continued to be charged the full amount when they were in fact entitled to some state help. This demonstrates how complex the system is.

4.16 If a person is in residential care for up to three years, and owns a house worth say £40,000, over those three years the system (by assuming that the house is sold and the proceeds are used to pay for care) will bring him or her to a level where it judges there is sufficient impoverishment to warrant state help. Someone with more assets is less likely to become impoverished in this way. The system at the moment helps people who are poor, demands that people of modest means make themselves poor before it will help, and affects people to a lesser degree the richer they are and better able to afford the sums required. This seems strangely inconsistent, and is at odds with the framework we set out in Chapter 3. The lack of consistency causes much distress to the public, particularly those who have modest assets which can be eaten up very quickly when care is required.

4.17 The Government Actuary's Department calculated, based on our estimates of public cost, that in terms of peoples' earnings from employment, from pensions and from investments, the current state funding system of long-term care represents a tax of some 2.2%. This supports a system which provides potential help only to those with assets of less than £16,000. There are no data on the assets held by older people in residential care. As explained in paragraph 2.12 Chapter 2, about 44% of the population of single over-75 owner occupiers are thought to have assets of less than £16,000 (see Table 2.3). This points to the proportion of people who under the current means test would be entitled to receive some help towards the costs of residential care. The rest of the population of single over-75s would have to fund all the costs themselves out of their savings or insurance policies. The savings of many of moderate means will inevitably be tied up in the houses which they have bought during their working lives. They, as Table 2.3 shows, tend to be asset rich, but income poor. A situation where the value of their home effectively dictates whether people are potentially entitled to state help for their care needs does not represent a form of effective pooling of risk of the kind which the Commission thinks is needed.

Expenditure Streams for Long-Term Care

4.18 NHS funds derive mainly from taxation collected and allocated by Central Government, with local decision - making on what is actually spent. The system is relatively straightforward with a clear line of accountability from local health commissioners to the relevant Secretary of State responsible for Health in England, Scotland, Wales and Northern Ireland. Services are commissioned locally from providers primarily in the public sector, with some private sector involvement.

4.19 In Northern Ireland, both Health and Social Services are funded in a similar way from the Northern Ireland Health and Social Services Executive. For both Health and Social Services there is a clear line of responsibility to one Secretary of State, and after devolution to one Minister.

4.20 In England, Scotland and Wales, Social Services are delivered by Local Authorities. Local Authority expenditure is derived from a combination of an allocation of general taxation via a Government grant (which is largely unhypothecated - not earmarked - between services) and money raised locally through council tax and fees and charges. It is important to note that there is far less direct central Government control over the detailed allocation of Local Authority expenditure (as distinct from national totals) than with the NHS, reflecting Local Authority autonomy. Central Government resources used to pay for the long-term care commissioned by Local Authorities consists of a grant covering a number of service blocks, but the individual Local Authority has discretion on how much to spend on each service.

4.21 Following consultation with Local Authority Associations the Government each year determines the amount of grant which goes to Local Authorities overall. This is then divided between authorities according to a formula. Standard Spending Assessments (SSAs) are published which indicate approximately how much the Government expects Local Authorities to spend on Social Services overall - not specifically on older people - to deliver a standard level of service. Most authorities spend at or above the SSA for Social Services as a whole (on average of 9% above). In England in 1996, according to figures supplied by the Department of Health, authorities spent 16% less than the SSA on services for older people (a sum of £0.7bn) while spending more on younger disabled people and on children.

4.22 The Commission supports the principle of local autonomy, and understands that the SSA should be seen essentially as an indicative basis for grant distribution. Nonetheless there is some concern that even the figures derived from a formula designed to assess relative need are being squeezed out by other priorities. We do not say that these other priorities are not worthwhile. They self evidently are. But it does suggest that the distribution formula is not right. The Government, in seeking to reassess the formula seem to share this view. We recommend a more transparent grant and expenditure allocation system, on which the proposed National Care Commission could report regularly. The Commission might in time be asked to recommend a better system of distributing the public money allocated for long-term care (Recommendation 4.3).

4.23 Had the true nature of the current system ever been made explicit between Government and citizens, it would be clear that only the poor are currently meant to receive state support and that a large part of the population is not entitled to any help. Those who could afford to do so could have considered private insurance, while those of moderate means would be aware that whatever savings they had would need to be used up before they were entitled to any help funded by the taxes they had paid. In our view, such lack of understanding has contributed massively to the uncertainty and bitterness felt by large numbers of people at the present time and the lack of preparedness of many. When the Government responds to the Royal Commission's report it must be explicit about what long-term care costs the Government will fund from taxation and what people will have to provide from their own resources. We recommend that the Government should make a clear statement as to the balance between an individual's personal responsibility for meeting care costs and what support he or she can expect from the state from taxation or any other means (Recommendation 4.4).

How the Current System has Evolved

4.24 Confusion and uncertainty exist as an intrinsic part of the current system. Looking at its development in its historical context shows how problems have become compounded over the years. In the post-war period, long-term care was provided in residential ("Part III") Local Authority homes ("Part IV" in Scotland), for which there was a waiting list and for which a means test was applied. Particularly ill or frail people might be looked after in the NHS. Two developments changed this:

• The increasing use of social security benefits meant that a public fund, without cap and without a test of care need, and with rules that were eventually uniform throughout the country, was available to fund people in residential and nursing homes in the private sector. Expenditure grew from £350m in 1985 to £2.5bn in 1993/94 and the "market" was shaped in a particular way, driven by what could be paid for rather than what people needed;

• During the 1980s the NHS became aware of its costs for the first time, and was subject to measured performance targets. The perception was that an old person on a ward consumed resources without an easily achievable and identifiable point of recovery. Given the existence of the uncapped social security benefits, residential and nursing home care provided one "exit" from the NHS for many patients.

4.25 These changes induced a new private sector infrastructure of residential and nursing home care and a degree of capital investment that may not otherwise have occurred given restraints on capital investment in the public sector. However, it discouraged domiciliary care (Local Authorities had to provide this out of their own budgets and charges); prevented the NHS and Local Authorities developing joint working and planned commissioning; but gave some old people access to care they could not otherwise have afforded. Whether in all cases it was the most appropriate care will never be known.

4.26 As the 1980s progressed, Social Security expenditure paid to people moving into independent sector residential care and nursing homes spiralled. This caused great concern. An internal Department of Health and Social Security Report - the Firth report - concluded that resources should be transferred to Local Authorities and out of the benefits system. In 1988, Sir Roy Griffiths in a report commissioned by the Government⁽²⁵⁾ took this further, proposing that Local Authorities should have a care assessment role as well as a budget transfer from Social Security. The intention was to encourage Local Authorities to spend more money on domiciliary care than before.

4.27 Government responded to the Griffiths proposals in the 1989 White Paper Caring for People⁽²⁶⁾. The aims of Community Care were expressed thus:

• to promote the development of domiciliary, day and respite services to enable people to live in their own homes wherever feasible and sensible;

• to ensure that service providers make practical support for carers a high priority;

• to make a proper assessment of need and good care management the cornerstone of high quality care;

• to promote the development of a flourishing independent sector alongside good quality public services;

• to clarify the responsibilities of agencies and so make it easier to hold them to account for their performance;

• to secure better value for taxpayers' money by introducing a new funding structure for social care.

4.28 One of the departures from Griffiths was the emergence of a Residential Allowance as part of Income Support paid by DSS from central funds, but only if an individual was placed in a independent sector home. This replaced Griffiths' proposal for Housing Benefit to cover accommodation costs. It was introduced for a variety of reasons - primarily to reflect a housing element in independent sector care in residential settings which, if the individual was in their own home, would be paid for out of Housing Benefit. It was not available to those placed in Local Authority homes. The Allowance appeared to make independent sector residential care cheaper for the Local Authority than its own homes. In that respect it may have been intended to provide an additional incentive towards the independent sector. This certainly seems to have been the outcome, as was put to us in numerous submissions and at a seminar the Commission held on the effect of the 1993 Community Care changes (see Research Volume 3 and paragraph 4.47). The Government have proposed transferring the Residential Allowance to Local Authorities in the English Social Services White Paper and using the money in a more carefully targeted way. We agree. In our view the Allowance serves no useful purpose and adds to the arcane nature of the current system. We recommend that the resources which underpin the Residential Allowance should be reallocated to Local Authorities to use in a way which better meets peoples' needs. (Recommendation 4.5).

4.29 Griffiths also called for a large degree of ring-fencing of Community Care funds across all client groups, to avoid the danger that other budgets would take money intended to fund Social Services. The amount of ring-fencing suggested by Griffiths never materialised, although there was a smaller degree of ring-fencing in the Special Transitional Grant (STG) which was intended to ease the transition to the new system. As noted in paragraph 4.4 it is difficult to know what level of resources goes into the current system. Ring-fencing would add clarity, but would remove local discretion.

4.30 Another difficulty arises for many people who have "preserved rights" to centrally fixed higher rates of Income Support, because they entered the care system before April 1993. It has been put to us that these rates are becoming increasingly inadequate. Many of the people concerned are in increasingly difficult circumstances. As they survive longer, it seems increasingly difficult to justify treating this group of people differently from those who entered the care system on or after 1 April 1993, for whom local authorities meet fees in full, subject to a contribution based on means. Equity demands that they should be treated in the same way.We recommend that the Government should consider whether "preserved rights" cases should be brought within the post-April 1993 system or whether some other solution can be found to address the shortfall in funding experienced by this group. (Recommendation 4.6).

4.31 We have already mentioned the incentive for the NHS to seek savings by passing care responsibilities to Local Authorities without the equivalent savings being passed on as well. More generally the current system, with different budgets held in different places, is perhaps inclined to encourage cost shifting to someone else, without regard for what is best for the individual or indeed for the public purse overall. Proper joint Commissioning, fuelled by better working arrangements without the pointless rivalry dictated by a series of fortresses constructed by budgets, would help to solve this problem. It needs to be encouraged. We discuss this in Chapter 8.

General Comments on the Present System

4.32 Simply describing the current system vividly demonstrates a number of complexities and confusion. No doubt unintentionally, it appears at times to be designed around a series of different bureaucracies, rather than the needs of individual older people.

4.33 The confusion we have described is simply in terms of health and social services. Other services add to the confusion. Housing must also play a part in the future if care is to be delivered properly in people's homes. If people are to stay at home rather than be moved to residential care their accommodation must be part of any assessment, including the need for suitable aids or adaptations. The system is often very slow at responding, with housing priorities being different from those of social services. We comment on this later in paragraph 7.4.

4.34 The Commission is clear about the strong lack of trust in the current system. There are pronounced feelings that Government was meant to underwrite the system in some universal sense through taxation, and it has not done so. People are not clear as to what they should expect. There is a linked feeling that the Health Service is abnegating its responsibility for care and making people rely on their own resources. Delivery at the sharp end is by Local Government, with its less centrally controllable (and more locally variable) system of finance, which produces variations in the implementation of the funding system, which also contributes to unease. The feeling is that a contract with the people has been broken. The reality is that there never really was one and, incrementally, rules were changed without people understanding what this meant. The result is a sense of betrayal, a lack of trust and a genuine sense of helplessness.

4.35 Even describing the current system makes its limitations obvious. Applying the Commission's value framework as set out in paragraph 4 makes that inadequacy more transparent. Informed by evidence received, a study of the literature and our own observations, our analysis of the present system may be summarised as follows:

Fairness

4.36 The current system clearly does not fulfil the reasonable expectations of old people. They feel that they have paid into a system through the National Insurance Scheme which they were led to believe would look after them in later life whatever their needs were. At a key point in peoples' lives they find that they are expected to pay for themselves out of assets they have accumulated over a lifetime for care they had previously expected would be free. We do not say this belief is logical: that it exists is a fact, and the sense of betrayal cannot be denied.

4.37 As the current system relies on the means test, those who have savings or are homeowners believe they are being penalised in that they are expected to put in a large amount of their own resources before they get anything out of it. Even though they pay the bill this often does not feel like a conscious purchase decision. It is often rushed, and by definition made at a time of personal crisis. It also involves using a rather unwieldy asset - their homes - to pay for care.

4.38 The current system does not seek to provide much support to informal caring, although a number of social security benefits for carers have been developed since 1976. Carers' organisations contend that the limit of carers' ability to cope has been reached. The system could do more to offer support for carers.

Maximum choice, dignity and independence

4.39 Under the current system the amount of choice available depends on what is offered locally and the state of the Local Authority budget. In some areas domiciliary care is charged for, in some it is not charged at all. Different levels of service are available in different areas. More consistency is required from the system generally, in relation to both residential and domestic care in respect of both payment and service provision.

4.40 As we have observed earlier in the chapter, in assessing an individual's need for long-term care a local authority can count on the Income Support Residential Allowance to further help support care in an independent residential setting. At the opposite extreme, a domiciliary package would not recover much in fees and might potentially cost the authority more than a residential care place. Securing the most appropriate care of the individual under the current system is precarious. If dignity and independence mean avoiding residential care unless it is absolutely necessary, the current system may be seen to push people into residential care and thereby compromise their dignity and independence at an earlier stage than might be necessary. Even the forms which people have to complete to obtain the various kinds of assistance can be lengthy and complex. This complexity - a complexity which exists at all levels in the care system, militates against choice and dignity. The bias towards residential - based care militates against independence. There must be a re-focusing on the needs of the individual.

Security, sustainability and adaptability

4.41 The present system seems to provide no sense of security for older people. Evidence to the Commission shows widespread anxiety among the older people about what will happen to them. There is a very real possibility that individuals are brought to a point of crisis at which residential or nursing care becomes the only option at the time (for example at hospital discharge). This cannot be interpreted as a funding system providing what people need. More time needs to be built in to consider the best options for the individual. Where prospects for recovery exist, the system should not drive them out.

4.42 The current funding system provides no incentive for anything other than the residential or nursing homecare option in the private sector in many cases. It can in theory provide greater scope for new types of domiciliary care, but this would mean withdrawing sums from current patterns of provision into which Local Authorities are locked with contracts, their own provision and also from reliance on benefit to underwrite the funding of care. Complaints procedures are complex and are compartmentalised: it is often not clear where complaints should be directed.

Quality and Best Value

4.43 The current system is clearly biased towards residential care irrespective of appropriateness and best value for the individual. For the Local Authority, this can easily represent the option with the least net cost. There are benefit incentives to using private provision, and also incentives to placements in Local Authorities' own homes, which can be more expensive than the private sector equivalent, because of the small marginal cost to the Authority. There can be no confidence that best value is being obtained from the system as a whole. Standards throughout the system are variable. Providers are often small, with commissioning being done on a very local basis. There are examples of both high and low standards and what people get depends very much on where they live and the state of local budgets. There seems to be little definable relationship between quality and cost, as has been pointed out by the Audit Commission in their report The Coming of Age (1997)⁽²⁷⁾.

4.44 The system may or may not be underfunded. Until mechanisms are clearer we will never know. The Local Government Association suggested as part of its spending negotiations with Government an extra £300m was necessary to improve the system. Only when flows of money are clearer will we be able to make a judgement as to the extent to which the system is underfunded.

4.45 As for a level playing field, it clearly does not exist. To a Local Authority, the cheapest form of care is residential or nursing care, which means that domiciliary care is not always considered in isolation from cost. There are a complex number of forces pulling in different directions.

CONCLUSIONS ON THE CURRENT SYSTEM

4.46 On this analysis, the current system is failing. That it is perceived to be failing can also be clearly seen from the letters received by the Commission and by the frank and deeply felt observations made at the Commission's public hearings. There is a sense of bewilderment, a strong sense of loss of control, a sense of actually losing the beloved individual to a system which is beyond understanding and which makes individuals feel beyond help. No amount of statistics or cool analysis can take away the human despair which individuals feel when confronted with the system as it is. That is not to say that the system fails everywhere - there are many examples of good practice throughout the country and many examples of dedicated staff working flat out to deliver a great deal of high quality care. The Commission considers that more should be done to spread good practice nationally. We make recommendations in this regard later on in the report, and would like to stress our appreciation that those who work in the care system are often able give care of the highest quality - despite the unhelpful forces at work in the system itself.

4.47 In addition to the analysis set out in paragraphs 4.36 to 4.46, the Commission held a seminar to establish the extent to which the Community Care reforms had achieved their objectives. The following points emerged from a picture of partial achievement, some of which referred to models of care which are discussed in Chapter 8:

• There has been more home care, but targeted at the most dependent. It was felt that prevention was squeezed out;

• Carers had been helped little, and that often services were not being offered where there was a carer in evidence;

• An over-supply in the residential sector and the effect of Local Authority purchasing power meant that costs were low and made residential care seem attractive in cost terms compared to home care. There was also a concern about quality of services in the residential sector overall;

• There was some change in management culture in social services, but still a long way to go to ensure more of a client based rather than a service based approach;

• The division of responsibility between the NHS and Social Services health/social divide caused a number of problems in terms of responsibility and accountability, and perverse cost incentives to take a short-term view based on cost alone remained.

4.48 In professional language, these findings mirror what we have had addressed to us from the public. The findings are set out in full in Research Volume 3.

4.49 Some of the letters received by the Commission on the system overall make harrowing reading. We make no apology for extensive quotations throughout the report. These letters should not be dismissed as being from people whose only interest is to protect the inheritance of their children or to inherit from their parents. There is a far deeper sense of injustice and failure to understand what is going on at a time of crisis.

4.50 Taking all of this evidence together, we have concluded that the current funding system is in clear need of reform. Within it there are too many flows of funds which have been designed for different purposes and what the individual does or does not get out of it depends on a number of complex decisions which are out of their control. People have no idea what to expect. The tendency of the system to require impoverishment - and its proof - before it will help leads to despair which in our judgement is unacceptable. Modestly prudent people risk losing their dignity, partly as a result of their condition and partly because of how the system deals with it. People have no choice but to receive services for which all but the poorest have no further choice but to pay.

4.51 The aim should be to revise the funding system so as to define a new and clearer relationship between state provision on the one hand and personal responsibility on the other. More specifically:

• The system needs to become simpler, and what the individual is entitled to should be clearer;

• People need to be able to rely on the system - now and in the future;

• What the system delivers must be consistent compared with what the individual needs or wants;

• The system should not encourage residential care (whether private or public) above any other form of care, nor, in requiring the release of assets which might be tied up in property, must it force the premature disposal of that property in such a way that excludes the possibility of a return from residential care;

• If the same kind of care is free from one provider or within one setting, it should be free in all contexts if the state has organised the care, or vice versa. There should be more consistency within the system;

• Whether care is charged for or not - and ideally - the standard of provision should not depend on where people live;

• The first focus of this system should be need rather than services delivered primarily on the basis of means;

• State support in the system should have a greater element of universality than now: services should not be seen as residual services for the poor.

4.52 Having concluded that the current funding system is deficient, we now consider possible changes to it, beginning with the prospects for the further involvement of privately purchased financial products.

Footnotes

(iv) There are differences which relate to the treatment of the value of houses which are up for sale, jointly owned assets and some types of income.

(v) The allowance is currently £14.45. However in some circumstances local authorities have the discretion to increase this amount. Any increase will reduce the contribution towards fees paid by the person concerned.

(vi) This will generally include the value of the home, but will not do so if the home is occupied by a spouse or partner or other specified relatives. In some circumstances local authorities have the discretion to disregard the value of the home where it is occupied by someone who is not a spouse, partner or other specified relative.

(vii) The rule is actually each complete £250 or part thereof.

We welcome your comments on this site. Prepared 1 March 1999