The costs that individuals are required to pay for their adult social care support in England are highly variable and uncertain. This has significant implications for current care recipients, as well as the general population who may eventually require care.
This research was commissioned under the previous administration (11th May 2010 to 5th July 2024) and therefore does not reflect the policies of the current government. The views expressed are the authors’ and do not necessarily reflect those of the government.
It is virtually impossible for individuals or care providers to know the lifetime costs of the care that they will require. For some people those costs are, very high, but this cannot be predicted in advance. At the same time, on the supply side, many providers of social care services operate on thin profit margins and the market exhibits relatively low levels of investment and innovation. On the demand side, many adults are poorly informed regarding social care services. The government has made repeated efforts over the years to place the sector on a more sustainable footing and to manage the uncertainty facing individuals, but these remain live issues.
The Department of Health and Social Care (DHSC) commissioned Frontier Economics (working with LaingBuisson) to provide a review and assessment of proposed social care charging reform, focusing specifically on the potential wider benefits of the announced care costs cap and increased upper capital limit for those entering adult residential social care. The work, which included developing a framework, a literature review and wider data analysis, was carried out over a 12-week period in 2021. The Chancellor of the Exchequer has since announced on 29 July 2024 that the planned adult social care charging reforms will not be taken forward in October 2025.
Key findings
We estimated that in aggregate across all currently retired individuals, the future savings that could have been expected due to the planned reforms would have been£11.1-40.0 billion. We estimated that this would have led to additional spending of £350 million – 1.1 billion per year, of which £170-520 million would have been on care services, with the remaining £180-560 million on other goods and services. The wide range around these estimates reflects a relatively high degree of uncertainty in the impact.
Frontier, in a separate report, also analysed the potential risks to the supply and continuity of good-quality care; to local authorities; to individuals receiving care, and to government. We developed a framework that the DHSC could use with local authorities to better understand local risks in the residential social care system associated with implementation of the Fair Cost of Care (FCOC) and Section 18(3) of the Care Act 2014.
The framework considered the level of risk across three areas:
1. Size of market
2. Ability of provider base to adjust
3. Ability of local authority to meet additional funding need
Click here to read: SECTION 18(3) AND FAIR COST OF CARE IMPLEMENTATION - Analysis of potential risks
Author
Director
Manager
07 November 2024
