The document discusses options for reforming social care funding in the UK. It notes that the elderly population is growing while funding for social care has decreased in recent years. It considers the option of social insurance funded by general taxation but notes this could increase costs significantly. It also discusses how wealth has become more concentrated among older generations but wealth taxes have remained flat. The Intergenerational Commission proposed a combination of additional public funding from a progressive property tax and bringing housing assets into the means test for social care with protections for those with high care costs.

1. July 19@resfoundation 1
Tackling Britain’s care crisis
What would a cross-party, long-term plan look like?
Damian Green MP, former Deputy Prime Minister
Liz Kendall MP, former Shadow Minister for Care
Norman Lamb MP, former Minister for Care
David Willetts, President of the Intergenerational Centre (Chair)
#eventhashtag
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2. 2
It’s not that we don’t care
Percentage agreeing or strongly agreeing with the statement that 'adult children had a duty to look
after elderly parents', by year and age band: UK
@resfoundationNotes: wording was slightly different in 1983 than in 2001 and 2017. In 1983 the statement was: 'children have a duty to look after parents when old'.
Source: RF analysis of National Centre for Social Research, British Social Attitudes Survey

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Need up, provision down: The social care conundrum
@resfoundation

4. 4
Need up, provision down: The social care conundrum
@resfoundation
65+ population
up by a quarter
in the decade
to 2018
Number of
over-85s
requiring 24-
hour care
expected to
double over
next 40 years

5. 5
Need up, provision down: The social care conundrum
@resfoundation
65+ population
up by a quarter
in the decade
to 2018
Number of
over-85s
requiring 24-
hour care
expected to
double over
next 40 years
Real per-
capita
spending on
adult social
care in
England fell
10 per cent
2011–2018

6. 6
Need up, provision down: The social care conundrum
@resfoundation
65+ population
up by a quarter
in the decade
to 2018
Number of
over-85s
requiring 24-
hour care
expected to
double over
next 40 years
• Funding shortfall of at
least £2 billion
• Most councils now
support those with
‘substantial’ or ‘critical’
needs only
• 1.2 million older people
in England say they don’t
get the care they need,
double the 2010 figure
Real per-
capita
spending on
adult social
care in
England fell
10 per cent
2011–2018

7. 7
The long history of inaction on care funding reform
@resfoundation
Labour’s green
paper
Compulsory
insurance payments
above for pensioners
with resources,
payable out of
income or out of
estate at death
Dilnot
Commission
£35k lifetime
contributions cap;
lift residential care
asset means test;
deferred payment
scheme
Care Act
Established lifetime
contribution cap at
£72k; raised the
asset means test
threshold;
established right to
deferred payments
Spring Budget
£2bn extra funding
for councils in
England;
announcement of
green paper
Conservative
manifesto
Include housing
assets in the
domiciliary care
assets means test;
raise the means test
floor to £100k;…
plus a cap!
Cap
scrapped
Cap delayed
until 2020
Green
paper
delayed

8. @resfoundation
• Private insurance markets are generally not able to
protect against social care risks
• Line between health conditions treated on the NHS and
those treated as social care needs can be arbitrary
8
In theory, wider social insurance funded out of general taxation
has much to recommend it

9. @resfoundation
• Private insurance markets are generally not able to
protect against social care risks
• Line between health conditions treated on the NHS and
those treated as social care needs can be arbitrary
• But this would bring lots of need currently met by
family and friends into the state system, at a time
when welfare spending pressures are already rising
9
In theory, wider social insurance funded out of general taxation
has much to recommend it

10. @resfoundation
• Private insurance markets are generally not able to
protect against social care risks
• Line between health conditions treated on the NHS and
those treated as social care needs can be arbitrary
• But this would bring lots of need currently met by
family and friends into the state system, at a time
when welfare spending pressures are already rising
• And to the extent that we do turn to taxation, need to
think about which groups (by age) and which taxes
(income vs wealth) are best-placed to deliver 10
In theory, wider social insurance funded out of general taxation
has much to recommend it

11. 11
1. Social insurance would bring additional need into the state
system at a time of existing welfare pressures
Historic and projected welfare spend as a proportion of GDP: UK
@resfoundationNotes: Data for years prior to 1966 are presented as five-year rolling averages. Total spend is based on the categories used in Hills (2004), so does not map
precisely to HM Treasury and OBR totals. Source: RF analysis of OBR, Fiscal sustainability report – July 2018, July 2018; HMT, Public Expenditure Statistical
Analyses; J Hills, Inequality and the State, Oxford University Press, October 2004

12. 12
2. Working-age adults provide most tax revenue, but their living
standards haven’t been doing well
Real household net annual income after housing costs (CPI-AHC- adjusted to 2017 prices), by life
stage: UK
@resfoundationNotes: ‘p20’ refers to incomes at the 20th percentile within each age group; ‘p80’ refers to incomes at the 80th percentile within each age group. Incomes are
equivalised to account for differences in household size. Source: RF analysis of DWP, Family Resources Survey

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3. Wealth, increasingly concentrated in older generations, has
surged since the 1980s, but wealth taxes have remained flat
Aggregate wealth and wealth-related taxes as proportions of GDP: GB/UK
@resfoundationNotes: Total household net wealth covers Great Britain; tax and GDP data cover the UK. Source: RF analysis of ONS, Wealth in Great Britain; ISER, British
Household Panel Survey; ONS, UK National Accounts; D Blake & J Orszag, ‘Annual estimates of personal wealth holdings in the United Kingdom since 1948’,
Applied Financial Economics, 9, 1999; OECD.Stat

14. @resfoundation 14
The Intergenerational Commission proposed:
£2.3bn additional public funding
from new progressive property tax
Housing assets brought into scope
of domiciliary means test
Cost cap (£50k) and asset floor
(£150k) set such that no more than
a quarter of assets can be depleted
Deferred payment mechanisms

15. @resfoundation
• A balance between taxation
and private contributions
15
The Intergenerational Commission proposed:
£2.3bn additional public funding
from new progressive property tax
Housing assets brought into scope
of domiciliary means test
Cost cap (£50k) and asset floor
(£150k) set such that no more than
a quarter of assets can be depleted
Deferred payment mechanisms

16. @resfoundation
• A balance between taxation
and private contributions
• A focus on wealth:
• Increasingly concentrated
within older generations who
will be the main beneficiaries
of a better funding
settlement
• Increasingly undertaxed
16
The Intergenerational Commission proposed:
£2.3bn additional public funding
from new progressive property tax
Housing assets brought into scope
of domiciliary means test
Cost cap (£50k) and asset floor
(£150k) set such that no more than
a quarter of assets can be depleted
Deferred payment mechanisms

17. 17
The IC proposal would offer more asset protection for those with
the highest care costs
Illustrative example of spend on care for an individual with lifetime care costs of £150k (split £60k
domiciliary, £90k residential), by asset level on going into care and care financing system: England
@resfoundationNotes: For simplicity, we assume that assets are all held in property. We assume individual income is just sufficient to cover a contribution to general living
costs, but not high enough to affect income means tests. Source: RF modelling

18. @resfoundation
• Balance between social insurance and
private contributions
• Inter- and intra-generational equity
• Public and cross-party support
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Conclusion: Navigating reform options