Welfare The Care Crunch – urgent increase in public interest rate needed 29 April 2008 NEWS RELEASE Embargoed until: Tuesday 29th April 2008 00:01 THE CARE CRUNCH urgent increase in public interest rate needed New research published today by the Resolution Foundation reveals the fragility of the long-term care system for older people. A ‘care crunch’ is likely and will only be avoided through realistic reform of the long-term care system. people are not planning for their future care needs – 7 out of 10[1] people have made no provision for their care in old age access to care is being restricted by tightening eligibility criteria and funds – local authorities continue to ration care low earners face particular challenges as they get caught on the cliff-edge of means-testing – over 72% of low earners have assets above the means-testing threshold for free state care The Government’s commitment to a Green Paper creates an opportunity to raise public interest and engage all parties in an informed debate on future reform of long-term care. The Foundation’s report, A to Z: mapping long-term care markets, based on analysis commissioned from Deloitte, provides a comprehensive overview of how the long-term care system operates and the potential impact of current trends. It identified five key areas of weakness that undermine the current system: Reliance on informal care– a system which relies so heavily on informal care from friends and relatives is vulnerable and has unseen costs particularly for low earners Navigation – the severe shortage of adequate information, advice and advocacy in a highly complex system leaves people confused and under-served Funding – tight budgets result in short-term solutions which delay moves towards more efficient long-term solutions like preventative services Local variation – a postcode lottery of access to, and quality of, care exists A responsive service – it is difficult for suppliers to respond effectively to peoples’ needs Clive Cowdery, Chairman of the Resolution Foundation said: ‘Low earners face a particular challenge – too poor to pay for care, but falling outside of state support. Realistic reform must address those caught in the care crunch.’ Sue Regan, Chief Executive of the Resolution Foundation added: ‘The Government has already signalled that it is committed to reform with the expected Green Paper. Our research found the care of our older people will only continue to come under pressure in the future, particularly as society ages[2]. To beat the care crunch fundamental reform is needed now alongside a new funding settlement.’ Julia Unwin, Joseph Rowntree Foundation Director, will be chairing the Resolution Foundation’s annual conference where the report will be launched, said: ‘We welcome the publication of this timely research. Earlier this year, as part of the Caring Choices coalition, we published the findings of our nationwide consultation which suggested that individuals want a fairer system with greater clarity about their entitlements.’ The Foundation publishes, A to Z: mapping the long-term care markets, at its Annual Conference on Tuesday, April 29th 2008. Speakers include, Nick Clegg MP; David Willetts MP; Julia Unwin, Joseph Rowntree Foundation; Julie Jones, Social Care Institute for Excellence; Mike Turley, Deloitte; Clive Cowdery and Sue Regan of the Resolution Foundation. What does the report do? – A to Z provides a framework within which future reform can be discussed. The report finds that small adjustments at the edges may have knock-on effects which de-stabilise other parts of the system so it needs to be considered as a whole. – It highlights the need for the system to be reformed alongside a new funding settlement. – The Foundation looked at the demand for care, and the mixed provision of care from private, public and third sector providers. The Foundation then tested the whole system as a working market against the criteria of fairness (because it is a market for a social good) and efficiency. – It builds on previous work by the Foundation which defined the issue as one that particularly affects ‘low earners’[3] sometimes referred to as the ‘not rich, not poor’. Lost: low earners and the elderly care market offered an insight into this group, who are often at the cliff-edge of eligibility thresholds and who face particular challenges in the current system. /Ends For further information please contact Cara Brown on 020 7489 4870 / 07813 302801 or cara.brown@resolutionfoundation.org All the Foundation’s research, reports, briefings, seminar notes are available on our website www.resolutionfoundation.org Notes to editors: 1. Over 2000 UK adults were polled in December 2007. The poll explored people’s level of understanding and perceptions of the quality and affordability of the elderly care system, and it asked them how they would be prepared to contribute to their care costs and also resolve the wider funding shortage. 2. more people are living longer putting further pressure on an already stretched system – the number of people aged 65 and over in the UK will increase by 81 per cent from 9.3 million in 2000 to 16.8 million in 2051[4] 3. The Government Actuary’s Department 4. Our definition was based on those individuals on “low” incomes, but who were mainly independent of state support. In order to identify this group, we used an upper and lower benchmark: – Upper benchmark = those individuals and households earning up to median income. Median income was used because it is a widely understood figure, and guaranteed that we focused on households and individuals with incomes below the average. – Lower benchmark = those who receive no more than 20% of their income from welfare benefits. Using BHPS 2006 data, we calculated median income for those both in and out of work as £11,747 for an individual and £22,548 for a household. Median income is the “middle point” of the UK population. i.e., there are equal numbers of people earning above £11,747 for an individual and £22,548 for a household as earning below. Median may seem low, but this will be due to large numbers of people on very low incomes (part time workers, welfare dependents, unemployed, students, etc.). Because many people in the UK are very rich (i.e. the distribution of incomes is skewed), the average income is higher than the median (about 30k).
