Politics

Could Wales see a tax increase to pay for the care of the elderly?

Transformation: The social care system must adapt to the increasing number of people remaining in their homes rather than seeking residential care. Source: Pxfuel

By Lowri Pitcher

Earlier this month, Vaughan Gething, Minister for Health and Social Services in the Welsh Assembly, called for a change in the funding, quality and sustainability level of the social care system in Wales. 

Currently, the Welsh Government spends approximately £1.2 billion on social care per annum. Mr Gething called on politicians to “consider seriously the funding it [social care] requires and how we raise this” in regard to the cost of social care which is set to rise between £30m and £300m by 2023.

The Health Minister is seeking a consultation, due to start this summer, in order to assess the options available to the Government.  However, he claims that the “Government doesn’t have a fixed position. I think that’s really important because if we come out and say either a fixed or preferred position, lots of people would be cynical. 

“My aim is conversation in the summer and then in the autumn publish what people have told us. Then there are clear choices for parties to put to the public in the Assembly elections.”

There are many options which could help increase the capacity and quality of the current social care system, one of these is a tax rise.  

In 2018, economist, Professor Gerald Holtham, published a report commissioned by the Welsh Government examining the possible ways of reforming the system. The report cited a possible tax rise or a social care levy in order to bridge the gap between the demand and the services offered. 

In practice, this could mean an age-cohort related tax which would entail contributions ranging from 1% of income for those aged 20-30 up to 3% for those over 60. If a basic-rate income tax increase was decided on, regardless of age, the rate would have to be 1.5 per cent.

The report specifies that a ‘social care levy’ may be more acceptable than a general rise in income tax as “There is evidence that the public is readier to accept taxes that are hypothecated to purposes of which it approves.” 

The cost of social care in Wales

Unlike the NHS, social care provided by local councils is not always free at the point of service and is means-tested.This is leaving thousands of elderly people paying for home visits and care home residency fees. 

Currently, the costs of home visits by carers are capped at £90 a week with plans to increase this to £100 a week by 2021. According to LE Wales the number of people aged over 65 using non-residential care services will rise from 44,000 to 67,000 (53% increase) between 2013 and 2030. 

With more people able to live independently for longer, this is putting increased pressure on community-based care services.  The Government is seeking to increase employment in the sector meaning one of the potential results of a social care levy would be to increase the salary of care workers in order to attract more people into the profession.  

Additionally, the number of older people in residential care is expected to increase from 11,700 to 19,000 between 2013 and 2030 (65% increase). Currently, residents in care homes may be obliged to pay the full amount for their care if they have assets of more than £50,000 (excluding their home if somebody is still residing in the property). 

According to Wales Public Services (WPS) 2025 report: “A delicate balance? Health and Social Care spending in Wales.” While “spending on local authority-organised adult social services has remained broadly flat in real terms in Wales…spending through local authorities on social care for the over 65s is not keeping pace with the growth in the population of older people, as such spending per older person has fallen by over 12% in real terms” between 2009-10 to 2015-16. 

It also stated that despite the total net expenditure since 2010 not declining as drastically as other areas of the UK, the trend of an ageing population in Wales, mixed with the fact that more people are likely to retire and move to Wales than are likely to retire and leave Wales, means that older adult (65+) care spending per capita decreased by 14.4 per cent between 2009-10 to 2016-17. 

While the Welsh social care system is more generous than that England and Northern Ireland, social care in Scotland is free. Mr Gething claims this is thanks to Scotland’s “more generous” budget deal from Westminster and is eager to reform the Welsh service without waiting on decisions from Westminster. 

According to Social Care Wales, Wales has a higher proportion of people aged 85 or over than the rest of the UK and recent results by the Office of National Statistics shows that there were over 840,000 people aged 60 or over in Wales in 2018. With over 20% of the Welsh population being aged over 65, the Welsh NHS Confederation also notes that we have the highest rates of “long-term limiting illness in the UK”  which it says is the most expensive aspect of NHS care. It noted that between 2001-02 and 2010-11, those with a chronic or long-term condition increased from 105,000 to 142,000 with numbers projected to increase still for conditions such as cancer, dementia and diabetes. 

With demand for social care increasing by 5.5% a year, an ageing population and a rising number of elderly people living longer with complex needs, it is hoped that a way forward can be decided on and implemented soon after the next Assembly elections.

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