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Social care for older people

How the PSSRU-led Wanless Social Care Review catalysed reform of the long-term care funding system in England

A decade ago, the King’s Fund commissioned PSSRU to work on a major review on social care for older people, led by Sir Derek Wanless. Our remit was ambitious: amid growing disenchantment with the existing social care system we were tasked to examine the demographic, economic, social, health and other trends over the next 20 years that would affect the demand for, and nature of, social care for older people. We were asked to identify what resources were required to fund an appropriate level of social care and to assess the advantages and disadvantages of different financing systems. Over 18 months, we developed a model that estimated the future increased level of need, the cost of addressing this need under different outcome scenarios, and the impact of adopting different options for paying for long-term care. Securing Good Care for Older People was published in 2006 and argued for a “partnership” funding model, whereby every older person would qualify for a minimum state contribution to social care and that this could be topped up by matched private and public contributions, with additional subsidies for those on low incomes.    


The Wanless social care report was well received by the government and other stakeholders as a piece of work that highlighted the limitations and shortcomings of the then prevailing system. It played a large part in the debate by clarifying quantitatively that there were issues that needed to be addressed including under-consumption of care, under-insurance, poor incentives to save and perceived inequity, particularly for low-to-middle income groups. Crucially, it galvanised a train of events that led to the financing reforms that are due to be implemented in 2016.


Immediately following publication, HM Treasury set up its own internal unit to explore further some of the ideas raised by the report, with two of the Wanless team directly involved in this follow-up work. This led to a Green Paper in 2009. Further PSSRU analysis was commissioned for the 2010 White Paper, Building a National Care Service. Throughout this process, the PSSRU’s model was used to provide the projected impact of different funding policies – including future costs and the winners and losers under different funding options. During this period I sat on Advisory Panels chaired by the care services Ministers and PSSRU LSE’s Dr Jose-Luis Fernandez was appointed as advisor to the House of Commons Health Select Committee on its review of long-term care funding.


Following the election of the Coalition Government in 2010, a new Commission on social care funding set up, chaired by Andrew Dilnot. The Commission asked the PSSRU to provide expert advice on reform options, based on its previous research. After the Institute for Fiscal Studies undertook an independent review of the model, Dilnot commissioned the PSSRU to consider the policy options using the model. We carried out a lot of modelling of patterns of costs and benefits and the implications of different funding systems. The Commission’s remit was tighter than that of Wanless. Its key recommendation of a limited liability (capped risk) model was designed in particular to tackle the under-insurance problem that was highlighted by the Wanless review, and drew heavily on PSSRU’s research on the distribution of lifetime risk. The framework for reform of the long-term care funding system was finally passed in to law in the Care Act 2014.


With the benefit of hindsight, the Wanless study played an important role in driving the reform process. Comprehensive reform did not take place immediately after the report but the study really set policymakers on a course for change. The Dilnot model is not what Wanless suggested, but it is another specific solution to the problems that we identified. In terms of our technical work, the model we developed for the Wanless projections will continue to be adapted and used for years to come.


Perhaps the one less successful aspect of the post-Wanless era is that in recent years the debate has focused almost entirely on how to pay for care. The other key aim of the Wanless study was to arrive at a better understanding of what the level of publicly-funded support should be for people with social care needs. This question is about something more fundamental than just the amount of money that should be spent. We still do not really have good evidence about the cost-effectiveness and value of mainstream social care. Such evidence would be extremely valuable in a debate about whether the level of support is about right or too little or too much. Going forward, the question of what the appropriate level of public funding for social care should be is an area where research and debate needs to continue.  


Interviewed by Teresa Poole

Professor Julien Forder joined the University of Kent branch of PSSRU in 1992 and moved to PSSRU at the London School of Economics and Political Science when it was set up in 1996. In 2007 he returned to PSSRU Kent as Professor of the Economics of Social Policy, initially as Deputy Director and then Director of PSSRU Kent. In 2005 he was the academic lead on the influential Wanless Social Care Review, commissioned by the King’s Fund. Here he explains how the study’s findings set the stage for renewed debate on the long-term care funding system in England and set in train a process of reform that continues today.

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