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08.06.2018

Britain’s Social Care Crisis: Getting in debt for your loved ones

The way that the social care system operates is failing, or so says a number of experts reacting to a report released this week that challenges the prominent levels of debt brought on by care home use.

Care Homes and Debt: the ‘ticking timebomb’

GMB Union raised the issue of the cost of social care as part of its annual conference. This follows a number of reports on the failing system, with many experts demanding change. Their report used Freedom of Information requests to every local authority in Great Britain and demonstrates that 166,835 people are currently living with arrears on their social care payments, and 1,178 have been taken to court by local authorities as a result of this.

The report argues that councils are increasingly necessary for covering the high costs of care due to insufficient savings, excessive costs, and Britain’s aging population. Often, this results in re-homing the most vulnerable members of society, such as sufferers of dementia, to lower cost homes.

GMB Union’s national officer, Sharon Wilde, explained:

‘These stark figures show the UK’s social care ticking timebomb has now blown a gaping hole in families’ finances. The fact that more than 1,000 people have been taken to court because they’re unable to pay for their own care – or that of their loved ones – shows the system just isn’t working. Our ageing population is creating a huge demand for care staff – but caring is still not seen as a sought-after career. The lack of local authority funding means low pay – and the sector is struggling to recruit and retain the dedicated staff needed to provide the best care to the UK’s most vulnerable people. We need a clear, coherent strategy for funding social care now and in the future. Otherwise the struggle to recruit and retain carers will become even more acute, while tens of thousands of people are plunged into debt trying to pay for the level of support that they need’

Similar reports over the past few years have highlighted other problems. Care homes are closing at an alarming rate of more than 12 a month in 2017, and families have complained that they are charged for rooms after residents have passed away.

Millbrow Care Home

One particular case study can be seen in Millbrow Care Home in Widnes. Terrible conditions found by inspectors, such as ‘smells of urine’ and 17-hour gaps between dinner and breakfast, put it on the verge of closure, until Halton borough council took over business from the private company, Four Seasons Health Care.

Four Seasons Health Care itself paints a picture of the broader problems faced by the social care industry. Their net debt of £525 million put them at risk of being bought out by a hedge fund last December. Similarly, HC-One, the UKs biggest care home owner, has an estimated £500 million debt.

This systemic debt problem helps to explain why half the 410,000 residents of care homes throughout the UK need help from local authorities as prices rise to deal with repayments. Most local authorities pay £550 per week for each of these residents. However, it is estimated by LaingBuisson, healthcare researchers, that a more realistic payment would be £650.

Ultimately, the systems dependency on local authorities, and an estimated funding gap of over £2 billion by 2020, has caused many experts to criticise the current system and demand change.

What do the experts say?

Most experts agree that something has got to change. This even includes a spokesperson for the Local Government Association:

‘Councils’ first priority is the safety and wellbeing of those they support. But adult social care services face an annual funding gap that will exceed £2 billion by 2020, and these figures illustrate yet another consequence of a system straining under real financial pressure. Fundamental changes to the way we fund adult social care are needed if we are to deliver a system that works for everyone is society. All funding options should be up for discussions. The Government needs to address the immediate pressures impacting on the system today and ensuring its forthcoming Green Paper will delivery reforms to future proof the long-term sustainability of adult social care.’

Similarly, the general secretary of the National Pensioners Convention commented:

‘This is graphic proof the social care system is letting down some of our most vulnerable older people and their families. The costs are simply too great to be left to individuals and the Government’s Green Paper in the summer needs to offer a real solution to sharing the risk and pooling the cost of future care across society as a whole.’

In December 2017, an advisor at an insolvency specialist, Nick Hood, spoke out against the financialisation of the care home system, the opaque nature of the private sector, and its dependency on local authorities:

‘It’s all well and good saying the government shouldn’t bankroll the sector but it’s overlooking the fact that it’s one of the biggest stakeholders in the care home sector because indirectly it funds most of the residents’.

It is clear that all are in agreement that a new system needs to be in place, a ‘proper plan to fund social care for this generation and the next’, as GMB Union suggest. Many will wait in anticipation for the Government’s opinion and solutions presented in their proposed Green Paper later this summer.

Help and Advice

While the experts debate the problem and discuss solutions, what can you currently do if you, or a loved one, need adult social care?

A Care Needs Assessment: Depending on the needs of the adult, and your income and savings, your local authority could help with the fees associated with social care. The amount you have to pay depends on the amount of your capital – your savings and your property. If you have:

  • over £23,250, you must pay full fees
  •  have between £14,250 and £23,250, part of the cost of care will be taken care of
  •  have less than £14,250, only your eligible income will be taken into account when deciding how much they contribute.
  • Your expendable income will also be assessed, and you will be given a ‘Personal Expenses Allowance’ of £24.90 per week.
  • Pensions and disability benefits are not counted as income in the means test.

NHS Continuing Healthcare: It is also possible that the NHS may contribute towards the cost of care if you have a significant healthcare need. This is called ‘NHS Continuing Healthcare’. For more information on the care home system, visit Age UK.

If you are one of the thousands already in debt due to social care, there are plenty of debt solutions that could suit your needs. Call us on 0808 2085 198 to talk to one of our caring, professional advisors.