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The Wanless report proposes a new funding system for older people, which moves away from means-testing towards universality, reports Mithran Samuel, who, below, talks to Derek Wanless about how it is time to end social care's status as a safety net for poorer people

Reactions to Sir Derek Wanless's King's Fund-sponsored report on older people's social care have focused on his forecasts for costs and call for a significant increase in investment in services.

The report states the share of gross domestic product devoted to older people's social care will have to rise from 1.1 to 2 per cent from 2002 to 2026 to cope with increased demand and the need to enhance services (Call for free minimum level of care, 30 March).

But less attention has been directed at his prospectus for funding care: a "partnership model", where the state would fund a minimum level of care and co-finance top-ups with the service user up to a "benchmark" care level (see The Partnership Model, bottom).

The report says there is a consensus on the shortcomings of the current means-tested system for funding residential and home care. This includes the "postcode lottery" in council home care charges, public ignorance about how much the state will provide, and the blurred boundary between free NHS continuing care and paid-for social care.

The report says means-testing discourages people from seeking social services' help, citing evidence that 6 per cent of self-funding care home residents are eligible for state help.

It also cites the "penalising" impact on people who save because the capital threshold above which state support is unavailable is only £21,000, and the fact that some people in this position are forced to sell their houses as a result.

The review assessed several models, with different mixes of state and private finance, against its outcome measure, the Adlay (see The Partnership Model, bottom).

The best overall outcomes came from a free personal care system - providing the benchmark level of care - not the partnership model.

This is because under the partnership model, given the top-up charges, people would consume less care than they would do if it were free.

But the report's choice of partnership rested on it providing slightly better value for money than free personal care, with lower costs overall and for the taxpayer. It lists other advantages:  partnership would provide a universal minimum level of care to all, ending social care's status as a "safety net for poorer people"; and by ending means-testing it would provide incentives to save.

But there could be a problem: moving from means-testing to partnership will benefit the poorest least. Under means-testing, the report estimates that the average annual outcome gain for
poorer people in need of care would be 0.27 Adlays, rising to 0.3 under partnership.

For people of moderate wealth, the means-testing outcome would be 0.22 and partnership 0.37, while for people of high wealth it is 0.25 for means-testing and 0.34 for partnership (see graph).



This effect is intentional despite the report's recognition that social care needs are proportionately greater among poorer people.

For Wanless, people of moderate means are ill-served by the current system: they are not able to self-fund comfortably, yet neither are they eligible for state support. The report says: "Means-tested systems can be so pro-poor that they result in a skewing of resources overall and that is the case with England's system."


It argues that the social care system will gain in status through being universal rather than targeted, so improving services and attracting a better qualified workforce.

Many in social care, eager to end the sector's status as a "Poor Law" service, would sympathise with this view. But, as the report admits, the "biggest challenge" of the partnership model, politically and in social justice terms, is selling an idea that will provide the least benefit to those who have least.

See Roll the dice...it's Wanless monopoly, and The Big Question

The Partnership Model
All eligible users, regardless of wealth, would be guaranteed a level of care based on need. This would be some fraction - Wanless suggests two-thirds - of a benchmark, cost-effective level of care for the individual. Users would be able to take the minimum or top-up their care. The state would match-fund their contributions up to the benchmark, above which the individual must self-fund. Those on the lowest incomes would have their assigned contributions below benchmark wholly or partly met through benefits. The costs of the partnership model would be greater than means-testing because it would bring into the system those currently excluded. And the state would also contribute a greater share of the costs, with estimated additional public costs of £4.2bn in 2004-5. Wanless proposes meeting £2.5bn of this by transferring money given to older people in attendance allowance and disability living allowance.

New outcome measure
The report proposes an outcome measure for the impact of care on meeting people's core personal, nutritional and safety needs. One Adlay - Activities of Daily Living Adjusted for a Year - measures the improvement in a person's condition from having those needs entirely unmet to having them entirely met for a year. It resembles the National Institute for Health and Clinical Excellence's quality-adjusted life year (Qaly) measure, which seeks to assess the value of health interventions. Wanless puts a value of £20,000 on an Adlay, while Nice values a Qaly as between £20,000 and £30,000. The benchmark level of services is when annual costs equal benefits.