The economics behind the new deal for carers

In social care they are known as “informal carers”, as if they were the mere auxiliaries of a formal state system set up to do the serious work of caring. But many in the ranks of this swelling army see it differently: they are the struggling spouses, children and friends who shoulder much of the burden of care for the growing population of older people. Prodded into action by remorseless demographic trends – this year, for the first-time, numbers of over-65s exceeded the numbers of under-16s – and an increasingly vocal lobby, the government has promised a New Deal for carers and a revised national carers strategy.

Care minister Ivan Lewis told a recent seminar organised by the Caring Choices coalition of charities that next year’s New Deal would focus on practical support. He said the government was considering options including allowances and benefits, tax incentives, more joined-up services, employment rights and respite care.

Judging by the views of carers, service users and policymakers who attended the same London seminar, Lewis has been listening. In a straw poll their top five priorities were respite care, financial recognition, emergency support, flexible working, information, advice and training. But recent research published by Carers UK shows the size of the task confronting the government and services: one-third of carers in work are hard up very few are getting breaks or even respite care despite earmarked money from the first national carers strategy eight years ago and up to half of working carers say social services are insensitive to their needs.

Initial findings on the right of carers to request flexible working, introduced in April, suggest many employers are agreeing to these requests. But the new policy has also drawn attention to the other ways in which carers are discriminated against, despite two pieces of legislation in little over a decade designed to make life easier for them.

“The whole agenda has moved on a huge amount since the first carers’ strategy as has the recognition that carers have a right to work if they want to in the same way as everyone else. Back in 1999 carers were not part of the equalities agenda now, partly thanks to the new Commission for Equality and Human Rights, they are,” says Carers UK policy officer Kate Groucutt.

She points out that only 50% of the nation’s six million carers are able to combine care with work compared with a national employment rate target of 80%, while carers are twice as likely as the rest of the population to suffer ill-health, usually as a result of stress or lifting injuries. A government-commissioned study rated emotional support as a key issue for many carers.

The study found many experienced long delays getting help from statutory agencies following assessments, with damaging consequences for their health and finances.

Given the growing demands on social care, carers are at the heart of the government’s policy as set out in the health and social care white paper Our Health, Our Care, Our Say. According to Julien Forder (pictured right), who helped produce last year’s Wanless Review on the future funding of long-term care for older people, informal carers provide just over half of the hours devoted to the higher level, more intensive care tasks with professionals providing the rest. If all care tasks are taken into account, the ratio is much bigger. Carers UK claims that, if the nation’s carers were paid for their work, it would cost the state £87bn a year, roughly the same as the NHS budget.

“The situation for carers is improving given the New Deal and the standing commission set up to look at policy in the longer term,” Forder says. “But there’s not enough support, financial or otherwise, for carers, given the significant role they play in the system. And it looks as if the supply of informal care is not going to keep pace with the increases in demand for care.”

Wanless estimated that an extra £2bn a year was needed to support carers, well short of what Carers UK thinks they are worth. As a health economist Forder takes issue with the £87bn estimate. “If a formal carer was to do what an informal carer does, the ‘replacement’ costs would be about £10bn. Their figure is at the highest end of all the plausible ways of calculating it.”

The Caring Choices coalition, which includes the big charities working with older people, has been holding public meetings around the country to find a consensus on the funding of long-term care ahead of the green paper, which the government plans to publish later next year. Steve Lee from Carers UK told the London gathering there was widespread anger among carers “at the poverty they are forced to endure as a consequence of their caring role”, drawing a sympathetic response from the health representatives of all three main political parties.

A cross-party consensus on this and other aspects of long-term care appears to be emerging which might be summed up as “more should be done as long as it doesn’t cost very much”. Liberal Democrats health spokesperson Norman Lamb said helping carers to stay in employment would be a lifeline, while Stephen O’Brien for the Conservatives said that flexible working and respite care should be the priorities. But he dismissed “financial recognition” as a “woolly phrase”, a line echoed later by Ivan Lewis who warned against hopes of a generous financial settlement for long-term care.

“If we did move to a far greater level of state subsidy, we’d have to raise taxes to pay for it,” Lewis said. “There are no easy choices or soft answers because any system that leads us to be more generous on a universal basis means that we’d have to find the money from somewhere.”

While many of its beneficiaries see the weekly carers allowance of around £50 as an insult, the prospects for any substantial improvement look bleak, not least thanks to the good intentions of carers themselves. “The hard-nosed economic argument is that if you pay informal carers you’re simply paying for what they would do anyway,” Forder says. “But against that you could argue that if you give them more financial support they are more likely to step out of the labour market to provide care and there is less risk of existing arrangements breaking down.”

Wanless’s partnership model for funding long-term care – universal entitlement to a minimum level of social care coupled with individual responsibility to contribute – appears to be the front-runner for all political parties, although Lewis’s words imply that means-testing is far from dead. Forder argues that a properly funded partnership model may increase the flow of carers as demand for their services rises.

“Given that their financial situation always influences whether people decide to care, if the partnership model provides support to people who don’t get it now it’s likely to change how would-be carers consider their options,” Forder says. “The argument for the partnership model has always been not that it will stop people having to sell their houses to pay for care, but that people are more likely to take up formal care and contribute towards it.”

In the end, carers may turn out to hold the trump card. Forecasts of the costs of care have produced, says Forder, “some pretty scary looking figures”. Without that vast army, the figures will look scarier still.

Further information
More on the partnership model 

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Mark Ivory