A new social care tax

Labour leadership candidate Andy Burnham has recently announced that under his leadership Labour would seek to bring in a tax to fund social care. While the details of this proposal remain scarce, it would look to stem the issue of rising costs in the sector which is threatening to cripple public finances and bring care provision to a halt. The move will undoubtedly prove controversial if past Labour social care proposals are anything to go by, but bold moves seem increasingly necessary given the sector’s perilous finances.

Although the country’s general economic outlook appears positive, the finances of many key services are anything but. While conditions have seemingly been improving for some time now, the government remains firmly committed to seeing out its austerity programme. The implications of this for local authorities are massive, and councils estimate they are likely to face a shortfall in their budgets of £4.3 billion by 2025.

Councils are therefore set to cut around £1.1 billion from their social care budgets this year alone as they struggle on, and with the living wage coming into force next year this issue looks set to become even more acute. The long term outlook is now very troubling; as the population of Britain gets older, the country’s ability to adequately meet people’s care needs looks likely to suffer if the status quo on funding continues unchecked.

Local authorities have been handed a lifeline by the recent announcement that the proposed 2016 care cap is being deferred until 2020. However, the respite that this has given local authorities is only temporary, and it is frustrating to see that policymakers do not grasp just how urgent finding a long term solution has become. The deferral of the cap is also bad news for general public, whose personal finances remain threatened by ever increasing care costs.

A social care tax may therefore be what the country requires should no other solution be found. While adding to existing personal tax burdens  such as income tax and national insurance is likely to prove unpopular, it would undoubtedly provide the sector with a much needed injection of cash and is  certainly preferable to the chilling prospect of a failed social care system.

Andy Burnham’s radical plans ultimately remain little more than an idea, and given the openness of Labour leadership race and the Conservatives’ continued power they are unlikely to be implemented any time soon. While we remain hopeful that policymakers will find a solution to the funding crisis that will not pass costs on to the individual, it is refreshing to see a mainstream politician offering fresh thinking on social care.

We are here to take your call and will provide impartial support and guidance – contact our friendly care experts today to discuss your care needs.

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