IF Manifesto Audit 5: Social Care

How intergenerationally fair are the promises being offered by different parties on social care? IF Junior Researcher Melissa Bui takes a look…

With the 12 December election in sight, the Intergenerational Foundation is interested in examining to what extent intergenerational fairness is on the agenda. We have produced a collection of short, concise summaries of our findings from our manifesto audit. This blog, the fifth in the series, focuses on one policy area in particular: social care.

In the full IF Manifesto Audit, we have applied a traffic-light system to signal how intergenerationally fair we consider the various policy offers to be. We grade intergenerationally fair pledges as “green”; “yellow” if intergenerationally neutral; “orange” if some progress has been made, but more needs to be done; and “red” if intergenerationally unfair.

Young people and social care 

Although social care is often considered an old persons’ problem, it is also a key intergenerational challenge. Inefficient state-funded social care can lead to people suffering from conditions not fully covered under the NHS being expected to fund their own treatment.

For a pensioner who is struggling with money, this could mean that the burden then falls on younger relatives. Young people today are already struggling with low pay, sky-high housing costs and a 41% marginal tax rate (for recent graduates). The extra burden of looking after their relatives more than previous generations had to, in a time where it is difficult enough to look after themselves, is a serious intergenerational injustice.

Young people are also set to live longer than pensioners, and thus will require a social care model that can meet both current and future demand. Currently, no such model has been achieved; last year it was estimated by the Local Government Association that there is a £1.5 billion funding gap in social care.

How intergenerationally fair are the promises being offered?

It is therefore no surprise that increasing investment in social care has been a common pledge across all the party manifestos examined, although the exact magnitude of the increase promised varies by party.

For the Green Party, the over-65 population has been given priority. The party has declared their intention to inject an additional £4.5 billion annually into services solely for over-65s – a sum much larger than the estimated funding gap. As such an investment discriminates against the younger generation, who are struggling more than current over-65s did at the same age, this particular declared commitment has been graded with a “red” colour to indicate its intergenerational unfairness.

The party does score better on intergenerational grounds, however, with their stated commitment to extend services to everyone who demonstrates a need for it, regardless of age. This pledge receives a “green” colour from IF.

Labour, the Brexit party and UKIP have offered to invest in more or better social care for all ages. For Labour, this will take form through a new National Care Service, which would provide free personal care services to those who need it, while UKIP claim they will invest an extra £2 billion per annum towards additional residential, nursing and home care services. The LibDems make it explicit that growths in investment under their government will be funded through a 1% increase in Income Tax. This is estimated to raise approximately £7 billion in additional revenue per year.

Although further investments in social care would also mean a better system for current generations now and when they reach old age, such a policy should not be considered intergenerationally fair if it is funded entirely by young taxpayers, who are facing more struggles than their grandparents did at their age. For this reason, IF has graded this LibDem offer with an “orange” colour.

On the same line of argument, we classify Labour, the Brexit party and UKIP’s manifestos with a “yellow” colour to signal intergenerational neutrality, since it is not clear how their additional investments will be funded.

Preventing the need to downsize to pay for social care – intergenerationally unfair

With the ongoing concern over how to fill the funding gap, the Conservatives demonstrate a strong aversion to making pensioners pay for part of it themselves. Their promise is that no one will be forced to sell their home to afford social care if they are elected into power.

Although the statistics may demonstrate that a large proportion of our upcoming pensioners are living on low-income, many are asset-rich due to unearned wealth throughout their lifetime. The majority of the current population of 50-somethings obtained houses at much lower prices, but have seen their asset wealth sky-rocket along with housing prices.

To be precise, the population of adults over the age of 50 own three-quarters of all housing wealth in the UK, the value of which totals to £2.8 trillion in equity, research by Savills shows. It has been found that these houses are often under-occupied, implying that the decision to downsize would typically leave enough money left over to help fund their social care. Selling their homes therefore does not incur a substantial financial blow for many families.

What it would bring, however, is a win for younger generations in terms of releasing some supply of (often large) houses into the market. We have therefore graded the Conservative party’s pledge to prevent this from happening with a “red” colour.

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