{"id":14668,"date":"2021-10-01T11:44:37","date_gmt":"2021-10-01T10:44:37","guid":{"rendered":"https:\/\/www.economicsobservatory.com\/?post_type=question&p=14668"},"modified":"2021-10-01T11:46:20","modified_gmt":"2021-10-01T10:46:20","slug":"carelessness-costs","status":"publish","type":"question","link":"https:\/\/www.economicsobservatory.com\/test\/carelessness-costs","title":{"rendered":"Carelessness costs"},"content":{"rendered":"\n

Newsletter from 1 October 2021<\/strong><\/p>\n\n\n\n

The availability of good quality social care is a central concern for many families and communities. Care services also provide vital support for the wider healthcare system and constitute an important part of the UK economy.<\/p>\n\n\n\n

Throughout the pandemic, the sector has rarely been far from the headlines. During the first wave, coronavirus spread quickly through care homes, leading to thousands of hospitalisations and deaths<\/a> among elderly and disabled people. Shortages of key medical equipment, such as ventilators and PPE, caused a medical emergency across the country, as care staff tried desperately to protect and treat their residents.<\/p>\n\n\n\n

The situation was similarly shocking during the second wave<\/a> in January 2021, when many more people living in care lost their lives.<\/p>\n\n\n\n

Once effective vaccines were developed late in 2020, it was elderly care home residents \u2013 as well as key worker staff \u2013 who were placed at the front of the queue to get their jabs. But even now, with 82% of the adults in the country fully vaccinated<\/a>, the continued threat of the Delta variant means many residential care homes remain on high alert.<\/p>\n\n\n\n

Protecting the most vulnerable members of society \u2013 whether from economic hardship or physical or mental illness \u2013 forms a vital part of our response to crises. Even outside the context of Covid-19, an important measure of whether an economy or society is \u2018advanced\u2019 is the extent to which vulnerable groups (such as those dependent on care) are looked after within the system.<\/p>\n\n\n\n

How to pay for this care with an ageing population is a challenge for governments around the world. The recent review by the UK government<\/a> of the funding system for adult social care has reignited the debate around whether tax increases are the answer. Last week on the Economics Observatory we explored several of the policy challenges facing social care in the UK.<\/p>\n\n\n\n

Taking care<\/h3>\n\n\n\n

Last week Steven Proud (University of Bristol) looked at how recent changes to social care funding might affect different service users<\/a>. Steve argues that while the proposed cap on costs may limit how much individuals need to contribute for their own care, its implementation (alongside other means-tested requirements) may still result in inequality between users.<\/p>\n\n\n\n

According to his analysis, the cap alone would make little difference to the poorest people. Indeed, the design of the cap \u2013 and the way it interacts with the means-testing formula \u2013 can lead to some surprising outcomes.<\/p>\n\n\n\n

For example, someone who has an initial wealth of \u00a3100,000 and has total care needs of \u00a386,000 (spread over eight years) will need to burn through 65% of their savings under the new system. But if their care needs were \u00a3500,000, this share drops down to 22%.<\/p>\n\n\n\n

For a wealthier service user (with assets worth \u00a3300,000), the maximum wealth share that they would need to give up to cover their care would be only 29%. Crucially, this would be the same whether their total care cost was \u00a386,000 or \u00a3500,000 (see figure below).<\/p>\n\n\n\n

Simulation of the impact of different costs to care<\/h4>\n\n\n
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