Between 2010/11 and 2018/19 total spending on adult social care in England fell by £86 million in real terms, representing a 4% reduction in local authority spending.

Repeated claims from government that spending is at an all- time high disguises the fact that such spending has failed to keep pace with the corresponding increase in demand, with spending per head having fallen by 6% per person over the same period.

Regardless of any debate around trends on spending, fulfilment or demand, there is an ever-pressing need for an open and honest public debate about what kind of society we wish to be, resulting in a long-term funding solution for both health and social care that reflects a consensus view.

Whilst adequate and long-term funding is the primary challenge in respect of the care crisis, the inherent complexities within the structure of the care systems need addressing.

The current devolved health and social care systems, much like some extended families, are fragmented across the UK.

They are also inherently complex, meaning that for many in need of care, their family members or legal representatives, they are unfathomable and extremely difficult to navigate.

The changing social care landscape

At the same time, we have also seen changes in the social care supply and demand. Not only is overall demand increasing, but the nature of demand is changing with a shift from residential towards domiciliary care.

Supply is also under threat. The evidence seems to suggest that spending cuts and increased eligibility thresholds have impacted more strongly in recent years on homecare than on residential care for older people.

Indeed, in England many local authorities are no longer funding care for people with low and moderate care needs.

A significant number of homecare providers have confirmed a loss of council funded volumes, some handing back contracts, and most reporting that growth in the market is now focused on privately and NHS funded homecare, with indications that this is likely to remain so at least for the foreseeable future.

This threat to supply is also impacting on residential care. UK care home firms are under pressure from the perfect storm of funding cuts, crippling debt, rising costs and staff shortages. Of course, all this assumes a business as usual context.

Covid-19 has singlehandedly thrown a spotlight on the perilous financial state of social care and despite short term government funding, a worsening pandemic may well be the final straw for both the NHS and local authority funded social care as we know it.

The critical role of guidance and advice

Putting Covid-19 to one side (if that’s possible), it remains the case that the vast majority of those in need of care do not know where to go for advice in trying to get answers to urgent questions. They don’t know where they can find appropriate care of a good standard or their local authority, the NHS or any other third party help pay for it. What about state benefits? And, if they have to pay, what are their options?

From a regulatory perspective, advice falls into two categories – non-regulated care advice that seeks to answer the questions above and regulated paying for care advice in respect of a personal recommendation as to the best way an individual should pay for their care if they have to following a local authority financial assessment.

Whilst some financial advisers offer advice in respect of both, many find it difficult to deal with the nonregulated aspects of care advice either because they don’t have the detailed technical and practical knowledge required to do so (in part due to the fragmented and complex nature of the UK systems in play) or because their business models make it difficult to deliver this advice cost effectively.

Even when it comes to regulated ‘paying for care’ advice, there are several ways someone can do so, some of which involve the use of residential property and for many the optimal outcome will involve a combination of both property and non-property assets and income.

For the financial adviser this means they will need to take a holistic approach and develop expertise in a number of areas including the growing later life lending market.

From the consumer perspective, many do not appreciate the importance of taking regulated paying for care advice, including the fact that only a regulated financial adviser with a designated care qualifications can advise on all ways of paying for care.

This is because one way (and for many the only way that guarantees payment of care fees for life) requires paying for a product called an Immediate Needs Care Annuity the suitability of which can only be determined by a regulated financial adviser who has passed an exam on long-term care insurance recognised by the Financial Conduct Authority.

In our experience of dealing with the general public, few understand this issue nor have even heard of this solution, and whilst it will not be suitable for everyone’s circumstances, understanding the cost of guaranteeing fees at a certain level for life is in our view the only way to properly assess the relative cost of all other ways of paying for care.

In recent years, financial advisers have looked to address these issues by developing a joint working relationship with a new breed of independent care navigation firms such as My Care Consultant.

By dealing solely with all aspects of non-regulated care advice on a daily basis, and developing expertise through dealings with both theory and practical application, we are uniquely well placed to provide advice in respect of the more immediate and urgent needs of those looking for care.

Furthermore, we are able to discuss the advantages and disadvantages of all ways to pay for care, the importance of seeking regulated financial advice and signposting to experienced and fully qualified local firms.

What needs to happen now?

Those that deliver good social care are, like those in health care, part of a skilled profession. Good care is complex and expensive.

When it comes to the issue of personal contributions from those with the ability to pay, personal wealth for a significant number of people will tend to accumulate in only a few places, namely pension funds or residential property.

Given income demands in retirement, the absence of a universal solution to paying for care and a move towards the provision of care at home, it seems self-evident that residential property will have a pivotal and increasing role to play in funding care.

It seems clear that any long-term solution to the growing care crisis will require some level of personal contribution from those able to pay, so the debate around funding solutions as well as the challenge of how consumers make informed decisions and ensure good outcomes in future needs to be urgently addressed.

Given the increasing financial demands on many in later life (making assets and income stretch to cover ever greater lifespans), the sheer size of personal wealth sitting in residential property is likely to have a central role to play for many when it comes to paying for their care.

As such, governments would in our view be well advised to inject some clarity and consistency into their messaging around the use of residential property wealth.

We also need an honest conversation and wider debate around what type of care system we want as well as how it should be funded.

Do we want social care to be free at the point of need in much the same way as health care? Do we want social care to be free for those without the means to pay and a chargeable service for those who can pay? Or do we want something in between?

Thereafter, government needs to create and fund long-term sustainable solutions as well as instigate a public information campaign that helps encourage those that are likely to pay something towards their care about how they might do so, many years before they are in that position, as well as help funnel consumers to basic but reliable social and health care guidance.

Here there is perhaps a bigger role for a centralised service helping the public understand the nature of the typical care journey, signposting to care navigators, regulated paying for care financial advice, and legal support at the earliest opportunity.

Without this, people will continue to stagger from one source of information (or misinformation) to another as they seek to self-navigate the care system that applies to them.

The lucky ones will end up with support that helps deliver good outcomes. The unlucky ones will not. Regardless of how the government intends to ‘fix the care crisis’, this effective lottery needs to change now.

*This article first appeared in a report by the Equity Release Council, supported by Pure Retirement and My Care Consultant – Solving the social care funding crisis: perspectives on the contribution of property wealth.

Jacqueline Berry is managing director at My Care Consultant