The Government’s failure to offer details around fundamental social care reforms was lambasted by industry experts today, as was the limited scope of the Online Safety Bill content, following the State Opening of Parliament.
In the first parliamentary session for the government outside of the European Union, the Queen’s Speech said proposals on reforms to social care will be brought forward but lacked clarity on a roadmap to resolve the ongoing crisis.
Rachael Griffin, tax and financial planning expert at Quilter, says: “The current system of social care funding is widely acknowledged as being unsustainable, yet proposed solutions have been far and few between from successive governments. Once again, social care changes have been promised by the government but fundamental reform has been kicked even further down the road.”
In its 2019 manifesto, the Government pledged to seek cross-party consensus on proposals for long term reform of social care, with the aim of ensuring that nobody should sell their home to pay for the costs. However, the Dilnot Commission calculated that their proposals would cost an additional £3 billion a year by 2020/21.
Griffin added: “Whatever solution is eventually in place, people will still need to think carefully about saving for their own care, as whatever is on offer is likely to be the bare minimum. Personal provision for social care will make up the vast majority of how someone pays for the care they need and it certainly won’t be a small amount so people should think carefully about not only saving for retirement but also for social care.”
Peter Hamilton, head of market engagement at Zurich, called the lack of detail disappointing.
Hamilton explained: “The ongoing challenges in care homes caused by the pandemic simply reinforced the urgent need for change and for addressing the inadequacies and inconsistencies in the current system. Commitment is needed to introduce measures that will ensure clarity for people around the level of support they can expect to receive from the state, as well as what they will be expected to contribute themselves. Of course, with that comes the need for serious additional funding.
“Without this, we will continue to see inconsistency and unfairness as people grapple with a complex system, unable to make any sort of financial provision or plan for their own futures or those of loved ones.”
Aegon pensions director Steven Cameron called upon the Government to come up with a stable and sustainable way of funding care.
Cameron said: “While we may see some discussion around improving delivery of social care, the Queen’s Speech offered no new clarity on how the Government will address the other half of the issue, the highly interconnected question of how social care will be funded. The Government needs to gain public and cross-party support for a deal to share costs between the state and individuals, based on their wealth. This needs to be fair across wealth bands and generations.
“The Government’s share needs to be backed up by sustainable and adequate funding, accepting this may involve raising taxes either on income or wealth. This is further complicated by the government’s 2019 election manifesto ‘triple tax lock’ commitment not to raise rates of income tax, national insurance or VAT. It could explore options concerning wealth taxes or extend National Insurance to earned income above state pension age, which is currently exempt. Another option would be introducing a completely new tax, earmarked specifically for social care, possibly levied on those above a certain age.”
Cameron said individuals will also need incentives to save for their share without facing unlimited or “catastrophic” personal costs.
He added: “We strongly support a cap on how much any individual will be asked to pay for care costs and clarity on any separate charges for ‘room and board’. Increasingly, preparing for possible care costs will become part of managing pension, property and other savings wealth into and through retirement. Financial advice will play a hugely important role in ensuring people make the right decisions for an uncertain future.”
Online Safety Bill ‘does not go far enough’
Separately, campaigners also expressed anger around the government’s decision not to include scams in its Online Safety Bill announced in the Queen’s Speech.
The draft laws will ensure that companies clamp down on illegal content, to be overseen by Ofcom which will be granted powers to fine companies that do not comply. However, campaigners have called for the legislation to go further.
Tim Fassam, director of government relations and policy, PIMFA, said: “We welcome the inclusion of the Online Safety Bill in the Queen’s Speech today as part of the Government’s commitment to making the internet safer for all to use. However, we continue to urge the Government to include financial harms within the scope of the Bill in order to achieve this aim and truly tackle criminal content online.
“It is vital that we get the legislation right here, that the legislation covers not just paid for online advertising but other forms of online content such as fake websites and social media profiles. That ministers appear more receptive to including financial harm within the scope of the bill is welcome news and shows the Government has heard our concerns around online fraud and how best to tackle it. We look forward to working constructively with the Government to create a safer internet for all that use it.”
Matt Burton, chief risk officer at Quilter, added: “It is good to see the government announce their intention to introduce an Online Safety Bill to protect internet users from harm, but there now needs to be a serious conversation on what types of harms are included.
“It would be illogical for a Bill aimed at reducing online harm to exclude anything financial given the scale of investment scams online, so the Bill must give financial harms parity with other social harms.
“For far too long we’ve been playing a game of whack a mole, where the onus has been on diligent individuals and providers identifying scam adverts and reporting them to search engines, the regulator and the police instead of the search engines undertaking basic due diligence to filter out fraudulent adverts in the first place.
“The Online Safety Bill provides the government with the perfect opportunity to require search engines and social media platforms to remove sham investment schemes from their sites quickly, and conduct the necessary due diligence to stop them from appearing in the first place.”