William Laing, Founder and Executive Chairman of LaingBuisson, issued the following comment in response to Prime Minister Andy Burnham’s announcement of a National Care Service, to be funded in part by ending the existing state pension triple lock from 2030.

Founder and Executive Chairman of LaingBuisson, William Laing, says:

“The vision has been presented – a National Care Service (NCS) – though there is little flesh on the bones yet, and the NCS won’t be set up until after the next election. We know that it’s for ‘care’ only, and that people in care homes will still have to pay for board and lodging. But there are still many unanswered questions.

“The detailed ‘offer’ that emerges will very likely depend on focus groups that the Labour government will undoubtedly set up to test out the social care options to see what is most palatable, what will be viewed as a con, and what is likely to win votes.

“Without going through the steps of the analysis, and focusing on care homes, the most likely outcome (if Labour wins another term) seems to be: local authorities will be the lead agencies administering the National Care Service. Up to 80 or 90% of care home placements will be contracted via local authorities, in place of about half, which is publicly commissioned now. Continuing healthcare funded by the NHS will presumably disappear – no need for it any more. So too will NHS-funded nursing care, and the money transferred to local authorities as the prime candidates for running the new National Care Service.

“Local authorities will continue to charge the residents they support, though the charge may be re-labelled as a ‘board and lodging’ or ‘living expenses’ charge. It will still absorb all of the income (bar ‘pocket money’) of the great majority of the people they support, but residents’ capital will be untouched.

“As an aside, in a recent and remarkably unaggressive Today interview with Nick Robinson, Andy Burnham did not deny the possibility that residents may still have to sell their homes to pay board and lodging charges – but that will probably be subject to a correction fairly soon.

“Returning to likely future scenarios, it is highly likely that top-up rules will be changed to allow better-off council-funded care home residents to pay higher fees in more luxurious homes than local authorities are willing to pay – because how else will newly enfranchised property owners be able to express a choice to pay for better amenities?

“In summary, Andy Burnham’s vision means that much of the pure self-pay care home market, which has fuelled recent investment in care homes, will be replaced by local authority commissioning supplemented by expanded top-up freedoms. How this will play out for care home operators and investors remains to be seen. It’s still a long way off, so plenty of time to prepare – and indeed lobby.

“Homecare is another ball game. In his Today interview, Andy Burnham put his faith in preventive services. But there is a huge task in turning round local authority practice, which is essentially to prioritise the highest needs. There is also the question of whether hollowed-out councils are up to the challenge. For the last two decades, they have presided over an essentially bust system of hourly (or half- or quarter-hour) slots with little innovation in the sort of outcome-based contracts that would support a real shift to preventive strategies.

“There’s also the question of who is going to supply care in the future. Ninety-five percent of social care is currently supplied by the independent sector – mainly for-profit. There have been noises about shifting back to public provision, and this may well be the preference of the prime minister. But the cost of buying out incumbent providers would be prohibitive, and it is difficult to see how the nationalisation of supply option could be taken seriously.”