Scotland’s care industry – part 3

In part 2 of this series of articles I looked at the Dilnot Commission and its recommendations on how to fund social care in England.

In this article I will look at the: “Independent Review of Free Personal Care in Scotland”, often referred to as the Sutherland Review.  Although not as wide-ranging as Dilnot, the Sutherland Review is important as although it concentrates on Scotland’s Free Personal and Nursing Care (FPNC) policy other connected issues are covered.

Lord Sutherland was asked in the summer of 2007, shortly after the SNP minority administration took office, to carry out an independent review of FNPC.   The findings of the Sutherland Review were published in April 2008.  More information, including a complete copy of the Sutherland Review. can be found here.

Before I look at the Sutherland Review in more detail it is probably useful to remind ourselves what FPNC actually is.   FPNC was introduced across Scotland on 1st July 2002.  Free Personal Care is a legal entitlement for people aged over 65 or over who have been assessed as having personal care needs that require services to be put in place.

Any personal care service which does not fall into this definition will continue to be charged for.   Subject to an assessment by the Social Work Service, Personal Care can include:-

  • Personal hygiene (e.g. bathing/showering).
  • Continence management (e.g. toileting/bed changing).
  • Food and diet (e.g. assistance with food preparation).
  • Problems of immobility (e.g. help to move around).
  • Counselling and support (e.g. reminder device).
  • Simple medication (e.g. creams/ eye drops).
  • Personal Assistance (e.g. dressing/going to bed).

Free Nursing Care is similar but is available to people of all ages who are assessed as requiring nursing care services.

The remit for the Sutherland Review was in four parts.

  1. The funding available for FPNC.
  2. The distribution of resources between local authorities.
  3. The impact of the withdrawal by the UK Government of Attendance Allowance from people receiving FPNC.
  4. How to ensure that funding for the long-term care of older people is sustainable.

Before I list the Review’s recommendations it is worth noting the concerns that had arisen over the first 5 years of the operation of FPNC.   There are:

  1. Questions had been raised about the consistency of provision between different local authorities.   This included the use of waiting lists with different eligibility criteria from one authority to the next.
  2. There has been continuing debate about specific issues such as food preparation.
  3. Questions had been raised about the practical implications of the legal ruling in the “Macphail” case. [i]
  4. Allowances for residential care have not been raised in line with inflation.

The recommendations were set out in a twelve point plan.  

The first 9 recommendations are described as “short-term”.  These recommendations were deemed necessary to stabilise the policy and address difficulties in funding and the variability of provision across the country.

  1. Address the Funding Gap.  The Scottish Government should provide additional funding to stabilise the policy in the short-term, i.e. for the next 5 years.    It is estimated that the shortfall in funding is around £40 million.
  2. Up-rate fixed allowances.  The Residential and Nursing Care Fixed Rate Allowances should in future be up-rated annually in line with inflation.
  3. Standardise assessment and delivery.   There should be clear “entitlement” for all those assessed as needing personal and nursing care, analogous with the NHS, and in line with that, local authorities and their partners should consolidate standardisation of assessment  for and delivery of services, to common processes and clearly stated target times.
  4. Establish clear national priorities and outcomes for older people.  There should be a specific reference to securing the wellbeing of older people included within the Scottish Government’s 15 National Outcomes set out in its National Performance Framework.
  5. Ensure costs are accurately monitored and reported.  The current failings in information systems identified should be addressed and more accurate systems to collect comprehensive and accurate cost information set in place.
  6. Improve local accountability.  A performance framework for long-term care services for older people should be built into the Single Outcome Agreement Model.
  7. Address imbalance in funding streams.  The UK Government should not have withdrawn the Attendance Allowance funding in respect of self-funding clients in care homes, currently amounting to £30 million a year.  That funding should be reinstated in the short-term while longer-term work to re-assess funding streams takes place.
  8. Clarify expectations.  Renew efforts to improve public information and understanding of the policy.  A clear understanding of shared responsibility needs to be fostered.
  9. Address cross-border/boundary issues.  Conclude work to ensure greater consistency in interpretation and application of Ordinary Residence legislation and guidance without further delay.

Recommendations 10 and 11 are described as for the “short to medium-term” and are aimed at securing the policy and keeping it under review within the next 5 years.

  1. Review and re-model.  The uncertainty associated with projecting future costs of long-term care means demand must be reviewed and re-modelled regularly and be reflected accurately in future local government finance settlements and capacity planning by local authorities and their health partners.
  2. Review public funding arrangements.  There should be a holistic review over the next few years of all the sources of public funding for long-term care of older people, including health, social care and housing support, but also UK Government benefit funding, in particular through Attendance Allowance and Disability Living Allowance.

Recommendation number 12 is for the longer-term and which requires more strategic long-term policy planning and vision.

  1. Review public funding arrangements.  Government at all levels should seek to establish a new vision for dealing with the challenge of demographic change, not just looking at long-term care, but also pensions, transport, etc.

There was relatively little initial reaction to the Sutherland Review.   Almost every comment made at that time was a positive one.   The lack of reaction can be explained both by the lack of real opposition to the policy in Scotland and also the financial crisis that had already began when the Sutherland Review was published.   The recent reaction to this policy is therefore of more relevance.

Since April 2008 we have had the Independent Budget Review.   More information on the IBR can be found here.  The IBR recommended that immediate work should be undertaken to review whether all free or subsidised universal services should be retained in their current form.  This is an indirect reference to the policy of FPNC.

We have also had a Scottish General Election.  Helpfully Age Scotland has outlined how each of Scotland’s main political parties how they would prioritise “older people issues” in the next Parliament.   The full report is called “Party Positions for the Scottish Parliamentary Elections 2011”.  [ii]

Scottish National Party

The SNP guaranteed the future of Free Personal Care by filling the £40m shortfall left by the previous administration.   See recommendation 9 of the Sutherland Review.

Labour Party

The Labour party pledged to establish a new “National Care Service” that combines health and care services.   No direct mention of FPNC is made but an indirect mention indicates that the Labour party supports the policy.

Conservative Party

The Conservative party pledged to protect funding for FPNC.

Scottish Liberal Democrats

The Scottish Liberal Democrats pledged their continued support for Free Personal Care.

Two points in particular are worth commenting on.

The first concerns an issue that is not mentioned.  The UK Government’s decision to withhold Attendance Allowance funding due to the introduction of FPNC in Scotland.  That issue is of course dealt with in the Sutherland Review.  Again see recommendation 9 of the Sutherland Review.

The second is the Labour party policy of a “National Care Service”.   Also interested to note that the Labour Party had appointed an expert group , including Age Scotland Chief Executive and former Labour party councillor in London and Campaigns Officer for the Labour Party in London, David Manion.

Also interesting to note that the policy seems broadly similar to what has been proposed by the “Christie Commission”.   More on the funding of the Christie Commission can be found here.

Since the Scottish General Election COSLA has called for a review of FPNC.  In response, both Henry McLeish, First Minister when FPNC was introduced, and Age Scotland have argued strongly for continuing the policy.  The President of COSLA has also in a personal capacity called for FPNC to means-tested.   [iii]


The world we live in seems very different from April 2008.  Public spending in Scotland is declining after many years of year on year increases.  FPNC was the flagship policy of the first Scottish Executive when introduced in 2002 and is still well supported by our main political parties.  How long will this continue remains to be seen.

In my next article I will look at some of the issues raised in the Sutherland Review in more detail and in particular the UK Government’s withholding of the Attendance Allowance funds.

James Aitken

Legal Knowledge Scotland

[i] This case concerned Argyll & Bute Council.  A complaint was made that the Council failed to provide FPNC in good time.  I will discuss this case in more detail in a future article.

[ii] The Age Scotland paper sometimes does not appear when searching its website.  If you cannot find it on its site it can be easily found by searching: “Party Positions for the Scottish Parliamentary Elections 2011”.  The Age Scotland website can be found here.

[iii] See BBC news report 29 June 2011, on-line Scotsman 4 July 20115 July 2011, and on-line Sunday Herald 15 August 2010.

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Scotland’s care industry – part 2

“The Report of the Commission on Funding of Care and Support” was published last week.  Although this report looks at the situation in England, and was commissioned by the UK coalition Government, the issues raised and the recommendations made are of direct relevance to us here in Scotland.

Extracts from the four key findings:

  1. The current adult care funding system in England is not fit for purpose and needs urgent and lasting reform.
  2. The current system is confusing, unfair and unsustainable.  People are unable to plan ahead to meet their future care needs.  Eligibility varies depending on where you live.
  3. A major problem is that people are unable to protect themselves against very high care costs.   The current availability and choice of financial products to support people in meeting care costs is very limited.
  4. Most people are realistic about the need for individuals to make some contribution to the costs of care in later life, but they want a fairer way of sharing costs and responsibility between the state and individuals.

Extracts from some of the main recommendations:

  1. To protect people from extreme care costs we recommend capping the lifetime contribution to adult social care costs that any individual needs to make at between £25,000 and £35,000.   We think £35,000 is an appropriate and fair figure.
  2. Not everyone will be able to afford to make their personal contribution, and those currently just outside the scope of eligibility for means-tested support are not currently protected.   To address this, means-tested support should continue for those of lower means, and the asset threshold for those in residential care beyond which no means-tested help is given should increase from £23,500 to £100,000.
  3. Those who enter adulthood already having a care and support need should immediately be eligible for free state support to meet their care needs, rather than being subject to a means test.
  4. Universal disability benefits for people of all ages should continue as now.
  5. People should contribute a standard amount to cover their general living costs, such as food and accommodation, in residential care.   We believe a figure in the range of £7,000 to £10,000 a year is appropriate. [1] 
  6. In reforming the funding of social care, the UK Government should review the scope for improving the integration of adult social care with other services in the wider care and support system.   In particular, we believe it is important that there is improved integration of health and social care.  [2]

Estimated cost

The estimated cost of these proposals is £1.7bn per year rising to £3.6bn by 2025.

Two examples from the Report may help explain how this would work in practice.  

Example 1:

Alice lived alone in her own home worth £180,000.  She had dementia and needed to go into a residential care home when she was 83 for the last 5 years of her life.

Under the current system

Alice’s daughter needed to arrange for Alice’s home to be sold in order to be able to use the money to pay for Alice’s care.   Alice had to pay for all her care and living costs in full until she died, spending £165,000 from her pension income and housing wealth.

Under Dilnot

Alice would initially need to contribute in full to her care and general living costs.  After two years she would have contributed £35,000 towards her care and reached the cap.   From then on, the state would pay Alice’s annual care costs of £18,500.  Alice’s general living costs would be paid out of her pension income.  Alice would be able to keep 80% of her wealth.

Example 2:

John has a stroke at the age of 85.  He could no longer manage at home and entered a care home costing £28,500 a year.   He lived in the care home for four years before he died.  Prior to this, he lived on his own, in a house which he owned outright and was worth £140,000.  He had £220 a week from his own pension and the state pension.

Under the current system

John had to contribute all his income except for £22.60 a week and use his housing assets to pay for his care.   He continued to pay for his care in full until he died, spending £74,000 from the value of his home.

Under Dilnot

John would pay the first £35,000 of his care costs and after two years he would reach the cap and then receive all his care without charge.  He would continue to contribute £10,000 a year towards his general living costs.  This would be done through his pension income.

John could choose to use his housing assets to pay for the £35,000 (taking out a deferred payment from the local authority), and still have £105,000 left, three-quarters of his wealth.

Reaction to this report in England

UK Government Ministers responded cautiously.  The health secretary, Andrew Lansley, described the Dilnot report as “an immensely valuable contribution” but warned that the UK Government needed to “consider carefully” the “significant costs” of reform.

Age UK welcomed the proposals. [3] Michelle Mitchell, Charity Director at Age UK, said: “Age UK welcomes the Dilnot Commission recommendations, which set out a clear blueprint for the long term sustainable reform of social care.

The Guardian said:  “Life is littered with potential financial catastrophes, from costly-to-treat illnesses to house fires, but in most cases the risks are pooled, whether through the state or the insurance market.    When it comes to care those with more than £23,500 are on their own, facing potentially unlimited liabilities.   The results are dire.  One in five retirees will clock up costs of more than £100,000.  Some 20,000 people are forced to sell their homes every year.  So Dilnot’s plan is very welcome as a way of staving off ruin for an unlucky minority.”

The Daily Mail took a different view: “The £35,000 doesn’t cover charges for bed and board; those could reach £10,000 per year.  And anyone wanting more than bog standard levels of care will pay extra.  So the middle classes will still face massive costs – while those on benefits will pay nothing.”


This is a good and more importantly a timely report that points to the questions that we in Scotland also need to ask and answer.

In my next article I will look at latest thinking on this issue in Scotland and in particular what our main political parties said prior to the recent Scottish General Election.

James Aitken
Legal Knowledge Scotland

[1] The fact that these costs are also means-tested in Scotland is often overlooked by some commentators in other parts of the UK.  

[2] The recently published report by the “Christie Commission” which looked at the future of public services in Scotland has made a similar recommendation. 

[3] It is not clear why this part of the organisation is called “Age UK” and not “Age England” as it is effectively the English umbrella group as distinct from  “Age Scotland”, “Age Cymru” and “Age NI”.

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Elderly care in England

Age UK claimed in a report published today that care and support for older people in England has reached breaking point.   The report claims that 800,000 people who currently need care receive no formal support from the state or private sector agencies.

A copy of the report can be found here.


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