Living costs 'rising for parents'

4 July 2011 Last updated at 23:01 GMT Families have seen prices rise for many essential items, the report says Parents must each earn at least ?18,400 in 2011 so their family can live to an acceptable standard, a charity says.

Cuts to childcare assistance and the freeze on child benefit, when prices have risen, have raised the income requirement, the Joseph Rowntree Foundation (JRF) said.

The minimum cost of living was 5% higher than in 2010, the report said.

But the government said it was doing what it could to help people who were feeling squeezed.

"The Government recognises that people are feeling squeezed and is doing what it can to help, reducing fuel duty so taxes on fuel are 6p lower than they would have been and implementing an increase in the personal allowance in April, taking over 800,000 of the lowest paid out of tax," an HM Treasury spokesman said.

The JRF report added that a single person needed to earn ?15,000 before tax and benefits for an acceptable standard of living.

"This report shows that the squeeze in living standards caused by the combination of rising prices and stagnant incomes is hitting people on low incomes hard," said the author of the report, Donald Hirsch, of Loughborough University.

Inflation

Since 2008, the JRF has gathered information from focus groups to set a benchmark for what it considers to be an "acceptable standard of living".

The official cost of living rose by 4.5% in the year to April, as calculated by the Consumer Prices Index (CPI) measure of inflation.

However, the JRF said that the "minimum budget" had risen by between 4.7% and 5.7% during the same period.

Continue reading the main story Single working age: ?240.89Pensioner couple: ?302.74Couple with two children: ?705.63Lone parent with one child: ?466.08

Source: Joseph Rowntree Foundation. Weekly budget including rent and childcare

This was because the basket of goods included food, council tax and public transport, taking up a considerable chunk of lower-income families' budgets, which had risen sharply in price.

"In practice, earnings have risen by less than inflation, meaning that many people on low incomes are finding it substantially harder to make ends meet than a year ago," the report said.

In addition, the housing costs had risen, and tax credits had been cut for some families so they needed to cover more of their childcare costs themselves.

"This report is an early sign of the huge impact that even seemingly modest changes in the welfare system can have, especially for low-income working families who depend on it to achieve an acceptable living standard," the report said.

The report said that for each pound by which they fell short of what they needed, they had to earn several pounds more to cover for higher taxes and lower tax credits.

In a statement, the government said that it had, "announced above-inflation increases to the child element of the Child Tax Credit of ?180 in 2011-2 and ?110 in 2012-13, funded in part by recycling the savings from freezing child benefit".

The gap between the national minimum wage and the minimum income standard was highlighted by the JRF, which has also produced a minimum income calculator.

It suggested that a wage of ?7.67 an hour would be needed by a single person, and ?9.41 an hour by each of a couple working full-time with two children.

A lone parent with one child would need to earn ?9.33 an hour. The national minimum wage is ?5.93.

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Social care costs 'need capping'

4 July 2011 Last updated at 14:58 GMT By Nick Triggle Health correspondent, BBC News Andrew Dilnot: "The government will be picking up a hefty bill"

Social care costs in England should be capped so people do not face losing large chunks of their assets, an independent review says.

Council-funded home help and care home places for the elderly and adults with disabilities are currently offered only to those with under ?23,250 of assets.

The Dilnot report said the threshold should rise to ?100,000 and a ?35,000 lifetime cap on costs would be "fair".

But the Treasury is known to have doubts about the expense of the plans.

Just over ?14bn a year is spent by councils on social care.

However, the changes would cost an extra ?1.7bn a year if they were implemented now - and this figure could rise by 50% as the "baby boom" generation begins to retire.

Insurance

Last year the coalition government asked economist Andrew Dilnot to look into how the system of funding social care in England could be changed amid concerns it was getting harder for people to get access to state support.

The ageing population and squeeze on council budgets have led councils to impose stricter criteria on who can get help.

Continue reading the main story Ben Geoghegan BBC Political correspondent

"Now Gordon Wants ?20,000 when you die".

That was the Conservative campaign slogan in 2010, the last time there was a serious attempt to sort out social care.

Then as now, the main political parties were talking about cross-party consensus.

Then as now, they insisted reform was needed so that old people didn't have to sell their homes to pay for their care.

However, their attempt to reach agreement failed and led to what Ed Miliband today described as "political bickering".

Might things end the same way this time round?

In Whitehall, officials are warning about the difficulties that lie ahead.

They insist this issue will "absolutely not be long-grassed", but politicians don't need reminding that - as one source put it - this will not be nice and easy.

It means while 1.8m are getting state funding, another 1m-plus either have to pay for support themselves or go without.

Mr Dilnot's commission has ruled out calling for care to be free.

Instead, it has recommended a partnership between the state and individual whereby the high costs are covered by the government - one in 10 people aged over 65 faces care costs of more than ?100,000 over their lifetime.

But the individual should be liable for the first tranche of care with a cap in costs set at between ?25,000 and ?50,000, the report said.

It went on to suggest ?35,000 as the ideal figure - a third of over 65s face sums above this amount.

Below the age of 65, the cap should be phased in. For young adults below the age of 40 to 45 it should be free - although in reality this makes little difference as hardly any pay now because those with care needs at that age have often not had time to accrue savings or buy property.

After that age, the cap should be gradually phased in by ?10,000 each decade.

The hope is that with the state paying for the high-cost cases, the insurance industry would be encouraged to develop polices which would cover any care costs below the cap.

The cap will not include so-called "hotel costs" for food and accommodation. However, the report said there should be a standard charge which could be around ?7,000 to ?10,000 per year.

Means-testing should remain so that the poorest would not have to pay, the commission recommended, but the threshold increased to ?100,000 for residential care to better reflect the rise in property prices seen over the last two decades.

The commission believes the cap and rise in the threshold will mean no-one will lose more than 30% of their assets paying for care.

Continue reading the main story Many councils in England have stopped providing support to those with low and moderate needsThe Dilnot Commission was set up in July 2010 to establish how to achieve an affordable care system for adults in EnglandWales and Northern Ireland both have means-tested systems which are similar to EnglandScotland provides free personal care, but in recent years has tightened the eligibility criteria for the same reasons as in EnglandMr Dilnot said the money would have to be found by making cuts elsewhere or raising taxes and he said any tax rise "should be paid, at least in part, by those of retirement age".

Launching the report, he added: "The issue of funding for adult social care has been ignored for too long.

"The current system is confusing, unfair and unsustainable. Individuals are living in fear, worrying about meeting their care costs.

"Putting a limit on the maximum lifetime costs people may face will allow them to plan ahead for how they wish to meet these costs."

The report also called for an end to the ever-tightening restrictions being placed on access, arguing there should be a national standard so everyone had the same access no matter where they lived.

The commission has already had talks with the Treasury about the proposals. It is understood that government officials voiced concerns whether extra money could be found in the current financial climate.

Social care is currently means-tested

Health Secretary Andrew Lansley acknowledged finding the money remained a challenge, saying such change would require "significant cost" and need to be balanced against other funding priorities.

However, he said despite this social care was still a "priority for reform" and the commission's report would be "carefully considered" before the government put forward its proposals next spring.

Labour leader Ed Miliband said he would be willing to have cross-party talks to try to reach a consensus on the issue.

The recommendations already have widespread support among charities and campaigners with many arguing it provided the blueprint for reform.

Michelle Mitchell, of Age UK, said action was long overdue: "Social care is at crisis point. Vulnerable people are going without care and that means their conditions are worsening and they are ending up in hospital and costing the government more. We cannot go on as we are doing."

Any overhaul of the system would take about four years to introduce.

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MPs attack Citizen Service costs

23 June 2011 Last updated at 01:20 GMT David Cameron met teenagers on a team-building course during the 2010 election campaign The cost of the government's National Citizen Service volunteering scheme is not justified at a time when youth services are being cut, MPs have said.

The education select committee said in a report that services for young people faced "disproportionate" cuts.

It estimated that offering NCS to all young people would cost more yearly than 2009-10 youth services spending.

The government said the money for the NCS was extra and it was consulting on a new vision for youth services.

The programme has been championed by Prime Minister David Cameron as a type of "non-military national service" to encourage young people from different backgrounds to mix.

It aims eventually -through external providers - to offer every young person in England the opportunity to attend a two-week residential, outdoor activities course and to spend a further three or four weeks working on local community projects.

'Significant cuts'

But the committee, chaired by Conservative MP Graham Stuart, said the current cost for pilot schemes was ?1,182 per young person - whereas Germany provided an entire year's volunteering for just ?1,228 per participant.

"We do not see how the government can justify spending the same for a six-week programme," the MPs said.

The government has dedicated ?13m for the scheme in 2011, and ?37m in 2012, aiming for 10,000 participants this summer and 30,000 next year.

But the select committee estimated that, given the government's aim to offer the scheme to all teenagers, if half chose to participate, the total cost could amount to ?355m per year.

That is more than the ?350m spent in total on youth services in 2009-10, the MPs pointed out.

"Given the degree to which year-round youth services are being cut, and in light of our concerns about cost and practical implementation, we cannot support the programme's continued development in its current form," the report concluded.

It said there had already been "very significant, disproportionate" cuts to local authority youth services, ranging from 20% to 100% of spending.

It cited David Wright, the chief executive of the Confederation of Heads of Young People's Services (CHYPS), who spoke of a "double whammy" to youth services, with ring-fencing removed from previously allocated funding sources, in addition to overall cuts of 28% over the next four years to local authority budgets.

'Dramatic reductions'

Dedicated youth-services funding has been amalgamated with other grants into an Early Intervention Grant - which itself is 10% less than the total of the funding streams it replaced, the MPs said.

They cited a survey by the CHYPS in February 2011, which found that cuts to youth services averaged 28% and some local authorities were cutting 70%, 80% or 100% of their services.

Cuts totalling more then ?100m were planned by March 2012, and open-access youth clubs and centres were hardest hit, the study found.

The committee's report also cited a Department for Education document which said local authorities in many areas were cutting youth projects in favour of protecting early-years and child-safeguarding services.

The budget reductions "may be both dramatic and long lasting", the MPs said.

"The government's lack of urgency in articulating a youth policy or strategic vision is regrettable, is compounding an already difficult situation, and should not be allowed to continue," the committee said.

The MPs recommended that the National Citizen Service scheme be turned into an accreditation scheme for existing youth-development and volunteering programmes, and that the funds earmarked for it be diverted into general, year-round youth services.

In response to the report, Children's Minister Tim Loughton said he was "disappointed" that the committee had "sought to undermine the NCS pilots before they have even got off the ground".

It said the funding for the scheme was "additional money for youth services, not an alternative to them".

"Local areas need to think more creatively about how they do this and consider what more the voluntary and community sector can provide," he said, adding that the government was consulting on a "new vision" for youth services to be published in the autumn.

He also said it was "a shame" that the committee did not hear from many young people, including those who took part in the NCS, who "universally said they benefited enormously from the unique experience".

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Universities warned to cut costs

12 June 2011 Last updated at 13:50 GMT Some universities may vanish under the new regime, Mr Hughes admits Universities should cut costs not "cry foul" that the rise in tuition fees to ?9,000 will not be enough, Lib Dem deputy leader Simon Hughes has said.

The government's access to education advocate told the BBC they should look to cut the wages of vice-chancellors.

He also urged inner-city schools to offer scholarships so poorer students were not barred from attending.

Grants are being withdrawn almost entirely from most courses with tuition fees expected to cover the cost.

The Lib Dems pledged to phase out fees before the coalition opted to allow universities in England to raise them to up to ?9,000, earlier this year.

More than 20 Lib Dem MPs voted against the plan, while Mr Hughes abstained.

Value for money

Those who supported it, including leader Nick Clegg, were criticised by opponents of fees as all Lib Dem MPs had signed a pre-election pledge not to raise them during this Parliament.

A charge of ?9,000 is the maximum allowed under the new rules.

Mr Hughes said everyone would rather see plenty of central government money for universities, but they, like the welfare state and local government, have had to take cuts to meet the deficit.

He told the BBC's Politics Show: "A lot of them [universities] are going to cry foul at the moment, whereas in fact what they need to do is make sure they give good value for money.

"Lots of universities have highly paid vice-chancellors, highly paid lecturers - actually not lecturing for many hours a week.

"So the universities need to do a bit of cost-saving themselves so that they are delivering a good product for the students but not spending money on things that are not for the product."

He conceded some universities "may disappear" under the new regime and said it was "unlikely" many would go private to survive.

"I think a few universities which have struggled to make their books balance may disappear. I think other universities may realise that they are putting on courses which are not very popular," he said.

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Elderly care costs 'could treble'

18 May 2011 Last updated at 10:49 GMT Some countries are struggling to recruit careworkers The cost of caring for the elderly could treble by 2050, according to a report by the Organisation for Economic Cooperation and Development.

The body, which represents the most industrialised nations, estimates that 10% of people in OECD countries will be more than 80 years old by 2050.

That is up from 4% in 2010 and less than 1% in 1950.

The OECD report said member countries are spending 1.5% of GDP on long term care.

It predicts spending as a share of economic output will double or even triple in the next forty years.

Overhaul

The report said countries must face up to the challenge of caring for ageing populations. It said a vision of long term care was needed and that "muddling through" was not an option.

Angel Gurria, OECD Secretary-General, said: "With costs rising fast, countries must get better value for money from their spending on long-term care.

"The piecemeal policies in place in many countries must be overhauled in order to boost productivity and support family carers who are the backbone of long-term care systems."

However, the report warns against relying too heavily on family members. It says low pay and hard working conditions result in a high turnover of care workers and that many countries were struggling to meet demand.

It says Germany, the Netherlands and Sweden had all increased retention by boosting pay and improving working conditions.

The OECD also said there was likely to be an increased need for migrant workers.

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