There is much support for the Dilnot Commission’s proposal to cap care costs for elderly people. But there are still many challenges to overcome and fears that politicians will simply ‘kick the can down the road’
The summer is over. The party conference season is complete. What now for the long-term care funding reform agenda and the recommendations of the Dilnot Commission that emerged at the start of July?
The commission has done a good job of winning the support of the social care sector over the past few months, which has more or less thrown its weight behind the proposed ʻcapped costʼ model. This was the core proposal that an individual’s lifetime contribution to their care costs should be capped at £35,000.
Support for this proposal reflects, in part, pragmatism: the free personal care of Labourʼs ʻNational Care Serviceʼ idea looks unrealistic at a time of potential economic meltdown. Many stakeholders are wary of disrupting the momentum of the reform agenda – or being seen to – when the commissionʼs recommendations appear to be the only game in town.
And because the commissionʼs proposals are about how to spend money in the social care system – not how to fund the system – stakeholders have also been able to cast aside painful discussions about new taxes or means-testing benefits that dominated debate before the last election.
However, any proposals for spending extra money in the social care system were always likely to win support from the sector. The really big challenges for the Dilnot Commission start now.
The first is how to pay for capped cost model. The commission has been keen to point out that the extra cost imposed by this model would be small compared to current social care spending and wider public expenditure. But thereʼs no agreed plan for how to fund the current system plus associated disability benefits going forward.
As the Commissionʼs own figures show, public spending on social care and related disability benefits will have to rise by around £12bn per year by 2025, just to ʻstand stillʼ. The extra bill for capping the care costs – £2bn rising to £3bn over time – will be on top of this. Without a plan for how to fill the growing funding gap for the current system, the capped cost model will remain stuck on the shelf.
Which leads to the second challenge: the politics. The Treasury is likely to balk at any cross-party agreement to implement the capped cost model without a comprehensive plan for how both it and the current system will be paid for. This means discussions will now have to take place among the parties about taxes and redirecting other forms of spending, with agreement ideally coming before next Easterʼs social care White Paper.
In truth, there are different ways of ʻkicking the can down the roadʼ, and the risk for the capped cost model is that politicians may do this now by agreeing only that it would definitely be a nice thing to have, and should be implemented in the next Parliament. Alternatively, the government may decide to take forward one strand of the commissionʼs recommendations – the £100,000 means-test threshold for residential care is widely tipped – and then seek to claim a ʻwinʼ for having reformed social care funding.
The final challenge is convincing the Treasury to back the capped cost model. Few on Horse Guards Road doubt that the current English system is underfunded and needs reform. But given the growing unfunded liabilities of the current system, the Treasury will scrutinise extremely closely the extra £2-3bn bill.
A lot will come down to how the Treasury assesses the benefits of the proposals. The model – which is really a cap on how much council funding individuals are excluded from owing to their wealth – doesnʼt really interlock with pre-funded care insurance for the £35,000 liability that individuals would be left with.
The commissionʼs arguments about a cap giving the public ʻpeace of mindʼ have also been queried by commentators, who point out that most self-funders in residential care would still face big weekly bills for care, even when they have reached the ʻcapʼ on being excluded from council support.
This could all mean that when the Treasury comes to ask itself whether the capped cost model is the best way to spend an extra £2-3bn in the social care system, the results may be highly contested.
But perhaps, at this stage, that is beside the point. Against the backdrop of economic malaise, with demand for care inexorably rising, the real value of the capped cost model now is that it can force politicians from all parties, as well as the Treasury, to face up to the question of how more money will be directed into the social care system over the next decade, including an extra £2-3bn boost to improve outcomes and fairness.
Getting sustainable funding into the system remains the key question; whether the capped cost model – or some variant of it – is the right way to spend extra money can be finalised later.
James Lloyd is director of the Strategic Society Centre
