Political paralysis has prevented Andrew Dilnot’s proposals on elderly care from being taken forward. Cross-party agreement is essential and the government should commit to introducing legislation by the end of this Parliament
The way in which social care is funded needs reform. The major parties all agree that the current system is outdated and unsustainable. They also recognise that an ageing population and changes in morbidity mean the cost of care will continue to rise. Efforts to adopt solutions have, however, been stuck in the slow lane.
In July 2010 the coalition government established an independent Commission on Funding of Care and Support (the Dilnot Commission) to review the funding system in England. In July 2011 the Commission reported to the government.
Its key recommendation was to cap an individual’s lifetime contribution to their care costs (with a cap somewhere between £25,000 and £50,000). The commission also recommended increasing the threshold for means-testing care from £23,250 to £100,000, introducing national eligibility criteria and removing the means-test for all people who enter adulthood with care and support needs.
Yesterday Reform brought together around 150 delegates, from politics, public service, business and the third sector, to discuss and debate the Dilnot report. The tone was upbeat. There was a sense that perhaps one part of the puzzle of reforming the English care system is falling into place.
Yet doubts remain, as Sarah Neville, public policy editor at the Financial Times, highlighted. Timing is one challenge – with the economic outlook and poor state of public finances meaning that finding taxpayer funds for the £1.7bn bill for the Dilnot proposals will be a challenge. There is also a question of whether – given the experience with the Health and Social Care Bill – the government has the appetite to take on the challenge of introducing another potentially controversial reform.
The political challenge comes as it is often believed that the state will cover the cost of care as it does with the ‘free at point of use’ NHS. Yet the reality is different and many people only discover they need to pay for care when they or a family member need it. The political problem this creates is that any new system of funding care tends to be judged against a system of free care, which does not, and never will, exist.
The reality is that any funding model will require hard choices – such as requiring people to fund care through the equity they hold in assets like housing. It takes a brave politician to, as shadow health secretary Andy Burnham did yesterday, acknowledge the true costs of care.
This line between health and social care was a key theme of the discussion. As Andrew Dilnot noted, England spends the equivalent of £1,000 a day per person on health care for the over 65s, and even more on social security benefits. Yet social care is relatively neglected. This balance needs to be shifted. There must be less emphasis on health spending, particularly on the acute sector, and more on social care. The reliance on hospitals must fall.
There is also a need for better integration of services and spending across social care, health, welfare and housing. The key principle must be to provide care in the right place, not just where it has been provided before.
The reality is that under any system individual families will have to play more of a role in funding the costs of care. This requires the government to be clearer about the role it will play. As Jules Constantinou from GenRe showed, while Germany, France and the United States have all taken quite different approaches to funding care, they all share one key feature. They have certainty over what the government will put in.
This need for certainty makes cross party support for any funding option essential. It also means that the exclusions to any system (for example, as Chris Horlick from Partnership illustrated the Dilnot cap does not propose covering hotel costs) must be transparent and not subject to political whim.
It is important to ensure that families can access the support they need. As David Thomson of the CII argued, this is not just a role for government. If families are going to make greater provision for their own futures they will need private ways of pooling risk and shifting costs over their lifecycle. This is exactly the role that financial services can play. But this creates challenges for both the demand and supply of services.
On demand, there is a need to build greater trust and understanding. On supply, more flexible and simpler products (although reconciling these two features may be a challenge) and clearer information are needed.
While politicians have been paralysed by the scale of the challenge of funding long-term care, they should focus on the opportunities. The government is due to release a White Paper on care in the next few months. This must commit to introducing legislation by the end of this Parliament.
Doing this would mean we could be in a much better place, with a better educated population, families preparing for their own future, higher levels of take up of financial products and, eventually, lower burdens on the taxpayer.
The Dilnot report has put reform to the funding of care on the table. There will never be an easy time to take on this challenge, but we have to make this work.
Dr Patrick Nolan is chief economist of Reform
