I never had Theresa May down as a gambler, but the
inexplicable line she appears to be taking on Social Care Funding appears to be
a gamble, and an unnecessary one at that.
Social Care funding first really became a personal issue for me in
2001, when like many families we became aware that my father’s carefully saved but modest reserves were
likely to be swallowed up by my mother’s care needs.
I began looking at
the history of this complex problem. The
reliance the Major government had placed on the Insurance industry had been a
mistake, most of the insurance packages had been withdrawn and the misspelling scandals
were well underway.
The need for people
to sell houses to buy care had become an issue in the 1997 election, and had
triggered a royal commission. This was the first of many studies and reports with
a coherent set of recommendations on how to protect people from the un-insurable
risk of care costs.
Things moved slowly. The treasury is always alarmed by the
cost of care, and conscious that it is wrong to put the burden of caring for
the rapidly growing older population on the shoulders of working age tax
payers. I think they are right about this. That meant that the then Labour
government carried out a temporary fix on social care provision, and delayed
taking the necessary steps to create a fairer care funding solution until the
2010 white paper. This was far too late!
For a while attracted the necessary cross party co-operation, until this
was broken by Andrew Lansley, and trashed by the Daily Mail with its headlines
on the “Death Tax”.
The Conservatives entered the 2010 election with the promise
to find a solution. They commissioned
the Dilnot report, with recommendations on raising the threshold above which
people have to pay their full care costs, from £23,000 to £100,000, and capping
the expenditure for an individual in care to £30,000. This would have created
the conditions where the private sector insurance system could have offered
packages to cover this limited risk of £30,000 care costs, at an affordable
price. This also would have created the certainty
to allow families to plan for care costs.
The Conservatives entered the 2015 election with a watered down
version of Dilnot, raising the individual liability to £72,000. This was far from ideal, but it at least
offered voters the notion that there would be some kind of limit on the risk of
care costs.
It was necessary to offer
this, because more and more families are experiencing the huge costs of care,
and a care system that is far from perfect. We are also seeing the Care
industry under increasing pressure with many of the providers, mainly private,
going out of business, because they can no longer make a profit. More and more people are also aware that
families that are paying the full cost of care are actually subsidising families that have no savings.
because funding by the local authority does not cover the cost of care.
Imperfect though it was it was a blow to many that the 2015
election promise was never met. The
treasury deferred it until 2020.
Sir Andrew Dilnot was understandably distressed by this.
Sir Andrew had not been consulted or warned that the Conservatives
intended in their manifesto for 2017 to go back on the promises of 2015, and to
totally change the approach to the social care funding issue. We are back as Sir Andrew made clear into the
realm of an un-insurable risk for many of the voters who are perhaps Mrs May’s
core supporters.
Sir Andrew is perhaps the mildest mannered and most
courteous man in public life, so when you listen to his interview on BBC Radio
4 Today 18/05/17 it is probably worth considering that this is what he sounds
like when incandescent with anger! http://www.bbc.co.uk/programmes/p0537zxb
So what is Theresa May doing? Before the calling of the snap election we
had the perfectly sensible plan for a green paper on social care, in the
Autumn, and careful cross party negotiations were underway to create a
sustainable solution. Today’s manifesto
announcement seems to have thrown all of this up in the air. I find it hard to understand why.
There are behind all of this some sensible assumptions. Mrs May is wanting people to pay far more for
care in their own homes, than many currently do. This probably links to the proposal to give
workers a year of unpaid “carers” leave which may work for some. This probably does make sense as the problems
of the Care home industry coupled with the demography means that there will not
be enough care home beds to go around. It is also sensible to point out the need for
inter-generational fairness. It is simply wrong that baby boomers who have opted
for a low tax economy throughout their working lives should expect the younger
generation, many of whom will never be able to afford to buy a house, to pay
for their care. It is also right to say
that the wealth locked up in people’s houses has to be part of the solution to
the problem.
What I think Mrs May has failed to understand is just how
worried many people are about the threat of care costs, of being a burden to
the younger generation, and of being deprived of the option of passing on
savings to their children and grandchildren. Her core voters are being left with an
un-insurable risk, and understandably many of them will not like this.
The answer to all of this is to spread the risk of care costs
as widely as possible There are ways to do this which would have given the
electorate as a whole a real sense that the care funding question was under
control. I find it hard to understand
why these options are not being considered.
I can only imagine that Mrs May is so completely confident
of winning the election that she can risk ignoring the interests of her core
voters, whilst throwing a bone to the people who bought their council houses,
with the hope of passing on a very small inheritance.
The proposals that Mrs May is putting forward cannot I think
happen without legislation, so if her
gamble pays off and she remains in power, there will be a lot of battles ahead.
https://www.theguardian.com/society/2017/may/17/theresa-may-conservative-tory-policy-older-people-pay-for-social-care
https://www.theguardian.com/politics/2017/may/18/tory-social-care-plan-example-market-failure-andrew-dilnot?CMP=share_btn_tw
https://www.theguardian.com/politics/2017/may/18/tory-social-care-plan-example-market-failure-andrew-dilnot?CMP=share_btn_tw