Today, from the Whitehall box labelled “too difficult to deal with”, the issue of how to pay for the care of the elderly will lift its battered head. Andrew Dilnot’s inquiry will propose a new model for paying for long-term care. Essentially, those needing it should find something in the range of £35,000-£50,000 to fund it from their savings. If the bill comes to more than that, the State will pick up the tab. His hope is that many will decide to insure privately for their share of the potential bill, so the heirs of the one person in four who has to go into residential care will no longer see their inheritance disappearing down the plughole of fees.
Every previous attempt to deal with this problem has failed. The Sutherland Royal Commission set up to look at it in 1999, to which I wrote a dissenting report, wanted the taxpayer to pick up the whole bill. In Scotland, where Lord Sutherland’s policy has been tried, it has led to exploding demand for care and a doubling in the cost of home care in five years — a recognised disaster.
A few years of Government shilly-shallying were followed by the even more cracked proposal by Gordon Brown to provide care free to people in their own homes, while making them pay in full if they went into a care home. The Tories dubbed his plans to fund this through a levy on estates a “death tax” and little was heard of it during last year’s election campaign.
Will Dilnot fare better? The omens are mixed. For example, one paper last week reported that Dilnot’s proposals would “cost the middle class more”. This is the precise reverse of the truth. Poorer people who already have their care paid for on a means-tested basis will get nothing out of his proposals. The middle classes, for whom the cost of care will be capped for the first time, will be the beneficiaries. Nevertheless, rumour has it that the Treasury and/or No 10 are looking to stuff Dilnot back in the “too difficult” box.
Amid this tale of woe, however, there is some comfort to be taken. Two big advances have been made towards finally solving this riddle.
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Firstly, there is now agreement between the political parties that long-term care should not be a political football. Older people need to plan for its costs, which means they need to know in advance what help they will get. They must have certainty, not for a year or two but for decades ahead. That in turn requires consensus. Yesterday, Ed Miliband offered to try to achieve it, and the Prime Minister has responded positively.
Second, it is now accepted on all sides that the cost of care cannot be borne wholly by either the State or by the individual. It should be fairly shared between the two. The bleatings of the “free care for all” lobby, which caused the royal commission to take leave of its sense, have subsided. Anyone who hankers after free care need only look at the size of the budget deficit to realise that it is not a starter.
So what’s not to like about Dilnot? One is that his proposals look likely to give too much to the better-off. He seems to be planning that everybody has to pay the same for the cost of their care, irrespective of wealth. For the average home owner, a £50,000 contribution might easily amount to a third of their wealth, the money they hoped to leave their kids. For the million-pound rich, it will amount to about a twentieth. An alternative would be a sliding scale in which the richer you are, the more you contribute.
Even more serious is the cost of the Dilnot proposals, which is likely to lie in the low billions — no drop in the ocean. But there is another pressing claim for more state cash for care: services to support the elderly are rising fast, as people live longer. The resources to pay for them are being cut, as the Government hammers local authority budgets. The squeeze by councils on fees paid to homes was one cause of the recent near-collapse of Southern Cross. In their own homes, increasingly only people with severe needs get help. Those with lesser problems have to fend for themselves. That means that they will more quickly be unable to cope, and be forced to leave their own homes for more expensive, less congenial care homes.
The present system represents an unfair risk to people with moderate assets who are unlucky enough to need intensive care for a long time at the end of their lives. Without reform, the long lives that we should expect to enjoy will turn out to be a curse. Is stopping that really “too difficult”?
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Lord Lipsey is a Labour peer who served on the Royal Commission on Long Term Care for the Elderly