Downing Street reacted cautiously this morning after being challenged to end “the last vestige of the poor law” by committing £1.7 billion a year to overhaul care for the elderly.
No one would pay more than £35,000 for a care home and most would pay much less under proposals from a Government-commissioned review to end the “fear and uncertainty” surrounding the funding of care for older people.
David Cameron’s spokeswoman said that the Prime Minister welcomed the report by the Commission on the Future Funding of Care and Support, but cautioned: “This whole area is complex as well as multi-faceted and certainly the whole funding issue is not something that can be looked at in isolation.” She denied, however, reports that the issue was “dead on arrival” because it would cost too much, and she insisted: “We are not going to back away from this.”
Andrew Dilnot, chairman of the Commission, said that ministers should come up with a White Paper by next Spring to avoid missing a “once in a lifetime” chance to fix a broken system, while Dame Jo Williams, another of the commissioners, said that she would be “disgusted” if ministers kicked the report into the long grass.
The following key recommendations were among those put forward by the Commission:
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- An individual’s contribution to their care should be capped. Mr Dilnot suggests that the cap is set at between £25,000 and £50,000, recommending £35,000 as “an appropriate and fair figure”. Taxpayers would pay all costs beyond that figure.
- Anyone with assets of under £100,000 would pay less than the cap. At present, people with assets worth more than £23,250 pay the full cost of their care, a situation condemned by Mr Dilnot as “crazy”. Means-tested help should be given for people for anyone with a home worth up to £100,000, he said.
- People in care homes should pay separately for the “hotel costs” of food and accommodation. These would be capped at between £7,000 and £10,000 a year, so that homes did not try to disguise nursing costs in ever-escalating bills for accommodation. Mr Dilnot said that people given care at home had to pay for their own food out of their pensions, so it was fair that people in care homes did so as well.
- People should be able to take out insurance policies to cover themselves against the £35,000 cost. Alternatively they may choose to pay up front or have the money taken from their estate after their death.
Mr Dilnot said that his proposals would offer peace of mind to elderly people who were terrified of the potentially unlimited costs of care. Some 20,000 people a year are thought to sell their homes to pay for care, with one in ten facing bills of more than £100,000. “It is the last vestige of the poor law,” he said. “It needs reform now.”
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He added: “The current system is confusing, unfair and unsustainable. People can’t protect themselves against the risk of very high care costs and risk losing all their assets, including their house.
“This problem will only get worse if left as it is, with the most vulnerable in our society being the ones to suffer. Under our proposed system, everybody who gets free support from the state now will continue to do so and everybody else would be better off.”
George Osborne, the Chancellor, is believed to have reservations about the idea of finding an extra £1.7 billion a year to pay for the plans. Mr Dilnot said: “It is one quarter of one per cent of public spending. We are absolutely clear that it is worth it.”
In a letter to the Chancellor and the Health Secretary, Andrew Lansley, Mr Dilnot writes: “I would urge you to move forward with pace. The system is in urgent need of reform. There have been many years of debate on how to take this forward; now is the time for action.”
Mr Lansley, who will outline the Government’s reaction to MPs this afternoon, said that he expected to give a “very positive” response to the Commission’s recommendations.
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Charities urged the Government to act on the report. Jeremy Hughes, chief executive of the Alzheimer’s Society said: “Today’s welcome report could bring to an end the scandal of the colossal ‘dementia tax’ where every year tens of thousands of families are left to pay all their care costs whilst other diseases are paid for by the NHS. The government mustn’t miss this opportunity to right a wrong that is destroying lives.”
Sir Stuart Etherington, chief executive of the National Council of Voluntary Organisations, said: “This review makes major strides towards identifying how we can achieve an affordable, sustainable and fair funding system for all adults in the UK. The challenge now falls to all parties to resist turning the review into a political football and to prioritise responding swiftly and decisively. It is the most vulnerable who will suffer if we cannot seize this golden opportunity to improve the funding of adult social care.”