Tuesday, 19 February 2013

The government's proposals for social care are neither fair nor sustainable.

The government have missed an opportunity to establish a consensus on the reform of funding social care. They are ignoring the key financial recommendation of the Dilnot Commission.  By focusing on the 'scandal' of people 'losing' their homes to fund their social care, they have missed the point, and by setting the cap at £75,000 they have missed it by a large margin.

The unfairness of the current arrangements for funding social care is not the 'scandal' of people 'losing their inheritance'. That is not where the 'scandal' lies. The scandal lies in the arbitrary and unpredictable impact the need for social care has, and the lack of coherent and sustainable ways to meet it.

There is nothing inherently unfair about having to use equity invested in our homes to fund our care. For several decades we were encouraged to buy our homes rather than rent them; we were encouraged to see it as a relatively secure investment for our hard earned savings.  For some time we even got tax relief on the interest which encouraged us to lock more of our money in our homes! But if we are not then willing to use the proceeds of that investment to help pay for our social care in the future, then what have we been making the investments for?

But if we are expected to contribute to our social care in later life then that contribution should be predictable, fair and transparent and the means-testing needs to be applied fairly. As the Dilnot commission concludes,  we need a system that is "fair and transparent" and what people might be expected to pay is established and clearly understood so that they can plan for it.

Under the government's plans, anyone with assets, including their home, worth more than £123,000 will have to pay for the first £75,000 of their care costs. They will also pay “bed and board” of up to £12,000 annually when in a nursing home. It is good that the means-testing threshold will increase from £23,250 to £123,000. But this is an asset threshold and includes the value of property. The average value of houses in London is over £445,000; in the West Midlands it is £165,000. Many will have assets above the means-testing threshold, and a cut off creates an arbitrary unfairness at that level. Many will still need to sell their properties to meet the costs of care up to the cap of £75,000.

The government could have set the cap at £35,000  as recommended by the Dilnot Commission which suggested the cap should be between £35,000 and £50,000.   The level of the cap was determined by Dilnot to be the level that "taken together, the cap and the increase in the threshold for state support in residential care, would mean that those with lower incomes and wealth receive greater protection."   The Dilnot Commission believe that " a cap outside of this range would not meet our criteria of fairness or sustainability." The government have chosen to ignore Dilnot and impose a cap that benefits the wealthiest but not the poorest home owners.

The Government currently spends £14.5 billion p.a. on adult social care in England. Just over half of this is on services for older people. By concentrating on the “scandal” of people having to sell their homes to pay for their care, the government has addressed a political problem but not the real economic and social cost of care. The shortfall in funding of social care will be £10-12 billion by 2021-2, according to the Nuffield Trust. There is little if anything in the government proposals to address that gap. Social care provision needs fundamental reform, with more coordination of care agencies and funding if it is to meet the challenges of a growing elderly population.

As Dilnot says "The Government should both implement our reforms and ensure that  there is suficient, and sustainable, funding for local authorities. Local  authorities will need to be able to manage existing pressures as well as the new requirements resulting from our reforms."

As it is, the government has cut funding for local authority provision for the past two years and with further cuts this is likely to be squeezed further. All political parties need to be honest with the public about the need for increased taxation to make up for this. In the long term, good quality social care will reduce the economic burden on the NHS. But we cannot hope to get a good quality of care by continuing to cut funding. As the Dilnot commission rightly concluded there needs to be better integration of services, the current ‘postcode lottery’ of care should be  addressed, there should be more transparent assessment processes, and there needs to much better information and advice.

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