Until now it's always seemed as if the British obsession with home ownership would scupper any attempts at setting up a decent system for elder care. For many people, the family home is their only form of saving, but damned if they are willing to draw down on those savings to pay for their own care in their dotage. No, no -- it must all be passed on, preferably inheritance tax free, to their heirs.
Just this past week, as we awaited yet another report into the problem, by the economist Andrew Dilnot, one newspaper columnist published a piece under the headline "She's your granny; why should she have to sell up?". To which it's tempting to respond, "actually, she's YOUR granny; why should I have to pay for her care?"
Well, you can knock me (and my granny) down with a feather, because it seems as if the redoubtable Mr Dilnot may have come up with a basis for solving this highly vexed issue. No doubt the politicians will find a way to mess it up, but his report points the way to a lasting solution.
There's a good summary of the proposals here, but the essence is that anyone with assets exceeding £100,000 will be expected to pay up to £35,000 towards their own care when they reach old age. Anything beyond that would be met out of the public purse. It's worth stressing -- because some of the initial responses seem to have missed this aspect -- that the £35,000 refers specifically to care costs. People would also be expected to pay for their own "hotel" costs (i.e room and board) out of their pensions. Dilnot sees this costing each person a further £7,000-10,000 a year.
The £35,000 could be paid in cash, or out of the eventual sale of the family home, but the big hope is that the establishment of a firm maximum will induce the insurance industry to design appropriate policies to provide cover. The government's role could then be seen as providing "catastrophic risk" cover for the uninsurable financial liabilities faced by the relatively small minority whose care costs spiral out of control.
The proposals have been welcomed by care charities and by politicians of all stripes. So why might it all get messed up? The answer, not surprisingly, is cost. Dilnot estimates that his proposals would cost £1.7 billion a year in 2014, the suggested start date, with the figure rising slowly after that. There's an argument to be made that the plans will pay for themselves, if they result in more people being cared for at home rather than in hospital, but the government will not want to bank on that. There are suggestions that cuts in other areas of social spending will have to be found if the Dilnot plan is to go ahead.
Dilnot seems to have made a tactical error here. His cost estimates are based on the £100,000 and £35,000 figures for the means test and the maximum contribution respectively. But of course, those figures are both moveable. There must be several combinations of a stricter means test and higher contribution limit that would allow the scheme to proceed with no initial cost to the public purse. By explicitly suggesting figures that result in higher public spending, Dilnot has made it harder for the government to propose a slightly less generous but self-funding scheme. This may reduce the chances of anything being done.
The £7,000-10,000 "hotel costs" estimate also seems low, based on my own fairly recent experience with two elderly relatives in care homes. There would be nothing to stop people from spending more of their own money, of course, but if a figure like this were seen as a norm for publicly-operated care homes, standards would inevitably suffer. (It equates to less than £30 a night -- you can't even stay in a Travelodge for that).
Care charities are saying that Dilnot has given the UK a "once in a generation" chance to fix a serious problem in the social safety net. That's probably an exaggeration, but there's no doubt that his is the best idea anyone has come up with so far. Will the politicians be able to rise to the occasion? Stay tuned.
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