Andy Burnham has promised to ‘fix’ social care and to ‘use some of his political capital on the issue’. The first steps are expected this week. Ed Davey, who has campaigned strongly on the issue, promises to work with him on a cross-party basis.
All good. The problem is that people mean very different things by the ‘social care’ problem.
The obvious priority is to help unpaid carers – around 6 million people, 1.7 million of whom provide care for over 50 hours a week – and those they care for at home. There are rather meagre carers’ benefits but, for the most part, carers make a financial as well as emotional sacrifice – while keeping their loved ones out of hospital and as part of the local community.
There is potential help in the form of local authority domiciliary care but the service has to be paid for since social care -unlike NHS health care – is not free, but means-tested for those with assets over £23,000 (and very expensive for -say- a live-in carer costing up to £50,000 a year). Moreover, the domiciliary care service is severely over-stretched and highly dependent on low paid, immigrant, care workers.
If funding were available it could be used to relax the eligibility criteria which keep around 2 million, mainly elderly people, from receiving the social care they need; or to improve the quality of service. Based on the Scottish model (where social care is free) the cost of a fully funded care service could be around £8 billion. That is a minimum.
But others are clamouring for ‘social care’ funding for a different reason. Many relatives with frail relatives, especially those suffering from dementia, choose not to assume caring responsibilities but to put them in a care home. Good care homes are expensive: upwards of £60,000 a year even without nursing care. Some residents are being forced to sell their family home to pay costs. Disgruntled relatives can see their inheritance disappearing in care home costs.
There is insurance to cover at least part of the cost but a formidable lobby has assembled to demand a cap on the costs of care to protect ‘the family home’. Professor Dilnot recommended a cap to limit the cost of care and the government I served in endorsed the idea. The Treasury baulked at the cost of the cap -now, around £4 billion- and it is not clear why this government would want to prioritise what is in effect an inheritance subsidy for those families with an expensive granny.
Even if the government ignores the more extravagant demands, such as cap on care costs, a meaningful new social care policy is likely to cost around £10 billion pounds. That raises the obvious and difficult question : who pays?. The Daily Mail is already warning its pensioner readers that they may face a ‘death tax’ – a levy on estates, on top of Inheritance Tax – of a kind that Andy Burnham once advocated as Health Secretary. Since the government has already made boxed itself into a position of promising more spending without raising the major taxes, the Daily Mail may well be pointing in the right direction. Care or inheritance?
* Sir Vince Cable is the former MP for Twickenham and was leader of the Liberal Democrats from 2017 until 2019. He also served in the Cabinet as Secretary of State for Business, Innovation and Skills from 2010 to 2015.
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10 Comments
If the Conservative Party chooses not to join in, will the level of consensus be enough to ensure that the cross party dimension is strong enough to deliver? If it is, it will still be a long hard slog but worth it. Is there a difference between one party in government taking decisions by itself and legislation arising from cross party discussions which might make tax changes more palatable?
“a formidable lobby has assembled to demand a cap on the costs of care to protect ‘the family home’. … It is not clear why this government would want to prioritise what is in effect an inheritance subsidy for those families with an expensive granny.”
Ouch! But what if you are the potentially “expensive granny – and grandad”? Your immediate concern is: “What if grandad ends up in a care home, while granny could happily go on living at home, but she is forced to sell the house to cover grandad’s care fees, and she won’t cope with the stress and disruption of doing that at an advanced age?”
“Sort yourself out by buying an insurance policy”, I hear you say. Chance would be a fine thing. You can’t easily buy any such policy while you are healthy, and if you wait until you actually need the care home, the policy will probably be too expensive to buy without selling the family home anyway.
I don’t want an “inheritance subsidy. If Government provided a subsidy to cover a cap on my care home costs, it would be perfectly reasonable for them to recoup it all from my estate. So in principle, it shouldn’t cost any taxpayers’ money.
This is a totally separate issue from the important issue Vince describes, that of helping unpaid carers. Capping care home costs shouldn’t (and mustn’t) get in the way of helping unpaid carers who look after elderly relatives at home.
David Allen – no-one has to sell the house they live in to pay for someone else’s care. If someone goes into a care home then the home their partner still lives in is never taken into account when deciding how much they should contribute.
If someone is on their own and moves into care then their house probably will have to be sold to pay care home fees. This, of course, only has an impact on the children’s inheritance, not on the person in care.
“If someone is on their own and moves into care then their house probably will have to be sold to pay care home fees.”
But not if they’re wealthy, and forward thinking enough, to put in a trust for their relatives. From my admittedly low level of knowledge, it seems to be another way that the government’s reach for income generation finds the middle earners rather than those most able to shoulder the expense.
As Ed himself knows, the financial penalty of being a carer for a family member is immense. Most family carers work excessive hours (often far more hours than a salaried person) and so are unable to undertake any paid employment. Carer’s Allowance is available to anyone demonstrably working in a caring role for more than 35 hours per week. but it’s a pittance of barely £2 an hour compared with the national minimum wage. We should seek a massive increase in its level, which would allow more people to take on the role of a family carer without becoming destitute themselves. And don’t complain about the cost of raising Carer’s Allowance, which currently saves the Treasury an estimated £70 to £80 BILLION each year that the country would otherwise have to find to look after those needing care services.
@Rif Winfield. Actually Carer’s Allowance is not available at all to a large proportion of family carers – those on State Pension. To quote:
“If your pension is £86.45 a week or more, you will not get a Carer’s Allowance payment.
If your pension is less than £86.45 a week, you’ll get a Carer’s Allowance payment to make up the difference.”
So whereas people of working age can supplement their income (with restrictions) with the Carer’s Allowance, pensioners can’t.
The choice seems clear – either funding care or protecting inheritances. If the first £10bn is scarce, it should go to carers and domiciliary care, not a cap that mostly benefits estates. And the fairest place to find it is unearned wealth – the loopholes around trusts and borrowing against assets – before anyone asks working families for more.
Mary Reid (your first post on this thread): You’re right – IF you want to rely on the tender mercies of your local council to part-fund your partner’s care home fees, and to decide what sort of care your partner will get, then yes, you probably won’t need to sell the home you are living in.
If however you value your financial independence, and indeed you would prefer not to live off the State if you can avoid doing so, then you are in a different position. If you are able to keep a savings nest-egg available to pay partner’s care fees without either risking your home or turning to the Council for support, you may well want to do that.
That nest egg then has to sit in some sort of fixed investment, doing nothing. If you could readily give it away e.g. to children or charities, it would do some good, and boost the economy.
A Dilnot-type scheme could avoid most of that. The costs of Dilnot should be wholly recouped from the estates of the beneficiaries. This particular idea is only justifiable if the net cost to the taxpayer can be held down to zero or below.
Mary’s first clarification here is really important as this point frightens many (ie losing a home they CURRENTLY live in to pay for someone else’s care)
I like the idea of a hypothecated tax on estates etc following death to help pay for social care. It would free up some extra funding for a neglected part of what should be the welfare state. It would also go some way to reducing the huge inequality in wealth accross the country.