This originally appeared as an article in the HSJ
The Spring Budget suggested that the government understood the two key issues for social care. First, that the care system was at breaking point following funding reductions in the teeth of demographic trends that increase demand, and second, the impact of the ‘overhang’ from the Care Act 2014.
On the first issue, the government clearly recognised the need to act, by announcing the phased £2bn increase and flexibility afforded for council tax increases for social care purposes. That was surely the right priority, for service users, local government and – given the knock-on effects – the NHS.
On the second issue, the ‘overhang’ from the Care Act 2014, by announcing a Green Paper on social care for the autumn, the government shied away from promising the money but signalled a desire to take a serious, measured and consultative approach to a matter which successive administrations have failed to tackle. Governments have been able to delay action because inaction doesn’t bring down the system – it is care users and their families who bear the financial pain.
As the Dilnot Commission pointed out, without a cap on social care contributions home owners face the potential of catastrophic care costs. Rather than their house flooding or subsiding, its equity may be fully consumed by social care fees. True, this will only happen to only a minority, but the same can be said of your house flooding, and we consider it essential to insure against that financial impact. The potentially huge financial costs involved have been emotively referred to as a ‘dementia tax’, making the point that the financial consequences of cancer and of Alzheimer’s disease are very different. Dilnot argued that the market structure doesn’t allow private insurance products to operate, but that the problem could be solved by the state taking the risk above a certain ‘stop loss’ point by the introduction of a contribution cap.
There is also a secondary problem: the small amount of capital wealth with which some people are left under the current system, which runs down the equity of house owners in residential care to the current capital threshold of £23,250, and the arguably illogical way which this applies across different types of care. Not only do those with ongoing health needs make no parallel payment, those receiving home care don’t contribute from their equity because they are – by definition – still living in their homes.
The Conservatives’ quickly-rescinded manifesto proposal started to address some of this inequity between payments for different types of care, raising the capital threshold to £100,000 and extending it to home care on a deferred basis, which would have generated extra income. It would also have been administratively simpler to implement than the Dilnot cap. Yet, far from tackling the primary concern, it actually extended its scope and made it potentially worse, hence the strength of feeling which the seemingly hasty proposals misjudged.