This is what politicians do with ‘a difficult one’

In 1997 the Labour Government made reforming the funding of social care a priority. A Royal Commission reported in 1999 and it took until 2009 for the Government to set out options for fundamental reform.

The above is from an email from Reform, which has now published a transcript of a conference on paying for long term care.

Why is it so difficult. I guess because there is not enough money for the government to pay for it all. But on the other hand, the government does not want to say openly, “You must pay for it yourself” or, even more honestly, “the poor will have it paid for, the rich will pay for themselves and those in between will have to make a decision about whether to be ready to pay or else run down their assets and wealth sufficiently so that the state pays. Oh, and by the way, if the state pays the care might not be so good.”

At present the worst option for individuals is to have some money which pays for a few years and then runs out completely at which point the person dies. All that money was saved and it has disappeared with nothing left over for children. This kind of system is a disincentive to saving apart from anything else.

Governments get a lot of flak when people are ‘forced to sell their homes’ to pay for care. But this easy anger on the side of newspapers and media fails to take account of the fact that if you were not ‘forced to sell your home’ then it would be easy to put all your money into a home knowing that the government would pay for care and you could still pass on money to your children.

What is the answer?

My answer would be considered too harsh and be unacceptable in a democracy where votes must be won. But what is an answer that a democracy would accept?

Here are some interesting comments made in the Reform conference:

Reform commentary: Change has to take place. Government programmes are largely funded on a pay as you go basis. With the ageing of the population, the proportion of people who work and pay the taxes that fund services is falling. The reliance on public funding must fall and recipients must fund more of the cost of services through direct charges and payments.

Lord Warner, Commissioner, Commission on Funding of Care and Support: “there is a huge lack of awareness as to how the care and support system works. 57 per cent of people say they know nothing or very little about care and support…It is very clear that a very large number of older people and their families believe that the NHS is going to provide their care and support so they don’t need to actually provide anything themselves.”

Nick Starling, Director, General Insurance and Health, Association of British Insurers: “we expect the number of people over 85 is going to double by 2030. Yet despite all this, old age seems to take people by surprise and I imagine a lot of people my age in this room have only really thought about it and experienced it when it has happened to them, happened to one of their parents or parents-in-law and you suddenly have to confront the issues about what long term care might mean, what it might cost.”

Nick Kirwan, Assistant Director, Health and Protection, Association of British Insurers: “if people are saying ‘I’m now not sure whether the state will pay for me or not’, why would they spend quite a lot of money taking out an insurance product in the light of that uncertainty?”

Penny Mordaunt MP, Chair, All Party Parliamentary Group for Ageing and Older People: “At the moment it is an extremely unfair system that we have, that if you are one side of the line you are fine and if you’re on the other then basically everything has gone.”

Richard Humphries, Senior Fellow, Social Care, The King’s Fund: “If you wanted to make an award, the equivalent of an Oscar or a BAFTA for a system of care and support funding that was the stingiest, most confusing, fragmented and poorly understood then I think ours would be up there, ours would be the King’s Speech of social care funding systems.”

Clive Bolton, Managing Director, Equity Release and At Retirement Director, Aviva: “somebody joining the job market today aged 23 with a broad expectation of working until they’re 60 because that’s what their dad did, they have an even chance of being retired longer than they are economically active. When you put that together you realise that the system is completely bust.”

Emma Stone, Director of Policy and Research, Joseph Rowntree Foundation: “partnerships are complicated to understand and they are complicated to communicate. The greater the range of options, the more difficult it is to achieve a system that is really simple to understand. So I think we just have to be very honest about it.”

Lord Warner: “Any fantasies about 100 per cent universal state provision, forget it. It is going to be a partnership between the state, individuals and their families, and that is inevitable.”

Paul Lewis, financial journalist: “There may not be, as Lord Warner says, in the fashionable sense a ‘silver bullet’, but there is a pile of gold there to solve this problem and I think that we should be looking at the value of homes…I know Lord Warner said there was no appetite for compulsion, there is no solution but compulsion. Take the value of homes and then the problem that we are all so worried about will disappear.”

Mark Pearson, Head of Health, OECD: “One obvious conclusion from this is that the future elderly are going to be paying a much greater proportion of the bill for long term care than the current cohort requiring long term care.”

  1. “And while a generation ago only one in ten families in social housing had no-one working, this had risen to one in three by 2008-09.” The section on housing and social care in the Comprehensive Spending Review
  2. Politicians waste the money of the poor – this time it was Tony Blair and NHS computerisation
  3. Not ‘to the grave’
  4. The dilemma of charities
  5. Seeing a doctor
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