“The £6 Billion Question”

A recent report on the funding of residential care contained some significant information of major consequence to older people.  It was produced by the relatively obscure Local Government Information Unit and commissioned by the equally unknown care home fees specialist – Partnership.

The central finding of the report is the forecast that there will be £1 billion a year shortfall in residential care fees.

This is not a new message.  It’s just one that has been falling on the deaf ears of politicians for far too long.  Nor is it something that residents and their relatives want to face so they have been turning a blind eye to the issue until the harsh reality of not being able to cope at home forces them to come to terms with paying for the high cost of residential care.

Here are some facts from the report:-

  • 40% of residents in care homes are self-funders
  • 25% of them run out of money
  • 612,000 residents receive some state funds
  • On average self-funders live 4 years in residential care
  • This will cost between £120,000 and £220,000

Put all these figures together and roll them forward fifteen years and the LGIU forecasts the cost of state support for older people in residential care will need to double from £6.36 billion to £12.15 billion.

Of course, this won’t / can’t happen which is why the politicians set up the Dilnot Commission to hand out the bad news – which is that older people who need more care are going to have to fund it themselves.

The good news is that the over 65’s collectively own £1 trillion of unmortgaged property.  The not so good news is that this will only work if everyone chips in something towards the very high cost of the oldest and frailest, particularly those with dementia who tend to need care for longer.

This is the equation that Andrew Dilnot is wrestling with.  I am sure he will shortly come up with a solution which requires people to use their housing equity to pay for care.  The £6 billion question is

 

This entry was posted in Residential Care and tagged . Bookmark the permalink.

4 Responses to “The £6 Billion Question”

  1. Southern Cross Card Game Televised 6.
    Again John a very succinct and mind blowing blog. However I am wary of drawing to a conclusion too soon, as personal circumstances ask me to ask more pertinent questions of me: What have I done to secure my future? Are the omens good or bad?
    To my mind Southern Cross have been totally irresponsible, and the model they adopted, if indeed they had a scheme or plan, (other than to reward the financial backers): Have caused me to question the whole of the Residential/Care Home industry, and to ponder are they all going to go belly up?
    My elderly mother is in a residential home in the North of England, and while we as a family pay the current level of fees-The family (My mother’s ) pot of money is finite and in agreement with your figures we have all ready paid for 4 years residency, and have a projected reserve of possibly 4/5 years at the current projected rates. However we are aware that should my 91 year old mother become frailer and require nursing skills, the projected 4/5 years becomes maybe 2 to 3 years at most, and that is if we are lucky as a family, and my mother’s health holds out.
    What does one do?
    Originally 4 years ago after a period of respite care my mother accepted the residential home of now: where she is resident.
    Should the parameters change and my mother require to be moved it will be traumatic both in health, welfare and financial terms, and here I must admit to a prayer or two, as I cannot like everyone before me forecast the future, I can only advise the family on choices of the day, and trust I/we have made the right decision.
    Conclusion.
    I must know not only reflect on my mother’s position, but that of myself wife, and our immediate siblings as we all approach the age of where help may be required from outside the family circle. It is disturbing, and very unsettling.

    Southern Cross Card Game Televised 6.
    Again John a very succinct and mind blowing blog. However I am wary of drawing to a conclusion too soon, as personal circumstances ask me to ask more pertinent questions of me: What have I done to secure my future? Are the omens good or bad?
    To my mind Southern Cross have been totally irresponsible, and the model they adopted, if indeed they had a scheme or plan, (other than to reward the financial backers): Have caused me to question the whole of the Residential/Care Home industry, and to ponder are they all going to go belly up?
    My elderly mother is in a residential home in the North of England, and while we as a family pay the current level of fees-The family (My mother’s ) pot of money is finite and in agreement with your figures we have all ready paid for 4 years residency, and have a projected reserve of possibly 4/5 years at the current projected rates. However we are aware that should my 91 year old mother become frailer and require nursing skills, the projected 4/5 years becomes maybe 2 to 3 years at most, and that is if we are lucky as a family, and my mother’s health holds out.
    What does one do?
    Originally 4 years ago after a period of respite care my mother accepted the residential home of now: where she is resident.
    Should the parameters change and my mother require to be moved it will be traumatic both in health, welfare and financial terms, and here I must admit to a prayer or two, as I cannot like everyone before me forecast the future, I can only advise the family on choices of the day, and trust I/we have made the right decision.
    Conclusion.
    I must know not only reflect on my mother’s position, but that of myself wife, and our immediate siblings as we all approach the age of where help may be required from outside the family circle. It is disturbing, and very unsettling.

  2. Southern Cross Card games.
    John as always you light the blue touch paper, there is a report but whether it is a bang or a squib I am unsure.
    You highlight the costs of future care that has to be funded as a fundamental principle of future government policy for the elderly. I ask what happens now? Southern Cross have nobody any favours and appear to have brought the problems of care to the current political agenda, but in doing so have brought disgrace to the whole of the residential/nursing care Home Industry.
    What now?
    John we all make choices on the best available information relevant at a point in time when the decision is made.
    Southern Cross are being castigated, and appear to highlight a North East Of England trait that absolute power corrupts, and there needs to be checks and balances in all aspects of life, even if one does not relish the fact.
    What I am unsure about is the models of various retirement schemes/Care Homes and nursing homes, and I do not want to get into a list of providers with marks out of 10, as I believe this would not be wholly productive. However it would be an assurance if models of the different providers could be analytical displayed with the pros and cons.
    Are there different Models to consider? Such as:
    1 Residential Home provider only
    2 Nursing Home provider only
    3 Combination of residential/nursing home provider
    4 Residential home provider with tied accommodation which is warden controlled
    5 Specialist nursing Home provider for such as alhzimiers suffers only
    6 Retirement Villages, with private accommodation only
    7 Retirement Villages with Local council residents only
    8 Retirement villages with a mixture of Local council/private and shared ownership owners.
    9 Retirement villages with support care provided for its residents.
    10 Warden Controlled housing-Local authority
    11 Warden controlled housing- Private only
    12 Warden Controlled Housing-Private and local Authority residents.
    13 Any other combination of welfare/care and a home for the over 55’s.
    It is a hard game poker and while money plays an important part, only players with guile make the game full of worthy opponents’. You cannot play a one handed poker game? Or Can You?

  3. I see now the proosals are for a ‘Bond?’ for £25K or maybe £35K before the government support the Dilnot Findings and the Care Industry in the UK in the next 10 to 20 years. As you have said before John we all have to be aware that we need to look after number one and one’s spouse before the government of the day may give us or indeed grant us a satisfactory level/standard of living in our retireemnt years and whats more into our dotage when we cannot defend or argue for ourselves, let alone reach out and deliver a blow through the ballot box.

    • john graham says:

      Don’t know if it will be a bond, but you certainly will have to pay at least the first £35,000 of the cost of your care. This looks like it will be extended to include the cost of domicilliary care which is currently paid for by the state ( if you can get it at all ).
      My guess is that nothing will happen before the next election.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s