My last blog on this subject was entitled “If The Cap Fits” published on 11th June 2011. The Dilnot Report “Fairer Care Funding” was published on 4th July 2011.
I have deliberately waited a while before commenting on what should lead to the biggest change in social care funding for decades. It remains to be seen whether the politicians will be bold enough to grasp the £2 billion nettle. So far the first politicians’ responses have been very guarded and non-committal from all political parties. They have been much more vociferous about the moral outrage of phone hacking and the appalling leadership of 80-year old Rupert Murdoch.
Our political leaders, including Andrew Lansley, the Health Secretary, have been almost silent on an issue which is far more relevant to the thousands of octogenarians on his doorstep.
Andrew Dilnot was given a highly complicated issue and one which the politicians had argued long about in the run up to the last election. I heard him speak in the early days of gathering evidence for his enquiry and he struck me as a very logical and clear thinker. His training as an economist ideally places him in a position to address the central issue, which is “how care is to be funded in the future?”
So what are his recommendations:-
- The first and most important issue is to put a cap on what people have to pay for residential care. Although initially leaked / trailed as £50,000, this is now proposed as £35,000:-
On the positive ……..this is a low ceiling to care costs which should encourage the insurance industry to step into the market quickly and at reasonable premiums;
Not so positive side ………it only applies to critical and substantial cases and does not include accommodation costs.
- The means test ceiling has been very significantly extended to offer some support to elderly people with up to £100,000 in savings:-
On the positive side ………this provides state help to many more relatively poor older people;
Not so positive ………it adds complexity and many more people into the social service assessment process.
- Accommodation costs are separated out from care costs and must be paid by the elderly person, although they will be capped at £10,000 per year:-
On the positive side ……..this enables a clear comparison with staying at home or moving to extracare housing.
Not so positive ……… presumably means tested pensioners will have to make a separate claim to the Local Authority for welfare benefit support.
- Attendance allowance is kept and will still not be means tested, but it will be ‘re-branded’:-
On the positive side ………..this is a clear recognition of the value of this relatively small allowance, which enables people to stay at home longer.
Not so positive ………..re-branding is undoubtedly a code for limiting the personal discretion on how the allowance is used. To save money, it might have been better to means test it.
- Top-ups will be allowed, thereby opening the door to people to purchase better quality if they or their relatives can afford it:-
On the positive side ……. this will bring more money into the sector, though this has been going on for sometime with CQC and Local Authorities, often turning a blind eye.
Not so positive …….. home owners might be tempted to reduce their service to residents who can’t afford the top-up fees.
- Portability will be allowed which will enable people to choose to move to other areas of the country:-
On the positive side ……..this should mean Local Authorities can no longer dictate where you have to live.
Not so positive ……..this is a marginal issue since most people wish to remain close to where they lived before.
Overall, I believe Dilnot has come up with a very good set of proposals in answer to the question he was set. The £2 billion price tag will inevitably lead to much political debate before anything is done. The assumptions about the level of the cap, the extension of the means test and the retention of attendance allowance will all, no doubt, be hotly discussed. Quite probably it will suit the politicians on both sides to stretch this out until upto or even after the next election. Prevarication only disadvantages the elderly themselves.
Dilnot has created a platform for the insurance industry to build long-term care insurance products which are vital to enable elderly people to have some certainty about future care costs. The proposals also limit the States’ cost to only paying for the most critical cases and then only after the elderly have paid for most of their own care at home, as well as the first eighteen months or so in residential care (unless they insure themselves). This is a good cost-sharing solution which has the potential to remove much of the financial uncertainty for older people.