“Dilnot Commission”

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.



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9 Responses to “Dilnot Commission”

  1. John Comments come later after digesting your remarks.
    One thing I did note in this mondays telegraph was a piece in the business section concerning ‘Southern Cross’: The now major landlords if I have read the article correctly, are saying that they are OK but that the level or cost of care management is an ISSUE as far as economics are concerned. What a load of poppycock, I thought the power and savings in a large umbrella conglomerate was the cost savings in management and purchasing was because of centralisation.
    Southern Cross can not have it both ways the security of ownership and the centraliisation of management and care, if now after selling and leasing back their properties to the monied backers, they claim their management skills cost more than they anticipated.
    What has happened to their statements of protecting the vunarble residents and the promise to maintain their personal level of care? They are a load of shiesters.!!
    ps. I think I have read the Southern Cross article correctly? If I have not I apologise for calling them names-but Whether they are gentlemen is another matter.

  2. John as ever you provide a platform to invite comments. I have first of all to ask you to clarify a few points, before I go into detail on your article.
    1 What is the official designation of ‘extracare housing’? I am slightly confused? Is it:
    A Care in the home, or and
    B As a resident of a care home –as defined by Care and Quality Commission (CSIC)? –Residential or nursing home-, or
    C In a residential place (retirement Village-say?) Where care in the home is offered as part of a package.
    2 Question? Does the person(s) receiving care have to the rent book holder or the owners of a type of accommodation have to be registered in some form or another?
    3 Does a resident of a residential Home come under the banner of ‘EXTRACARE’ or is this not allowed? Because of registration difficulties with the authorities and the non-calenture of a ‘Nursing Home’?-Clarity Please.
    Now John to your article.
    Point One Cap for residential Care.
    A/ I note you comment that initially only care cost will be an allowable expenditure, not accommodation costs.
    Point Two Means test
    B/ This is the grey area, and I feel will capture many people. Is a second home considered a Savings, and as a capital asset for this means test? If there is a mortgage against the asset is the equity that is the saving?
    Point three Accommodation Costs
    C/ here you claim that to extracare housing or downsizing is a negative consideration: Why? Please clarify. If one stays in one’s home is the tenancy or ownership legal documents of paramount importance when claiming the benefit of accommodation to be paid.
    D/ How do I know if I retain my house-asset that the council will not, levy a premium on my part of the care costs to recover accommodation costs as a social tax for the ‘COUNCIL RUN Residential and Care Homes, or as you have defined the ‘extracare housing schemes?
    Point Four Attendance allowances
    E/ I wait to see if the allowance is rebranded- For personal reasons it is a useful income to offset residential care home fees.
    Point Five Top Ups
    F/ Better quality? I am not after utopia but what does the industry regard as better quality, and will their fees reflect what is more than a basic standard-Here I would like consideration to be given to the regulators to be clear as to what ‘QUALITY’ means and that they are clear and as precise as possible so that the manager of care facilities cannot fudge his services to the advantages of profit-unlimited.
    Point Six Portability.
    g/ This is a vexing problem, and there should be a national scale of portability- But here I urge caution one cannot in later life live in retirement remote from family and then when infirmed or become elderly expect it is a right to be moved to anywhere in the country. When younger you have a choice in life and this you must realise affects your care in older/later life.
    H/ This is a noble and reasonable cause or augment, But I would urge caution and turn it on its head. Viz:
    If we become old dependent on the state and they have a transferable policy could all the Cornish elderly residents be moved to the NW or NE, or all the English residents exported to Scotland of Ireland to balance the care budgets. I.E. We become commodities of economic worth and are used as such to pacify escalating costs?
    I have not been very helpful here John to which I agree, and as you say Dilnot has had a hard task. But all though I have a vote, my voice and body are fading and all I wish is to be heard and given life which has a quality and meaning.
    The insurance side of the discussion you mention is a good one. One buys to cover an investment life insurance/assurance. Maybe the industry could use to both their customers and own advantage a policy for life which is taken out when born, and paid for a lifetime covers care costs and if one lives a life free from care costs, ones estate is reimbursed the value of the policy. Initially I would submit the £250 at birth paid by the government is used for this kind of policy, and that there is no surrender values only on death? It may take some thinking about, as care costs in later life cover out do a conventional mortgage cost, and such policies could cover both possibilities?

  3. John Graham says:

    Hi David,
    Thanks for the response, your like everyone else who reads
    Dilnots report and I suspect they too will have thousands of questions. Some I can explain in my next post on the report which will follow in the following weeks.

    As ever the devil is in the detail.

  4. John today by email I recieved an electronic newsletter copy from CQC. In it was an extract saying that in their role with Southern Cross-Paraphrasing- was a statement that ‘CARE STANDARDS WOULD BE Maintained’ or words to that effect. My response to this beautiful wording was and is, as follows :
    Your stated policy that the level of care in ‘Southern Cross Homes has not deminished is interesting. What is the regulatory connnection between costs and standards? How do you apply upto date standards and ensure the costs charged are not inflated by profit (greed)? To whom are you responsiible as a client, the ‘user’ or the ‘provider’. That is what I wish to know, and how you apply the term best practice and maintain the standards in line with economics, against material, managerial, and staff costs? Do yo have an answer which is not ‘government speak or goobbledegook?
    The reply will intrigue me? I suspect the answer will be a lemon! and very bitter in the mouth.

  5. John, the Sunday Telegraph had a pull out section today Sunday 7 August titled Senior Living. I found it interesting apart from the usual trade adds. One thing that I questioned was the article on page11 ‘On the Move’
    The subject highlighted some of the discussions we have had on this blog site, about when one should consider downsizing in old age, whether is at bereavement, or when both partners are able to look further into the future and take an active step to a future life.
    We are all different and do things for our own personal reasons, but I believe one has from time to time to have an open mind and a flexible attitude to life, especially if ones family are dispersed, and you are elderly? Moving at any age is a trying and emotional time, and where does one wish to wind up with friends, one’s family, or on your own. The choices we make in younger life then we cannot expect the state to move us willy nilly to a place where we wish without recourse to economics-Unless we are self sufficient and free of the state.
    PS This is also entered under the £6 biliion dollar question-For reference John

  6. John this is a good analysis. One thing worth noting is that the £100,000 capital limit will only apply to people who need residential care – the existing limit of £23,250 (in England) will be used if people need care in their own home. The coverage of this in the media has been a bit misleading.

    • john graham says:

      Thanks for that extra information Lizzie. It is still not clear to me how domicilliary care costs are going to be calculated in relation to the overall “cap”. I assume they will be included, otherwise there will be a perverse incentive for people to move early into residential care. This is surely the opposite of what Dillnot intended when he recommended keeping Attended Alowances.

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  8. John my feelings copied to BBCTV1 about the 2 episode programme-‘When I grow Old’ broadcast on the 06 &07 July at 21.00.
    I find the media and what they believe the general populus conception of growing old? Needs to be actively challenged, and in your former role John you enacted those ideas and stirred me into the personal beliefs I now hold about old age and retirement.
    A very absorbing and interesting programme over the two episodes. In Silverville the OU/BBC looked at the ailments and trials of old age: Here the BBC took the viewer into what is available for the elderly, with the preconceptions of today’s thinking.
    All four scenarios in episode 2 had their good and bad points. What I wish to challenge overall is the mindset for old age. The programme sells old age as a last resort when ones partner/companion/spouse has died, and the subject person is on their own.
    What I believe in is that between friends and a partnership married or convenience, the couple have not thought of their final years together, and the pleasure that may bring to the survivor. Here if one moves actively into some form of protected housing/retirement village or such arrangement, then the survivor while they have the personal memories of the departed they also have the new found friendships of their associates and joint friends who are of a similar age group, in the same community, and this will not lessen the personal loss, but may help the feeling of helplessness and loneliness, which your programme brought home as all the people in the programme appear to have been moved into care home environment, through factors outside their own choices.
    I must say being proactive and selecting your own abode by downsizing and with ones partner/companion/spouse if talked about with the greater family and friends has its greater rewards.

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