The politics of long-term care funding has become very contentious in the run up to the election and the debate has moved from a relatively rational debate on options for the future to emotive political point scoring.
This is a shame, given the huge importance of this issue to the Nation.
In brief, the Government published its Green Paper last year which proposed a new National Care Service. It ruled out ‘free' support, thus retaining the post-war consensus which differentiates social care from the NHS. The preferred option was a £20,000 contribution which could be met in various ways, for example at retirement, through contributions through a working life or at death. Not surprisingly, the size of the contribution attracted media attention, but at this point we were still in rational debate mode between the parties.
Then, out of the blue, came the statement on ‘free' personal care at home to be funded from existing health and social care budgets. Given that the purpose of the Green Paper was getting the public to accept a joint responsibility with Government for funding social care, this announcement was surprising. And, of course, it does not tackle the underlying issue. If, having received free personal care at home, an individuals' care needs become such that if a move into residential care is needed they will again be means tested for funding.
For a family this could lead to perverse incentives to keep relatives at home. On the other hand, cash strapped councils may be tempted to coerce older people into residential care, particularly if they could sell their homes to pay for it. This change of policy was the cause of the breakdown in any rational debate between the parties. Especially as, on the face of it, it was a popular move.
The next announcement was from the Conservatives. They went back to the proposal of a £20,000 contribution and labelled it a ‘death tax' at the same time as announcing their own proposal for a voluntary insurance scheme (so not a tax) and what is more it would only cost £8,000. The money would be paid at age 65 or later - but not at death. They also said they would not talk to Labour unless they dropped the ‘death tax'. Not to be outgunned the Liberal Democrats then weighed in saying they would oppose the free personal care at home proposal - calling it a "cynical promise which will lead to cuts in care budgets for many vulnerable elderly people" i.e. cuts in services for those not in the scheme to pay for those who are.
So what do the public think of all this? The Sunday Times published a You Gov survey carried out in February and they found that a proposal for a 10% inheritance tax (i.e. about £20,000) to fund long term care had 34% support and 49% opposition. And a voluntary £8,000 insurance payment had 34% support and 52% opposition.
And the conclusion, sadly, is nothing has changed. There is no consensus in the political classes about what to do and no majority public buy-in to paying any separate charge. Maybe one day we may reach a tipping point, as has happened in some EU countries, for example France.
Lessons from there suggest that this will only be reached when there is a really significant difference between services which are State and privately funded - resulting in a clamour from the middle classes to have an alternative means of supporting better services for their relatives - i.e. an insurance option for large numbers of people akin to a ‘long-term PMI'.
Richard Walsh is a director and fellow of SAMI Consulting www.samiconsulting.co.uk
