Theresa May’s social care proposals based on ‘shaky foundations’, says former pensions minister

The system of clawing back care costs from the sale of people’s homes after they die is a “postcode lottery” that will need urgent review under Theresa May’s plans to overhaul payments for social care, according to the former pensions minister.

Steve Webb, the former coalition minister, made the claim after an analysis of responses from local authorities across the country on the “deferred payments” system – the way councils are currently meant to allow people put off paying their care home fees until the family home is sold.

Under the scheme, people living in residential care can, in some circumstances, ask the local authority to meet their care home bills and in return the council recover the money plus interest from the later sale of the family home.

But through replies to 140 Freedom of Information requests, Mr Webb said his data showed that 10 local authorities had not entered a single agreement since the scheme was introduced in 2015. They included Westminster, Tower Hamlets, Hackney, Kensington and Chelsea, Haringey, Lewisham, Lambeth, Ealing and Blackburn.

Mr Webb, the former Liberal Democrat politician who is now the director of policy at Royal London, said it was clear “there is already a lottery as to whether people facing significant costs can exercise their legal right to defer their payments under the existing system”.

The warning came as Conservatives defended a policy unveiled in their manifesto last week that means people with assets of more than £100,000 will have to make greater contributions to their care costs, both in nursing homes and in their own homes, although the payments can be deferred until after they have died.

An earlier commitment to introduce a £72,000 cap on care costs will be scrapped, but if the Conservatives return to power after the general election, the Government will offer protection from the cost of social care for people with assets totaling £100,000 or less.

However, more people will be liable to contribute to the cost of being looked after, as the value of an elderly person's property will now be included in the means test for care in their own home.

Damian Green, the Work and Pensions Secretary and close ally of the Prime Minister, ruled out any rethink of the Conservatives’ manifesto pledge on social care despite polls showing the Tory lead over Labour has shrunk in the last week.

“We have set out the policy, which we are not going to look at again,” he added.

Ken Clarke, the former Tory minister, also rejected the phrase “dementia tax” when asked about Ms May’s social care policy on BBC’s Radio 4’s The World This Weekend. He said including the value of an elderly person’s property in the means test for care in their own home was a sensible proposal to tackle the crisis in social care.

Mr Clarke said: “The idea that, instead of somebody living in a half a million-million pound house contributing to their own care, younger people of working age who can’t afford to buy a house should actually pay more tax – because that’s what will happen to actually provide the quantity of social care that we need – is grossly unfair.

“This is free market economics with a social conscience, and as a one-nation Tory it’s what I’ve always believed in, but it’s got to be practical, competent, got to have some common sense.”

But Mr Webb said: “Some local authorities clearly promote the scheme [deferred payments] and alert residents to their legal rights while others appear not to be doing so.

“If far more people are going to face deferred charges in future because of the inclusion of the value of family homes in the means test for social care, the Government will need to investigate very quickly why the present system is not working properly. Otherwise there is a danger of building a new system on very shaky foundations.”