The rebellion this week among Conservative MPs over where to set the cap on the personal cost of social care, which took a hefty chunk out of Boris Johnson’s previously solid majority, is rooted in an endless debate about what constitutes unfairness.
The need for social care is inherently unfair. For example, it is deeply unfair, but a fact of life, that some spend their later years in good health enjoying an active retirement with holidays on the Spanish coast, while others are burdened by the physical pain, psychological toll and great financial expense of a rapid decline. It is also unfair that some have family in a position to take on care work in private homes, while others do not.
So is the job of our government to root out whatever other causes of inequality and unfairness exist in the social care system? The social care sector is creaking, and its weaknesses have been horribly exposed during the coronavirus pandemic, so now is the right time to make a change. The debate over the health and care bill is overdue. But it’s been wasted on a series of rehashed ideas that lack the confidence, radicalism and foresight to actually tackle the problems – right now and in the future.
The cap on the personal cost of social care at £86,000 is clearly deeply flawed. It benefits those who have made more money simply by sitting in a family home that happens to be in the south east of England, and penalises those in less well-off areas. It allows the wealthiest to retain large sums gained from property and pass them onto their children as inheritance, while those with homes worth much less will see their life savings and most of the equity in their home wiped out meeting the cost of their care needs, leaving their children with nothing. It’s a perverse life lottery that only hands out winning tickets to those who have already won in the past.
The cap is also much higher than that recommended a decade ago by Sir Andrew Dilnot, in his much-delayed report on meeting the costs of care. He suggested a lifetime contribution between £25,000 and £50,000 would be fair, punting for a round £35,000. That recommendation has been widely ignored in the 10 years of Conservative government since.
If a capping system is the only one on which we can agree (and the political debate seems to have stagnated over this point), a lower cap is the only way to mitigate against deep-rooted unfairness. After all, the entry point is also artificially low: only those with assets below £23,250 are eligible for “free at the point of use” social care services. By contrast, it’s possible for any individual to save £20,000 every year tax free in an ISA. Care costs come to almost every adult individual; this is not a debate about the super wealthy.
A much fairer alternative would be to place a percentage cap on the cost instead – say, 50 per cent of personal assets, with no forced sale of a family home while a spouse is still living there (as the current bill provides). The wealthiest will then cover almost all the cost of their care themselves, while the poorest will be funded primarily by the state.
All the talk of caps seems deeply unambitious. There must be other ways to meet the costs and spread it among the generations. Relying so heavily on housing wealth to cover the cost up to the £86,000 cap is incredibly short-termist. By 2016, only 27 per cent of moderate earners (between £22,000 and £30,600) aged under 34 owned their own home, and rates are likely to have plummeted in the years since, as wages stagnate, household bills rocket and the effect of the pandemic takes its toll on savings rates. The 30-year-olds of today are unlikely to have amassed the same personal pot on which to draw, and are already projected to be more likely to be renting in retirement.
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So where are the more radical ideas? A mansion tax for care costs has been mooted by many, including my colleague John Rentoul, but there’s little support for that in parliament. We can guess why, when so many individuals in the House are owners of multiple properties. But what a missed opportunity for a more realistic debate on the link between unearned asset wealth and care costs.
What about a tax on damaging industries too? There’s emerging, though not yet firm, evidence of the link between air pollution and dementia onset. Could something be drawn up to tax the most polluting industries to take some of the financial strain of dementia care, while also encouraging them to reduce emissions and meet their carbon targets?
A more straightforward option is a personal lifetime care savings fund, a sort of second pension pot. At least two generations have now thought of their home as an alternative savings scheme, a passive asset on which to draw in retirement. If this can’t be guaranteed anymore then an alternative way to save becomes more palatable to individuals. It could work in a similar way to the now defunct childcare vouchers scheme, which sees parents take a salary sacrifice to meet the cost of a service they need. Why can’t this be replicated for a service to be drawn upon in the future?
These options have the benefit of potentially being swapped and shared between family members too, as some win and others lose the lottery of life. On that basis, perhaps tomorrow’s citizens will also be more willing to consider a government-backed care insurance scheme.
Talking of lotteries, eight years ago the academic Les Mayhew, professor of statistics at Bayes Business School (then known as Cass Business School), suggested that the government tap into the psychology of gambling to solve the care crisis, and set up a sort of premium bond for care. He suggested the incentive of huge, random cash prizes would encourage investment in a personal care bond, which, unlike premium bonds, could also build up interest and provide a final sum available to be redeemed against care costs in later life. Another idea that sadly attracted little political attention.
One of the most important provisions of the health and care bill is to bring the health and social care systems closer together, and make moving between them easier for patients and less costly for the state. Perhaps the most radical, under-discussed solution to the care crisis of all is to draw social care philosophically into the NHS, as well as practically. The NHS is a national treasure due to its principles of universality. For care, that would mean introducing a duty to provide free personal care at the point of need, and fund it by increasing general taxation. The think tank IPPR suggested the same just two years ago. Think it wouldn’t be popular? Look at the overwhelming support for the NHS and care workers during the last difficult 18 months. If it led to an improvement in care, it’s certainly palatable.
The bill in its current form is so hamstrung by short-termism that the problem of care will be thrown back into the Commons within a decade, revisiting the same old arguments yet again. It’s a disappointing, regressive waste of politicians’ energy at a time when voters have an unprecedented appetite to support their older family members and the care workers who look after them.