Labour peer Norman Warner on the government's display of poor politics and poor economics over adult social care
The long-awaited White Paper on adult social care finally made it into the daylight last week, together with a draft Care and Support Bill. The Bill will need careful scrutiny but there is little to seriously quarrel with in the White Paper. The problem is the misleadingly called “progress report on funding reform.” There has been no progress since the Dilnot Commission – of which I was member – produced its report a year ago.
The irony of this is that the Commission was asked to work quickly and report within a year – which we did – so that the government could introduce legislation in this Parliamentary Session. We delivered but the Coalition hasn’t. After a year of silence, they have produced a 38-page report that takes us no further forward. The Treasury has blocked progress on funding reform and left Andrew Lansley with a few small fig leaves to cover his embarrassment.
The whole issue of a future funding system is now in the long grass of the next public spending review which means that any new system will not see the light of day before the next general election. The main fig leaf is a deferred payment scheme with interest-bearing loans that is repayable after death. This it is claimed will be introduced in 2015 despite the fact that it will be difficult to get off the ground if people do not know the lifetime cap on care costs that they will be responsible for. On the two critical Dilnot issues of the size of the cap and the level of an extended means test, the government has done little more than say it is attracted to the ideas in principle. It has given no clue whatsoever of the ways of funding the transition to the new system it is prepared to contemplate. After a year of deliberation over a start up cost, that is less than one-thousandth of public expenditure.
The cross-party talks are supposed to continue, although it is totally unclear what Mr Lansley is allowed to talk about. Unless we are going to land another tax burden on the working population, those who benefit from a fairer and more resilient care funding system a la Dilnot will have to stump up more from their assets where they can afford it. This does not mean the confiscation of total assets or the compulsory sale of houses. Dilnot’s proposals would mean that on average, nobody used more than 30% of their assets to meet care costs. So there were no real disincentives to saving.
In the meantime the adult social care funding crisis worsens almost daily. 8 out of 10 local authorities only fund care where it is critical or substantial, and these terms are being redefined on a more restrictive basis. People are getting domiciliary care on literally a minute by minute basis. Home-owners are drawing up their business plans to provide care to self-funders only because councils are becoming unreliable funders. The gap between demand and supply is worsening by approaching £1bn a year. The result is that social care casualties are ending up inappropriately in the medical wards of acute hospitals at double or more the cost of care in a nursing home.
This is very strange economics for a government with the laudable aim of securing better value for money in our public finances. After patching up the Coalition, the Prime Minister should pay a bit more attention to his Chancellor’s arithmetic on funding social care. As things stand, it doesn’t make sense in the hands of a Health Secretary with no negotiating position – and looks like poor politics as well as poor economics.
Lord Norman Warner is a backbench Labour Peer and former Health Minister