Caring more, shouting less

This is not Westminster’s finest hour. But of all the reasons we have to be angry at our politicians, their duck islands and flipped homes will pale into insignificance if they cannot take the steps needed to sort out our broken system of caring for older people.

This can only be achieved through long-term, across-the-board reform agreed by all parties. Instead, we are getting party point-scoring of the ugliest kind. If they fluff this one, we will all pay the price as we, or our family members, are neglected or impoverished when we need to be cared for, years into the future.

In recent weeks, the debate over reform of long-term care funding has descended into a shouting match, with the Conservatives refusing to participate in cross-party talks about the government’s green paper proposals, and accusing them of wanting to ‘tax the dead’. To move beyond this pre-election posturing, we need to remind ourselves how we got here.

First, a series of reports published over the course of more than a decade have showed decisively that our present care- funding system is incoherent, inadequate and unfair. Multiple funding streams provide selective support, with many people on modest incomes having to sink into poverty in order to pay for the care that they need if they develop conditions requiring intensive help with daily living, whether in their own homes or in care homes.

Moreover, the overall level of resources available will on present policies fall further and further short of what is required, as the population ages.

Two years ago, the government finally accepted that fundamental reform to the system is needed. Last summer, it produced its long-awaited green paper, suggesting a single coherent system of paying for care with clear-cut entitlements, but making it clear that state funding from general taxation would only go a small way towards paying the bills.

It set out options for enabling people to pay the remainder, including through either voluntary or compulsory insurance.

Then, at the autumn party conferences, both Labour and Conservatives undermined the call for a national debate on a universal solution by announcing policies to fix just part of the problem. Labour announced free personal care at home for people with the highest needs, a tax-funded giveaway undermining the idea of creating a consistent system of sharing costs between state and individual across the system. This is now in the Personal Care at Home Bill.

The Conservatives announced a plan for voluntary insurance to prevent people having to sell their homes to pay care home fees. Their sums on the cost of this have been widely questioned; more importantly, the proposal also only addresses part of the system, and on its own could create a perverse incentive to move into a care home so as not to pay for expensive personal care in one’s own home.

These competing proposals distracted from what should be the fundamental issue of the debate about paying for care. This is how to reduce the lottery under which some people with very high care-needs in later life have to meet huge bills unless they are penniless.

An NHS-style settlement in which we pay through general taxation looks politically impossible because of the extra tax funding that would be needed. But some form of insurance system seems to make sense, given that we should be willing each to pay something to avoid the risk of a very high bill — ‘pooling’ the risk.

Up until now, private insurance has not offered viable products, because companies have inadequate information about future needs: they can only guess how many 50-year-olds insuring themselves today will be living in care homes in 2040. But with some government backing and perhaps guarantees, private insurance could potentially become the means of risk-pooling.

There are honest arguments for and against compulsory or voluntary forms of insurance. The risk in a voluntary scheme is that relatively few people take it up, because they hope that they will be able to fall back on the state.

There is also a risk of ‘adverse selection’ — whereby people least likely to need help (perhaps those with the highest access to family support) choose not to insure themselves and thereby make things more expensive for everyone else. Some however argue that adverse selection will be small, since people have poor advance information about whether they will need care, and that if they choose not to protect themselves that is their own lookout.

However, a problem is that the very long period between such a system being introduced and the outcomes becoming fully clear (it could be decades between paying a premium and claiming benefits) mean that there is little opportunity to ‘try it out’.

If it is introduced and ends up feeling inadequate, it will be a generation before we have something better. This does not rule it out, but a voluntary scheme would need to be more carefully thought out, and extend to a wider range of care needs, than any proposal so far.

A compulsory levy would be a more clear-cut way of creating a ‘national care service’, with everybody entitled. The proposal is to impose a flat-rate charge on all home owners aged 65, which they could pay from pension lump sums, staged payments or otherwise with their assets on death.

Since ultimately this would have similarities to an inheritance tax for home owners, it is highly vulnerable to political attack. Yet would it be such a vote-loser if it were presented to the public, not as a ‘tax grab when you die’ designed simply to boost Exchequer revenues, but as a means for every home owner to protect themselves against a much bigger loss?

Paying £20,000 for sure when you die to save £200,000 when alive, if one is unlucky, may sound less like a tax grab than a good insurance deal to many elderly home owners.

Advertisements juxtaposing Gordon Brown’s name with a tombstone do not however lead to a balanced consideration of the options.

The failure of the parties to get around a table to discuss the choices available may seem unsurprising immediately before an election. However, by poisoning the political discourse on this issue, it has made it harder to achieve something similar to the pension reforms that followed the Turner Commission.

These achieved cross-party consensus not through politicians sitting around a table but by the government of the day adopting a set of sensible proposals and the opposition accepting that it would not undo them. The next government will need to work very hard to get a comparable settlement on social care.

Yet to give up trying to reform the system, or to change it a bit at the margins and leave its contradictions untouched, would leave you, me and everyone else in Britain vulnerable to a huge loss of quality of life should we need help looking after ourselves when we are older.

Above all, at a time when we most want security and clarity, the system will expose us to nightmarish complexity and risk. Unless MPs, ministers and shadow ministers can start behaving more responsibly on this issue, such suffering will persist for years after the toll of MPs’ bell towers has faded from memory.