Damian Green: Greater funding for social care requires a frank discussion with voters about priorities
Damian Green is MP for Ashford, and is a former Secretary of State for Work and Pensions.
Whoever the new Prime Minister is (full disclosure: I’m a Boris Johnson supporter), they will need a lively domestic agenda to complement the final throes of this stage of Brexit. Which will mean tackling some of the burning injustices which were identified but not addressed by the outgoing administration. The grasping of social care must be an urgent priority.
For many years social care and its funding has been one of the most difficult subjects in British politics. In 2010, the Labour proposals were condemned by Conservatives as a Death Tax, and Labour were out. What goes around comes around, and in 2017 our own ideas, more generous than the existing system, were badged the Dementia Tax, and dreams of a large majority disappeared overnight.
It is one of the most personal issues possible, as many individuals suddenly find themselves having to provide a decent quality of life to a loved one with no proper guidance about how to do it, and what their entitlements are.
At the same time it is financially demanding. Essentially, the vast majority of people agree that we need to spend more on social care. Simultaneously, they are insistent that they should not themselves pay any extra tax. We need a serious national conversation about this (not staring in mid-campaign) and must face up to some unpalatable truths.
The current social care system is unsustainable not just financially but politically. It is too often opaque to those trying to understand it, with no apparent logic to the conditions which receive free NHS treatment, and those which do not. It is also apparently unfair in not rewarding a lifetime of prudence. Those who have saved feel that their savings will simply disappear, while those who have not saved receive the same level of care.
Less well-known is the fact that funding social care out of council tax means that local authorities are reluctant to allow too many care homes to be built. An ageing population means that already more than two fifths of council spending goes on social care. This figure will only increase over the years, so councils are fearful that all their other services will be swamped by the rising demands of the social care system.
The failures in social care put unnecessary extra pressure on the NHS. Indeed, the new, generous funding plan for the NHS depends on the assumption that we develop a social care system which keeps people out of hospital longer and discharges them in a smooth and timely fashion.
I recently published a paper for the Centre for Policy Studies “Fixing the Care Crisis” which dealt specifically with the problem of care for older people. There is at least as big a problem for working age people who need care, but let’s deal with one problem at a time.
A new system will need to meet four objectives. It will need to provide enough money to cope with an ageing population. It will need to be fair across generations and between individuals, ensuring that no one has to sell their own home, and ending the “dementia lottery”. It must lead to an increase in the supply of care beds and retirement housing. And ideally it should secure cross-party consensus.
We should look as a model to the pension system, where the basic State Pension has been increased significantly, while at the same time most people save additionally through their working years to provide comfort and security in old age. Auto-enrolment has been a great cross-party success story, encouraging millions more to save towards extra security in old age. The benefits will not come for decades, but they will be huge when they arrive.
Similarly, just as the basic State Pension has been improved in recent years I believe we should offer a Universal Care Entitlement, offering a better level of care both for homecare and residential care. For those who need residential care this would cover the core residential costs. Needs would be assessed locally but the money would come from central Government. This would take away the pressures on local councils.
Will this involve extra money? Of course it will. My estimate in the CPS paper is that providing decent care in this way would involve an extra £2.5 billion extra a year immediately, with increasing amounts as the demographics change over the years. Others put the figure higher. This is serious money, but not a big problem for the Treasury to find to improve a vital service. Any suggestions for an increase in tax or National Insurance will be controversial, as I have found, but politicians need to be honest about this. If the public want extra spending, the Government will have to raise more money to pay for it.
In addition, we need to find an acceptable way to allow those with the capacity to improve their own provision to do so. This would come through a Care Supplement, a new form of insurance designed specifically to fund more extensive care costs in old age.
This is analogous to the private pension system, which sits alongside the state system. It would allow people to buy insurance at the level they can afford to provide peace of mind. It would not be compulsory, (as pension auto-enrolment is not compulsory) so could not be stigmatised as a Death Tax or Dementia Tax. People could save for it over many years or make a one-off payment (possibly using equity release) at a suitable time in their lives.
These ideas would take the burden of social care funding away from local authorities, and even more importantly offer certainty and security to the increasing numbers who will need social care in old age. No one would have to sell their house and see their inheritance disappear. Everyone would have the chance of receiving better care. Fewer people would be left unnecessarily in hospital beds as they wait for social care to be available.
None of this is easy and it will take political courage. But it absolutely necessary if we are to provide peace of mind and security to frail elderly people who richly deserve it.
Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com