How will England fund long-term care?

Interview with Andrew Dilnot, the man who must come up with the answer

Somewhat disarmingly, Andrew Dilnot says he is “having a whale of a time”. Many other economists would have run a mile if asked by ministers to come up in short order with a solution to one of the thorniest public policy problems around, devising a sustainable reform of long-term care funding, but the former director of the Institute for Fiscal Studies insists he is revelling in the challenge.

“It’s very exciting, particularly because I haven’t done any economics for some time,” says Dilnot, who has been principal of St Hugh’s College, Oxford, for the past eight years. “I have had a lot of people saying, ‘That’s quite difficult,’ but I am not at all downcast by it. Of course it’s difficult, but there is a general mood that something has got to be done.”

Dilnot is tomorrow giving a progress report on the work of his commission on the funding of care and support at the National Children and Adult Services Conference in Manchester. In a preview of his presentation, he has told Society Guardian of the gaps in research and data that are hampering the commission, made clear that it is taking the broadest approach to its task – including looking at money currently committed to disability benefits – and, perhaps most significantly, described himself as “not a silver-bullet person”.

In remarks that indicate that the commission will look to different funding solutions for different care groups, Dilnot says: “It may be that our view is that there is a single answer to all of these problems that works for the working-age group with disabilities, the very elderly, those needing residential care, those needing domiciliary care – a solution that happily presents itself for all of those groups put together.

“But the system has lots of component parts. While a good system needs to be as simple as possible, I don’t think there is going to be a single, big scheme that fits the whole. Whether that means you need to have separate systems for those over a particular age, and those under it, I am not sure. That may turn out to be the right way of drawing boundaries, but it may not be.

“There is absolutely no question that, on average, some of the issues facing the working-age group are different from those facing the over-retirement-age group. But whether age is the thing that you want the system to turn on, or not, I think is very much up in the air.”

Unwelcome surprise

This may come as an unwelcome surprise to politicians of all parties who hope for a straightforward, one-size-fits-all reform. The Conservatives fought the general election on a policy of unlimited care funding in return for a voluntary, one-off insurance payment of “around £8,000”; Labour planned a national care service, which in stage one would have guaranteed free domiciliary (home) care for people with the highest needs and, in stage two, free residential care after two years in a care home; the Liberal Democrats, while proposing a commission to sort out a solution, nevertheless favoured a “partnership” scheme by which the state would match individual contributions pound for pound above a universal minimum.

Dilnot points out that the present system is a patchwork, the legacy of “a bit of a muddle” in the 1948 welfare-state settlement, and therefore not amenable to an at-a-stroke reform. “We have kept things working for 50 years by sticking bits together,” he says.

What makes the reform issue pressing now is, of course, the demographic challenge. Over the next 20 years, an estimated 1.7 million more people will have a care need; of the present cohort of 65 year olds, one in five will need care costing more than £50,000. Meanwhile, councils are warning that home care for hundreds of thousands of older and disabled people could be withdrawn as spending cuts force them to restrict services to those with “critical” needs. Dilnot’s commission has been charged by the government with producing a comprehensive analysis of the issues, recommendations for reform and an implementation blueprint – all by July.

The commission’s 10-strong secretariat is hunkered down in the Department of Health’s Skipton House in Elephant and Castle, south London. Dilnot and his fellow commissioners, former Labour health minister Lord (Norman) Warner and Dame Jo Williams, chair of the Care Quality Commission, meet every Friday. Dilnot himself is doing an average three-day week and has booked three months’ leave from Oxford for the final stages of the work.

What is holding things up at the moment, says Dilnot, is lack of solid research and data in certain key areas. One is the length of stay in residential care – not a rough average, which is known, but the critical “shape of the tail”, in other words the numbers and longevity of long-stayers. Another is the extent and nature of unmet need for care and support among people not receiving it at the moment.

“It’s not that we think there is no unmet need, in fact there is, but getting good data about where and what, and who is affected, is really important and one of our biggest problems,” he says. As chair of the Statistics Users Forum and founding presenter of More or Less, the BBC Radio 4 series on use and abuse of statistics, he is evidently pained by the social care sector’s failure to keep good numbers.

Partly to try to address this, the commission intends to run a short, targeted consultation in the next few months. It will appeal for help to fill the data gaps, but also try to pinpoint what the issues are that any reform needs to tackle. Dilnot says that while there is dissatisfaction with the present system, and a widespread perception of unfairness and inefficiency, the commission needs to be clear what problems it is seeking solutions for.

He does not disguise the fact that, in seeking solutions, the commission will cast its net wide. This means that disability benefits are in play – despite the outrage expressed when the last Labour government flirted with diverting money from attendance allowance and disability living allowance into the care funding pot. “We spend £83bn a year on social security benefits for the elderly, £50bn on NHS care for the elderly and only £8bn on social care for the elderly,” says Dilnot. “We cannot make sense of this issue without looking at how it all fits together.”

He is equally forthright in asserting the commission’s determination to consider all reform options, despite public hints by ministers that it should not waste time by coming up with a recommendation of the notorious “death tax”, or estate levy, as favoured by Labour for stage three of its doomed national care service.

“We are an independent commission and I have been absolutely clear with [ministers] that we are looking at everything,” says Dilnot. “I don’t think they would have asked me if they thought they could tell me what to do. And they haven’t tried to.”

Curriculum vitae

Age 50.

Status Married with two daughters.

Lives Oxford.

Education Olchfa comprehensive school, Swansea; St John’s College, University of Oxford, BA (Hons) in politics, philosophy and economics.

Career 2005-present: pro vice-chancellor, University of Oxford; 2002-present: principal, St Hugh’s College, University of Oxford; 1981-2001: various roles at the Institute for Fiscal Studies (director, 1991-2002).

Public life July 2010-present: chair, commission for the funding of care and support; 2003-08: board member, National Consumer Council; 1999-2004: trustee, Relate Oxfordshire; 1992-2002: member, Social Security Advisory Committee; 2000: awarded CBE for services to economics and economic policy.

Publications Co-author, The Tiger That Isn’t: Seeing Through a World of Numbers.

Interests Numbers.