Commission set up to review social care funding

A commission on social care funding that is likely to recommend a larger role for private insurance, probably backed by some form of state underpin, was announced on Tuesday by the government.

The three-strong commission will be chaired by Andrew Dilnot, principal of St Hugh’s College, Oxford, and a former director of the Institute for Fiscal Studies, aided by Lord Warner, the former Labour health minister, who led a revolt against the last government’s plan for free personal care for those with the highest needs, and Dame Jo Williams, acting chair of the Care Quality Commission and a former social services director.

The commission has been told to produce a partnership between individuals and the state and will examine a wide range of ideas that include the state providing a set proportion of care costs, or a matching contribution up to a set limit, both of which could make the development of an improved private insurance market easier.

Its recommendations, certainly in the short term, are highly unlikely to increase current public spending amounting to over £14bn on social care in England as Andrew Lansley, the health secretary, underlined again on Tuesday that social care is not protected from the spending cuts to come.

The terms of reference do not formally rule out Labour’s plan for a comprehensive state-backed social insurance system, with individuals paying a premium of perhaps £20,000 to £25,000 either at retirement or on death. However, Mr Lansley said the commission “knows our views”, having dubbed Labour’s plan a “death tax” ahead of the election.

The commission is being asked to produce a sustainable, long term solution, while also examining how people could protect their assets, especially their homes, against the costs of care. Ahead of the general election, Mr Lansley proposed an insurance scheme, which he claimed would cost only £8,000 per individual to cover care in a residential or nursing home. Aside from scepticism over whether that was a realistic premium, the scheme was widely criticised for tackling only part of the problem given that much care is delivered at home, rather than in a residential or nursing home.

The commission’s terms of reference say its solution should “support reform of the whole system”. It is being asked, within two months, to produce criteria against which it will judge funding models so that those can be taken into account for the autumn spending review. Its full report is due within the year.

Mr Dilnot brings a formidable analytical brain to the many potential solutions that have been trailed for social care funding. He warned on Tuesday that “there are not going to be any easy answers” and that “difficult decisions will have to be made”.