Face up to social care funding crisis
“The answer is clear,” said the health secretary Andrew Lansley, as he launched his commission on paying for social care, “we must develop a funding system for adult care that offers choice, is fair, provides value for money and is sustainable for the public finances.”
But the answer is absolutely not clear. The commission chair, Andrew Dilnot, will now head off for the summer with piles of documents examining how to pay for England’s elderly care. To demonstrate his independence, no option will be ruled out, including the possibility of resurrecting the “death tax”.
The former health secretary, Andy Burnham, would like to revive his compulsory levy on people’s estates, and Jackie Ashley is supportive. Set at a maximum of £50,000 per couple, a 10% levy, they claim, could fund a free national care service for all, leaving even those with high care costs something to pass to their children. But the Conservatives’ “tombstone” poster (“Don’t vote for Labour’s death tax”) was the last nail in its coffin before the election, and it’s unlikely current ministers could go back on that.
In any case, as a long-term solution, it’s flawed. While death is a certainty, continuing wealth from home ownership isn’t. The average age of a first-time buyer not receiving help from parents is now 38. Much of today’s older generation may have mortgage-free, valuable properties, but younger adults may not be in the same position. It’s likely a levy on estates would reliably fund free social care for no more than one generation.
The “death tax” fails another test: fairness. Ashley suggests it would be progressive, because if everyone forfeits the same proportion of their estate the wealthy pay more. But many people feel very strongly that having worked hard, made sacrifices to afford a mortgage, saved money and paid taxes, they deserve their affluence. A levy paid after death doesn’t ease their sense of injustice. In this country, the subject of any type of inheritance tax often touches a nerve. For many parents, being able to maximise their children’s inheritance is as important as any other act of nurturing.
As the coalition launches its social care commission, the “death tax” illustrates the problems it faces. The various funding options have already been picked over again and again to reveal political and practical pros and cons. “Yes,” the care services minister, Paul Burstow, told me. “That’s why there must be trade-offs.” He prefers a settlement over a consensus, but this is risky. We’re a long way from a public appreciation of the scale of the social care challenge. Earlier this year, research by the Institute for Public Policy Research and the accountants PricewaterhouseCoopers found that most people have no idea how they will foot the bill when they need care; neither do they agree who should pay in future. While England’s social care system is in crisis, the public are in denial .
In the face of these attitudes, politicians will find it hard to make the right reforms. The coalition needs to be bold and honest. It must convince people that fixing a system that is so broke only the poorest and the most needy receive state support is worthwhile. It needs to warn people that at the moment the cost of care in older age for a 65-year-old man will average around £22,000, and for a woman over £40,000. As our population ages, we must find support for a simple, sustainable and fair way of investing in our social care – otherwise the future is scarier than anything any politician could put up on a billboard .