The government continues to evade the complex question of how we pay for long-term care. But care funding reform must not be sacrificed to the cause of deficit reduction
Reform of long-term care funding in England has been overdue for at least a decade. Before the financial crisis, this was a tough challenge for policymakers. Now, it looks like a nightmare.
Andrew Dilnot’ commission on how to fund care issued its recommendations last summer, but the government has not come forward with a plan to implement them despite pressure to do so from the Department of Health. The roadblock to reform is obvious: an unprecedented fiscal crisis and the Treasury’s deficit reduction strategy.
Indications from the Treasury now suggest they have a new gambit: punt the decision on the Dilnot proposals down the road to the 2013 spending review.
The Treasury’s calculation is simple. The overriding objective is deficit reduction, and the strategy for doing this is as much political as it is financial. As such, there can be no compromises and no exceptions. Reform of the social care system must be sacrificed to the more important mission of eliminating the structural deficit. Handily, social care is complex and confusing to voters, and lacks political resonance at the ballot box and in MPs post-bags. No one would expect social care to be a priority in 2013.
But the Treasury’s approach is wrong. There are potential sources of revenue for the social care system that can only be accessed for social care, and not for deficit reduction. They are politically untouchable in all scenarios, except as part of a comprehensive package of reforms to social care that can be put to older voters. They include things like bus passes for 60-year olds, some universal benefits, and – yes – the billions in untaxed property wealth left in estates. Any rational analysis of public spending and household wealth shows that the long-term care funding challenge is not caused by a lack of money. The problem is political.
This is what makes social care different. It is why reform of long-term care funding could proceed despite the Treasury’s deficit reduction strategy.
But accessing these potential revenue sources for social care is not something the government can do alone. The political risks are far too great. They can only be accessed if all the political parties act in concert. To open the lock on this bank vault, the government and the Opposition need to turn their respective keys at the same time. Clearly, both have an interest in doing so.
So, on the one hand, this means a clear, honest, transparent offer to the older population regarding what a reformed care funding system will look like.
On the other, it means an honest debate with the public about the trade-offs involved, what older people should expect to contribute, as well as guarantees that money earmarked for social care will not be diverted elsewhere. Engaging the older cohort in this dialogue has become easier in the wake of record youth unemployment, double-dip recession, increases in university tuition fees and massive cuts to public services. The sly, misleading obfuscation by the Treasury that resulted in the Budget’s ‘granny’ tax debacle shows what to avoid.
So the Treasury should loosen the reins and welcome a wider debate on how to find the money for England’s ailing care system that cuts across the 2013 spending review process. Treasury policymakers know only too well that demand for care is rising in line with population ageing, and the social care system is already cut to the bone of a socially bearable minimum. Even in the absence of discussion on wider funding reform, the Treasury will have to scrabble around to find money to prop up the current system. The difficult decisions are unavoidable, so much better to link them to a positive discussion about what a reformed system and new ‘offer’ should look like.
But let’s not forget through all of this that the social care system features intolerable suffering right now among some of the most vulnerable people in our society. Deficit reduction is important but so is dignity and humanity. Letting the social care system slip further over the precipice – thereby, incidentally, ramping up NHS costs – without a real debate with the public would not represent a responsible fiscal strategy. It would be madness.
James Lloyd is director of the Strategic Society Centre. The centre’s new report – The Roadmap: England’s choices for the care crisis – can be downloaded from www.strategicsociety.org.uk