Is the idea of care cap dead? Looking beyond Dilnot
Several major plans to reform the social care system have failed since the 1990s. The most recent attempt, which followed the 2011 Dilnot Commission, proposed a cap on individual liability for all who accumulated more than £72,000 in social care costs.
Originally scheduled for 2016, implementation was pushed back to 2020 in the immediate wake of the General Election. At a Reform roundtable this week led by Norman Lamb MP, attendees saw this as a sign that the Dilnot cap was unlikely to see the light of day. What, then, is the future for social care funding?
The short-term response from the Government has been to introduce the social care precept, which gives local authorities the ability to raise additional revenue through council tax to fund social care. But attendees noted the regressive distributional impact of this policy, and underlined the need for alternative, longer-term funding arrangements.
One idea was to improve the options available to self-funders, either through helping people access equity stored in their home, or opening up the market for pension products that included some form of social care insurance. The care cap was partly meant to stimulate a private market for such options, but some attendees argued the level of the cap was too high to improve supply.
Given understanding of the social care system is so poor, demand for these products could also be boosted through a government-led awareness campaign – another recommendation from Dilnot that hasn’t fully materialised. Research by Partnership, a supplier of financial products to fund long term care, suggests that while people are becoming more willing to insure against social care costs privately, only 9 per cent consult with their independent financial advisors.
Nonetheless, there are few countries in the world where the private market for care manages to cover more than 5 per cent of the population with needs, so alternative ways to organise government provision were also discussed. One such policy was the introduction of a hypothecated health and care tax, with some attendees noting that European countries with similar systems (such as Sweden and Germany) have managed to respond better to rising demand. A specific tax would also give people a grasp of what level of support they can expect, complementing the objectives of an awareness campaign.
Social care isn’t easy politics. The gravitational pull of the NHS draws funding away from local authorities responsible for providing services, and the self-funded debate often revolves around unpalatable options such as selling a family home. Finding a political consensus under these circumstances is challenging – the collapse of Dilnot is a testament to this fact. But in the absence of a solution, the only outcome will be more people facing catastrophically large care bills.