(Blog updated 3.45 16 Jan 2012)
Lots about care funding in the news today so it's worth trying to unpick what's going on. Here are the main lines in descending order of importance:-
- The government is considering imposing a cap of between £50,000 and £60,000 on people's lifetime care costs, with the state picking up the bill above this point, reports The Daily Telegraph. This is significantly above the £35,000 cap proposed by the Dilnot commission last year and hence quite a bit cheaper for the public purse.
- Cross-party talks on forging a solution on care funding are due to start tomorrow, reports the BBC, the first such talks since the acrimonious breakdown of discussions before the 2010 election over Tory allegations of Labour plans for a "death tax" to fund care.
- Three-quarters of people support a cap on lifetime care costs as proposed by Dilnot, an Age UK survey has found, reports The Daily Mail.
The latter is hardly a surprise: who would not want more rather than less help from the state?
As for cross-party talks, who knows? Labour's current position on care funding is unclear and expecting health secretary Andrew Lansley and care services minister Paul Burstow to come together with Labour's Andy Burnham and Liz Kendall on social care when they are at daggers drawn on the government's NHS reforms may be asking too much. But let's be optimistic.
The idea of a £50,000-£60,000 cap is more worrying. Andrew Dilnot (left) was not theological about having a £35,000 cap but instead proposed a range of £25,000 to £50,000. However, he said that £35,000 was "fair and realistic" and that anything above £50,000 would not be fair, on the basis that people with lower levels of wealth may not receive adequate protection from the risks of needing social care.
A £60,000 cap would cut down the bill to the Treasury of implementing Dilnot from £1.7bn a year to about £1bn a year.
However, it would mean the reforms would fail a key test: namely, protecting people from the risk of high levels of care costs in older age.
£60,000 is a considerable sum (and it's worth noting that the cap excludes living costs in residential care, which would be additional to the £60,000); a cap of this level would make people far less likely to save or take out products to insure themselves against future care costs (another key goal of the Dilnot package), meaning that a market in such products would fail to emerge; and while making little difference to wealthy families, would hit those with moderate levels of wealth (for whom the difference between £35,000 and £60,000 is most significant).
(Updated bit) The DH has now distanced itself from the £50,000 to £60,000 figure in a statement to this Guardian story. The story also provides a useful link (see emerging findings on this page) to the source of the story: a paper in November by one of the groups feeding into the government's engagement process to shape the forthcoming White Paper on care reform.
Contrary to what I have said above, this group, which was looking at the role of financial services in the care system, suggested that a cap of this level could stimulate people to save for their care and encourage the financial services sector to develop suitable products to enable them to do so. However, it's also clear that this figure was also given with a nod to making care funding reform more affordable for the public purse.
The group, which included civil servants and representatives from the social care and financial services sectors, also said more analysis was needed on the impact of different levels of cap. Hopefully, this is being done now and the results of this - rather than efforts to keep the overall bill to the state down - which shapes the White Paper.