Gov’t needs to ‘get real’ on care reform, Altmann

Ring-fencing £7bn of higher rate pension tax relief revenue would be “getting into difficult territory”, Ros Altmann, director of the Saga Group, has argued.

Today (11 June) it was suggested in the House of Lords that £7bn accumulated from higher tax relief on pensions should be ring-fenced to fund the recommendations of Andrew Dilnot, chair of the Commission on Funding of Care and Support.

The Dilnot Report, published by Mr Dilnot on 4 July, had three strands: a £35,000 cap on individuals’ lifetime contributions towards their social care costs; a jump in the means-tested threshold from £23,250 to £100,000; and ‘hotel’ costs of between £7,000 to £10,000, which will continue to be paid for by residents in care.

It has been suggested that implementation of this would cost around £2.2bn.

Requesting the timetable for the draft bill to modernise adult care and support in England in the House of Lords, it was suggested that higher rate tax relief at £7bn a year could “pay for Dilnot seven times over”, and the government was asked to consider this.

Ms Altmann said: “The government says there is no tax money for care and we get periodic calls for the end of the higher rate tax relief and I have heard so many potential uses for this money. The fact is we have a deficit and lots of departments would be competing for this money. The obvious use is to use it for state pensions.”

She pointed out that if we want to find new money for care we need to find it from “older generations”.

Ms Altmann said: “Disappointingly the government says it just can’t afford to use Dilnot’s solutions. The government needs to wake up because we have to spend more money on social care, but what will happen if we don’t allocate money? More money will be spent on the NHS –which is the most expensive and the least suitable. I would urge the government to get real and put in clear proper reform for a care system going forward.

“This £2.2bn is going to come from the health service anyway but this may increase to £4.2bn as people will end up costing more as they may get more ill and this could be avoided by spending that original £2.2bn.

“The government seems to be frightened of putting a cap on costs. If there is a cap, people can build up a pot of money as they know the state will look after them once this has been reached.”