Jeff PrestridgeApr 3 2019

Government slow on care reforms

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Government slow on care reforms
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Ideas were meant to have been published as long ago as last summer when Novak Djokovic was winning his fourth Wimbledon men’s singles final and England were beating India four-one in a five-match test series on home turf despite the best batting efforts of Virat Kohli.

Caroline Dinenage, minister of state for care, has valiantly attempted to deflect any flack by blaming that big, nasty – and convenient – chestnut called Brexit as one of the main reasons for all the delay.

It is funny how Brexit gets rolled out as an excuse, when it has not got in the way of the government’s plans to rack-up probate fees for thousands of grieving families – a move quite rightly condemned by critics as a cynical tax disguised as an administrative fee. Scandalous, again.

Dementia is currently the number one cause of death in the UK and it is expected that one-in-three people born today will experience some form of it in their lifetime.

Governments, it seems, will move heaven and earth when it comes to raising taxes, but suddenly go to ground when big public spending issues rear their ugly heads.

Remember the government’s decision in 2015 (when David Cameron ruled the roost) to push back the proposed introduction of a £72,500 social care cap to 2020 on cost grounds, only for the idea to be scrapped altogether late last year?

It is also a little rich that, in spite of bucket-loads of procrastination, Ms Dinenage has attempted to paint a rosy picture about the government’s work in finding an affordable solution to funding long-term care.

A few weeks ago, in response to questions in the House of Commons, she said: “There has been a failure of successive governments to get to grips with this very thorny issue of the long-term funding of adult social care. We are the government who have decided to tackle the issue. We will no longer put it in the ‘too difficult’ pile, and we will be publishing this document [the green paper] shortly.”

Given the government’s fragile state, I will not be putting any money on the green paper ever seeing the light of day. But then I am a cynic who has seen green papers on long-term care come and go more regularly than buses on London’s Kensington High Street.

I am in the Nadra Ahmed camp when it comes to long-term care. Late last year, the chair of the National Care Association told Financial Adviser that the delays were of no surprise.

She added: “Successive governments have raised the issue of social care only to kick it into the long grass. This is a mistake when you consider that more people are living longer and needing care. Dementia and obesity are adding to the catalogue of problems that the social care sector faces, both practically in terms of physical and psychological care.”

Too right. Dementia is currently the number one cause of death in the UK and it is expected that one-in-three people born today will experience some form of it in their lifetime.

Most of the ‘cost’ associated with dealing with dementia – care in particular – is currently borne by sufferers and their families. My father died of vascular dementia nearly two years ago, and it was only the utter devotion of my mother that ensured his last years were as comfortable as could be expected.

It left her exhausted and I am not sure she will ever truly recover from the experience.

A whole range of long-term care ‘solutions’ will allegedly be raised in the green paper, ranging from ‘care’ Isas (backed by former pensions minister Baroness Ros Altmann) through to ‘care’ pensions and maybe a new tax on the over 40s (a so-called social care premium).

What is key is that the paper is published soon and that solutions are agreed and acted upon swiftly.

As things stand, the financial services industry’s response to the long-term care problem has been lukewarm. Pre-funded care plans are no longer available, leaving immediate care annuities as the prime solution to funding care costs.

VitalityLife should also be commended for adapting its serious illness cover so that it can be left in place in later life to defray some of the care expenses resulting from a number of later life degenerative illnesses such as dementia, Parkinson’s disease, Alzheimer’s disease, a stroke and general frailty (inability to undertake key essential activities).

Once the serious illness cover has run its course (typically at age 65) it converts to a whole-of-life policy with the sum assured and premiums fixed – or both linked to inflation. The benefit amount available will then be equal to 50 per cent of the remaining cover with an overall cap of £100,000.

Protection specialist Alan Lakey, director of Highclere Financial Services, says the product is “interesting”, although he says it represents no more than a pin prick in terms of providing a solution to meeting long-term care costs.

Fair point. But at least VitalityLife is moving in the right direction – and at a faster pace than the rest of the insurance industry.

As for Ms Dinenage and her merry band, snail pace seems to be the way forward. Publish, Ms Dinenage, and be damned.

Jeff Prestridge is personal finance editor of The Mail on Sunday