Jeff PrestridgeDec 9 2020

Still waiting on a 'fix' for care

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Reform of social care funding should have been a priority for all governments that have run this country with varying degrees of success over the past 30 years.

Sadly, it has not been. It is an issue that has produced plenty of promises and lots of proposals, but no decisive action to date. Cost, it seems, has frightened off successive administrations from tackling one of the big issues our society faces.

The current government is as guilty as past administrations in its display of dilatoriness on this matter, although, in its defence, it has had bigger problems to contend with.

If we are lucky, proposals on social care funding reform may be announced by the government in the next few months

‘Problems’ that will not go away in a hurry, even if a mass vaccination programme against coronavirus comes on stream in the near future.

If we are lucky, proposals on social care funding reform may be announced by the government in the next few months, although it could well be autumn 2021 before the government reveals its hand.

The sooner the better, especially in light of the bold comments that Boris Johnson made just after becoming prime minister in the summer of last year.

“My job is to protect you or your parents or grandparents from the fear of having to sell your home to pay for the costs of care,” he said. “And so I am announcing now – on the steps of Downing Street – that we will fix the crisis in social care once and for all, and with a clear plan we have prepared to give every older person the dignity and security they deserve.” Well Mr Johnson, we are still waiting for the ‘fix’.

Talking reform

This week, I was a panellist at the virtual Protection Review annual conference, contributing to a debate on the role that the insurance industry could play in any future reform of social care funding.

The industry’s record in this area is not brilliant. Pre-funded care plans, available in the 1990s, are no longer sold because they proved too expensive for both insurers and customers. This means the only insurance option currently available is the immediate care annuity.

Yet it is obvious that insurance should play a key part in any reform of social care funding.

This point was made by three excellent contributors to the debate – a politician (Damian Green, MP for Ashford) and two individuals whose brains are immersed in insurance knowledge (Vitality Life’s Deepak Jobanputra and Gen Re’s Jules Constantinou).

They all came at the issue in different ways. Mr Constantinou looked at the important role insurance has played in long-term care funding in both Germany and Singapore, primarily as a top-up to state provision.

If such a public-private partnership works in these two countries, he argued, there is no reason why it could not work in the UK.

Meanwhile, Mr Jobanputra emphasised the need for a greater societal focus on health and wellness so as to help curb the increase in conditions such as dementia and Alzheimer’s.

Those aged 65 today, he said, would live on average for another 25 years, but only 11 of those years would be spent in ‘good’ health.

Mr Green did not pull any punches. He said 5.9m people would need care by 2040, compared with 3.5m in 2015.

Solutions

Three solutions, Mr Green added, were possible: long-term care absorbed within the NHS (“colossally expensive”); a cap on the amount people pay for care after which the state takes over responsibility (the ‘Dilnot’ solution); or some form of universal care entitlement topped up with insurance (his own solution as outlined in a paper issued last year by the Centre for Policy Studies). The insurance industry, Mr Green concluded, must step forward with ideas.

Of course Mr Green is right, although the insurance industry cannot be expected to work in the dark. It needs guidance from the government on its direction of travel so that it can come up with possible solutions.

According to Mr Green, the government believes the insurance industry is not keen on playing a part in the reform of long-term care funding.

That is certainly not the message conveyed by either Mr Jobanputra or Mr Constantinou. I trust those august people who run the Association of British Insurers are virtually knocking on government ministers’ doors, armed with a range of solutions.

For much of my 30 years as a journalist on a national newspaper, reform of long-term care funding has been on the political agenda.

It is reprehensible that no government has been bold enough to act decisively. It remains to be seen whether Mr Johnson’s creaking administration can do what previous governments have failed to achieve – and come up with the goods.

Wishing you a happy Christmas and a joyous New Year. Stay safe.

Jeff Prestridge is personal finance editor of The Mail on Sunday