Election 2017Jun 9 2017

Fears social care reforms face future in the long grass

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Fears social care reforms face future in the long grass

Social care reforms are now likely to be kicked into the long grass as the Conservatives deal with the fallout from a weakening of their majority in the House of Commons.

The social care crisis was one of the key battlegrounds of the election with the Conservatives’ so-called “dementia tax” hitting the headlines.

The Conservatives’ initial manifesto plan was that elderly people should fund the entire cost of their social care, until they got down to their last £100,000. There was no mention of a cap on costs, which under the Coalition Government had been planned to be £72,000 before David Cameron delayed it to 2020.

Faced with a backlash, the Conservatives did an about turn and announced there would be a cap at an unspecified level after all.

By 2025, there will be 2.8 million people over 65 needing nursing and social care, unable to fend for themselves, many suffering from dementia.

Rachael Griffin, financial planning expert at Old Mutual wealth, said Ms May "painted a target on her back" when she announced her controversial social care plans as she faced negative public sentiment towards her proposals and seemed unable to answer crucial questions.

"She is now unlikely to be able to get such a controversial policy through parliament.

“The solution to the social care crisis needs to be a long term one, and should not be a policy that is allowed to flip-flop with the political current.

“As the new government starts to consider the social care crisis, policymakers should look to form a social care policy which represents an acceptable compromise for all parties via a cross-party parliamentary group.

“A social care green paper is required and hopefully that will propose solutions that are simple, sustainable and communicated in consumer friendly language. Anything else will leave the public back at square one.”

But Tom McPhail, head of policy at Hargreaves Lansdown, thinks the likelihood of a green paper on social reform is less likely than if there were a strong Conservative majority.

“The Conservatives were right to raise the issue of care provision and funding but arguably it was this as much as anything which lost them the election. Implementing policy change on this huge area of policy would have been challenging for a strong government, now it looks a massive uphill struggle for the next government to bring through any really meaningful change in this policy area.” 

Steve Webb, director of policy at Royal London, also believes the prospect of an early solution to the social care funding crisis is unlikely.

 "A minority government will struggle to pass any major reforming legislation which creates gainers and losers. Reforming the funding of social care will almost certainly be kicked into the long grass.”

He added: "For decades governments have set up Royal Commissions and expert reviews to tackle the thorny issue of social care funding.

"Just as it looked as though some decisions were going to be made we now have a government which will struggle to get anything contentious through the Commons and the Lords.

"But until the government is clear what level of support it will provide with social care costs, it will be impossible for the insurance industry to come up products which build on state support.

"In the circumstances, the best thing to do would be to implement the Dilnot reforms which are already on the statute book so that there is at least some cap on costs, and so that top-up insurance products can be developed."

Malcolm McLean, senior consultant at Barnett Waddingham, suspects for the moment social care will go into the "too difficult box".

“Setting aside the political ramifications, I would like to see the original Dilnot proposals combined with those put forward by the Tories in the campaign. That would mean both a floor and a cap on the costs of long term care brought in from 2020.”

However, Steven Cameron, pensions director at Aegon said: “Kicking social care funding into the long grass would be irresponsible. A simplified version of Dilnot proposals might form starting point for cross-party consensus.

“Social care funding turned out to be one of thorniest issues of the election campaign with opposing views on how to solve this growing crisis resulting from an ageing society. Politicians may now be even less keen to wade into this emotive and for many unpalatable topic, but it would be irresponsible to kick it into the long grass.

"Neither the Conservatives not Labour are suggesting individuals won’t have to make a contribution and ideally we’d arrive at a cross-party agreement.

“Social care funding needs to remain a priority and people deserve certainty and stability. A cap on maximum contributions is essential to allow people to plan ahead while also protecting their inheritance aspirations.

"The overall solution needs to strike a fair deal between individual and state contributions, be stable over time without constant tinkering and be easy to understand without hidden costs. People deserve certainty and stability to be able to plan ahead for this eventuality with confidence.

“Labour’s Manifesto talked of aiming for cross-party consensus while exploring a range of government led options including a wealth tax, an employer care contribution and a new social care levy.

"It also committed to short term funding increases to allow a limit on personal contributions, something the Conservatives also ultimately committed to, so there may be more common ground than it looked.

“The Dilnot proposals might act as a starting point, but we need to find a way of simplifying them. One option would be to express the cap in terms of the maximum weeks for which the individual will be required to pay.”