Since Andrew Dilnot published his Fairer Care Funding report in July 2011, much has been written and said about it by the press, by charities and by politicians on all sides.
Most of the comment has focused on why it's not enough, why it should go further and why it should come in sooner. For example, Laing & Buisson wrote only last month that the Dilnot proposals, if implemented as set out, ‘would fail to cover even half the costs' they are intended to.
However, amid the flurry of talk and analysis, the government - and more specifically the treasury - have been vague and elusive on definite figures and timescales. And there are two good reasons for this:
1. They know that the country cannot afford the Dilnot cap, and
2. They know that fundamentally we do not need the change Dilnot proposes.
Those who disagree will no doubt be cursing me for daring to say such a thing, but let me explain why I believe it to be true.
The current system is:
• If you go into residential care (without nursing) and cannot afford to pay, then the Local Authority pays.
• If you go into residential care (without nursing) and can afford to pay ... well, then you pay.
• If you never go into residential care (around 70-80% of people), you do not have to pay.
Fundamentally, this system is as fair as it was when it was designed 64 years ago. The hoo-hah surrounding it centres on the feeling that people ‘should not be forced to sell their homes to pay for care'. But if someone's home does need to be sold (aside from the fact that this can usually be deferred until after death using a deferred payment agreement), who really loses out?
Is it the care recipient themselves? Well, no, because the fact is that almost no one who moves into residential care ever moves back into their home again. In a sense, it doesn't really matter to the person in care if part of their house goes to pay for it.
The only ones to lose out are the likely beneficiaries of the person's estate.
Dilnot gives an upper estimate of costs for his plan of £2.2 billion per year, itself probably an underestimate (as these things usually end up being) and probably set to rise into the future with the ever-ageing population. That's at least £83 extra tax per year for every household in Britain.
Paying £83 per year ‘inheritance insurance' may sound like a good deal for those English people who have older relatives with property that they want to inherit. But 30% of people in the UK do not own their home.
Should they and their relatives pay more tax simply to protect the inheritance of others? And what about people who don't have older relatives whose property they have set their sights on? Or those 10 million or so people who don't live in England?
Only English care policy is set and paid for by the UK Government, and there are many elsewhere who feel they don't get fair compensation from the Barnett formula.
Don't get me wrong, there are lots of problems with the current system. The four Charging for Residential Accommodation Guides are too long and complex, there is far too much leeway given to Local Authorities in setting their standard rates, the rapid inflation of care costs is an ongoing worry, and so on.
But asking everyone to pay more tax to protect the inheritance of a few just isn't appropriate, especially in a time of fiscal consolidation. And the Treasury know this, which is why Dilnot is gradually being shoved ever further into the long grass.
Trevor Durham is a Chartered Financial Planner with LEBC Group and is an accredited member of SOLLA.