In his press conference earlier today, Ed Miliband offered cross-party talks and co-operation on the future of social care. This is smart politics. It looks mature and non-partisan on an issue of major public concern, in sharp contrast to the Conservatives’ use of “Death Tax” attack ads before the last general election. It enables him to get ahead of the debate that will follow publication of the Dilnot Commission’s report next month, and it allows him quietly to discard Labour’s commitment to a National Care Service.
Dilnot has been doing the rounds in Westminster drumming up support for his preferred solution to the social care funding conundrum, so he should be pleased that the Leader of the Opposition has offered such constructive engagement. If Dilnot – and the Department of Health – can persuade the Treasury to stump up state funding for capping care costs, then the political consensus which has eluded policymakers for many years on social care might be within reach.
Much will hang on the level at which an individual’s maximum care costs are capped. The Sunday Times reported a figure of £50,000, in what looked like a direct briefing from the social care minister. If that is indeed the sum, then Dilnot will get public and political backing. Anything north of £100,000 looks unsellable.
There is some rough distributive justice in this: capping care fees at £50,000 does a lot more for wealthy southerners in big houses than it does the squeezed middle pensioner with £30,000 in assets living in the West Midlands. Dilnot will doubtless reply that his task is to solve the structural problems with social care funding, so that a hybrid state-private insurance market can develop effectively, rather than ensure distributive justice right across the income scale. That answer will probably suffice, although all eyes will be on whether his solution stacks up against current private care insurance market failures. Will enough people be enrolled into insurance schemes to share the risk and the cost? And will there be any compulsion to take out cover if not? The more comprehensive the enrolment, the better the value for individuals.
Miliband also had something interesting to say about the social care provider market. He did not argue for taking care services and residential homes back into the public sector, but made the case instead for strategic management of the market by the state. Ideally, the state would take an overview of the sector (via its regulators) to ensure that it was resilient and had a sufficient diversity of providers to ensure competition, as well as default provision for when the market fails. An expanded role for the mutual, not-for-profit sector should also form part of Labour’s pitch here, since it is quite tenable that people will value the ethos and stability of such provision in their cost calculations and care choices.
Equity release will also need to figure in the future funding of social care, as I argued in the FT last week, since no solution is fair or plausible without tapping into the wealth of the baby-boomers in some shape or form. New Zealand is an interesting example here: it has legislation to allow local authorities to defer the collection of local rates to cover care fees until an individual dies, at which point the rate charge becomes the first call on the estate, ahead of mortgages and other charges. This makes for a safe, publicly organised form of equity release.
Separately, the Prime Minister’s announcement that Monitor will have a new responsibility to integrate social care with the NHS might just help tackle the final piece of this jigsaw, that of the divide between services (with all its attendant costs) that first opened up in 1948, when the NHS was created. If that can be overcome, history really will be in the making.