Chris Horlick discusses how the new government is likely to deal with long term care and asks how people can be made more aware of the need to make advance provision
Long term care was a major topic for discussion in the run up to the General election. Do you feel this will continue to be the case post election?
I believe the reason why government has been reluctant to commit itself to an overriding policy in this area is that it may be extremely controversial and costly. Controversial; because with the much publicised financial constraints on public spending this will inevitably require individuals to fund a significant element of their care and particularly residential ‘hotel’ costs.
As there are now more people over 60 than under 16 in the UK, the link between paying for care and direct taxation must inevitably weaken, again placing more pressure on individuals to meet some, or all, of their care costs. Costly; because our ageing population is set to grow significantly over the next 40 years. Not only will there be more people over 60, they will live for longer, with the fastest population increase in those aged over 85.
The reason why I believe Government has to grasp the nettle now is that currently 130,000 people are entering residential care every year. From this, 41% are classified as self funders e.g. they have over £23,250 of assets (including their home) which means that they are responsible for meeting their own residential care costs.
With a Lib-Con Coalition, what long term care proposals will they produce?
First, what is unlikely to be implemented? I believe that the Labour Government’s most recent announcements on the Personal Care at Home Act and White Paper ‘Building the National Care Service’ fall into this category.
The Personal Care at Home Act was passed just before the end of the last parliament. As a result of significant opposition to it, the Labour Government conceded that both Houses of Parliament will have to approve the Act in a vote after the election. It is unlikely that the Conservatives will support legislation while the LibDems in advance of the General Election, opposed it and proposed instead to divert the funds earmarked for the Act to give one week’s respite to one million carers (in England).
The White Paper requires at least two Labour victories for the delivery of a National Care Service (NCS); a first parliament to set up an Independent Funding Commission to review funding options for long term care and, a second to pass the enabling legislation to deliver the NCS. Labour’s loss of the last election means that this timetable is in shreds. However, would a Lib-Cons Coalition persist and deliver it?
I believe not. In advance of the election, the LibDems proposed to integrate health and social care funding together, to enable people to stay in their homes longer rather than going into residential care homes or hospital. LibDem proposals did not rule out an NCS-style solution.
However, I believe that on cost and philosophical grounds the Conservatives are extremely unlikely to commit themselves to an NCS. During the course of this Parliament I suspect we will see an independent funding commission to establish the care needs of the UK’s ageing population and how much it will cost to fund? It will then identify the best ways of funding this.
As all proposals by political parties approaching the general election involved an element of private sector funding and insurance; ranging from the Conservatives 100% voluntary insurance scheme to Labour proposals which required individuals to cover their residential care costs, I would be very surprised if any future consensus position, again, did not involve the role of private sector funding and insurance.
Will political indecision put people off making care planning decisions until a range of concrete proposals have been delivered? How can people be made more aware of the need to make advance provision?
Practical consideration rather than policy proposals tend to be the trigger for purchasing care products. Most care planning decisions are triggered by a distress element, e.g. someone having a fall and needing immediate care.
However, greater transparency by all politicians to highlight which costs the state will cover and which costs that it will not, I believe, would provide a powerful incentive to drive awareness of the real scale of the costs people are facing to fund their long term care.
I would also support a Government-backed education campaign, coupled with increased media attention to ensure increased awareness of long term care funding, which has been high in the run up to the General Election, maintains its profile.
However, one of the most important ways to generate awareness must be by financial advisers, who can highlight this important need through a comprehensive fact find to anyone in their 50s or above. It is a sobering thought that out of the 53,000 people who have to pay for their residential care fees this year, only 7,000 received appropriate financial advice!
Chris Horlick is managing director of care at Partnership
Avoids paperwork with two-step process
Investment process will use machines
Mark Sterling accused of operating a collective investment scheme without authorisation
'Increasing engagement will only favour those prepared to put in the effort'