Is there a solution to long-term care costs?Posted by Gareth Hargreaves
How can the Dilnot Report recommendations be made to work?
The Baby Boomer generation is getting old. According to the Government Actuary Department there are 10 million people in the UK aged over 65 years old. Projections for the next 20 years see that age band expand by a further 5.5 million and by 2050 the figure will have almost doubled to around 19 million.
Those are the projections and it doesn't take a genius to see that the cost of paying for long-term care services will put significant strain on health trusts and already strained Treasury coffers.
For those approaching the point where they have to consider care options - the thought of liquidating assets to pay for it raises a lot of resentment and anger. Having willingly contributed to the welfare state all their working lives - on the understanding that the service would care for them when they became infirm - the reality is that they will foot the bill for care themselves.
As unpleasant a reality as that is, a viable alternative has yet to be proposed. The numbers of older people who require care services is growing and our increased longevity has greatly expanded the length of time that we will be in receipt of that care.
The 2011 Dilnot Commission Fairer Care Funding was a useful exercise in establishing news credibility to the issues surrounding the funding of caring for the elderly, but with a government convinced of the merits of austerity budgeting and estimated costs to the Treasury of £1.8billion if Dilnot's recommendations were followed, the report was always on a hiding to nothing. It is however a good starting point from which to start the process of bringing wider awareness to the problem and encouraging better financial planning for later life among the pre retired.
Labour Peer Lord Lipsey is a supporter of the Care and Support Bill (introduced in the House of Lords and now in its committee stage), which aims to implement the recommendations of the Dilnot report and cap care costs for the elderly at £72,000 from April 2016.
Speaking in Money Marketing, Lipsey said: “I am a supporter of Dilnot but there are concerns about too much of the money going to better-off people and not enough to providing better services to worse-off people.
“There are many strong features to the bill, particularly eliminating the injustice of long-term care wiping out your wealth, whereas someone who doesn’t need care can leave the whole lot to their children. I especially support it with a much higher cap of £72,000 rather than Dilnot’s £35,000 recommendation.”
Lipsey endorses the principles of the reforms, but does not believe the bill will solve the growing crisis in care for the elderly. Nor does he think pensions should be used to pay for long-term care, as many are already under-funded.
He says: “The bill is a good starter but not enough money is going into care, certainly not from local authorities. The Government is going to face a choice to allocate more money to care or they will face people living in squalor during the last years of their life. It’s up to them which of those two options they choose.”
Age UK claim that the proposed changes will help only one in eight people who require care and much more must be done. Charity director general, Michelle Mitchell, said: 'We welcome the consultation as one more step towards transforming our crumbling, unfair social care system for current and future generations of older people, nonetheless it is clear the new system is complex and there is still a long way to go to make sure the system works and achieves its aim.
'However, it is crucial that the public understands what costs are included under the cap and what impact the proposals will have. With a cap set at £72,000 it is clear that only a relatively small percentage of older people will receive financial support as a result - namely those who have the greatest care needs for a considerable amount of time.
'It will also only apply to those who are assessed as eligible - so people may be surprised that even those with quite considerable care needs may not have access to the system. Age UK would like to see it open to all those who would currently be assessed as having "moderate" care needs, to encourage people to seek support before they reach crisis point.'
Mitchell's comments are backed by the annual budget survey from Association of Directors of Adult Social Services (ADASS). Having slashed £2billion from budgets in the past 24 months, further cuts of £800million from the £16billion budget are expected this year. The bleak outlook becomes even bleaker for care providers and those requiring services.
Key points from the survey:
- Eligibility for publicly-funded services continues to tighten - 87% of councils now only respond to needs that are classified as substantial or critical under the Fair Access to Care eligibility criteria, compared to 47% in 2005/6
- The number of people receiving publicly-funded social care has continued to fall – by 7% in 2011/12 and 17% since 2006/7, now standing at lowest ever level. Over the same period, the population aged 85 years and over has soared by more than 20%
- Nearly three-quarters (71%) of the money allocated so far from the NHS to promote joint working in 2013/14 is being used to offset cuts to services and help meet demographic pressures
- Most councils are not increasing fees to providers in line with inflation – last year the average increase was less than 1% raising concerns about the impact on the financial viability of providers and whether they can maintain the quality of care.
Health Secretary Jeremy Hunt has said that the UK faces 'a very big challenge' to cope with the cost of its ageing population and changes need to be made quickly, but given the lack of warmth with which the government commissioned Dilnot Report was received in Whitehall it is clear that a solution is some way off and that resistance to the Care and Support Bill is to be expected.
Our partners in the EU are facing up to similarly demanding demographic changes, in Germany pensioners who have been unable to pay for care home accommodation have relocated East in search of value for money - more than 7000 are estimated to be living in retirement homes in Hungary, while an estimated 3600 are in the Czech Republic and Slovakia. However, this figure is minor when placed alongside the estimate of Germany's federal bureau of statistics which claims more than 400,000 older Germans cannot afford to live in a retirement home in their own country.
Current Fair Access to Care guidelines require 'substantial or critical need' before assistance is given. The Care and Support Bill offers the opportunity to create a future that will make care services more accessible to people with limited assets and won't see us exporting our older people abroad.
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