Former pensions minister Ros Altmann explains why the Conservatives’ policy on social care would fail to solve the growing crisis.
The Tory manifesto was a turning point in the election campaign. To say the policy announcements on pensions and care were badly thought through would be an understatement. They don't really seem to have been thought through at all.
The combination of means-testing Winter Fuel Payments for pensioners, with the draconian social care changes, suddenly saw the Tories' traditional support among older voters waver.
Mass means-testing of pensioners has already been discredited due to the disincentives it poses to private pension saving. To extend means-testing in this arbitrary manner, without consultation or proper understanding of how the policy would impact on pensioners, was a mistake of monumental proportions. To combine the two looked like a punishment to families with loved ones who were ill, not just to older people.
Not only is this policy proposal politically poisonous, because it hits the very people who are most likely to vote Tory - those who own their own home, or who have built up a nest-egg or some assets to pass on to their loved ones – but it would not solve the social care crisis anyway.
To suggest that the cost of social care could be met by means-testing Winter Fuel Payments is fantasy. And almost immediately, the Scottish Tories announced that all pensioners in Scotland would still get the money, so this was clearly not going to work.
Political own goals
Of course there were multiple issues that played a part in this debacle. Some were due to Labour's promises of free tuition fees, school meals and higher minimum wages, but others were own goals such as foxhunting, grammar schools and ultra-hard Brexit. Such unforced errors played into the hands of the Opposition parties. But the real killer was social care.
The care crisis has been worsening for years and is in danger of bankrupting the NHS. There is no one silver bullet that will solve this massive problem, but some elements of the solution were already in place. The manifesto tore those down, rather than building on them.
Legislation was passed in 2014, with cross-party consensus, for a £72,000 cap on lifetime spending on 'eligible care needs' for home care or care home costs. This did not include the costs of board and lodging, which would be up to an extra £12,000 a year.
The legislation also increased the means-test threshold from £23,250 up to £118,000 of savings. At the moment, if you have more than £23,250 of savings or assets, you fund all of your own social care.
Crucially, though, the value of your home was not taken into account in the means test if you received home care, or if you were in a care home but still had a relative living in your house. Then along comes the Tory manifesto and proposes something altogether more draconian – suddenly opening up the social care funding crisis as a national political issue.
Instead of a £118,000 means-test floor, the Tories cut this to £100,000. And this was to include the value of your home in all circumstances. So if you needed homecare, or you were in a care home and still had a partner living in your house, the value of your property would still count against you for council funding.
Suddenly, millions more people faced being hit by social care costs - most particularly those families whose loved ones had dementia or other conditions that did not count as 'health' needs. A millionaire with cancer could have all their care costs paid by the NHS and their house would be safe. But an older person with dementia and a home worth £250,000 would have to pay for all their care until most of their house value was gone.
Care reforms were disastrous
There are so many reasons why the Tory manifesto care reforms were disastrous, not only because they were politically poisonous, but they would also actually make the care crisis worse. Here are three of the major flaws in the proposals.
They would actually worsen NHS bed-blocking: Effectively, older people who owned their own home would have to pay for leaving hospital. If they knew the costs would come out of their house as soon as they leave hospital, they and their children would have an incentive to stay in hospital for longer where care is free.
Proposals don't give councils any extra funding to pay for care: The lack of social care funding, at either state or private sector level, is at the heart of this crisis. Councils will still need the funding to pay for elderly care but will not know when they will recoup the outlay from people's homes on their death. This leaves current underfunding unaddressed and fails to help councils plan for long-term care.
Would disincentivise saving for care instead of incentivising it: A sensible social care funding policy would ideally encourage people to save to fund their care, similarly to incentives to save for an old age pension. But these proposals will discourage people from bothering to save for care costs as they will lose so much in the means test.
Care should not be used as a political football
The Tory manifesto proposals for social care would be a disaster and are never likely to be implemented. The Labour and LibDem manifestos talked of a National Care Service and increasing taxes. However, rather than using care as a political football, a national solution is needed.
This could consider extra national insurance payments, or a charge on all people's estates, plus new savings incentives alongside pensions and Isas, and integration of health and social care systems. The care crisis cannot be left any longer, the need for radical action is urgent and a combination of reforms is needed. The sooner politicians wake up to this and work together to find solutions, the better.
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