General Election blog: What about social care?

May 19, 2017 | Analysis, News

Proposals in the Conservative Party manifesto which would increase the number of people who have to pay for the care they receive in their own home hit the headlines yesterday. 

But with over a million people not getting the social care they need and local councils unable to find the resources to help them, all parties recognise that we need a new settlement for social care.

This settlement should have three characteristics:

  • It should have all-party support. Social care is a long-term issue that will not go away. Having successive governments changing the system will not give those who need care or may need care in the future (potentially all of us) the peace of mind we need;
  • It should increase the pooling of risks and costs. Whether an individual will need social care is currently a lottery; the potential costs to an individual and their family can be huge, but not everyone will need care. And it is a risk against which it is almost impossible to ensure. This is why the pooling of risks through public policy is efficient, fair and necessary;
  • It must involve new resources. Providing care to the many people who are not getting the care they need will cost money, and quite a lot of it.

The Labour Party’s manifesto launched on Tuesday and the Liberal Democrat manifesto published on Wednesday both recognise the need for consensus.

Labour last proposed cross-party discussions on this key issue when it was in government in 2009. But the emerging consensus to pay for social care through increased inheritance tax was scuppered in 2010 by a Conservative election poster lambasting “Labour’s death tax”.

The current Conservative manifesto does not indicate any intention to reach a cross-party consensus.

The Conservatives’ proposal is simply to change who is eligible for support for the costs of their care but does nothing to increase the pooling of risks or costs. It proposes to relieve councils of any responsibility for homeowners who currently receive subsidised care in their own homes, who will now have to pay for their own care until their assets are down to £100,000. (The current system does not include the home in calculating assets for those receiving domiciliary care, but has a much lower threshold of £23,250 for both residential and domiciliary care; far more people will have to pay for their own domiciliary care in the proposed new system, and somewhat fewer for their residential care).

This may relieve some anxieties about inheritance, since the £100,000 limit means that those who were expecting to inherit a home, will at least receive £100,000, but is hardly a solution to the problem of social care! It is simply getting more of those who need care to pay for it themselves. In practice, for homeowners without enough income to pay for their care, their care costs will be recovered after they die from their estate.

All the other parties whose manifestos have been published so far propose putting extra money into social care – the Conservatives call their policy that too, even though their extra money comes from more people paying for their own care. The Liberal Democrats propose an extra 1p on income tax to fund a new fully integrated Health and Social care service.

The Women’s Equality Party propose investing half the existing £23 billion infrastructure fund to fund investment in care. Labour is promising £2.1 billion annually to meet immediate needs, with the long term aim of developing a cross party consensus on finding a new way to fund social care, aiming at raising at least another £3 billion annually.

Among the funding proposals that should be resurrected is using inheritance tax to fund social care. Besides being able to raise a lot of money, inheritance tax levied on all high value estates has the benefit of increasing equality and social mobility.

Although the Conservatives have fiercely resisted the idea, dismissing it by using the emotive language of a Death tax, they are in practice proposing an increase in numbers of people liable for another type of inheritance tax that we have in this country, the really unfair one that is levied on the estates of only those who need care.

Professor Sue Himmelweit is a member of the Women’s Budget Group Management Committee