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Tory Predicament Shows Again Why Social Care Is The Pandora's Box Of Policymaking

25/05/2017 11:56 BST | Updated 25/05/2017 11:56 BST
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The hidden dimensions of the social care debate made the controversy around the Conservatives' manifesto, in which the issue featured prominently, almost inevitable.

The Tories propose to raise to £100,000 the asset floor at which older people qualify for local authority assistance in funding their care costs - but unlike at present, this would include the value of the individual's home for domiciliary as well as residential care, meaning many more homeowners would have to pay for their home care.

The policy was presented as an equitable solution to a long-standing crisis - but the subsequent reaction shows that the political and philosophical questions thrown up by social care reform will make it one of the most intricate and tortuous tasks facing the next Government, whichever party wins on June 8th.

Placing the cost burden of increasing funding for the social care system on the system's users rightly reflects the fact that older generations have fared significantly better financially in recent years than working age people, whose incomes have fallen by 1.2% since the financial crisis according to the ONS (compared to a rise of 13% among retirees). Labour and the Liberal Democrats' proposals to increase social care funding by contrast raise revenue from the population more broadly.

The Conservatives' plans were criticised as a "dementia tax". But this criticism, implicitly rejecting the idea that those who need more care should contribute more to the care system, is undermined by the decision we have taken as a country (up to this point in time) that, unlike individuals facing illness or injury, those with longer-term care needs resulting from ailments such as dementia should not see the costs of their treatment socialised.

If those decrying the policy as a "dementia tax" were to follow their own argument to its logical conclusion, social care free at the point of use would almost certainly be the result. Regardless of the relative merits of that idea, it is not what is proposed by either Labour or the Liberal Democrats, leaving these parties open to the accusation that they are asking the young to pay for care for the old without offering the whole-system reform needed to philosophically justify such a demand.

This thinking around socialised risk does however find partial expression in Conservatives' belatedly adopted plan for a cap on the total cost an individual might have to pay towards their care. When care needs are "allocated" on an effectively random basis, it seems wrong that all the cost of care should be borne by the private individual, so the cap provides an (incomplete) form of social insurance. Both Labour and the Liberal Democrats also propose a cap of this kind.

The policy therefore attempts to marry up concerns around intergenerational fairness (ensuring it is primarily older people paying for what is predominantly an older person's service) with intra-generational fairness (limiting the total amount individuals have to contribute towards randomly distributed care needs).

However, in embracing the principle of social insurance in this way, the policy should also acknowledge that those with care needs will have different value asset bases when they begin to require care, and should be asked to make different contributions accordingly - in the same way as those with higher incomes make greater contributions towards the cost of their health treatment (as well as the treatment of others) by paying more into the general tax pot from which that treatment is funded.

One way to reflect this in social care would be to have an adjustable cap, where pensioners with less valuable assets at the time of their retirement have a lower cap on their care costs than those with assets of greater total value. The cap could be set for each individual as a percentage of asset value at the time when care is first needed, with that percentage rising as total asset value rises.

Aside from the arguments about social insurance, it is also worth considering the extent to which the Tory proposals are naturally redistributive in favour of citizens in lower-income areas. Firstly, young people in better-off areas would be disadvantaged by the introduction of a fixed inheritable sum (i.e. the asset floor) because of the lower purchasing power of that sum relative to lower-income areas.

Secondly, in less affluent parts of the country, lower house prices will mean fewer people with care needs will have to pay the maximum capped amount towards their care as they are more likely to hit the £100,000 asset floor. But this also means the state will have to pick up a bigger share of care costs in those areas, where local authority revenue will be lower as a result of smaller council tax and business rate receipts. The policy therefore logically demands redistribution between local authorities too, again in favour of less affluent areas; however, this is potentially highly controversial given the financial pressures faced by all local authorities at present.

The Conservative proposal therefore, like Whitman's narrator, contains multitudes - and has deep repercussions beyond just social care policy. However, as the contortions required by the continuing divide between health and social care become ever more elaborate, it is hard to avoid the conclusion, also reached by the Barker Commission in 2014, that this divide is ultimately not sustainable in the long-run, for more severe care needs in any case.

There is therefore an urgent need for a national conversation on the boundary between an individual's obligation for their care (and medical) needs, and the operation of the principle of social insurance. The past week has shown the strength of feeling within the country on this issue; the next Government - whichever political colour it is - must not shirk from this responsibility.