their election manifesto in June. Mrs May deserves credit for attempting to grapple with it when so many politicians seem to think that if we ignore the issue it will simply go away.
But as you’ll remember she got her fingers burned for putting forward a plan that had not been fully thought through and her humiliating U-turn not only cost her a majority but made it even less likely that the issue will be dealt with. Politicians will see what happened to her and run even further away from trouble.
To put the costs in some context, the average pensioner’s income has this year risen by 0.5 per cent from £14,456 to £14,522 in 2017. As the report shows, the cost increase has consistently outpaced pensioners’ incomes. Since 2012 the average care home cost has gone up by £6,500, which is a 23.7 per cent rise from the 2012 figure of £27,404.
Over the same period the average pensioner’s income has increased by just 9.9 per cent, from £13,208. Those figures mean that a pensioner on an average income could now pay for only five months of care. Given that the average stay in a home is 2.5 years and costs £84,760 something is very out of kilter. Which means that the only solution for many people is to sell their home.
Quite apart from the policy issues this raises – the very issue that Mrs May was attempting to deal with in her manifesto – there’s a big question underlying the figures. Why are costs rising so much?
There’s no one answer but one of the biggest factors is a classic example of the golden rule of politics: the law of unintended consequences. When George Osborne, then chancellor, introduced the national living wage in his 2015 budget it was intended to boost incomes for the lower paid. But it had a huge impact on care homes where workers are at the lower end of the pay scale.
One leading charitable provider of residential care, Jewish Care, calculates that the living wage will add £4million to its wage bill by 2020. That’s not just because of the immediate pay increases but because pay differentials mean other wages also have to be increased to keep staff happy.
Add on to that the cost of auto enrolment for pensions – every employer in the UK must now put its staff into a pension scheme and contribute towards it – and you can see how staff costs alone are shooting up.
THIS is the root of the social care crisis. With councils struggling to meet existing commitments they cannot afford the increased care home bills. Indeed some private providers have stopped taking in council funded residents because the amount councils are willing to pay is simply unrealistic.
It’s a vicious circle. When the cost of operating a home rises councils can’t pay, which means the home has to close, which means fewer homes, which adds to demand.
Residents then have to sell their homes to pay for their care, which means their family loses an asset they thought would be passed down through the generations. They then take their anger out on the politicians who preside over this, which means politicians are increasingly reluctant to deal with the issue. Which begins the cycle all over again.
As things stand it is impossible to see anything even close to a solution in sight.
‘Biggest single issue facing the country’