May’s U-turn on ‘dementia tax’ will hurt poorer people, think tank warns
Theresa May’s “dementia tax” U-turn will deepen the crisis facing poorer people “without assets” who desperately need social care, a health think tank has warned.
Cash-starved local councils – already facing a £2.1bn black hole – will be hit with higher costs to pay for
the shake-up but may now end up with no extra funding at all, it has forecast. That risks a disastrous increase in the 1.2 million older people already not receiving the help they need, after £4.6bn of cuts to town-hall spending on social care since 2010.
The King’s Fund also suggested the Conservatives are keeping voters “in the dark” about their plans for social care, which would be kept under wraps until after election day. “The Conservatives have focused on protecting the assets of relatively well-off people,” Richard Humphries, a senior fellow at the think tank, told The Independent.
“The question is how to provide adequate services to people without houses, savings and pension plans. They are the priority for local authorities but, without extra money, they will now take another hit. Councils are trapped in a downward spiral unless their inadequate funding is addressed. Instead we have short-term sticking plasters, policies made up on the hoof.”
The stark warning comes as the parties turn back to domestic policies, after the three-day pause following the Manchester bombing and the immediate focus on the terror threat. There is evidence that the Prime Minister’s “dementia tax” embarrassment – she promised a cap on lifetime care costs, just four days after the Tory manifesto ruled it out – has caused a collapse in her once-daunting poll lead.
It is also not clear what the proposed cap will look like. Home Secretary Amber Rudd yesterday told the BBC’s The Andrew Marr Show: “The Prime Minister has said yes, there will be a cap, but we are not sure where the cap will be. What we are saying is we will have a green paper to make sure that we set it at the right level and we consider all the other alternatives.”
The pledge of a cap appears to blow a fresh hole in social care funding, because it would swallow up a huge chunk of the extra cash the Conservatives have promised – with local councils the losers. Ms May’s proposals will raise about £2bn a year, by means-testing winter fuel payments and by charging homeowners for care received in their own properties, for the first time. But a cap set at the mooted figure of £85,000 would cost £2bn alone. Yet there will also be a large bill from allowing people to keep £100,000 of assets before they must pay for their own care.
Mr Humphries said that opened up the grim prospect of local councils ending up with less money for dayto-day social care – on top of an existing projected £2.1bn funding gap by 2019. He criticised all the major parties for failing to produce a “big bold package of reforms” for the social care crisis, in their election manifestos. But, focusing on the Conservatives, Mr Humphries said: “They have not provided any costings for any of this. Voters are being kept in the dark – they won’t know until they produce a green paper.” Meanwhile, £2bn pledged for social care in the last Budget was now in huge doubt after the funding mechanism – higher National Insurance payments by the self-employed – was scrapped, he said.
Janet Morrison, chief executive of the care charity Independent Age, said older people and their families were already unable to get help with “washing, dressing and eating”. “Local councils are already failing to provide adequate social care services and pressures on the care system will only increase as our population ages,” she warned. “Whoever is in government after the election, there is an urgent need for a long-term, comprehensive and sustainable approach to social care funding.”
The King’s Fund believes town halls will have to completely re-engineer the way they deliver social care to cope with the planned Conservative changes, at significant cost. They are likely to face a doubling of applications to defer payments until after death, cutting revenue while increasing workload and imposing legal charges, at a time when back-office staffing has been cut sharply. Other experts have spoken of councils having to spend large sums on lawyers to chase families for their money after the death of the person who received care.
Mr Humphries stressed that local authorities supported the idea of a cap on costs, but needed to know that
giving families that reassurance would not hit their own budgets. “The Conservatives have got to get the balance right – protecting people without assets, as well as those who have got assets,” he said.
A Conservative spokesman said: “At the last Budget, we committed to putting £2bn extra into the social care sector to relieve pressure – and our reforms will deliberately see wide consultation with councils, so they get more support and resources in the coming years. But investing in public services is only possible with a strong economy – which Jeremy Corbyn is too weak to secure through Brexit negotiations and so, under Labour, we’d see more borrowing and higher taxes.”