The social care crisis will get worse. My Universal Care Entitlement will fix it

While the world has been convulsed by Covid for the past six months, none of the urgent problems that we faced in February have gone away. Some have been made more acute. The social care crisis has been building for decades, but the unacceptable way we treat old frail people was starkly exposed by the fact that one in 20 care home residents in the UK has been killed by the virus.

Boris Johnson is the latest prime minister to promise a solution, and I am optimistic that this time there will be action, not least because the problem becomes more acute and widespread as time passes. The number of people over 65 who needed help with care in 2015 was 3.5million. By 2040 it will be 5.9million. The longer we put off a decision, the more misery is caused, and the more expensive the eventual bill becomes.

Why has the political system failed in this area? Every change will cost billions, but this is true of many desirable improvements. The particular issue with social care is the widespread false assumption that it is something that is already provided “free”. It isn’t, except for the poorest, but most people only encounter the system later in life and it comes as a shock.

The symptoms of strain are widespread. The quality of the care provided is patchy. The amount of provision, both of care in your own home and of residential care homes, is inadequate. The workforce is underpaid.

Those paying privately are charged more for identical services than those paid for by local authorities. The productivity of the care sector has fallen by an extraordinary 20 per cent since 2000.

What links all these failures is a chronic shortage of money. Last year, with the Centre for Policy Studies, I suggested a new funding system based on the successful mix of state and private funding we have in pensions. There is a basic state pension to which we are all entitled at a certain age, but on top of that we encourage everyone who can to save privately so that they have a more comfortable old age.

I proposed a Universal Care Entitlement, which would guarantee a decent level of care to all paid for out of tax. But additionally there would be an insurance system with which people could buy peace of mind that they would be able to choose what is best for them if they need residential care for a period at the end of their life.

This is similar not just to our pension system, but to the care system that operates in Germany. There would be various ways to buy the insurance: working age people might pay premiums over a number of years, while retired people could make a one-off payment, perhaps using a small amount of the equity in their home. One great benefit is that no one would be forced to sell their home under this scheme.

The Centre for Policy Studies has now compared this idea to the two other main systems proposed. One

Taking the whole sector into public hands is superficially attractive but would mean social care is always fighting for cash within an NHS budget under constant pressure

is the model suggested by the Dilnot Commission, where most people pay for their care with private insurance, but the state steps in when a person has spent a certain amount, or when the person’s assets have fallen below a certain level.

This is cheaper for the Government than my suggestion, but it exposes some people to the need to sell their family home to pay for care. Also, because most people’s wealth is tied up in their home, it means that a far higher proportion of wealth would be taken from those in the North and Midlands than those in London. The political implications in dozens of new Conservative seats could be drastic.

The other simple solution is to nationalise the whole care sector and put it inside the NHS. This alternative is superficially attractive to many people, but it would mean that social care would be permanently fighting for its share of an NHS Budget which is always under pressure. Social care would, I fear, replace mental health as the Cinderella service of the NHS.

No solution is painless. But the preferred outcome must improve the long-term viability of the care sector, to ensure quality, while being fair to those having to save in case they need it. It needs to be combined with other reforms, such as building more housing suitable for older people, and a greater emphasis on public health to stop many people ever needing care. Funding care in the same way that we fund pensions is the right approach for the Government to take, and the fairest way to guarantee dignity for all in old age.