This is a good U-turn on care of the elderly

A month ago it looked as though the Government had had a failure of moral courage over how to deal with one of the biggest long-term problems facing the nation –the rapidly-rising bill for caring for people in their old age.  Ministers indicated that there was no room in the current spending round to address the issue. Yesterday David Cameron dramatically changed his mind. Quite right too.

Last year around 40,000 older people were forced to sell their homes to pay their care costs. With a room in a care home now costing an average of £26,000 a year one in four people faced bills of more than £50,000. One in 100 had to find £100,000 or more. The problem is set to grow exponentially. In 20 years the population of over-65s is projected to grow by 50 per cent. The number over the age of 90 is expected to treble. As a country, we will need to be spending a far greater proportion of our national income on care and support.

Politicians have ignored this demographic time-bomb for years. As a result we have developed a muddled system of providing social care only when people have almost completely run out of money. That has generated massive uncertainty among the older generation who get no help with care bills if they own assets of more than £23,250. Selling their homes – before or after their deaths – has been the only option. It has created a system where people are encouraged to cheat and give their assets away to their children so they appear not to have any wealth when they are means-tested. That has not just generated enormous fear in the frail and elderly but also an inability to plan because they have no idea what the worst case scenario might be.

Andrew Dilnot, the economist who chaired a commission into the issue last year, described the current system as “nuts”. He proposed that the total care bill of individuals should be limited to £35,000. And he said those in need should not begin paying unless they had assets of £100,000. Politicians of all parties welcomed the report but the Government last month said it was deferring consideration of how it could find the £1.7bn that Dilnot would cost. That was a catastrophic failure of leadership which charities for the elderly attacked as a betrayal of older people.

The prime minister’s U-turn on his Chancellor’s reluctance to implement the reform is welcome. It will rectify the injustice of those with a modest home being forced to pay the same as those with substantial assets. It will also remove the prospect of individuals facing unlimited liability for their care, which has inhibited the development of an insurance market to help individuals defray the risks of massive bills.

Big questions remain as to how the reform will work and be funded. It is not clear whether the controversial idea of “pay when you die” will form part of the package and, if so, who will value properties and how interest rates will be set; local authorities have neither finances or the expertise to make such a scheme a success. Social changes, such as family break-ups which may result in fewer potential carers, will add to the challenges. And there will be issues over the quality of care; complaints on that, and on the poor attitude of some care staff, have risen by nearly a quarter in the last year.

But both parties in the Coalition have indicated that they will commit to implementing the Dilnot recommendations. Motives may be mixed. Liberal Democrats know that after dropping plans to reform the House of Lords, they need something substantial in the legislative programme for the coming years. Mr Cameron is said to believe that sorting out care of the elderly would be a prime legacy on which the Conservatives can contest the next election. But the Labour party has in the past promised a cross-party consensus on Dilnot. Labour should therefore support rather than capitalising on Mr Cameron’s change of heart.

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