My Lords, the first duty of the state in social care is financing its provision to those who cannot pay for themselves. Yet local authority budgets have been cut to the bone, despite rising costs and increasing numbers.
This primary duty has been eclipsed politically by the natural fear of home owners and their heirs that potentially catastrophic costs of social care will consume the value of the parental home. Most proposals to deal with this involve setting a maximum amount anyone has to pay—say £80,000—after which the taxpayer would meet the costs. That gives the greatest benefit to those with the most valuable homes, particularly in the south. The owner of a modest or a partly mortgaged house who needs three years’ care would still lose nearly everything, while someone in a London home worth £1 million could bequeath more than £900,000 even if they spend more than 20 years in care. How is that fair, popular or levelling up? Moreover, extending free social care to some, let alone all, home owners would pre-empt public funds desperately needed to ease the pressure on councils’ social care budgets and on the many care homes that were barely viable even pre-Covid.
Yet there is a solution to the risk of catastrophic costs of elderly social care that does not pre-empt funds needed by the existing care system. It is insurance, which was one of the first solutions to be considered by Dilnot and others but was rapidly dropped because the insurance industry said that it would not provide policies to protect people from having to sell their homes. It could not do so because of uncertainties about future government policy and possible medical advances prolonging frail longevity. Moreover, working people will not pay for such policies on top of saving for their pensions and repaying their mortgages.
But an alternative to private insurance has been ignored: that the state offer such insurance. The alternative to asking people to contribute during their working lives is not taxing them but enabling them to pay for such insurance after they retire by taking a charge on their homes. The state insurer would then be reimbursed when they die or sell their homes. I have set out the details in the Civitas pamphlet Solving the Social Care Dilemma, and in a Private Member’s Bill coming before this House on 16 July, when I hope to see all noble Lords once again. Meanwhile, can my noble friend the Minister confirm that this option has been considered by his department, to which I sent it many months ago?