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Government may abandon care home cap promise

Cherry Reynard
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Cherry Reynard

A new report suggests the Government may abandon its promise to introduce a cap on care costs by 2020.

A cap has been on the table since 2011. The Government has sought to ensure those who need care would not see the full value of their home and savings eroded by fees. Residential care home costs average £31,200 in the UK, rising to over £43,700 a year if nursing care is necessary (Laing & Buisson Care of Older People UK Market Report 2016/17). The cost of residential care can be considerably higher in London and the South East.

However, with more people needing care every year, the potential bill for the UK treasury has grown. In the General Election, the Conservatives proposed sweeping reform of the care system, and no cap, while Labour promised to foot a greater share of the bill.

There was a significant public backlash over the ‘dementia tax’ and the Government said it would include the option of a cap in a consultation paper. However, the Government has now ruled out introducing a cap by 2020. The final consultation paper is to be published next summer.

Tom Selby, senior analyst at AJ Bell, said: “History will not reflect kindly on a Government that has promised so much and delivered so little on long-term care. More than six years after the original Dilnot cap was proposed it appears we are back to square one. It’s quite incredible that the Conservative Party appear to be so blasé about abandoning key election promises, although it’s perhaps a sign of the weakened position of Theresa May’s minority administration.

A system of auto-enrolment, similar to that used for corporate pensions, is being considered. Bell says: “The idea of a pension style auto-enrolment system for long-term care is potentially an interesting one although the obvious risk is that, with so many demands on their money, people will simply opt-out. There would also likely need to be some sort of incentive structure to encourage people to put money aside.”

He added: “Ultimately policymakers are coming up with a myriad of solutions for a single problem – how to fund an ageing society. There is a danger that if long-term care is tackled in isolation we will end up with a smorgasbord of policies that don’t work together.

“Never has it been clearer that some sort of independent commission is needed to knit these strands together and build a long-term savings strategy resilient enough to withstand political upheaval.”