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Chris Skidmore MP: Saving enough for care means caring enough to save

SKIDMORE CHRISChris Skidmore is the Member of Parliament for Kingswood, a Member of the Health Select Committee and author of the Report: ‘The Social Care Market: Fixing a Broken System’. Follow Chris on Twitter.

We all know that, when it comes to delivering care for our rapidly ageing population, change needs to come: we know that without reform, our creaking, patchwork system of social care cannot be sustained. To tackle a problem that will affect the next generation as much as our own, we must seek to tackle both how this system is funded, and how it is delivered. Of course there remains the eternal political temptation to kick the can down the road, and delay the inevitable, as the Labour government did in 1997 with endless commissions and vague promises. To do this would be a disservice to everyone in this country, whether they need care, will need care, or care for someone else. Knowing this, the government will be publishing a White Paper on how best to deliver social care for the future. So far, there has been cross-party consensus that the current situation cannot continue: we cannot afford to put off reform; neither can we afford for any one party to play politics with the most vulnerable.

Increased life expectancy will mean more people eventually needing care and support. This in turn means that funds will need to be found. The Personal Social Services Research Unit’s modelling of future expenditure for Dilnot predicts that by 2030, the total annual spending on long-term care for people will have risen from £20.6 billion to £44.8 billion, of which £26.3 billion is state funding. This would constitute a rise in spending in services as a % of GDP from 1.63% to 2.31%.

The contributory principle that used to form the central pillar of our welfare system has been eroded over time - yet the remnants that continue to operate mean that many people feel an entitlement to free social care that simply does not exist. Ultimately we will all end up having to contribute more to our future care needs - and the time to begin cannot be delayed inevitably. At present it is the tax paid by people of working age that funds a great deal of care. This is unsustainable when you consider that by 2030, the ratio of working people to those aged 70 and over may well have fallen from 5.3:1 (as in 2010) to around 3.7:1.

There is already a serious gap in what we save now, and the projected costs of the social care system down the line. The Dilnot Commission’s report points out that half of people aged 65 and over can expect care costs of up to £20,000, one in ten can expect costs of over £100,000, but that there is no way of predicting who will end up needing what. The only answer, therefore, lies in risk pooling - as with insurance - yet the financial products that one might hope to use do not effectively exist. As Dilnot says,

This is the only major area in which everyone faces significant financial risk, but no one is able to protect themselves against it”.

Clearly then we need to ensure that it is possible to save and insure against future care needs, alongside encouraging people to do so. But who isn’t saving? And how much is the shortfall?

In a 2008 survey, 3% of people claimed that they were already saving for their long-term care, 32% that they had plans to do so, and 64% that they had not. However, of people aged 16-35, 73% of people claimed that they had no plans to pay for their future social care - an unsurprising yet worrying proportion.

So there is clearly a problem, and one that cannot simply be solved by increasing the amount of taxation that the government demands. Other countries such as Germany and the Netherlands have had to face the same uncomfortable truth, that there is not enough money that the state can provide to care for the elderly in comfort for their old age, and that it must be the individual who takes greater responsibility for their care. In recognising this, they have sought innovative solutions such as direct cash payments for those who need care, delivered at a fraction of the cost and they have opened up the social care market, delivering greater choice and freedom for care. To allow the state to hold the reins, to command the provision of social care, would neither encourage personal responsibility, nor be sustainable in the long term. There must be a concerted effort from all involved to properly explain what is at stake, and why planning for potential care needs is every bit as important as planning for a pension.

Ronald Reagan once said that there are no easy answers in politics, but there are simple ones. And in tackling the thorny problem of funding social care, there is a simple answer. If we are to save enough for care, we must care enough to save.


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