National insurance increases would add to employers’ costs, while leaving the property of the elderly untaxed. But we need to break the decades-old policy logjam and reflexive sabotage, and begin the process of enacting a solution
On 4 February 2013, an 81-year old widow named Gloria Foster died after an immigration raid shut down the care agency that was responsible for sending helpers to get her out of bed in the morning. Gloria was trapped alone, starving and dehydrated, for nine days. She was unable to get help. By the time she was found, soaked in urine, it was too late to save her.
Gloria was born in India, and worked as a secretary for Shell in Africa, where she met her husband Bob. Together they moved to Surrey, but Bob was killed in an accident just 18 months later. Gloria lived as a widow for the rest of her life, but was a keen golfer and made many friends. They told the newspapers she was a larger-than-life character who loved music and animals.
I first heard the story of her tragic death when I was working at 70 Whitehall: the Cabinet Office, right at the heart of government. There were television screens in the office playing the rolling news, and the scandal played out on the hour, every hour, all day.
It sticks in my mind because it was the very day ministers decided to press ahead with a social care investment plan recommended by the expert they’d put in charge, an ex-boss of the UK Statistics Authority, Andrew Dilnot. The so-called Dilnot plan was going to cost taxpayers about £4 billion, and wouldn’t have made a blind bit of difference to Gloria’s plight.
The coroner’s investigation found a host of errors that contributed to Gloria’s death. But for me, it’s a symbol of a wider truth, a wider catastrophe, 40 years in the making. The chronic underfunding of social care, even while demand soared. Lack of money for decent wages, leading to the growing reliance on migrant workers, including those without the legal right to work: the only people who would put up with the shoddy contracts and terrible pay. And a blind refusal among our politicians, decade after decade, to face up to the political costs of telling people we needed to change the system, from top to bottom.
As rumours emerge of yet another possible settlement, what hope can we have that sense will prevail over politics? Has Covid brought us to the moment when taxes will finally rise to fund care, and MPs of all parties will bravely nod it through? History teaches us to fear they will not.
Social care is not part of the NHS. It is help with practical, rather than medical needs: from washing and dressing, to preparing meals and getting out and about. It includes a whole range of things, from full-time residential care and daily visits to support people still living in their own homes, to helpers who support younger disabled people to get to work.
Demand for this kind of help has been growing for decades for two main reasons. First: we’re all living longer, so the total number of older people in our society is growing. Most people develop one or more health problems as they get older, from diabetes to dementia, and as we age, the chances that we’ll need help with daily living increases.
More people, living for more years with more health conditions, means more need for carers. And this trend is accelerated by the second reason for rising care demand: improved medical treatment. Massive improvements in neonatal care over the last 50 years have saved and prolonged millions of lives that would otherwise have been lost at birth or in childhood. Life expectancy for people with conditions like Down’s Syndrome or cystic fibrosis has increased very substantially.
Even trauma surgery has improved, so the number of people surviving car crashes or battlefield injuries, but with life-limiting conditions, has increased. All these small changes add up to a steady and substantial increase in the number of people with disabilities who need help to lead independent and fulfilled lives.
These trends were not just predictable – they were predicted. Statisticians, health economists and actuaries have been pointing at graphs with lines on them for decades, telling our political masters that this was going to happen. And the politicians have nodded wisely, sucked their teeth and decided to do something about it, maybe, soon.
In 1997, the new Labour government established a Royal Commission to advise them on how to fix the social care system and make sure everyone got the help they needed. The commission reported back in 1999 and said social care should be free for everyone. That was going to be expensive, and it didn’t seem like a priority at the time – so Labour put the report in a drawer somewhere and tried to ignore it.
They carried on ignoring the social care crisis, even when their healthcare adviser Sir Derek Wanless told them not to in 2002. They ignored the social care crisis when Wanless went off and wrote an independent report in 2006 suggesting a new cost-sharing model between citizens and the state. And then in 2009, Labour finally came to the table for cross-party talks on a new funding system that would help cover the often catastrophic costs families were paying to look after their elderly or disabled relatives.
Cross-party talks considered a range of options, including a tax that would be levied on people’s estate after they had died. Already, many people defer care charges until after death, when the family home can be sold off to pay the bills. The proposed new tax would have been a £20,000 charge on every estate – every inheritance – to share the costs of care across the whole population. Cross-party talks were then blown to smithereens when the Conservatives realised they could harm Labour’s electoral prospects by campaigning against this proposal: they launched an election poster featuring a tombstone engraved with “RIP off” and described it as Labour’s “death tax”.
Fast forward a few months, and we are back to Andrew Dilnot. The Conservatives and the Liberal Democrats agreed on a coalition programme in 2010 that included a pledge to establish a “commission on long term care”. The Conservative Health Secretary, Andrew Lansley, was keen to build up a private market where individuals could buy insurance to protect them from care costs in later life. The Liberal Democrats – for whom I worked at the time – were more keen on a state-funded model. So we parked the debate and put Dilnot in charge of finding a pathway through the politics.
His proposals, when they came back, had two faults. The first was their focus: the theoretical goal of social care reform has always been to find ways to put more money in, to pay for more care. But the politicians inevitably swing back to the main political pain point: people losing their “family home” to pay for care.
The complaint at constituency surgeries is not actually that too little money is going into the system: it’s that too much is going into it. Families get angry when their inheritance is lost to them simply because their parents happened to get dementia and needed years of expensive residential care. Dilnot proposed to put an end to this by capping the total amount of costs anyone would face, at perhaps £80,000. After that, the state would pick up the tab.
There are good arguments for doing this: it’s unfair that a sort of medical lottery plays a part in whether you inherit anything from your parents; and a cap on care costs might make it easier to plan, or buy insurance for, care. But that doesn’t change the basic fact that the “Dilnot cap” is at its heart a way of protecting the assets of people who have them. It doesn’t, in and of itself, put a single extra penny into the care system: it doesn’t increase the hours carers can spend with people, it doesn’t raise wages or improve training, and it doesn’t buy a single piece of new equipment. It wouldn’t have saved Gloria from those nine frightening days, dying alone.
But Dilnot’s proposals had a second, fatal flaw. They were too expensive. The coalition agreed on a deferred plan to implement the “Dilnot cap” after the 2015 election. And then the Conservatives won a majority and ditched the whole thing. Somewhere in the Department for Health, Dilnot’s report was put into a drawer, on top of the Wanless Report, and the long-forgotten Royal Commission.
Two years later, Theresa May was the new prime minister. She was confident that she would win an election victory of her own. She was facing the worst Labour leader in living memory, and her poll ratings were surging. Now was the moment to tell the voters the truth, she (or her advisers) decided. This nightmare problem of social care, which everyone wanted, but no one wanted to pay for, needed to be dealt with. May would win a mandate for lancing the boil and fixing social care once and for all.
The Conservative manifesto proposed to put new money into the care system with a new charge on what’s called “domiciliary care”. At the moment, if you need care in your own home, it is means tested against your savings. But no matter how big and valuable your home – if you live in it, it’s protected. The moment you go into a care home, that changes. Your house is fair game, and you’re expected to pay for care by selling it – though you can usually defer the charges until after the homeowner has died.
This creates a perverse incentive to stay in your home for as long as possible, even if it puts you at greater risk of falling, or getting sick. It also creates a perverse incentive against downsizing to a smaller, safer house, and freeing up money to live well. If you sell a £250,000 terraced house to move into a £150,000 bungalow, you have £100,000 in the bank and suddenly you start paying for your care again.
May’s plans would have eliminated these problems and brought more money into care. But they were instantly unpopular; discredited by Labour as a ‘dementia tax’, while causing uproar among Conservative MPs and supporters. May had to backtrack and promise a Dilnot-style cap on care costs alongside her plan. But it was too late. It’s likely that her attempt to be honest about the costs of social care cost her the election.
All across Westminster, the lesson was learned again: there are votes in opposing charges and taxes for social care. George Osborne did it with his death tax poster. Jeremy Corbyn did it with his dementia tax complaint. Both sabotaged any chance of a long term settlement in favour of short term political gain.
And when the pandemic came, the consequences of forty years of political failure were writ large in the vast death toll in our care homes; minimum wage care workers sleeping on camp beds in the communal areas, aproned with bin bags, in a desperate attempt to shield the residents for whom they cared.
So now, in 2021, will a lasting settlement finally emerge? The proposal from government appears to be a hike in National Insurance, for employees and employers – raising about £10bn. In the coming weeks, lots of people will come forward with lists of other reasons why this particular proposal will be bad.
Economists will produce spreadsheets and distributional analyses showing that whatever the government proposes has flaws, and could be fairer to poor people, people in Wigan, people with short term care needs, people with non-property assets: the lists will go on.
The honest truth is that I agree with them. I don’t like this solution very much. I don’t think it’s a good time to add to employers’ costs, and I think it’s unfair to leave the assets of the elderly untaxed. But we cannot make progress while we all stand isolated waiting for the moment when everyone agrees with us.
House of Lords reform was killed by the multitude of different proposals put forward by different factions who refused to compromise. Theresa May’s attempts to get Brexit through Parliament were destroyed by the same dynamic: small groups who all wanted their solution, and not to be blamed for the downsides of whatever got agreed. But if this intransigence is all our politics has to offer on the great, long term, difficult issues of the day, our politics will collapse.
The story of social care would be depressing enough if it were the only big problem our politics was failing to deal with. It isn’t. In fact, it’s probably not even one of the top five. In 2014, after spending most of a lifetime in professional politics including five years in the Cabinet, Charles Clarke edited a book called The Too Difficult Box. It’s an essay collection detailing 27 different policy issues that the political system has failed to crack for a generation or more – from drugs policy to prostitution, immigration to welfare reform, climate change to media regulation.
To Clarke’s list, we could add: adapting the education system to the future of work, regulating artificial intelligence, policing online crime, fostering innovation, levelling up growth in poorer parts of the country, building enough homes, managing the eastward shift of global power, dealing with the costs of our ageing population, and more.
In a period of fast, accelerating and unprecedented change, it is getting harder than ever to navigate the competing interests of citizens in a diverse society. Instead of making the attempt, most of our political leaders are adopting a divide-and-conquer approach that worsens division instead of challenging it.
Populism, identity politics, tribalism of left and right, post-liberalism: the dominating theories of today’s political life all gather strength from hyping up outrage about their enemies for short term political gain. But the outrage makes it harder and harder to persuade citizens to compromise in the common interest.
Some people measure the health of a democracy by the levels of public participation. Some by the breadth of debate and opinion between different groups or parties. I see it differently. I judge the health of a democracy by its ability to solve its collective problems. And on that measure we are failing.
We must put aside our preferences when it comes to social care: what we can agree on is far more important than the particular choice we make. If the government can get this controversial, imperfect idea through parliament, perhaps this will be the beginning of a new way of doing things – a chance for us to stop spending our days fighting pointless culture wars and open up that too difficult box. My fingers and toes are crossed.
Polly Mackenzie is chief executive of Demos.