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“If not Dilnot, then what?” England’s choices for the care crisis James Lloyd Director, The Strategic Society Centre Tuesday May 29th, 2012


‘The Roadmap: England’s choices for the care crisis’ Published May 17th, 2012 Download at www.strategicsociety.org.uk


Unprecedented fiscal crisis Double-dip recession Unknowable eurozone uncertainties …and the social care system at breaking point. What decisions will policymakers have to make?


Spending Decision What will the state spend on care and support in future and how will this money be spent?


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Funding Decision Where will the money come from to fund spending on care?


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Funding Decision Where will the money come from to fund spending on care?

Current system


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Funding Decision Where will the money come from to fund spending on care?

Current system

Free personal care


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Funding Decision Where will the money come from to fund spending on care?

Current system

Free personal care

‘Capped cost’ model


‘Capped exclusion from means-tested support’ No one will miss out on more than £35,000 of council support because they are wealthy. Reaching the ‘cap’ still determined by family care + local decisions on level and form of support. Increase in Upper Capital Limit (charging threshold) for residential care up to £150,000


But policymakers may still have concerns: Funding – how will it be paid for? Is it worth doing ‘on the cheap’? Feasibility – will it work in practice? Outcomes – no overseas evidence or pilots. Risks – Treasury wary of government making promises.


So if not Dilnot – and assuming we do something‌ then what?


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Funding Decision Where will the money come from to fund spending on care?

Current system

Free personal care

‘Capped cost’ model


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Funding Decision Where will the money come from to fund spending on care?

Current system

Free personal care

‘Capped cost’ model

Other models of partnership


Other models of ‘partnership’ First – put these models in context…


Free personal care

Current system


Free personal care Dilnot Other ‘partnership’ models Current system


What are the ‘other models of partnership’? Potentially – lots of options Two stand out:


1) Co-payments/‘Wanless’ 33% of assessed personal care costs funded by councils, regardless of means Broadly costs the same as ‘Dilnot £35k’ 2) Raise means-test threshold/‘Means-test Plus’ Raise Lower Capital to £150,000 Costs slightly less than ‘Dilnot £35k’ Broadly same outcomes in terms of asset protection as Dilnot Very easy to implement


Key points: Different pros and cons Each just represents different settings of the ‘control dials’ of council support Like Dilnot, costs can be dialled up or down, depending on generosity Different models are not mutually exclusive Dilnot + Wanless


Key points: Different pros and cons Each just represents different settings of the ‘control dials’ of council support Like Dilnot, costs can be dialled up or down, depending on generosity Different models are not mutually exclusive Dilnot + Wanless = ‘Walnot model’


So if not Dilnot, then what are the options? Do nothing Different ‘partnership’ model But all this will ultimately be determined by the Funding Question…


The Funding Question… …Where will the money come from to fund spending on care and support? Costs of current baseline system going forward + cost of new ‘partnership’


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Funding Decision Where will the money come from to fund spending on care?

Current system

Free personal care

‘Capped cost’ model

Other models of partnership


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Current system

Funding Decision Where will the money come from to fund spending on care?

General taxation

Free personal care

NHS

Care & support budgets

‘Capped cost’ model

Universal benefits

Other models of partnership

New taxes


But as well as public spending choices, there may be ways to leverage more private sources of funding for the care system‌


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Current system

Funding Decision Where will the money come from to fund spending on care?

General taxation

Free personal care

NHS

Care & support budgets

‘Capped cost’ model

Universal benefits

Other models of partnership

New taxes


Spending Decision What will the state spend on care and support in future and how will this money be spent?

Current system

Funding Decision Where will the money come from to fund spending on care?

General taxation

Free personal care

NHS

Prefunded insurance

‘Capped cost’ model

Care & support budgets

Disabilitylinked annuities

Universal benefits

Other models of partnership

New taxes

National Care Fund


Pre-funded care insurance No country in the world has a properly functioning market. Multiple demand and supply-side barriers. + extra barriers unique to England. How much would be brought into system? Conservative estimate: ÂŁ0.5 billion by 2025.


Disability-linked annuities Lots of demand side barriers: Only ‘DC’ savers Most have low value pension pots Existing bad annuitisation decisions (single-life; no inflation protection) Conservative estimate: £0.3 billion by 2025


National Care Fund Different versions… but a state-sponsored insurance scheme for personal care costs Can sit on top of Current System, Wanless, Dilnot, etc. Not ‘compulsory’ taxation, but overcomes demand-side barriers to private insurance Enable people to use property wealth to insure themselves Can become compulsory overtime Keeps risks with private sector Estimate of revenue: around £2.6 billion by 2025


In conclusion: if not Dilnot, then what? Do nothing Another model of ‘partnership’ But whatever happens, we have to talk about where the money comes from.


James Lloyd Director The Strategic Society Centre 145-157 St John Street London EC1V 4PY james.lloyd@strategicsociety.org.uk www.strategicsociety.org.uk Twitter: @__SSC

The Strategic Society Centre is a registered charity (No. 1144565) incorporated with limited liability in England and Wales (Company No. 7273418).

Lloyd_2012 05 23 If not Dilnot then what  

“If not Dilnot, then what?” James Lloyd Director, The Strategic Society Centre Tuesday May 29 th , 2012 Download at www.strategicsociety.org...

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