‘Fixing’ social care requires competence and honesty – not qualities Boris Johnson is known for

This government has – in its own, inimitable way – “done” Brexit and seems to have got through the worst of the pandemic. Infections may be rising to the levels we saw at the start of the year, but the contrast between death and hospitalisation rates now and back then is striking. The Johnson administration now promises to deal with another massive challenge which has defeated previous governments, of various political hues: social care.

To “solve” the problem of social care in a way which is financially and politically sustainable requires courage, competence, honesty and the mastery of complexity: not qualities which first come to mind when summarising the prime minister. But, without them, the policy will fail.

There are two big, but widely understood, problems. First, how to raise large and growing amounts of public funding to support care in the community, keeping an increasingly old and sick population out of hospital, while recognising the challenge of squeezing additional tax revenue out of an already damaged and highly indebted economy. Second, and key to the toxic politics of the issue, is the means testing of social care. Unlike health care, which is universally free at the point of use, free social care is available only to the frailest and poorest.

Rationing by means as well as needs has especially serious consequences for elderly people with dementia and other long-term, debilitating conditions. Their requirement for prolonged care within a costly residential home tends to mean the family home – and subsequent inheritance – is put at risk as care bills mount up.

The issues are well rehearsed. Green and White papers have come and gone. It does not require commissions of great minds to elucidate the difficulties; they have been elucidated to exhaustion. Committees and inquiries now serve largely as devices to postpone decisions. What is required is political will, not merely to take difficult decisions but to make them irreversible; to remove the temptation for opposition parties to trash them and to promise to reverse them.

Past experience explains why political will is so difficult to mobilise. Labour’s proposals for funding were killed by labelling them a “death tax” (on the family home). The coalition’s acceptance of the Dilnot Report (specifying a limit to personal liability for care costs) was subsequently killed by the Conservatives because it made explicit the cost to families, scaring those who aren’t affected as much as it outrages those who are. Theresa May’s very similar proposal in 2017 was dubbed a “Dementia Tax” and probably cost her the election.

Since those failures, the need for action is greater and the government’s financial position is worse. The population is ageing, with a growing cohort of the very old – over 85. The incidence of illnesses requiring the support of carers is growing. There are just over 800,000 dementia cases at present, and this will rise to a million by 2025 and two million by 2030. There are also growing numbers of people with Parkinson’s, severe strokes, arthritis and other conditions requiring support, whether at home or in care and nursing homes.

It is now estimated that around 838,000 receive publicly funded care (548,000 of whom are elderly). But there are 1.5 million elderly people, alone, who are judged by the King’s Fund to need the help of carers but are assessed by the increasingly stringent system of public sector rationing – which varies from one local authority to another – to be insufficiently disabled or to be able to pay for themselves, or both. For dementia patients alone there are around 350,000 unpaid carers, mostly women who have given up paid employment.

It has been estimated that around £6bn is needed simply to restore the level of per capita public funding for social care to 2009/10 levels. And the increased sum needs then to grow by 4 per cent every year, twice the plausible growth of the economy as a whole. That is before we consider improvements in quality (such as longer domiciliary visits and better-staffed care homes) or improvements in the pay and conditions of the 1.5 million staff, or integration of services with the NHS. And there are competing priorities to pay for in the NHS itself: the post-Covid backlog of cases for elective surgery, nurses’ pay, the big accumulation of people suffering mental ill health.

It is clear that, without a significant increase in direct or indirect taxes, it will not be possible to tackle all of these items, as well as to provide promised additional funding for defence, schools, “left-behind” communities, scientific research and state aids to industry. There is some support amongst the public for a hypothecated additional tax to pay for improvements in health and social care, but it is difficult to devise a tax whose yield rises as fast as demand in this sector. And the Treasury absolutely hates the idea of losing control over the use of revenue.

The public was also promised a Brexit dividend and, whilst people have almost certainly been disabused of the Brexit fairy, they may not respond well to being told that there is a negative dividend in the form of higher taxes. It requires a fertile imagination to see Messrs Johnson and Sunak combining to put a big tax bill before the public. Forget it.

And all that political pain is before we get to the heart of the politics of care: whether or how to help the minority of families whose dependent relative is costing a fortune, subsisting in a care home (or with expensive, round the clock, care at home) for years. The cost – which can be around £60,000 per annum. for an average care home – is far beyond most post-retirement incomes, requiring the liquidation of assets including the family home. And that is, in effect, an additional inheritance tax on those with a parent with dementia or similar condition.

There are two ways of looking at this situation. One is to ask: why should we worry about one subset of the asset-rich part of the population who could have covered at least part of the risk through insurance and care planning? The other is to say it is fundamentally unfair that a major financial penalty falls on those who were unlucky enough to spend the last years of their life with a disease which is dealt with through means-tested care provision rather than – say cancer – which is treated free through the NHS.

The Dilnot Report from 2012 is the best guide through this economic and moral maze. Dilnot argued that the extreme situation of great longevity with 24-hour care requirements is a “tail risk” which has to be covered by social insurance – that is the taxpayer – since the private insurance market will not meet it. But families can reasonably be expected to meet some of the cost; he suggested a cap of £70,000. There would also be a lifting of the minimum value of assets at which means-testing begins for all forms of social care: currently around £23,000, which effectively ensures that all homeowners pay for their care whether they are at home or in a residential home (albeit with complex local variations).

Dilnot seemed at the time to be a reasonable compromise. The coalition government approved it in principle. But there was hostility from those who thought the cap was too low and those who thought it too high (including the Treasury which would have to contribute as much as £2bn.) The subsequent Conservative government stalled.

My expectation is that this government may finally use the political space created by Brexit being “done” and the political comfort of a solid parliamentary majority to adopt some slight variation of Dilnot and pronounce the social care problem similarly “solved”. Some of the immediate, individual family financial crises will be alleviated. But the much bigger issue of ensuring that there is quality care in the community by properly funded professional carers to meet the needs of the disabled and the growing number of frail-elderly will remain.

Without strong economic growth and a government willing to tax a lot more to spend a lot more, professionalising care and treating carers properly will be unattainable. Future governments will be left to grapple with it.