The claim
“The government’s own figures… are still about £3.4 billion short of the total amount that’s required.”
Andrew Lansley, Shadow Health Secretary, 19 February 2010
Cathy Newman checks it out
Looking after the elderly is very expensive, with the average 65-year-old expected to need care costing more than £30,000. The political row over the last few weeks has focused on whether or not Labour is secretly planning a £20,000 death tax to finance care for the elderly.
But the Tories now claim that even once such a tax has been levied, the government’s national care service will still be billions of pounds short.
Over to the team for the analysis
The Conservatives have already caused an uproar with a poster campaign claiming Labour would bring in a £20,000 death tax (we checked the claim in the Tory advert here).
In fact, the government has set out three options to pay for a new national care service: a partnership scheme similar to the status quo, where individuals and the state both pay a contribution, and either voluntary or compulsory insurance where people would pay around £20,000 to get their care costs covered.
Compulsory insurance could be paid either during your working life or the money could come from your estate after your death – the so-called death tax, which the Tories oppose.
But we’ve established that none of the three schemes fully covers the cost of care for the elderly.
The funding shortfalls are squirreled away in this Department of Health analysis released with the green paper.
Compulsory insurance – which Channel 4 News understands is the government’s favourite option – would be the costliest to the public purse. Even after the individual has paid into the scheme, whether before or after death, there would be a black hole of £3.4bn in 2014, rising to £3.8bn a year in 2024.
That money would have to come from elsewhere in the health department – presumably through cuts – or from the Treasury. The bottom line of course is the general taxpayer will have to foot the bill.
There are similar, though smaller shortfalls, in the partnership and voluntary insurance schemes – £0.9bn in 2014, falling to savings of £1.1bn in 2024.
None of these estimates include the set-up costs of the scheme – so the total bill could be even higher.
Experts we spoke to said the government hadn’t released enough detail about its calculations to say what the final cost could be.
“None of the political parties have published their costings of these policies in any detail at all,” said Andrew Harrop of Age Concern and Help the Aged. “We are concerned that all the proposals could leave a gap.”
The Department of Health refused to give FactCheck more details, but said the white paper, expected within weeks, will do so.
Cathy Newman’s verdict
The Tories are right to draw attention to a funding black hole in the government’s national care service. Many people might not be too happy about being forced to pay up to £20,000 into an insurance scheme – only to find the government coming back for £3.8bn a year more.
But the Conservatives have some money worries of their own. They’ve been keen to trumpet their answer to the care question – an optional £8,000 levy. Sounds like a bargain, but read the small print and you’ll discover that, like any other insurance premium, the price is fixed for one year only.
