Labour ‘failing a generation’ by scrapping social care cap

The Chancellor’s decision to scrap bringing in a cap on how much people pay towards their social care is a “tragedy” according to the architect of the plan.

Sir Andrew Dilnot accused the government of failing “another generation of families”.

The social care cap was one of the things deemed unaffordable yesterday by Rachel Reeves who blamed the last government’s overspending.

Andrew Dilnot: This is a tragedy for two reasons. It’s a tragedy because it does mean failing yet again, another whole generation or many generations of people who need care, their families, the people providing care. People have been expecting this for a long, long time. And six weeks ago, Wes Streeting, when he was the Shadow Secretary of State for Health and Social Care, he’s now the Secretary of State for Health and Social Care, said ‘We’ve committed to this cap’. This is one of the things that I want to do that gives certainty and stability to families. Well six weeks on, what was then a promise of stability has turned into abolition.

So it’s a tragedy because I think it’s a great shame when people don’t do what they said they will do. But it’s also a tragedy, much more importantly, because it lets down the whole of our society and leaves everybody exposed to the risk of social care, with no structure within which to plan or manage their care. It leaves those who work in the social care sector still without a sector that thrives, where they’re paid very poorly. It’s just a tragedy.

Krishnan Guru-Murthy: Of course, you used to be Andrew Dilnot of the IFS [Institute for Fiscal Studies]. So you know the public finances well, as well. What would it have cost?

Andrew Dilnot: So Rachel Reeves said yesterday that she would save £1 billion in 2025-6 as a result of this change. That’s £1 billion out of a total level of public spending of £1,000 billion. Now, of course, nothing is free, and every item of public spending that you increase means less public spending elsewhere, or more taxes, or more borrowing. Those choices are absolutely there to be made. But the point about social care is, first of all, that we’ve promised to do it. We’ve been promising to do it for 30 years without getting round to doing it. And secondly, that the benefit that comes from doing something on social care is very large, relative to the cost, because this really is something that we can’t do on our own.

We wouldn’t dream of saying, ‘If you’re worried about your house burning down, everybody should save up enough just in case their house burns down.’ That’s effectively what we’re doing in social care. We’re asking everybody to seek to cover themselves for the worst possible case. We shouldn’t do that. That’s what social insurance is there for. Social insurance is the bedrock of the whole of the British welfare state and indeed of welfare states around the world. Social care is an absolutely perfect example of how it can be a very, very cost effective way of transforming people’s lives.

Krishnan Guru-Murthy: Do you think the argument is the same since the day… I mean, it’s a long time ago when you first said that we should do this. And of course, we have an ageing population. Just restate the case for why people shouldn’t have to sell their homes. Why should that burden be shared by the state?

Andrew Dilnot: Avoiding people selling their homes was never the purpose. The purpose was to pool the risk. So most of us will need social care before we die. 80 per cent of us. But most of us won’t need very much. We just don’t know which of us it is that will need an awful lot. Some of us could need half a million, £1 million worth of social care. Faced by that kind of very skewed distribution, excuse my technicality, what we always do is we go for insurance. We don’t save up enough to deal with our house possibly burning down or in case our car crashes. We have insurance. We don’t save up enough in case we have a health care problem. We pool that risk completely through the National Health Service.

So it’s definitely an insurance problem. And it’s not an insurance problem that the private sector can possibly solve, because we’re looking to insure a risk a long way in advance. The only entity that can provide this insurance is the state. So it’s the classic case of the argument for social insurance. And by going down that route, we can make everybody feel better off. We can spend relatively little, each of us providing the insurance, and we can transform our lives, take away the terrible fear that affects families and the individuals who need care. Anybody who’s been part of a family where social care has been a need knows this. We need to sort it out.

Krishnan Guru-Murthy: And just briefly, if the government goes down the road of another review or a royal commission, a cross-party exercise to try and come, is it just a waste of time?

Andrew Dilnot: I don’t think there’s much more that we need to uncover. There have been lots of royal commissions, commissions including my own. We know what the challenges are. We know what the possibilities of tackling it are. We just need to make a decision and get on with it.