Home rule | Analysis | Money Marketing
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Home rule January Retirement Strategy Samantha Downes looks at Chancellor Alastair Darling’s moves to cut public spending by £5bn and keep more elderly and disabled people in their homes When Chancellor Alistair Darling announced in last December’s pre-Budget report that he intended to cut £5bn from public spending, he ignited the longterm care debate. The LTC industry is split as to whether the decision - which will mean that older people needing care will be supported to stay in their own homes where possible - will result in a significant breakthrough for an issue which has dogged several successive governments. The plans form part of the Personal Care at Home Bill 2009. The Bill, which was flagged up in the Queen’s Speech, is a £670m initiative to guarantee free personal care at home for up to 280,000 elderly and disabled people with the greatest needs. Partnership Assurance managing director Chris Horlick welcomed the PBR announcement although he feels it appears to “cut across” the Government’s White Paper on social care, Shaping the Future of Care Together, and consultation for that ended last November. Horlick says: “We welcome the debate but there are fundamental problems with what the Government is trying to do. First, it is not new money that the Government is committing in the Bill, it is coming from cuts in the NHS and, second, the Government has yet to clarify what it means by the greatest need.” Horlick says we could end up with a situation where the medically needy but cash-rich may be prioritised over those who are less medically needy but cashpoor. “This is an anomaly yet to be cleared up by the Government,” he says. Horlick also believes Conservative plans for an £8,000 care insurance payable by retirees at 65 has also not been thought out. He says: “They are basing their figures on one in five people needing care for two years and the cost of that averaging at £25,000 a year. As we know, care in the south of England is far more costly. More than one in five people need care and self-payers are in care for an average of four years, not two.” Liz Faye, financial planner and presenter of the FSA’s Financial Capability in the Workplace team, feels that the Government has created public uncertainty over longterm care provision. She feels that both the Conservative and Labour parties have failed to move LTC forward. She says: “From my experience, families rarely give longterm care funding any priority until it is required and their loved one has an urgent requirement for care, so I think it would be difficult to get the population to accept the Conservatives ‘£8,000 at 65’ proposal. Equally, I cannot see how Labour’s free personal care in your own home
http://www.moneymarketing.co.uk/home-rule/1005306.article
02/02/2010
Home rule | Analysis | Money Marketing
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scheme can work either.” Faye adds that insisting on caring for people at home was unworkable. She says: “I regularly come across families whose lives are thrown into chaos by having carers coming and going from their home, as well as having to care for their partner in between times. This leads to very little respite for the nonneedy person. Economics is one thing but care in the home, with carers three or four times a day is not always the solution either.” Regardless of which option the next Government decides upon, Faye believes it is imperative that any government can only move the LTC issue on if it spells out exactly what it is offering. She says: “Families can then make an informed decision about how it would impact upon their assets and take the necessary steps to bridge any funding gaps.” Munich Re healthcare actuary Ian Sissons is even more pessimistic. He believes that the PBR announcement is a sign that LTC is now off the agenda. He says: “NHS funding increasing in line with inflation for 2011 to 2012 is actually a lower year-on-year increase than in the recent past. This was not really unexpected as the additional funding was always going to be temporary but it does mean that there is now great emphasis on reducing NHS costs. “Against this background, I think you can infer that reform of social care and long term care funding will slip down the priorities at the moment. Of course, the NHS issues are also dwarfed by the more general financial problems.” Andrew Harrop, head of public policy at Age Concern and Help the Aged, says the Government had left the care sector in the dark. He says: “With huge public spending cuts now likely outside the NHS, schools and policing, people reliant on care services can only fear the worst. To prevent care services from getting any worse and lives being placed at risk, the Chancellor’s commitment to protect health spending must be extended to social care as well as the NHS. Spending from the health budget should be reprioritised to provide additional funding for the care system.” While many are pessimistic about any Government-inspired resolution of the LTC issue, Horlick believes the increasing number of older voters may finally swing things. He says: “Older voters are the ones affected and there are more of them. Theywill push the issue through. What we as an industry need to do is support them. Whether people are in nursing or residential care, they need sensible financial advice and that has got to be good for everybody.”
http://www.moneymarketing.co.uk/home-rule/1005306.article
02/02/2010