British Social Care and Home Ownership

The British family home has iconic status. Home ownership is longed-for and anyone not owning a house is silently thought of as, in some way, second class. Parents often give large amounts of cash to their adult children for deposits, sometimes even re-mortgaging their own house to raise the money. Frail elderly people seem to prefer to have an under-funded old age to using the capital embedded in their house. Politicians are actutely aware of this. The Conservative Manifesto, 2017, proposed more than quadrupling the current state funded insurance of the family home from £23,500 to £100,000*. This policy gives money to heirs and beneficiaries which underlines just how important the home is in British political life.

British social care for the elderly comes in two principal forms. Firstly, there is care in the home for those requiring support but able to live independently and safely. Secondly, there is residential care, which provides continuous care. Neither are free but the current (2017) basis for charging is different. It’s this difference the Conservatives wishes to change. Care in the home only takes into account the revenue of the client, with the value of the home disregarded. Residential care costs do take the value of the home into account. 35,000 houses are sold annually to pay for residential care costs leaving heirs and beneficiaries with a minimum legacy of £23,500. This legacy would be nil if the state’s quasi-insurance didn’t exist.

Britain’s National Health Service provides care, without charge, when needed. Nonetheless those suffering dementia don’t qualify. For quite arbitrary reasons dementia isn’t deemed an ‘illness’. This is perverse and causes resentment because those suffering dementia, an illness of ageing, aren’t supported by the NHS. Some dementia sufferers have very large bills – half a million pounds isn’t unheard of. Long-term residential care is very expensive and house sales are a force majeur for a significant number of elderly people, increasing their stress and illness. The Conservative proposition quadrupled the quasi-insurance, giving heirs and beneficiaries a very large guaranteed legacy. The downside of this proposition is that domicilary care would be provided on the same basis as residential care, with the family home included in the asset base. This widens the prospect of forced house sales.

It’s easy to empathise with dementia sufferers and their heirs and beneficiaries. What’s difficult to accept is that the state should make a substantial contribution to their legacy. The Dilnot Commission was chaired by a senior economist who surprisingly recommended an entirely egregious proposition. Hie proposition was that the state shouldn’t authorise charges of more than £35,000 for care and charging should begin, if and only if, assets exceeded £100,000**. Obviously this proposition maximisies the value of the legacies of the very wealthiest. It begs the question of why the state has a role in insuring legacies at all?

Is the current (2017) quasi-insurance offered by the state at a cost of £254m really caused by embarrassment? Everyone knows that dementia is an illness of ageing** but as Dilnot demonstrated, a generous, but partial, unwinding of the current position will cost circa £1.7bn. This is generally believed to be unaffordable. A series of spineless political compromises have brought the residential and domicilary care system to its knees. The state is, quite wrongly, subsidising the wealthiest people in Britain with a benefit which is slapdash and, ultimately, provocative.

The disastrous state of social care in Britain can be resolved but only by courageous politicians leading public opinon. Consequently absolutely no-one is expecting anything other than a continuing deterioration in the quality of care for our elderly citizens. The political rock is that there is no subsidy for the wealthy. The political hard place is that the care system is fully funded. The Conservative manifesto heroically failed in 2017*** and there will be many more failures as media shroud waving trumps sound policy decisions.


“Under the current system, care costs deplete an individual’s assets, including in some cases the family home, down to £23,250 or even less. These costs can be catastrophic for those with modest or medium wealth. One purpose of long-term saving is to cover needs in old age; those who can should rightly contribute to their care from savings and accumulated wealth, rather than expecting current and future taxpayers to carry the cost on their behalf. Moreover, many older people have built considerable property assets due to rising property prices. Reconciling these competing pressures fairly and in a sustainable way has challenged many governments of the past.” Conservative Party Manifesto 2017 p64

* p63ff

** p2 see also and file:///C:/Users/Chris/Downloads/andrew-dilnot-presentation.pdf


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