Chancellor Rachel Reeves flunked her first big test on social care - Bill Carmichael

The Chancellor Rachel Reeves received a tremendous shock this week when she discovered a massive hole in the public finances that will necessitate big tax rises in the Autumn.

Perhaps Ms Reeves somehow missed the slew of reports from independent think tanks, the numerous warnings from eminent economists over the past three months, or the dozens upon dozens of news stories warning of precisely this eventuality, and accusing the main political parties, including Labour, of failing to be honest with voters over the mess we are in.

Perhaps the Member for Leeds West was living under a rock at the time, or had taken a long holiday on the far side of the moon without any internet access.

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Ms Reeves also seemed taken aback by the crisis in the social care system - so much so that she ripped up plans by the previous Conservative government to deal with the problem.

Chancellor of the Exchequer Rachel Reeves making a statement in the House of Commons on public finances. PIC: House of Commons/UK Parliament/PA WireChancellor of the Exchequer Rachel Reeves making a statement in the House of Commons on public finances. PIC: House of Commons/UK Parliament/PA Wire
Chancellor of the Exchequer Rachel Reeves making a statement in the House of Commons on public finances. PIC: House of Commons/UK Parliament/PA Wire

It is difficult to understand how all this passed her by. Well over a decade ago a report compiled by Sir Andrew Dilnot described adult social care as inadequate, unfair and unsustainable, and recommended radical reform to fix the system.

Whereas health care is ‘free’ - that is paid for by the taxpayer - social care is means tested, and if you have assets, including savings and property, above a certain threshold you have to pay for some or all of your care.

The result is that many elderly people, who have paid mortgages all their lives out of taxed income, are faced with care bills of hundreds of thousands of pounds, and a large number have been forced to sell their homes to pay for care bills.

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Sir Andrew recommended two key changes. Firstly, there should be a lifetime cap on the amount any individual should have to pay for care. Sir Andrew suggested £35,000, but the Conservative government eventually accepted £86,000.

Secondly, the asset threshold should be raised from the current £23,250 to £100,000.

Credit to the Conservative government for drawing up plans along these lines, but shame they kept delaying implementation. The latest date for the reforms to come into force was October next year.

But now the Chancellor has scrapped these plans and we are back where we were 13 years ago when Sir Andrew first issued his report.

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He appeared on BBC radio this week describing Ms Reeves decision as a “tragedy” and adding “to rip it up is unbelievably disappointing for hundreds of thousands of families who need care”.

Labour did not mention scrapping the cap in its manifesto, and there is little detail of how they plan to resolve the crisis, beyond vague suggestions of a ‘National Care Service’ along the lines of the NHS and no details of where the vast amounts of money for such a service will come from.

This really matters, not just to the families involved, but for the workings of the whole of the NHS.

One of the big problems faced by the NHS is that there are a large number of elderly people who are infirm, but not sick in a way that can be treated, who are stuck in hospitals because there is a shortage of suitable care to enable them to live in care homes or their own home. Quite simply they have nowhere else to go.

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This limits the ability of hospitals to admit sick people who actually require treatment. The beds are not available.

That is partly why waiting lists are so long, and why we have seen ambulances lining up outside A&E departments with sick patients waiting hours for admission.

The new Health Secretary, Wes Streeting, has bluntly announced that the NHS is “broken”. Fair enough, but he has absolutely no chance of improving the NHS unless the crisis in social care is solved first.

Yet, the current government seems to take the view that if they ignore the problem it will go away of its own accord. It will not.

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This was the new Chancellor’s first big test, and in terms of adult social care at least, she entirely flunked it.

For months Labour have been pretty sure they would form the next government, and they had plenty of time to prepare a spade-ready plan to fix social care.

Instead, less than a month into the new government and we see the same old, same old - a refusal to be honest with the public, a refusal to confront the difficult issues our country faces, baffled by surprise about problems that have existed for decades, no plan, no ideas.

It is early days, and perhaps they will turn things around. But it has not been a great start, has it?

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