Reform social care for all by using pensions model – Damian Green

But there have clearly not been enough of us to make solving the problems less painful than allowing them to drift on with regular injections of emergency funding, which are of course welcome, but they are a sticking plaster.

To have a long-term solution, we need all parties to agree, as they have on pensions – another long-term, expensive, complex issue on which we do reasonably well as a country. Even in these divided political times, people of good will can work together across parties.

The vast majority of ​people agree that we need to spend more. At the same time, they insist that they should not pay any extra tax themselves. We need a serious conversation about this.

We know that social care, especially for the elderly, is often too opaque for those trying to understand it, with no apparent logic in the conditions that receive free NHS treatment and those that do not. It is also apparently unfair in not rewarding a lifetime of prudence. Those who have saved feel that their savings will simply disappear, while those who have not saved receive the same level of care, often in adjoining beds.

Less well known is the fact that funding social care out of council tax means local authorities are too often reluctant to allow new care homes to be built. An ageing population means that already more than two fifths of council spending goes on social care. That figure will only increase over the years.

Of course, all the various failures in the social care system put unnecessary extra pressure on the NHS. Indeed, the long-term plan, with all its generous funding for the NHS, depends on an assumption that we develop a social care system that keeps people out of hospital longer and discharges them faster. At the moment, both halves of that assumption are questionable. We need to solve the social care problem to solve the NHS problem as well.

A new system needs five objectives. First, a new system needs to provide enough money to cope with the increasing, ageing population. Secondly, it needs to be fair across generations, meaning that today’s working taxpayers are not asked to pay both for their own care in decades to come and the care of the generation above them. Thirdly, it needs to be fair between individuals by ensuring that no one has to sell their own home for care and ending the dementia lottery in which one condition is treated on the NHS and another is not. Fourthly, it needs to lead to an increase in the supply of care beds and retirement housing. Fifthly, in an ideal world, it should establish a long-term cross-party consensus.

We need to look to the pension system as a model, because it has achieved many of our aims. In recent years, the state pension has been increased significantly, but at the same time most people save additionally throughout their working years to provide comfort and security in old age.

Auto-enrolment has been a great cross-party success story. Similarly, just as the basic state pension has been improved, we should offer a better universal care entitlement, with a better level of care for both home care and residential care. Needs would be assessed locally, but crucially the money would come from central government rather than local government.

We also need to encourage people to save themselves through a care supplement – a new form of insurance designed specifically to fund more expensive care costs ​in old age. The analogy is with the private pension system, allowing people to buy insurance at a level that they can afford to provide peace of mind. It would not be compulsory so could not be stigmatised as a death tax or dementia tax.

The ideas would take the burden of social care funding away from local councils and offer certainty and security to the increasing numbers who will need social care in old age. No one would have to sell their house and see their whole inheritance disappear; everyone would have the chance of receiving better care; and fewer people would be left unnecessarily in hospital beds as they wait for social care to become available.

None of this is easy and it will take political courage, but it is absolutely necessary if we are to provide peace of mind and security to frail, elderly people and working-age people who need care. They all deserve it.

Damian Green is a Tory MP and former First Secretary of State. He spoke in a Commons debate on social care – this is an edited version.