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Dilnot: Cost not an argument against £2bn reforms

by William Robins on Feb 10, 2012 at 07:01

Dilnot: Cost not an argument against £2bn reforms

Economist Andrew Dilnot has argued the government should be able to fund his £2 billion long term care reforms without increasing public spending.

Speaking to members of the social care industry at the Westminister Health Forum seminar Dilnot, who headed up the Commission on Funding of Care and Support, said the question of how to finance the reforms was not a legitimate argument against the proposals.

‘The economic argument cannot possibly be used in all of this,’ said Dilnot (pictured).

‘It would be a very poor reflection of the potency of government if it were not able to find the funding for this. I am not suggesting an increase in public spending.  It could be achieved by re-organising public spending.’

Under proposals laid out last July the government would fund any care costs above £35,000 and the threshold of assets people can hold and still qualify for means-tested help would rise from £23,000 to £100,000.

Together this will cost the government an extra £2 billion a year.

Dilnot has previously warned the government could delay the implementation of his proposals. More recently care experts have warned of political opposition to the plans within government with reports the Treasury planned to throw out the proposals.

Earlier this week, MPs sitting on the Health Select Committee publicly backed the reform in a report on care.

2 comments so far. Why not have your say?

Tom Scott

Feb 10, 2012 at 08:58

The problem with Dilnots reforms is that they are all about protecting capital rather than funding care. The crisis in the care system is that in most cases the state currently pays less than it costs to provide care, meaning that self-funders pay more to cross-subsidise their local authorities.

Paying care providers sufficiently to cover their costs would be a start but would cost more than £2bn I suspect, but without this people will find that when they are entitled to state funding they will still need to top up from their own resources.

Anyway, I thought state benefits were a safety net for those in need, not a method of protecting inheritances for people who may be well off anyway.

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Julian Stevens

Feb 10, 2012 at 10:03

"re-organising public spending" is nothing but a euphemism for cutting public spending on other things. How can it be otherwise? Why not encourage people to make their own provision cost-effectively by allowing tax relief on premiums to insurance plans? That would surely cost vastly less than £2Bn ~ in relative terms, not much at all ~ and at least some of the costs of doing it that way would be recouped in the form of income and NI tax receipts. Why go for an expensive option without first even considering a not very expensive option? It just doesn't make sense.

Then again, as others have commented, whenever government gets involved, the solution to any problem is virtually never the most simple, practical and cost-effective. The private sector, i.e. insurance companies, would very probably leap at an opportunity to market a new product with the added attraction of tax relief. These people just can't see the wood for the trees.

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