The Sunday Times

July 15th, 2012

The maths is simple: it just costs too much to grow old

Liam Byrne, the outgoing Labour chief secretary to the Treasury, famously left a note on his desk for his coalition successor saying there was no money left. He was absolutely right, but the general response was one of hilarity and I don’t think enough people took him seriously. There really is no money, or rather there isn’t enough money by a long way to pay for the things we have come to think essential in a welfare state like ours, such as decent care for old people.

Things are bad enough already. Already too many frail old people live alone and largely ignored, with only a few minutes of help or “social care” each day with their most essential needs. And they are the lucky ones: councils have been cutting back hard on social care and increasingly only the neediest can hope to get anything. And anyone with savings of more than £23,250 — excluding a flat or house — is not entitled to it.

Although the coalition gave local authorities £2 billion for extra social care for the elderly, it did not ring-fence the money, so it doesn’t always reach the old people who need it. The result is a sad grey crowd of people who are cruelly called bed blockers: old men and women who no longer need hospital care but whose lonely, unattended dwellings are not fit for them to go home to.

Meanwhile, when a person needs to go into a residential home, councils are required to pay the fees, but only when a person’s assets, including residential property, are worth less than £23,250.

Currently that means many people — about 40,000 a year — are forced to sell their houses or flats to pay for care homes. This is a cause of great bitterness — a bitterness that will grow if the rule about including one’s home in the assessment is extended to social care. On top of that, the system is complicated, bureaucratic and pretty much a lottery, varying from council to council. But things are not going to get better, whatever politicians might like to promise.

Last Thursday the Office for Budget Responsibility (OBR) announced in a chilling report that the escalating costs of an ageing population will mean yet more national austerity. Pointing out that the proportion of people over 65, who now make up 17% of the population, will rise to 26% by 2061, it estimates many increased costs, in care of the elderly, health and pensions, amounting to an added £80 billion a year in today’s money.

In the next 20 years, the number of people over 70 is set to rise by 50%, reaching nearly 10m, according to the Office for National Statistics.

The OBR states that Britain’s public spending will be “clearly unsustainable” over the next 50 years, despite the spending cuts. So, far from care for the elderly rising above today’s inadequate standards, it is almost certain to fall further below them. There’s no money now and in future there’s going to be even less.

Presumably that is why the government’s white paper and draft bill on social care, revealed last week, avoided the 64-squillion-dollar question, which is how in a time of increasing poverty the country can hope to pay for it — even as it is, let alone as one might like it to be. Forget the nuts and bolts; I agree for once with the gorgeous, pouting former Labour health secretary Andy Burnham, who said that “with no answers on the money, this white paper fails the credibility test — it is half a plan and … may raise false hopes among older people”.

Sometimes I think there isn’t much hope, true or false. This may be an insoluble problem. It may be that we are just beginning to face the fact that the welfare state and the expectations people have of it are no longer affordable. Austerity doesn’t begin to describe what will have to be a revolution: the old expectations and the old sense of entitlement will have to go. At the same time, those who can pay will have to pay more. Here are some suggestions about paying for care of the elderly, most of them unpleasant.

Universal benefits must go. The thinking behind them is out of date, and both unaffordable and undesirable. Scarce public money must go only to the neediest, through means testing. Universal bus passes (which cost £1 billion a year), winter fuel allowances (£2 billion) and free television licences must go. I’d say the same about child benefit (£11 billion). The well-off don’t need a heating handout that would hardly pay for a large dinner party, and the fertile don’t need perverse incentives to have more than two children.

Everyone must accept that their savings, including their homes, may have to be spent on paying for care in old age. There’s no universal right to leave one’s property to one’s children.

It’s true that those without assets may get much the same care as the provident, but there are many reasons why people end up penniless, not all of them bad. Besides, would anyone like to see a two-tier care system under which the “undeserving” elderly are offered a lower level of care?

Anyone who does have enough savings in some form to pay for the difficulties of old age should be glad of it and proud of it — and so should their children. Many adults actually have to impoverish themselves and wear themselves out to look after elderly relations; at least those whose parents have assets can be spared that.

Taxes of all kinds must rise hugely, or else there will have to be a large hypothecated tax upon people reaching old age. Services to old people must be reduced. In future they will have to rely more on their families, neighbours or charity. Families should be given big tax incentives to look after their own old people, or even other people’s.

NHS and social services must be amalgamated somehow, so the inadequacies of social care are no longer dumped on hospital beds, at much greater cost to the taxpayer. Health service care must be rationed for the very old. Palliative care of every kind should be available, but not ambitious treatments.

There should be fewer old people. I’ve often felt the best thing one can do for one’s children is to die before real infirmity sets in. The taboo against deliberately shuffling off this mortal coil, as people did in other cultures in the interests of younger people, is wrong. Most people say they never want to be a burden to others in old age; it would be good if more of us felt able to prove we mean it, by taking a timely and pleasant walk up the snowy mountain. Especially since there’s no money left.