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It appears that long-term care has finally made it to the centre stage of political debate so it seems only right that this month’s Retirement Strategy cover interview is with Sir Derek Wanless. Once dubbed Gordon Brown’s most trusted banker, Wanless carried out a Government review of National Health Service funding in 2002 which led to a massive increase in public spending on the NHS.

In 2005, Wanless was asked to review the state of social care for older people by The King’s Fund. While most of the political debate around financial services at the time centred on avoiding a pension crisis, Wanless’s review issued a stark warning about future funding of elderly care services.

The sensible debate on elderly care that was emerging has been overshadowedby politicians chasing headlines

The review painted an uncomfortable picture for politicians in terms of what Wanless believed needed to be spent on prop-osals such as universal entitle- The sensible debate on elderly care that was emerging has been overshadowed by politicians chasing headlinesment alongside a top-up private/ public insurance scheme, even though the sums were far less than the long-term cost of doing nothing. As such, it was conveniently ignored by all parties. Fast forward three years, add an impending general election where politicians are all grasping for the latest big idea and Wanless’s conclusions are finally being listened to.

The recent Government green paper listed a host of possible solutions, including public private/partnerships, a voluntary insurance scheme or a compulsory model.

Unfortunately, but perhaps inevitably, the sensible debate that was emerging has been overshadowed by politicians chasing headlines with promises that will be hard to keep. The costs of Government and opposition proposals are either not being talked about or appear extremely optimistic. Last week’s Scottish Parliament report into the ballooning costs of universal elderly healthcare should have sharpened people’s minds and the figures outlined in our Wanless interview press home the size of the issue.

It was encouraging to hear news that Just Retirement is planning an entry into the long-term care market and it must be remembered that any proposals will only succeed if the industry can be tempted to participate.

Elsewhere in this issue, AJ Bell marketing director Billy MacKay responds to the concerns expressed last month from LV= over low-cost Sipps and Alfa director general Chris Cummings outlines the work Aifa is doing to promote holistic retirement planning to its members. Any feedback or ideas for future issues should be sent to paul.mcmillan@centaur.co.uk.

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  1. I am sorry, although I do not wish to be indulged with the wisdom of Sir Derek Wanless on any subject matter. The Wanless judgement has proved to be fatally flawed, and all the salient facts are in the public domain. Wanless was the infamous Head of Risk, and Senior Board Director, at Northern Rock. At the quasi Court of the Commons Treasury Select Committee, Wanless was deemed highly culpable for the Rock’s collapse, by virtue of a reckless disregard for sound prudential governance. Wanless also sat on the Rock’s Remuneration Committee, which incentivised the zealous Executive with gilded bonuses, that encouraged ‘Empire building’ without foundations. Wanless was ousted from the Rock’s old Board concurrent with the Treasury (that’s you, me, and unborn future generations) multi-billion pound bailout. Prior to Northern Rock, Wanless was CEO at NatWest, from where he was also ousted in 1999. NatWest was so weakened under the Wanless stewardship that it was handed to Fred Goodwin on a plate – we all know the rest. Ponder for a moment, how banking today may have been without the Wanless factor. Turning to the Wanless 2002 NHS Funding Report. This was commissioned by Gordon Brown as Blair had pledged Euro level NHS spending on the BBC’s Frost program. Close followers of current affairs will recall that Brown sought “intellectual justification” for his proposed tax and NI hikes. Many critics surmised that Wanless was given the report’s conclusion, and asked to justify it. Yes, the NHS funding that followed the report was substantial. Substantial enough to see GP’s, Consultants and NHS Mandarins see their average salaries double in the last 7 years. If only the same could be said for Nurses pay, and front line services. Had prudent caveats been incorporated into the funding report, we could have witnessed a far more equitable distribution of the extra funding, but then prudence is not in the Wanless DNA. All I ask, is that before fawning over Sir Derek Wanless for his views, we first consider the cost to the UK of his judgemental faux-pas to date.

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