Conservative MP John Redwood has hit out at Andrew Dilnot’s proposals for long-term care funding for the elderly.
In a report for the Centre of Policy Studies, Care for the Elderly, Redwood argues the Dilnot proposals go too far in extending liability to the taxpayer.
The Dilnot Commission proposed a cap on the cost of care of £35,000 and an increased means-tested threshold of £100,000.
Redwood says the estimated £1.7bn annual cost of the policy would be better spent improving care homes than funding a proposed £35,000 cap on care costs.
Redwood says: “One must question whether the £1.7bn cost of the cap is the best use if further funds are available. This money will mainly go towards protecting the inheritances for families who can afford to pay for care. Furthermore, Dilnot’s claim that the cap in itself will generate an insurance market has been met with a mixed reception by the industry.
“Now is not the time to develop a new state programme which will be incredibly difficult, politically, to rein back if downside risks are realised.”
Redwood says there are a series of barriers preventing individuals taking out insurance including uncertainty around future unit care costs, future healthcare needs, the belief that the state provides free care and the complexity of products.
The Association of British Insurers has hit back at Redwood’s suggestion that the industry does not support the Dilnot plans by writing to him to explain its belief that Dilnot would stimulate the development of long-term care insurance products.
Redwood believes equity release should be used to fund care rather than richer children inheriting their parents’ housing wealth.
In January, Money Marketing revealed Liberal Democrat concerns that Dilnot’s funding plans would be expensive, bureaucratic and regressive.