Dilnot is making serious plans for the care of the elderly. But can the Coalition?

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The Independent Online

What a test is posed by Andrew Dilnot's proposals for elderly care. His recommendations are balanced and expedient, but they cost money and look to a future beyond the next election. For politicians worrying what might happen in the next hour, the future always seems like a distant land. The test applies to the Coalition and also to Labour. But the challenge extends beyond politicians. Nearly all of us are living longer. We are tested too.

Most immediately Dilnot makes demands of those in power. During the intoxicating days of last summer, senior ministers in the Coalition were keen to prove they could form an even bigger tent, calling on the advice of those from outside the Conservative and Lib Dem parties. As ever influenced by Tony Blair, they had noted how New Labour had appointed unlikely figures to review sensitive policies. Blair often turned to a business leader or a disillusioned Tory. Gordon Brown's preference was for bankers – before they ceased to offer a protective shield for nervy ministers.

In their big tent, David Cameron and George Osborne opt for former Blairite ministers, left-leaning journalists – various Huttons have played their part – and the robustly independent Dilnot. For insecure politicians, forming big tents is similar to offering a referendum at a future date. The formation and the offer help to buttress them. The problems come when the independent outsiders report, or a referendum actually has to be held. One cabinet minister tells me that there has been a degree of unease at the top of the government with the recommendations of all the independent reviews from the various Huttons and now from Dilnot. I sense there is a part of Cameron/Osborne that wished they had commissioned "independent" reports having decided the outcome in advance, a technique favoured by Gordon Brown.

Instead they asked Dilnot to preside over an area of acute political sensitivity, involving planning for the long term. Dilnot is not malleable, although he has worked hard to ensure that all the key political players knew where he was heading. Dilnot elevated the reputation of the Institute of Fiscal Studies to its current deified status when he was at the helm in the mid-1990s. His role then was to articulate the obvious, that future public spending demands were much higher than New Labour was willing to acknowledge in opposition, or the precarious Conservative government would dare to admit. Stating the obvious is not easy when political orthodoxy is on another planet.

In relation to elderly care, political orthodoxy is not quite on a different planet. Various governments have commissioned reports based on the assumption that something must be done. Only when the reports are published does nothing much happen.

Dilnot's proposals are elegantly balanced, combining a mix of additional private funding through insurance schemes, a new role for local authorities as a financier, and higher public spending from the government. The prize is a guarantee of a cap on costs. The financial burden is spread widely and yet there is radicalism in the report's sweep. The Coalition is limited in its radicalism, seeking near-revolution in market-based reforms for public services but wary of any initiative that involves additional public spending. Although, as they are discovering, quite a few of the favoured reforms are expensive, at least in the short term. George Osborne is looking to spend any spare cash on pre-election tax cuts rather than on schemes that might benefit voters in a future when several more general elections have been contested. The Treasury is wary.

On the surface, Labour is positive. Ed Miliband has announced several times that he seeks consensus. If he means it, he cannot lose. Appearing to help a Prime Minister places a Leader of the Opposition in a position of strength. Miliband has a chance to make a degree of mischief by not overtly seeking to make any mischief at all. His backing is enough to make the doubters in the Treasury have a few more doubts. After all, it is Osborne and not Miliband who will have to find the money. But if Miliband succumbs to the temptation to play less subtle political games, of appearing to seek consensus and then turning away when the tough decisions are taken, he will have failed the challenge too.

On both sides there is some genuine worry that Dilnot's proposals are not as redistributive as they might have been. Some ministers on the Lib Dem wing of the coalition retain a soft spot for a so-called Death Tax to provide the necessary resources. But the Dilnot framework is the only offer on the table.

That is why we voters are challenged too. If opinion polls suggest the proposals are popular, the Coalition will have no choice but to implement them and find the additional costs. The case for public spending on any front is often made in a hair-shirt, altruistic tone, as if voters are making an avoidable sacrifice. On the whole, getting old is unavoidable. There was astonishingly high support for the increases in NHS spending in Brown's 2002 Budget, presumably because voters recognised the benefits to them that would or could arise from higher investment. The argument applies now. For selfish reasons voters must seek a way out of the current demoralising anarchy of elderly care. They should support Dilnot's proposals.

Often in British politics it is fashionable to proclaim bold radicalism in a safely generalised manner. Specific challenges tend to elicit a more timid response. During exchanges in the Commons yesterday afternoon, caution on both sides replaced the more familiar posturing. Dilnot will form the basis of further discussions, both sides nervously agreed.

Are we up for long-term financial planning, higher public spending and robust regulation? The answer should be yes. The fact that the question is posed suggests the actual response could well turn out to be no.