Public Policy Editor
The UK does not appear to face an impending crisis over the cost of long-term care, John Bowis, the junior health minister, told MPs yesterday.
"There is no great time-bomb about to explode," he told the Commons health committee, which is investigating the issue. The increased costs of an ageing population looked to be "manageable for most individuals and for the taxpayer".
With only about one in seven of the elderly expected to need long-term care, "so long as we sensibly plan ahead, it is a manageable scenario", he told MPs.
Mr Bowis's assessment - in contrast to some predictions about the likely escalating cost - came as his department gave the committee a memorandum on projections of cost. These ignore contributions made by carers and from those who already pay for their long-term care themselves, but examine NHS, social services and community health service spending.
The memorandum stresses that there are "wide differences of view" which could see the cost of long-term care more than double or fall by a half as a proportion of national income.
But, it says, "on most reasonable assumptions" the proportion of GDP taken by long-term care in 2030 - when the number of elderly is due to peak - is likely to be only a little larger than the present 2.3 per cent. In addition, the extra costs to be absorbed "imply future rates of increase which are lower than those accommodated in the last 15 years".
The assessment assumes the economy grows at its historic rate; that the next generation of elderly will be no more dependent than the present one; that the real cost of services will rise by 1 per cent a year; that there will be a similar rise, as the country gets wealthier, in those who can pay all their own long-term care costs; and that there will be 10 per cent fewer carers looking after relatives and friends as the population ages.
With a consultation paper due on how to fund long-term care in future, Mr Bowis dismissed the idea of allowing individuals to keep the average value of a home - about pounds 60,000 - when undergoing means-tested care, saying that would involve a "substantial cost" of pounds 500m a year.
He also appeared to rule out a new pay-as-you-go national insurance, or creating new compulsory funded insurance schemes. Such ideas would be "confiscatory", he said.
Minister will, however, outline schemes where if individuals cover themselves for a fixed amount of care, they will be allowed to keep a similar sum if they then need to fall back on means-tested care.