Editorial: This still won't pay the bills for elderly care

It has taken the Government more than 18 months to come up with its response to Andrew Dilnot's report on the future of social care and, for all the time it has taken, there is unlikely to be great rejoicing at the result. The report's central recommendation was intended to address the current main cause of resentment – that those with even quite modest assets must fund their care from their own resources, which can mean selling the family home rather than leaving it to the children. A ceiling of £35,000 for payments was proposed, after which the local authority would pick up the tab.

As was trailed yesterday, the Coalition has adopted the main principles, while substituting its own figures. There will be a ceiling on what anyone must pay, but it will be double that suggested by Mr Dilnot – and in practice much more, as so-called "hotel" charges will not count. At the same time, the cut-off for state help, currently assets of £23,000, will be replaced by a sliding scale, with some help for everyone with less than £123,000. Part of the price for these changes will be a freeze on the level at which inheritance tax is paid, with more people inevitably drawn into the net.

The introduction of a sliding scale is welcome. The £23,250 barrier created an artificial division between "haves" and "have-nots" in which pretty much all homeowners were eligible for no state help at all.

Nor is a freeze on the inheritance tax threshold unreasonable. The vast majority of homes outside the South-east will remain exempt. As for the doubling of Mr Dilnot's proposed £35,000 ceiling for payment, the Government's case is that it is unaffordable in present circumstances, and that judgement is theirs to make.

Yet it has to be asked whether ministers have not taken the coward's way out. Politically, Coalition ministers may have felt they had no choice but to focus on the emotive issue of enforced home sales. But it is indisputable that property – which is not subject to capital gains tax if it is a main residence – has seen disproportionate returns over the lifetime of today's over-50s. We see no reason why that largely unearned capital should not be tapped in order to help pay for social care. A stronger argument for more state generosity is the disincentive to saving that the low threshold for assets presents. Under the existing system those who have saved nothing for their old age have all their social care needs met at public expense, while those who have saved are, in effect, penalised. There is an injustice here, which the proposed changes do something, but not a huge amount, to remedy.

No government can ignore the formidable challenge that the ageing of the UK's population presents to the Exchequer, to the NHS and to local authorities. The need for social care in particular is rising exponentially. It is also clear that members of the baby-boom generation will be more demanding in terms of the quality of accommodation and services they will expect when their time comes. It is clear, too, though, that very many people – used to a health service that is free at the point of use – are not reconciled to the idea that the cost of social care will be their personal responsibility, still less are they prepared for the actual expense.

Nor are they completely wrong. The demarcation between medical and social care, which is so fiercely observed by both sides, is to a large extent artificial. The two are organised and funded separately; they have their own hierarchies and their own – considerable – vested interests, which creates only confusion for the users. Whatever the Government announces today, it should be only an interim solution on the way to breaking down this unnecessary, and expensive, barrier to streamlined care.