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By Debbie le Quesne

Cost of care pay-back scheme ‘badly underestimated’

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A central plank of the Government scheme aimed at preventing some 40,000 pensioners a year having to sell their homes to pay for care, has failed to establish the true costs involved, according to a new report.

Not surprisingly, the news is big on the AgeUk website (see http://www.ageuk.org.uk/latest-news/care-costs-badly-underestimated/). Under the planned scheme pensioners would be able to borrow the costs of their care from the local council and the money would later be recouped from their estate after their death. Simple enough it seems.

But the Local Government Association (LGA) is now saying it could cost up to five times more than official estimates. Ooops! I quote the AgeUK post: “After looking at councils’ own planning estimates, the LGA – which represents almost 400 councils in England and Wales – has predicted that local authorities will collectively need to put aside £1.1 billion to operate the scheme within 10 years.

According to the LGA’s calculations, assumptions in the Government’s own impact assessment about how much people will have to borrow and for how long suggest the scheme would cost only £230 million a year.” How can they get it so wrong?

The article goes on to explain that the Department of Health “did not recognise the estimate cited by the LGA and stated that the scheme is designed to be cost neutral within a few years.”

The DoH says it has set aside £110 million to help councils with the start-up costs. I’m no economist, but if the figures are so catastrophically adrift, bankruptcy of local authorities could be a very real possibility, then where would our most vulnerable be?

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