The more there is of mine the less there is of yours

... said the Duchess. The quote is, of course, from Alice in Wonderland. I'm reminded of it by the mess the government has got itself into over the new care costs cap of £86k announced only in September.  The government has clarified that, as an individual's assets reduce below £100k and means testing comes into place, with councils making a contribution from the public purse so that the individual's dwindling assets last a bit longer, the contribution from the council does not count towards the £86k cap. People still have to shell out until they've coughed up £86k of their own money.

I must say I was astounded at the reaction. What part of an £86k cap on an individual's contribution would you expect to come from someone else, Alice?

To be fair I hadn't realised the original government announcement implied that the £86k cap wasn't really an £86k cap. And so those in high dudgeon have a point. Kind of.

It is that the cap hits folk in low cost housing areas (mainly but not exclusively the north) disproportionately. Sure, if you are wealthy, you'll never get the benefit of this council funded taper and will hit the £86k cap first. And in all probability have more left over once the cap comes in. So yes, the cap implies that rich people will pay the same and retain more than less affluent individuals. But that was always implicit in a cap.

Sir Richard Dilnott apparently predicted this situation in his original report, aeons ago and says the government has now got it wrong. But wait: Dilnott and others could have framed it the other way round: there's a minimum you can keep rather than a maximum you have to pay. Yes, I know that wouldn't work for the Tories. And might not work in a revenue generating sense: it's a perennial rule that you only generate a lot of tax by hitting ordinary people, not just the "rich". But in principle you could devise a progressive tax-like system. Except the government having inherited a situation where everyone had sat on their hands for more than a decade, had to do something quick, not good, so didn't have time to devise anything complicated.

Notwithstanding the current storm in a teacup, the real problem is that the government didn't "fix social care". Indeed it hasn't yet tried. It came up with a hastily devised revenue generating tax and a boosted cap to protect most people's assets to some extent. A cap will always favour the wealthy though the decision was, initially, almost pathetically well received in the less affluent areas characterised as 'red wall'. When you don't have so much you may be very grateful to keep some of it. Indeed a higher proportion in some cases, when you factor in inheritance tax thresholds. 

But isn't that the problem? The solution not only didn't address the actual issue of provision and quality of care, it left more rather than fewer anomalies in the way the care costs cap works with inheritance tax, when logically it was an IHT issue the government was actually addressing not a care costs issue. 

I don't know what those red wall voters, let alone Alice, will say when they realise the cap only applies to personal care, not 'hotel' costs. I don't know the balance but I'd have thought the hotel costs were the larger component. In a kind of cost-price averaging, nursing care home residents all pay the same weekly cost (in my experience) irrespective of their actual care needs. So if you need a lot of care, the others in your nursing home who don't end up subbing you. Just as the self funders sub the local authority funded residents, who pay a block rate driven down by bargaining power, to the short term benefit of council tax payers but creating even more anomalies and lower funding for a chronically underfunded service.

This could get messier yet. As I predicted in my post of 9 September Taxing Times, which noted that the PM didn't have a plan for social care, he had a funding mechanism which was actually more about protecting the value of people's houses than anything else.

And his problem is - that's what a lot of people thought, not just me.