FOR TOO long the issue of long-term care for the elderly – one of the most important challenges facing our generation – has remained unresolved.
Last week, as it shot up the news agenda following public disagreements between all three major political parties, it became clear that this issue will now, quite rightly, be a key battleground in the run up to the next general election.
However, as those of us who work in the financial services industry are only too aware, there are downsides to all this publicity. When an issue gets used as a political football, it often becomes beholden to short-termism and petty points scoring when what is most required is a serious debate and cost-effective, sustainable solutions.
On the face of it, this is a purely political issue – politicians are elected to provide answers to problems such as this so why should the financial services industry get involved?
The reality is that the UK currently spends £19bn a year on long-term care, and the private sector provides 35 per cent of this funding. Last week, the Audit Commission pointed out that the total cost of social care in the UK will double by 2026 if current practices continue.
With UK public finances in disarray and the baby boomers growing older, a combination of insufficient funding, rising costs and increased demand have left the current system unfit for purpose. Clearly, the funds need to be found from somewhere as a matter of urgency and this is where the financial services industry can step in and help.
Last Autumn, a City of London Corporation commissioned report, produced by the City University’s Cass Business School, suggested that better equity release schemes, top-up insurance and bonds for those with no assets could all help fund the provision of long-term care for the elderly. The report also found that there is considerable room to expand the scope of public-private partnership schemes.
However, in order for the public and private sectors to work together in such a way, firms must have confidence in the system in which they are operating. If this relationship is to work, it is not just the incoming government, but also its successors, who must commit to it. So degree of cross party consensus is vital to its success.
Not only are we in a unique position to safeguard the future health of our ageing population, we also have an opportunity to demonstrate the tangible benefits of having a world-class, innovative financial services industry based in the UK.
Forget bonuses, forget expenses and forget the heat and dust of the general election; politicians and the financial services industry need to join forces and come up with a solution to the considerable public policy challenges facing us at the present moment. In doing so, this is one way in which both sides can start to restore their battered reputations, regain public trust and prove their social utility.
Nick Anstee is Lord Mayor of the City of London.