Andrea Rozario, director general of the ERC, said the government’s white paper on social care published in July had some good ideas but questioned whether enough thought had been given to funding.
The white paper suggests that the current deferred payment scheme, which was first proposed by a Royal Commission more than a decade ago, will be expanded.
Under the scheme local councils have been able to offer interest-free loans to people who might have been forced to sell their homes to pay for a stay in a care home.
The loan is repaid when the person passes away either via sale of the property or being remortgaged by the heirs.
Over the past year just over 8,500 people used this scheme – mainly those who had very little in savings – and councils were able to pick and choose who they wanted to offer this to.
Under the new scheme councils would be obliged to offer these loans and allowed to charge nominal interest, most likely in line with inflation to avoid it costing them money.
Roazario said: “The most important question this raises is – do councils have the expertise, funding and real desire to offer these types of loans to all the older people in their areas?
“Firstly – as with most parts of the government - councils are under increasing pressure to economise and tighten their belts.
“Indeed the Local Government Association reports that local authorities are already facing an estimated £1bn reduction in social care budgets so unless there is significant central funding, I would suggest that they would struggle to pay for this initiative – at least initially.”
Rozario also said council staff would require “extensive training” to be able to administer the scheme effectively.
And she highlighted that some councils would find these proposals “more of a burden” than others.
In West Somerset 47% of people are over-55 but in Tower Hamlets just 12% of residents are, government population figures show.
Rozario said: “So can the councils do this on their own? I would suggest not.
“What is needed is a partnership between government and the private sector. The equity release industry knows how to administer these products, we know how to advise on these product and we know how to safe-guard consumers who use these schemes.
“So we would welcome the opportunity to contribute to the process so ensure that it is the success it deserves to be.”
