News round-up 16/8: Government in Dilnot U-turn

Care for the elderly

The government is rethinking the cost of care to the elderly, and will cap the amount of money paid towards it at £35,000, the Independent leads with today. The paper claims senior sources within both coalition parties have said that plans for a cap – proposed last year by economist Andrew Dilnot – have been revived, despite Treasury concerns, and will be formally announced in the autumn as part of a Coalition relaunch and inserted into the Care and Support Bill.

The plans - which could be implemented as early as 2017 – were discussed by the ‘Quad’ of prime minister David Cameron, chancellor George Osborne, deputy prime minister Nick Clegg and chief secretary to the Treasury Danny Alexander at a dinner last Friday. Mr Cameron is understood to have made the U-turn on the plans just a week after the government announced it accepted in principle the Dilnot Commission’s findings but indicated they might not be affordable. The Treasury is expected to argue that the plan should be paid for out of the general NHS budget.

The Daily Mail reports that the prime minister will find the annual cost of £1.7bn to fund the plan in the next public spending review.

Economy

Leading economists who backed George Osborne’s deficit-reduction proposals in opposition have attacked the chancellor’s austerity plan, the Guardian leads with today. Half of the economists supporting austerity in 2010 have said it was time for a rethink and have urged the Treasury to take advantage of low borrowing costs to increase spending on infrastructure projects.

Liberal Democrats have also started to break ranks, calling for the chancellor to loosen deficit reduction targets and pay for more growth-boosting projects in infrastructure, the Financial Times writes.

Elsewhere, the FT reports that a fall in unemployment figures has brought some relief to the coalition government. At the same time, these figures have led to questions as to why employment is rising in a shrinking economy, with the Bank of England describing the circumstances as a “genuine economic puzzle”.

Boris Johnson

Mayor of London Boris Johnson has told the prime minister to stop “pussyfooting” around key issues, accusing him of blocking moves by the chancellor to commit the government to big infrastructure projects, like the proposed Thames Estuary airport, the Times leads with today.

Elsewhere, the Daily Telegraph reports that Mr Johnson said the prime minister had fallen victim of “institutional inertia”, while praising the chancellor for backing “big ideas”. Mr Johnson has also refused to rule out a return to Parliament when his second term as Mayor of London runs out in 2016.

Infrastructure

The Campaign for Better Transport has attacked proposals to bring in toll roads as “fatally flawed”, the Financial Times reports. It said chancellor George Osborne recently floated the idea of privatising the Highways Agency and Britain’s main roads and motorways as well as introducing tolls on some new or widened routes. The CBT said tolling would lead to “poor or biased funding decisions” which would not lead to good value for money.

Procurement

The Financial Times reports that the Scottish government plans to make public procurement processes “friendly to Scottish business”. A consultation paper suggests that all public bodies might be required to advertise contracts on a single Scottish government website as well as going through the European Union’s procedures for public contracts.

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