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How can the government address social care funding?

February 28, 2018

A new year and another social care green paper consultation.

Everyone agrees something needs to be done but no-one can agree what it is – we have been here so many times before.

We can go back to the Royal Commission in 1997; to the Wanless Report for the Kings Fund; to the Labour ‘death tax’; to the Dilnot Report and the care cost cap and to the last Conservative manifesto and the ‘dementia tax’.

In a sense, despite how peculiar and perverse our system of funding social care is, nothing has happened that has impacted on the public consciousness to the extent that a government has actually been forced to make significant changes to the system.

Maybe the current NHS crisis, caused in part by bed-blocking and elderly patients stuck in wards, is the tipping point, or maybe once we move out of “winter pressures” it will all settle down again.

Tipping point

Let us suspend disbelief and assume that we really do have a tipping point. How is the government addressing it beyond perverse tinkering with funding mechanisms?

Allowing local authorities (LAs) to increase council tax to add a little bit towards social care funding is a good case in point.

The areas with the lowest numbers of privately funded care home places are the same as the areas with populations which receive the biggest council tax rebates.

LA-funded places are cross-subsidised by private payers, and the council tax increases are a drop in the ocean compared to the post austerity cuts that have been imposed on LAs.

Department of health

The prime minister has recently reacted by addressing the chronic under-naming of Jeremy Hunt (thanks to NHS Network News for this satire) by making him secretary of state for health and social care.

But in fact the department of health (DH) has always been responsible for social care policy.

The problem is that the new Health in Construction Leadership Group (HCLG) (CLG also suffered from under-naming) holds LA budgets and, overall, HMT controls the money – it was HMT who effectively vetoed the care cost cap.

Expert panel

To make things even more complicated it was the cabinet office along with DH that announced the commitment to a green paper being published this summer.

Mid-November they announced members of a new expert panel to support its deliberations.

As you would expect Sir Andrew Dilnot is to be on the panel as are the insurance industry.

Nothing wrong with that, though I do wonder how they haven’t lost the will to live given the number of times they have been asked to do the same thing.

Social tax

Meanwhile in policy wonk world we have suggestions for a hypothecated social (and possibly NHS) tax.

HMT always resist these for two reasons: first they like to have the freedom to decide how to allocate the nation’s resources and second because ring-fenced budgets have little incentive for efficiency savings as their income is guaranteed.

The other suggestion doing the rounds is for pensioners to pay NI contributions.

Apart from the fact that NI starts at a much lower base than income tax (which would bring many more lower income pensioners into the tax bracket), can anyone really see a Conservative government alienating its core vote in this way?

If the ‘dementia tax’ was a step too far, this policy is in another league altogether.

Questions and answers

If we have reached a tipping point, is there an answer? These are the key questions…

How do we get more money into social care?

How do we deal with the perennial problem of NHS and social care silos shifting budget costs to each other?

And how can at least some of the perversities of the current system be resolved?

I would bring in the care cost cap because it would encourage the development of long-term care insurance bought by the working population which would eventually lead to more self-funding entrants to care homes which would give more money to cross-subsidise LA-funded entrants.

I would merge LA and NHS responsibilities for health and social care.

This is already happening in Greater Manchester.

The result has been that delayed discharges from hospital have been almost halved; care workers are being paid more (avoiding recruitment problems) and all of this has saved money overall.

And I would give DH the money from HCLG – not just rename it.

Written by Richard Walsh, SAMI Fellow and first published in Cover magazine, January 2018.

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