Blog 9th September 2021

Sep 9th 2021, 15:20

Blog 9th September 2021

In this blog I consider this week’s announcement by Boris Johnson on Health and Social Care.

The news this week is being dominated by the government’s publication of ‘Building Back Better: Our Plan for Health and Social Care’ that includes their proposal to introduce a new health and social care tax across the United Kingdom to pay for reforms to the care sector and NHS funding in England. The scheme was approved by Parliament yesterday.

The tax will begin as a 1.25% increase in National Insurance contributions from April 2022, paid by both employers and employees, and will then become a separate tax on earned income from 2023 - calculated in the same way as National Insurance and appearing on an employee's payslip. This will be paid by all working adults, including older workers, and the government says it will be ring-fenced to go only towards health and social care costs. Income from share dividends will also see a 1.25% tax rate increase.

Boris Johnson, the Prime Minister, said that the tax would raise £12billion a year with most going into catching up on the backlog in the National Health Service created by Covid - increasing hospital capacity and creating space for nine million more appointments, scans, and operations. He said that:

“Everyone will contribute according to their means… You can't fix the Covid backlogs without giving the NHS the money it needs… You can't fix the NHS without fixing social care. You can't fix social care without removing the fear of losing everything to pay for social care, and you can't fix health and social care without long-term reform."

£5.4billion over the next three years will go towards changes to the social care system, with more promised after that. The changes include:

  • A cap being introduced on care costs in England from October 2023 of £86,000 over a person's lifetime.
  • All people with assets worth less than £20,000 will then have their care fully covered by the state, and those who have between £20,000 and £100,000 in assets will see their care costs subsidised.

Of the £12billion, Scotland, Wales, and Northern Ireland will receive an additional £2.2billion to spend on their services. That leaves £10billion a year for health and social care in England of which £6billion a year has been earmarked for the National Health Service and £2billion a year for social care. Just over half of that will go towards the new funding model (helping people to pay for care) and just under half will go on delivering care - training for staff, support for councils and work on making the care and health services work better together. Some of the rest will be spent on increased employers’ national insurance contributions. However, there remains a £1billion increase in the health and social care budget that will fund other activities with the government saying they'll announce further details in the coming weeks.

The Cumberland Infirmary in Carlisle

The National Health Service had requested an annual increase in its budget of £10billion a year just to enable it to catch up with the backlog of work caused by the coronavirus pandemic. However, it will receive little more than half of this meaning that, when compared with increased need, the National Health Service is facing a real reduction in resources.

The case for social care predates the pandemic. Successive governments have failed to address the problems of social care for years and have instead forced councils to care for an increasing elderly population with declining budgets. The government’s proposals don’t really mark much of an advance with their paper stating (with a mixture of ignorance, complacency, and wishful thinking) that:

"We expect demographic and unit cost pressures will be met through council tax, social care precept, and long-term efficiencies."


The Civic Centre in Newcastle-on-Tyne where I once worked as the City's Social Services Accountant

Nick Golding, the Editor of the Local Government Chronicle writes:

“Unrelenting council tax rises, with social care precepts placed on top, are very much sticking plasters, not bold new thinking – nor indeed sustainable and progressive. The notion that there is further scope for long-term efficiencies in our current system is of course fanciful”

Furthermore, the proposed cap that will consume most of the additional resources being made available for social care, only solves one part of the problem - protecting people's assets when they face significant costs – something that will benefit, not the people needing care, but the beneficiaries in their wills. Also, people will still need to be eligible for care to benefit from the cap. As access is rationed, only the frailest qualify and currently half of requests for help are turned down. Councils say the money will do little to help them tackle this.

Meanwhile, the stipulation that people funding care themselves will have access to the same cost rates as councils means that they will no longer be cross-subsidising those receiving council-funded care. However, the reason why councils are getting rock-bottom rates above self-funders is because their funding crisis – that has been caused by successive governments - means that they have no other option than to drive down costs. The end to cross-subsidisation will drive up councils’ care costs without creating any additional resources thus making the problem worse.

Chief executive of the UK Home Care Association, Dr Jane Townson, told the BBC that:

"This is nowhere near enough. It will not address current issues and some measures may create new risks."

Chairman of the Independent Care Group, Mike Padgham, said it was a:

“Huge opportunity missed for radical, once-in-a-generation reform of the social care system (that would not address the staffing crisis which was) sending the sector into meltdown on a daily basis as care providers struggle to cover shifts".

The leader of the Liberal Democrats, Sir Ed Davey - who is a carer himself - said that the tax was ‘unfair’ and that the government's plan missed out solutions for staffing shortages, care for working age adults and unpaid family carers.

As Nick Golding, the Editor of the Local Government Chronicle concludes:

“Social care needs a rethink. It needs to become a more forward-looking, preventative service, rather than a service of last resort for those in the direst need. To adopt this forward-looking stance, it needs a lot of extra resources, with time and space for its practitioners to have far more of an emphasis on keeping the well well. A culture of 15-minute home visits and of private equity giants treating residential care as a means of profiting from the property market needs to be addressed urgently.”

A copy of ‘Building Back Better: Our Plan for Health and Social Care’ can be viewed or downloaded by clicking here.

The government intends to publish a social care white paper later this year focusing on choice, control, and independence to care users; outstanding quality of care; and fair and accessible care to those needing it. How this can be achieved within this funding framework is hard to imagine.

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