The Chancellor of the Exchequer Philip Hammond announced that the adult social care system in England would receive an additional £2 billion of funding over the next three years in his recent Spring Budget speech, but the reaction from charities and care experts has been mostly negative. Are we really no closer to finding a proper solution for the health and social care crisis?
As this blog reported recently, the gap between the level of demand for adult social care services in England and the budgets which exist to fund them has been estimated at £1.5 billion in the current financial year, with significant rises forecast for the years ahead. On one level, the Chancellor’s announcement that additional funding would be provided by the central government was good news, as it should mean that some of the worst problems affecting the system can be alleviated. However, experts involved in adult social care have warned that this will do nothing for the long-term problems facing the system, especially since this is unlikely to be genuinely “new” money (rather than resources which are reallocated from a different part of the health budget).
Social care experts have complained that, in addition to not recognising the unprecedented level of demand which the social care system is under from an ageing population, other government policies have actually made it harder for them to balance their books, particularly the implementation of the new National Living Wage which, it has been estimated, will cost social care providers an extra £2.3 billion per year by 2020 (although this is undoubtedly good news for front-line social care workers, many of whom do exceptionally challenging work for very poor pay). Giving a pay rise to large numbers of social care workers also imposes more indirect costs, particularly in the form of higher National Insurance contributions and higher pension contributions, if these are applicable.
In addition to announcing this new funding, the Chancellor made two other comments about adult social care which underline what a difficult problem this is to fix politically.
Firstly, he announced that a new green paper would be launched over the coming months setting out a range of options for a long-term funding solution. This might sound good in theory, were it not for the fact that the Coalition government went through much the same process half a decade ago, which culminated in the Health and Social Care Act 2012. This Act was supposed to implement the policy reforms proposed by the economist Andrew Dilnot, which revolved around capping an individual’s liabilities to pay for their own social care at a fixed ceiling, beyond which the state would step in, but the implementation of this system was quietly deferred two years ago. What role, if any, that system will play in the new green paper is impossible to predict, but it wouldn’t be surprising if the government decides to go all the way back to the beginning again.
Secondly, the only option which the Chancellor explicitly ruled out was a revival of Labour’s so-called “death tax”, the pejorative label that was given to the last Labour government’s proposal to fund social care by making it free during peoples’ lifetimes and then reclaiming a portion of the costs from their estate. Like all systems, this option would have its advantages and drawbacks; but from a practical point of view there is no good reason to dismiss this (or any other) option completely out of hand.
Sadly, this last point just demonstrates the poisonous politics surrounding adult social care which make this issue so hard to resolve.