Social care: this spending round offered just another sticking plaster

With prorogation, Brexit bills, and the spectre of an early election to keep parliament busy, this week’s spending round—which set government departments’ budgets for 2020/21—may feel like a distant memory to those brave enough to still be following British politics. But the chancellor’s statement is worth examining to identify prioritiesfor any government seeking to improve policy.

Overall, the spending round halted cuts in public services—but isn’t enough to undo the effects of a decade of austerity. Real spending growth will be 4.1 per cent in 2020/21 but that will reverse only a third of the real terms cuts in day-to-day spending since 2010. Funding levels of some services will still be way down on 2010: local government allocations (on a real terms, per capita basis) will be 77 per cent lower than in 2009-10; housing and communities down 52 per cent.

Adult social care has also suffered under austerity, with government spending in England falling from £346 per person in 2010/11 to £324 in 2017/18. People felt the consequences. The number of older citizens receiving publicly funded care fell by 400,000 between 2009/10 and 2015/16. Many more—as many as 1.4m—go without basic care such as help to eat, wash, dress, and go to the loo.

In his first speech as prime minister, Boris Johnson promised to “fix the crisis in social care once and for all,” giving “every older person the dignity and security they deserve.” The latest spending round is not the fix but a temporary sticking plaster.

The chancellor announced £1.5bn to tackle the problem. Of this, £1bn is central government funding, while £500m will need to be raised by councils increasing their social care precept—a ringfenced council tax—by 2 per cent (which could exacerbate inequalities, as richer councils can raise more but may have lower needs). Of the £1bn from central government, £500m is likely to go to children’s services.

This means councils could have an extra £1bn to spend on adult social care in 2020/21. That will help, but will only just meet rising demand. And if councils are unable to raise the precept, the extra money will not be enough to stop decline.

This leaves four priorities for any government serious about fixing the crisis.

First, properly stabilise social care funding beyond 2020/21. Spending will need to grow to keep pace with changing population needs and address staffing shortages (currently at 110,000). On top of the extra £1bn announced this week, another £3.4bn will be needed by 2023/24 just to meet demand pressures and boost staff pay in line with the NHS.

Second, immigration policy must help, not hinder, the recruitment of the international staff social care providers rely on. More than 90 per cent of care workers earn below the proposed £30,000 salary threshold that could be required to obtain a visa after Brexit and 8 per cent of staff are of EU nationality. A further 10 per cent are from outside the EU.

Third,the government must improve access to care. Now, only people with the highest needs and lowest means receive publicly funded services. Improving access back to 2010 levels—before widespread cuts to services—would require around £11.5bn of government investment by 2023/24 (which includes the cost of meeting demand pressures and boosting staff pay), on top of the £1bn from the spending round.

And fourth, more fundamental reform is needed in England to provide better and fairer access to social care and provide people with protection against social care costs. Today, people with assets above £23,250 must pay for their own care. But whether someone will incur high costs in later life is highly unpredictable. Around one in 10 people aged 65 face future lifetime care costs of over £100,000.

With no way for people to insure themselves, the government must play a fundamental role in protecting us against what might be catastrophic costs, pooling risks across the population. But policymakers have choices about the kind of protection to offer. The government could pay for most care for the whole population (making social care more like the NHS), or just some portion of it (like “free personal care” in Scotland) or costs above a certain threshold or “cap.”

In our recent analysis of social care reform options, we set out how a “capped cost model”—in which the government covers the costs of people with the greatest and most expensive lifetime care needs—could be used flexibly. A government might set the cap at a different level depending on its values, priorities, and public spending plans. And new legislation isn’t needed to implement it as the 2014 Care Act covers such a possibility.

While the current chancellor has described himself as a “low tax guy,” tax increases would be an obvious route to paying for a fairer and more comprehensive system. Overall tax revenue in the UK as a share of national income is lower than in most comparable countries. Ultimately, the right level of spending on adult social care—and how to pay for it—comes down to political choices. Ducking these for much longer is nothing less than a failure of the political class towards the most vulnerable people in society.

Jennifer Dixon and Hugh Alderwick, Health Foundation