5 September 2021

Weekly Briefing: Crisis? Which crisis?


“We will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve.” (Boris Johnson, July 2019)

It’s taken two years, but if reports are to be believed Boris Johnson will soon set out his ‘clear plan’ to fix England’s creaking social care system.

The preferred solution is – again, reportedly – to boost funding with a hike in national insurance, accompanied by a cap on lifetime care costs. The level at which the tax rise and cost cap will be set is the subject of the traditional tussle between Number 10 and the Treasury. And there’s added political risk in breaking a manifesto pledge not to increase income tax, VAT or NI.

I think the latter point is something of a red herring; voters know we’re in a different world to the one in which the 2019 manifesto was written and I suspect most would accept the need for different policy choices. What will really rankle is raising a tax that hits employers and younger workers, but which pensioners do not currently have to pay.

Equally, we should be wary of making this all about tax-and-spend. Obviously, funding matters, but it’s far from the only issue affecting a complex, fragmented set of services.

The ‘crisis in social care’ Johnson refers to is really a series of overlapping problems: an overworked, understaffed, undertrained and poorly paid workforce; a huge shortage of specialist retirement accommodation; a rump of providers who stick around despite offering sub-standard care – and an overall structure that is both opaque and uneven.

The pile of green papers, consultations and commissions on this topic underlines that there is no simple solution that will keep everyone happy. Certainly, Labour’s idea of slapping ‘National’ on the front and hoping for the best won’t cut it. A one-size-fits-all system might be appealingly simple, but In the words of one care expert, it would also be ‘hugely expensive, legally difficult and time-consuming to implement’.

A better alternative is set out in Damian Green’s 2019 report for our parent organisation, the Centre for Policy Studies. It recommends a pensions-style system that combines security, via a Universal Care Entitlement, with an element of choice through a voluntary Care Supplement, which individuals contribute to themselves and can draw on to provide a better standard of care. This approach would not only end the ‘dementia lottery’ that so frightens many voters (just ask Theresa May), but would get a bit more of the over £1.5tn of pensioners’ housing wealth into the care sector.

It’s not just about getting more money into the sector, but who spends it. As our editor-in-chief argues here, having councils pay a big chunk of care costs means they are hugely averse to building more retirement accommodation, because more elderly people means big increases in their costs and less money for other services. That’s on top of many councils’ reluctance to build new housing of any sort on their patch, of course.

The result is that we have far less specialist accommodation than countries such as the US or Australia. A return to the national funding we had in the 1980s, while also removing planning impediments to new retirement housing (such as Section 106 requirements) would deal with a major obstacle to a care system that really meets residents’ needs.

The point being that working on the demand side with extra taxes and central funding will not produce results unless there is adequate supply of both staff and suitable accommodation. So by all means let’s have a debate over which taxes to raise to pay for what, but don’t pretend winning the funding battle is the end of the argument.

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John Ashmore is Editor of CapX.