Last September the Government announced its ‘Build Back Better’ plan for health and social care.
This featured the introduction of an £86,000 cap on lifetime care costs, a far more generous upper financial means test threshold, the ability for self-funders (people who pay for their own care) to access care and support at the council-funded rate, and plans for councils to pay providers a ‘fair rate of care’.
The Government deserves credit for resurrecting plans to protect people from catastrophic costs, after three decades of inaction where successive governments failed to grasp the nettle. But six months on from the announcement, there are worrying signs that delivery of the reforms is heading for trouble.
Some of this stems from the Government’s courageous, but controversial, decision to put up National Insurance (NI) to pay for the new health and social care levy. Many in the Government’s own ranks remain uneasy about this manifesto-breaking pledge and the deteriorating fiscal climate is amplifying demands for the NI hike to be abandoned. The reform proposals have already been trimmed to save money, so reducing the benefits to people with lower levels of wealth.
The most ominous noises are coming closer to home from the people charged with implementing the reforms. The Local Government Association (LGA) has warned that if the reforms are under-funded it could tip councils over the financial edge. Inadequate funding would not only derail the proposals but run the risk of destabilising existing services. Work for the County Councils’ Network suggests that the shortfall is at least £854m.
We have been here before. In 2015, a year ahead of the planned introduction of similar proposals, the LGA made almost identical arguments that the pressures on council care budgets were so great reform should be postponed – but not abandoned. This would give councils more time to work out the costs of the changes and allow funding to be redirected into council budgets.
The reforms were delayed, yet not a penny of the £6bn identified by the Treasury found its way to councils’ coffers. Instead, many inside Government, who had never supported a cap, were glad to be offered a pretext to walk away from it.
The issue returned to the long grass, not to reappear until six years later. The case for funding reform had to start all over again. So, while many of the LGA’s concerns are legitimate, calls for delay are high risk.
There are at least three reasons why further delay would not help secure better social care and could even make things worse. The first is to acknowledge that any reforms that bring self-funders into the publicly-funded system will always be tricky to implement, reflecting the fact that for too long too many people have been lost to the system and so little is known about them. It is unlikely that there will ever be a good time to do this.
The second is there is no reason to believe that postponement would, of itself, relieve any of the other pressures afflicting social care – certainly not the workforce problems that require a clear plan in its own right.
The choice before the sector now, as it was in 2015, is not between the current proposals and using the money instead to bolster council budgets. The realpolitik of social care reform is such that a different choice is not on the table.
With the pressure on the public finances intensifying, the risk of creating an opportunity for the Government to row back on its commitments, however limited, are very great.
The third reason is the heavy price of further delay. Had the original reforms gone ahead from 2016, today, hundreds of thousands of people would have benefited from more state support, including people turning 18 with care needs who would now be receiving free support.
In policy terms, a fundamental principle would have been established that the state places a limit on how much people are expected to pay towards the costs of their care. This move – albeit limited – towards universalism, would have brought more people into the public system, thus helping to reserve social care’s dismal trajectory of decline. Instead, social care is in a much worse place than it could have been. Nothing was gained from the 2015 postponement and much has been lost.
Many of the concerns about the current plans are legitimate. More clarity is needed about the detail and the timetable for implementation, but they do not justify making the same mistake of allowing the perfect to be the enemy of the good.
Richard Humphries is a senior adviser to the Health Foundation and Newton Europe