Labour should propose funding social care properly before looking to take over struggling providers, argues Edward Jones

The realities of the pressures on social care were set out on Monday as care users gave evidence to the communities and local government select committee on how funding shortages are effecting their day-to-day lives. The committee’s hearing, part of its inquiry on adult social care, came not long after Jeremy Corbyn used his speech to the 2017 Fabian Society winter conference to set out his stall as the populist, radical alternative to an elitist government. As part of his relaunch, which seeks to emulate the anti-establishment vibe of Donald Trump’s presidential campaign, the Labour leader declared that ‘the people who run Britain have been taking our country for a ride’ and, under his leadership, a Labour government would make a ‘complete break with this rigged system’. Beneath the rhetoric, this speech set out a key policy position on social care.

Social care in England is in crisis. The Care Quality Commissions 2016 ‘State of Care’ report all but called on the government to provide extra funding to social care in England. As Corbyn correctly highlighted, the CQC ‘found that one in five nursing homes did not have enough staff on duty to ensure people received good, safe care’. The report also some understatedly declared that the adult social care sector ‘continues to experience financial strain’; with further efficiencies very hard to achieve without cutting services or staff numbers further, many care providers are likely to go out of business.

Attacking the government for failing to find extra money for the National Health Service or social care in the autumn statement, Corbyn pledged on social care that ‘Labour will not let the elderly down’ and, if necessary, take decisive action to ‘take failed care homes into public ownership’. This is certainly a bold policy proposition and a radical solution to a crisis that has been left unaddressed for far too long.

Corbyn was right to point out the ‘outrage’ of the effects of underfunding in the social care system. In the 2010-15 parliament, the House of Commons Library shows that local authorities who provide the majority of funding for social care saw their budgets cut by 50 per cent. Combined with an ageing population living with more complex care needs, this is contributing to the immense pressure currently being felt by accident and emergency units up and down the country who cannot discharge their patients safely. This is also why, as Corbyn pointed out, a total of 380 care home businesses have been declared insolvent since 2010 – funding is being cut while costs are increasing. Corbyn’s warning that a failure to put the money into social care now puts the system at serious risk of breakdown is timely and should be heeded.

The image of private companies making money out of sub-standard care that leaves people’s parents and grandparents neglected is strongly emotive and will strike a chord with the wider public, as well as the rank and file of the Labour membership. The lack of funding means patients face a lack of alternative providers to turn to if a social care provider is found to be neglecting those in its care – they cannot be fired because there is no one else to turn to. Saying that the public sector will, in such cases, step in, is an apt policy move to deal with a market that is failing. However, in its policy response Labour must be careful to distinguish between the two issues: many social care providers are failing because funding is tight – this needs to be addressed before punitive measures are taken.

The definition of ‘failed’ is absolutely crucial to this policy. Good care home providers, with strong leadership and excellent staff, could be classified as ‘failing’ because the government has left them underfunded and they can no longer balance the books. In such a case, would Labour nationalise the provider? Taking a company which has neglected those in its care due to failed leadership is one thing; taking companies which are failing not due to mismanagement and poor staff but a lack of public funding into public ownership is something else entirely. The CQC made very clear that funding pressure is limiting good quality care. If the policy is the latter, this could lead to government nationalising companies because it has itself starved them of resources. Instead, Labour should propose funding social care properly before looking to take over struggling providers.

However, Labour also needs to spell out what extra money for social care looks like. The Conservative government is giving greater flexibility to local authorities to raise the ‘precept’ for funding specifically for social care, raising extra money from taxing their own residents by up to an additional three per cent per year. The government says that this, in addition to using savings from a New Homes Bonus, will allow an extra £900m for social care, although councils suggests that it will actually be much less. However, this is a regressive system punishing those starved of cash and most in need, as wealthier councils will be able to raise much more money from its more affluent residents. How much, and crucially how, Labour will provide extra funding, remains to be seen. As Karyn Smith MP previously wrote for Progress, to be credible, Labour needs to say how we find the funding. Simply pledging extra money is not enough; a plan is needed to deliver it.

In a debate on the future of the Green Investment Bank, shadow business secretary Clive Lewis told the House of Commons that ‘Is it simply the case ‘public good, private bad’ – that’s what we think on this side.’ Although speaking specifically on the bank, Lewis was much maligned in the press for expressing a simplistic view of the wider economy. How Labour chooses to define ‘failed’ care homes will show a wider perspective on whether the party takes such a broad brush view to the whole economy, or if will develop effective and targeted policy interventions.

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Edward Jones is a healthy policy consultant for GK Strategy. He tweets @EJCJones93

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