The government could raise £20bn for a ‘social care premium’ by adding an extra penny paid in the pound over the lifetime of the next parliament, writes Steven Duckworth
Since we ushered in the new year eight weeks ago, two topics have dominated the news: Donald Trump and the government’s ongoing attempts to develop an exit strategy from the European Union. Consistently the third order story has been the problems – the word crisis appears overblown, but may be legitimate – facing the United Kingdom’s health and social care system; opinion polls confirm that it is a serious concern for the public too; the health and social care system faces massive challenges. Funding per capita for care is falling slightly against a backdrop of increasingly complex needs. Councils have had budgets cuts – and have little leeway to increase local taxes – and National Health Service providers (mainly hospital trusts) are running budget deficits and clinical commissioning groups are no longer in a position to bail them out. Significant problems lie ahead in the absence of extra cash.
So is there a way forward from this? First, the point should be made that new money alone will not avert future problems in the health and social care system. The lack of integration between the health and socials worlds hampers both. England’s secondary care system is 50 years old – Enoch Powell’s dream of a district general hospital in every town providing every service – and not coping well with modern demands and the model of primary care (GPs and community pharmacists) is older still. Along with extra funding, the care system needs to become focused on quality, safety and cost, in order to make it a high value model of care delivery. Much of this reform is being written into the 44 sustainable and transformation plans being developed by the NHS across England. But reform costs money, transitions from one model of care to another can produce significant capital requirements and added transactional costs.
General taxation offers the most obvious and equitable way of getting extra funding into the health and social care system. However tax rises remain politically toxic and no one should want to put low earners back into paying tax, while higher marginal rates confer little extra income for the government. Grand schemes for the taxing of multinational companies would need the sort of tax harmonisation and scrutiny at an international level that the UK appears to be turning its face away from. One option that could be explored is the introduction of a hypothecated tax for health and social care.
An extra penny paid in the pound over the lifetime of the next parliament could raise about £20bn, a new government should undertake to make this time limited to five years and indicate that £12bn of the new ‘care premium’ would go into updating the social care system and the remainder would go specifically to NHS transformation under the auspices of STPs and be overseen by NHS England and the provider regulator NHS Improvement. Scotland, Wales and Northern Ireland would receive similar, pro rata amounts, sent to the devolved parliaments directly.
A care premium would have one major benefit and one major downside, however. Linking the payment of tax to the transformations plans for health and social care would have the advantage of creating a population that had a direct interest into how these plans developed. A body of citizens with a stake in making these plans successful would be hugely positive. One downside of the premium is related in part to the main advantage; an electorate used to having a direct link to how government programs are funded might want to exert further influence. Not in itself a bad thing, but there may be nervous discussions about how to take forward the funding of international aid for instance.
Regardless of this all political parties should start to talk seriously about the opportunities a care premium could offer, but it can only do this if they prove themselves serious about the reform of health and social care, particularly by getting behind the development and implementation of STPs. In no way are these plans perfect and they generally need more work, especially around workforce issues and the clinical case for change. That said the current government is running out of road in relation to health and social care policy, all parties must update its thinking and show the public an alternative way forward.
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Steven Duckworth is a Labour party member. He tweets at @FoxHedgeHog
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