3. A new settlement for health and social care

The issue

The 1948 settlement – which established the NHS as a universal service, free at the point of use, and social care as a separately funded, means-tested service – is no longer fit for purpose. With so many people living longer with a mixture of needs that cross the boundaries of health and social care, the historic divide between the two systems is not sustainable. 

The independent Commission on the Future of Health and Social Care in England in England, chaired by economist Kate Barker, was established by The King’s Fund to consider the case for change and how to ensure adequate funding to meet future needs. Its final report set out a compelling vision for a new settlement that better meets 21st century needs.

The Barker Commission’s central recommendation was to simplify fragmented commissioning arrangements by moving to a single, ring-fenced budget for health and social care, and a single local commissioner of services. Entitlements to social care would be fairer, more consistent and generous, while entitlements to NHS services would remain unchanged. It suggested a radical package of measures to pay for this including tax reforms, limiting some universal benefits paid to older people and changes to prescription charges.

What must be done?

Responding to the challenge set out by the Barker Commission and delivering a new settlement for health and social care should be a top priority.

  • As a first step, the government should move quickly to develop a framework to enable all local areas to move to a single commissioner of health and social care by the end of the parliament. The detailed arrangements for delivering this should be left to local areas to agree.
  • More generous entitlements to social care should be phased in over time, as the Barker Commission recommended. This should be a key priority once the public finances are on a stable footing, with the aim of making some progress before the end of the parliament.
  • In the long term, the government should aim to bring public spending on health and social care up to 11–12 per cent of GDP – the same proportion currently spent by countries such as France, Canada and the Netherlands on health alone.
  • As the Barker Commission argued, the bulk of the additional funding needed to pay for a new settlement should come from the public purse. This raises difficult choices, so we urge the government to initiate a public debate about how to ensure adequate resources to meet future needs.