Raising taxes to pay for social care: what will the consequences be?

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It's now a full two years since the Prime Minister stood on the steps of Downing Street and promised to ‘fix social care’. We’re still waiting for the plan he said was ready back then. But what to read into the more recent media reports that a decision is close because the government has finally agreed how to pay for reform? Might the moment finally come?

If the rumours are to be believed, the new Secretary of State for Health and Social Care and the Chancellor have persuaded the Prime Minister that social care reform requires a tax rise to fund it. This would be arguably the first time in more than a decade that HM Treasury seems to have got on board and accepted the need to reform. We shouldn’t get too carried away though as it doesn’t mean that the two big hitters in Cabinet agree on everything to do with social care. Even if they have persuaded the Prime Minister to accept a tax rise (and therefore break a manifesto pledge), I’m sure there will still be very healthy debates about the overall cost and ambition for the reforms.

Decisions to increase taxes are never easy ones for government to make, and even more so for social care when the public understanding of the existing system is very poor, but let’s assume the reported agreement that there should be a tax rise to pay for social care is correct (and let’s not worry, for now, about which tax they choose to raise). 

If there was such a public commitment to a tax rise to support social care, what might the consequences be?

This could be one way to make sure both the existing means-tested system has more funding to deliver the quality and vision for social care we all want to see, and to fund a reformed offer for self-funders.

It would bring a genuinely new source of funding into the adult social care system and that can only be a good thing for the system and those who depend on it. With demographic changes, and the funding cuts of the past decade, we know the system is starved of cash. This could be one way to make sure both the existing means-tested system has more funding to deliver the quality and vision for social care we all want to see, and to fund a reformed offer for self-funders.

Not only would a tax increase bring in new money, but any reform package it funds will have to be generous enough for the public to consider it ‘worth’ it. Back in the 2000s, there was a 1p increase in National Insurance to fund a ‘better NHS’. The resulting ‘better NHS’ was a generational improvement in waiting lists, major investments in key causes of death such as cancer and heart disease, and improvements in mental health. The deal with the public wasn’t just to tinker at the edges – more money, contributed collectively, delivered significant improvements. The improvements in waiting times could be counted in national statistics, and seen and felt in personal experiences of the NHS.

For social care, that would mean an injection of funds that demonstrably both improves the quality of and access to the current system, and delivers wider reforms, such as a new deal with self-funders. Given how poorly understood the current social care system is by most of the public, it will take quite a concerted communications effort to explain what will be better, and deliver it. But it should mean that the ambition will need to be high to help the public see what they are getting in return and to consider it ‘fair deal’ in return for higher taxation. For example, a cap on costs – long thought to be the preference of the PM for the self-funder question – would need to be set at a level low enough to protect significant numbers of people from the fear and uncertainty of high costs of long stays in residential care, or a new means-test threshold would have to be much higher than the £23,500 of today to ensure that substantially more people are eligible for free or subsidised care.

Done poorly, increased scrutiny and performance accountability could shift social care into the equivalent of a widget production line, with the national focus on what can be counted rather than what matters most to people who use care and support.

With the additional funding will come significantly greater expectation of more transparency, performance and scrutiny as the other side of the deal with central government – in effect HM Treasury saying it will give the sector more funds but it needs to see the value the taxpayer gets from that money. In and of itself, that doesn’t necessarily need to be a bad part of the deal. It’s reasonable to think that, in return for many billions of pounds, taxpayers will know what social care is delivering. But how this is done is key. Social care is a vast array of services and what ‘it’ is is very personal to the individuals living their lives with care and support. It doesn’t necessarily match well to a simple approach of counting beans. Done poorly, increased scrutiny and performance accountability could shift social care into the equivalent of a widget production line, with the national focus on what can be counted rather than what matters most to people who use care and support. This would be particularly worrying given a lot of what is counted is at the interface between social care and the NHS – too much focus on delayed transfers of carefrom hospitals, for example, fails to appreciate the breadth of care and support provided to working-age adults. With careful thought it should be possible to design a system of scrutiny and accountability that supports the person- and community-centred principles of social care. But recent history with the Better Care Fund, for example, suggests it will take a concerted effort to do this in the right way.

Overall, the signs of agreement on a tax rise to pay for social care should be a good thing for those who need care and support to live their lives, both now and in the future. It would move the debate on from whether to reform to how to do it. Finally.

Comments

Julia Michell

Position
Writer,
Comment date
31 August 2021

If the system were flexible whereby the cost could be shared or indeed the cost of private care a little less, £30 to £40 would not hit so hard on the pocket.

Helen Jones

Position
Caregiver,
Organisation
Unpaid lackie
Comment date
14 August 2021

Local CCGs have now withdrawn basic services like removal of ear wax which blights the lives firstly of those with Hypothyroid and then when hypothyroid causes deafness and need for hearing aids yet again these cause a build up of ear wax ....as any audiologist will tell you ....yet these patients and anyone forced to rely on hearing aids will tell you they are now somehow to find £65 to £80 for a private ear wax removal at the very GP surgury who always did it for free on NHS

No amount of care by the patient can stop or prevent or deal with this issue and no consideration of the economic impacts for those reliant on totally inadequate old state pension has been given any consideration whatever

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