27 February 2017 – a historic Sunday for the Welfare State?

27 February 2017

First, please see my article in the Telegraph today on the need to get to the heart of the matter on the questions of NHS and social care. It drew heavily on our recent research on Sustainability and Transformation Plans. Key quote from the article:

“A great deal of the current problem lies in the fact that no one in the NHS is truly in charge of taxpayers’ money – or rather, too many people are. In England, 209 health bodies and 152 local authorities all spend NHS and care budgets according to different agendas. It is no wonder the service finds it hard to make decisions or to plan intelligently for the future.”

With more space, I would have given more evidence on the fact that the NHS is changing only at a glacial pace. One reform metric, for example, is the proportion of A&E attendances that take place in locations other than major A&E units. That percentage has stayed unchanged at around 30 per cent for the last five years. Reform success would have seen that proportion rise, alongside a fall in overall A&E attendances.

Second, let’s say a little more about the Government’s briefing on social care in the Sunday Times yesterday, which does seem to me to be an important moment. The Government has in mind a two-stage plan: some extra funds for social care in the Budget, paid for from normal tax revenues; and then, a complete review of how social care is paid for, with all options on the table. The idea of immediate interest seems to be is the social insurance models of Japan and Germany, where citizens pay a small proportion of their income into care insurance funds, from which all citizens can draw if needs be.

Reform is developing its ideas on social care funding, so watch this space. Whatever the specific ideas, however, it is a very big deal when any government decides to open a debate on the funding of the welfare state, and implicitly suggests that it wants a solution that it is not based on traditional taxation.

The last review on such a scale was probably the Turner Commission on pensions, which published in December 2002. The Turner Commission also settled on a social insurance type system, via auto-enrolment.

The last question is whether the Government can have a debate on financing social care without opening a similar debate on healthcare. Tony Blair’s Government did of course hold a review on how to fund the NHS, under Sir Derek Wanless, but gave the reviewers very little options to choose anything other than taxation. It could be different this time.

Andrew Haldenby, Director, Reform

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