Summary:

  • Labour should provide a costed plan, before the upcoming budget, that can reach across parties and be sustained in the long term to ensure the future of service provision and end the crisis of unmet need.
  • Personal care for individuals with critical and substantial needs should be provided free at the point of use, universally, at an immediate cost of around £3.3bn this year rising to £5bn in 2025.
  • Potential funding solutions: – targeting Winter Fuel Allowances and free TV Licences at the less well-off, raising £1.4bn; – a review of prescription charges, radically reducing charges and exceptions, raising £1bn; – a 2% increase in upper earnings limit (£42,000+) national insurance contributions, raising £1.6bn.
  • Create a Fair Service Fund to compensate areas of low wealth but high need with a temporary national surcharge on £2.5m+ banded properties, raising £1.3bn
  • A future Labour manifesto should offer further proposals, providing greater funding and provision for individuals with moderate needs, as suggested by the Baker Report – though other spending priorities must be kept in mind.

1.8m older people do not get the social care they need.  696,500 older people not receiving any of the help that they need to conduct everyday activities.

28% of care homes are currently at risk of financial failure and 77 local authorities reported the closure of at least one care home in only six months of last year.

Large scale provider failure is not a question of if, but when and the human and financial costs of the current system on service users, their families and carers is significant.

The state of social care is critical and nothing but fundamental reform will fix and sustain it.

In this Labour should lead the way and though it may make some individuals feel uncomfortable the approach has to begin by reaching across the aisle.

Social care needs a long term, sustainable funding settlement that will not only address current financial and provisional hardships, but the pressures that will be felt in the near-future.  If a cross-party agreement can be reached then the future care of people in need can be ensured in the long term, free from the fear of sudden retrenchment and instability.

For this, I argue Labour should provide a fully costed, pragmatic plan for social care reform that can reach across parties before the upcoming budget, as well as offering its own more expansive proposal at future elections.

Clearly increasing the provision and the quality of services must be at the heart of any changes in social care.  Unfortunately, since the recent funding proposals of the Dilnot Report (2011) and the Barker Report (2014) the condition of the NHS and social care has deteriorated further.

Proposals which already fell short of providing universal health and social care, on equal terms, seem more elusive than at the time of their writing with new challenges and crises arising that require the very same funding that expanded services would seek to gain.  Despite this, the recommendations of the Baker Report are not unattainable.

The Reform

As such, it should be the policy of the Labour Party to provide free and universal social care to anyone with critical and substantial needs.  This is neither ideological or idealistic but a realistic, positive, step in the right direction that can improve provision and service quality.  What’s more it can be achieved imminently, so long as there is political will, across parties, to achieve it.

This settlement can be sustained in the long term – as it must be.  The 2014 Baker Report projected that this would cost £3.23bn more than the current system in 2017 rising to £4.99bn per year in 2025 – though it is likely that these projections are slightly conservative given the recent downturn in the state of health and social care.

Funding the Reform

‘Hard choices’ will have to be made to fund this new settlement.  For example targeting the Winter Fuel Allowances and Free Television Licences to those eligible for Pension Credit could provide £1.4bn.  Although this may sit uncomfortably with some this would, in effect, be a progressive move, as wealthier older people would be cross-subsidising the care costs of the less well off in substantial or critical need of care.

Currently individuals earning over £42,000 only pay 2% in national insurance contributions on their earnings over £42,000Increasing this to only 4% could raise around £1.6bn for health and social care.

A review and reformation of prescription charges could raise around £1bn every year by reducing the basic charge for all NHS patients from £8.40 to £2.50 whilst abolishing exemptions and maintaining a cap of £104 per year.  A further billion pounds could be raised for every pound the charge was raised above £2.50 .

Labour should take these proposals to the Commons as the basis for cross-party negotiations to finally end the crisis within social care and establish a sustainable social care system that tackles the epidemic of unmet need.

Creating a Fair Service Fund

The sole reliance on locally raised revenue to fund local authority services perpetuates the Inverse Care Law in social care.  Local authorities in less affluent areas – who tend to have higher levels of need – have a much lower council tax base with which to raise revenue and provide services.

What’s more, as the Director of the Institute for Fiscal Studies, Paul Johnson, has stated Council Tax is ‘deliberately regressive in its design’ – that is it takes 8% of the income of the poorest, whilst only costing the richest 2% of their cash.

To rectify this, a comprehensive review of wealth and property taxation is required by central government in the medium term.

In the interim, Labour should argue for the establishment of a Fair Service Fund, to distribute nationally held revenues to local authorities with high levels of social care need, but low levels of wealth with which to satisfy them – functioning much like the Migration Impact Fund before its abolition.

This could be raised through, supplementary to council tax, nationally set bandings of property taxation on high value properties, as a temporary measure until a comprehensive reform of property taxation takes place.  Annual charges of £3,500 for properties worth between £2.5m and £3m, £5,000 for properties worth £3m to £4m, and £9,000 for properties worth between £4m and £5m could raise over £1.3bn.

Once a revaluation and reform of local property taxation has taken place, more accurate and progressive bandings could be placed, than those which currently exist, and the funding mechanism of the Fair Service Fund can itself be changed.

This could not only help to end the Inverse Care Law within social care, but to tackle regional inequities and play a small part in reconnecting Labour with the ‘left behind’ communities that have received very little investment in recent decades, who are increasingly turning their backs on the Party.

The state of social care is critical.  Labour cannot be content with criticising the Government’s failure and inaction whilst passive itself.  Virtue signalling and commentating won’t do – we need real policies and credibility.

There are millions of people that desperately need us to make a difference.  Let’s start now.

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