The whole picture: How to fund integrated health and social care

Mary Riddell

The NHS Act, passed in 1946, “lifted the shadow of fear from the homes of millions”, according to Nye Bevan, the creator of the modern health service. That shadow has fallen again, and this time round the lives most darkened are those of the elderly denied the basic care they need. Social care, covered by the National Assistance Act, has always been a Cinderella service.

At the same time, the NHS is on an unsustainable course, with demand rising and budgets falling in the light of the 4 per cent productivity savings required every year by government. The undisputed solution advanced by Andy Burnham and Liz Kendall is ‘whole person care’, or a fully integrated service that would cater for physical, mental and social needs and save money by helping people live at home rather than being warehoused in hospital.

How should an amalgamated service with a fully merged budget work, and how should it be paid for? The guiding principle should be that the individual, not the institution, should be at the heart of care. Each elderly person (as Labour recognises) should have a single advocate who is responsible for overseeing and co-ordinating all their care, so ending the current bureaucratic nightmare. Better preventative care, home adaptations, increased use of new technology, a minimum of 30 minutes for domestic visits and better pay and conditions for carers would be a start.

But even such modest changes would have big funding implications. How to weld a tax-funded health service, free at the point of use, with a skeletal operation in which an individual bears a large part of the cost (few will live long enough to reach the government spending cap of £72,000) is the greater challenge facing Labour.

An estate tax has (regrettably) been deemed a non-starter, and Ed Balls has ruled out an earmarked NHS tax. Very probably, Labour will have to reconsider that veto when (not if) the service reaches crisis point. But the more immediate problem is how to fund social care. Balls has also (and with Burnham’s certain blessing) ruled out an across-the-board 1p rise in National Insurance, arguing that the costs would fall on a working age population who have suffered worst in the recession.

That leaves Labour two courses. Either it can compel elderly people to take out social insurance (rather than the failed voluntary version recommended by Andrew Dilnot). Or it can follow the recommendations of the Barker Commission for the King’s Fund and do some or all of the following: widen charges for prescriptions (saving up to £1bn), limit free TV licences and winter fuel payments for older people to those on pension credit (£1.4bn); end pensioners’ exemption from National Insurance, charging 6 per cent rather than the standard 12 per cent.

Labour could go further – and it should. As the Fabians have calculated, levying full NI on older people’s total taxable incomes could raise £8bn, even if you protected those on low incomes. Any bid to recoup money from the wealthier elderly will raise protests (not least from the grey vote), but there is no fairer option. The relief of fear, misery and suffering should drive any self-respecting Labour government.


  1. George Talbot

    Voters may like fully integrating health and social care but they differ as chalk and cheese. And when I challenged integration on Funding Social Care on Your Britain, January 2013, I could quote a recent speech to the King’s Fund in which Andy Burnham said that even fully integrated care and shifts from hospital to home would not fund personal care. Neither is now on Labour’s website. Then the King’s Fund admitted that integration brought benefits and costs.

    I recalled that GDP had doubled over the last three decades while women were becoming surrogate men and encouraged into paid work with everyone working harder, often for less, especially women! And I noted a worrying report on outsourcing on Radio 4, 14th January; still at Plenty of fear for those on zero hours contracts!

    Mary Riddell recalls that Nye Bevan created the NHS to end fear. But Attlee’s socialist government hoped to lessen fear by nationalising much of industry and the Bank of England. It funded this despite high debts and kept capital in the UK. Yet this article ignores the resources growing GDP should produce that could fund the NHS and provide good wages because it accepts false claims about the budget deficit.

    So We Own It challenges privatisation. The NH Action Party is fielding candidates to defend the basic NHS values. And Peter Roderick has just presented a bill to reinstate it to the NHS Consultants’ Association. But where is a Fabian vision of an essentially socialist NHS such as Bevan created?

  2. Robert Price

    Labour could tax the rich if it wished to. We currently have one of the most hated governments in modern history. If you took the time to read this brief paper you might realise why.

    Yet despite this, Labour don’t have the commanding lead in the polls they could have. I remember the Brown bounce, and how it disappeared as the person who everyone thought was truly left wing but prevented from being so by Tony Blair, became another Blair. It seems just from recent comments by the Fabians that they intend for Ed Miliband to follow this same path; the path of right wing policies with left wing rhetoric. It’s what will prevent victory next year.

    Bizarrely enough it is not the racism or right wing policies which are aiding UKIP. It’s the left wing rhetoric linked to the public ignorance of what their policies actually are. With the Green Party it is actually the knowledge of their left wing policies in the environment described in the paper posted above; which I urge the Fabians, who are meant to love knowledge and debate, to read.

    It’s the almost stubborn effort not to offer true change of the kind offered by something like the universal basic income which will lead this country to another five years of pain under a Conservative/ UKIP government. For many, they simply wont survive that period. It is also what leads a large number of former Labour Party members to now offer their support to the only left wing party, the Green Party.

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