Ever since his first speech outside Downing Street as Prime Minister, Boris Johnson has promised to solve the social care crisis, ‘once and for all with a clear plan we have prepared’. On Tuesday, after months of constant delays, we saw that plan.
Though short on a huge number of details, the Prime Minister promised to introduce a ceiling for how much someone will have to spend on their own care of £86,000, as well as a gradual amount of means-tested support for those with less than £100,000 in assets like their home, bank accounts, or pension.
All of this will be funded by a 1.25 percentage point rise in National Insurance rates, which will generate around £36 billion over the next three years. Of that, £5.4 billion is for social care in England, and £16 billion is for NHS England funding, while £8.9 billion is set aside as for the ‘health-based Covid response’ and £5.7 billion for health and social care in the devolved nations.
From the way it’s funded, the amount being allocated to social care, and the reform policies themselves, the plan looks to be completely broken from the start.
First, it’s really important to understand what we’re talking about when we refer to the ‘social care crisis’, as it’s essentially a huge array of different systemic issues rolled into one. To begin with, there’s the issue of reduced quality and lack of access to care – nearly 1.5 million people aged over 65 don’t receive the care and support they need, and just this summer, close to 75,000 disabled and older people and carers were waiting for help in England alone.
Then there’s the staffing crisis: there was already a shortfall of roughly 122,000 care workers before the devastating impact of the pandemic. That shortage creates an array of knock-on effects, like staff overwork, an inability to provide care to those in need, and chronic burnout. When mixed with the already infamously low wages (care workers earn on average £8.50 an hour and a quarter are underemployed on precarious zero-hour contracts) that’s meant some 149,000 care staff left the care sector in 2019-2020.
On top of that, there’s the need to reverse the impact austerity and cuts to local authorities had – social care spending is now £700 million lower than it was in 2010 in real terms, despite a constant increase in demand. And finally, there’s the issue of the exorbitant cost of care. Without a ceiling on the amount people can spend on social care, every year some 17,000 elderly are forced to sell their homes to fund their own care.
Of all of those issues, the newest reforms only really try to address the final point, by setting a ceiling for the most you can pay for care and offering support for the most in need. Even there they fall short, though, with experts telling me that the £86,000 ceiling is basically as high a ceiling as you can go for, and that in poorer areas with lower house prices outside London, many may still be forced to sell their homes to pay for care.
On the other issues, the new programme does little to nothing. Take staffing levels: it only sets aside around £500 million for staffing—just over £100 a year per person working in social care—and then it’s only for ‘training’. Not only would that fail to increase pay and conditions to a level to entice more people to work in care, it wouldn’t even plug the increasing numbers of carers leaving industry each and every month.
The way the plan is being funded is also illogical and unfair. For one, the vast majority of the money isn’t going to social care but to the NHS. While that money for healthcare is desperately needed—14 million people could be left on waiting lists for treatment by next autumn—it isn’t enough. NHS leaders have estimated a minimum of £10 billion a year will be needed to pay for the impact of the pandemic – much more than this policy has earmarked for the NHS.
Even the money they have offered is less than it seems, as it is said to also include the costs of paying for ongoing pandemic spending on programmes like test and trace (previously funded by emergency borrowing) across future years. It leaves social care with just £5.4 billion across three years to solve this huge array of problems. Simply put, the amount being generated by this National Insurance hike simply isn’t enough to catch up the NHS from the devastating impact of Covid while curing the social care system of its countless ills.
And raising that money through a 1.25 percent levy on National Insurance rates means those least able to afford it are being called on to carry the heaviest burden. Unlike just about any tax in our country, National Insurance rates literally go down the more money you earn. The rate of National Insurance drops to 2.5 percent for income over that £50,000 (soon to be 3.75 percent after the changes), while those earning under that threshold face paying 13.75 percent. Now young university graduates earning £27,250 or more a year face paying a 52 percent effective tax rate.
Meanwhile, those who make their money as landlords, from vast investment portfolios, or who have already retired, will in most cases pay nothing. Simply put, those with wealth and capital are being subsidised by those without it. Nothing better sums up the inequality at the core of the proposals than the fact that the dwindling number of care workers won’t receive a pay rise, but are facing paying even more of their income in taxes.
A lot of people have jumped to defend these new proposals, arguing that ‘something is better than nothing’. But that argument only works if no other ideas are or have been on the table – and the fact is there are so many ways this could and should be done.
Take the proposals now being put forward by Andy Burnham. His plan (similar to one he tried to pass in 2010 when Gordon Brown was Prime Minister, as well as one proposed under Jeremy Corbyn) would see social care reshaped to be provided on NHS quality and terms though a National Care Service, free at the point of use for the vast majority of users. That would then be funded by 10 percent levy on all estates, as well as taxes on overall accrued wealth.
The wealth tax alone, even set as low as 1 percent, could generate £260 billion in five years by some estimates. Think tanks like the IPPR have also highlighted that by equalising the rate of capital gains tax (i.e. taxes on money made from selling assets like real estate or stocks and bonds) with the general income tax on work, around £90 billion could be gained for the Treasury. That would not only give us far more money to properly reform health and social care – it would do it without making care workers themselves foot the bill.
As much as politicians may try, this issue isn’t going away. Due to a mixture of falling birth rates and longer life expectancy, the share of people over the age of 65 has risen from 10.8 percent in 1950 to 18.5 percent in 2019. Demand for social care both for the elderly and the young has risen heavily. One industry leader previously described the growing crisis in social care to me as ‘the next climate change’ – an existential problem for society and our future.
The thing about existential problems is that by their nature they should make you rethink the way your politics, society, and economy are structured. What is often forgotten about our social care system is that it has been left largely unchanged and unreformed for decades. In the 1940s, the NHS exploded onto the scene, promising to universalise the best possible care, free at the point of use. But social care never got the same revolutionary promise or focus. Now its own ‘NHS moment’ is sorely needed.