Kate Barker offers radical prescription for care

23 Sep 14

All but the poorest pensioners could be asked to contribute more under proposals for the biggest shake-up to the way health and social care is paid for since the NHS was founded

The debate on how we pay for social care continues to evolve. It’s now more than three years since economist Andrew Dilnot delivered a highly praised report on how social care might be funded. His conclusions attracted significant consensus, and many have been taken forward in the Care Act, most of which kicks in next year.

However, Dilnot is not the end of the story. The King’s Fund think-tank has also been working on this area. In June last year it established an independent expert commission chaired by Dame Kate Barker, a former member of the Bank of England’s Monetary Policy Committee. It was charged with looking again at the postwar settlement for health and social care, to consider whether it remains fit for purpose and how it might be remodelled to meet future needs.

The Commission on the Future of Health and Social Care in England’s conclusions were published in early September and called for a ‘radical reshaping’ of the two parallel systems so they focus more on the needs of users and provide a simpler and clearer pathway through the system.

‘We have concluded, as others have before us, that our system is not fit to provide the kind of care we need and want,’ said Barker at the report’s launch.

‘We proposed radical change, greater than any since 1948, that would bring immense benefit to people who fall into the cracks between means-tested social care and a free NHS. This includes people at the end of life and those with dementia or other conditions where too often there is a conflict about who pays at the expense of what people need.’

Among the report’s specific recommendations is the call to move to a single ringfenced budget for health and social care, with a single commissioner determining local spending priorities. 

People with ‘critical’ social care needs should have these met by services that are free at the point of use. Over time, this should be extended to people with ‘substantial’ needs and, by 2025, to those with ‘moderate’ needs.

Extra funds would be generated by taking away free TV licenses and the winter fuel payments from all but the poorest pensioners, and requiring people working past state pension age to pay National Insurance at a rate of 6%. As the more generous elements of the new care settlement were phased in, a 1% increase in NI should be imposed on people over the age of 40 and on those earning more than £42,000 a year. 

Charging should also be extended to the accommodation costs of people in receipt of NHS continuing care, although charging more widely was ruled out.

The removal of pensioner benefits, a rise in NI for certain groups, the introduction of an element of charging for some NHS services – some might say the commission’s recommendations are politically toxic. Indeed, the charity Age UK – while broadly welcoming the commission’s recommendations – also sounded a note of caution.

‘We feel bound to point out that taken together, the commission’s proposals would constitute quite a big hit on the incomes of many older people,’ said charity director Caroline Abrahams.

‘We worry especially about the potential impact on older people with modest means, who sit just above the poverty line. 

‘In addition, we think many older people will question how good a deal it is to be asked to exchange the certainty of more money today for the possibility of better care tomorrow.’

The commissioners themselves acknowledge that their deliberations have been difficult, and will require some political courage to implement.

‘We came to the conclusion that there are quite a lot of pensioners now who are better off than they were 20 or 30 years ago,’ Lord Michael Bichard, chair of the Social Care Institute, tells Public Finance.

‘In a difficult financial climate you’ve got to start looking at that and we want to protect poor pensioners, but we think there are some pensioners who could be making more of a contribution to this sort of change. 

‘This is also an issue of inter-generational equity, the question about whether younger people are being asked to carry too much of a burden in terms of public services, and there ought to be a bit of a rebalancing. I don’t think anyone on the commission found it easy to defend winter fuel payments for very wealthy people.’

Increases in NI contributions for older workers are also ‘politically difficult’, he agrees, but adds: ‘Again, it’s that equity between generations and we wouldn’t be the only country that’s imposed some additional charge on people past 40 for the additional care that will be required.’

His fellow commissioner, Julian Le Grand, professor of social policy at the London School of Economics, says the plan for charging is not that radical.

He also dismisses suggestions that the recommendations would usher in charges for other NHS services.

‘We don’t think there’s much scope for increased charging for NHS care and we don’t think the argument has been made.

‘When you look at NHS continuing care, which is the extreme version of care, people don’t have to pay for [their] accommodation costs, but do for residential social care costs, we thought [equalising the charging] would be the sensible way to go.’

Commissioners are hopeful that, given their systematic and costed recommendations, the Barker commission will be taken seriously by ministers, even in the current austerity climate.

Austerity is ‘clearly a worry’, Le Grand admits, but he notes that the commission is recommending its proposals are phased in as the economy improves.

He adds: ‘We are now coming to the end of the austerity period. Had we proposed this in 2009 or 2010 I think it would have been knocked out of court, but now I think it’s more realistic.’

Bichard says the tough fiscal climate doesn’t obviate the need for the reform, or change the fact that elderly social care costs already exist and need to be met by someone.

‘What we’re saying is “yes, there will be hard choices to make”, but if you look at the prudent projections of the growth of gross domestic product then there will be money available during the next 15 years to make available to public services. 

‘The money will be spent, the question is where is it spent. We think that it should be making more social care free at the point of delivery. It is a scandal in this country that if you have cancer all of your care and support needs are met by the state and if you have dementia then they’re not.’

The commission is clear that its recommendations do not represent the only way forward for the government and that other choices could be just as valid. But doing nothing, the commissioners say, is not an option.


  • Vivienne Russell
    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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