By Rob Whiteman, Chief Executive, CIPFA
This article was previously published on HSJ.
In the weeks leading up to the Autumn Statement, think tanks, many politicians on a cross-party basis, NHS organisations and councils were clear that the government must do something to relieve the pressures on social care and health systems. However, in the 'post-truth' environment where the views of experts are not wanted, such advice was roundly ignored. Instead we heard during PMQs before the Autumn Statement that social care is well funded and health is receiving record investment.
For social care the position is near critical. Councils have made substantial productivity gains for two decades, and six years of austerity has seen the spending power of local authorities reduced by 40%. Social services have been squeezed so substantially that the sector is now at tipping point. It is no surprise that the number of vulnerable people being helped by local authorities is rapidly decreasing, despite the increase in those who require it.
Like many other commentators, CIPFA believes that the government must commit to a 'golden ratio' linking spend on health and care to at least 10% of GDP as a means of planned sustainability. The evidence of decades is that real-terms spending fluctuates; and that when troughs are corrected, often late in the day owing to growing public pressures, we see the proportion of spend on reactive services further rise and the proportionate share of preventive spend further fall. In other words, using this moment in time as an example, we would be better to see the government invest now in a range of preventive services – public health, mental health, social care and primary care – than a similar sum be used for reactive bailouts later in this parliament when public concern at the strains on their services reaches a political crescendo. That the chancellor failed to address the urgent needs of health and social care may in time define this government as much as Brexit for a public that was promised more resources for the NHS if we leave the EU.
If the NHS would best receive a planned injection of resources now rather than a reactive settlement later, for social care there must be an acceptance that the Better Care Fund and the social care precept won’t realistically bridge the gap as promised. Possibly the government held back announcements in the Autumn Statement and will act at the time of the local authority settlement next month. But the social care precept in particular has been criticised as a less than ideal way to make the sector’s finances healthier. This is because it mostly benefits areas that are able to raise more in council tax, which are often regions with the lowest amount of social care need. County councils, for example, with huge children’s and adult care pressures are often using reserves without replenishment in a way not sustainable for much longer; with some potentially facing an illegal deficit next year. Funding levels are being further compromised by government’s plans to increase the National Living Wage. Although it will be a welcomed boost to living standards, the increase will cause the costs of care to rise, and without any match in funding.
Finally, success needs the two tectonic plates of the NHS to work together. NHSI will drive 'technical productivity' changes where efficiency and grip reduce costs; but equally the system will ultimately never learn to self-balance unless NHS England’s leadership of sustainability and transformation plans (STPs) for the first time in NHS history builds medium-term 'allocative productivity' where resources are spent in the right place to achieve optimal value for money from the overall system. System leadership, though, needs a newer set of skills, collaborations, metrics and culture than the pseudo-market of the last 15 years. With energy and commitment this will take time to deliver; especially at first by NHSI and NHSE not giving mixed messages to organisations that are used to vertical command during the new horizontal working they must establish on the ground.
I hope the prime minister, chancellor and secretary of state see that building sustainability and transformation is not just for Christmas!