Mr Hammond's big picture is admirable - now let's see the fine print


By Rob Whiteman, Chief Executive, CIPFA

This article was first published by the Health Service Journal

The social care crisis has dominated political debate over the past few months. Politicians from across the spectrum have been calling for social care to be put on a sustainable financial footing, and so it is a relief that, after all this talk, the chancellor has announced some action.

Investment for health and social care

The chancellor has responded to the immediate pressures on the health and social care system by investing an extra £2.2bn over three years in social care and by increasing the NHS capital budget which underpins the proposals in sustainability and transformation plans (STPs). Local authorities and healthcare partners will await clarification on what conditions apply and how this boost to funding will be accessed and distributed, but the headline is clearly a positive one.

The increases in capital are welcome, but – as they add just 2.5% to the £4.6bn total NHS capital spend – not a game changer. As such, the addition won’t be enough to address the concern that the developing STPs don’t yet have enough up front investment in place to assure their delivery. Moreover, the recognition that some STPs are ready to move to the investment stage, but others are not, is significant. What process will be followed to decide which STPs are at which stage? And, while it may be right to accept the reality of ‘two speed STPs’, the savings streams due over 2017–20 are all set at full speed ahead, so this does appear to acknowledge a problem. If some STPs are not ready to invest in the transformational changes needed, how can they be ready to deliver their share of the £20bn savings target?

The social care increase effectively gives local care systems in full from 2017 the extra spending power of £1.5bn which was to be provided incrementally by 2020 through the improved Better Care Fund. This is exactly what CIPFA called for as the minimum assistance needed. That said, it won’t be enough to plug the full social care funding gap, and it is only a short-term response – so it is equally encouraging that the government has signalled its intention to address longer-term funding concerns for social care through a Green Paper.

The Green Paper

The Green Paper signals a meaningful commitment to ensuring there is a sustainable means in place to meet the future needs of an ageing population. It will, of course, be a very tough nut to crack. This government isn’t the first to apply the nutcracker, but does need to make this the last such application – just as this is the last Spring Budget. 

CIPFA believes that the Green Paper should explore linking NHS and social care funding to a minimum share of GDP, which would aid long-term planning by protecting funding from short term shifts in the political climate. This ‘golden ratio’ would enable service leaders to plan sufficiently for the long term and invest in transformation and prevention – with both being currently put on the back burner as funding is used to sort historic deficits.

However, it is a concern that the chancellor has already blocked consideration of one radical option, that of using the inheritance on estates (unhelpfully nicknamed the ‘death tax’). It would be preferable to keep all options open, however distasteful they may be for some. The truth is that no method of sorting the long-term sustainability of the health and social care system will please every interest group. Moreover, any solution is likely to require a greater contribution from taxpayers and politicians will fear a public backlash from that too. It is hugely important, then, that there is sufficient public engagement with social care issues to ensure people are on board.

The chancellor has made a good start in giving short-term assistance and recognising the need for a long-term solution. Now comes the hard part: turning the right intentions into successful action. 

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