Responding to COVID-19: insight, support and guidance
How sharply do the parties differentiate themselves in their manifesto proposals for the health and social care system? Looking at the parties that have been in power this century, all three manifestos are full of warm words asserting their support for the NHS and claiming services would get better on their watch. Beyond that, one might helpfully distinguish two main areas of finance-related policy intent.
A minimum extra "£8bn in real terms over the next five years". Given that the current government is halfway through a plan that commits £8bn over the five year period 2015–2020, that is likely to mean £4bn additional to current plans.
It may be that the proposed changes to charging could enable gross social care spending to rise, but the manifesto does not claim that.
No additional commitments are apparent, though there are undertakings to deliver improved service levels.
An extra £6bn annually ("£30bn over the next Parliament") over current plans to be committed to the NHS and public health (£250m of that total). This is before taking account of the abolition of hospital parking charges, which will account for £120m, and a commitment to revisit STPs to "focus on patient need rather than available finances", which could significantly reduce savings and hence the spending power freed up.
There is also what appears to be a further £3bn recurring increase to fund the move to a new ‘National Care Service’, bringing health and social care together and implementing the Care Act’s £72,000 (2014 prices) cap on social care costs. The extra £9bn forms part of wider spending commitments and proposed funding sources, the viability of which has been questioned.
Also mentioned are uncosted commitments to pay more to NHS staff and carers, and to improve mental health – possibly from within the increases previously set out.
£6bn recurring injection, initially by putting 1p on income tax, to be subsequently funded by "a dedicated health and care tax on the basis of wide consultation". The priority areas for that £6bn are "social care, primary (and other out of hospital) care, mental health and public health".
Also included are uncosted commitments to extra payments to carers, more funding to help GP practices, and various public health initiatives.
An additional £10bn recurring funding is likely to be needed by the end of the next parliament if current services are to be maintained. The new government should recognise this shortfall and make explicit policy choices in that context to ensure sustainability – ie to ensure that (current pressures + cost of new commitments proposed) = (extra funding + taxes + quantified proposals to reduce services in NHS or elsewhere).
Social care proposals, as yet uncosted, are to extend deferred scheme payments linked to wealth (including property) to those receiving home care; increase the threshold below which capital is not taken into account from the current £23,250 to £100,000; and consult on the level of cap to apply to total care costs (flagged by the pre-manifesto commitment to a Green Paper in late 2017, then ‘clarified’ in response to public reactions to the manifesto’s failure to mention a cap). Increase Immigration Heath Surcharge, which is currently expected to generate a somewhat optimistic £200m/year, from £150 to £450 (students) and from £200 to £600 (migrant workers).
It is also proposed to introduce means testing for Winter Fuel Payments and move from a ‘triple lock’ for pensions (annual increase of the highest from 2.5%, price increases or pay increases) to a ‘double lock’ from 2020 (the higher of pay or price increases only). There is also a proposal to "review the operation of the internal market" and, in time for the start of 2018/19, "make non-legislative changes to remove barriers to the integration of care". That could lead to an end of the purchaser–provider split in NHS England, though it is a less definite move in that direction than the Lib Dems' propose.
No proposals to change the current financial set-up for health or social care are mentioned. Commitment to implement the Care Act cap and continue triple lock on pensions strongly emphasised.
Commitment to implementation of the Care Act cap and a move away from tariff system in the NHS, towards place-based budgets. Proposes a cross-party convention to review the long-term sustainability of finances and "a statutory independent budget monitoring agency for health and care, similar to the Office for Budget Responsibility" to "report every three years on how much money the system needs".
Following an apparent Conservative wobble, there is cross-party consensus on the need for a cap on social care costs recouped from individual users. The level of the cap is less significant than the principle that there is an element of ‘insurance’ against drastically high social care costs, and the need to establish a clear position as soon as possible to assist service users and their families in forward planning. The cap, however, deals with issues of social justice, not funding shortfalls (Dilnot’s cap proposal was costed at an eventual £2bn per year – see here for a summary of its merits).
The proposal to take account of housing wealth for both home care and residential care equally makes fiscal sense and has an underlying equity (though it would leave the contrast between health and social care charging systems even starker). The delays in councils receiving deferred income would be likely to be much longer where home care (possibly followed by residential care) is involved than where only residential care costs are deferred – the possible effects of that will need to be thought through.
CIPFA supports setting a minimum percentage of GDP to be spent on health and social care, so reducing the political fluctuations in funding and facilitating long-term planning and preventive investment. None of the manifestos endorse that, but the Lib Dem proposal for a budget monitoring agency is in the same spirit. The triple lock is financially unsustainable, and arguably unnecessary now that the average pensioner is better off than the average working age adult.
However, the Conservative proposal of a double lock will not save money if inflation is above 2.5%, and so could be similarly unaffordable given current inflation trends.
Despite the cross-party consensus on the need to support the NHS in its current form, the prioritisation of mental health services and the capping of total social care costs payable, there are clear differences between the manifestos. The Labour proposals promise the most to assist health and social care, but do the least to make the underlying position sustainable. Labour, like the Lib Dems, presumably include £2bn within their extra funding proposals to introduce the cap as under the Care Act. Somewhat surprisingly, given they could have said simply that a Green Paper had already been announced, the Conservatives gambled with a fiscally sensible but politically risky approach to social care, which gives the impression of being somewhat off-the-cuff, and has not yet been defined precisely enough to be costed.
Whatever the election result, the future of health and social care funding will continue to be a high-profile topic. The various ideas put forward could, therefore, plausibly remain relevant in future debates – though it isn’t clear from what the manifestos state that any of the parties have tackled the issues facing health and social care in a fully coherent and demonstrably sustainable way.