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Will the Treasury block social care reform yet again?

The impact of ‘the Treasury view’ on social care decisions

What on earth has all this got to do with social care? Rather a lot I think. When it comes to social care the Treasury is generally thought to take the view that significant investment offers poor value for money; more specifically that it runs the risk of being ‘dead weight’ public spending in governmental jargon – i.e. spending on something that might otherwise have been obtained for free, and therefore wasteful. This is essentially because of the enormous contributions of unpaid carers and the fact that hard-pressed care staff often go the extra mile out of decency and a commitment to their clients. This is brilliant from a Treasury perspective. At the very least, as they would see it, it weakens the case for additional public spending. It may also help to explain why there’s a clear pattern of the Treasury injecting just enough money periodically into social care to avert complete collapse, but no more.

A linked Treasury argument is that investing in social care and, to a degree, in the NHS, is like ‘pouring money down a black hole’: there is never enough and it is unclear what lasting good it does. Part of the problem is that social care has been so underfunded for so long, and there is so much unmet need, that showing sustained positive results is tough, let alone guaranteeing an ‘end to the demand for more’.

A year or so ago I gave evidence to the House of Lords Economic Affairs Committee which was holding an enquiry into social care. At the time the Committee included 2 former Chancellors of the Exchequer and 3 former Permanent Secretaries to the Treasury (not Mr MacPherson), as well as some other very distinguished policy makers. I was treated with great courtesy but I have to say I was fairly astonished by one exchange that took place, and it went to the heart of this idea of ‘the Treasury view’ of social care. A former Treasury Permanent Secretary and I had the following discussion during this session, following a reference to the kind of social care system often described as ‘free personal care’.

Committee member: “We have spoken about a national care service, which seems to imply a convergence between the NHS and the care system. It implies to me that, first, there would be a widening of the conditions that are assisted. At the moment, a medical condition is paid in full, but something long-term is not.

Secondly, you are converging on a service that has no patient contribution. The problem that we have to face is the cost of this…. If you make the system wider and more generous, there must be some behavioural consequences of that, and the first consequence is that Mrs X will say, “Well, I can go back to work now that my mother is being better looked after”. That might be good for the economy, but it is not very good for the taxpayer. Is it realistic to expect to be able to afford a system in which the behavioural incentives are to expand the service? That is pretty much what happened in 1948 when the National Health Service was created: lots of people who had never gone anywhere near a doctor thought, “That’s fine, I can get treatment”. The costs would be a lot greater and the informal family contribution would be backed out.”

Me: “The evidence is contrary in other countries where they are more generous….[and here] an enormous quantity of people are providing care on a pretty intensive basis for nothing or virtually nothing, and they do it because they want to…. That is a strong human motivation, and I do not think it would suddenly be changed by whatever we did in this way. However, it would mean that people who did not have that—for example, there are growing numbers of people in our society who do not have children—would not be left in the pretty desperate position that they are now.”

Committee member: “I am not sure I share your optimism, but it would be nice if it were like that.”

So setting aside the fact that if this kind of argument had prevailed in the 1940s we would never have created the NHS, here is a former Treasury mandarin saying that the problem with creating a social care system worthy of the name is that informal carers, who are of often but by no means always women, might be tempted back into the labour market, whereas it makes more economic sense for the country for them to ‘stay at home’ and a ‘constrained’ social care system helps to enable this.

From an economic perspective this may have some validity but from a social and ethical perspective it sucks! It leaves millions of older and disabled people relying on a service which is wholly inadequate and it cynically exploits the goodwill of both (under)paid and informal carers to try to fill the gaps. And goodness knows what happens to those with care needs who don’t have anyone to help them, such as the growing numbers who are ageing without children.

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