Dr Eamonn Butler is Director of the Adam Smith Institute.
We carry on spending hundreds of millions on prestige projects such as HS2 at a time when we’ve just blown £300 billion on lockdown policies. But if there is one sector of the economy that really needs some capital investment, it is the social care sector.
Roughly three-quarters of our residential care homes are old and no longer fit for purpose. Many are converted houses and hotels that just aren’t suited to providing for elderly and frail people. And most of those that were purpose built are well below modern standards in terms of bedroom and dayroom sizes, bathroom provision and much else. They need upgrading—or knocking down and replacing.
So that’s a lot of cash, though we could probably bring it in for less than we’re spending on HS2. It’s pretty obviously not going to come from our depleted Treasury, though, and why should it? The older generation have already voted themselves generous benefits—triple-lock pensions, free TV licences, reduced rates of national insurance, winter fuel payments, you name it—at the expense of those who are actually still in work and paying the tax to fund it all. And only a third of them are likely to need any social care at all. So they won’t be thrilled by paying for other people’s.
Yes, there’s been a national debate about how we need to spend more and shove an extra penny on income tax to raise the means-test level and give more people free social care. But again, raising taxes is not exactly a smart policy if you want to grow the new businesses that will get you out of water this deep.
That’s why we say, in our new report Fixing Social Care, that the solution is not more state provision but more partnerships between state and independent sectors. For example, we need new care homes and pension funds and insurers need new long term investments—particularly now that shops and offices might be empty for a while.
Sounds like the basis of a deal. We suggest that investors should create new care homes—not just in ones and twos as at present, but an economies-of-scale dozen at a time, and lease a whole care package to local authorities. That gives councils future security on their caseload and avoids them stumping up huge capital sums.
And why can’t people provide for their own social care, instead of demanding the government pays for everyone? The answer is that insurance is not viable when you have the long-tail risk that a few people might have to spend many, many years in an expensive residential care setting.
So why don’t we make insurance both viable and affordable, by the state stepping in, not to pay for everyone, but just to pay the cost of anyone who needs more than, say, six years’ of care? That would instantly create a market, bring money into the care sector, involve insurers who would make sure that care providers delivered good value for money, and make sure that the mass of people would get dignified care when they needed it.
We need new partnerships in care delivered at home too—something often ignored because it’s not very visible, but actually a huge part of public and private spending. Local authority care at home is pretty dire, selected on price rather than quality, and carers are so strung out travelling from person to person that they have little time when they arrive.
And council budgets are so stretched that many carers, and the private companies that manage home carers, are simply giving up. The virus just made everything worse. Starved of PPE (all destined for the NHS front line), many carers were simply turned away by their vulnerable but frightened clients.
This can’t go on. Let’s welcome in the new generation of care providers who are harnessing artificial intelligence, blockchain and other technology, driven through user-friendly apps like Siri and Alexa, and who employ world-class recruitment, training and management techniques, to deliver services where human beings are in short supply. And there are plenty of other parts of the care system—where half the council spending goes on the under-65s, remember, such as people with physical, mental health or learning problems—that need just this kind of shaking up.
We won’t fix the crisis in social care just by arbitrary boosts to public budget. We need to fix a broken system: to bring in investors, insurers, new providers and new technologies. And throw out all the red tape and ‘always done it this way’ attitude that prevents innovation.