OPINION: National Insurance increase to resolve the social care crisis

Tony Stein

Tony Stein, Chief Executive, Healthcare Management Solutions, offers his thoughts on this week’s social care announcement.

In this soundbite world that we live in where the average person’s attention span extends no further than the end of the paragraph, we need to steel ourselves for the consequences of not really thinking things through.

The debate is raging around the idea that the social care crisis can be fixed by increasing National Insurance (and I notice an increase in tax on dividends). The following themes will sound familiar:

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  1. Boris is breaking his manifesto pledge not to raise taxes!
  2. A rise in NI is a tax on the young and a tax on the less well-off.
  3. Boris is only looking for favour among the elderly who don’t want to sell their houses to pay for their care and, because this applies mainly to the wealthy in the south-east it disadvantages those poorer people up north.
  4. Why should the young pay for care when it’s the elderly who benefit?

I’m sure that there are many others that will be ventilated over the coming days and weeks, but it seems the die is cast, and the decision made.

What we need to do is to take this back to first principles.

Is there a ‘crisis’ in care? If there is, what solutions are there and, if the solutions involve more money, where should this come from?

The answer to the first question is, unequivocally, yes. When there are people in our society (of all ages) who cannot get the help that they need simply to deal with the activities of daily living, then that is a tragedy. Young and old in a civilised, first-world country, should not be left unable to feed, clean and clothe themselves, put themselves to bed, attend medical appointments, access fresh air and social stimulation. Even if you are of a particularly hard-nosed persuasion and don’t see these as ‘your problem’, the long-term consequences of ignoring these issues are that there are even greater strains placed on the NHS and society ultimately picks up the pieces as more people must drop out of paid, tax-paying employment, to care for those around them.

The crisis does exist in that we are an ageing population and so there are more people living longer and with chronic medical conditions and there are fewer taxpayers to pay for their care. This puts a strain on the already stretched local authorities which have other issues such as the young disabled, education, housing, refuse management, policing, and infrastructure to manage.

The argument about the manifesto pledge is frankly ridiculous. The manifesto was written in mid-2019 before anyone had even thought of the pandemic. If anyone seriously thinks that the pandemic didn’t require a full-on review of any pre-COVID strategic thinking, then they are seriously delusional. In fact, if the government blindly pursued its pre-COVID economic strategy without considering the financial impact of the past 18 months then they’d, quite rightly, be considered lunatics.

If we all agree that nobody should left unable to feed, clothe and wash themselves, then we need to fund social care in the same way that we agree that people needing medical care are helped through funding the NHS.

This isn’t about protecting people from having to sell their houses. This is about agreeing, as a nation, that we should provide for everyone’s social care needs just as we pay for their health needs. We don’t make rich people pay for getting their broken leg fixed. We don’t insist that wealthy people pay to be cut from their crashed cars. No matter who you are or what your relative wealth you would have access to the same social care. Is this fair? Well, if you’re wealthy then you’ll pay more in taxes over your lifetime so…. And remember, we’re talking about basic social care needs here. If you decide that you want your social care delivered in a 5-star care home with butlers and Michelin starred cuisine, then you’ll pay for that separately. If that’s what you want, why not?

If you’re young and fit, why should you pay anything, you’re not receiving the benefits? Well, the criticism is that those receiving the benefits today haven’t been making sufficient provision throughout their working lives and that’s why we’re in this mess today. So, my point would be, to avoid the same criticism in the future, the young should start contributing now for when they get older, or sick, and need care.

The worry that I have is that this fantastic initiative will be hijacked by politicians and by cash-strapped local authorities and this once in a lifetime opportunity will ultimately be squandered. I can see the money raised being ring-fenced, however, local authorities will, as this new money finds its way to them, simply reduce the amount they’re paying from their existing social care budgets. Ultimately, the full benefit for social care won’t find its way to the front line where it’s needed.

The German model is a very good example of progressive thinking.

Taxes were increased to pay for social care. Social care was made available to everyone based on an agreed national scale. Whoever you are, however, wealthy you are, and however much in taxes you’ve contributed, you receive exactly the same benefits based on a pre-determined scale. These funds are managed centrally, not through regional government. People eligible for support can choose to receive cash instead (at a slightly discounted rate) and thus they can choose to have friends and relatives care for them and have the cash support to enable that to happen. This ends the postcode lottery that exists today where those in wealthier local authority areas receive care and those in cash-strapped local authority areas don’t. Where those in the wealthier areas get a decent standard of care and those in cash-strapped Local authority areas are put on auction sites to be handed off to the lowest bidder to look after. It also means that where family choose to support their loved ones, they are given the financial means to do that. Progressive thinking.

I suspect that the politicians over here will mess this up. They won’t ring fence the funding properly to curry political favour with the local authorities. They’ll choose to raise the funds through NI rather than Income Tax because that’ll be perceived to be politically more palatable to the Tory faithful even if it will result in some anachronistic imbalances.

All that said, I’m trying to remain optimistic. At least attention is focussed on the problem at last.

Tags : national insuranceOpinionTony Stein

The author Lee Peart

1 Comment

  1. I agree with the contents of this good article and it should be widely published.. Sadly, however, opinions are formed on the short, sound bites pumped out by most of the media. As a home care provider of over 4 decades, the announcement this week will not have much impact on my current or future clients.
    The current situation of care worker vacancies needs to be addressed but the good intentions to pay care workers increasing wages, as mentioned by many, will in fact mean that the £86K cap will buy less care!

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