In his Autumn Financial Statement last month, Chancellor of the Exchequer George Osborne finally conceded that there is a problem over resources allocated by government to meet the rising costs of social care. That much is welcome. But that recognition has produced only a tiny step towards meeting the problem and does not appear to include any realistic calculation of its size in monetary terms.
The Chancellor said he will allow local authorities to increase council tax by 2% to fund extra social care. We should welcome this admission that additional resources are urgently needed. However, as The Economist pointed out in its analysis of the Chancellor’s statement, the poorest councils which have the highest demand for such services will find it most difficult to raise taxes. And even if local authorities do raise the total of £2bn by 2020 which it is suggested could be generated by this change, that sum is unlikely to offset past cuts. (According to the Resolution Foundation, local authorities face a 77% cut in their government grant in the decade 2010-2020.)
The Economist also reported a recent King’s Fund survey of NHS trust finance directors which indicated that in September the number of patients who should have been transferred from hospital to another form of care but were not was 26% higher than four years ago.
So where does this leave us? We have the Chancellor’s admission that more resources are needed for social care. We have a small loosening of the purse strings which have for five years been pulled so tight by central government that local authorities have struggled to meet their legal obligations on social care. But we are nowhere near a viable solution to the challenge of meeting these obligations.
We now need to focus more attention on where these obligations should sit. Social care costs increasingly arise from the impact of dementia in various forms. That surely is a proper charge to a growing NHS budget, not to declining local authority budgets.
Even so, local authorities can show the NHS how to release expensive hospital beds by funding suitable care outside hospital. The Chancellor must be able to see the huge saving which could be achieved by accommodating these bed-blockers in care or nursing home beds much better suited to their needs.
Why has central government not yet found the will to sort out the interaction between two major lines of public spending in a way which should significantly ease financial pressures both for the NHS and for local authorities? The Chancellor produced several rabbits from his hat last month, but there is another here that he seems to have overlooked.