Debate on the funding of social care always emphasises the costs, not the financial gains
Debate on the funding of social care always emphasises the costs, not the financial gains, – the ‘unaffordability’ of change. In this article, we want to look at the funding anew. This debate is particularly important as the Casey Commission gets under way.
First, we need to be clear what sort of social care and support we want
End Social Care Disgrace campaigns for a National Care, Support and Independent Living Service (NaCSILS) which will be publicly funded, free at the point of use and publicly provided, and not for profit. It should be nationally mandated but designed and delivered locally, co-produced with service users and democratically accountable. It must be underpinned by staff whose pay and conditions reflect true value and skills and designed to meet the needs of informal carers. It should be informed by a task force on independent living led by user-controlled groups from diverse backgrounds.
We campaign for this model of adult social care and support for a range of reasons – social, ethical and human rights. There is a clear moral case for a free social care system that protects all and spreads the risk across society, like the NHS. Transforming social care in the way we recommend would be the equivalent to the creation of the NHS – hugely popular, transformational to community, civic life, and the standing of the country internationally.
Transforming social care will bring important economic benefits and make an important contribution to the country’s productivity and prosperity. The cost is offset to a very large extent by the increased contribution of extra economic activity and savings in other parts of the economy. If anything, Adult Social Care is a net contributor to the economy, not a drain on it.
First, doing nothing has a substantial cost
There is a reduction in the potential for economic activity for working age disabled people. The earnings loss associated with the onset of long-term health conditions was estimated at £43 billion in 2021.
There are the costs of people giving up economic activity in order to care, with resultant lower taxes being received; more people becoming reliant on benefits and some 16% of informal carers in debt. There was an increase in unpaid carers of 3.7 million between 2011 and 2020 (Office of National Statistics). The costs to the state of young carers being excluded from work were £1.048 billion a year. We don’t know the cost to the Treasury of adult carers leaving work, but a conservative estimate might be £5 billion.
We need to factor in the inability to recruit and retain staff in adequate numbers. Over a quarter of the UK’s residential care workers lived in, or were on the brink of, poverty in 2020. This has a considerable cost to the Treasury, and on the country’s wider productivity and prosperity. The Health Foundation has estimated that England needs 627,000 extra social care staff to meet demand by 2030.
The burden to NHS funding of unplanned admissions to hospital and delayed discharges is substantial. IPPR estimates an economic benefit in reducing delayed discharge of around £80bn due to increased productivity and reduced consumption of medical care. A reasonable saving by boosting social care could therefore be £20 billion a year.
Profits go to companies rather than public service – we advocate radically reducing the involvement of the private sector. The asset value of privately owned care homes amounts to £245 billion. The 784 small to medium sized care home providers have a leakage rate in profits disguised as rent payments and management fees of £7 out of every £100 of income, and £13 out of every £100 for the largest 26 providers, equating to £1.5 billion a year taken out of the care system.
These costs total at least £26 billion. Obviously, some of these costs have been very difficult to quantify.
The cost of End Social Care Disgrace’s social care transformation would be £41.2 billion annually
We calculate that the extra cost, as a result of the following changes:
- ending the dependence on private care;
- replacing the income from charging;
- returning funding to 2009 levels;
- 25% salary and wage increases;
- free domiciliary personal care – support for daily living;
- free residential care;
- other services;
- Direct Payments.
The Skills for Care documentation estimates the current cost of social care at just over £30billion. The key table is this one:
In countries with more generous public long-term care systems (Denmark, Netherlands, Sweden, Norway), public expenditure is around 3-4% of GDP 20 21, which is more than double the current share in the UK. That would equate to about £87 billion.
These costs would be offset by:
- Increased earning and taxation from increasing wages to £15/hr £7.7 bn Ref
- The economic contribution of adult social care to England £50.3bn annually
- Re-investing profits from the private sector £1.5 bn
- Reducing delayed NHS discharges £20 billion
There are other savings that are impossible to estimate
Skills for Care estimates that the economic contribution of adult social care to England was £50.3 bn annually, more than its current cost of provision.
Skills for Care in 2018 calculated that care-workers represent 6% of total employment. The average full time equivalent worker generates £19,700 of value towards the economy.
The indirect effect of the adult social care sector (resulting from the purchase of intermediate goods and services by the adult social care sector in delivering its services) was estimated to contribute £10.8 billion of Gross Value Added to the UK economy.
Purchases made by those directly and indirectly employed in the adult social care sector) was estimated to contribute a further 251,300 jobs (176,100 FTEs) and £11.1 billion of GVA to the UK economy.
This article builds on work done by one of its members – Ealing Reclaim Social Care Action Group – which brought together expert thinking about funding social care reform. We have used publicly available data to make estimates of costs and benefits.
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