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09.05.17

Health Foundation: New government must give social care greater GDP share

Even if the short-term pressures facing the social care and health system at present are fixed, the pace of funding growth for the sector will need to accelerate beyond 2020 and take a greater share of the GDP if we are to keep pace with demand, the Health Foundation has argued.

In the first of three briefing papers planned for before the snap election in June, the influential think-tank reiterated warnings that the social care system is “widely recognised as inadequate and unfair and needs a fundamental reform”.

Central to this will be ensuring it absorbs a greater share of GDP than it does at present, in order to keep up with an increasing and ageing population that brings with it a rise in chronic disease levels. It will also be imperative to grow funding in order to meet public expectations and fund new technologies and medical advances.

With the UK economy expected to grow at a mean rate of 2.4% a year, accounting for inflation, the budget of the NHS and social care in England will need to increase by at least £33bn to maintain its share of GDP to around £160bn in 2031-32 in today’s prices, the Foundation said.

And when considering the long-term financial pressures facing the health and care sector, the Office for Budget Responsibility’s (OBR’s) central estimate shows funding pressures rising by over 4% a year between 2021 and 2031. This is significantly higher than its projection for UK economic growth, meaning an extra £68bn will be required, explained the organisation.

Its director of research and economics, Anita Charlesworth, said: “Years of austerity have left the NHS and social care sector in an increasingly perilous financial state. Government funding plans are not keeping pace with demand and cost, and, as a result, these vital services are showing increasing signs of serious strain.

“Health and social care are vital public services that all of us rely on in times of need. We’ve seen years of funding volatility – going from feast to famine and back again – which is damaging for the long-term planning of services.”

Whatever the outcome of the general election on 8 June, there are “big challenges ahead” for health and social care, she added.

“If we are to deliver the quality service people expect, funding will need to rise – not just in the short term – but year on year. Our social care system is widely recognised as inadequate and unfair and needs a fundamental reform,” said Charlesworth.

The Health Foundation’s briefing also reignites calls for an independent financial body, similar to the OBR, to be established to lay out the long-term financial outlook for health and social care. The idea was first mooted by a House of Lords Select Committee early last month, and has since been reiterated by the NHS Confederation in its refreshed manifesto.

In the short term, the Health Foundation argued, social care needs “immediate attention” from the incoming government. Despite the extra cash allocated in the Spring Budget, the care market is still “severely underfunded and unaffordable” for people on low incomes who aren’t eligible for free care.

As a result of this, one in 10 older people now face future lifetime costs of more than £100,000 for their care needs.

Almost half a million fewer people received public care in 2012-13 compared to 2009-10 due to councils being pushed to tighten their eligibility criteria, and in 2015-16, the number of people aged 65 and over living in England grew by 2% – yet the number receiving social care dropped by 2%.

The social care funding gap is now projected to surpass £2bn by 2019-20.

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