Why the debate around a National Care Service may put a strain on Plaid and Labour’s co-operation agreement

Andrew Potts

As part of Welsh Labour and Plaid Cymru’s Co-operation Agreement, an Expert Panel has been established to look into the merits of creating a Welsh National Care Service, free at the point of need.

As our population grows older but not necessarily healthier it becomes increasingly likely that more of us will need some form of social care and support. Even if we manage a lifetime of avoiding GPs and hospitals then the unfortunate truth is that in later life many people will need help with the basics of getting washed, dressed and fed.

There are two distinct differences between healthcare and social care – where the money comes from and the mechanisms for spending it.

Good or bad, many of us have tales to tell about our own, our family’s or friends’ experiences of the NHS. We all know that it is a large organisation that benefits from funding, infrastructure, and varying degrees of respect. I’d compare it to Mount Everest – very big, you don’t necessarily want to experience it for yourself, but it’s nice to know it’s there.

Social Services departments have just as wide a remit as the NHS, covering a cradle-to-grave array of support, from foster care to dementia care. It is those people accessing social care who are typically referred to as the most vulnerable in our society but who have hitherto been most overlooked.

The establishment of a National Care Service would at least begin to bring some form of parity between health and social care.

How do we get there?

The Expert Group’s Terms of Reference suggest that “social care will remain a responsibility of local government and continue as a public service.”

But how can it be a national service when it is still delivered by 22 separate local authorities? The NHS in Wales is delivered by seven Local Health Boards (LHB). As the push for greater integration of health and social care continues, then logic suggests that delivery should be on the same footprint as LHBs.

The Expert Group’s remit also includes considering “how to increase the percentage of publicly delivered care provision, including the role of local government ownership”.

That implies not just a national service but a nationalised service, which will have its own financial implications. No mention is made of improving service quality, consistency or people’s outcomes.

Paying for it

What people can sometimes forget is that ‘free at the point of need’ does not mean free of charge. Services have to be paid for, so how do we do it?

The National Care Service (Scotland) Bill is currently going through the Scottish Parliament, which would allow Scottish Ministers to transfer adult and children’s social care services from councils to a new, national service.

The aims is to provide more consistent and better quality services across Scotland, with services delivered by local ‘Care Boards’.

But whether a National Care Service in Scotland or Wales would drive quality and performance improvements is debatable given the varying performance of LHBs already under devolved control.

In 2022-23, Welsh councils are budgeting £2.4bn on social work and social care, or about a quarter of overall spending. Shifting responsibility for social care from councils to ‘Care Boards’ would therefore require transferring one-quarter of councils’ budgets.

Councils have some discretion over how much they spend on social care services, in particular through changing council tax levels and the amount of the budget they allocate relative to other services such as schools. For example, the average Band D council tax for Wales for 2022-23 is £1,777, ranging from £1,573 in Caerphilly to £2,099 in Blaenau Gwent.

Spending on social work and social care varies from 24% in Denbighshire to 33% in Powys, amongst the most and least deprived councils respectively according to the Welsh Index of Multiple Deprivation (WIMD). Decisions currently made at a local level will present a challenge for centralised funding of social care.

If responsibility for social care is transferred from councils to a National Care Service, should there be a commensurate fall in local budgets? Logically, yes. But what if a council with an above-average council tax spends proportionately more on social care to secure better quality care in its area?

Deducting the expected social care spend would mean residents would continue paying a higher council tax rate but see less spent on other local services. However, as time passed and local social care services converged to the standards of the National Care Service, they would no longer benefit from above-average social care.

Alternatively, a formula could be developed to assess the amount needed to deliver the national average standard of social care and reduce each council’s funding by that amount. It would avoid penalising residents of councils that spent more, while benefiting those in areas that spent less.

However, the amount deducted from low-spending councils would be more than their actual social care spend, meaning they would have to cut spending on other services or increase council tax levels. A transition period would be needed to ensure knee-jerk tax hikes or service cuts are avoided.

National service, local delivery

Although the Expert Group’s terms of reference currently avoid looking at the consistency of service quality, it nevertheless should be a key objective for a National Care Service. If it is possible to assess the relative amounts of funding needed across Wales to deliver a consistent standard of social care then centralising funding would enable consistency of service delivery.

However, effectively assessing current, let alone future, funding needs is difficult. Local socio-economic, deprivation, spending and service utilisation data can be used. But the past is not always a good indicator of what the future might look like.

Local discretion to vary council tax can facilitate service consistency by allowing a council to spend more or less than a centralised assessed amount to effectively deliver services.

Removing local discretion would mean centralised funding assessments need to be as accurate as possible, and I have previously written about the potential dangers of funding formulas.

A report by the cross-party think tank Demos – A People’s Budget: How the public would raise taxes – found that a majority (59%) of people in Wales want any tax rises to go to the Welsh rather than UK Government, with only a quarter (24%) preferring to pay more tax to HM Treasury.

However, the poll also contained findings suggesting strong Welsh opposition to higher taxes to pay specifically for social care in Wales, with reasons including a lack of trust in the Welsh Government’s ability to deliver social care effectively; concerns that Wales could not afford the bill without help from the rest of the UK; and general opposition to higher taxes.

A perceived poor performance in running the NHS means a lack of faith in the Welsh Government’s ability to run social care and little support for a social care tax in Wales. Other survey respondents acknowledged that, with Wales being a net beneficiary of being part of the UK, Welsh tax rises would need to be significant to meet the costs of social care.

The possible implications are obvious. Removing discretion from local authorities could result in a fall in quality of local services for some, and austerity for others, while imposing a social care tax would be unpopular. The increase in National Insurance contributions (the ‘Social Care levy’), with Wales receiving its proportion to help bolster health and social care spending, will likely be reversed in the coming weeks should Liz Truss become prime minister.

A tricky path is being walked, with funding options likely to prove politically difficult at local and national levels.

Decisions will be made by more informed people than I, but centralising a quarter of Welsh councils’ spending needs careful consideration. If discretion is left at a local level, then a National Care Service will be ‘national’ in name only, simply adding a layer of bureaucracy (which is one way of emulating the NHS).

Setting national standards (which I agree with) could mean the need for raising council tax or reducing other local services (which nobody wants). And it still may not lead to consistency of care standards across Wales.

The future of social care is an area which may yet put much strain on the Co-operation Agreement. Whatever happens, it will be a taxing decision for politicians to make.