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Austerity is alive and well eight years on, no matter how many billions Theresa May gives to the NHS

The government’s refusal to properly fund the NHS’s sibling service, social care, demonstrates both of the main traits associated with 'austerity logic': social negligence and economic illiteracy

Harry Quilter-Pinner
Saturday 23 June 2018 11:55 BST
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Theresa May sets out her vision for the future of the NHS, tax payers will pay more

“The truth is that the country has been living beyond its means. Today, we must pay off the debts of a failed past and lay the foundations for a more prosperous future." With these words, during George Osborne’s first budget as chancellor back in 2010, a new era in British politics was ushered in; one in which virtually every area of government has been dominated by an ideological drive to shrink the size of the state.

This week was the eighth anniversary of this proclamation. Osborne may have celebrated the elimination of the UK’s budget deficit early this year, but austerity is now widely regarded a failed experiment. Most economists recognise that it exacerbated Britain’s post-crisis recession, whilst the social costs of the cuts are there for all to see: a decade’s worth of progress on poverty reduction and public service reform undone.

Even the Conservative Party seem to recognise this (though perhaps more out of political necessity than conviction). Theresa May’s recent "gift" to the NHS on its 70th birthday – a new long-term funding deal worth an extra £20bn of spending per year by 2023 – is a signal that things are changing. After a gruelling decade of staff shortages, growing deficits and longer waiting times, it’s budget will grow by 3.4 per cent per year for the next five years, marginally less than its long-run trend, but significantly more than originally planned.

Behind closed door Conservatives will no doubt be congratulating themselves. More spending was the message of the last election, and now the government can say they have delivered. But scratch beneath the surface of May’s announcement and the shine starts to come off. In particular, the government’s refusal to properly fund the NHS’s sibling service, social care, demonstrates both of the main traits associated with "austerity logic": social negligence and economic illiteracy.

If the last decade has been a harsh one for the NHS, it has been even worse for social care. Spending has fallen in real terms virtually every year since 2010, down 13.5 per cent from £439 per person to £379 in 2016/17. The result has been significant distress to those in need of support. Take one statistic as an example: the number of people receiving help from the government to fund for their care needs – and therefore avoiding catastrophic care costs of over £100,000 – has fallen on average by a staggering five per cent per year since 2010.

This is the reality of Britain today. Many of our most frail elderly people are forced to choose between selling their home and getting the care they need, with over 1.2 million people deemed in need of social care but not receiving it. As the state has withdrawn from its caring responsibilities, family members and friends have been forced to step in. Every day another 6,000 people join the army of informal carers up and down the country, who together save the UK economy a staggering £60bn per year.

The decision to ignore social care is not just socially damaging, it is also economically flawed. The NHS spends over £3bn a year on people who are medically fit to leave hospital but cannot because they have no one to look after them in the community. Cuts to preventative care mean too many people deteriorate too quickly leading to a loss of independence and higher bills for the state. And, a lack of investment forces thousands of people to spend the last days of their life in hospital, against their express wishes and at great expense to the NHS.

This situation is no longer tenable. By 2030, the number of people over the age of 65 will increase by about a third, and the number of those over 75 will treble. Demand for care will rocket. This is undoubtedly one of the biggest challenges we face during the decade to come. Growing old should not mean growing poorer. We are one of the richest countries in the world: we can afford to take bold action to secure a better future.

“A revolutionary moment ... is a time for revolutions, not for patching." This was the argument made by William Beveridge – the father of the welfare state – as he set out the case for change in the post-war period.

Three quarters of a century later, we have reached another one of these moments. Kicking the can down the road on social care is no longer an option. We need to embrace reform that sees social care fully funded through general taxation and "free at the point of need" just like the NHS. Only then can we really start to celebrate the passing of a dogma that has blighted so many people over the last decade.

Harry Quilter-Pinner is a research fellow at IPPR, a progressive think tank

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