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Poverty doesn’t come cheap

Throwing more money at the ‘first aid camp’ at the bottom of the cliff without fixing the broken fence at the top doesn’t make financial sense, argues Chris Perry

Published by Professional Social Work magazine, 23 December, 2022

The government’s solution to fixing the ‘broken’ social care system lies in the Health and Social Care Bill 2021.

But in reality, it falls short of the whole system reform that’s needed. Sadly, this is not surprising. For since the creation of the NHS in 1948, it has been rare for successive governments to take such a long-sighted view of investment.

And when the field of vision is too narrowly focused on winning the next election, those in power will shy away from radical change if they think it will prove unpopular with the electorate.

Much of the need for people using health and social care services is rooted in poverty and inequality and a system that perpetuates it.

Take the example of care homes and how unfairness built into the infrastructure impacts on families.

Care homes operate on a shoestring and ten per cent are in financial difficulty with a risk of closure.

Former Labour politician Ed Balls’ two part BBC series “Inside the Care Crisis” covered the issues well last month. He rightly highlighted that someone with cancer gets free terminal care whereas for someone with Alzheimer’s Disease or dementia, their care is means tested.

Looking after a relative with these two conditions is very demanding with sleepless nights, the worry of them wandering or leaving a gas tap on, the guilt felt when having to concede their relative had to go into a care home. Their reward for this is to lose their inheritance.

Unfortunately, the proposed cap on charges for long-term care, contained in the Health and Social Care Bill 2021, will benefit the rich as those without sufficient savings will still have to sell their houses to pay for their care.

It is also concerning that so-called ‘self-funders’ (a dreadful terminology) are often waived away and told to “find a home for your mum”, denying the older person an ‘assessment of need and verification of wishes’ and their relatives the help they need.

Regrettably, the proposed Integrated Care Partnerships in the bill appear to be more concerned with protecting the purchaser/provider split and commissioning than providing integrated care.

The purchaser/provider split was introduced by the 1990 National Health Service and Community Care Act in-order to facilitate a mixed economy of care which it was thought would force prices down and quality up: but it has had the opposite effect.

In addition to which:

  1. Social workers have been engaged on the purchasing side, assessing eligibility for specific services, rather than using relationship and therapeutic counselling to bring about change
  2. The ‘contract culture’ has led to over-prescription with time allocated to specified tasks, particularly in home care, with carers left with little discretion to respond in situ to changing need
  3. The contract culture has also led to increased fragmentation with different components of a “package of care” bought from different providers

With so much political and media attention on social care there is a real danger that it will be seen as a way of emptying hospital beds perpetuating a ’minding’ rather than a ‘mending’ service.

The government cannot go on throwing money at more of the same. There needs to be a whole systems’ review followed by radical reform designed to:

  1. reduce demand upon health and social care
  2. change the emphasis in social care from ‘minding’ to ‘mending’
  3. improve both the effectiveness and efficiency of health and social services
  4. provide high quality continuing care, free at the point of delivery, for those who need it

Wealth is health

The first point – reducing demand upon health and social care – is crucial. Research has repeatedly shown the correlation between income and demand upon the NHS.

There are two million older people living in poverty in Britain - many of whom, prior to the abolition of the default retirement age in 2012, were forced into retirement and condemned to spend the rest of their lives in poverty. This is men over 74 and women over 69 who are also not entitled to the new state pension as they retired before April 2016.

Britain has one of the lowest state pensions in the western world.

It is not surprising, therefore, that 80 per cent of the expenditure of the NHS goes on older people. The Netherlands with the highest state pension in Europe spends 60 per cent of its health budget on older people.

An estimated 1.3 million older people suffer from malnutrition costing the NHS £19.6billion per year. There are five main causes of malnutrition: lack of money; lack of motivation; incapacity; lack of support and social isolation. And yet the government has reduced the income of retired people further by stopping the free television licence and reneging on the “triple lock” (see footnote).

Widening inequality

During the last ten years the super-rich have got richer and the majority poorer. According to a report by the Paris-based World Inequality Lab, 2020 saw the steepest increase in billionaires’ wealth on record. In contrast 100 million additional people, worldwide, sank into extreme poverty.

The basic state pension in the UK is just £7,155 per year (or £9,563 with pension credit) and the national living wage £18,278. Average earnings are £30,212. The definition of poverty is anything less than 60 per cent of median household income.

Some 3.8 million older people live alone, meaning they only have one household pension, of whom 78 per cent are women. Compare these rates to the millions paid each year to the chief executives of the major companies. Pascal Soriot of AstraZeneca was the highest earning CEO in 2020, making £15.45 million, ahead of Brian Cassin of Experian who made £10.3 million.

A consequence of this widening inequality is that there are now 3.9 million children living in poverty in the UK. The government has focused on making work pay, but two in three children who are in poverty have a parent who is in work.

These parents are no more able to do anything to help their children than are older people who have no earning capacity or borrowing power.

Children brought up in poverty are less likely to do well at school, more likely to have health problems, making a demand upon the NHS, and have a shorter life expectancy. And the government reduced their income still further by withdrawing the extra £20 per week paid during the pandemic.

The cost of food is going up and gas prices are soaring. Soon it won’t be a choice between “heating or eating” as the poorer older people and families will not be able to afford either. Hats off to Mark Drakeford and the Welsh government for introducing free school meals for all primary school children to reduce the stigma and labelling of selective provision.

According to Philip Alston, special rapporteur on extreme poverty to the UN, who visited the UK the year before the pandemic, government ministers were in a "state of denial" about poverty. Despite being in one of the world's richest countries he had encountered "misery".

Quoting figures from the Joseph Rowntree Foundation, he said that more than 1.5 million people were destitute at some point in 2017. A fifth of the population, amounting to 14 million people, were living in poverty. In contrast the pay of chief executives at businesses on the FTSE 100 index surged 11 per cent on a median basis during 2017 while average earnings failed to keep pace with inflation, rising just 1.7 per cent with inflation at 2.8 per cent.

There was widespread concern during the banking crisis that while the majority suffered austerity those the public were led to believe had brought about the crisis prospered. As a result of the crisis the share value of the banks fell, but after the government bailed them out share values rose and half the money paid to RBS, for example, went straight out in bonuses which were related to share values.

It is rumoured that Bob Diamond was paid £125 million by Barclays Bank during his five years as chief executive whilst making 30.000 people redundant. Barclays Bank was not one of those bailed out by public money but this demonstrates the huge income differentials top to bottom.

Some of the larger companies running multiple care homes have borrowed money to meet revenue loses and paid themselves bonuses before adding the loan charges to the care home costs – described by former Health Secretary, Jeremy Hunt, as “the unacceptable face of capitalism”.

Whilst the rich have been prospering, cuts in health and social care may also, according to research from the Centre for Health Economics at York University, have caused 57,550 more deaths than would have been expected.

The researchers estimated that a one per cent decrease in health care spend would generate 2,484 additional deaths, so the loss of 13.64 per cent between 2010/11 and 2014/15 might have caused 33,888 additional deaths.

They also calculated that a one per cent decrease in social care and public health spend would generate 1,569 extra deaths. So, the ‘loss’ of 15.08 per cent between 2010-11 and 2014-15 might have caused 23,662 additional deaths.

Research by Benjamin Seligman, Maddalena Ferranna, David E. Bloom in the USA concluded that substantial inequalities in Covid-19 mortality are likely, with disproportionate burdens falling on those who are of racial/ethnic minorities, are poor, have less education, and are veterans (older people). Healthcare systems must ensure adequate access to these groups, they recommend, and data on social determinants should be systematically collected from people with Covid-19.

Quick-fix populism

Increasing heath care provision, as York University argue, or increasing access to it, as the American researchers suggest, is essential in the short term: but in the longer term there is the need to build a fence at the top of the cliff by dealing with poverty, income inequality and disadvantage. Unless governments do this, and enhance the quality of life of many, they will never keep pace with demand.

Some economists will argue that the bigger the banquet of the super-rich the more crumbs which will fall on the floor for the poor as wealth trickles down and creates jobs.

The British system of democracy promotes quick-fix popularist component level solutions to whole system problems, thereby creating problems for future administrations.

In the 1950s Britain had one of the best railway networks in the world with most towns and villages having a station and goods yard. Then in the 1960s Dr Richard Beeching closed most of the nonprofitable branch lines, failing to recognise that it was they feeding into the main lines which made the main lines profitable. Nor did he appear to consider the impact it would have on road haulage, travel and pollution, the consequences of which are being felt decades down the track.

Little attention was given to the Irish border or that between Gibraltar and Spain during Brexit. It was perhaps the customs union and freedom of movement, introduced in 1992, more so than the Good Friday Agreement, signed in 1998, which led to the end of hostilities.

It would save money in the long term, and enhance the lives of many, to lift people out of poverty now. Poverty does not come cheap.

For children and working people it will mean more better paid jobs, reducing pay differentials, bonuses and dividends. It may need “regulation on pay differentials within large companies” restricting the pay of the highest paid to an agreed multiple of that of the lowest paid in any one company, so that any pay rise benefits all, with bonuses restricted to an agreed percentage of profits, not share value or pay, and shared by all who contributed.

This would not apply to people who get royalties from patents, book sales or records or a percentage of ticket sales or advertising revue generated by their sole efforts, but to large multinational companies around which a small group of people circulate creaming off millions.

Increasing state pension is a win-win

For older people it is within the gift of government to increase the state pension now and recoup the cost through the consequential savings. A higher state pension would enhance the quality of life of many, reduce demand upon health and social care and those that did need long term care would be able to contribute more towards it by handing over their income up to the cost of the care home, less their personal allowance, as they do now: with no need to take their savings or house into account.

This, together with other organisational savings, identified in my article on the Health and Social Care Bill, would enhance the lives of many and produce savings to enable tax cuts.

A win-win.

Chris Perry is a former director of social services for South Glamorgan County Council, a former non-executive director of Winchester and Eastleigh healthcare NHS Trust and Director of Age Concern Hampshire