Monday, 1 July 2013

Postcode lotteries

The NHS is intended, at least in theory, to provide a consistent level of service across the country. However, local authorities, again in theory, can set levels of service in accordance with local decisions: they can provide more services but will have to charge more council tax to fund it, or alternatively they can reduce council tax but will have to reduce services to match.

I have said 'in theory' both times because the practice is rather different. The NHS is less consistent than you might expect. Funding was controlled by Primary Care Teams until April this year when the bulk of it was handed over to new Clinical Commissioning groups. Their funding - and therefore priorities - will vary across the country.

Local authorities have, however, been moving in the opposite direction. The bulk of their funding comes not from council tax but from a central government grant. They are severely constrained by what they can raise through council tax because governments impose caps so as to control overall public spending.

The whole system is fiendishly complicated and very few people know or care about the detail. Many people do not appreciate that hospital and community health care comes from the NHS while social care such as care homes and domiciliary care from local authorities. NHS care is free at the point of delivery, apart from such things as prescription charges for those who are liable, whereas social care is chargeable and the charges can be high.

Both entitlement to social care and the charging arrangements vary across the country. This reflects the different histories and priorities of different local authorities - as well as such things as the demographic makeup, affluence or deprivation and politics. But many people feel - whether rightly or wrongly - that this is unfair, and that entitlement to services should be consistent across the country. When local authorities are hard pressed financially, they manage by reducing entitlement to services. There is a national classification for this: needs may be low, moderate, substantial or critical. Local authorities have been free to set their own eligibility thresholds for services within this scheme.

Now the government has decided there should be a national scheme, and it will be set at the level of substantial need. Most local authorities do this already but a few have set their threshold at the critical level. Will this be affordable? The government estimates it will cost £23 million a year to do this. On the other hand, it would cost £2 billion a year to lower thresholds to the moderate level.

The fact that the NHS is a separate organization - or rather a number of separate organizations - from local authorities, and their boundaries may well not coincide means that there all sorts of perverse incentives in the system. In one sentence: more social care would reduce the need for hospital care. The government has recognized this and is transferring £3.8 billion from the NHS to be jointly managed with local authorities to provide more social care. This is not new money, and local authorities have already had substanital reductions in their funding. But it will certainly help.

What I consider we really need is full integration of adult social care with the NHS, so that perverse incentives can be ironed out. I wish the big reorganization of the NHS had concentrated on this. But it is good that it is beginning to happen now.

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