Reflections on the Barker Commission

Sally Ruane | October 17, 2014 | Blog

Just ahead of the annual party conferences in which the funding of the NHS has been revealed as a likely battleground in the coming general election, the final report of the King’s Fund’s Commission on the Future of Health and Social Care in England: A new settlement for health and social care, was published. The Commission was chaired by Dame Kate Barker, a business economist and long-serving former member of the government’s Monetary Policy Committee. The other commissioners were eminent figures from the worlds of social care and local government, plus a professor of social policy and a group of nine ‘experts by experience’ (i.e. service users). No doctor was involved.

The result is an interesting document, not least because it authoritatively rebuts the assumption of so much recent policy debate, that the NHS is becoming ‘unaffordable’. The real question, the report argues, is whether we are prepared to match other OECD countries’ health spending, and whether we will continue to share the cost, or let it fall increasingly on those who are sick.

The Commissioners’ main focus was on reshaping health and social care into a single service suitable for an era in which chronic illnesses, especially of older people, are becoming more and more important, and are giving rise to indefensible differences in entitlement between free NHS care and means-tested social care, and equally indefensible difficulties in getting funding decisions made and services provided. For instance, many would struggle to understand why a retiree suffering from dementia should have to pay for all her care, while another one suffering from cancer gets it free. Or why individuals and their families have to undergo weeks or even months of worry, and often of impoverishment, while social services and NHS providers argue about which of them is responsible.

To overcome these problems the Commission recommended uniting social and health care in a single system, with a ring-fenced budget and a single commissioner (no more arguments between NHS commissioners and council officers trying to conserve their respective budgets); entitling people who need the highest levels of social care to free care on the same basis as health care; and ultimately extending free care to people with ‘intermediate’ levels of need for social care too.

The report also recommends various ways to help pay for this new ‘settlement’, including, in the short run, while public finances are still being rebuilt, ‘a revamped prescription charge; better targeting of winter fuel payments and free TV licences; rationalising the treatment of accommodation costs in health and social care; … ending the exemption, from employees’ National Insurance contributions when people work on past state pension age… [and] a 1p increase in the rate of National Insurance for those aged over 40 as a health and social care contribution’.

Any of these proposals may be challenged, of course, including by defenders of the NHS who correctly point out that ‘rationalising’ the treatment of accommodation costs by charging NHS continuing care patients for it would be a potentially dangerous precedent for introducing charges, and would not raise significant revenues . In the longer run, however, the report calls for significant tax increases, including consideration of a wealth tax, arguing that increased GDP will make room for these once public finances are restored to health.

But equally significant is what the Commission does not recommend. They rejected not only tax relief on private insurance, but also charging for health services. After looking carefully at a wide range of possible charging systems they concluded that they would not raise much money, and ‘more importantly such charges risk adverse impacts on health, particularly for those with incomes just above the level at which any exemptions were set’. In the view of Julian Le Grand, the Commission’s social policy expert, this finally lays to rest the ever-renewed call for charging . Whether he is right about that will obviously depend on how much weight the Barker Report proves to carry with health policy-makers.

And most interesting of all is the wider thinking of the Commission, at a time when so many voices in health policy circles have been warning that the NHS is unaffordable and approaching a financial cliff-edge. Their report notes that:

with much more generous provision of publicly funded social care than even we are recommending, public expenditure on health and social care combined might reach somewhere between 11 and 12 per cent of GDP by 2025. That compares to the 18 per cent of GDP that the United States spent on health alone in 2010. It also compares to 11.2 per cent spent by Canada, the 11.6 per cent spent by France or the 11.9 per cent spent by the Netherlands in 2010 on health alone. Each country also has additional public expenditure on social care. In other words, by 2025 public spending on health and social care in England would only broadly match the proportions of GDP that these countries spent on health alone15 years earlier.

Or as the commissioners put it, in large font: even with bigger spending increases than they are recommending, ‘By 2025 England’s public spending on health and social care combined would barely match what comparable countries spent 15 years earlier’.

As for the Office of Budget Responsibility’s current projection of public spending, it would mean an even lower share of GDP being spent on health and social care by 2025 than today, and the Commission ‘simply does not find that credible’. In effect, the Commission is saying that if we want to be a modern country like other modern countries we must be realistic and recognise that the resources are there and will be spent:

overall spending on the cost of care for older people will inevitably rise given the ageing of the population. The question is not whether this money is spent. It is about where the costs fall – on collective provision through public expenditure, or on those individuals and families who are unlucky enough to have very high care needs.

Not to acknowledge this, the Commission implies, is mystifying and irrational.

In arriving at this conclusion the Commission did not step outside the parameters of recent mainstream health policy debate. It did not, for instance, ask whether the benefits of operating the NHS as a market outweigh the costs; or whether serious measures to cut alcohol and sugar consumption might significantly reduce health care costs; or whether a less regressive tax system might reduce inequality and raise employment and cut levels of sickness. It did not rub in the evidence it cited showing the dramatic failure of market provision in the US. It engaged in the debate as it has been framed, in recent years, by the advocates of marketization, and found that the issue is not about ‘affordability’ but about how we choose to distribute the relatively ample resources we have for the kind of society we want.

A commission largely drawn from outside the NHS, led by a prominent economist and advised by health and social care users, has produced answers which perhaps will surprise some. How far its report will carry weight remains to be seen. Perhaps the fact that the NHS emerged as such a central issue in the Scottish referendum will make policy-makers in England take its analysis more seriously than they otherwise might have done.

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About the author

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Sally Ruane

Sally Ruane is the Deputy Director of the Health Policy Research Unit at De Montfort University, Leicester and a former member of the CHPI's EMT. She has published in books, academic journals and magazines in the UK and Spain and has a particular interest in the private finance initiative, service configuration and political aspects of the policy process.See all posts by Sally Ruane