Thread by @rcolvile

Lord Willetts has written an interesting piece for @Telegraph responding to @DamianGreen's @CPSThinkTank paper on social care, arguing that paying for the growing elderly population is going to become THE issue in politics telegraph.co.uk/news/2019/04/2…. A few thoughts below...

Willetts points out that just keeping our current promises to the elderly will add £36 billion to public spending by 2030. So sorry folks, but taxes gotta rise (especially on the elderly, especially on their accrued wealth).

But I take another lesson. People don't want to pay more taxes. (The reaction in some quarters to @DamianGreen's mere hint of a suggestion that they might have to is a pretty good indication of this.)

So before we ask people to pay for a single extra penny, we need to do everything we can to make sure that we're spending what's already collected as wisely as possible - and that if we do raise spending, it's used effectively.

We had a version of this argument over the NHS funding increase. Everyone was obsessing about whether it should be 3.5%pa or 4%pa or what have you, with detailed predictions about what that would mean for care quality.

In fact, as we pointed out in a @CPSThinkTank briefing note, the long-term effects of pushing up NHS productivity (or letting it fall back) MASSIVELY outweighed the effects of extra funding cps.org.uk/files/reports/…

(This is why eg @MattHancock's focus on improving NHS technology is so welcome, for reasons set out in a far-sighted report by @AlanMakMP cps.org.uk/files/reports/…)

It's the same regarding @DamianGreen's paper. For me, the most interesting part of it wasn't that he pointed out there was a funding gap in social care - everyone who's looked into this completely accepts that (and in fact the estimates he/we used were drawn from others' works).

It wasn't even that he suggested how to fill the gap. It's that he pointed out that the entire structure of the social care system isn't geared up to give proper value for money.

This is a point I develop in my @CityAM column today - not yet online, but here's the screenshot

Since 2000, productivity in the social care system has FALLEN by 20%. That's the equivalent of £3.4 billion being taken out of the system - 150% more than the funding gap recently identified by MPs.

One big reason for this is that making councils responsible for social care funding means that they are incentivised not to build care homes or retirement housing - because you're increasing the number of elderly residents, which will in due course hammer your budget

The result of this is that care home provision has stagnated even as the elderly population has soared - and that we have A TENTH of the amount of retirement housing compared with comparable countries

This means the care homes we do have are overcrowded and often pretty old - care quality in modern homes is much, much better & more efficient. It means the lack of beds flows back into the NHS, causing huge problems there.

And it means that elderly people stay in homes that have become too big for them, because there isn't enough suitable high-quality housing to downsize into.

(Our head of policy used to work on housing - the only paper he ever wrote that generated actual fan mail was the one where he argued we need to build more bungalows...)

To wrap this all up, we will definitely need to spend more money on the elderly. But we need to ensure that the systems we're putting that money into are fit for purpose - that they're spending that money as effectively as we can.

And before we put up taxes to pay for it, we need to scrutinise every penny of public spending. In fact we're working on proposals ahead of the Spending Review to identify approx £30 billion in savings that could be used to pay for social care and other priorities (like tax cuts)

In conclusion: caring for the elderly is a huge challenge. Getting government to spend its money wisely is an even huger one. But we need to do both.