More money for residential care? The system needs reform first.

There’s a debate raging about how to pay more for ‘social care’, but it’s mainly a debate about how to pay for the largest cost, which is the price of residential care.  A year in residential care can easily cost £40-50,000. It’s residential care that is most likely to eat up all a persons’s savings, along with the value of their house.

Unfortunately, the finance of residential care has been based in a deeply exploitative model, and the conduct of a few of the largest providers, while legal, is open to question in terms of the use of funds, the stability of the operation, and the quality of the service provided.  I’d recommend a critical report from 2016 by Burns and others, called Where does the money go?  They explain how a complex series of financial transactions have been used to milk the system of money, and most of it finishes in tax havens.  Operational companies, which actually provide the care, are separated from property companies, which charge them rent.  The operational companies are loaded with debt at excessive rates of interest, paid to finance companies.  Management services are subcontracted to other companies within the group.  And so it goes on.  The authors comment:

Putting more money in to the system via higher weekly payments per bed will not produce a robust and sustainable care home sector when the financialised providers are so adept at taking money out.

 

Work in progress

In the course of the last year, I’ve spent much of my time writing two books.  I have just sent the final copy of the first to Policy Press, who will be publishing it early in 2022. It’s called How to fix the welfare state, and it reviews a series of problems and issues in British social services. It’s a personal take on the welfare state; I had things to say, and thought it was time to say them. Each of the chapters in the book outlines the structure of services, the impact of some false and misleading narratives, and the real problems that need to be addressed. The book outlines where approaches to the services have gone wrong, and makes suggestions about what they need to do to get things right.

I can be reasonably confident that this won’t be my last book, because the second is virtually finished.  It’s a work of general political theory, called, for now at least, Government for the people. It looks at the way the role of governments around the world have changed to take on responsibility for public welfare.

 

‘Shaping future support’: more on the obsession with work-testing people who are ill

The ‘health and disability’ Green Paper, Shaping Future Support, is nominally addressed to benefits for people with disabilities and ‘health conditions’.  It promises a review of three broad areas – ‘enabling independent living’, support into employment and  experience of the services, but in the wash this mainly comes out as a review of two issues, assessment and employment.

On the topic of assessment, the paper has little to offer.  People find the assessments are repetitive and inaccurate; the main responses are ‘triage’ and developing more telephone and video assessments.  On the first point, I defy anyone to develop a triage process that doesn’t lead to people being asked some of the same questions twice – unless, of course, the purpose of the triage is to block some people from going futher. As for inaccuracy, the central problem is that the DWP is still holding to the idea that their assessors can garner more information in an hour than professionals in continuing care can collect over several months.  There will be a problem for as long as the DWP continues to disregard medical evidence.

The other issue, and the issue which gets the most coverage in the Green Paper, is about employment. I apologise for repeating myself, but it stands repetition. Two million people who receive Employment and Support Allowance have been receiving it because they are too sick to work, and it is not reasonable to ask them to.  I can say that with reasonable confidence, because they have been subjected to a government-set assessment that was designed to establish precisely that point.  I am sure that there will be those in government who will say, ‘ah yes, but they are still capable of work-related activity’.  They may be, or may not, but there has been no assessment of that; there should have been, there was going to be some relevant test, but the DWP decided not to introduce one.  At present the only criterion for being deemed capable of work-related activity is an assumption, that by default people who need less support must be capable of such activity.  So they are set to do things like writing a CV and invited to have their confidence built. Just what people with bowel cancer need.

One other point about the Green Paper is worth noting.  Late on, in paras 300-303, it floats, for no obvious reason, the possibility of combining ESA/UC with Personal Independence Payment – despite acknowledging that the criteria for eligibility, and the assessments, are  quite different.   I suspect, but do not know, that this may herald an attempt to restrict disability benefits to people on low incomes.

The government embraces the Equality Act – in a way

While preparing to ease lockdown, the Prime Minister’s office has issued this threat, reported in the Guardian: ‘Businesses that chose to enforce mask-wearing would need to take legal advice on their responsibilities under the Equality Act, Downing Street said.’ It appears that ‘equality’ consists of exposing vulnerable people equally to the kinds of risk otherwise experienced by football supporters and anti-lockdown protests, and firms that decline to do this have to take legal advice to defend their actions.

Unemployment is not about to triple – is it?

I was idly poring through the most recent edition of the DWP’s Benefit Expenditure and Caseload Tables – I know, it’s sad – when I came across this striking sequence of data, in the table headed “Unemployment benefits”.

2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26
Outturn Forecast Forecast Forecast Forecast Forecast Forecast
Expenditure, £m (real terms)
20,119 38,564 41,873 42,680 45,298 50,373 57,990
Caseload, 000s
2,330 4,284 4,509 4,544 4,714 5,192 5,953

By that reckoning, both caseload and expenditure will increase to two and a half times their current level.  There will be nearly six million people unemployed.

There are two possible explanations for this.  One, which I think implausible, is that the government is anticipating a massive and prolonged surge in unemployment as a result of the pandemic and Brexit.  The scenario is not beyond imagination, but I don’t think it at all likely,  even if it was true, that the government would build it into their medium-term forecasts.

The second, which is much more likely, is that the figures represent the anticipated caseload of Universal Credit, currently being counted without any distinction between people who are unemployed and the rest. At the moment, Universal Credit is mainly performing two functions: payments to people who are unemployed, and payments to people on low earnings.  As time goes on, it will also be taking in more and more people on ‘legacy benefits’, and the largest group of people in that category  are nearly two million people currently receiving Employment and Support Allowance. There may well be some people on ESA who are really unemployed, but all of them are  sick or incapacitated.  Bear in mind that the basic, central criterion for receipt of the benefit is that these people are sick, and cannot be expected to work.  That’s not just me saying that. This is the text of the 2012 Welfare Reform Act:

37 Capability for work or work-related activity
(1) For the purposes of this Part a claimant has limited capability for work if—
(a) the claimant’s capability for work is limited by their physical or mental
condition, and
(b) the limitation is such that it is not reasonable to require the claimant to
work.     

Anyone who applies for ESA has to show that they have limited capability for work, tested not (as it once was, and should be) by doctors who know their patients,  but by an elaborate points scheme.  The whole point of providing a long term sickness benefit is to make provision that does not depend on people seeking work.

What the forecasts tell us is that the government currently intends to make no distinction between people who are unemployed and people who cannot reasonably be expected to work.  They will all be counted as receiving unemployment benefits.

The Resolution Foundation proposes a rethink of benefits

The Resolution Foundation has published a short report – they call it a ‘briefing note’ – to consider lessons from the crisis for the system of benefits.  They make several key points, most of which I’d endorse:

  • Earnings-replacement is a critically important role of benefits
  • The current system of sick pay is inadequate, and forces sick people to go to work when they shouldn’t
  • The distinction between employees and self-employed people makes no sense
  • The general level of benefits is too low
  • The safety net needs to reflect housing costs and family size
  • Big reforms will inevitably generate problems
  • There is going to be an increased demand for support for long-term sickness.

I’d depart from their arguments in two ways  First, I don’t think the response of the benefit system, and particularly Universal Credit, has been adequate even within its limited sphere of operation.  Half the applicants have found the process difficult, delays have been marked, it’s full of arbitrary hurdles, and it’s riddled with errors.

Second, the report  seems to me to think of universal benefits, earnings replacement and safety net benefits as being alternatives.  It’s in the nature of cash benefits that they can be combined from different sources, in different ways  – what matters is the final ‘income package’.

Some reflections on ‘ethnic disparities’

The report of the Commission on Race and Ethnic Disparities is a long, dull read, and it’s taken me three goes to force myself to the end of it. They argue:

“Put simply we no longer see a Britain where the system is deliberately rigged against ethnic minorities. The impediments and disparities do exist, they are varied, and ironically very few of them are directly to do with racism.”

Lots of public comment has beaten me to the punch, and I’m not going to try to give an account of everywhere it goes wrong.  There are four key problems with the line they take.  The first, quickly identified by Jonathan Portes, is the extraordinary definition of ‘racism’.

The Commission … proposes the following framework to distinguish between different forms of racial disparity and racism:
1. Explained racial disparities: this term should be used when there are persistent ethnic differential outcomes that can demonstrably be shown to be as a result of other factors such as geography, class or sex.
2. Unexplained racial disparities: persistent differential outcomes for ethnic groups with no conclusive evidence about the causes. This applies to situations where a disparate outcome is identified, but there is no evidence as to what is causing it.

There are only two kinds of racial disparity: those which can be explained by other means, and those where there is no conclusive evidence.

The second point was nailed by Tom Newton-Dunne, who obviously got through the report quicker than I did.  He identifies one early comment as central:  “As our investigations proceeded, we increasingly felt that an unexplored approach to closing disparity gaps was to examine the extent individuals and their communities could help themselves through their own
agency, rather than wait for invisible external forces to assemble to do the job.”  That is the report’s approach in a nutshell – it is only when one moves on to later sections that its importance becomes clear.  As I read through, with growing disbelief, the Commission’s readiness to condone stop and search by the police  – it’s not racist, apparently, but the poor police have become “society’s punching bag” (p.190)  – I had the strong sense that the message to minority groups had become: stop whingeing and behave  yourselves.

The third point rests in the definition of ‘institutional racism’, a term which is

applicable to an institution that is racist or discriminatory processes, policies, attitudes or behaviours in a single institution.

Some discrimination is direct. If people within an organisation are empowered and able to behave in a racist manner, there’s something wrong with the processes that allow them to do that.  The vetting of tenants, GP removal of list patients and adverse selection of job applicants are examples.   And if those processes are permitted to continue despite the evidence that they are working in a racist way, there is clearly an institutional problem.

Some discrimination, however is indirect – a term which exists in our laws, but doesn’t feature in this report at all.  If the system is not ‘deliberately rigged’, they seem to be arguing, it’s not racist.  Some processes can appear to be neutral while repeatedly producing disadvantage.  Processes such as exclusion, stop and search and the operation of the criminal justice system do that.  And that is  waved aside in a report that is determined to locate the source of problems in the action of individuals.

The fourth problem lies in their emphasis on finding ’causes’. If causes are complex, addressing them one by one is not an effective way of changing the pattern. If they are unknown, that’s no excuse for inaction.  The way into a problem is rarely the way out of it.

Lastly, a minor irritation.  This is a personal blog, and it’s hard to pass over a report like this without riding a personal hobby-horse.  Students, we read, “should be taught about all famous and important people in the society” (p.91)  Paupers, peasants, prisoners, soldiers and slaves aren’t typically famous.   I think it would do this country a power of good if students learned less about kings and queens and rather more about the lives of the people who came before them.

‘Greed is good’, revisited

Boris Johnson’s claim that the vaccine programme is a triumph of self-interested ‘capitalism’ has been roundly condemned; I don’t think I need to explain why it’s simply not true in this context.  It has spurred me, however, to come back to the broader argument, that we owe our prosperity and living standards to private enterprise.  That argument has been vigorously restated in support of Johson, for example by Rod Liddle in the Sun: “this is what brings about progress in society”.

It’s an argument that goes back at least to Mandeville – private vice leads to public benefit – but it’s most often cited from Adam Smith:

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages”

That much is clearly true, as far as it goes; I do not want to take anything away from it. However, it’s only one aspect of our current standard of living in the UK.

If we look back at the things that have made our lives better than it was in Adam Smith’s time,  there are a few other things to consider besides butchers and bakers.  First, there’s the fabric of public space: roads, drains, pavements, street lights. Second, there are the standards and services that govern our private space: housing standards, sanitation,  sewerage, waste disposal, water supplies, and energy supply.  Third, there are the services and facilities which shape our daily lives: education, health, social security, and housing.   (The last one on the list deserves a reminder: we built six million council homes, and most of them are still standing even if they’ve been privatised or transferred to new management.)

It’s become commonplace for the advocates of free markets to claim that we owe everything to private enterprise.  That claim is false.  In some cases, governments paid private enterprise to provide goods and services; in some cases, such as agriculture or energy supply, they kept services going that would have collapsed otherwise; in some cases, they produced the goods directly.  All of the examples I have given were, at least to some degree and in some cases predominantly, the result of collective social action.  Not private enterprise, not self-interest, but government.

Is it time for a stimulus package?

I write this, not knowing the answer.  One view is that as the pandemic quietens, the economy will spring back into life – not, perhaps, the ‘V’ shaped recovery that the Bank was hoping for last summer, but at least a climb out of the canyon.   Another possibility is that those people who’ve been saving during the lockdowns will have pent-up demand to release as soon as the opportunity arises, and that this will translate into inflationary pressure, for example in housing.  In either of those scenarios, we don’t actually need to inject resources into the economy.

On the other hand, there are some disquieting economic trends.  The pandemic has already closed some businesses, and there will be more.  The continuing lockdown in other countries will reduce demand in Britain further.  Brexit  means that some existing trades selling to Europe (and some to Northern Ireland) will not be viable – for example, small shipments of agricultural produce have become prohibitively expensive and tied up in bureaucracy.    And people have incurred debt, serious deprivation and in some cases destitution.

The case for a stimulus package, of the sort that Biden is introducing in the USA, is that it is only by increasing demand that the economy will get moving again.  But the British economy is not like the US; it’s much less self-contained, much more dependent on trade, services  and complex international supply chains.   I can’t tell, then, whether a major increase in expenditure is actually justified.

However, there is another option.  The position of the people who have suffered most can and should be protected; that implies redistribution and transfer payments, which are the other side of the Biden plan.   If we take resources from people who have been able to save and move the same resources to those who have little, that would probably have a marginal stimulus effect, without running any serious risk either of overheating the economy or of inflation. It’s possible that some sectors would suffer ill-effects, but as great as my respect is for the people running foodbanks, I could stand to see them being put out of business.

The one-number census is not a good way to chart what is happening

It’s census time again.  I’ve made several criticisms of the process in the past, at first in an e-mail list and subsequently in two of my books, and I hate repeating myself.  Checking my previous posts, however, I find that I haven’t made any of those comments on the blog, so it makes sense to cycle through them now.

The first thing is to acknowledge that something like a census is essential.  The census gives us the denominators – the numbers that go below the dividing line.  Without those numbers, we can’t tell how big a problem is, or how evenly it’s distributed.

‘Something like’ a census, however, doesn’t mean it has to be this  census.  There are major problems with the UK census, and most of them are avoidable. I’ve heard Ian Diamond, who’s now the head of the Office for National Statistics, lecturing on this, and he emphasises the importance of  arriving at ‘one number’.  The  preservation of the census in this form is its greatest weakness.

If we look around the world, we’ll find that Britain’s reliance on a one-number census is increasingly unusual.    They’re used in southern Europe, but in other countries they use different techniques.  The USA has the American Community Survey, a large geographic sample of about 3% of the population, to get the fine detail.  Germany has a 1% micro-census and a range of information from administrative sources.  The Nordic countries are using registers of information.  France has a rolling census, allowing for regular updates.

The British census is too long, too complex, too unwieldy, and too slow.  If we go back to the historic archives, we can see what the census used to be: a literal count of the persons in each household, comprising names, ages and addresses.  That, frankly, is all we need from a single census – and as much as we can handle.  The English census has 51 questions. Every added question is another hole in the ship.

The first problem is time.  It generally takes two years to get the first results from the census, and, because it’s such a massive exercise, it has to last us for 10 years after that.  (We last had a mid-term census in 1976.)   That means, simply enough, that the census is always out of date – by at least two, and up to twelve, years.  If we want, for practical purposes, to do something useful, like setting up a primary school, the census is at best a rough, rusty guide.  Rolling data would be much better for the purpose.

The second problem is accuracy.  Statisticians have probably learned that as the numbers get bigger, they become more reliable – that we can be ‘more ‘confident’ about the findings.  This is just not true, at least not in the real world.   What happens with big numbers is that mistakes and biases are amplified, and we are liable to invest the numbers with meaning when they may have none.  I think people will remember, for example, the large number of write-ins claiming to be members of the Jedi religion; at least we can tell that’s bogus.  It’s more difficult to pick holes in other responses, but we should be able to acknowledge at least that we couldn’t rely on previous censuses to get the numbers of young men right.  If this census gives us an accurate, reliable count of people who are disabled or those whose gender is non-binary, I for one will be astonished.

If we really want to know about these topics, the census won’t give us the information.  That is going to rely on much more detailed work, probably with a qualitative  component to clarify what the answers actually mean.  That leads me on to social science, and finding better ways to do things.  Numbers about society are indicators – that is, signposts or pointers. We do not need accurate counts of everything; we need to have enough to prepare samples, which we can look at in more depth.  The census provides us with the sort of information we need to work out how to make a sample.  The great mistake is to suppose it can do more than that.