Enough is Enough - Burnham's Speech on Social Care

This is worth reading, as well as Dan Poulter's useful intervention and Jeremy Hunts disgraceful attempt at political point scoring where he fell flat. Burnham spoke during the Opposition debate on Social Care on the 16 Nov and its likely this will be the most important speech he will do in the House, with the Mayoral vote in Manchester next year. He really should have been the Secretary of State for Health longer.

Andy Burnham (Leigh) (Lab) 

I congratulate my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley)—my good friend—on an excellent speech. She ​has no equal in this House as a champion for older people and their carers. Her speech, unlike the speech by the Secretary of State, was firmly rooted in the real world.

This is the century of the ageing society. Caring for people as they live longer lives is the greatest public policy challenge of our times, but for years Parliament has shown itself to be unequal to that challenge. I want to speak today to tell the story of the efforts to reform social care over the last decade, because I want the facts to be on the record, so that people can understand what happened and vow to do better. The story explains the mess we are in today. To be honest, it is quite a shocking story of partisan point-scoring and, worse, political cowardice, which have seriously failed millions of older and disabled people.

The story started nine years ago at the spending review in 2007. I was Chief Secretary to the Treasury at the time, and at the insistence of the Treasury I gave the Department of Health the condition on its spending review settlement that it would conduct a root and branch review of the funding of social care. There was a recognition, even in the Treasury, that if we allowed the situation to continue, it could, in the end, damage the national health service. Quite clearly, the funding was not sustainable, and if social care was left to collapse, it would drag down the NHS with it.

The urgency of such action had been recognised almost a decade earlier, in 1999, when a report by a royal commission on the matter recommended free personal care, paid for by general taxation. It did so for the reason that if we pay for free preventive care in people’s homes, those people do not end up in hospital and costing us all more. Nothing was done, and by 2007 the need for reform was urgent. So between 2007 and 2009, a huge amount of detailed modelling work was done and options were looked at.

When I arrived in the post of Health Secretary in 2009, the work had come to a head. The analysis supported a clear conclusion that radical reform, rather than patching up, was needed. Department of Health officials supported the Treasury analysis that there would be risks to the NHS if social care was allowed to decline. A Green Paper was published in July 2009, and the idea of a national care service was first put forward. The thinking was that only by bringing the systems together, with a system of clear national entitlement, would we be able properly to move towards integration. The maintenance of two entirely differently funded systems—one free at the point of use and the other means-tested and charged for—would mean that they would never be able to speak the same language and there would always be barriers to integration.

I was ready to grasp the nettle, because it was clear to me that the NHS was facing a decade of lower funding from 2010 and 2020, and that one of the ways it could cope with that was with the efficiencies we could unlock through properly and fully integrating health and social care and by moving from a hospital-based medical model to a person-centred social model of care starting in the home.

This is where things went wrong. Picking up that I was ready to up the momentum for reform, the then shadow Health Secretary, Andrew Lansley, approached me in Portcullis House just before Christmas 2009 and asked me for cross-party talks. I thought about it, but I agreed. I thought, as my hon. Friend the Member for ​Barrow and Furness (John Woodcock) has suggested, that we should take the issue out of party politics, which would be better for everybody. We had a couple of meetings, in which we went round the issues. I favoured the more ambitious, comprehensive reform of paying for social care on the NHS principle—that everybody contributes, but everybody is covered for their care needs and has peace of mind in later life. Andrew Lansley wanted a more voluntary system, in which the insurance market would come up with solutions. That was where we left it.

Then a bombshell was dropped in February 2010: the poster saying, “Now Gordon wants £20,000 when you die.” I very vividly remember the day when it landed. I was told that Andy Coulson had put pressure on Andrew Lansley to do it, and that he did not really want to, but felt he could not say no. I do not know whether that is true, but I know that the Conservatives, who asked me for cross-party talks, betrayed the confidence that I gave, and they have never seen fit to apologise for that. The point is not about the personal political damage that that did, but about the chilling effect the poster had on the social care debate. It instantly killed any talk of radical reform, and it actually had a deadening effect for the rest of the following Parliament—the last Parliament—during which no real progress was made.

That brings me to what happened after the election, when, as shadow Health Secretary, I challenged the Government from the Opposition Front Bench about the poster that they had put out during the election saying that they would cut the deficit, not the NHS. I made the point that if they did so, they would in effect cut social care: if they prioritised NHS spending within the reduced envelope, that would have devastating consequences for social care and would in the end come back to affect the NHS.

From the Dispatch Box at every Prime Minister’s Question Time, the then Prime Minister used to quote me as claiming that it would be irresponsible to give the NHS real-terms increases, but he never commented on the second part of what I had said, which was that it was irresponsible to do so if we were cutting social care. I did say that, and it was irresponsible to social care in the way they did to pay for their commitment to the NHS. Social care was cut by 9% during the last Parliament, with 400,000 vulnerable people losing support in their homes. Those people ended up in A&E or trapped in hospital beds, piling pressure on the hospital system.

Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)

I pay tribute to the right hon. Gentleman—this may be my last chance to do so—for the work he has done as a Member and wish him well in his future career if he is successful in his election. Does he agree that the chilling effect of the outcome of those conversations before the election and perhaps the betrayal of his confidence, as he puts it, is that there could no longer be a rational conversation about properly funding the health and care system through any form of taxation? That is the problem that has emerged, and perhaps the best way to fix it is through general taxation.

Andy Burnham

I am very grateful to the hon. Gentleman for his intervention and the spirit in which he made it. He is absolutely right: that set everything back and ​meant that there was no possibility of a cross-party approach. There will have to be such an approach if we are to fix social care and, indeed, to give the NHS what it needs, because they will both need more funding during this Parliament. That is the real shame. I did not make my point about Andrew Lansley for political reasons; I just want people to understand what happened, so that the current generations of politicians might do something different.

The answers we have since had from the Government are wholly inadequate. We have heard today that the precept does not raise enough money, particularly for poorer councils. It is no answer; in fact, it just cynically devolves the responsibility for the whole issue to local government, even though councils did not create the problem. I still favour an all-in system. I will say it: I favour a system in which we ask older people to pay a set contribution, so that they have peace of mind in later life, with all their care costs covered.

Mr Jeremy Hunt

I am listening very carefully to the right hon. Gentleman. In the spirit of wanting to rise above party politics, will he agree that it was totally wrong of him to suggest at any stage in the last Parliament that the Government wanted to privatise the NHS, when we have never had the intention to do so? It was wholly irresponsible to scare the public about that.

Andy Burnham

In a week when Virgin Care is taking on a huge community care contract, I do not think the Secretary of State should be making that point—particularly the Secretary of State who privatised ambulance services in Greater Manchester. I honestly do not think we need to go there.

The point that I am making is about funding social care. The Conservatives claimed that we were introducing a new inheritance tax. Do people not understand that just 3.4% of estates in this country attract inheritance tax? Why is that? Because the vast majority of estates are whittled down by the costs of care—tens of thousands of pounds, or hundreds of thousands of pounds for some people. That is not fair and it is not sustainable. We must be able to do better.

I feel so strongly about this because I saw my grandmother go through the care system in England 20 years ago and, frankly, it was nowhere near good enough. I arrived here saying that I would do something about it. I tried to do something about it, but we have not got anywhere near a solution to the scale of the challenge. People will need to put party politics aside and find common ground. The point scoring and failure to grasp big issues have led to a situation where people have low regard for this place.

We are left with a malnourished, privatised care system in England that is sinking lower as we speak. A culture of slap-dash 15-minute visits is entrenched, in which staff do not get properly treated, trained or respected. Standards in care homes have slipped even further, and stories of neglect and abuse abound—we hear them all the time. Countless vulnerable people and their families still have to pay these cruel dementia taxes, which have risen under this Government, losing everything they have worked for and going into later life with everything on the roulette table: home, pension, savings—the lot. That is not the care system we should ​have in 2016 in this country. At what point are we going to say, “Enough is enough,” and actually do something about it?

Abbott should stop acting like a Tory and be more like Blair

On Friday, 26th August, Diane Abbott was interviewed by Shaun Lay on the Radio 4 news programme the World at One. (The podcast can be downloaded here.) The most interesting thing was that she didn't promise any extra money for the NHS. In fact she flatly ruled it out. The interviewer, Shaun Ley, pressed her on this:

“is your only option to say that we actually need to spend more on the NHS as a proportion of GDP, is that fair?” 

to which Abbott replied

“we certainly aspire to maintain what we spend on the NHS in a proportion of GDP”

So Ley pressed her again:

“you say that you do not want any increase in co-payment, you say that you do not want to change the system of funding, then you’ve got to spend more?”

And Abbott refused to promise more funding

“you’ve also got to save money, as I’ve explained to you”.

Abbot refuses to increase spending on the NHS in spite of the fact that the NHS is clearly underfunded. The government says that the NHS “overspends” whereas it's clear the NHS is not funded sufficiently to cover the demand. Labour under Corbyn are now agreeing with the government on the level of NHS funding. This is probably not surprising since John McDonnell agreed with Osborne’s ludicrous Fiscal Responsibility Act. Abbott, who is possible the least informed of any shadow minister ever, trotted out unevidenced tripe. She gave three ways that the NHS reorganised under Corbyn would “save” money.

First, PFI. Abbott said:

“Every year for the coming decade we going to be spending nearly £2bn on PFI and I’ve spoken to CEOs of big London teaching hospitals who are talking about buying out their private finance initiative arrangements because it would be much cheaper at current levels of interest.” 

Ley challenged this:

“to do that will they have to be able to borrow from elsewhere, or will the Treasury have to pay for it?” 

Abbott replied that

“the CEOs I have been speaking to are talking about borrowing money as an institution”.

I won’t defend PFI, it is an expensive mechanism for many reasons, but Abbott is clearly out of her depth on PFI. There are several issues here. Let’s start with her claim that getting rid of PFI would “save” £2bn. The only source for this figure appears to be an article in The Daily Telegraph in July 2015 – a year ago.

The Telegraph says

“The scale of the PFI charges is contained in official figures compiled by the Department of Health and obtained by The Telegraph.” 

Unfortunately the Telegraph do not provide a link to these “official figures” and searches on the Department of Health website does not yield any results. Abbott is quoting figures a year out of date that clearly she has not checked.

Up until April 2016, there were two financial regulators: Monitor for Foundation Trusts and the NHS Trust Development Agency (TDA) for NHS Trusts. In April 2016 these were amalgamated into one regulator called NHS Improvement. Two thirds of trusts are Foundation Trusts. Monitor provides annually consolidated accounts for all Foundation Trusts. The consolidated accounts for 2015/16 says that the capital repayment payments for PFI were £185m and the interest paid was £363m. So the total PFI finance costs for Foundation Trusts was £548m. This is in comparison to the total PDC dividend payments of £544m for Foundation Trusts (PDC is an alternative, government-backed, finance scheme).

The Trust Development Agency did not issue consolidated accounts, but there is no reason to think that NHS Trusts have larger amounts of PFI per trust than Foundation Trusts. NHS Improvement has released the 2015/16 fourth quarter performance report which includes both the aggregated figures for Foundation Trusts and NHS Trusts. This report says that in the 12 months to the end of March 2016 PFI costs (capital repayment and interest) were £898m (compared to £839m for PDC).

Thus we can assume that the finance cost of PFI to the NHS is around £900m a year.

So where does the Telegraph get a figure of £2bn from? The PFI arrangement is usually that a private company builds, and then operates the building on behalf of the NHS. The trust owns the building on effectively a lease mechanism. The “operates” comes in several forms, it could be just the maintenance of the building, but it could include services like cleaning, catering and car parking. These are all services that must be provided, and without the PFI contract, a trust would either have to provide these services themselves, or contract a private provider. (Under a law passed by John Major, there are VAT benefits for a trust to outsource such services to a private contractor.)

The important point is that there will still be a cost, even if a trust provides the services itself. The extra billion that the Telegraph quotes is presumably the service charges. For services the vast majority of the costs will be staff, so it is unlikely that there will be much scope for savings, unless there are staff losses or pay cuts. If there is a saving, it will be in the region of millions over the country rather than billions.

The finance part of PFI involves borrowing money, which can be done cheaply now by the government. However, note that Abbott did not pledge government funding to “buy out” PFI she specifically said that the trusts would have to borrow the money themselves, and this will be at a higher rate than the government would pay.

One English trust, Northumbria Healthcare Foundation Trust, has "bought out" its PFI, however, they didn’t go to the open market to borrow the money. Instead, Northumbria obtained a loan of £114m from Northumberland County Council and the council borrowed this money from the Treasury’s Public Works Loan Board. In effect this is a government loan in a roundabout route. Abbott has ruled out a Labour government financing such “buy outs” of PFI, so Northumbria is not the model she will use. Even so, the loan of £114m would yield a saving of just £3.5m a year to the trust, and if this is scaled up to all PFI schemes, such savings are unlikely to provide savings of “billions”.

Abbott's policy that trusts should make their own arrangements to "buy out" PFI schemes is at odds with many of Corbyn's ardent supporters, who demand that the government should either buy out the schemes or even cancel them altogether. Since Abbott is saying that trusts should borrow to buy out PFI schemes raises the question of whether anything has changed at all since a trust may borrow from a bank, who may be part of a consortium providing PFI services.

Morally, one has to question “buying out” PFI loans. If the PFI companies have been “swindling” the NHS for decades there is no moral case to simply reward them by buying the loan off them. Morally, a radical government would seek redress for such “swindling”. Abbott is not suggesting this, which implies that she really does not regard PFI as being as bad as she is saying in public. What is clear is that there are unlikely to be savings of billions in buying out PFI schemes.

Abbott’s second point was agency staff. She told Ley

“we are spending £3.6bn on agency staff, there is no need for the health service to spending that on agency staff.” 

Here, she is marching in lock step with Jeremy Hunt, and like Hunt she will fail. There are numerous cases around the country where trusts have breached Hunt’s agency cap because trust boards have recognised that care would be unsafe with their staff level without agency staff. Removing agency staff does not solve the workforce problem. The staff shortage problem was caused by the Coalition. Osborne froze NHS pay rises and Lansley abolished the Strategic Health Authorities which were responsible for training. Although Lansley created new organisations to manage the funding of training of staff (Health Education England and Local Education and Training Boards) there was a hiatus in workforce planning. Further, Osborne made this even worse by announcing the abolition of the nurse bursary to pay for nurse training.

Abbott could have used the interview as an opportunity to attack the bursary policy and the woeful workforce policy of the Conservatives, but she didn’t. Instead, she just echoed what Hunt has already said.

The third area that Abbott claimed she would save money was on medicines and in particular Abbott chose to stigmatise diabetics. Abbott told Ley:

“And then there is the question of drugs, some of these proprietary brand drugs there is a mark up of times seventy three, so we think that there is money to be saved. And I think in the long term we do need to look at public health, we do need to look at prevention. Ten percent of NHS drugs bill goes on drugs for diabetes. We think public health issues like diabetes, like obesity, exercise and alcohol could in the long run bring down costs of the NHS as a whole.”

On the question of drug prices, this presumably comes from a report by The Times earlier this year that claimed that there was a “loophole” that allowed branded drugs to make such large mark-ups (accompanied, of course, by cherry picked examples). Abbott mentions “proprietary brand drugs” and presumably she means branded drugs that are dispensed when a chemically identical generic drug can be dispensed instead. (Some drugs are still under patent, so a generic is not available.)

While it is possible to improve the prescribing of generics, the NHS has actually done very well so far. Prof Appleby (then) at the Kings Fund estimated that the proportion of proprietary drugs has fallen by a third since 1976. If this change had not happened then the cost of prescriptions (taking into account that the volume of prescriptions has increased four times) would be twice what they are now. Of course, savings can always be made, but the likelihood is that the easiest savings have already been made, and the next lot of savings will be a lot harder.

I do not think that Abbott has any coherent plan as to make more savings from switching from branded to generics, I think she is making this point because it is part of Corbyn’s campaign against Owen Smith because of his former employment by Pfizer. Note that Abbott does not attack the politically created, but non-evidenced Cancer Drug Fund. She does not supply any new innovative ideas, like NICE. No, she attacks branded drugs because Smith once worked for Pfizer.

After attacking the price of branded drugs, Abbott then goes on the offensive against “diabetics”. She says:

“ten percent of NHS drugs bill goes on drugs for diabetes. We think public health issues like diabetes, like obesity, exercise and alcohol could in the long run bring down costs of the NHS as a whole”. 

While Abbott is right that “diabetes” does cost the NHS a large amount of money she makes the typical second rate politician error of not stating the type of diabetes. There are two: type 1, which is an autoimmune disease and cannot be prevented or cured, and type 2 that has some association with obesity, but is not entirely caused by obesity. Nine tenths of diabetics are type 2, and the NHS is keen on trying, where it is possible, to prevent people developing type 2 diabetes. However, blaming type 2 diabetics for the financial state of the NHS is something that right wing politicians do, now Abbott is joining in.

A tenth of diabetics are type 1, and there is little that can be done about reducing the cost of their treatment. Even if Abbott is claiming that she can save money on treating type 2 diabetics, she is being misleading. There is a growing obesity problem, and obesity may lead to type 2 diabetes. However, the age demographics of current type 2 diabetes is that it is a condition of the elderly. It is being old that is the cause of their condition. There are ways to make the treatment of type 2 diabetes in older people safer and more effective (and consequently, save money) but Abbott did not mention these ways and I am sure she does not know about them.

Everything about the interview screamed: a clueless politician briefed by an ignorant researcher. Spouting nonsense loses the confidence of the public, and worse, it threatens Labour's rightful claim to be the party of the NHS.

Abbott says that she will keep to the Tory NHS funding levels. This is appalling; the most effective way of destroying the NHS is to keep to the damaging flat funding policy of the Tories. Abbott needs to acknowledge that in 1997 Blair promised to raise the funding of the NHS every year in real terms. And on this Blair won a landslide. Then in 2000 Blair pledged to raise NHS funding as a proportion of GDP to European levels. And on this Blair maintained an enormous Commons majority in the 2001 election.

These figures are clear: Abbot should stop acting like a Tory, and should be more like Blair.

Second Brexit Referendum: a Positive Resolution

It is clear that the the next Prime Minister after Cameron will have a tough time deciding whether to recommend to Parliament that the UK should make an Article 50 notification (of the Lisbon Treaty) to the European Council. The current timetable is that the Conservatives intend a quick election campaign, appointing their leader (and hence the Prime Minister) by the beginning of September.

If the UK goes into recession  then there will be political pressure not to invoke the A50 notification which will be seen as an action that could make matters worse. (Technically the country cannot go into recessions because the definition is that there has to be two quarters of negative growth, and September is less than two quarters away, so I should say "if it looks like the country is heading into recession".)

In the few optimistic moments I have had over the weekend I have come up with this scenario.

The UK Parliament will have to approve the A50 notification, and Parliament is about to go into summer recess and does not meet again until September, then pauses for the party conferences, and real business starts in October. So the A50 notification cannot be done before October. At which point there will be:

• a new Prime Minister (which could be pro-Remain May or Osborne); 
• a summer of the civil service planning for how long, and how many resources, it would take to disentangle EU laws from UK law (most likely: a long time and a lot of people that they do not have); 
• a summer of MPs talking to businesses and communities and finding out the real effect of Brexit (a lot of scare stories will be gathered); and 
• the party conferences allowing MPs to get the opinion of party members. 

After all of this, a good many of the "the people have spoken" MPs will think "maybe if we can get a better deal then the people will think again".

Since it was clear that immigration was the top line issue during the referendum, the "better deal" will have to be about immigration from the EU. We know that it is a red line for the EU: access to the single market, inside or outside the EU has to have an agreement on free movement of people. That won't change.

In my opinion, immigration is good, but you have to have the infrastructure for the increase in population. So the "better deal" I suggest is that the EU will have to agree to pay for the building of this infrastructure: schools, health centres, hospitals, as well as social housing, in areas with a large influx of EU migrants. This policy would cover the entire EU, not just the UK, so it could get the approval of all countries. Such a policy would mean that EU migrants will no longer be seen as a drain on public services, but will be seen as the reason for the improvement of public services. A positive policy, and a second referendum will approve it, in my opinion.