Feature

The creeping privatisation of community care

The changes of the last few years have seen a gradual shift of long term care from the public to the private sector and of costs from the state to the individual. Allyson Pollock explains how the government has privatised community care in all but name

People in health and local authorities are tired of constant re-organisation. The organisational tasks divert us from the political ones and above all from understanding the implications of change. Here I consider how the organisational changes resulting from the NHS and Community Care Act 1990 affect community care.

Despite community health services being a ‘priority service,’ since 1949 spending has remained constant and low (around 8 per cent) as a proportion of total NHS expenditure. In 1993, former health minister Dr Brian Mawhinney proclaimed ‘the internal market is now working, health authorities are beginning to use their purchasing power to benefit patients, for example, by shifting resources into community health services’. Yet the study he cites by the National Association of Health Authorities and Trusts shows that although the purchasing intentions of HAs were to shift money to the care of elderly people and community services, in reality the opposite occurred.

The NHS shares responsibility with local authorities for the care of elderly people, mentally ill people and people with learning disabilities or physical disabilities. The 1944 NHS Act and the 1948 National Assistance Act made the long-term care of sick or infirm people the responsibility of the NHS, and care of frail and old people the responsibility of local authorities.

The distinction between frailty and infirmity is difficult to make yet crucial because NHS services are free while LA services may not be. The ambiguity in the funding arrangements for health and social care has been concealed to a greater extent because in the past the NHS has provided a lot of continuing care free at the point of delivery. The NHS and Community Care Act now brings funding to the fore.

Before 1991, NHS and local authority provision mainly took the form of beds in institutions. But bed closures accelerated throughout the 1970s and 80s, partly as a result of the philosophy of deinstitutionalisation but mainly because of the need to drive down public expenditure. Cost containment has always been a key issue. Since 1980, over 100,000 beds have disappeared from the NHS: these include acute, mental illness and geriatric beds, and beds for people with learning difficulties (see figure).

This loss has been masked by huge re-provision in the private sector. Indeed the closures were only made possible by an amendment to the Social Security Act in 1982, whereby people entering private residential care could claim income support, which they were not eligible for in LA care or in hospital. Between 1979 and 1991, the number of income support recipients rose from 11,000 to 231,000. The social security expenditure bill rose from less than £10m to £1.4bn pounds.

Although there has been huge private sector expansion, the scale of loss of NHS and LA beds has not been matched either by the increase in private sector beds or by an expansion in community services. Home help provision for the over-65s or the over-75s has not increased despite bed closures. Day care provision has increased marginally for the 65-75-year-olds; total day care places have increased very slightly, but we can no longer collect figures because of changes in data definition and collection. Meals on wheels provision has fallen.

The escalating social security bill prompted government action. The Griffiths report culminated in the NHS and Community Care Act 1990, and community care was implemented in 1993.

The community care act aimed ‘to provide the services and support that people affected by the problems of ageing, mental illness, mental handicap or physical and sensory disability need to be able to live as independently as possible in their own homes or in homely settings in the community’. There are four main strands to the act. First, the assessment of need whereby individuals state their needs and preferences for services. Second and third, both purchasing and funding responsibility for continuing care was transferred to LAs. In order to cap the social security budget, the government devolved that part of the budget which would have been spent on community care to local authorities in the form of a transitional, four-year, ring-fenced grant (STG — special transitional grant). Finally, the government introduced the purchaser/provider split to LA social services, mimicking the NHS internal market. Competitive behaviour was ensured by stipulating that 85 per cent of the STG had to be spent in the private sector.

Funding is the key to distributing resources equitably. In 1948 the NHS inherited a huge legacy of inequitable service provision which for the last 40 years it has tried very hard to overcome. Central taxation certainly was essential to addressing equity: it enabled the fair distribution of GPs, the hospital plan of the 1960s, and the resource allocation formula to be implemented.

Since 1991, the new capitation formula has caused a huge shift away from equitable provision. Resources are being diverted to the more prosperous areas forcing the government to introduce a modified capitation formula. But this may not be implemented fully for the next three years, by which time all the damage will have been done in inner city districts, such as the one where I work, where we have had to lose something like a fifth of our budget over five years.

Local authorities receive central funds from government via the standard spending assessment (SSA). But LAs are also dependent on client charges and local taxation, both of which vary from authority to authority. The central grant (the SSA) builds into its calculation an estimate of what LAs will raise from local charges. The SSA assumes that LAs will raise 30 per cent of all the costs of residential homes and 9 per cent of home care costs from charges. Not all local authorities charge for services, for example some inner city areas, where the population is poor and deprived, and so those that do not start their financial year with a shortfall.

A second important distinction from NHS funding is that LA funding is not ring-fenced. Local authorities have discretion to spend as much or as little as they think is important on social care; the money can be used on other things.

As well as geographical inequities resulting from the amounts councils can raise from local charges, patient charges themselves create inequities. In the NHS charges make up about 4 per cent of the NHS budget compared with 30 per cent in the social services budget and in the NHS charges are standardised with clear national criteria about who pays for what. There is no standardisation across LAs. The Association of Metropolitan Authorities has shown great variation across local authorities in charging policies across social services: some have flat rate charges, others have means-tested charges and some have no charges. Where you live determines what you pay and which services you receive.

Increasingly all LAs are levying charges. In the next few years it is estimated that the percentage contributed by individuals towards community care will rise from 30 per cent to around 50 per cent. The effect of the community care act has been to undermine the principle that the NHS should provide services for everybody from cradle to grave. It has also been to create huge inequities in funding, charging arrangements and resource allocation.

Needs will be determined by the amount of money and resources each LA has. By devolving funding decisions the government has devolved rationing decisions much more tightly. As one woman in Wandsworth said: ‘I’m offered more services than I can pay for.’ Local authorities are introducing their own sets of eligibility criteria to determine who gets access to services. We have little evidence about how these criteria compare across authorities.

Local authority policies will also have to be harnessed to HAs’ and GP fundholders’ policies. It is becoming increasingly difficult to monitor what is happening to healthcare spending because of the increasing substitution of acute hospital care with care in the community.

Hospital at home schemes and rapid discharge policies are being sold under the umbrella of innovative community care in homely settings. But will this mean that social care components — laundry, meals on wheels, all the things that would be free in hospital, will now have to be paid for by individuals? Some community trusts are being contracted by LAs to provide community services which they once provided free of charge. Joint commissioning has been hailed as the way forward to ensure seamless care between health and local authorities, but will it too allow services that were free to be siphoned out through the community care loophole into a system which charges for care?

We must think very carefully about what these developments really mean in this political climate. Some may be welcome, and there are many people working very hard to make things work in their communities, but with decreasing budgets we are going to have to delineate health and social care much more finely.

In conclusion, funding and spending are difficult to monitor in health and social services. But the transfer of community care to LAs is likely to create new inequities, both in central funding mechanisms and in patient charges. Many of the data on community services are no longer being collected. The number of health and social service indicators doubled in 1990-91 and was then drastically reduced.

The other big worry is private sector spending. We are not collecting data about creeping privatisation. How do local authorities, where some people have 250 home care providers, gather information? There is little or no planning in community care. There is no information being gathered centrally. What data that exists is not being aggregated, so we have no idea about service needs, utilisation, provision or outcomes. The NHS is also muddying the picture. It is very difficult to untangle long stay beds from acute spending and there is increasing substitution of acute care by the community. Until we can be sure we have good data on community care and funding we will never know whether community services have begun to be a priority.

Discussion

‘Money is being siphoned from the inner city and sent to more affluent, healthier regions. Could we not try and use this information openly as a pressure group, possibly petitioning Parliament against all the bad in it. The number of pensioners is increasing and the beds have decreased. Are they going to community care? There’s no provision at all. These things are scandalous.’

‘There aren’t the resources being put into community care. Also the right to buy your council house seems to have been almost an insurance through the back door: you bought it 10 years ago and are now having to sell it to pay to look after yourself in your old age.’

‘The shift from inner city to shire county is seen as a shift to rural. But rural areas within the shire counties do not get the money. We should think about equitable resources for rural health not just deprived inner cities.’

‘It’s not just social care that it is to be paid for. Some patients I represent, who have huge open wounds in their skin sustained as a result of NHS negligence while they’re in hospital, discharge themselves from hospital because they’re thoroughly cheesed off with it. They are then told ‘Sorry, because you’re a patient in the community you cannot possibly need this wound dressing’ because there is a different tariff.’

‘Your talk was quite defensive of the NHS as a planning structure. People who’ve argued for a long time for increased accountability of the health service have been attracted by a model where local councils purchase healthcare. There is a fundamental conflict between the centralist model with its national criteria which you’re arguing for and a model where local communities influence decisions.’

‘In LAs we devolve our powers to people who are not accountable only because we’ve been told we have to do it. With a different central government, LAs might well be able to provide healthcare in an accountable and equitable way, with ring-fenced funding and clear criteria for services.’

‘We need to get way from issues like welfare paternalism to welfare citizenship or welfare rights. There’s no watchdog with teeth vetting these agencies springing up everywhere. Things like home help and meals-on-wheels are still not controlled by the people getting them. I’m very involved in the Independent Living movement where disabled people employ their own personal assistants. Why can’t other people employ personal assistants or have advocates do this for them? Elderly people, people with learning difficulties, people with mental health problems. You must give the money and the power to the people who are using the services. We need to look at the whole set up, not just return to the paternalistic services of the welfare state.’

Response: I agree, we need more accountability. But something like three-fifths of all local authority spending, £60bn, is in the hands of quangos. The only reason why community care isn’t also is because the government added that clause about purchasing 85 per cent of services in the private sector. You have to be suspicious in this climate of moving health services into LAs where local accountability has been all but dismantled. The purchaser/provider split is regrettable because it has made the accountability of all providers unclear. One argument that is put on behalf of LA control is that it is worth trading off equity for local accountability. I’m saying we have to put mechanisms in place for local accountability but we have to think about geographical equity, which is what the NHS has been good at.

This is an edited version of a talk given at the Health Rights AGM.