Now is the time for bold initiatives to back social care

Now is the time for bold initiatives to back social care

by Robert Kilgour
article from Tuesday 30, June, 2020

AS WE BEGIN to unlock the lockdown the government needs to be bold and take some genuinely radical initiatives. I would like to suggest two.

The Prime Minister recently announced that the Department for International Development (DfID) will be merged with the Foreign and Commonwealth Office. This presents an opportunity for the Foreign Secretary to re-examine past decisions on aid and allocate spending in line with the real needs and priorities of our overseas partners.

Importantly, it also presents a chance to gather cash currently wasted on ludicrous vanity projects and instead use this money to ensure that our vital social care system has the funding it so badly needs

Britain is legally committed to meeting the UN's foreign aid target for all developed countries of 0.7 per cent of Gross National Income, but only the Scandinavian countries, Luxembourg and the Netherlands also meet that target.

While there are many worthwhile projects the UK supports around the world to help those in need, especially in Africa, the legitimacy of our aid budget is undermined by ridiculous misuses of public money.

If we were to simply match the European average of around 0.5 per cent of national income – the amount given by such wealthy countries as Switzerland and Germany – we could still fund the essential programmes we support around the world without spending on ridiculous schemes to meet our current arbitrary 0.7% target, such as the £15m project aimed at reducing the flatulence of Colombian cattle.

Rwanda’s dictator Paul Kagame received £62m of our money and spent half of it on a sponsorship deal for his favourite football club, Arsenal, to promote tourism to his country, and Ethiopia promoted a five-piece girl band called Yegna as part of a programme part-funded by British aid to the tune of £5.2m. These are just two extreme examples of waste of British taxpayers' cash. There are many more.

A lot of the strain on our NHS – even before the Covid-19 emergency – stems from the crisis in social care. Our ageing population means we’re in desperate need of care home beds – however we’re losing these at a growing rate each year. Lack of investment by Government and stretched local authorities means desperately needed care homes are closing.

This is exacerbated by a continuing shortage of nurses and care staff. We have previously relied on workers from around the world coming to the UK – however, there has been a 90 per cent decline in the arrival of EU nurses since the Brexit referendum and an increase in those returning home. 

If we were to only match the European average of 0.5 per cent of national income, around £4.5bn a year extra would be available for social care. 

That amount of public funding would have a transformative impact on the sector ­– and help take some of the strain off the NHS. 

There is a raging argument within Government around how to raise taxes to pay for our health and social care needs. Well, here is a way to help save our social care system while restoring sanity to our aid budget – with the added benefit of avoiding increased taxes on hard-pressed families. It’s a win-win – and I believe this merger decision by Boris Johnson could allow it to happen.

A second initiative is for the Chancellor, Rishi Sunak, to half the rate of VAT levied on the social care sector.

The Westminster Government and the Scottish Government have given money to local authorities for distribution to support care homes, but the sad fact is that not much of this has got through to the front line where it has been much needed.

Whether or not the Chancellor is aware of that, I am suggesting to him to help struggling social care businesses by reducing VAT in a targeted way for one year.

This would really help care homes in a very direct way, those who have borne the brunt of the Coronavirus pandemic and who have had to dig deep to hire extra staff and buy an unforeseen avalanche of PPE equipment, to get back on their feet and help them fund much needed improvements and refurbishments.

As things stand, £1m worth of improvements on refurbs, extensions and other improvements would cost £1.2m. In the current environment that money is just not there.

With finance as tight as it currently is for businesses in the care home sector this type of measure would really make a difference. It would actually raise more net tax revenue for the Treasury than the status quo.

I know care home companies throughout the UK would like to make these improvements, and the Treasury should consider that 10 per cent of something is better than 20 per cent of nothing.

The UK Government has said that it is willing to look at sector-specific cuts in tax, for example to the tourism sector. I would like to put my bid in for such backing for the social care sector, which has been so important to the whole country during this crisis.

Such a move would benefit all UK care homes directly at a stroke and help the businesses recover post-COVID, as well as creating an employment boost for the construction sector too.

Use funds saved from the waste in the overseas aid budget and halve VAT temporarily – these two initiatives could help turn social care around. It is time to be bold and radical.

Robert Kilgour founded Four Seasons Health Care in Fife in Scotland in 1988, opening its first care home in Kirkcaldy in May 1989 and leaving in early 2000 when the company was operating 101 care homes with around 6,500 staff UK wide before making his final financial exit from the company in 2004. He then founded Renaissance Care in 2004 and is currently Executive Chairman of that company, one of the leading Scottish care home operators, that runs 15 homes throughout the country looking after 700 vulnerable elderly residents - 70 per cent of whom are local authority clients – employing close to 1,100 staff.

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