Summary of final report

1948 Hospitals were given to the NHS. What we now call social care was left with local authorities. This organisational structure persists to this day.

2014 People are living longer with more complex diseases that require co-ordinated health and social care. The distinction between health care and social care is being eroded by these changing needs and new ways of meeting them.

For better services, spending will have to increase and become more joined up. But how could this be done and where should the money come from? The King’s Fund set up the independent Commission on the Future of Health and Social Care in England, led by Kate Barker, to explore these issues and to come up with recommendations. Here we present the problems the commission identified and the changes it proposes.

Problem 1: the system is unfair Most health care (major and minor) is free at the point of use. Social care is heavily rationed and means tested. This leads to situations where people with dementia have to pay for their own care while people with cancer don’t. Both cases involve significant care needs but they get very different levels of assistance from the state. There is not equal treatment of equal needs.

Problem 2: the funding is separate The NHS budget is ring-fenced, comes mostly from national taxation and must be spent on health. Publicly funded social care is paid for by local authorities through a mixture of central government grant, council tax and user charges. Levels of spending vary across the country. Deciding who pays for what is a constant source of friction which can impact on people who are caught between the two systems.

Problem 3: the system is not co-ordinated The organisations that commission health and social care – 211 clinical commissioning groups for hospital care, emergency care, community care and mental health; 152 local authorities for social care; and NHS England for primary and specialist care – are not aligned. This creates inefficiencies with financial and human costs. For example, 3,000 beds a day are occupied by people who are fit to leave but are stuck in hospital while funding or assessment is resolved.

The commission concluded that tinkering with the existing system is not enough to address these problems. We need a new settlement for health and social care to meet 21st-century needs and aspirations. What would this involve?

Change 1: commission health and social care together Remove the barrier between health and social care. Have a single, ring-fenced budget and commission both together.

Change 2: create simpler pathways with more personal control Design simpler pathways through the current system that respond to changing levels of need. Use a new care and support allowance and personal budgets to give people more control over the support they receive.

Change 3: increase provision of ‘free’ social care Make all social care for those with ‘critical’ needs free at the point of use. Extend this to ‘substantial’ social care needs as the economy improves. By 2025, provide support for ‘moderate’ needs as well.

These changes offer a big prize – a more integrated service, simpler pathways through it and more equal treatment of equal needs. But this has to be paid for somehow, either from the public purse or out of people’s own pockets. This new settlement will be more efficient and achieve better outcomes for people – but it will cost more overall.

The hard choices: how should we pay for this? These changes should not be paid for by new NHS charges, nor should they be funded privately or through insurance. Instead, this increased access to social care should be paid for by public finance, and much of the cost should be borne by those who can most afford it (wealthier people) and those who will benefit from it the most (older people).

How can we afford it? Prescription charges Make prescriptions much cheaper but remove most of the exemptions. Potential saving of £1 billion

How can we afford it? National Insurance Restructure National Insurance to collect more from those over 40, those over state pension age and high earners. Potential extra revenue of £3.3 billion

How can we afford it? Contributions from older people Limit Winter Fuel Payments and free TV licences to older people on low incomes. Potential saving of £1.4 billion

How can we afford it? Wealth and property taxes Review taxes on wealth and consider reforms to inheritance tax, wealth transfer tax, capital gains, property tax, etc.

Overall, the government should assume that public spending on health and social care will increase from 9.6% to 11–12% by 2025. The commission believes that in the long run this is affordable and sustainable. That sounds like a lot of extra money but it’s still less than other similar countries spend on health care alone.

What do you think? About the new settlement the commission is proposing? How it could be achieved? How it should be paid for? Tweet using #barkercomm or comment at www.kingsfund.org.uk/commission

This is an abridged version of the commission’s final report. To download the full version, including all 12 recommendations, go to www.kingsfund.org.uk/commission