Damian Hinds on the Budget and who pays for social care reform

Rt Hon Damian Hinds MP, Shadow Secretary of State for Health and Social Care, on what he wants from the Budget on 28 October, why he does not believe the triple lock can pay for a National Care Service, and who picks up the bill for pay rises the government does not set the fees for

Interview by William Walter, managing director of Bridgehead Communications

Damian Hinds faces his first Budget as Shadow Health and Social Care Secretary less than two months after taking the brief. He was appointed on 31 August, replacing Stuart Andrew, and inherits a portfolio in which the most consequential decisions are taken somewhere else.

He is not new to the arithmetic. The MP for East Hampshire was Exchequer Secretary to the Treasury under David Cameron, Minister for Employment under Theresa May, and later Education Secretary. He has sat on both sides of a spending negotiation, and his answers read like someone who knows which side usually wins.

He begins a long way back from the fiscal event. “In my lifetime, life expectancy has risen by almost a decade,” he says. “That is wonderful, but it means that many more people now need care for extended periods, sometimes very extended periods, and that number is only likely to grow.”

That is his case for treating this Budget as more than in-year adjustment. “It is imperative for society to address this,” he says, “and it is imperative for politicians to find a system that is compassionate, sustainable, affordable and fair.”

Four adjectives, and the tension between the last three is the whole argument. Hinds’s charge is that the government has not reconciled them. “The Labour government have so far given us headlines about reforming social care, but no coherent or costed plan for delivery,” he says. “If they want to foster confidence among those relying on social care, and among our hardworking health care staff, they must be open and honest about the funding.”

The triple lock question

The test of that is the Prime Minister’s own proposal. Andy Burnham intends to help pay for a National Care Service by changing the pensions triple lock from 2030. Asked whether that is credible without something sooner, Hinds does not equivocate.

“No,” he says. “The public deserves honesty about the difficult choices involved.”

His objection is arithmetical before it is political. The triple lock change, he argues, raises “nowhere near enough money for what the Prime Minister has suggested a ‘National Care Service’ would include, leaving serious questions about how this will be paid for”.

It is also, in his view, the wrong target. “We believe, in any case, that launching a raid on pensioners is not the right way to address the problems facing the care sector.”

Providers will notice what he does not say. He offers no alternative revenue source, and will not supply one on the government’s behalf. “The government cannot promise an overhaul of social care without a costed and deliverable funding plan,” he says. “The public deserves honesty about the difficult choices involved, not vague or incomplete promises.”

A settlement, and who pays for it

For much of the past two years the sector’s central ask has been a national funding settlement, pressed by the Local Government Association among others as the only way to end the postcode lottery in fee rates. Hinds is sympathetic to the diagnosis and non-committal on the cure.

“I certainly appreciate the pressures on local authorities’ finances,” he says. “While a national funding settlement for social care may sound appealing, the key question is how it would be paid for.”

He attaches a second condition. “We must ensure that any new structures deliver value for money for taxpayers, and deliver meaningful reform that staff and those who rely on care need.”

The same logic governs his answer on the Fair Pay Agreement, where the gap between who sets pay and who funds it is widest. Government negotiates the rates. Councils commission the services. Providers sit in between holding the bill.

“Care workers provide an essential service and deserve to be fairly rewarded for the vital work they do,” Hinds says. “We do not believe a nationally imposed Pay Agreement is the right way to achieve that, and there is a lack of clarity on how this proposal would be funded.”

He is direct about where he thinks the cost lands. “Imposing national pay expectations on councils and care providers, expecting them to pick up the bill, could leave councils with less to invest in future care provision.”

His test for the Chancellor is that the money follows the mandate. “Any additional spending commitments must be matched by a clear and sustainable funding plan, to ensure money reaches frontline services and to protect the long-term sustainability of the care sector.”

Then the sentence providers will recognise from their own board papers. “Fair pay absolutely matters. So does ensuring providers have the resources to recruit and retain staff and deliver high-quality care without compromising access to vital services.”

What a Budget can and cannot do

Asked what he would announce if he were at the despatch box himself, Hinds first lowers expectations about the event.

“A Budget is generally about how the Government raises money, rather than how it spends it, with spending priorities set out in a Spending Review,” he says.

Within that, his ask is framed as subtraction rather than addition. “This Budget must focus on encouraging employment including in the social care sector, rather than placing additional financial burdens on care providers, as we have seen with this Government’s increase in employer National Insurance contributions.”

That is the former Employment Minister’s instinct. Bring the cost of hiring down and the rest follows.

He also wants the Treasury to look properly at who delivers the service. “Given the prevalence of private and voluntary provision within social care, it is essential that the specific needs and financial pressures facing care home businesses are properly understood and taken into account.”

It is a fair complaint. Independent providers deliver the great majority of care home places in England, and absorb policy costs set by a department that does not commission from them directly.

His last word is the broadest. “Obviously for the whole of society, the single most important element of any Budget is to have an economy that is working well.”

For a sector that has absorbed employer National Insurance, the National Living Wage and now the Fair Pay Agreement in close succession, that is at once the most uncontroversial line in the interview and the one with the most riding on it. On 28 October, Hinds finds out whether the Chancellor agrees.

Damian Hinds will give his verdict on the Budget in a second interview with Care Home Professional, published after 28 October.

This interview was originally published in Care Home Professional.