Monday, 9 January 2017

A Better Way To Tackle The Social Care Crisis

In the past day or two, a few unsettling headlines that show the NHS in a bad light have got everyone arguing again about who in Westminster is going to save the day by giving it the spending it deserves (the reality is far scarier as I blogged about here). This has followed recent political deliberations from politicians and political commentators alike about whether a council tax rise is the answer to our social care funding crisis. It is not; in fact, raising council tax to fund the social care crisis is a bit like trying to get rid of a stray cat from your back door by throwing tuna chucks at it.

One of the big problems in the UK is that the government spending is far too large. Coupled with the fact that the burden of public sector spending (on health, education and pensions, as well as on social services) is rising faster than the tax that can be generated to pay for it, this amounts to a big problem that's only going to get worse.

The main reason this problem has been allowed to get out of hand, not just here, but right throughout Europe, is because there is not enough of an incentive for politicians to curb their spending. And the reason for this is that the tax burden falls disproportionately on a small subsection of the population, whereas the voting habits fall on a much wider proportion of the population. For example, the bottom 50% of earners are only picking up about 5% of the total tax bill, so their motives to desire increased public spending are out of kilter with the viability of that spending.

A good way to lessen this problem would be to introduce a tax reduction program whereby the tax bill is distributed more evenly while at the same time reduced as a whole. So, for example, if there was a cap on how much the highest earners could be taxed measured up against the average tax, the incentives to oppose dodgier costly government spending projects would be heightened, as would government revenue to pay for the increasing social care costs (the costs that aren't picked up by the clients themselves). It would also help if we sorted out this little problem I blogged about a few years ago.