More government spending not the answer to social care


Monetary Policy

Motion to raise interest rates narrowly defeated

The IEA responds to the letter from social care groups to the government

Commenting on today’s letter from social care groups to the government, Prof Philip Booth, Editorial and Programme Director at the Institute of Economic Affairs, said:

”Although it is regrettable, it is not without good reason that successive governments have kicked the issue of social care into the long grass for nearly 20 years. The financial consequences of mistaken reforms would be dire. Already, the Office for Budget Responsibility expects government spending to rise by one eighth as a proportion of national income over the next generation using very optimistic assumptions – this is largely due to the consequences of ageing. If social care financing were to be reformed in such a way that the state paid a bigger share of the cost, the consequences for future generations could be disastrous.

“It would be helpful if those groups campaigning for reform were to propose practical solutions to the problems that we face that could lead to the delivery of more effective care at lower cost, promote charitable and family provision of care and promote better mechanisms of private saving.  The current system is described as “chronically underfunded”. However, with the government now spending half of national income, increasing government spending burdens on future generations cannot be the solution.”

Notes to editors

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