National Care Service could exacerbate social care postcode lottery, says IFS

The Scottish Government’s proposed National Care Service could exacerbate rather than reduce differences in service quality across Scotland, according to an analysis from economic research organisation the Institute for Fiscal Studies (IFS).

The government introduced its National Care Service (Scotland) Bill in June, outlining plans to set up a series of care boards that will operate in the same way as health boards and will be the direct responsibility of ministers.

It came following a 2021 review led by former NHS Scotland chief executive Derek Feeley and was hailed by health secretary Humza Yousaf as a means of ending what he termed the “postcode lottery” in social care.

In an observation paper published today, IFS associate director David Phillips said as the plan envisages transferring social care services away from councils into a new, national service it would lead to big changes for councils but would not necessarily improve the quality of care.

“The aim of this is to provide more consistent, as well as higher-quality, social care services across Scotland, although at a local level the plan is for services to be delivered by new care boards rather than a single national agency,” he said.

“Whether it will achieve its aims is far from clear – the National Health Service, where regional health boards deliver services locally but are accountable to Scottish ministers in a similar way, still sees notable differences in performance and outcomes across the country.

“The plans would represent a big change in Scottish councils’ responsibilities and require the reallocation of billions of pounds in funding, potentially posing challenges.”

The service, which is slated to launch at the end of 2026 if the bill gets the backing of Holyrood, is expected to cost half a billion pounds to deliver. When it is up and running local authorities would no longer have any responsibility for running social care services. 

When Yousaf unveiled the plans he was accused of “grabbing power” from local authorities, with  Unite the Union calling the plan the “biggest power grab” in the era of devolution.

Scottish Labour health spokesperson Jackie Baillie said the proposed service “threatens the very existence of local government in Scotland” while Craig Hoy, the Scottish Conservatives’ shadow social care minister, was critical of the intention to divert £1.3bn over five years away from frontline social care to pay for administration costs.

Phillips said another problem with centralising services is that councils currently have discretion in terms of being able to alter their spending as and when required, while a national service seeking to provide uniformity across the country would not be able to do so. He said the unintended consequence of that could be an increase in disparities in care quality.

“Centralising the over £4bn councils currently spend on these services does not guarantee consistently high standards of care, as experience with the NHS shows,” he said.

“Indeed, while councils can use the discretion they currently have to spend more or less to offer higher or lower than average service quality, they can also use this discretion to offset errors in centrally determined spending needs assessments.

“If this discretion is removed, differences in service quality could therefore actually increase if spending needs assessments are not sufficiently robust.”

Social care minister Kevin Stewart said the government remains committed to launching the new service and "ending the postcode lottery in the provision of care in Scotland", adding that additonal money would be made available to ensure its success.

“Publishing the bill, which puts in place the ability for local areas to design services that best meet the needs of their local communities, is the first stage in the process, and we are now developing opportunities for people and organisations to become involved in codesigning the new service," he said.

“We have committed to increase public investment in social care by 25 per cent over the lifetime of this parliament, the equivalent of more than £840m of increased investment.

"Our 2022-23 budget confirmed more than £1.6bn directly from the Scottish Government for social care and integration to lay the groundwork for the National Care Service.

"This is in addition to the investment that is provided for care services by local authorities currently.”