The costs of not focusing on care

Nick Kempe – 28 October 2022

The National Care Service – the costs of not focusing on care

When Rishi Sunak, as chancellor, announced an increase in National Insurance to fund social care the Scottish Government, were presented with an opportunity.  Normally, any improvement to public services has to be funded by savings elsewhere, which makes financing reform challenging, but here was money on a plate.  In Caring for All Common Weal briefly explained how that money, an estimated £1.3bn, could be used to get a new National Care Service (NCS) off to a flying start. Our suggested priorities were to fund wage increases for social care staff and, related to that, to phase out the private sector and stop profiteering from care, which would release more money to pay staff properly.   

The Tories, of course, then backtracked and are now flip-flopping to such an extent that it is impossible for anyone to predict what might happen.  However, had Scotland a properly costed plan for a new NCS at this point it could have been used to pile the political pressure on Rishi Sunak to honour the commitments he made as chancellor. 

In June the Scottish Government published a financial memorandum to accompany the NCS Bill.  This was not fit for purpose but has received very little publicity until this week when it was subject to a scathing attack by an SNP MSP on the Scottish Parliament’s finance committee, Michelle Thomson https://www.heraldscotland.com/news/homenews/23076280.national-care-service-snps-michelle-thomson-no-confidence-cost-plan/ an attack which was partially endorsed by the SNP Convener of the Committee Kenneth Gibson.

There are two major problems with the financial memorandum (Social Work Scotland has produced three excellent critiques https://socialworkscotland.org/consultations/national-care-service-scotland-bill/).  First, it explicitly excludes the costs of most future care reforms, whether these are those that the Scottish Government has committed to funding, like the abolition of care charges, those that it hasn’t, like investment in preventive services, or those that fall somewhere in-between, like the commitment to pay staff fairly.  Second, the set-up and estimated running costs for the National Care Service are not properly explained and appear eyewatering.  In short, MSPs are now concerned that they are being asked to invest large amounts of money in new structures for what appears very little.  And at a time when public finances are in meltdown.

The financial memorandum estimates the net additional running costs of a centralised NCS to be between £83-144m.  This would expand the Scottish Civil Service by between 440 and 660 staff at a cost, as Social Work Scotland has explained, of £80 – 107k per person.  This should not be a surprise but appears a direct consequence of the Scottish Government outsourcing responsibility for the design of the NCS to KPMG, which knows little about care but charges large sums of money for its advice.  The extent of their influence over government was illustrated this summer when Jenny Stewart, former partner of KPMG, was appointed a non-executive director of the Scottish Civil Service https://www.gov.scot/about/how-government-is-run/civil-service/jenny-stewart/.

The estimated additional costs for running the new care boards, unelected and under ministerial control, is even higher-  between £142m and £376m.  The variation will apparently depend on the number of the care boards and how many local authority staff are transferred.  It is almost certainly an underestimate.  

This week Common Weal received a response to a Freedom of Information request asking for the advice the Scottish Government had received from Anderson Brown LLP on the VAT implications of its proposals (local authorities are exempt from VAT whereas central government is not).   The Scottish Government refused to disclose the costs on the grounds that it is still formulating policy.  

There are many other costs associated with the creation of the new care boards which are not properly considered in the financial memorandum.  They include: TUPE, the costs of preserving the pay, terms and conditions of staff currently employed by local authorities, including their pensions; asset transfers, e.g the buildings and IT to be used by the NCS and how to “dis-integrate” these from other local authority systems and assets;  asset liabilities, for example, the cost of the debt or repairs that might be required to buildings that transfer to the NCS.

Trying to sort all these issues out will be incredibly expensive – KPMG and other management consultancies will be licking their lips – and consume the efforts of boards and managers when what they should really be doing is focussing on how care can be improved.  As this unravels, it is predictable that the Scottish Government will be forced to drop plans to transfer Children’s and Justice Services to the NCS at a later date leaving Scotland with half a national care service.

The obvious solution is for the Scottish Government to drop its plan for a centralised top-down NCS Service under the control of Scottish Ministers and instead design the NCS around current structures to minimise disruption.  That would allow whatever money is now available to be invested in care and for stakeholders to focus on what really matters.  

In Caring for All, Common Weal argued that local authorities should be the building blocks for a new not for profit National Care Service but reformed so that the design and control of care services is devolved to local communities and those who use services, their carers and staff are empowered and represented at all levels in the system.  Instead of leaving it to KPMG, local authorities could now be taking up the challenge of designing and costing an NCS in partnership with stakeholders and from the bottom up.  An acknowledgement of past mistakes coupled with some practical costed plans might help persuade MSPs that radical changes to the draft National Care Service Bill are not just required but feasible and would deliver better outcome for far less administrative cost.

3 thoughts on “The costs of not focusing on care”

  1. Alastair Moodie

    I demand independence for Argyll and Bute! Let us take charge of our own ferries, care services, etc
    The Scottish Government has more centralised powers than Westminster, with no instinct for meaningful devolution to local authorities and communities.
    The Scottish Government is also less accountable to MSPs than the UK Government is to MPs.
    We have had SNP hegemony for too long. Let’s demand real democracy NOW!

  2. Richard Sutherland

    The National Care Service (NCS) is a shocking example of Scottish Ministers and the civil service sowing instability, disruption and chaos into key public services. It is also a monumental financial and human waste of resources of their making. An irresponsible and Scottish Government specific spiral of risk, damage and recklessness.

    The Scottish Government is seeding utter chaos at a time when the opposite is needed. This is just like the UK mini Budget. It is a £ 10 billion to £ 30 billion pounds waste of money and will harm the people and carers of Scotland for a generation.

    How has this happened ?
    To warm up the private sector and start the financial waste with a bang, the National Care Service idea and the ideological centralising project in the Scottish Government has probably spent more than £ 150 million so far since 2019. This is Scottish Ministers spending money on the likes of Management Consultancies such as KPMG, Deloitte, Cap Gemini and also the internal staff costs, staff transfers and promotions, disruption to NHS and HSCPs, seminars, workshops, service designs, technology plans, consultations many thousands of internal and external meetings, Ministers’ time, PwC, lawyers etc.

    None of this is properly accounted for and in the open. The public do not see this waste. Audit Scotland should be there in real time to expose this waste. The NHS should be asking for a refund for the damage caused by NCS.

    The other signs of the chaos – there is no NCS Strategy. There is no NCS Operating Plan. There is no NCS Financial Plan. Nothing plausible, at all.

    The ” National Care Service ” is essentially a futile and wasteful political and private sector program in its current state. To repeat, it is a 25 year long, anything between £ 10 billion to £ 30 billion pounds cost, restructuring, moving the deck chairs around program. And for what ?

    NCS is done by the Scottish Government only for themselves, to increase their powers, and for the civil service to sign over health and care to the private sector to make profits. No Minister knows the real financial costs. Nor do MSPs. The public see no benefits, nor do workers. There is no plan. This is Scottish Government specific volatility and chaos.

    Many people in the NHS in Scotland must know deep down in their souls and consciences that the health and care services they try to deliver will get much worse if they are taken over by the Scottish Government, centralised and then care awarded to private sector organisations. This will hurt.

    NCS is the National Care Smash for the people, families and carers of Scotland……….it will end with No Care Scotland.

    On the waste, let’s estimate there have been 28,235 people involved so far, at 332,540 meetings and 17,369,850 total hours of time spent at a cost of £ 190 million. Yet the NCS concept is still going in circles and downwards and backwards. Ministers and SG, NHS and NCS do not know what they are doing or why. The SG has no plan.

    Why has it come to this ? Why do Scottish Government only fund their own chaos, and the private sector interests to profit from it ? What is it for ?

    There are MSPs in the Scottish Parliament who are now saying what a monumental risk, what a financial disaster for Scotland. £ 10 to £ 20 Billion to be spent on the National Care Service vanity project and restructuring. Is that not a shocking waste of scarce resources ? Think how that money could be used elsewhere.
    SNP MSPs like Kenny Gibson and Michelle Thomson have highlighted this expensive shambles and self imposed chaos.

    The Green MSPs have said next to nothing about the health and care privatisation agenda of the Scottish Government. The silence of the Greens demonstrates an intent to encourage privatisation and centralisation. The MSPs seem determined to end the idea of local, sustainable health and care services for local people. Completely. For ever.

    The majority of MSPs in Holyrood of the Scottish Government also appear to support further care chaos, volatility and instability for the next twenty five years. They prefer to impose and centralise all the £ 4.3 billion local authority spend and give it to the private sector rather than stop and review their actions.


    NCS is the Scottish Ministers equivalent of the UK Mini Budget of October 2022. Civil services across the world focus on high level policy. They and Ministers do not seem to understand local services or delivery, and they are not at all able to advise how to spend money wisely. Ministers are going fast down a deep hole. The Scottish Parliament can appoint Tom Scholar, recently of HM Treasury and now available, to advise the Scottish Ministers and civil service on financial prudence and stability.

    The First Minister, Health Minister and Care Minister have not thought much about the NCS. They are inflicting this NCS crisis on the Scottish people when most of us thought energy prices and the cost of living crisis were already bad enough.

    There should be a hard stop and an independent review.

    Meanwhile the National newspaper says –
    “…..SCOTTISH councils will have to bid against private companies to continue to provide care services under the Government’s plans for a National Care Service (NCS).
    The NCS bill would centralise £ 4.3 billion of public spending – one-third of Scottish councils’ total budget – and require councils to bid against private interests in order to win a share of the funding they currently control…..”

    KPMG and others in the private sector now have inside knowledge of the care system in Scotland as the consultancies have already been paid many millions (?) in 2020 and 2021 to prepare to dismantle it. This destruction is known as the target operating model (TOM) and it is the Health and Care Minister’s way to spend money to create faster privatisation of the NCS and NHS.

    See Case Ref./5637587 National Care Service: Business Case & Operating Models


    The private sector Consultancies who bid for the TOM were given feedback, this one above is from Scottish Government to Cap Gemini – the feedback is not language that front line health and care workers will ever recognise. It is all about privatisation and the private sector taking over the Scottish health and care sectors and workers –
    Feedback by Scottish Government to Cap Gemini on failed TOM bid –
    “….The section would have benefitted from further information/details on the specific methodologies likely to be used for the development of the TOM – for example, further information on the Henley and Ashridge approach developed would have provided an insight into the proposed methodology. …”

    Kenny Gibson MSP, Michelle Thomson MSP and parts of the Scottish Parliament Finance Committee are right. The National Care Service is holed above and below the water. The NCS is a chaos, a shambles and a financial crash worthy of Liz Truss and Kwasi Kwarteng. The short lived recent UK Government must be incredibly proud to have taught Scottish Ministers in 44 days how to destroy a health and care system and set it up for privatisation.

    Like the UK Mini Budget, Scottish Ministers and the Scottish Parliament should review their National Care Service plans and stop.

    It is time to rethink the National Care Service crash and let independent people work together to save us all from this health and care meltdown. Scotland cannot afford to waste many more billions of pounds by the actions and inactions of Ministers, Scottish Government, NHS, COSLA and civil service etc.

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