Scotland has been aflame with talk in recent weeks of whether universal benefits are sustainable or not, and in particular those which apply to our elderly. But there’s an enormous falsity at the heart of the position taken by the Unionist parties, because they refuse to consider independence as a possible solution and base their argument on the premise of a bankrupt UK constantly slashing the Scottish Government’s block grant for the forseeable future under a programme of savage austerity (which would be the same regardless of whether the Tories or Labour were in charge).
There is, of course, an alternative. By most sane assessments, an independent Scotland’s economic starting position would be pretty similar to that of the UK. Both sides of the debate quibble over a percentage point here or there, but the reality is that at least to begin with the amount of money in the pot would be more or less the same.
(Move a few decades into the future and an independent Scotland will either be drowning in wealth from a world-beating renewable energy industry, or crushed by debt because all the oil’s run out, depending on your ideological persuasion.)
The point the No camp must doggedly and repeatedly turn a deaf ear to, however, is that while an independent Scotland might not have vastly more money to spend than it does now, it wouldn’t have to spend it on the same things.
By almost any account you care to seek out, Scotland as a part of the UK vastly overspends on defence. Or at least, the UK vastly overspends on its behalf. Two different independent reports in the last year have concluded that were Scotland to control its own defence budget and spend similar proportions of national income on it to comparable countries, it would save around £1.5bn a year.
(This in itself seems quite a conservative estimate and allows for a considerably larger armed force than many Scots believe would be necessary for a small country with no pretensions of “punching above its weight” on the world stage, but we’ll stick with the neutral figures to avoid any arguments.)
How, then, might this impact on the affordability of universal services for the elderly? Let’s focus on the most expensive – free personal care. The media has been full of horror stories for some time about the rising cost of this policy, which has rocketed since its introduction in 2002, though nobody seems able to say by exactly how much. The BBC story linked in that last sentence claimed a 150% rise in seven years – from £133m in 2003/04 to £342m in 2010/11 – but Community Care put the 03/04 figure at £194m, which would mean the increase was only half as much (76%).
But to keep all the gloom-and-doom-mongers happy (if that’s not a contradiction in terms), we’re going to investigate the worst-case scenario. If we strip out the effects of inflation to get to the real-terms increase, the figures quoted by the BBC represent a rise of 11% a year. So what happens if the cost of free personal care continues to soar on that trajectory for the next 20 or 25 years?
(It won’t, because the population isn’t going to increase and age infinitely – we’re not going to suddenly start living to 180 – and the cost of care actually FELL by £16m from 2009 to 2011, but remember we’re painting the bleakest picture possible here.)
The extra cost of free personal care for the next two decades would come out like this:
So to pay for free personal care over the next 20 years assuming those worst-case 11% annual (and compound) rises, then, we’ll need an extra £17.53bn. That sounds like a lot of cash to have to find – until you remember that in our independence scenario we’ve also saved £30bn over the same period from the defence budget.
In other words, even if we take the gloomiest figures available, and project a staggering, extremely unlikely cost increase of 11% every single year, an independent Scotland could afford to fund universal free personal care for the elderly for the next 20 years and still be a minimum of £13bn in profit.
(Which would, as it happens, be more than enough to also cover similar increases in prescription charges and bus passes, with billions still left over. And remember, that’s from defence savings alone, without increasing a single tax.)
Nobody thinks costs will actually rise that much in reality. Earlier this month, in a study widely reported as an apocalyptic warning, former Auditor General Robert Black suggested that costs of health and social care – a statistic that includes far more than just free personal care – for Scotland’s over-65s might rise to £3.6bn by 2030.
Based on the official Scottish Government stats for 2006-07, that’s a far lower figure than the one we’ve calculated above, which gets to £2.8bn on personal care alone. (With social care included too it’d be more like £4.6bn.) Yet even under our far more pessimistic formula the policy is still eminently affordable.
(And this entire analysis ignores the fact that personal care aimed at keeping people in their homes is actually cheaper than looking after them in hospitals, and saves lives by freeing up beds, and that any introduction of means-testing will mean spending money on bureaucracy that could have been used for healthcare. We’re keeping the maths as simple as possible for the benefit of any Labour front-benchers reading.)
It may well be the case that Scotland can no longer afford to look after its old people if it stays in the Union. We’re happy to take the word of the Unionists on that – they should know, after all. But then, we don’t have to stay in the Union.
In 2014, we’ll get to choose between using our money to care for our own people or usng it to drop bombs on other countries’ people. Is that really, as Johann Lamont and chums would have it, a “tough choice”? Not from where we’re sitting it’s not.