Thursday, 29 December 2016


Today investors fret over elections, referendums, a slowdown in China, euro zone debt… the list is endless. Meanwhile journalists are always full of doom and gloom – it sells more papers.

During the week Sir Mervyn King [Fellow of the British Academy] former Governor of the Bank of England spelled out why we should be more confident in Brexit. We could do with a few more stalwarts to promote the same message after the remainers message of doom & gloom never materialised.

2016 has been the year of the improbable. According to Ladbrokes, a £1 bet on Leicester winning the Premier League, the UK voting to leave the EU and Donald Trump becoming US president could have returned over £4.5m.

This year feels like a crescendo of events that started with the 2008 financial crisis. Since it bottomed in 2009 the market has climbed what is often termed a ‘wall of worry’. Commentators have continually expected markets to fall, but instead they have climbed higher and higher. However, fear of falling markets has caused many investors to miss out on this bull market. Of course the smart money has been there.

With most investors in pessimistic mode, there is plenty of cash on the sidelines waiting for an opportunity to enter the market. This means that should markets fall by, say, five or ten percent, the dip could be heavily bought. We saw this with the Brexit referendum, where the market’s fall was quickly reversed.

Low interest rates add to the favourable backdrop for equities. In this environment it’s easy to see the attraction of equity income funds, many of which yield from 3 to 5% at present – albeit that unlike the security of cash, your capital will fluctuate, so you could get back less than you invest.

2017 should be a better year especially if the government coughs up a few bob for social services.

Monday, 12 December 2016

Health and Social Care

There is a lot of talk about NHS funding and services and there is a lot of talk about social care funding or lack of funding and services but rarely do I see the two linked and yet I consider Health and Social Care to have a symbiance with one another.

At the moment, health and social care – the help given mainly to old or disabled patients to help them continue to live at home rather than in hospital or nursing homes – are different systems in England. NHS medical treatment and domiciliary support, which is provided mainly by local councils, are usually not joined-up.

Adult social care has enjoyed an average annual real-terms growth of 5.1 per cent since 1994 but much of this has been absorbed by demographic pressures. Over the past five years spending on services for people with learning disabilities has risen by 20 per cent and for those with physical disabilities by nearly 14 per cent. But spending for older people has increased by less than 3 per cent and has not kept pace with demographic change, according to the Kings Fund.

Mounting demands on care budgets has led the government to identify additional resources in the Spending Review and to commission an independent review to recommend a more sustainable way of funding care for the future. But a tough spending settlement for local government suggests that a funding gap of at least £1.2 billion could open up by 2017 unless all councils can achieve unprecedented efficiency savings. What's more the last autumn statement made it very clear that there was no extra spending for social care in England.

The consequences are that even fewer people will receive the care and support they need. This will have knock-on effects for people needing NHS care as there will be more emergency admissions to hospital, delayed discharges and longer waits for treatment. Currently there is a battle between the hospitals [A&E] and social care. Someone is taking into hospital and treated medically, they are improved and the hospital wants their bed back, but unless the person can leave under their own steam or are moved by social services, bed-blocking can ensue and this is causing friction.

Social care is not simply an adjunct to the smooth running of the NHS. It is possible that under-investment in vital health services, such as continence and community nursing, may generate additional demand for social care support. A better understanding of the reciprocal relationship between spending in health and social care is essential to ensure that they operate as a whole system of care. NHS Health and Social Care have a symbiance with one another and until this is accepted little progress can be made.