Drop ARPA and think smarter, government urged

• The latest calls for state-funding of R&D are not visionary, but simply a repeat of a failed history

• State spending on research and development, in both the United States and

• Britain, does not contribute to innovation or economic growth

• £800m allocated to create British Advanced Research Projects Agency is a wasteful use of taxpayers’ money 

• The UK should look to the economies of Japan, South Korea, and Taiwan’s economic miracles and encourage private sector Research & Development

• The UK Government is making a mistake by creating British ARPA.

New research by the Adam Smith Institute argues that this pursuit of a state-funded research body is a waste of taxpayer funds that will not stimulate innovation or substantial technological progress. 

Often reported as a personal preoccupation of senior government advisor Dominic Cummings, the creation of a British version of the USA’s Advanced Research Projects Agency (ARPA) has been government policy since the Queen’s speech in 2019, in which she said the British government would:

“… significantly boost public R&D … modelled on the US Advanced Research Projects Agency …”

This followed a blog post a year earlier, on March 11, 2019, when Cummings said:

“We KNOW how effective the very unusual funding for computer science was in the 1960s/1970s—ARPA-PARC created the internet and personal computing …”

Terence Kealey, author of the report and emeritus professor of clinical biochemistry at the University of Buckingham in the United Kingdom, says that ARPA’s proponents misdiagnose the incentives that drive innovation and the history of the project in the United States. 

ARPA, along with other state-funded research spending, is justified by proponents through claims of a “market failure” in science funding: that private companies under produce “public good” basic science research. Yet the history of technological progress since the Industrial Revolution is one of private businesses investing in beneficial innovations without state assistance. 

Research from the OECD shows that public sector funding of R&D crowds out private funding and does not contribute to economic growth. While in the USA, the large scale public funding of research projects led to no long-term increase in per capita growth, and that US productivity actually declined.

Looking at the history of the American ARPA, and scientific progress in the USA before, during and after its foundation, the report argues that the original ARPA was a mistake and that the British government’s attempt to repeat it is ‘folly.’

Instead of copying a failed US model, the free market think tank argues that the UK should be looking to the far east for inspiration. South Korea, Taiwan and Japan’s embrace of a laissez-faire approach to R&D, funded by industry for its own interests, has meant high-tech companies growing quickly to challenge those in the industrialised west in recent decades. 

Business sector R&D spending in Japan and Taiwan stands at nearly two and half times that of the UK’s and South Korea’s is nearly three times as high as our own. 

Meanwhile nearly all of these countries’ research comes from private sources. 

Kealey argues that the eastern miracle economics enjoyed their status because their governments did not direct or fund research and that the latest calls for state-funding of R&D are not visionary, but simply a repeat of a failed history.

Terence Kealey, an adjunct scholar at the Cato Institute in Washington DC, former lecturer in clinical biochemistry at Cambridge University and author of the report, said:

“In the hope of stimulating technological and economic growth, Parliament has committed £800 million to funding a British ARPA (Advanced Research Projects Agency). Yet the original American ARPA of 1958 failed to stimulate either technological or economic growth. Moreover it was, like our imitative ARPA, based on a discredited, Marxist, model of science. Every penny of our £800 million will be wasted.”

Matthew Lesh, Head of Research at the Adam Smith Institute, said:

“The evidence is clear: innovation is a bottom-up, spontaneous market-driven process. The so-called 'British ARPA' is throwing £800 million of taxpayer money down the drain. If we want our entrepreneurs and innovators to succeed we need to focus on reducing taxes and cutting red tape not on boondoggle vanity projects."

Notes to editors:  

For further comments or to arrange an interview, contact Matt Kilcoyne: matt@adamsmith.org | 07904 099599

The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Britain faces mental health crisis post-pandemic, novel psilocybin treatments needed

The Adam Smith Institute and the Conservative Drug Policy Reform Group call for a review of the Schedule 1 status of psilocybin in this new paper. 

Millions of Brits have endured social isolation, stressful working conditions, and lack of family contact, and other stressful or depression-inducing circumstances due to the ongoing pandemic, lockdown measures, and the associated economic crisis. Britain faces a mental health time bomb, says the free market think tank the Adam Smith Institute (ASI) and policy group the Conservative Drug Policy Reform Group (CDPRG). 

A new paper, co-released by the Adam Smith Institute and the Conservative Drugs Policy Reform Group and authored by leading researchers from King’s College London, and the University of Manchester, argues that the rescheduling of psilocybin, the active compound in magic mushrooms, could help avert a looming mental health crisis. 

The paper has been sent to the Home Office accompanied by statements of support from leading scientists. 

The Misuse of Drugs Regulations 2001 deems psilocybin, along with many other potentially revolutionary medicines, harmful and lacking medical potential. This classification is erroneous, the scientists say. 

Crispin Blunt MP, who chairs CDRPG, says that this, coupled with the Misuse of Drugs Act 1971, means a “cross-hatching of prohibitive scheduling” that “has led to a scientific blackout lasting nigh on fifty years, precluding new treatments and, with them, the prospect of a better life for millions of people.” 

Thousands of men and women from the armed forces, policing and front line medical staff are suffering from psychological injuries incurred through service to their country. The country has walked away from these brave individuals, the think tank warns as it calls for innovative new approaches. 

Psilocybin, the psychoactive compound in magic mushrooms, is found naturally in over 100 species of fungi. It induces temporary changes in mood, perception and cognition via activation of serotonin receptors in the brain. Although it is commonly seen as a recreational drug, a growing body of peer-reviewed academic research indicates that it  works well against treatment resistant depression. Depression affects an estimated 1.2 million adults in the UK and is a leading cause of suicide. 

This could not only improve the lives of those suffering this debilitating mental illness, but could also save the NHS billions and contribute substantially to the British economy. Mental illness costs the UK economy £94 billion per annum. Beyond the direct impacts on personal health, mental illnesses can reduce disposable income, financial security and workforce participation. Depression alone costs the UK an estimated £10bn a year from cost of treatment and lost employment. 

Together the researchers, CDPRG and the ASI propose the movement psilocybin to Schedule 2 of the Misuse of Drugs Regulations 2001 on a research only model. They argue in the report that the rescheduling of psilocybin will reduce the current barriers to research, enabling the sorely needed exploration of fresh mental health treatments by the UK’s scientists. 

“Brits have faced months of isolation under lockdown and we’re only beginning to understand the consequences for not only our physical but also our mental health. Even before Covid-19, an estimated 1.2 million of us were battling against treatment-resistant depression. There hasn’t been a breakthrough in depression research for decades. By rescheduling psilocybin we have a chance to put Britain at the forefront of research, and change millions of lives for the better." 

(Dan Pryor, Head of Programmes, ASI)

Rescheduling psilocybin can reduce the absurdly high costs, extended research timelines and stigma that needlessly characterise the process of researching Schedule 1 substances with medicinal potential. Removing these barriers will equip the UK to develop world-leading mental health treatments that are more effective and more cost-effective than current responses, enabling the UK to fulfil its potential as a global centre of excellence in mental health and life sciences research. 

The authors argue that psilocybin’s current inclusion in Schedule 1 of the 2001 Regulations follows an outdated assumption of harmfulness, implicit in its Class A status, which is not supported by the current evidence base. Controlled drugs may be rescheduled by a Statutory Instrument implemented by the Home Secretary, on the advice of the Advisory Council on the Misuse of Drugs (ACMD), without affecting existing legal controls on non-medical or scientific use, and there is a precedent for rescheduling controlled drugs before market authorization.

• Progress in the treatment of depression has been slow. Prior to the approval of esketamine by the European Commission in late 2019, the last major advancement in the treatment of depression came over 30 years ago with the licensing of SSRIs. 

• Psilocybin will fundamentally improve the treatment of mental health conditions. Psilocybin works in a different way to traditional antidepressants and psychological therapies, by directly increasing activity and changing patterns of connectivity in brain regions strongly associated with ongoing depression and anxiety. 

• Psilocybin’s current Schedule 1 status is at odds with its low toxicity. Compass Pathways recently completed the largest ever randomised study of psilocybin, in collaboration with Dr James Rucker and Professor Allan Young at King’s College London. The study found that psilocybin caused no statistically significant worsening of cognitive and emotional measures, no serious adverse events and no adverse events that led to withdrawal from the study. This is the strongest evidence yet for the basic safety profile of psilocybin, and the best evidence yet to justify ongoing, large scale research in patient populations. 

• Moving psilocybin to Schedule 2 could kick-start the UK’s flagging mental health research field. The UK presently has no active pharmaceutical laboratories doing central nervous system research and development outside of universities since Eli Lilly closed their site in Surrey in March 2020. 

Statements from the paper authors

Dr. James Rucker, Honorary Consultant Psychiatrist and Senior Clinical Lecturer in mood disorders and psychopharmacology at the Centre for Affective Disorders at the Institute of Psychiatry, Psychology & Neuroscience at King’s College London and the South London and Maudsley NHS Foundation Trust.

“Major depression is common and deadly. It is associated with nearly half of all suicides in the UK and is a leading cause of disability and socioeconomic burden worldwide. About a third of people suffering with major depression don’t get better with standard drug and psychological treatments. Good quality, small scale clinical trials have indicated that psilocybin therapy is an effective new treatment for those people. 

We now need to perform large scale trials to confirm this. However, psilocybin is designated a ‘Schedule 1’ drug by the UK Government. This makes large scale clinical trials very difficult and very expensive to conduct. Schedule 1 designation is unnecessary because psilocybin is not dangerous and not addictive when compared to other drugs. Therefore, we are asking the UK Government to review the Schedule of psilocybin, so that we can work more efficiently to bring a potential new treatment to patients who are suffering, and dying, every day with major depression.”

David King, Director of Research at the Conservative Drug Policy Reform Group (CDPRG) and a final year graduate medical student at King's College London. (Corresponding Author) 

“There are more than a million depressed adults in the UK today whose illness does not get better with antidepressants. Almost one in three of these people will attempt suicide. My mother was one of them - she took her own life in 2013 after struggling with mental illness for decades. I speak from experience when I say that the impact on patients and their families is tremendous. 

Meanwhile, pharmaceutical interest in developing new drugs for depression has completely dried up - with one notable exception. Psilocybin-assisted therapies are being investigated, and the evidence suggests that they may work where other treatments have failed. One might think that the UK Government would be supporting this vital research however possible, but the opposite is true. 

Despite substantial evidence of safety, and with no known association between psilocybin and crime, it is controlled by UK law under the strictest possible regulations. While these regulations do not prohibit research, they make it far more difficult. Parliament has known about these barriers to research for 20 years, but no progress has been made. We cannot afford to wait any longer. The Government has an ethical duty to support mental health research by rescheduling psilocybin, urgently.”

Dr. Jesse Schnall, medical doctor in Melbourne, Australia, former visiting student, University of Oxford. 

“Every person deserves access to good healthcare. Rescheduling psilocybin is safe, effective and achievable today. When we discover a tool to help people who are suffering, we must use it. When the law no longer reflects the evidence, we must change it.”

Dr. Daniel D’Hotman, Australian Rhodes Scholar and medical doctor, currently completing a DPhil on the ethics and politics of using AI for suicide prevention at the University of Oxford.

“People with mental health issues deserve the same high quality care as any patient. But for some people, including many former service men and women with PTSD, all existing treatments fail. Psilocybin has shown great potential to help these patients. Yet its Schedule 1 status is holding back research. Rescheduling psilocybin would restore fairness to the regulatory environment, and give British scientists every chance of providing a new therapy that can reduce suffering for those who are in need."

Timmy Davis, Psilocybin Rescheduling Project Manager and researcher at the Conservative Drug Policy Reform Group (CDPRG) and is undertaking psychoanalytic training with the SITE for Contemporary Psychoanalysis. 

“Modern research is showing psilocybin to be a safe and effective psychiatric intervention, lending scientific credence to the voices of those who have espoused its psychotherapeutic properties for decades. Depression has been the target chosen to indicate its promise but psilocybin’s potential lies in its applicability across numerous clinical categories; a list including depression, post traumatic stress disorder, alcohol use disorder, nicotine addiction, obsessive compulsive disorder and anorexia nervosa is by no means exhaustive. While psilocybin remains in Schedule 1 these lines of research and others are unjustifiably stifled. The expedited rescheduling of psilocybin could save and improve numerous lives, alleviating the suffering of millions of individuals living with myriad mental health conditions, as well as furthering the UK’s reputation as leading the world in psychedelic research."

Prof. Jo Neill, Professor of Psychopharmacology in the Manchester Pharmacy School at the University of Manchester. 

“Psychedelic Medicine can provide an effective therapy for many hard to treat conditions, such as PTSD, refractory depression, addiction, and potentially many other disorders. More research is urgently required to enable our understanding of how these drugs work and how they can best be used for patient benefit. Current drug scheduling restrictions hinder this research, creating time delays, significant costs, and unnecessary bureaucracy. None of these restrictions applies to Schedule 2 drugs. Rescheduling will enable Psychedelics Research, and ensure that the UK’s Life Sciences sector becomes an international leader.”

To arrange interviews with Corresponding Author Dave King and with press enquiries for the Conservative Drug Policy Reform Group, please contact press@cdprg.co.uk

With press enquiries for the Adam Smith Institute, please contact matt@adamsmith.org (07904099599)

Ad ban plan won't help Britain battle the bulge

After news was released of Boris Johnson planning to ban ads for Britain’s favourite foods on telly and online, Daniel Pryor takes to task the idea that it will help Britain battle the bulge:

"Politicians might find TV ads annoying, but the revenues they generate help fund our favourite shows. Banning junk food ads before watershed would give us worse TV and do nothing to improve the nation's health. A large body of evidence shows that advertising doesn't brainwash us into buying things we don't want. Instead it works by boosting specific brands, like encouraging people who fancy a takeaway to choose Wagamama over Nando's. Since there's no legal definition of junk food, the proposed ban would include virtually all fruit juice, raisins, hummus, most cheeses and more. Public health nannies might want to treat us all like brainwashed children, but we should reject them and their half-baked nonsense."

For further comment or to arrange an interview, please contact Matt Kilcoyne on 07904099599 or email matt@adamsmith.org

Giving a stamp of approval to a good tax cut

The Adam Smith Institute has cautiously welcomed most of Chancellor Rishi Sunak’s summer statement. Matthew Lesh, Head of Research, said:

"Stamp duty is Britain’s worst tax. The cut is the right move to get Britain moving. Temporary measures to get young people work experience, to build inwork skills, are also welcome in the face of an increasing minimum wage.

“Furlough continues for a few more months but reality will hit eventually. In the forthcoming Budget, the Chancellor should cut the cost of hiring by permanently reducing the burden of employers’ national insurance, remove red tape like occupational licenses, and abolish the factory tax to get businesses investing in their futures.

“The stimulus proposals are very questionable. The VAT cut and subsidising restaurants will be expensive and provide limited benefit. People aren’t spending on food, accomodation and attractions because of safety concerns, not lack of demand or cash.” 

To arrange an interview, or further comment please contact Matt Kilcoyne on 07904099599 or email matt@adamsmith.org

Real New Deal is Boris' Promise of Planning Reform

Despite worrying news of an interventionist ‘New Deal’ for the country, the best noises from the Prime Minister Boris Johnson in his speech in Dudley today come in the detail of promised planning reform. Much of which builds on suggestions the ASI has made in recent months and years — including the great research work done by London YIMBY’s John Myers. Matt Kilcoyne, Deputy Director of the Adam Smith Institute, gives the following comment:

"Usually you trail your best lines, but the Prime Minister's best bit is yet to come: promised planning reform is the real new deal. Homeowners will be able to build up via a fast track approval process and neighbours' consent; commercial and residential properties will be able to switch purpose without hindrance; and the developers will get the ability to demolish old stores to get people living on our high streets. This is a plan to build up, rebuild, and repurpose. 

"If Boris delivers this reform package we could finally build homes in the places people want to live, transform our forgotten towns and cities into living metropolises, and help tradesmen bounce Britain back to growth after this viral shock."

For further comment please contact Matt via 07904099599 or email matt@adamsmith.org

The protectionist commission Adam Smith warned about

Following the Government’s announcement of a Trade and Agricultural Commission our Matt Kilcoyne says:

“In response to the actually unacceptable news of a commission being set up to restrict the scope of trade talks in response to lobbying efforts by the NFU, please find a bit of perfect Adam Smith who dealt with this kind of nonsense in 1776.

‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

‘It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.’

This commission is a kick in the teeth for consumers and it is a conspiracy by a powerful few against the public good.”

To arrange an interview or further comment please contact Matt Kilcoyne on 07904099599 or via email matt@adamsmith.org

Lockdown Independence Day is a cause for celebration

Our Matthew Kilcoyne welcomes the Prime Minister’s announcements to reopen the UK economy’s lockdown as the viral threat recedes.

"Britain’s Lockdown Independence Day will be the 4th of July and that is a cause for celebration. While caution has been prudent in the face of a viral threat, we cannot exist in a state of government-imposed stasis forever. 

"Common sense solutions previously mooted now need to come into effect: allowing any pub to operate outdoors, use their car parks as beer gardens for punters, and even use local parks as part of their backyard. Cafes and restaurants must be able to turn high streets into living streets with outdoor seating.

"These are the first of many steps the Government should take to ensure that our retail and services sectors thrive. It should come with the withdrawal of support for businesses that can stand on their own feet. But those that still face government restriction on raising revenue deserve support while the virus continues to disrupt our lives."  

To arrange an interview or further comment please contac Matt Kilcoyne on 07904099599 or via email matt@adamsmith.org

Govt listens to concerns over NHS app

Head of Research Matthew Lesh welcomes the news that the government is to abandon its home-made app in favour of working with Apple and Google to provide a decentralised contact tracing app with fewer privacy concerns and greater effectiveness:

“We have lost crucial time, but it is welcome that the Government has listened to public concerns to get this important project right. It was always folly for NHSX to try building an app from scratch. Despite assertions, it was never going to work as well or ensure privacy would be protected as the Apple-Google framework. The decentralised, Apple-Google approach will protect privacy, work across borders, limit battery drain, and effectively work in the background. A more effective app will help protect the NHS and save lives as winter approaches.”

To arrange an interview or further comment please contact Matt Kilcoyne on 07904099599 or email matt@adamsmith.org

Pay blood plasma donors for a safe and secure supply

This World Blood Donor Day (14 June, 2020) a new paper — co-published in the United Kingdom by the Adam Smith Institute, the United States by the Niskanen Center, and the Australian Taxpayers Alliance — argues in favour of paying blood plasma donors.

• There are significant global shortages of blood plasma used to make plasma therapies. Demand is growing at a rate of 6-10% per year. Three-quarters of people do not have access to the appropriate plasma therapy, largely outside of developed countries.

• Shortages are significantly exacerbated by the World Health Organisation’s policy — adopted by the United Kingdom, Australia, New Zealand and some Canadian provinces — to rely exclusively on Voluntary Non-Remunerated Blood Donations (VNRBD).

• The United Kingdom currently imports all (100%) of its supply of plasma therapies, Canada four-fifths (84%), Australia half (52%), and New Zealand one-tenth (13%). These countries are too increasingly dependent on imports of plasma therapies from countries that remunerate donors such as the United States and Germany. This inflates the global blood plasma price, making it unaffordable for low to middle income countries.

• 5% of the world’s population is responsible for more than half of all the plasma collected in the world.

• In order to ensure a safe, secure, and sufficient supply of plasma therapies, the United Kingdom, Canada, Australia, and New Zealand should adopt Voluntary Remunerated Plasma Collections (VRPC). 

Transfusing the blood plasma of those who have recovered from Covid-19, called convalescent plasma, appears to help against the novel coronavirus.The UK’s National Health Service has already begun trials with recovered Covid-19 patients, including from Health Secretary Matthew Hancock.  

However, well meaning bans on paying for blood plasma donations in the 1990s to avoid Creutzfeldt-Jakob disease (CJD) and HIV transmission, has left the UK over-reliant on imports at a time international demand is rising and supply is contracting. A new paper, authored by Georgetown University professor Dr Peter Jaworski, argues this World Blood Donor Day (14th June) that it’s time for donors to be paid for donating blood plasma to ensure a healthy supply. 

New uses for plasma therapies, and a reduction in plasma donations during the crisis, will put additional strain on what is already a strained global supply, the report outlines.

In return for a voluntary donation of blood plasma, under a reformed paid system the donor would receive payment — either in the form of cash, or a payment in kind such as time off work, vouchers, or tax credits. By increasing the incentive to donate, donations are expected to substantially increase. 

The United States, where donors are paid, is responsible for 70% of the global supply of plasma. Altogether, countries that pay donors (including Germany, Austria, Hungary, and Czechia) account for nearly 90% of the total supply. There is now not a single jurisdiction anywhere in the world that meets its needs exclusively based on non-remunerated plasma collections. 

Demand for plasma therapies is growing at around 6-10% per year. Blood plasma is now the USA’s 11th most valuable asset for export, worth US$26 billion and expected to reach US$44.3 billion by 2023.

The report argues that the UK, Canada, New Zealand, and Australia should follow many European countries and the USA in withdrawing prohibitions on voluntary remunerated plasma collections. These developed, English speaking democracies would ensure a domestic security of supply and free themselves from over-reliance on the United States or EU-only schemes.

Stringent viral detection tests required for donations by regulators limit the countries that effective donations can be taken from to reduce risk from blood transmitted diseases such as HIV, HBV, and HCV. Modern procedures including heat treatment, solvent and detergents, and nanofiltration limit this further to developed world countries. However, increasing supply in the UK, New Zealand, Canada and Australia, could have beneficial effects for the developing world too. 

Five-percent of the world’s population is responsible for more than half of all the plasma collected in the world. North America and Europe together account for 74% of all immunoglobulin treatments derived from blood plasma used in the world, while Latin America uses just 5%, Middle East and Africa consume just 2%. The UK’s import of plasma therapies means millions of people in the developing world who could be helped by plasma therapies are left to go without.

Due to historic fears over vCJD, the United Kingdom is currently the furthest from the objective of sourcing plasma therapies. All of the country’s plasma therapies are imported, mostly from the United States. “Spontaneous” development of CJD is now, however, comparable in the UK to other developed countries and the over abundance of caution should be removed and paid donations allowed, the think tank argues. This could help meet the near 10% growth per year in demand for plasma therapies. 

Peter Jaworski PhD, author of the report:

“Voluntary Remunerated Plasma Collections are the only evidence-based path towards a safe, secure, and sufficient supply of plasma. Relying on non-remunerated donations makes no medical or economic sense. It is at  least twice as expensive, and less than half as effective.  This is a threat to patients, and a risk to their supply of plasma therapies.” 

“The UK, Canada, Australia, and New Zealand are a drain on the global supply of plasma. The only way we can finally begin to contribute to the global supply of plasma is to permit Voluntary Remunerated Plasma Collections at home.”

Nobel Prize winning economist Alvin Roth says of the current over-reliance on the US’ paid donor market:

“I find confusing the position of some countries that compensating domestic plasma donors is immoral, but filling the resulting shortage by purchasing plasma from the U.S. is ok."

John Boyle, President of the Immune Deficiency Foundation (U.S.):

“The global demand for plasma’s life-saving properties continues to grow, so it’s vital that we collectively explore practical ways to increase plasma donations so that supply keeps pace. Because people living with many types of primary immunodeficiencies require lifelong infusions of plasma-derived therapies, our community is especially sensitive to the need for an adequate global plasma supply. We believe that recognizing plasma donors for the heroes that they are and educating the public on the need for more donations is important. We also believe that it’s time the international community looks realistically at the possibility of compensating plasma donors so their most vulnerable community members aren’t forced to go without their medicine because of politics, bias, or misinformation.”

Kate Vander Meer, founder of Plasma for Life (Canada), a patient group:

“At the end of the day, it is patients who bear the biggest risk if there is a safety issue but what is often overlooked is that security of supply is just as essential to patient health. Patients know paid plasma is just as safe. We have been putting it into our bodies for years. It's the negative impacts of shortages, the anxiety over supply, and the guilt of seeing other patients suffering through shortages knowing Canadian patients are a significant drain on the global supply when we should be capable of contributing that weighs heaviest on me.”

Robert Slonim, professor of economics at the University of Sydney, says:

“Professor Jaworski’s brief “Bloody Well Pay Them,” is a must read for all Australian health and blood authorities, and the Australian Red Cross Lifeblood. Jaworski’s sober review of the evidence leaves no room for doubt that Australia’s non-remunerated plasma policy to collect plasma is an unmitigated failure leaving Australia increasingly vulnerable to shortages and health risks that, costing over $1 billion every five years, is unjustifiably and excessively burdensome on Australian citizens. Any fair minded non-dogmatic reader of “Bloody Well Pay Them,” will undoubtedly conclude that Australia should immediately take action towards remunerating plasma donors before the failed non-remunerated policy turns into a national health crisis”

Matthew Lesh, Head of Research at the Adam Smith Institute, says:

“We have a practical need and moral duty to begin remunerating blood plasma donors. Not only would it ensure the safe and secure domestic supplies for life saving treatments, it would also mean contributing to rather than taking away from the global supply.“ 

Brian Marlow, Executive Director of the Australian Taxpayers Alliance, says:

“Australia’s ongoing policy of non-remuneration for plasma collection is a large part of the reason we have huge shortages and ever increasing public healthcare costs for taxpayers.If adopted, the solutions outlined in this report would help encourage more plasma donations and save the Aussie taxpayer hundreds of millions of dollars over the next few years. I can't think of a better solution.“

Samuel Hammond, Director of poverty and welfare policy at the Niskanen Center, says: 

The world's dependency on the United States for blood plasma is unsustainable. It makes health systems in the U.S. and other developed nations more fragile, and reduces access to plasma therapies in many developing nations. The W.H.O.'s opposition to remuneration exacerbates the shortage by standardizing bad policy and perpetuating misinformation about the risks of paid donation. To end the global plasma shortage, our peer countries must end their prohibitions on voluntary, remunerated plasma donation, and shift from a policy of national self-sufficiency to a policy of global contribution.

Notes to editors:  

How it works in practice — A unit of raw plasma sells for approximately U.S.$250-300. A unit consists of a litre. The average donation yields roughly 800mL, and is compensated at US$20-50. For a litre of plasma, donors receive between US$30-60. Per litre of plasma, the revenue is split 20-30% for the donor, and 0-5% for the company in the form of profit. Donors receive on average US$20-50, or US$15-35 per hour. 

Frequency of donations — the United States permits twice-weekly donations, up to 104 times per year. However, according to data from 2017, the average frequency of donations per 12 months was 21.4, with 14% giving more than 50 times, and 6.7% giving more than 70 times.

For further comments or to arrange an interview, contact Matt Kilcoyne: matt@adamsmith.org | 07904 099599.

The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Revolution required to solve social care crisis

A new paper from the neoliberal think tank the Adam Smith Institute argues that the social care system is broken, unfit for purpose and cannot be fixed by new taxes. 

• Social care system is characterized by perverse incentives and is woefully out of date.

• Taxpayers should pick up the ‘long-tail’ costs of those needing many years of care. 

• Making social care free to everyone as part of the NHS is a non-starter and would be the largest nationalisation ever.

• Debate over the budget for social care is pointless when the money spent goes into a system that is largely dysfunctional.

• Public funding and long term care budgets should give much higher priority to younger adults with physical disabilities, mental health or learning problems, whose needs have long been under-resourced. 

The UK social care system is broken, unfit for purpose and cannot be fixed by new taxes and spending or making more people eligible for free care, says a new report by the Adam Smith Institute. 

While Covid-19 has focused attention on elderly people in care homes, half of social care spending actually goes on younger people with physical, mental health or learning problems, plus help delivered to people’s own homes. The whole system is in crisis, argues the Adam Smith Institute, distorted by perverse incentives, unfair and woefully out of date. While there has been much talk about raising public care spending and providing more free care, it argues, only widespread and disruptive change will solve the deeper problems and prevent future cases of neglect. 

The think-tank calls for “disruption” to the system and for “new partnerships in new markets that embrace fundamental change.”

“People aren’t looking beyond how to get more money into social care,” argues the report’s co-author Eamonn Butler. “And more funding is seen as a magic bullet that would solve all the problems. But an arbitrary boost to care budgets will do little good. We can only solve the crisis in social care by looking at and radically reforming the whole system, not just one part of it.”

From 2017 onwards the Government promised a Green Paper, aiming to “ensure that the care and support system is sustainable in the long term” and to improve integration with health and other services and between different care providers. During the 2017 General Election campaign, former Prime Minister Theresa May said the proposals would include a lifetime “absolute limit” on what people pay for social care—though there was less agreement on how this would work, how much it would cost, and how it would be funded. After the 2019 election there was talk of a White Paper, before the Covid-19 outbreak cut discussions short.

Most care homes with residents funded by local authorities are over 20 years old and no longer up to modern standards, the free market think tank argues. Many are converted old hotels and houses, with narrow corridors, small rooms and no en-suite bathrooms. Equally, self-pay residents get a raw deal from providers and insufficient protection from regulators.

Meanwhile, live-in carers hired by families typically have no qualifications and many are paid less than the national living wage. And care delivered free to vulnerable people in their own homes by local authorities is usually selected on price, not quality, and there is very little use of modern information and artificial intelligence technology that could spectacularly raise its quality and efficiency.

“The idea of making social care free to everyone as part of the NHS, possibly funded by a new ‘care tax’, is a non-starter,” says Eamonn Butler, warning that “this would be the largest nationalisation ever. The NHS has 170,000 beds in 1,300 hospitals. Adding another 480,000 beds in around 20,000 nursing and care homes would overwhelm it completely.” 

The Institute also thinks it unlikely that the government would stump up the hundreds of millions of pounds needed to upgrade residential homes, or that taxpayers would accept the extra burden. Instead it advocates a partnership with private pension and insurance investors to develop large numbers of new and upgraded facilities, and lease them to local authorities, giving local authorities a long term, whole-service package without having to find the capital to build new homes themselves.

And it says that there are other options, such as individual savings accounts or the Australian system, a mixture of voucher subsidies and refundable bonds, should be explored first before any hasty decisions are made.

On funding, the report’s authors say that insurance is not presently a viable way of people providing for the care they might need later on, because the insurance industry cannot cope with the ‘long tail’ risk—the risk that a few individuals might need a great many years in a residential nursing or care home. In order to create a viable insurance system and induce more families to contribute to their own care needs, the Institute proposes risk-sharing between individuals and government. If people insure themselves for six years’ of residential care, they suggest, the government would pick up anything beyond. This helps ‘pool’ risk and makes insurance affordable.

In return, public funding and long term care budgets should give much higher priority to younger adults with physical disabilities, mental health or learning problems, whose needs have long been under-resourced. 

A more rational and affordable care system will involve disrupting the market, but will deliver better supply, sustainability and fairness in a more functional system. Without a radical overhaul of provision, increases in public funding will not avoid future crises.

Andrew Lansley, former Secretary of State for Health (under the Coalition)

 “I welcome this further contribution to the debate on how we can sustain social care in the future. I do sincerely hope that this will encourage action now”.

Rt Hon Paul Burstow FRSA, Former Health Minister (under the Coalition)

“As we begin to contemplate the world after Covid the Government must spell out its plans for the renewal of the purpose, workforce and fabric of social care. This report is a timely contribution to thinking about how and what we pay for to secure the right care and support for all who need it.”

David Davis MP, Member of Parliament and former Chairman of the Conservative Party:

“Nationalisation or pseudo nationalisation of the care sector would only compound the mistakes that have led to too many deaths. We need creative solutions to deliver large-scale private sector investment into the system that would improve patient outcomes. If more state control is the answer than someone is asking a pretty dumb question.”

Peter Carter, former Chief Executive of the Royal College of Nursing:

“This interesting paper provides a way forward on one of the most pressing issues facing society across the UK at this time. Social care is under huge pressure and the existing model of funding is not sustainable. I would recommend this paper as a way forward.”

Stephen Collier, Chair of NHS Professionals, Chair of Eden Futures and former Group Chief Executive of BMI Healthcare, says:

“This is an interesting and challenging read. Its proposals on funding of new care home capacity are both imaginative and deliverable, and if implemented would help the sector, and the broader economy at a difficult time. The proposals would help raise standards of accommodation for the care sector and the flow-through effect on service quality would be strongly positive.”   

Andrew Lewer MP, Member of Parliament:

“I welcome this Report by the Adam Smith Institute into the future of Social Care. There has been agreement across the political spectrum that wholesale reform of care is necessary for the whole of this century and yet it has not happened. The issue must move from the “too difficult” column to the “too difficult to ignore” column and it must do so urgently. The ideas in this Report provide some well thought through ways forward.”

Stephen Collier, Chair of NHS Professionals, Chair of Eden Futures and former Group Chief Executive of BMI Healthcare:

“This is an interesting and challenging read. Its proposals on funding of new care home capacity are both imaginative and deliverable, and if implemented would help the sector, and the broader economy at a difficult time. The proposals would help raise standards of accommodation for the care sector and the flow-through effect on service quality would be strongly positive.”

Roger Williams CBE, Director, Institute of Hepatology:

“An excellent and balanced account of the present situation and of what might be possible for the future.”

Ian Smith, former Chair, King’s College Hospital Trust and former Group Chief Executive of BMI Healthcare:

“Incisive report.

Clearly the care home and the care at home sectors are under existential threat. I think you have come up with a number of ways that this vital sector can be saved.”

Dr Mary Baker former President of the European Federation of Neurological Associations and former CE of the Parkinson’s Disease Society:

"This well written report offers new ideas for social care that are convincingly thought through and succinctly expressed; a very good and balanced report.”

Jonathan Lord, MP for Woking:

"Congratulations on this excellent report. It’s a very useful contribution to the debate on social care and raises a number of crucial questions that are too often overlooked."

Notes to editors:  

For further comments or to arrange an interview, contact Matt Kilcoyne: matt@adamsmith.org | 07904 099599.

The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.