House of Commons Library

Adult Social Care Funding (England)

Published Wednesday, March 8, 2017

This Commons Library briefing paper examines the key funding pressures facing adult social care services in England and evidence of the impacts of these pressures on social care and health services. The paper explains the additional funding for adult social care that the Government has made available in this Parliament, and discusses stakeholder concerns about a growing social care ‘funding gap’ and the need for a long-term sustainable funding solution.

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Adult social care provides personal and practical support to enable adults of all ages (both older people and working age adults) to retain their independence and the best quality of life possible. Adults may be cared for by family, friends or neighbours without payment (informal care), or through services they or their local authority pay for (formal care). Publically funded adult social care is means-tested and primarily funded through local government. It constitutes the biggest area of discretionary spend for local authorities in England.

Social care funding pressures

The combination of a growing and ageing population, increasingly complex care needs, reductions in funding to local government and increases in core care costs have placed adult social care services under increasing pressure.

Local authorities have sought to protect social care budgets and relieve funding pressures through local efficiency initiatives. However, as the scope for savings efficiencies reduces, local authorities are having to manage social care funding pressures by other means, including service reductions, smaller care packages, stricter eligibility criteria, and reducing the prices paid to providers.

Commentators are increasingly concerned that, due to reductions in social care services, more people who need care are not having their care needs met. There is also evidence that care providers are facing quality challenges and the care provider market is becoming increasingly precarious. Furthermore, in some areas a lack of suitable care provision is adding to pressures in the health service.

Additional funding for adult social care

In recognition of the funding pressures, the Government announced (in November 2015 and December 2016) three new sources of funding for local authorities with responsibility for adult social care:

  • A new Social Care Precept, under which local authorities are able to increase council tax levels by up to 2% (above the referendum threshold) for each year between 2016/17 and 2019/20. In December 2016, the Government announced increased flexibility which will enable local authorities to, if they wish, bring forward the Social Care Precept, by raising council tax by up to 3% in 2017/18 and 2018/19;
  •  An improved Better Care Fund – which will include additional social care funds for local government, rising to £1.5 billion by 2019/20; and
  •  A new Adult Social Care Support Grant which will provide £240 million to local authorities in 2017/18.


Social care in crisis?

In the run up to the 2016 Autumn Statement, a wide range of organisations, including local government, health bodies, the voluntary sector and the Care Quality Commission, questioned the sustainability of publicly-funded social care and called for additional funding in order to avert a ‘social care crisis’.

Whilst stakeholders welcomed the additional adult social care funding announced by the Government, they have contended that the funding is insufficient to address the scale of the pressures facing the care system. Various estimations of the extent of a social care ‘funding gap’, between the available resources on the one hand and the demand and cost pressures on the other, have been put forward. The Local Government Association, for example, has estimated that social care faces a funding shortfall of at least £2.6 billion (by 2019/20), even with the additional funding from the Social Care Precept and the improved Better Care Fund.

Spring Budget 2017

In the Spring Budget, delivered to Parliament on 8 March 2017, the Government announced an additional £2 billion funding for adult social care in England over the next three years (2017/18 to 2019/20), with £1 billion available in 2017/18. The funding will be supplemented by measures to ensure local authorities facing the greatest challenges are identified and supported, and to ensure more joined up working with the NHS.

The future?

It is widely acknowledged that, with an ageing population, the pressures on social care funding are likely to increase further in the longer-term. Commentators have called for a comprehensive review, involving key stakeholders, to develop a long-term funding solution. The Government has announced that it will publish a Green Paper later in the year setting out proposals to put the financing of social care on a more secure and sustainable long-term basis.

Commons Briefing papers CBP-7903

Authors: Hannah Cromarty; Rachael Harker; Mark Sandford

Topics: Community care, Health services, Local government, Older people

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