House of Commons Library

Adult Social Care Funding (England)

Published Monday, October 23, 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 2015 Conservative Government announced in the last Parliament, and discusses wide-spread concern about 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). Social care is a devolved policy area. In England, publicly funded adult social care is means-tested and primarily funded through local government.  It constitutes the biggest area of discretionary spend for local authorities.

Social care funding pressures

Adult social care services in England are facing unprecedented funding pressures, due to the combination of a growing and ageing population, increasingly complex care needs, reductions in funding to local government and increases in care costs.

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 short-term funding

In recognition of the funding pressures, the 2015 Conservative Government announced (in November 2015, December 2016 and March 2017) additional funding for local authorities with responsibility for 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 –to include additional social care funds of around £4.4 billion between 2017/18 and 2019/20.
  • A new Adult Social Care Support Grant which will provide £240 million to local authorities in 2017/18.

The Local Government Association (LGA) has welcomed this additional funding which has helped to relieve some immediate funding pressures. Nevertheless, the LGA estimates that adult social care services will face a funding gap of £1 billion by 2019/20, and that an additional £1.3 billion is required immediately to stabilise the adult social care provider market.

Long-term sustainability

It is well evidenced that the demographic pressures on adult social care will increase further in the longer-term. Despite the additional funding announced in the last Parliament, there is a consensus that social care funding needs to be put on a more secure and sustainable long-term basis.

Commentators have called for a comprehensive review, involving key stakeholders, to develop a long-term funding solution. The Government has committed to bring forward a Green Paper setting out proposals for the sustainable funding of social care.

Further information on the means-test for social care and the cap on social care costs can be found in the House of Commons Library briefing papers: Social care: paying for care home places and domiciliary care (England) (SN01911), and Social care: Conservative manifesto's commitments on the means-test including the £100,000 limit (England) (CBP08001). Further information on the market for residential care is provided in the Commons Library briefing paper The Care Home Market (England) (CBP07463). The Commons Library briefing paper Social care reform: funding care for the future (SN06391) provides background information on the Dilnot Commission and the Coalition Government's reform proposals.

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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