House of Commons Library

Adult Social Care Funding (England)

Published Tuesday, October 16, 2018

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 short-term, ring-fenced funding that has been committed to adult social care between 2016/17 and 2019/20, and outlines concerns about a social care funding gap and financial uncertainty post 2020.

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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 significant funding pressures, due to the combination of a growing and ageing population, increasingly complex care needs, reductions in central goverment funding to local authorities and increases in care costs.

Local authorities have sought to protect social care budgets and relieve funding pressures through local efficiency initiatives and cuts to other service budgets. However, as the scope for savings 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 social care funding 2016/17 to 2019/20

In response to the funding pressures on adult social care services, the 2015 and 2017 Conservative Governments have made a series of announcements (in November 2015, December 2016, March 2017 and February 2018) committing additional short-term, ring-fenced funding for adult social care. The funding is being delivered through:

  • A 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 enables 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.
  • An Adult Social Care Support Grant which will provide £240 million to local authorities in 2017/18 and £150 million in 2018/19
  • An additional £240 million for social care packages to ease NHS pressures this winter.

In total, local authorities will have access to up to £9.64 billion dedicated adult social care funding over the three years to 2019/20.

Commentary

Whilst commentators have welcomed the additional adult social care funding, a wide range of organisations are concerned that short-term funding pressures remain. The Local Government Association estimates that adult social care services face a £1.5 billion funding gap by 2019/20, and a £3.5 billion gap by 2024/25.

Furthermore, the additional funding has been piecemeal and short-term. As a result, local authorities face continued uncertainty about the source and level of social care funding post-2020, which is limiting their ability to plan and to build capacity in the care provider market.

Responding to the Prime Minister’s announcement of a multi-year funding plan for the NHS, the Local Government Association has called on the Government to make the same commitment to social care funding.

Social care funding in the longer-term

It is well evidenced that the demographic pressures on adult social care will increase further in the longer-term. There is a widespread consensus that social care funding needs to be put on a more secure and sustainable long-term basis.

The Housing, Communities and Local Government Committee and the Health and Social Care Committee joint report on the long-term funding of adult social care (June 2018) concluded that “in its present state, the system is not fit to respond to current needs, let alone predicted future needs as a result of demographic trends”. The Committees proposed that a combination of different revenue-raising options will need to be employed, at both a local and a national level in order to raise the funds required.

A Government Green Paper setting out proposals to reform social care for older people is expected to be published in autumn 2018, while a parallel programme of work is being undertaken for working age adults. The implications for local authority funding are not yet clear. No timescale for consultation or implementation has been announced.

The Local Government Association has published its own green paper – The lives we want to lead: the future of adult social care (July 2018) – which sets out options for how the system could be improved and paid for in the long-term. The LGA will respond to the consultation findings in autumn 2018.

 

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 paper: Social care: paying for care home places and domiciliary care (England) (SN01911). The Library's briefing paper on Social Care: care Home market - stucture, issues and cross-subsisation (England) (CBP08003) provides further infromation on the market for residential care. The Library briefing paper Social care: the forthcoming Green Paper on older people (England) (CBP08002) discusses the forthcoming Green Paper.

  

Commons Briefing papers CBP-7903

Authors: Hannah Cromarty; Rachael Harker; Mark Sandford

Topics: Community care, Local government, Older people

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