Social Care - Health Committee Contents


4  Funding and staffing an integrated system

A social care system in crisis?

54. In its terms of reference for this inquiry the Committee sought to focus its attention on the future funding systems for social care in England. During the inquiry, however, the Committee has concluded that the issues involved in social care funding should be seen as part of the wider issue of funding for the health and care system as a whole. No one, including the Government, has sought to persuade us that it is either desirable or possible to fund future care needs on the basis of the current structure of care.

55. This set of circumstances creates two key issues. Most immediately—are current funding arrangements sufficient to meet care needs while a more integrated model of care in put in place? Secondly—do current plans suggest that the move to a more integrated model of care will be fast enough to meet the needs placed upon the care system within the resources available?

56. The Government recognised the immediate issue in its Spending Review when it announced an unprecedented transfer of funds from health into social care, something that this Committee very much supports. The Department of Health evidence has set out the position in detail:

In the Spending Review, the Government allocated an additional £2 billion per annum by 2014/15 to support adult social care which, together with an ambitious programme of efficiency, it believes will enable local authorities to maintain the current level of service provision. This assessment has been corroborated by the King's Fund. Its publication on social care budgets following the Spending Review showed that the settlement would be sufficient if local authorities made efficiency savings of around 3.5% per annum in adult social care. The Department agrees broadly with this analysis.[56]

57. The report of the Commission on Funding of Care and Support (the Dilnot Commission) is instructive. Published after the Spending Review[57] (which outlined the transfer of £2 billion in additional resources to social care from the NHS) the Commission stated that:

We consider that the current social care system is inadequately funded. People are not receiving the care and support that they need and the quality of services is likely to suffer as a result. We recognise that there is a shortage of precise data on the extent to which needs are currently met, but we do know that social care expenditure on older people has not kept pace with the increase in demand. Over the last four years demand has outstripped expenditure by around 9%.[58]

58. Many witnesses to our inquiry have restated that a crisis in funding exists within social care. The Local Government Association has stated that "[…] the current system is underfunded and has been for many years. The demand is growing and, therefore, that gap is growing. That is a case the Local Government Association, and indeed others, have been making for a long time".[59] The Association of Directors of Adult Social Services went on to tell the Committee that:

[…] The gap has never been disputed. The gap exists […] What we try and do is avert the collapse of social care by constantly trying to re­examine what we do in the absence of the reform and resources that we have clearly asked for, for some time.[60]

59. The Government cites the King's Fund in support of its viewpoint that the existing level of funding for social care is adequate, should local authorities make the efficiency savings required of them. The King's Fund's evidence to us however paints a slightly different picture, calling these efficiency savings "very ambitious":

The squeeze on local authority budgets over the next four years will see a widening gap between needs and resources. As we indicated in our evidence to the Committee's previous inquiry into public expenditure, despite the additional £2 billion announced in the Spending Review and the best intentions of local authorities to protect social care, a funding gap of at least £1.2 billion could open up by 2014 unless all councils can achieve unprecedented efficiency savings. Since then, the ADASS budget survey shows that there will be almost £1 billion less in adult social services budgets this year, of which councils aim to recover £681 million from efficiency savings. This is a very ambitious target when taking account of efficiencies already achieved in recent years.[61]

60. When we spoke to the Minister of State for Care Services about the funding gap he argued that there is no funding gap and no funding crisis in social care:

The point I am making is that there is no gap. There is no gap in the current spending review period on the basis of the moneys that we are putting in plus efficiency gains through local authorities redesigning services […] We don't accept the position that there is a gap. We have closed that gap in the spending review.[62]

61. The King's Fund has estimated that in 2012 approximately 890,000 service users with some care needs are not receiving any service, and that this will reach 1 million people by 2016.[63] The Minister did not accept this figure:

On the issue of unmet need, I am yet to find any agreement among academics on a definition of unmet need. Even the personal social services research unit says that it is a very hard area to navigate and come to any firm conclusions on.[64]

62. The Local Government Association publicly responded to this statement by saying that:

It is deeply worrying that despite the best efforts of councils, leading charities and the government's own experts, the message that we are facing a financial crisis still doesn't seem to be getting through.[65]

63. In supplementary written evidence after the Minister's appearance the Department of Health told us:

The Department acknowledges that there is unmet need but also that the scale of this is difficult to precisely define and measure. The eligibility framework seeks to support councils in prioritising funding on those with the highest need. Government is clear that everyone who thinks they may be in need of care and support is entitled to an assessment, and if this assessment concludes that services are required to meet the person's assessed needs and the person qualifies under the means-test, services must be provided. [66]

64. The Department of Health says that additional funding made available to social care in the spending review (through two streams: one from the NHS for social care which also benefits healthcare, and one to local authorities through the general formula grant) will by 2014-15 provide an extra £2 billion a year for social care compared to pre-2010 expenditure, amounting to £7.2 billion in total over the four year period (see table below). It says that this, together with the up to 3.5% a year efficiency savings that local authorities are being asked to make, means that there is no funding gap for social care:
£bn  2011/12 2012/13  2013/14 2014/15  
New DH grant funding for social care (rolled into formula grant - non ring fenced)  0.53 0.93  1.0 1.0  
NHS Funding to support social care  0.8 0.9  1.1 1.0  
  • Of which: Reablement
0.15 0.3 0.3  0.3 
  • PCT transfers 11/12 and 12/13
0.65 0.62 -  
  • Other- mechanism for 13/14 and 14/15 to be confirmed
-  0.8 0.7  

Source: Department of Health

65. Against this, the LGA told us that, in 2011-12, "the [social care] service's budget has already been reduced by nearly £1 billion".[67] Age UK said that:

Councils have reduced their spending on older people's social care by £671 million in real terms in the year between 2010-11 and 2011-12. This is a decrease of over 8 per cent […] Even after adding the £330 million transferred from PCTs to the amount spent by local authorities, the overall effect is still a real decrease in spending on older people's social care of £341 million or around 4.5 per cent.[68]

66. As the Committee reported in its recent report on Public Expenditure, there is clear evidence of resource pressures on social care authorities. The Committee welcomes the Government's commitment of an additional £2 billion per annum to social care by 2014-15, but recognises that even this substantial additional commitment is only sufficient to meet additional demand if social care authorities are able to deliver an unprecedented efficiency gain of 3.5 per cent per annum throughout the spending review period and does not allow for any progress in responding to unmet need.

67. The quality of social care is also an issue that has been raised with the Committee. Regardless of whether there is sufficient funding in social care, evidence suggests that there are also problems with the quality of some social care services. High quality social care is important. As Scope told us in their evidence:

The receipt of high quality social care can often make the difference between a disabled person being able to work or not, and can have a huge impact on their ability to contribute to the economy and engage in society.[69]

68. Despite its importance, some people are in receipt of a variable level of service quality. Age UK told us that:

The whole area of quality, both in care homes and domiciliary care, is key. There are huge issues around the funding of care being in crisis, but there is a deeper and hidden crisis around the quality of care.[70]

The Alzheimer's Society shared one particular example of poor quality domiciliary care that risked having a negative impact on the life of the service user:

I was talking to one domiciliary care provider who said that they refused to book sessions of less than 30 minutes for their private clients but on local authority­funded care they are booking 15 minute visits, which, of course, for somebody with dementia is often worse than useless. You have barely got through the door and you are expected to dress, feed and look after the personal needs of somebody in 15 minutes. You cannot do it. There is a need to expose the failures of the system in order to get change.[71]

69. Despite national guidance on the matter there continues to be a highly variable approach to assessment. Local Authorities have the discretion to determine which needs are "eligible needs", i.e. which level of need will qualify a person to receive care and support. Since 2003, eligibility has been assessed by councils according to a set of four standard threshold criteria (critical, substantial, moderate and low), laid down in mandatory Fair Access to Care Services (FACS) guidance.[72] Definitions of moderate, substantial and critical can vary across Local Authority boundaries, and can depend on who is undertaking the assessment. As Jeremy Hughes, Chief Executive of the Alzheimer's Society told the Committee:

There is an example I was reading recently of somebody who has spent six months and gone through three re­assessments with a different outcome each time, thinking, "But my needs have not changed. How can this be?" There is an enormous amount of confusion and a need for that universal understanding of what quality is and what the assessment is.[73]

70. The Care Quality Commission told us that "for those that fund their own care, navigating the system, finding the right information, in the right place at the right time to help them choose a service can be a very difficult process.[74] Hanover Housing, the National Housing Federation and others described to us the variable quality in the housing options available to older people.

71. The Government recognises the importance of this issue. The National Institute for Health and Clinical Excellence will be tasked with developing quality standards for social care. The Government's vision for social care emphasises more information, a greater focus on outcomes, driving forward personalisation and greater choice and competition as the way forward.[75] The Minister of State told us that the Government will pursue this issue further in its forthcoming White Paper on social care:

[…] how we make sure that people can, through greater choice and awareness of what the options are to meet their care needs, also help, through those choices, to drive improvements in quality. That quality will be a very big part of what we will set out in the White Paper.[76]

72. The evidence suggests that some people are paying for poor quality housing and services. Despite this, Parkinson's UK told us:

There is little detail on the Department's promise to look at a citizen's right to challenge poor quality services and lack of choice.[77]

73. The weight of evidence that we have received suggests that social care funding pressures are causing reductions in service levels which are leading to diminished quality of life for elderly people, and increased demand for NHS services. Although the transfer of £2 billion from health to social care is welcome, it is not sufficient to maintain adequate levels of service quality and efficiency.

74. As it reported in its recent report on Public Expenditure, the Committee believes that the levels of efficiency gain which have been planned by the Government will not be achieved unless there are fundamental changes in the way care is delivered. In particular the Committee believes that successful delivery of the Government's plans requires a dramatic strengthening of its commitment to deliver more integrated services.

Rebalancing public sector spending

75. The Commission on Funding Care and Support (known as the Dilnot Commission), citing Department of Health and Department of Work and Pensions figures, estimates that just under £150 billion is spent on services and welfare/disability benefits to older people in England. In his evidence to us, Andrew Dilnot broke this number down further:

One of the earliest pieces of analysis that we asked our colleagues on the secretariat to do was to draw us a chart […] which shows how much public spending in England there is on older people. It shows that total spending is about £145 billion a year: nearly £3,000 for every man, woman and child in England is spent on an older person. Of that, more than half is social security benefits, principally the state social security pension, but also housing benefit, pension credits and so on; £50 billion is the NHS; and just £8 billion is social care.[78]

Andrew Dilnot went on to state that this distribution of resources is sub-optimal:

It is pretty clear to us that, if you started with a bar that was £145 billion high, you would not draw the lines in that position, particularly the distinction with this very small amount of separate money spent on social care and the much larger amount spent on healthcare […] our strong sense was that the balance is not right and there is inefficiency and reduced welfare as a result of that split between social care and the NHS. Because of the way the systems work at the moment—the lack of pooled budgets and of working together—there is a barrier to getting sensible allocation of resource across the piece. We need to tackle that. We think it is essential, and certainly something to be looked at.[79]

76. We noted earlier the Dilnot Commission's conclusion that the social care system is 'inadequately funded.'[80] Andrew Dilnot was also clear that the separate funding streams for health, social care and welfare mean that resources are allocated in an inefficient way. At a time of scarce resources and rising demand the Committee believes that this structural inefficiency, which has been recognised for decades, can no longer be ducked. Too much is spent treating preventable injuries like falls, which can have a catastrophic impact on the lives of older people, some of whom may never regain independence again. If we are to create a sustainable, high quality support system for older people, commissioners need to rebalance the entire expenditure on services for older people across the NHS, social care, housing and welfare. This will be a process, rather than an event; the purpose of creating integrated commissioners, is to create agents within the system who have both the ability and the incentive to drive the necessary process of fundamental change in service provision.


77. Personal budgets (one element of the personalisation agenda) allow individuals to have direct control over how their care needs are met. Following an assessment, an individual can be allocated an indicative budget that could be made available to them to meet those needs. Individuals are given the choice of an account held and managed by a local authority, a direct cash payment in lieu of services or a mixture of both. We saw evidence of how this new culture of personal budgets works in practice during our visit to Torbay where a number of patients had opted for previously unavailable treatments such as acupuncture.

78. The Committee is well aware of the support which has been expressed for the growing personalisation of social care by both the previous Government and the current Government, as well as by many service users, and it is sympathetic to these responses. It is also, however, concerned that some of the implications of growing personalisation of social care budgets need to be further examined.

79. A growing number of people are having their care needs quantified and converted into a sum of money through a resource allocation system (RAS). This creates a scenario in which people's needs could be assessed less personally and could develop into an entitlement-based system which awards them a specific cash amount under a process more akin to social security than social care. On the pitfalls of this system in respect of social security support for residential care in the 1970s and 1980s, particularly cost control, Jenny Owen from Essex County Council told us:

The costs were running away and it became the responsibility of the local authority, and then we had FACS, that gate­keeper. But now what we have is all the questions you were asking about portability and whether you can have a consistent system. That is the tension that you are describing.[81]

80. While the Committee remains sympathetic to the cause of greater personalisation, it believes the Government needs to be clear-sighted about the likely impact of personalisation on total demand for social care —and therefore on social care budgets. This is an issue to which the Committee will return.

Social care workforce

81. The Committee also notes that a new offer needs to be made to the social care workforce. This large group of dedicated staff work exceptionally hard for the people that they care for. Often they do this under difficult circumstances and for low, sometimes minimum wage. The Minister acknowledged this when he told us that:

Can I start with the first point, which was an unfair press, by acknowledging that an awful lot of people—the vast majority—who work in our care work force do a fantastic job? They are dedicated and compassionate and should be applauded for that. We tend to focus on the shocking and appalling.[82]

82. Like all services, social care depends on a skilled, motivated workforce. It is reasonable to assume that with demand for social care rising as the population ages that we will also see a rise in the numbers of people working in social care services. Such staff need and deserve the respect of the communities in which they work in order to ensure that services can recruit the right people at the right time.

83. In our previous report on the Nursing and Midwifery Council, the Committee examined the issues surrounding the registration of healthcare assistants and support workers, and recommended that they be subject to statutory regulation.[83] The boundaries of the social care workforce clearly extend far beyond these two groups, and there is a case for ensuring that there are clear professional standards and a means for holding people to account when these are repeatedly not met.

56   Ev 222 Back

57   The report of the Dilnot Commission was published on 4 July 2011 whereas the Government's spending review of the Department of Health was published on 20 October 2010 Back

58   The Commission on Funding of Care and Support, Fairer Care Funding. The report of the Commission on Funding of Care and Support, July 2011, p 14 Back

59   Q 126 Back

60   Q 164 Back

61   Ev 152 Back

62   Q 544 Back

63   King's Fund, Securing Good Care for More People, 11 December 2010, p 49 Back

64   Q 544 Back

65   "No funding crisis in social care says Minister", The Guardian, 17 January 2012 Back

66   Ev 223, page 2. Back

67   Ev 189, para 15.b.iii. Back

68   Age UK, Care in Crisis 2012, 30 January 2012, page 1. Back

69   SC 78 Back

70   Q 78 Back

71   Q 74 Back

72   Social Care Institute for Excellence, Facts about FACS 2010, April 2010 Back

73   Q 94 Back

74   SC 62 Back

75   Department of Health, A Vision for Adult Social Care; Capable Communities and Active Citizens, 16 November 2010 Back

76   Q 635 Back

77   Ev 153 Back

78   Q 387 Back

79   Ibid. Back

80   Paragraph 52 Back

81   Q 235 Back

82   Q 559 Back

83   Health Committee, Seventh report of the session 2010-12, Annual accountability hearing with the Nursing and Midwifery Council, HC 1428 Back


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© Parliamentary copyright 2012 
Prepared 8 February 2012