This report should be read with . Taken together these reports describe the funding pressures on adult social care and their very serious consequences, and make the case for immediate extra funding. In addition, this report explores progress on integration of health and social care services and innovation in the provision of social care. We also set out what needs to happen to ensure that social care is funded sustainably in the medium and long terms.
We believe that inadequate funding very seriously affects the quantity and quality of care that is being provided to people, the National Health Service, care providers, the care market, the way that care is commissioned and the workforce and unpaid carers. We examine the evidence in paragraphs 8 to 119, and conclude that constraints on funding have led to:
This is why, in our Pre-Budget Report, we recommended that extra funding (in the form of the £1.5 billion 2019–20 tranche of the improved Better Care Fund) should be made immediately available to meet the shortfall in 2017–18 and that the Government should commit to closing the adult social care funding shortfall for the years to 2019–20, in line with the amount that the National Audit Office estimates is needed. While we welcome the Government’s commitment to provide an additional £2 billion for social care over the next three years, this falls short of the amount we believe is required to close the funding gap.
We recognise that increased funding alone is not the solution, and make a range of other recommendations (which are set out in full at the end of this report) for action. Our key recommendations concern care commissioning, monitoring of care services, and the workforce:
Councils are required to facilitate and promote high quality care, personalised care and support for all people in their local area, including self-funders, through their market shaping and commissioning activities. We found that funding pressures are undermining the relationships between councils and providers, thus affecting councils’ ability to work with them to shape the market. Funding pressures have similarly affected the commissioning process for both councils and providers, with the pursuit of low fees becoming the driving factor in commissioning for some councils. We also heard evidence from providers about poor commissioning practice, unfair contracts and depleted commissioning teams.
The evidence we heard suggested that not all councils routinely monitor the care services they procure to ensure that they are sufficient to meet people’s needs, or are of a high enough quality and adequately resourced, for example to pay for care workers’ travel time and ‘sleep ins’.
The high vacancy and turnover rates, particularly among nurses in social care, point to severe challenges in the social care workforce. We heard that a range of factors contributed to these. These included low pay not reflecting the amount or importance of the work involved, low status, poor terms and conditions, and lack of training opportunities and career progression.
The complexity of the social care system and its interaction with the NHS and other services, such as housing and benefits, is very clear. The evidence we received highlighted the Disabled Facilities Grant as an example of how the structure of the system hindered service delivery, and we look at this in detail in paragraphs 122 to 124. Integration of health and social care services aims to reduce complexity by streamlining services, as well as improving people’s outcomes and achieve efficiencies.
We believe that integration of health and social care has great potential and that it is the right direction of travel, given the increasing demand for services and the need to improve patients’ experiences and ensure they are at the centre of how care is organised. However, we found that:
We therefore recommend that the Government be more realistic in its expectations for integration and that it addresses the barriers to integration by, for example, setting out a strategy with Skills for Care and Health Education England, for aligning the health and social care workforces.
We believe that the inclusion of local councils in planning for integration will result in integration of more services, such as housing, benefits and public health services, leading to better experiences and outcomes for people who use them. We recommend therefore that decisions on pooling health and social care budgets should be made locally and that local government should be involved in the commissioning of local health services to ensure that decisions about local health services are informed by local needs and existing local public services.
We approached innovation in the light of the other evidence we heard about funding pressures, demographic change and the difficulties presented by the structure of the system. We found that funding constraints and demographic pressures are acting as a driver for some councils to innovate and change the way they deliver care. However, due to budget pressures, most councils are in panic mode and are not ready to rethink the way they do things. We recommend that the Government should create an innovation fund to encourage and give councils the capacity to consider how innovative approaches could be applied in their local area, including alternative models of care, such as the Shared Lives scheme.
We believe that serious consideration must be given to how social care will be funded once reforms to local government finance have taken effect (i.e. 2019–20 and beyond) and in the much longer term (from 2030), taking into account current demographic trends.
From 2019–20, local government will retain 100% of business rates, leading to a rise in its funding levels by £12–13 million, the transfer of additional responsibilities to ensure the reforms are fiscally neutral and the ending of Revenue Support Grant (RSG). In our Pre-Budget report, we presented estimates ranging from £1.1 billion to £2.6 billion for the funding gap in social care by 2019–20 and requested that the National Audit Office make an independent determination of the shortfall.
Once RSG has been phased out, councils’ main sources of discretionary funding will be council tax and business rates. Much of the evidence we received highlighted the fact that, growth in council tax and business rates income was unlikely to match demand for social care, particularly in deprived areas with higher levels of need. We recommend that:
We believe that, after successive attempts at reform and in the context of ever-increasing demographic pressures on the system, there is an urgent need for a review of how to fund social care in the long term. The evidence we received suggested that, to ensure success, it would need to be inclusive and attract wide public backing, and our visit to Germany showed that cross-party political support, which was key to securing their reforms, is vital. We also heard that the review must be ambitious and consider taking funding from a wide range of sources, including how each of us contributes towards the cost of our own care.
We welcome the Government’s announcement of a Green Paper on the long-term funding of social care. We recommend that it:
The Government needs to take three urgent steps with regards to the funding of social care: address the funding pressures being felt now; ensure that funding for social care is linked to need and rising demand following the reforms to local government finance; and, based on cross-party and public support, find a lasting way of funding social care sustainably in the long-term. Recognising that increased funding alone is not the only solution, we also make a range of other recommendations for action, namely on care commissioning, monitoring of care services, and the workforce. We will review the scope of the Green Paper when it is published later this year and consider whether a further inquiry into any of the issues it raises is needed.
29 March 2017