Summary
Adult social care provides care and support of a personal and practical nature to adults of all ages with care needs to enable them to lead independent and fulfilling lives. For some years now, concern has grown about the pressures on councils’ adult social care budgets, and the financial sustainability of the system was therefore the main theme of our inquiry. The focus of this interim report is on the short-term funding of social care, and in a few weeks we will report our findings on the wider system and the funding of social care in the medium- and long-term.
Since 2010 the core grant which councils receive from central government has reduced and, at the same time, councils’ social care budgets have faced a set of increasing cost pressures, which include a growing and ageing population, increasingly complex care needs, and costs arising from the implementation of government policies, including:
- the Care Act 2014—£2.5 billion to implement from 2013 to 2019–20 (National Audit Office estimate);
- the National Living Wage (including compliance with the national minimum wage)—£360 million in 2017–18 (Association of Directors of Adult Social Care estimate); and
- Deprivation of Liberty Safeguards—£127 million a year (Local Government Association estimate).
Councils have protected their adult social care budgets as far as possible by making savings in other services and have managed the pressures with efficiency savings. However, although local government was once doing ‘more for less’, it is now doing ‘less for less’, and we heard evidence that either people are not getting the care they require or the care they already have is not being increased as their needs grow. Our final report will explore this further.
Recognising the pressures on the system, the Government provided new sources of funding for social care—the social care precept, the improved Better Care Fund and the adult social care support grant—which it expects will raise £7.6 billion for social care over the settlement period. Without this, social care would be significantly worse off and our witnesses welcomed the intervention, as do we. (We also note that work to review the needs assessment formula is ongoing and is expected to conclude by the end of 2018.) However, we heard that, even taking into account these funding commitments, there is a ‘funding gap’ in adult social care, estimates for which range from £1.3 billion to £1.9 billion in 2017–18 and £1.1 billion to £2.6 billion in 2019–20. Arguments about the lack of central government funding will, however, be weakened if councils have not raised the maximum amount available to them.
We heard a range of concerns about the new funding mechanisms, which we explore in detail in this report. These included concerns about the sufficiency of the amount raised by the precept and the variation across councils in the funding it generates, that the adult social care support grant is a reprioritisation of funding from the New Homes Bonus and that the improved Better Care Fund is backloaded at a time when funding pressures are acute.
We believe that social care requires immediate extra funding and recommend that the Chancellor brings forward the 2019–20 tranche of the improved Better Care Fund to fill the funding gap in 2017–18. Given that sector estimates for the funding gap for rest of the Parliament vary, we believe that the National Audit Office (NAO) would be well-placed to determine the amount of funding needed to meet the shortfall and request that they carry out this work. The Government should then commit to closing the funding gap in line with the NAO’s findings. There is also an urgent need for a review, ideally cross-party, of the provision and funding of social care in the long term. We shall consider this further in our main report from this inquiry.
3 March 2017