1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department of Health and Social Care (the Department), the Ministry of Housing, Communities and Local Government (the Ministry) and the Care Quality Commission (CQC) about adult social care markets in England.
2.Adult social care includes social work, personal care and practical support for adults with a physical disability, a learning disability, or physical or mental illness, as well as support for their carers. Family or friends provide most care unpaid.
3.The Department is responsible for setting national policy and the legal framework. The Ministry oversees the distribution of funding to local government and the financial framework within which local authorities operate. In 2019–20, local authorities commissioned care for 839,000 adults; spending a net £16.5 billion on care, 4% less in real terms than in 2010–11. In 2019–20, total spend on local authority arranged care, including income from NHS, joint arrangements and some user contributions was £23.1 billion. Local authorities commission most care from independent providers. CQC regulates providers for quality and also oversees the financial resilience of large providers. Many people arrange and pay for their care privately, with individuals separately paying around £8.3 billion for care.
4.The Department projects that if current patterns of care continue, around 29% more adults aged 18 to 64 and 57% more adults aged 65 and over will require care in 2038 compared with 2018. Between 2018 and 2038, the Department projects that the total costs of care will rise by 90% for adults aged 18 to 64, from £9.6 billion to £18.1 billion, and 106% for adults aged 65 and over from £18.3 billion to £37.7 billion.
5.Many providers run on tight margins, and care home providers need high occupancy levels to remain in business. Occupancy in care homes fell from around 90% at the start of the pandemic to around 80% in February 2021. Provider organisations also told us about extra costs due to COVID-19, including extra Protective Personal Equipment (PPE), cleaning, testing, and higher insurance premiums. Due to local authority funding pressures, the Association of Directors of Adult Social Services (ADASS) warned that in 2020–21 only 4% of individual Directors of adult social care at local authorities were fully confident they would meet their statutory responsibilities for care. This compared with 35% in 2019–20.
6.The Department told us it would continue to provide free PPE for care homes until March 2022. It said that for 2021–22, providers received an extra £1.1 billion of ringfenced funding through the Infection Control Fund and an extra £270 million of ringfenced funding to support testing for COVID-19 and the workforce. As at March 2021, the Ministry had provided unringfenced funding totalling £4.55 billion to help address local authority cost pressures. The Ministry outlined that local authorities could provide further support to care providers from their share of extra unringfenced funding. Government support has helped to stabilise the sector. CQC told us there were fewer voluntary care home closures in 2020 than in 2019, with 361 closures in 2020 compared with 482 in 2019. It said that extra Government support had definitely interrupted the normal pattern of closures and kept some locations open.
7.MHA, a residential care provider, told us that after local authorities received an initial £3.2 billion from government in unringfenced support, of the 188 local authorities it worked with, 60% did not increase fees. We asked how confident the Ministry was that additional funding had got to the right places. The Ministry accepted there was a “very active debate” about how much providers received from the original unringfenced funding. It told us that, based on its latest monthly data collection from local authorities, 88% of the aggregate additional spend by local authorities due to COVID-19 on adult social care went to external providers. The Department, the Ministry and CQC confirmed there is no oversight whether funding reaches individual providers.
8.CQC has warned that ongoing support is likely to be required in 2021 if care home admissions remain low or costs remain inflated. The Department told us that in 2021–22 an extra £341 million is available through the Infection Control Fund. The Ministry outlined how a further £1.5 billion of unringfenced funding for local authorities could help with COVID-19 pressures. Care England said many of the fee rates proposed by local authorities for 2021–22 do not reflect the increased care cost per head caused by lower occupancy. It feared the extra unringfenced funding will not help the frontline and that other council budgets will subsume it. We asked what exit strategy is in place. The Department noted that the extra money was for specific COVID-19 purposes and while it expects support will continue for a while, it hopes this will not be permanent. The Department acknowledged there were lots of moving parts and it would work with local government and aim for a smooth transition. The Ministry recognised that “stepping of this particular escalator” was going to take a bit of care to get right.
9.Governments, regardless of political party, have been promising care reform for the past 20 years. Reform has been repeatedly delayed, despite numerous government white papers, green papers, consultations, independent reviews and commissions. Many organisations, such as the Nuffield Trust, an independent health think tank, describe the current system as broken. The Department has committed to bring forward reform proposals in 2021.
10.A range of bodies told us of several issues, aside from funding, that need addressing through the expected reforms. We asked the Department how ambitious its vision for reform is. The Department told us it would not comment on future policy. We asked about unpaid carers, of which there are around 7.3 million in England. We pressed the Department about how it knew whether local authorities discharged their duties to support carers. The Department told us that it is for local authorities to perform those duties; and it supports them with guidance, including on best practice. The Department will look at whether CQC could provide this assurance through its expected future role in overseeing local authority commissioning. The Institute and Faculty of Actuaries points out the popularity of home care. ADASS agreed, and said it wanted to see a ‘Homes first’ policy adopted. We pressed the Department on how it could move away from care home provision. The Department told us it wants to encourage diverse types of provision and there were some real opportunities around home care. The Department is carrying out research into home care and is confident this will support reform. The Department agreed that driving innovation in the sector is crucial and said reform must centre around individuals.
11.The Department reintroduced a director-general with sole responsibility for care in June 2020 and increased its care team around three-fold between April 2020 and January 2021. The Department told us it now has a large team and enough people to work on reform. The Department will utilise experts within the Department, CQC, partners in local government and ADASS, as well as sector representatives to support reform. The Department told us it was speaking to around 70 different organisations, as it starts to work up its thinking. With regards to modelling future need, the Department told us it has confidence in models from the Care Policy and Evaluation Centre which project future demand and costs. We asked if this modelling would form the basis of the proposals. The Department told us that when looking at reform it intends to look more broadly than just demographic pressures.
12.Care policy cuts across many policy areas and value for money issues can arise if multiple departments take separate views. The Department told us it will try to move the system towards focusing on population health as opposed to separate, siloed services. The Department stressed the importance of services working more closely together to keep people out of hospital through preventative health measures. The Department noted the system will need to be accountable to local government. Given the close relationship and how housing and care interlink, we pressed on plans for accommodation. The Ministry told us it does not set out a national strategy, and instead encourages local bodies to balance the various levers in place to encourage development. It pointed to the Ministry’s support through the £11.5 billion affordable homes programme between 2021 and 2026, of which 10% of housing built should be for supported housing. In 2021–22, the Department intends to allocate £71 million of funding through the Care and Support Specialist Housing fund and £573 million of Disabled Facilities Grants, to support people staying in their own home. The Department highlighted a forthcoming report on the role of housing and care by the Social Care Institute for Excellence, which it said is due to report this summer.
13.Local authorities faced significant financial pressures before COVID-19, with a 29% reduction in spending power from 2010–11 to 2019–20. The Local Government Association claimed that over the past decade care costs have risen by £8.5 billion, but total funding has grown by just £2.4 billon. It said this has forced councils to make savings from care services and divert money from other council services. Mencap alluded to chronic underfunding of care and a reduction in care packages. Between 2015–16 and 2019–20, the number of adults receiving long-term support arranged by local authorities fell from 873,000 to 839,000. The Department confirmed that local authority spending was under pressure. The Ministry said it funds local authorities adequately and that spending on care had increased since 2015–16. These increases had followed a decline in spend every year since 2010–11 and overall local authority net spending on care was 4% lower in 2019–20 than 2010–11.
14.In 2018, the previous committee recommended that the Department develop a long-term funding plan for social care. In 2019, the previous committee concluded that one-off, short-term initiatives do not provide value for money. Since 2019, there have been successive one-year spending reviews. The Nuffield Trust stated reliance on sporadic injections of money from central government limits investment in innovation and technology. CQC told us that providers know there are short-term injections of funding put in by Government and so can operate in the short term. However, CQC also said this means providers cannot make multi-year investment decisions that will make the sector stable in the “very long term”.
15.CQC cited investment in staff training, buildings and infrastructure as examples of areas which require long-term thinking. It told us that stable, long-term funding would enable investment in long-term innovative care models and prevention. The Department said it would prefer care to have a long-term funding settlement like the NHS and recognised the limits of not having this on the ability to plan for the longer-term. But it cautioned against overstating the case and said that despite not having a long-term settlement, care quality had remained steady. We pressed the Department over when it would have long-term funding plans. The Department replied it would like a similar planning horizon across health and care to aid integration, but the timing is dependent upon spending review decisions.
16.The previous committee recommended that the Department should set out how it will professionalise the care profession through a workforce strategy. The Department confirmed it has delayed its promised workforce strategy as the last couple of years “have not played out exactly as planned”. The Department acknowledged the need to bring a strategy forward because the workforce is under huge pressure and needs investment. The Department said the workforce issue was linked to long-term reform and long-term funding and it expects to bring forward workforce proposals alongside spending plans. Skills for Care, the Department’s delivery partner for workforce development, argued for a national workforce strategy that ensures the sector prepares for more staff with a broader, higher skill set to meet future need.
17.Around 1.5 million people work in care. Staff costs typically make up over half of a provider’s costs. Written evidence received from across the sector stressed the need to support the workforce further. For example, Mencap highlighted the lack of recognition and reward for care staff and noted the need for better pay and a plan for greater professionalism so staff can build a career in social care. Provider organisations such as Care England called for extra funding to allow for parity of pay and conditions with the NHS, and more widespread professionalisation and training opportunities for the workforce. The National Care Forum highlighted how care staff are “less supported, rewarded and recognised,” than NHS staff. Skills for Care told us pay and conditions continue to be an issue, with the average care worker earning £8.87 an hour. Skills for Care believes that every care worker should take part in learning and development, but in 2019–20, 50% of workers had no recorded qualifications. The Department agreed there are questions around funding but said elements such as career structures and professionalism are not money dependent.
18.Skills for Care told us that turnover in 2019–20 was 30.4%, equating to 430,000 people leaving jobs every year. The Department agreed that turnover is too high, but claimed around two thirds of people leaving a care job stay in the profession. Age UK warned that this leads to a revolving door of care workers for people who must live with the uncertainty and lack of continuity this causes. The Department said it had not done any direct impact assessment on whether high turnover has impacted on delivery, but stated that care quality remains high despite it. Skills for Care noted its work shows that when employers invest in skills they have lower turnover rates which reduce costs in finding new staff and provides better outcomes for people who use services.
19.Nurses work in both the NHS and social care. The Royal College for Nursing told us of its concerns that there are too few nursing staff to provide safe and effective social care. It highlighted challenges including underinvestment, national shortages, low public and professional perceptions of working in care, long and unsociable hours, low pay, little career progression, and zero-hour contracts, despite the demanding role. It welcomed Government’s appointment of a Chief Nurse for Care to tackle these challenges. We pressed the Department about a lack of parity between terms and conditions in the NHS and care. The Department noted there are differences in terms and conditions, but some providers pay comparable rates to NHS. The Department told us it is important to see the nursing profession together, and not through NHS and social care silos. The Department told us it has commissioned research to look at the role of the registered nurses in care homes. The Department accepted there is quite a lot to do in order to give confidence that working in care is a positive choice for nurses.
1 C&AG’s Report, The adult social care market in England, Session 2019–21, HC 1244, 25 March 2021
2 C&AG’s Report, para 1
3 C&AG’s Report, paras 2, 9, 10, 1.6, 1.8
4 C&AG’s Report, para 20
5 C&AG’s Report, para 2.31
6 Care England submission and National Care Forum submission
7 Association of Directors of Adult social care submission
9 C&AG’s Report, Local government finance in the pandemic, Session 2019–21, HC 1240, 10 March 2021
10 Q 19
11 C&AG’s Report, para 13
12 Q 20
13 MHA submission
14 Qq 44,55
15 Qq 45–49
16 C&AG’s Report, para 2.31
17 Q 56
18 Q 68
19 Care England submission
20 Qq 67–68
21 C&AG’s Report, para 3.12
22 Nuffield Trust submission
23 C&AG’s Report, para 24
24 Q 87
25 Qq 33–37; C&AG’s Report, para 11
26 Institute and Faculty of Actuaries submission
27 Association of Directors of Adult social care submission
28 Qq 88–94
29 Qq 58,88
30 C&AG’s Report, para 2.12
31 Qq 83,89
32 Q 92
33 C&AG’s Report, para 25
34 Qq 34, 75
35 Q 95; C&AG’s Report, para 3.19
36 C&AG’s Report, para 8
37 Local Government Association submission
38 Mencap submission
39 C&AG’s Report, para 10
40 Q 14
41 C&AG’s Report, para 1.8
42 Committee of Public Accounts, The adult social care workforce in England, Thirty- eighth Report of Session 2017–19, HC 690, 9 May 2018
43 Committee of Public Accounts, Local government spending, The adult social care workforce in England, Seventy- sixth Report of Session 2017–19, HC 1775, 6 February 2019
44 C&AG’s Report, para 2.6
45 Nuffield Trust submission
46 Q 11
47 Qq 10–11
48 Qq 8, 12–13
49 Committee of Public Accounts, The adult social care workforce in England, Thirty- eighth Report of Session 2017–19, HC 690, 9 May 2018
50 Qq 69,80
51 Skills for Care submission
52 C&AG’s Report, para 22, 1.24
53 Mencap submission
54 Care England submission
55 National Care Forum submission
56 Skills for Care submission
57 Q 71
58 Skills for Care submission
59 Q 78
60 Age UK submission
61 Q 79
62 Skills for Care submission
63 Royal College for Nursing submission
64 Qq 70–72