Government must find additional billions in next month’s government spending review to fend off the risks of lower-quality care, provider collapse and more legal challenges to councils in England.
That was the warning from the Local Government Association (LGA) and Association of Directors of Adult Social Services (Adass) in a joint submission to the spending review, which will set government spending limits from 2016-2020.
Without additional resource, the gap between councils’ resources and their ability to meet existing levels of need will grow at £700m a year and reach £2.9bn by 2020, the LGA has estimated. This is caused by the impact of inflation, demographic pressures, expected cuts to councils and the introduction of the so-called ‘national living wage’, a minimum wage of £7.20 an hour for the over-25s from April 2016, which will increase the costs of doing business for care providers.
In addition to this core funding gap, the two associations say that councils are facing specific pressures in other areas including:
- at least £172m a year from the impact of the Supreme Court’s “Cheshire West” judgement on the Deprivation of Liberty Safeguards system.
- the need to fund winter pressures on social care, which the LGA and Adass say have been historically underfunded by government.
- pressures arising from making councils fully responsible for former Independent Living Fund clients following the fund’s closure in June 2015, with the government yet to commit to funding these pressures after April 2016.
- the need for direct payment recipients who employ their own staff to pay into a pension for them.
- the pressures on the care market arising from the reduced fees paid to providers by councils in recent years, leading to less competitive wages and reduced profit margins for care firms, risking the collapse of businesses and workforce shortages.
Poorer quality and less safety
If the extra funding does not materialise, the LGA and Adass predicted a series of adverse consequences for adult social care service users, including a drop in the quality and safety of care, reductions in the size of care packages and delays in carrying out assessments.
They also warned that more providers may exit the market for council-funded care or see their businesses fail and councils may also face more successful legal challenges in relation to care assessments.
While closing the adult social care funding gap is the associations’ top priority, they also called for the government to invest an additional £2bn a year in a “transformation fund” to help local government and NHS leaders reorientate the care system towards prevention.
They said such a fund “could prevent problems arising in the first place, prevent dependency on the social care and health system, or – when targeted at the right groups of people – prevent the escalation of problems which become worse for individuals and more costly to the taxpayer”.
Spending on prevention by councils fell by 6% in cash terms from 2014-15 to 2015-16, despite the Care Act placing a duty on councils to arrange preventive services, from April 2015.
Efficiencies have almost run out
This year’s spending review follows five consecutive years of cuts to government funding for councils. Though the government partially compensated for the impact of by mandating the NHS to transfer resources each year to councils to spend on adult social care. Since April 2015, this has been done through the Better Care Fund (BCF).
However, despite the NHS transfer, the LGA and Adass said that councils would have seen a £5bn funding gap for adult social care open up from 2010-11 to 2015-16 had they not made £2.5bn of efficiencies and diverted £2.5bn from other council services to the care system.
The associations said that there was no more scope to pursue this strategy. Cuts to other council services, such as libraries or leisure centres, were storing up problems for adult social care by reducing investment in promoting population wellbeing and there was now also much less scope to make efficiencies in adult social care.
£10bn for NHS
The government has pledged to increase NHS funding by £10bn above 2014-15 levels by the end of the decade. But there has been no such pledge for adult social care, which the LGA and Adass said was not sustainable.
“At the moment, social care and health have a shared ambition, but not a share of the money which is needed to achieve this,” said Izzi Seccombe, the LGA’s community wellbeing spokesperson. “It simply doesn’t add up and the spending review is the Government’s opportunity to address this.”
Pumping money into the NHS but not into social care has to stop.”
“NHS money will not pay for the essential visits from carers that help people to get dressed or washed or the night time call to help someone into bed. It is these services that enable people to live with dignity in the community for longer instead of being forced unnecessarily into hospital beds – at a cost to the NHS and the public purse.”
Where the money will come from
Adass and the LGA said the government should find the money through reductions in spending on other services and recycling the resource that would have been spent on implementing funding reforms under the Care Act from April 2016. The cap on people’s care costs and more generous system of means-testing would have cost an additional £0.7bn in 2016-17, rising to an additional £1.2bn in 2019-20, according to government estimates.
This has now been delayed until at least April 2020 after the LGA warned that its implementation would place the care system under further strain.
There is no indication as to whether government is sympathetic to the case for using this money. Ministers have said that they are considering the future demand for adult social care and the impact of the living wage policy in their spending review decisions.
Local government to be cut
However, they have already indicated that funding for local government will be cut. The Department for Communities and Local Government, which is responsible for local government funding, has been asked to model cuts of 25% and 40% from 2016-20.
Even if the lower figure were implemented, such a cut would substantially affect adult social care, along with other local government services.
One option that ministers have indicated they are considering is expanding the Better Care Fund (BCF) – the mandatory pooled budget across health and social care introduced this year – in order to channel more NHS resource into adult social care.
The vast majority of the mandatory funding for the BCF – worth £3.8bn this year – comes from the NHS and a significant proportion of it is being spent on adult social care. Since 2011-12, the government has mandated the NHS to provide some funding for adult social care.
However, NHS leaders are known to be hostile to using the BCF, and by extension the extra funding the government has promised for the NHS, to help adult social care.
The LGA and Adass submission follows a separate one provided last month by Adass, the NHS Confederation, provider umbrella body the Care Providers’ Alliance and charity coalition the Care and Support Alliance.
This made a similar case and illustrates the unity of opinion across local government, the NHS, the independent sector and the part of the voluntary sector that supports older and disabled people on the need to protect adult social care funding.