The government’s funding settlement for adult social care will not be enough to meet existing shortfalls or future cost pressures and risks causing more unmet need, service failures and hospital admissions.
That was the warning today from local authority, NHS, provider and charity leaders in a letter to cabinet ministers urging immediate talks designed to find additional funds for the sector.
Contrary to predictions, chancellor George Osborne announced additional, targeted money for adult social care as part of the spending review, which has set government funding limits from 2016-20. This was from two sources:
- Additional money for the Better Care Fund – the integrated health and social care budget – paid directly to local authorities and rising to £1.5bn a year by 2019-20.
- The opportunity for councils to raise an additional 2% a year through a council tax “precept” with the money going to adult social care alone. If all councils did this in each of the four years of the spending review, the government estimates it would raise almost £2bn a year by 2019-20.
Despite this additional money for adult social care, overall, local government is due to see its funding fall by 6.7% in real terms from 2016-20.
In their letter to Osborne, health secretary Jeremy Hunt and communities secretary Greg Clarke, the Association of Directors of Adult Social Services (Adass), NHS Confederation, Care and Support Alliance (CSA) and Care Providers Alliance (CPA) warned that the money would not be enough to deal with current and future pressures.
Settlement will not resolve funding crisis
These include the impact of inflation, increasing numbers of older and disabled people and the new national living wage, which comes into force in April next year, on care costs.
“We believe the package put forward for social care will not enable us to fill the current gap in funding, cover additional costs associated with the introduction of the National Living Wage, nor fully meet future growth in demand due to our ageing population,” said the letter, signed by Adass president Ray James (pictured, above), among others.
“There are also additional pressures that arise from the costs of regulation, cost of emerging policy, pensions and many others. Without concerted action across government and the sector, the settlement is not sufficient, not targeted at the right geographies and will not come soon enough to resolve the care funding crisis.”
The associations called for further talks with the Treasury, Department of Health and Department for Communities and Local Government to help “avert the crisis” in social care. Without additional money in the settlement, they warned that there was “potential for significant and adverse impacts”.
Service failure and unmet need
- An increasing number of older people, disabled people and their carers without any, or without sufficient, support to meet their needs.
- An acceleration of the failure of domiciliary, residential and nursing home providers, which would happen mostly in areas where most service users are state-funded and which are also the areas least likely to benefit from the council tax precept.
- An increasing pressure on the NHS with more people admitted to hospital and more delays to get people home safely.
Council tax concerns
The letter follows analysis suggesting that the council tax precept will raise less than half of what the government predicts – just £800m by 2019-20 – and its benefits will accrue disproportionately to well-off areas. Poorer areas will be disadvantaged because they have less ability to raise funds from council tax.
As reported in The Observer, the King’s Fund found that it was highly unlikely that all councils would levy the full precept in every year as some council leaderships had been elected on a platform of not raising council tax.
The letter from Adass, the NHS Confederation, the CPA and to ministers also raised concerns about the council tax precept, asking ministers how it could be ensured that it delivered the money required for adult social care and did so equitably between areas.
Funding will come too late
The letter also warned that the money from the Better Care Fund would come too late to be of significant benefit. There will be no additional BCF money in 2016-17 and sector leaders are concerned that most of it will be provided in the later years of the spending review period, 2018-19 and 2019-20.
The associations also asked for clarification on how the government had funded the additional costs of the national living wage through the spending review. The new wage floor for people aged over 25, set at £7.20 an hour next April and due to rise to over £9 by 2020, is due to add about £1bn to council adult social care costs by 2019-20.
The letter comes ahead of the local government settlement, which will set out in more detail how much money councils will receive from government in 2016-17.