Additional short term-funding required to shore up ‘failing’ provider market

ADASS budget survey reveals fears around contract hand backs, as issues with workers’ pay emerge as a ‘significant worry’

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Three quarters of councils believe providers will experience financial difficulties over the next year, the Association of Directors of Adult Social Services (ADASS) Budget Survey has revealed.

Despite receiving an extra £2.3 billion from the government this year, ADASS president Glen Garrod called for increased short-term funding to “shore up” a social care system which exists in an “increasingly fragile state”.

Issues with recruitment and retention of social work staff were also raised in the report, as directors recognised the importance of being able to increase staff salaries.

Budget increases

Councils announced they intended to spend £21.4 billion on adult social care services this year, making up 37.8% of total council budgets. It was the eighth consecutive year that resources for adult services had increased, with local authorities spending £20.8 billion last year.

Meanwhile, councils have planned to make savings of £700 million on adult social care costs for 2018/2019, equating to 4.7% of net adult social care budgets. This number is down 15% from last year when local authorities set social care planned savings to £824 million.

Responding to the survey, Cllr Izzi Seccombe, chairman of the Local Government Association’s Community Wellbeing Board, said:

“This report is further compelling evidence of the irrefutable crisis in adult social care funding which cannot be ignored.

“The fact that nearly 40 per cent of councils’ overall budgets are now spent on adult social care shows that local government is striving to protect this vital service. But despite these efforts, the combination of historic funding reductions, rising demand and increasing cost pressures mean many councils continue to have to make significant savings and reductions within adult social care services to balance their overall budgets.

Changing methods of saving

Three quarters of directors reported that reducing the number of people in receipt of care is important or very important to achieve necessary savings this year. A need to reduce the number of people using social cares services was reflected in the methods councils valued as important to reducing costs.

Just over 80% of local authorities said developing asset-based and self-help approaches were very important in their efforts to make savings. Meanwhile, early intervention (69%) and effective housing solutions (54%) were also rated as very important by directors.

Just 14% of directors said that reducing the level of personal budgets was very important and 9% identified controlling wage increases as an important to bringing down costs.

The report stated this was indicative of a shift towards long-term approaches to saving money, stating that reducing costs of finding cheaper alternatives were “no longer a viable option for making savings” as “the scope to do [so had] been exhausted”.

This year’s report was released in preview to the forthcoming green paper on social care for older people to be published this summer. Yet directors said they were more concerned about financing social care services for working age adults (32%) than financing care for older people (12%).

Handing back of contracts

Another key finding revolved around failures in the provider market after 66% of councils said they had been affected by this issue in the last sixth months.

Close to 50 directors said they had seen home care providers closing or ceasing to trade in the last six months, impacting on 3,290 people. Meanwhile 44 reported that contracts had been handed back by home care providers, affecting over 2,500 service users.

Despite raising fees to providers, the report said increases failed to match what providers required to run sustainable services.

In response to these trends in failure, 78% of councils indicated they were concerned about their ability to meet the statutory duty to ensure care market stability within their existing budgets.

“This disruption significantly impacts on well being and is thought to impact on morality when it involves someone moving home in an unplanned way”, added the report.

Recruitment and retention worries grow

The association labelled recruitment and retention as “the most significant worry” within adult social care.

In March, Skills for Care declared that “insufficient investment” in the workforce had resulted in workers seeking employment in other industries, such as retail, where they received better pay and faced fewer work pressures.

The budget survey echoed these worries, with directors recognising the ability to increase care workers’ salaries as the most important factor in recruitment and retention. Improved working terms and conditions, and progression opportunities were ranked as important to ensuring the sufficiency of care workers as well.

Along with Brexit, the government’s decision to increase the wages of over 1.5 million NHS staff in March posed further threat to retaining a skilled work force.

“With the NHS offering the lowest paid NHS staff across England pay rises of up to 29% over the next three years, there are understandable concerns about both recruitment and retention of care staff in the social care sector, if similar wages are not available,” the report said.

It estimated that the government would need to invest £3 billion to match this for adult social care.

Desperate for a solution

Garrod expressed his disappointment at the government’s continued failure to fund “essential care and support”, expressing a need for both short-term and long-term funding.

“It is of serious concern that we have such a fragile social care market, where 48 councils across the country have seen care providers close or cease to trade in the last six months – this means that people do not have the choice over the care that they should have and the potential to transform lives is being lost,” he said.

“There is an undeniable, urgent and imperative requirement on the Government to act to ensure interim funding continues until the green paper is implemented, that the social care workforce receives the wages and esteem it deserves, that the care market is safeguarded, and that the long-term funding solution that social care desperately needs is finally delivered.”

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