Worsening social care funding position wreaking increased human cost, warn directors

Numbers affected by home care provider closures double as fragile care market and NHS cost shifts exacerbate financial woes for councils

budget cuts
Photo: takasu/Fotolia

Story updated 27 June 2019

A worsening social care funding position is wreaking an increasing human cost as councils struggle under the weight of a fragile care market, cost pressures from the NHS and short-term funding streams.

That was the sobering message of this year’s Association of Directors of Adult Social Services (ADASS) budget survey, which found that significantly more people were being affected by failures in the care market than last year.

Since 2010-11, directors report having made £7bn in savings – once inflation and demographic pressures have been taken into account – to deal with funding cuts and cost pressures.

Despite net social care expenditure being due to rise from £14.6bn in 2018-19 to £14.9bn in 2019-20, directors predict having to make a further £700m in savings in 2019-20 to deal with the pressures councils are under.

Two-thirds of ADASS members said that providers had already faced challenges in relation to care quality as a result of savings to date, while over a third said fewer people can access to care and personal budgets were smaller. Similar proportions anticipated these trends continuing in 2019-20.

Lack of confidence in meeting duties

As last year, just 35% of directors were fully confident budgets would be sufficient to meet statutory requirements during 2019-20, as ADASS said the recent history of government using short-term funding to prop up the system could not continue.

With the government’s promised green paper now more than two years overdue and no timescale apparent for its publication in the context of Brexit and the Conservative leadership contest, ADASS president Julie Ogley warned: “Too many older and disabled people and their families still struggle without getting the help they need. Social workers, managers and councillors are having to make incredibly difficult decisions based on dwindling resources, which should not be allowed to happen in a modern, compassionate society.

“We cannot be expected to keep relying on emergency, one-off funding just to keep service going while not knowing about how much might be available for the rest of this year, let alone next.”

Fragile market 

In this year’s survey, ADASS has sought to bring out the human impact of the funding restraints that have beset the sector since 2010, particularly by highlighting the fragility of the provider market.

Three quarters of councils (up from 66% last year) reported that providers had closed, ceased trading or handed back contracts in the previous six months.

The biggest impact was in the home care market, where 72 councils, just under half the total, saw providers close or cease trading in the previous six months, affecting 7,019 people, more than double the number reported by directors in the 2018 survey.

In a briefing to launch the survey today, Ogley attributed the sharp rise to the failure of Allied Healthcare, formerly one of England’s biggest home care providers, at the end of 2018.

The provider, which supported 13,000 people, was forced to transfer and sell its contracts after it ran into financial difficulty. It blamed the low fees paid by councils for its struggles to deal with debts.

Fifty two councils reported closures of residential or nursing care providers in the last six months, while 26 councils saw closures of both care home and home care providers, though the numbers affected by care home closures fell compared with last year.

Key findings: ADASS 2019 budget survey

  • Net adult social care expenditure is due to rise from £14.6bn in 2018-19 to £14.9bn in 2019-20.
  • However, councils predict having to make £700m in adult social care savings in 2019-20 to deal with cost pressures, adding to £7bn already reported by directors since 2010-11.
  • The biggest sources of predicted saving in 2019-20 will be efficiency savings (£248m) and using asset-based and self-help approaches to reduce numbers receiving long-term care (£228m).
  • Only 33% of directors are fully confident that their planned savings target will be met with 65% partially confident.
  • Just over a third of directors (35%), a similar proportion to last year, are fully confident that budgets are sufficient to meet statutory duties in 2019-20, with duties in relation to market sustainability and the Deprivation of Liberty Safeguards being the most at risk.
  • Almost 80% of directors say that they have been subject to additional costs as a result of the NHS reviewing the application of continuing healthcare.

Provider and workforce pressures

The significant pressures within the care market were evident in other survey results. Sixty two per cent of directors were not fully confident they would meet their duties to promote diversity and quality in provision of services in 2019-20, though this was down from 78% in 2018-19.

For the third year in succession, the majority of councils said they would be increasing provider fees by between 3% and 4.9% with the national living wage – the wage floor for those aged 25 and over, which rose by 4.9% in April to £8.21 an hour – cited as the biggest driver.

Other pay, recruitment and retention pressures were also cited as major drivers of fee increases across the care home and home care markets.

However, directors were clear that salaries for care workers needed to increase as they ranked it clearly as the most important factor in ensuring there were sufficient numbers of care staff in their areas, ahead of improved terms and conditions and progression opportunities.

This was particularly so in the context of the NHS introducing a new minimum pay rate of £8.92 an hour in 2018, which increased the pay of the lowest paid by 10%, with further annual increases up to 2021.

NHS-driven costs

While funding from the NHS – channeled through the Better Care Fund – has been used to prop up the social care system in recent years, this year’s ADASS survey found councils were enduring increasing cost pressures from the health service.

Almost 80% of directors said their council had been subject to additional costs as a result of the NHS reviewing the application of continuing healthcare, shunting costs onto local authorities and families.

As of the end of March, 56,036 people in England were eligible for CHC, a marginal increase on the same period in 2018. However, there is a downward trend in those eligible for ‘standard CHC’, which excludes those who are fast-tracked to having their full health and social care costs met because their conditions are rapidly deteriorating.

A greater proportion of directors than last year (73%, as opposed to 65%) reported reductions in NHS contributions to CHC, shared funding arrangements or section 117 mental health aftercare as a funding pressure.

The biggest source of NHS pressures on social care (reported by 87% of directors) related to the impacts of increased hospital admissions and community health activity, while 71% of directors cited insufficient primary, community or mental health services as a pressure, up from 68% last year.

‘Vicious circle’

Investing in asset-based support and preventive services to reduce the numbers of people needing long-term care was slated as the second biggest source of savings for councils this year. However, while spending on prevention is due to increase by 5.4%, from £1.19bn to £1.25bn, in 2019-20 this follows a fall last year and means spending on prevention makes up just 8.4% of the total adult social care budget, a similar proportion to 2017-18.

The survey report said this meant councils were still “trapped in a vicious circle of having insufficient funds to be confident they can meet all their statutory obligations, whilst being unable to release funding to invest in approaches that might reduce the number of people with higher needs in future”.

Short-term funding

Source: NHS Digital

As the graph from NHS Digital above shows, a six-year real-terms slide in adult social care expenditure in England came to an end in 2016-17, since when there have been year-on-year increases, as a result of new funding streams provided by government, specifically:

  • Since 2014-15 the Better Care Fund (BCF) has provided for resources to be transferred from the NHS to adult social care to protect services and help councils meet their Care Act duties.
  • Since 2017-18, government has provided further funding through an Improved Better Care Fund to further protect adult social care, support the provider market and reduce pressures on the NHS. According to ADASS the two streams will provide £2.58bn for adult social care in 2019-20, down from £2.63bn in 2018-19.
  • The government has also provided £240m in each of 2018-19 and 2019-20 for adult social care to meet winter pressures.
  • A further £410m social care grant has been provided for adult and children’s social care in 2019-20 to improve services and reduce pressures on the NHS. According to the ADASS survey, 53% is due to be spent on adults’ services.
  • Since 2017-18, councils have been able to levy an additional charge, known as a ‘precept’ on council tax to raise funding for adult social care. This was limited to a 6% rise in council tax up to 2019-20, with a maximum 3% hike in any one year.

However, there is no commitment from government to continue with the precept, winter pressures money, social care grant or improved Better Care Fund after 2019-20, which ADASS pointed out made it very difficult for councils to plan their finances.

“The uncertainty over the future of the social care grant, the Improved Better Care Fund and other funding streams after 2019/20 makes it difficult for councils to commit funding to longer-term solutions needed to prevent people from needing care in the future,” said the report. “This situation, at worst, places the sustainability of adult social care at severe and immediate risk.”


Following the survey, ADASS called on the government to provide the following:

  • A long-term, sustainable funding solution for adult social care.
  • Funding from the government’s spending review next year to be for at least two years and to continue until whatever is in the promised green paper can be produced and implemented.
  • Adequate funding to meet an increasing number of people’s needs in the ways they want.
  • A proper debate with the public about the priority of social care.
  • A continued focus on recruitment and retaining of a caring, skilled and valued workforce.
  • A vibrant care market which gives people choice and control.

This year’s Community Care Live 2019 boasts over 30 free learning sessions to equip you to face the key challenges in social work practice today. You can also sign up to any of our eight legal learning sessions to help ensure you have the legal literacy your role requires. Register now to ensure you don’t miss out. 

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4 Responses to Worsening social care funding position wreaking increased human cost, warn directors

  1. Blair Mcpherson June 27, 2019 at 5:35 pm #

    Where has the ADSS been for the last 10 years of austerity!

  2. Candy June 27, 2019 at 8:35 pm #

    Councils themselves are very wasteful too, so here is a way to save money. I’m making a disclaimer in that I’m speaking as a locum social worker who has the confidence to state that I’m damned good at my job, just ask my ex-colleagues or managers, and speak to some of my clients too!! So before we as locum SW’s start getting the usual diatribe about us financially bleeding local authorities dry, I thought I’d jump in first and make some suggestions about how councils can save some money; after all, every little helps.

    Why not sack all permanent social workers, managers and indeed therapists, finance staff, etc, in fact every member of LA teams, who have become lazy and complacent in their jobs, many of whom are just hanging on for their pensions. Some of these workers do such a lousy job on your cases (an understatement) that you need us locums to come in and clean up, causing the councils to pay out twice. Also sack obsolete managers and directors, that’ll save a fortune too.

    Many perm staff and indeed managers (many of whom themselves were locums in a former life but forget where they came from, due to short term memory loss) treat us with contempt and are envious of our perceived wealth. My question is, why don’t you all become locums if we have it sooo good? You see, as a locum I cannot take months, or in some cases years out on full ‘sick’ pay while permanent staff can. Then you need us locums to come in and clean up after you…it’s a vicious cycle.

    • Kelly Donald July 4, 2019 at 12:47 pm #

      Hear! Hear!

  3. Colin Slasberg June 28, 2019 at 9:46 am #

    What the ADASS survey doesn’t say is that the highest spending councils spend over £20K per service user while the lowest spending just £11K. How does ADASS explain that? And how does ADASS account for holding spending so successfully to budget – actually an underspend last year – whilst leaving no needs unmet in the wake? The answers to these questions – and others ADASS wont face up to – show that ADASS must take responsibility for their part in causing the crisis in social care funding. The politically expedient eligibility system which ADASS obediently and uncomplainingly acquiesces with is at the heart of a dysfunctional system that feeds off and seeks out crises. When will ADASS face up to what the evidence is actually saying, and cease looking inward to what it tells itself and what it wants to believe.