Adult care needs extra £7bn a year by 2023-24 as ‘starting point’ for required investment, say MPs

At least £7bn must be injected annually into adult social care by 2023-24 to meet demographic pressures, fund minimum wage rises and protect people from “catastrophic costs”, MPs have said.

However, while this would represent a 34% increase on current spending in England, this would only be a “starting point” for the investment the sector needs, the House of Commons health and social care committee said in a damning report published yesterday that followed an inquiry into social care funding and the workforce.

The committee, which has a Conservative majority and is chaired by former health and social care secretary Jeremy Hunt, said the full cost of adequately funding social care was likely to run into tens of billions, because of the need to address unmet care needs, tackle shortfalls in quality, stop the shift in the market towards self-funders and address low pay,

‘Recognising sacrifices of the workforce’

“The gravity of the crisis now facing the social care sector requires a bold response if we are to recognise the sacrifices made recently by the social care workforce and—most importantly—look after vulnerable people in our society with the dignity and respect they deserve,” the report said.

As part of this, the committee was supportive of introducing free personal care – at an estimated cost of £5bn a year – which it said would “simplify the current confusing arrangements for people who need care, and would put social care on a more equal footing with the NHS by ensuring that all basic care needs are met free at the point of need”.

The committee’s report comes with the government still committed to the long-term reform of social care – as confirmed by health and social care secretary Matt Hancock in evidence to the inquiry – but with no clear timetable for doing so, in the light of the economic uncertainty due to Covid-19.

However, the committee said the pandemic had laid bare the urgency of the need for significant investment in the sector, given the “devastating consequences” it had had for service users and staff.

“The case for making a sustained investment in social care has never been stronger. The toll the pandemic has taken on this sector means that social care is no longer a hidden problem, but one that the country as a whole understands. We urge the government to now address this crisis as a matter of urgency,” the report added.

‘Catastrophic care costs’

The committee’s call for a £7bn annual funding injection by 2023-24 is made up of £3.9bn to cover the costs of demographic change and planned increases in the national living wage, and £3.1bn to implement a cap on care costs, limiting people’s lifetime liabilities to protect them against “catastrophic costs”.

This represents a 34% increase on the projected £20.4bn adult social care budget for 2023-24. The report did not explore how such an increase could be funded but the committee said it “recognises the challenges involved and the need for innovative thinking to address them”.

The cap on costs would be based on the 2011 Dilnot Commission’s proposal for a limit on people’s liabilities for their care costs, worth £46,000 in today’s prices. This was legislated for by the Care Act 2014 but has not been brought into force, though the government is believed to be considering introducing the reform.

The cap would be based on the amount a local authority would have spent on meeting a self-funder’s needs had it been required to do so – excluding living and accommodation costs in a care home. This would be calculated through assessments and annual reviews, meaning the policy would require a substantial increase in the number of assessments carried out by social workers and care assessors and significantly more staff.

“Such a change would focus resources on the most severely affected people, protecting those with very high care needs – and remove the injustice which sees the NHS cover certain types of extreme care costs but the social care system not cover others, including those with dementia, motor neurone disease or many other neurological conditions,” the committee said.

Latest call for free personal care

The report is the latest to recommend the introduction of free personal care in England, following the House of Lords’ economic affairs committee’s July 2019 report and a 2018 joint report by the health and social care committee itself with the housing, communities and local government committee.

In Scotland, free personal care is in place with a limit of £180 per week for personal care and a further £81 for people needing nursing care. If care costs more than that, the person’s savings or assets are used to pay the difference. Think-tank the Health Foundation has estimated that free personal care allowances currently only meet around 25% of the weekly cost of a residential care home place, and it would cost £5bn a year to introduce a similar version in England.

The report comes with the government having announced that its long-awaited spending review – which was expected to set government spending limits for for 2021-24 – would only cover 2021-22, because of the uncertainty caused by Covid-19, raising questions over its potential to provide a longer-term funding solution for social care.

The Local Government Association was highly critical of the move, saying it made it “incredibly difficult” for councils to plan their finances. In response to the committee’s report, Ian Hudspeth, chair of the LGA’s community wellbeing board, said: “The upcoming spending review must provide councils with the extra funding they need to help shore up social care ahead of winter and get through the second wave of Covid-19, deal with the existing challenges exacerbated by the pandemic, while also using this funding for a ‘down-payment on reform’ to place social care on a long-term, sustainable footing.”

‘Irresistible case for reform’

Association of Directors of Adult Social Services president James Bullion said the committee’s report offered a “succinct distillation of the irresistible case for fundamental reform and sustained investment in care and support for working age disabled people, older people and carers”.

He added: “It makes clear that immediate action is needed and leads us to ask, if not now, when?  The government must use the spending review to ensure continuity of care and support and to create the space for a public conversation about the type of care we all want for ourselves and our families now and in the future.”

A Department of Health and Social Care (DHSC) spokesperson said it recognised the challenges facing social care and it was doing everything it can to support the sector during the pandemic including through regular testing of staff and residents in care homes, the supply of free personal protective equipment, as of this month, and over £1.1bn through the infection control fund.

“We remain absolutely committed to ensuring everybody is treated with dignity, and nobody has to sell their home to pay for care. We know there is a need for a long-term solution for social care and are looking at a range of proposals as part of our commitment to bringing forward a plan that puts the sector on a sustainable footing for the future.”