Councils to face targets in return for adult social care funding

Councils will face targets on improving adult social care in return for funding in the forthcoming financial year, the government has confirmed.

In return for £400m in additional cash for 2023-24, the Department of Health and Social Care (DHSC) expects councils to take action in relation to any one of reducing waiting times, addressing workforce shortages, tackling delayed discharges from hospital or improving fee rates for providers.

Authorities will also need to ensure that they at least maintain performance in relation to the other three performance areas, according to the conditions set for the market sustainability and improvement fund (MSIF).

Councils will need to provide the DHSC with initial and finals report on how they have spent the money in the MSIF and made progress against all four target areas.

Funding risk if targets not met

In a briefing produced this week, the Department of Levelling Up, Housing and Communities (DLUHC), which is responsible for local government finance, said that the DHSC may  withhold future funding if the conditions for receiving the MSIF were not met.

“Through reporting DHSC will assure itself that the funding is being used in line with the grant conditions and, as a last resort, ultimately reserves the right to withhold future funding until satisfied that all fund conditions have been met,” it said.

“DHSC will provide local authorities with the opportunity to explain how they have used the funding and any additional context through challenge sessions before considering further measures.”

Councils ‘may be set up to fail’

The DHSC is yet to specify the metrics councils will need to report on. However, the Association of Directors of Adult Social Services (ADASS) has said it is “extremely concerned” about the targets “[setting] councils up to fail”.

In its response last month to the consultation on the local government finance settlement for 2023-24, it warned that the reduction in government support for businesses’ energy costs from April would increase providers’ costs, some of which would be passed onto councils.

It also raised concerns about the prospect of the DHSC making unfunded inflationary increases in the upper and lower capital thresholds, entitling more people to funded care, and the minimum income guarantee, limiting how much councils can charge people for community-based care.

ADASS added that, should that happen, the government would need to “re-evaluate its expectations” of councils.

This was written before the DHSC confirmed today that the lower and upper capital limits, £14,250 and £23,250, respectively, would stay frozen for a 13th consecutive year, in 2023-24, though the MIG, along with the personal expenses allowance for care home residents, would rise by 10% to cover inflation.

In the briefing this week, the DLUHC said: “We are continuing to engage with local authority and sector stakeholders on the metrics and reporting mechanisms to ensure that the final set are suitable and do not add unnecessary, additional burdens on local authorities where possible. The metrics will be finalised in the grant guidance.”

The MSIF will be worth £562m in 2023-24, £400m of which will be subject to the performance targets.

The remaining £162m is a continuation of a sum allocated in 2022-23 to help councils work towards paying providers a fair cost of care.

Councils ‘lack funding to pay providers fair fees’

Councils were required to submit cost of care exercises to determine what a sustainable fee that covered providers’ costs and allowed for a reasonable level of profit would be, by 1 February 2023.

Among councils that have published their results, current fees often fell short of the calculated fair rate, prompting ADASS to warn that authorities lacked the resources to deliver it.

However, provider body Care England has argued that councils should be able to find the money to meet the fair cost.