‘Worst financial outlook for years’ for adult social care revealed by directors’ survey

Adult social care faces its “worst financial outlook” for at least seven years on the back of rising levels and complexity of need and costs being shifted from the NHS, a survey of directors has revealed.

Despite receiving what the previous government described as the “biggest funding increase in history” for 2023-25, councils overspent their adult care budgets by £586m (2.9%) in 2023-24, found the Association of Directors of Adult Social Services’ (ADASS) annual spring survey.

This was the highest overspend in at least a decade, while councils also reported having to budget for £903m in savings in 2024-25 (4.4%), the highest annual level recorded by the association since 2016-17.

Just one in ten directors said they were fully confident they had the money to meet their statutory duties for adult social care in 2024-25, down from 35% for 2019-20 and 12% for 2023-24.

And directors reported cutting back investment in preventive services, from £1.55bn in 2023-24 to £1.43bn in 2024-25, despite their potential to reduce or delay needs for care and support

‘Worst financial outlook in years’

“This is easily the worst financial outlook for adult social care budgets that I’ve seen in the seven years of leading the survey,” commented ADASS’s director of policy and analysis, Michael Chard, in a post on LinkedIn.

On the back of the findings, the association called on the new Labour government to shift resource from hospitals to social care and community health to prevent people reaching crisis point, as well as committing to a “long-term, fully funded solution” for the sector.

In its general election manifesto, Labour offered no funded commitments on adult social care, though said it wanted to raise staff pay, improve consistency of care and enhance partnership working across health and social care to tackle delayed discharges and promoting care at home.

It also set a 10-year vision to create a “national care service” but did not define what this would mean.

In response to the ADASS report, a Department of Health and Social Care spokesperson said: “We are determined to tackle head-on the significant challenges social care faces. We will undertake a deep-rooted programme of reform to create a national care service and make sure everyone gets the care they need.”

‘Biggest funding increase in history’

In November 2022, amid significant pressures on the sector, the then government announced what it called the “biggest funding increase in history”, which involved new money and recycling resource earmarked to implement the cap on care costs and related charging reforms.

In 2023-24, this amounted to almost £2bn in extra government grant for councils to spend on adult social care plus up to an estimated £550m from raising council tax by 3% and the adult social care precept – which is ring-fenced for the sector – by 2%.

The impact of this was seen in government figures on council budgets for adult social care for 2023-24, which showed that net expenditure on adult social care was £2bn (10%) higher in real terms than in 2022-23, at £22.3bn.

ADASS’s survey, carried out from April to June this year, was answered by 145 of the 153 authorities, with the association scaling responses up to represent the whole country.

Its figures for total spending are different from the government’s but also showed a significant increase in budgeted spend, from £17.7bn in 2022-23 to £19.2bn in 2023-24 (these figures are not adjusted for inflation).

Overspend driven by mounting need

But despite this, councils collectively breached their budgets by £586m (2.9%) in 2023-24, the largest overspend recorded by ADASS in at least a decade, with 72% of authorities breaching their budgets.

Within this group, 92% of directors indicated that a cause of the overspend was the average cost of care packages outpacing their assumptions, while 89% attributed it, at least in part, to the numbers requiring long-term care exceeding their expectations.

As evidence of the increasing complexity of need that councils were meeting, ADASS found that the average number of home care hours a week councils delivered per person rose from 13 hours 40 minutes in 2021-22 to 14 hours 43 minutes in 2023-24.

In relation to the number of people in need, 22% of councils said they had seen a more than 10% rise in the number of people referred from the community, with a further 46% seeing a rise of less than 10%. Most people (about 80%) are referred to local authorities from the community.

There was an even sharper rise in referrals from people discharged from hospital, whose numbers grew by more than 10% in 45% of areas and by less than 10% in a further 37% of areas.

Cost shunting from the NHS

However, pressures also came from the NHS, with 36% of directors reporting an at least 10% increase in referrals from people who would previously have been, or were formerly, eligible for continuing healthcare (CHC), with another 37% seeing a rise of less than 10% in this group.

The NHS funds social care for people eligible for CHC on the grounds that they have a primary health need. If someone is found to be ineligible, either they or their council must fund their social care.

As of the first quarter of 2024, 51.95 people per 50,000 population were eligible for CHC in England, down from 54.65 per 50,000 two years earlier, according to NHS England data.

Almost all directors (94%) agreed that tightening eligibility for CHC was leading to councils or individuals picking up the bill for more care home placements for people with complex needs.

A similar proportion agreed that there had been a trend of NHS integrated care boards reviewing people who qualified for CHC to find they no longer qualified, leading to an increase in
people requiring council-funded social care.

Meanwhile, 84% of directors reported that frontline adult social care staff were increasingly undertaking tasks that were previously delivered by NHS staff on an unfunded basis, up from 70% in its 2023 autumn survey.

Pressures continuing into 2024-25

Directors said the pressures they faced in 2023-24 were continuing into 2024-25. While they planned to increase budgeted spend from £19.2bn to £20.5bn, authorities reported having to make £903m in savings from their adult social care budgets.

Sixteen per cent of directors said they were not at all confident they had enough money to meet their statutory duties, while a further 74% were partially confident that they would do so.

More positively, ADASS found that waiting lists for assessments, reviews and care packages had fallen, from 470,576 at the end of August 2023 to 418,029 as of the end of March 2024.

“This is welcome progress in difficult circumstances,” said the association. “Nevertheless, it is important to remain sensitive to the difficult human stories behind these numbers. These figures
are still historically high and should command the same concern as hospital waiting times.”