Councils call on Prime Minister to deliver on her promise to provide more funding for social care

CCN Latest News, CCN News 2022 | 20 September 2022

Councils have called on the new Prime Minister to deliver on her promise to provide more funding for adult social care, warning that the cost-of-living crisis could add £3.7bn to the costs of delivering social care – more than double the expected rise.

During the Conservatives’ leadership election, Liz Truss vowed to spend more on adult social care over the next two years, a move welcomed by local government. She said she would abolish the Health and Care Levy but keep the additional funding for services – estimated at £13bn next year – while providing more funding to social care.

The County Councils Network (CCN), which represents 36 councils in county areas, say that the new Prime Minister must now ‘follow through’ with this commitment, warning that services face a perfect storm of staffing shortages, less availability of care beds and higher costs at a time when demand is increasing.

As a result, people are waiting longer for a care package or placement, at a time when the perception is that social care is ‘fixed’ with reforms on the way and due to be implemented next October.

Care providers also say they are facing higher costs too – which threatens their viability – ahead of planned reforms which also due to introduced from next autumn, which both councils and providers have said are drastically underfunded and threaten care market sustainability.

Their warning comes as new analysis reveals that councils in England are set to face £3.7bn in additional costs in 2023 compared to 2021 to keep care services as they are presently due to rising inflation, wage increases and demand. These rising costs are double of that of previous estimates by PwC for CCN, which estimated costs would rise £1.6bn over the same two-year period due to a combination of service demand and inflation.

This warning is illustrated in the first chapter of CCN’s new Five Point Plan for County and Unitary Councils, which focuses on how local authorities have been impacted by the cost-of-living crisis. Download it using the button below.

Under the previous government’s plans, just 9% of the £13bn ringfenced for health and social care is to be spent on adult social care.

This funding, however, is not aimed at addressing the immediate pressures in the system, such as the need for councils to commission more care packages to meet rising demand and to alleviate inflationary costs.

Instead, it is to pay for the reforms being introduce from October 2023 – which encompass more generous financial support for care users and funding for councils to raise the fee levels so they pay providers a new ‘Fair Cost of Care’. However, CCN say the planning for these reforms are already placing councils under severe strain, with research published earlier this year showing the policy was underfunded by £854m a year.

With this existing funding shortfall and a three-fold increase in core costs, if no more funding is forthcoming councils will have to further scale back the quality and accessibility of care services, meaning that people could be waiting longer than they do present for a care package.  At the end of April, it was estimated that there were 542,000 people waiting for care packages, assessments, or direct payments and reviews – up by 37% six months prior.

These longer waits are impacting on hospital discharges, where people are medically fit to leave hospital but are being held up because of a lack of available care in the community. At the end of July, there were 13,014 beds occupied by those who are medically fit to be discharged which equates to 10% of all beds – up from 10,381 last November. Many of these delays are attributable to adult social care.

County leaders say the new government should confirm further investment in adult social care in this month’s emergency budget, with extra funding to come directly to local government as soon as possible so councils can begin to address pressures.

Cllr Martin Tett, Health and Social Care Spokesperson for the County Councils Network, said:

“The new Prime Minister’s commitment during the leadership election to spend more money in adult social care was a welcome recognition that the care system is significantly underfunded and that this has a knock-on impact on the NHS.

“Services were already under pressure ahead of the government’s reforms being introduced next October, and councils were not set to receive any funding to address these immediate problems. However, the situation is now worsening with rising inflation meaning councils face an extremely challenging 18 months and increased costs of £3.7bn this year and next. We face the perfect storm of staffing shortages, fewer care beds, and higher costs – all of which will impact on individuals waiting for care and discharges from hospital.

“Whilst the perception is that social care is fixed with reform on the way, the experience of those who require care now is anything but. We urge the government to confirm that social care will receive a much-needed funding boost as soon as possible in this month’s emergency Budget.”

Notes to editor

  • The County Councils Network (CCN) is the national voice for England’s county councils. It represents 23 county councils and 13 county unitary authorities. Collectively, they represent 25 million people, or 47% of the country’s population. Read more
  • The projections on estimated increases in adult social care costs are CCN analysis using the IFS–CIPFA Local Government Finance Model. More details on the model can be found here: CCN used the model to calculate net spending on adult social care for all upper-tier councils in England for the year 2021/22 and projections for 2023/24.
  • The model’s default assumptions on demand growth were used, with 2019/20 used as the baseline for projections. However, the default inflation and average earnings projections in the model are based on the OBR’s March 2022 forecasts, for CPI of 8.0% in 2022/23 and average earnings growth of 3.8%. More recent forecasts by the Bank of England, and the latest data on average earnings, are much higher.
  • CCN adjusted the economic forecasts in the model, adding 3ppt to forecast CPI each year, and 2ppt to average earnings growth. This assumes CPI of 11.0% in 2022/23 and 5.4% in 2023/24, and average earnings growth of 5.8% in 2022/23 and 4.3% the following year.
  • The figure that projects councils would have seen £1.6bn in additional costs in 2021/22 and 2022/23 without inflation rising so rapidly is taken from research carried out by PwC for CCN. See page 34 of this report for a more detailed breakdown.
  • Data on the number of people who are medically fit to be discharged and no longer meet the criteria to reside in hospital is taken from this NHS dataset for July 2022 here and November 2022 The total number beds available across the NHS is taken from the Q1 2022-23 dataset here.
  • CCN research which estimates that the proposed ‘Fair Cost of Care’ charging reform policy is underfunded by £854m a year can be read here.