New analysis reveals the regional impact on local councils of the government’s flagship adult care reforms

CCN Latest News, CCN News 2022 | 25 May 2022

A new report today reveals the regional impact on local authorities as a result of the government’s flagship adult social care reforms, concluding that the costs of these proposals could be significantly underestimated.

The analysis, released today by the County Councils Network (CCN) and Newton, provides the first independent analysis of the reforms, which include a more generous means-test, a cap on care costs of £86,000, a move towards a ‘fair’ cost of care, and the ability for people who arrange and fund their own care to ask their local authority to do it on their behalf.

The report estimates that the costs of reforms in the nine years from when they are introduced to 2032 could be a minimum of £10bn higher than currently estimated and could create a further workforce crisis in social care, with over 5,000 extra staff projected to be required to carry out extra care and financial assessments for those seeking to benefit from the reforms.

The report, Preparing for Reform, has been developed through extensive engagement with local authorities, providers, and residents alike, coupled with unique postcode-level analysis to understand the impact of the reforms across the country.

Download the report here.

 

Key findings include:

  • The cost of the care reforms, including the cap and means-test for over 65s, new ‘fair cost of care’ and administrative overheads in England will cost a minimum of £25.5bn over the next decade. This compares to the government estimate of £15.6bn for the same elements of the reforms. The analysis suggests more people will benefit from some financial support under the means test and cap, meaning the cost of this element alone is £2.5bn higher than government projections.
  • There is a significant regional variation in the costs of implementing the reforms, with councils in county and rural areas disproportionately impacted. Councils in England’s counties account for 57% (£14.3bn) of the total estimated minimum costs of the reforms over the next decade. This is compared to 19% (£4.9bn) in urban metropolitan borough councils in the North and West Midlands
  • An additional 4,300 social work staff will be required to carry out the additional Care Act assessments, reviews, and case management, on top of a current vacancy rate of 1,782. In addition, an extra 700 financial assessors will also be needed to carry out  additional financial assessments if no changes to existing ways of working are made. The report projects an extra 200,000 care and financial assessments will be required annually, which determine the level of support an individual receives, at a cost of £1.9bn to councils over the next decade. 
  • Councils in county and rural areas could face the biggest financial and workforce challenges. Unless the government provides more funding and changes the way it allocates resources between councils, county and rural areas could face a minimum funding deficit of £7.6bn. Some 3,000 additional new social workers and financial assessors will be required in these areas, 60% of all new recruitment.
  • In order to properly fund these reforms, the government could potentially need to spend half of the Health and Social Care Levy by 2032 on these proposals alone, irrespective of other social care pressures in the system. The report estimates that the total costs of the reforms could be between £5.6bn and £6.2bn a year by 2031/32. The levy will generate an extra £12bn in annual revenue earmarked for both the health service and social care, but only £1.2bn in each of the next three years has been committed to these social care reforms so far.

A separate survey of CCN councils for the report found that almost two-thirds of councils felt that they were ‘not well prepared’ for the reforms due to funding shortfalls and a tight timescale of implementing them from October 2023. Just over three quarters (77%) said that they would be unable to allocate any more resources from other service areas to pay for any financial shortfall, whilst nine in ten (91%) said they were ‘very concerned’ they will be unable to recruit enough staff.

Councils say recruitment on this scale will be ‘impossible’ and they will need more funding to attract more staff, alongside extra time to implement the reforms by transforming their working practices, including greater digitisation of assessments to streamline the process.

Facing a funding shortfall, and a workforce crisis next year, two-thirds of councils support delaying key aspects of the reforms beyond next Autumn, rather than a ‘big bang’ of introducing all of them at the same time. This would give councils more time to transform their services in anticipation of the extra assessments required, including greater use of technology. The report also calls on government to urgently invest in a national recruitment and workforce development campaign for local authorities and providers.

Failure to do so could result in individuals facing even longer waits to get a care package. Presently, there are over 500,000 people waiting for an assessment – and councils will face further administrative pressures from the reforms from next October.

Councils will also face significant unfunded cost pressures, particularly those in counties. The report calls on government to fully fund these reforms based on its financial projections and to re-examine its funding formula which will distribute funding for the reforms. CCN is calling for this formula to be overhauled to account for county areas being particularly exposed to the costs of reforms.

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

“There is clear support from local government for the government’s package of social reforms, which will make the system fairer and ensure that more people do not face catastrophic care costs.

“However, today’s report shows there is a significant financial and operational cost to these reforms, which are likely to be significantly more than the government’s estimates. We urge ministers to clearly examine these findings, which show costs are likely to be higher than the government is forecasting, and potentially devastatingly so in some regions.

“Local authorities are also facing a mountain of extra assessments required for the thousands of people who will approach their local authority to benefit from the reforms and it will be almost impossible to recruit the extra staff required.

“Therefore, the government must fully fund these reforms, incorporating the substantial extra cost they are likely to generate for councils so we are able to set balanced budgets in the future. Importantly, instead of a big bang introduction to the reforms, today’s report calls for them to be phased to give local authorities enough time to mitigate the challenges and give them enough time to transform and prepare for such a momentous change.”

 

 

 

Daniel Sperrin, Director at Newton, said:

“Newton is pleased to have partnered with CCN to carry out this analysis of the impact of the charging reforms. It is evident that whilst offering clear benefits for residents, the reforms will have a profound financial and operational impact on local authorities and providers. We hope that the findings and recommendations from this report will help both local and central government to prepare to implement the reforms, and so help realise the opportunities that they present.”

 

 

 

 

 

Notes to editor

  • Various sources of national data were analysed to create the demand and financial projections in this press release and in the report. This includes bespoke postcode level wealth and asset data to help model the financial impact for each region. For each postcode, 25 data fields were gathered and analysed, including individuals’ savings, income, investments, and house value, along with factors such as if a house is owned, and if individuals live in couples or alone. Together this data provided the basis to assess chargeable assets, which underpins this analysis. A full methodology can be found on page 13 of the report.

Regional and council-tier breakdown of the minimum costs of reform – and the funding shortfall faced by areas and local authorities (lower estimate)

 

Estimated Cumulative Cost 2023-2032 (£/m)
Over 65s Means Test & Cap Fair Cost of Care Operational Costs Total Estimated Funding* (£/m) Funding Shortfall (£/m)
CCN (County & Rural Unitary) £8,877 £4,338 £1,131 £14,347 £6,729 £7,618
Met Borough £1,579 £3,043 £244 £4,867 £3,800 £1,067
London £1,165 £586 £224 £1,974 £2,400 -£426
Non CCN English Unitary £2,265 £1,747 £302 £4,314 £2,571 £1,743
England** £13,886 £9,714 £1,901 £25,502 £15,550 £9,952
East Midlands £614 £802 £100 £1,516 £1,295 £221
East of England £1,793 £1,173 £298 £3,264 £1,573 £1,691
London £1,165 £586 £224 £1,974 £2,400 -£426
North East £429 £673 £47 £1,149 £893 £256
North West £1,346 £2,327 £195 £3,868 £2,305 £1,563
South East £4,391 £1,010 £540 £5,941 £2,163 £3,778
South West £2,221 £510 £225 £2,956 £1,562 £1,394
West Midlands £853 £1,365 £95 £2,313 £1,730 £583
Yorkshire & the Humber £1,074 £1,269 £176 £2,520 £1,578 £942
England** £13,886 £9,714 £1,901 £25,502 £15,550 £9,952

 

*Estimated funding is arrived by firstly taking the government’s estimate of the total national costs of reforms for the years 2023/24 to 2031/32 for comparable elements of the reforms analysed by Newton. Figures are obtained from the government’s Adult Social Care Charging Reform Impact Assessment (see here). Estimated funding by region and LA type is then calculated by taking this total and distributing to each individual council using the adult social care relative needs formula (ASC RNF). Funding for each council is then aggregated to region and council type. The ASC RNF is the current formula used by government to distribute social care funding.

**England total for funding estimate and funding shortfall rounded figures.  

Regional and council-tier breakdown of social workers and financial assessors required

Additional Social Workers Additional Financial Assessors
CCN (County & Rural Unitary) 2506 495
Met Borough 558 83
London 538 39
Non CCN English Unitary 702 88
England 4304 705
East Midlands 221 45
East of England 684 97
London 538 39
North East 108 16
North West 448 65
South East 1186 250
South West 507 88
West Midlands 214 38
Yorkshire & the Humber 398 67
England 4304 705

 

  • 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. For more information click
  • Newton is a transformation and improvement specialist, with an extensive track record of delivery that includes health and care. They have worked with over 100 public sector organisations, and these partnerships have delivered measurable and sustainable improvements in outcomes for people, transformed ways of working and staff engagement, while saving in excess of £300m (and rising) on a 100% contingent fee basis