Over £2bn of vital social care funding at risk next year as councils warn they will start to decommission services 

More than £2bn of funding for vital social care services is at risk next year, with council leaders today urging government to confirm that resource will continue otherwise services will start to be decommissioned in the coming months.

The warning comes as the County Councils Network (CCN) releases new analysis, ‘Adult social care funding and the Spending Review’ which shows that £2.4bn of funding for care services for the elderly and younger adults which makes up one-third of total government grant funding for councils, has yet to be confirmed by Whitehall.

Click the image below to download the new analysis.

County leaders are calling on the Chancellor to use the upcoming one-year Spending Review to confirm all current funding for social care will continue next year. This comes amidst speculation that the Sajid Javid will prioritise funding announcements for the NHS, schools, and the police at next week’s Spending Review.

In addition, they have urged Sajid Javid to fully fund next year’s estimated £652m increase in the costs of delivering care due to rising demand and inflationary pressures. The 36 county authorities in England account for just under half of this – £314m.

However, this would just keep services as they are currently rather than improving or enhancing them – and would still leave councils facing a funding shortfall due to an existing overall funding gap of £5.2bn for all councils next year, according to CCN projections.

The government grant funding currently at risk includes the Improved Better Care Fund, which is coming to the end of its three-year cycle in 2020, alongside the social care grant for councils and a winter pressures grant, both of which were announced at last October’s Budget.

Without the continuation of this funding councils will soon have to begin decommissioning frontline services and care packages for the elderly aimed at reducing delayed discharges from hospital due to a lack of availability of non-acute care beds, whilst also making further reductions to core care services alongside preventative measures and discharge work to help get people out of hospital quicker.

Councils warn they will have to begin preparations for decommissioning during the Autumn months as they need to give care providers sufficient notice – and they argue that next month’s Spending Review must give councils the clarity they need to continue these services.

The analysis shows that county authorities are the ones who are most reliant on these three temporary grants. In total, 23 out of the top 30 councils most reliant on this temporary grant funding are county local authorities. This is in percentage terms total of all government grant funding, on this temporary grant funding. Somerset County Council is the highest – with 47% of all its grant funding coming from the temporary grants.

Next year, all 151 care authorities will need to spend £17.3bn with £8.2bn worth of expenditure for the 36 county authorities. If the government was to commit to continuing the three grants, alongside exiting government funding, this only makes up 40% of council costs for social care – with the rest being met through council tax and further local authority service reductions. In county areas, this figure is just 29% of funding that comes via Whitehall. CCN argues that this is unsustainable in the long-term.

Today’s analysis from CCN shows that different council types across the country will be exposed differently if the government grant funding at risk does not continue.  If government does not roll-over the three grants, then less than one fifth of funding for care services in county areas (18%) will come from the government – with the rest being borne by council tax and further local authority service reductions.

This is at a time when demand for the service is increasingly exponentially – by 2020-21 costs will have risen 20% £2.9bn since 2015, with councils estimated to be spending £6.1bn more per year on adult social care by 2025 compared to what they were spending a decade prior.

Cllr David Williams, chairman-elect of the County Councils Network, and leader of Hertfordshire County Council:

“The new Chancellor worked very constructively with councils in his time as Local Government Secretary of State and was well aware of the pressures we face in delivering adult social care against a rising tide of demand. In addition, the Prime Minister’s commitment to find a long-term solution to the funding of care services is very welcome.

 “It would be inconceivable that the temporary grants – particularly the Better Care Fund – that have allowed us to prop up care services and address pressures on the NHS over the past few years, will not continue. But we are still in the dark over whether this lifeline for care services will continue. 

“With budget planning for 2020/21 underway, we will reluctantly have to seek to decommission services that are directly funded by these grants in the coming months, in order to present a balanced budget next year – unless this funding is continued. We urge the Chancellor to use next month’s Spending Review to commit to rolling over these grants.

“This alone won’t be enough however. Councils in aggregate face an extra £650m costs next year due to rising demand and costs of delivering adult social care, with the bulk of this falling on county areas If we are to protect frontline services, the Chancellor must provide councils with the resource to fully fund these pressures as a short-term measure ahead of genuine reform to the system. If not, once again council taxpayers will be asked to foot the bill, while frontline services will inevitably be reduced.”

 Notes to editor

• CCN is the national voice for England’s county councils. It represents all 26 county councils and 10 county unitary authorities. Collectively, they represent 25 million people, or 47% of the country’s population. It is a special interest group of the Local Government Association. For more information, visit countycouncilsnetwork.org.uk.
• Click here to download the new publication, ‘Adult social care and the Spending Review’ which explores the funding for councils for adult social care this current year and analyses various scenarios available to the government.
• For a list of the top 30 councils most reliant on these temporary grants, please contact Ian Burbidge using the details below.
• The £2.4bn figure is this press release is made up of the improved Better Care Fund, which was announced in 2017 and its three-year cycle finishes at the end of 2019-20. It was worth £1.8bn to local authorities this year. Separately, the government announced at its October 2018 Budget the ‘Social Care Grant’, worth £316m to adult social care services (the remaining £94m was allocated to children’s social care) and the ‘Winter Pressures Grant’, totalling £239m. Both of these were one-year grants for 2019/20.
• The £652m figure in this press release is taken from an analysis done by PricewaterhouseCoopers (PwC) for CCN, which compares the increase of ‘spending need’ for councils (the costs of delivering services and rising demand for those services) between 2019-20 and 2020-21. It is on page 18 of this report.
• The £5.2bn funding gap figure taken from the report above, with the analysis from PwC.
• The £17.3bn figure of councils’ ‘spending need’ for next year is taken from the same report and analysis on the same page as above – and the ‘CCN’ £8.2bn figure is taken by adding together county councils and county unitary councils.
• The table below outlines how much government grant funding will make up council costs for adult social care, by local authority type and an English average, next year.

  Grants as a percentage of councils’ spending need in 2020/21:

• CCN also analysed different scenarios available to the government, and how each scenario would impact on local authorities, which is where the 18% for CCN councils is derived from. The complete analysis is on page 16 of the report, ‘Adult social care and the Spending Review.’