Paying for adult social care

Despite additional funding announced in the last Parliament, it is widely acknowledged that social care funding needs to be put on a more secure and sustainable long-term basis.

What is adult social care?

Adult social care provides personal and practical support to enable adults of all ages to retain their independence and quality of life. People receive care in their own homes, in the community or in residential settings.

Unlike medical care through the NHS, adult social care is not free for everyone. Local authorities typically only pay for care for adults assessed as having high needs and limited means. Many people finance their own social care, or receive unpaid care from family, friends or voluntary sector organisations.

More people, less money

The pressures on publicly funded adult social care have become
increasingly acute:

• Demographic pressures – the population is growing and more adults with long-term and multiple health conditions and disabilities are living longer. The number of adults aged 85 or over, the age group most likely to need care, is rising faster than the population as a whole. The Personal Social Services Research Unit estimates that the number of older people needing publicly funded social care could increase by around 300,000 (69%) by 2035.
• Reductions in overall funding – funding for local government has been falling. As a result, net adult social care expenditure has fallen by 9%
  in real terms, from £15.7 billion in 2010/11 to £14.4 billion (planned)
  in 2016/17.
• Increases in care costs – cost pressures have arisen from inflation,
  the National Minimum Wage, and the introduction of the National
  Living Wage.

As the scope for further efficiency savings diminishes, local authorities have sought to manage funding pressures by reducing or restricting care services. Commentators are concerned that more people are not having their care needs met.

There is evidence that the care provider market is becoming increasingly precarious. In the six months to July 2016, 48 councils in England (32%) experienced at least one provider ceasing trading in the homecare market, and 77 councils (51%) experienced at least one provider of residential/nursing care ceasing trading.

The squeeze on social care funding is also adding to NHS pressures through unnecessary A&E attendance, emergency hospital admission and delayed hospital discharge.

Capping individual care costs

Individual care needs, and thus costs, can vary substantially and are difficult to predict. The July 2011 report of the Commission on Funding of Care and Support, chaired by Sir Andrew Dilnot, proposed an increase in the means-test threshold, above which people are liable for their full care costs, from £23,250 to £100,000, and a £35,000 cap on lifetime contributions to costs.

The Coalition Government accepted Dilnot’s proposals, but set the contribution cap at £72,000. The initial implementation date was April 2016 but, notwithstanding a manifesto commitment, the Cameron Government announced a delay in implementation to April 2020.

A short-term respite

In the last Parliament the Government committed to increase social care funding for local authorities through:

• A new Social Care Precept, under which local authorities have discretion to increase council tax levels by up to 2% for each year between 2016/17 and 2019/20, or up to 3% in 2017/18 and 2018/19.
• An improved Better Care Fund (see margin), to include additional social care funds of around £4.4 billion between 2017/18 and 2019/20.
• A new Adult Social Care Support Grant, providing £240 million in 2017/18.

A long-term solution?

While this additional funding was welcomed, it fell short of the sums some believe is needed to bridge a predicted funding gap by 2019/20.

With an ageing population, the pressures on social care funding will increase further as time goes on.

The Personal Social Services Research Unit estimates that net expenditure on social care for older people is set to rise by 155% (from £6.9 billion in 2015 to £17.5 billion by 2035). This means the percentage of UK GDP represented by social care for older people in England would increase from 0.38% in 2015 to 0.75% in 2035 (based on Office for Budget Responsibility March 2017 forecasts for GDP).

Many have suggested that a cross-party consensus is needed on this, but nobody can agree on what it should be. Meanwhile, the party election manifestos, and extensive media commentary, highlight the range of views on this issue, including deep-seated ideological differences on the roles of the individual, family, and state in funding social care, as well as different views on what the state can afford to pay for.

This article is part of Key Issues 2017 – a series of briefings on the topics that will take centre stage in UK and international politics in the new Parliament.

Image: Loving hands by sparkle glowplug. Creative Commons Attribution 2.0 Generic (CC by 2.0)

The Care Quality Commission concluded in 2016 that “the sustainability of the adult social care market is approaching a tipping point”.

The Better Care Fund is a pooled budget, shared by local authorities and the NHS, intended to incentivise and transform the integration of health and social care services.