In July 2019 the House of Lords Economic Affairs Committee published a report into the funding of social care. The report argues that social care has been underfunded for many years, and an increase in funding is urgently required. In addition, the report contends that the Government should implement a sustainable long-term funding solution, address disparities in provision between local authorities, and invest in the social care workforce.

Since the House of Lords Economic Affairs Committee’s report was published, the coronavirus pandemic has led to an increased focus on the social care sector, particularly care of the elderly. A House of Commons Health and Social Care Committee report published in October 2020 stated that “the Covid-19 pandemic has thrust the long-recognised crisis in social care funding into public consciousness”. The Government has said that it will bring forward proposals for reform of social care.

House of Lords Economic Affairs Committee’s report

The House of Lords Economic Affairs Committee’s report argued that there is an urgent need for increased funding in adult social care, and for disparities in levels of provision to be addressed. These are the report’s main conclusions:

  • Adult social care in England is inadequately funded. Although demand has been increasing, funding for adult social care in 2017/18 (the latest figures which were available at time of publication) was below 2010/11 levels. Approximately £8 billion per year is needed to restore care quality and access to 2009/10 standards.
  • There is significant pressure on unpaid carers (often friends and family) to provide unpaid care. This pressure is increasing as access to local authority funding for care decreases.
  • That self-funders pay more for care than local authorities means that care homes market themselves primarily to self-funders, reducing places available to those funded by local authorities.
  • That local authorities, rather than central Government, pay for care results in disparities in level of provision around the country, as some local authorities are able to spend more on social care than others.
  • Employers of care workers need to be able to pay their staff more to compete with other employers. There also should be a career structure that better reflects the skills and social importance of care work.

The committee recommended that the Government introduce free “personal care” (help with basic activities of daily living). It also recommended the Government retain a means test for accommodation costs, which could be capped. The committee argued that social care funding should not be reliant on locally raised revenue, as this has little connection to local demand for care, but should be funded largely from general taxation.

House of Commons Health and Social Care Committee report

In October 2020, the House of Commons Health and Social Care Committee published a report into the funding and workforce of the social care sector. The Committee argued that reform was needed in two distinct areas: “firstly an immediate, and sustained settlement to address the current funding pressures in the system, and secondly, more far reaching reform to address the historical injustices in the funding system”.

The report also repeated the House of Lords Economic Affairs Committee’s call for improved pay and professional development for care workers, stating that there is an “urgent need for appropriate pay, professional career structures and parity of esteem with NHS colleagues”.

The committee concluded that “the starting point for the social care funding increase must be an additional £7bn per year by 2023–24”. It also said that “the Lords Economic Affairs Committee’s report makes a persuasive case for the introduction of free personal care” and this idea was “worthy of consideration”. In addition, it recommended a lifetime cap on care costs.

Levels of funding

Social care funding comes from a combination of regular local authority budgets, the additional element of council tax ringfenced for social care (the ‘social care precept’), and Government grants.

The House of Lords Economic Affairs Committee’s report cites figures showing that total adult social care spending in England was £700 million lower in 2017/18 than in 2010/11, at approximately £21.3 billion in 2017/18 compared to slightly more than £22 billion in 2010/11. The committee stated that there had been an increase in demand in that time, therefore spending per head had decreased further. The committee also highlighted that over half of local authorities had overspent against their social care budgets and many had financed this overspending from their reserves.

In 2018/19, total spending increased by £882 million to reach £22.2 billion. The number of older people also continued to grow. Between 2010/11 and 2018/19, spending per person on adult social care services fell in real terms by approximately 12 percent, according to the Health Foundation.

In its report, the House of Commons Health and Social Care Committee presented estimates it received from multiple organisations of the funding that would be required to resolve various issues in the social care sector. These include the Health Foundation’s estimates that £2.1 billion annually would be required to meet future demand arising from an aging population and £12.2 billion per year would be required to recover peak spending levels and increase pay.

Impact of coronavirus

The coronavirus pandemic has had a significant impact on the adult social care sector. Increased pressures have led to more public attention on quality of care, unmet care needs, inadequate pay and conditions for the social care workforce, and lack of coordination between the NHS and care providers.

Since March 2020, the Government has issued various tranches of additional funding for local authorities to help cope with the effects of Covid-19, including in social care. On 19 March 2020, the Government announced £1.6 billion to help local authorities to respond to the pandemic, including with respect to “increasing support for the adult social care workforce”. On 18 April 2020, £1.6 billion more for councils was announced, and on 2 July 2020 the Government committed to a further £500 million of un-ringfenced funding for local authorities. In the November 2020 Spending Review the Government said further grant funding would be available to help councils respond to Covid-19 in 2021/22:

The Government expects to provide local authorities with over £3 billion to address Covid-19 pressures, including in adult social care. This will support councils to maintain care services while keeping up with rising demand and recovering from the impact of Covid-19.

Government policy on reforming social care

In Boris Johnson’s first speech as Prime Minister, in July 2019, he announced that he “had a plan” to reform social care, stating:

My job is to protect you or your parents or grandparents from the fear of having to sell your home to pay for the costs of care and so I am announcing now—on the steps of Downing Street —that we will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve.

In its manifesto ahead of the 2019 general election, the Conservative Party said that demand for care for both the elderly and working-age people is growing. It said that in order to address this challenge the country must “build the same level of consensus on social care as we have already built on the NHS”. The manifesto said that, if elected, the Conservative Party would:

[…] build a cross-party consensus to bring forward an answer that solves the problem, commands the widest possible support, and stands the test of time. That consensus will consider a range of options but one condition we do make is that nobody needing care should be forced to sell their home to pay for it.

On 14 January 2020, Prime Minister Boris Johnson was questioned about the reform of social care. During the interview on the television programme BBC Breakfast, Mr Johnson was asked about his announcement in July 2019 that he had a plan for social care. In response, he said, “we will be bringing forward a plan this year but we will get it done within this parliament”.

On 6 March 2020, the Health and Social Care Secretary, Matt Hancock, wrote to MPs and Members of the House of Lords asking for views on reforming the social care system. In the letter, Matt Hancock set out a two-step timeline for social care reform talks. The first phase was calling for the views of MPs, the next stage would be structured talks in May 2020 on reform options.

In response to a question on the plans for reform at a coronavirus briefing in June 2020, Mr Hancock said the pandemic might cause a delay to the plans:

Well, the time frame has been clear, which is that we have got to get these reforms done in this parliament and the prime minister has previously said we will get them set out this year. That was before coronavirus—we will still try to do that but it is not straightforward.

In November 2020, as part of the Spending Review, the Government stated that it is “committed to sustainable improvement of the adult social care system and will bring forward proposals next year”.

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