ADASS Reflections on Autumn Statement 2023

The build-up to the Chancellor’s Autumn Statement is one of hope and trepidation for those of us that work in adult social care.

As someone who has a glass half full approach to life, I was hoping (blindly it transpires) that there would be some recognition of the ever-growing pressures facing adult social care and local government finances (councils face a £4bn funding gap over the next two years according to the latest LGA figures).

The reality was that there was very little cause for early festive cheer. In recent years, grants such as the Workforce Recruitment and Retention Fund, and the Market Sustainability and Improvement Fund have at least enabled have helped us try and keep pace with inflation in terms of what we pay for care and crucially increase care workers pay, which in turn has reduced levels of staff turnover (According to the Government’s evaluation). We had seen some green shoots of recovery on the care workforce in terms of vacancies and availability of, for example homecare which showed that investing in care makes a difference. However, these improvements are now at risk.

As an organisation ADASS is committed to campaigning for better pay and conditions for social care workers, especially as adult social care has been defined as a low-paying industry by the Low Pay Commission (LPC) since 1998. So, the pre-Autumn Statement announcement that the National Living Wage will rise to £11.44 per hour (an increase of just under 10%) as of 1 April 2024 is something that should be celebrated. But (there’s always a but), given the financial pressures facing adult social care and local government, it’s inconceivable that an increase of this level can be absorbed by existing budgets without having a detrimental impact on those of us who access care and support.

The reality for next year is that councils will be left to pick-up the shortfall in funding for the higher than expected increase in the National Living Wage. Having spoken to a handful of Directors since the announcement, an increase of this scale has blown a hole in their already stretched budgets for 2024/25. The likely cost of funding the NLW increase nationally will be north of £500mn for adult social care alone. It would be interesting to see the Government’s new burdens doctrine assessment of the increase on councils and also any supporting equality impact assessment.

Our recent Autumn Survey report highlighted the scale of the challenge facing Directors in 2024/25. Prior to the National Living Wage announcement, they were expecting to deliver savings of £964mn in 2024/25. This is the highest level of savings since 2015/16 when Directors were tasked with making £1.1 billion of savings. Clearly, these figures are likely to increase at the detriment to those of us who access care and support, their carers and families.

Care providers are also right to raise concerns about where the funding will come from to pay for the increase, given the economic landscape for councils. The Low Pay Commission have highlighted that across all sectors since the NLW was first introduced, employers have had  to absorb the increases via reduced profits or, where possible, to pass them onto consumers through higher prices. However, employers are now ‘reaching a limit in what they could pass through’ and there ‘remain large low paying sectors – social care and childcare in particular – where employers’ ability to pass on increased costs is highly constrained’.

Recent Government policies have sought to provide investment to increase capacity, with the Market Sustainability and Improvement Fund focusing on increasing provider fees, reducing waiting times and supporting improved recruitment and retention of the workforce. However, barring Government producing an early and surprise Christmas present through the provisional local government finance settlement in December, it’s likely the financial outlook for 2024/25 will be bleak. Which not only means that we won’t be in a position to take forward the Government’s vision for reform, but we will be most likely taking a backward step.

Without action it’s likely that we will remain in this vicious cycle where too many people are waiting for health and social care, meaning that in many cases their health and wellbeing is deteriorating and their needs are increasing. Pressures in the NHS are compounding the pressures in social care. As more people wait for NHS treatment, more deteriorate and need social care. As people wait for social care they deteriorate and need NHS treatment.

It doesn’t have to be this way. We set out in our report Time to act: A roadmap for reforming care and support in England earlier this year a range of short, medium and long-term actions that could transform social care. This included the need for a long-term fully funded plan for adult social care, including a workforce plan. We will continue to work with partners across social care to make the case for change, after all, who wouldn’t want to ‘live in the place we call home, with the people and things that we love, in communities where we look out for one another, doing what matters to us.’ (Social Care Future)