Introduction & summary
The Association of Directors of Adults Social Services (ADASS) welcomes the opportunity to make this representation for the 2017 Autumn Budget preparations. This should be read in conjunction with our Spring budget representation.
Social care provides care, support, and safeguards for those people in our communities who have the highest level of need and for their carers. We believe it should be treated as a national priority. Nearly two million people rely on these essential services and around 6.5 million carers support people alongside and beyond the formal social care sector. It makes a contribution of £43bn to the national economy in direct and indirect costs.
However, successive governments have failed to sufficiently address what is an overwhelming issue: the recognition of and funding for these vital services and supports. Ageing societies, in which younger people with disabilities are living longer too, normally devote a bigger share of their national wealth to long term care and support. Yet OECD analysis shows that spending on adult social care as a percentage of GDP (UK) continues to fall behind the European average.
This representation covers both the short and longer term issues in relation to social care funding and takes account of the need to consider how services are organised and delivered to achieve better outcomes for people.
The Spring Budget contained a welcome recognition of the need for immediate additional resources and longer term funding reform. It is essential that the Government builds on these important first steps to develop a sustainable future for adult social care.
The context and recent developments
In our representation for the Spring Budget we set out a whole range of financial and services challenges faced by local authorities that were impacting on care providers and the NHS and affecting the quality and availability of social care needed by increasing numbers of older and disabled people. The depth of shared concerns about the quality, safety and sufficiency of social care services has been expressed by national and local organisations from across the public, private and voluntary sectors and from affected individuals. These concerns have been supported by independent commentary from the Care Quality Commission, the King’s Fund and The Nuffield Trust and also endorsed by the chairs of Select Committees for Public Accounts, Health and Communities and Local Government. The challenges impact on care markets, care workers, the NHS and most of all are felt by older and disabled people and their families.
- recognises that announcements in the Spring Budget have helped to ameliorate some of the worst consequences of these pressures. Without the introduction of the Adult Social Care Precept and the additional Spring Budget funding, some councils’ finances would have come close to collapse this year and the impact on older and disabled people, on the care market and on the NHS would have been even more significant.
- summarises further and more up-to-date evidence that has emerged since our earlier representation of the fragile state of the social care system and a continuing funding gap in 2017/18 and beyond;
- calls for further action to address continuing pressures and bring forward proposals for long term reform.
A system under continuing pressure
Our annual budget survey of local authority financial plans in 2017/18 shows that councils are continuing to prioritise adult social care over other services, in the context of a reduction in central government financial support to local government of £16bn between 2010 and 2020. Council spending on adult social care is set to increase from 35.6% in 2016/17 to 36.9% this year, despite councils having to make 8% cuts in overall budgets on top of previous year’s reductions. All councils bar five are making use of the social care precept. But councils still reported planned savings in 2017/18 of £824m, although some of the additional £1bn available through the improved Better Care Fund may be used to offset these previously planned savings, in some councils.
This means that total cumulative savings in adult social care since 2010 will amount to over £6bn by the end of 2017/18. Overspending by councils rose significantly in 2016/17 and indicates that Directors are finding it increasingly difficult to implement planned savings – only 31% are fully confident that planned savings for 2017/18 will be met and despite the additional funding which has been made available for adult social care, Directors’ confidence falls for future years, to a point where only 7% are fully confident that savings targets will be met in 2019/20.
The survey also shows that the need for social care, arising from increasing numbers of older and disabled people, increased by 2.8%, the costs of the National Living Wage and other requirements rose by £378.5m and there were increasing costs associated with delayed transfers of care from hospitals including fines for delays. Of particular concern is that working age adults (including people with physical and learning disabilities and people with mental health needs) account for 1.7% of these pressures – 1.2% alone by people with learning disabilities. It follows that long term funding proposals will not be sustainable unless they address the needs of the whole of the population and not just older people.
The care market remains fragile and is failing in some parts of the country
Most councils have used some of the additional £1bn available this year to increase the fees paid to independent providers by above the rate of inflation. This is recognition of increases in the national living wage and other cost pressures, including those associated with sleep-ins. Fees for home care in particular have risen markedly, with increases of more than 5% in almost a quarter of councils. Nevertheless the average hourly rate paid for home care - reported to be £15.39 in the budget survey – falls short of the £17.19 minimum benchmark cost identified by the United Kingdom Home Care Association.
There is continued evidence from this year’s budget survey of failure within the provider market, affecting at least 69% of councils and thousands of individuals as a consequence. 53% of councils experienced care home providers handing back contracts or closing or ceasing trading in the six months to May 2017. Independent industry analyst LaingBuisson’s most recent assessment is that capacity is slowly dropping out of the market at a current rate of loss of about 2,000 beds a year, concentrated in less affluent areas of the country where providers are dependent on local authority contracts.
In the already fragmented home care market, another major national provider has decided to withdraw from local authority contracts, the fourth to do so in the last eighteen months. As LaingBuisson put it, these exits “send a bleak message to investors and strike a warning note for local authorities and central government”. 54% of councils have experienced home care providers handing back contracts.
The NHS is under pressure too
The failing state of the home care market is having a significant impact on the NHS. Waits for care packages at home is now the single biggest cause of delayed transfers of care, accounting for over a fifth of all delayed days. Delays for this reason have risen by 41% over the last two years. Even where the NHS was responsible for the delay, the increase was 44% over the same period in the previous year, indicating that there are underlying capacity and workforce issues faced by NHS and local authority commissioners alike. This is a system-wide issue.
Councils continue to prioritise hospital discharge through the Better Care Fund and mainstream budgets. Although just one fifth of new referrals for social care in 2015/16 came from a hospital setting, councils have used one third of the £1bn additional money this year to assist NHS partners in seeking further improvements.
Like social care the NHS experiences a similar mismatch between demand and funding and the resulting pressures affect the social care system too. This year’s budget survey reveals high levels of concern by Directors throughout the country about the impact of pressures in the local NHS. People who are waiting longer for treatment will need social care support longer than anticipated. Under-investment in primary care and community health services makes it more likely that people will end up needing local authority funded long term residential care. Efforts by NHS England to reduce the escalating spend on continuing healthcare is likely to put further pressure on local authority budgets for nursing home care.
It is essential that future funding settlements for the NHS and social care take account of the inter-dependency of these services and encourage collaboration rather than cost shunting.
Demand and need continue to rise
As noted already, over half of current cost pressures arise from the needs of working age people. 48% of gross council spend on adult social care is on people aged 18-64yr. Existing estimates suggest that the number of learning disabled younger people is set to rise from 220,000 in 2010 to around 290,000 in 2030. For physically and sensorily impaired younger people the projected rise over the same period is from almost 2,900,000 to 3,100,000.
There is new evidence that the future care needs of older people will be greater than previous estimates. A recent assessment of the impact of increasing life expectancy on health and disability published in The Lancet show that current older people are spending more of their remaining life with a range of low and high care needs. In particular men and women studied were living on average an additional 2.4 and 3 years respectively with substantial care needs. This suggests that the volume of care needed will be much higher than previous estimates, with as many as 71,000 additional care home places required by 2025. As well as the implications for family and friends who supply unpaid care, this will require a substantial increase in funding for community services and residential care.
A major challenge for local authorities will be how to balance the needs of people across the whole age spectrum in a way that is fair, effective and sustainable. This should be acknowledged and addressed in the forthcoming Green Paper.
Quality and workforce challenges are mounting
Inspection of social care services by the Care Quality Commission between 2014-2017 show that although 77% of inspected services are assessed as good, there is wide variation across the country. Only 2% of services are rated as outstanding and there is too much poor care. 2% of services are currently rated as inadequate, and 19% of services are rated as requires improvement and are struggling to improve.
38% of services were still rated as requiring improvement following re-inspection, and 5% of these services had deteriorated. Not all services that were originally rated as good maintain quality, with 26% receiving a lower rating after re-inspection.
These conclusions are reflected in rising levels of concern expressed by Directors, 75% of whom report that more providers in their area are facing quality challenges now as a result of local authority savings, rising to 83% anticipating that this will be the case for the period 2018-2020.
Many of the quality and capacity challenges experienced by commissioners and providers arise from continuing difficulties in recruiting and retaining staff. The overall staff vacancy rate across the whole of the care sector has increased from 4.5% in 2012/13 to 6.8% in 2015/16. The vacancy rate for home care staff was 11.4%, again underlining the critical condition of this part of the market. Over the same period turnover rates have risen from 22.7% to 27.3% a year.
These difficulties relate in part to the relatively low level of wages in a sector that is large – over 1.5m jobs – and projected to grow by between 15 and 55% between 2013 and 2025 as the volume of care needs rise. The average wage of a care worker is £15,007 and the mean hourly rate for care workers in the independent sector in 2016 was £7.72, just £0.52 above the national living wage at the time. In areas of high employment and/or above-average wage levels, local labour markets will not provide the capacity required for social care services. The national living wage will not be a sufficient response to these challenges.
Another major threat to workforce sustainability arises from Brexit and potential changes to immigration policy. Around one in 20 (6%) of England’s growing social care workforce are non-British European Economic Area nationals – around 84,000 people – although this is differentially felt with one fifth of nurses in nursing homes in the South East coming from the EU.
We warmly welcomed the decision in the Spring Budget to provide an additional £2bn to councils in England over the next 3 years to spend on adult social care services, £1bn of which has been provided this year. This year’s budget survey demonstrates that this has alleviated further significant reductions and is being used to address social care needs, support the provider market and relieve pressures on the local NHS, in line with the Government’s expectations.
However whilst the new money was an important first step towards addressing financial pressures and has staved off the collapse of services in many places, it will not close the growing funding gap that according to independent estimates is still set to reach £2.1bn by 2020 despite the increase. The Care Quality Commission has reiterated its warning from 2016 that there remains a real risk of the social care system ‘approaching a tipping point’. There is deep concern about the ability of councils to fulfil their statutory duties under the Care Act and other legislation, with only 4% of Directors expressing full confidence in their ability to do so in 2017/18.
For these reasons the government is right to acknowledge that more needs to be done to put the system on a more secure and sustainable long term footing and the proposal to publish a green paper on options for achieving this is a positive step forward. There have been a number of previous commissions and reviews over a number of years, including Sutherland, Wanless, Dilnot and Barker, and the consequences of delay and indecision by successive governments are now being felt.
The whole care sector, including senior leaders from the NHS, local government and the independent sector, stands united in recognising the importance of an adequately funded social care system in promoting the country’s wellbeing and ensuring the right care is available in the right place and at the right time. We reiterate our commitment to work with government and the sector and to bring the knowledge and experience of ADASS to achieve lasting reform.
Therefore we ask that the Government:
- Builds on the additional £2bn for the period to 2019/20 by taking further steps to secure additional recurring funding to address continuing service pressures and secure the stability of the care market. Whilst not the only answer, recurrent additional funding to local government, based on need for social care is integral to any solution.
- Bring forward at the earliest possible opportunity clear and wide-ranging options for consultation about putting the social care system on a more secure and sustainable long-term footing beyond 2020. This should aim to secure the right balance between the protection of private assets from catastrophic care costs and adequate public funding for those who have never been able to acquire such assets. Reforms which address only the position of self-funders will simply entrench the unsustainability and inequity of the adult social care system.
- Helps us to address the urgent workforce pressures in the sector by:
- affording care staff, social workers and social care nurses the same recognition and attention as doctors and other key professionals and by resourcing this;
- enhancing the status of care workers, addressing pay issues, reviewing key worker housing, training, and the contribution of DWP/work programme providers, funds apprenticeships, and skill mix;
- working with us to develop a national recruitment campaign and addressing our concerns about the uncertainty for non UK EU citizens who are a crucial part of our workforce.
- Recognises the importance of adult social care in achieving long term transformation of the wider health and care systems in order to promote independence and reduce the need for long term care; and ensuring the full engagement of local authorities in sustainability and transformation partnerships and in the emergence of accountable care systems.
The Association of Directors of Adult Social Services is a charity. Our objectives include:
Our members are current and former directors of adult care or social services and their senior staff.