How will the social care sector be funded in the future?

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In the first of a series of ‘Knowledge’ pieces, Philippa Shirtcliffe, Head of Care Quality at Quality Compliance Systems (QCS), a leading provider of best practice for the social care and healthcare sectors, focuses on the future of funding and asks if the current organisational model works.

Talking to policy experts from the Nuffield Trust and The King’s Fund and those care professionals working on the front lines, she examines the case for Integrated Care Systems, a National Care Service and other strategic models.

Repairing a damaged and fragile social care sector: it is the promise that every Government makes but very few actually deliver on. Boris Johnson is the latest Prime Minister to make the pledge. In October last year at the Conservative Party Conference, Mr Johnson vowed to ‘fix the injustice of the care home funding’ and ‘to care for the carers as they care for us’.

Whether Mr Johnson makes good on his promise is anyone’s guess. But, what is also true is that he may not have a choice. The COVID-19 pandemic has shone a spotlight on the herculean challenges that the social care sector faces on a daily basis. It is not that those working in this embattled sector haven’t spoken out. On the contrary, the bodies that represent the UK’s 1.52 million social care workers have powerfully and passionately argued the case for reform for many years. But Governments haven’t listened – or taken action.

Suddenly, however, a perfect storm has made landfall. Fuelled in part by COVID-19, this storm, which has claimed over 90,000 lives [i] and has also exposed deep social inequalities, has led to a sea-change in thinking. The media have rightly amplified the voices of organisations such as the United Kingdom Homecare Association (UKHCA), the National Care Association (NCA), the National Care Forum (NCF) and many others. The public, who have lost loved ones in the crisis, suddenly see the importance of robust, well-funded health and social care systems. They are shocked and surprised to hear that courageous care workers, who took great risks to look after their relatives, only receive the minimum wage. They are astonished to learn that the Government labelled care workers ‘unskilled’ before the pandemic. They want reform and now it seems likely that the Government may be forced to finally act. But where does it start and what should it do to fix the system?

The challenges

The King’s Fund has written several papers, including its Social Care 360 study and a report, entitled What’s your problem, social care?, which lists eight issues. So, what are they?

The report, which was written by Simon Bottery, says that an unfair system of funding, which relies on individual means testing rather than risk pooling, where ‘everyone contributes to the total cost through taxation’, is a big problem. Closely related to social care funding is the fact that, with the means-testing bar set at £23,250, many people are forced to sell their house to pay for their care. Another dire consequence of a punitive means testing system is that ‘it limits publicly funded social care to people with the lowest assets’. This, says the report, creates a large swathe of the population who are not getting the daily care provision that they need.

The report identifies a second tranche of issues, which hinder care providers’ ability to deliver outstanding person-centred care. They all relate to funding. The study highlights workforce pay and conditions, market fragility and quality of care delivered. In short, the study says that local authorities in charge of commissioning are ‘often motivated by a desire to minimise costs’. This, the study says, has a negative impact on the sector, as it does not account for rising costs. Often, they are too great and this means that some care providers go out of business.

Finally, the paper points to a lack of integration between healthcare providers and social care providers, and a postcode lottery, where the area a person lives in can determine the level of care they receive.

With funding, or a lack of it, lying at the very heart of the issue, the question is, how does the Government raise the money it needs for a publicly-funded social care system that is fit for purpose? It is one that Boris Johnson and his cabinet have been promising to tackle ever since Mr Johnson took office. But so far it has not published a detailed, strategic roadmap outlining its plans.

Sir Andrew Dilnot’s social care reforms, which were never implemented, provide a solid starting point. But while Sir Dilnot’s recommendations, which sought to shield the public from incurring catastrophic costs, make perfect sense, it could be argued that they alone would not be enough to fix an already fragile system which has been further ravaged by COVID-19.

Helen Buckingham, the Nuffield’s Trust’s Director of Strategy, explains, ‘What the COVID-19 pandemic has also brought into the spotlight, however, is the growing awareness of the inter-dependency between the NHS and care sector. There is a better understanding at both national level and local levels of the support each entity needs from the other.’

Integrated Care Systems

With hospitals at full capacity, and there being only half the number of beds there were 30 years ago, the NHS desperately needs the care sector to help with provision. The NHS also leans on the social care sector to provide a wide range of support for individuals – including supporting those with mental health issues and physical and learning disabilities. However, as a result, the social care sector is severely stretched and urgently needs more money.

On funding, Helen, who joined the Nuffield Trust four years ago, points to a recent report entitled How to fund social care?, which outlines 15 different options, taking into account several international funding models. She says, ‘While the final choice depends on what policy ends a Government wants to achieve, essentially a good funding system is one that is clear and consistent on eligibility. Secondly, a good funding model provides clarity on the benefits that people would receive. Finally, it would enable long-term financial stability for the care provider market and provide peace of mind for the general public.’

But, in the absence of clarity on a future funding model, how can Integrated Care Systems work better with the care sector when, according to The King’s Fund, ‘there is no blueprint for developing an ICS’?

With Integrated Care Systems expecting to cover the whole of England by April, Helen thinks that ‘engagement between the NHS and the social care provider sector is highly variable’.

She explains, ‘NHS England is not looking directly at the relationship between the care sector and the NHS when they look at local systems. Instead they are focusing on the relationship between the different parts of the NHS and also the one between the NHS and the local authority. But there isn’t really anyone from the NHS consistently looking at the relationship between the NHS and providers in the care sector as part of that.’

Helen believes that, if Integrated Care Systems are to effect positive change in relation to the care sector, ‘the care sector must have an equal say on how resources are allocated’, which means ‘having a seat at the ICS table’.

She states, ‘The care sector, including the domiciliary care industry, need to be a central part of the decision-making process. Why? Because the more ICSs have a strong relationship with and a good understanding of the care sector in their area, the better they will become in meeting the holistic needs of people who use the service.’

It is a frustration shared by Anita Astle MBE. Anita, who is the Managing Director of Wren Hall and an Executive Director of Nottinghamshire Care Association, says, ‘The care sector needs more seats at the commissioning table. But whenever we ask, we are constantly pushed back. Those in charge of commissioning have told us that they want to find a solution to Primary Care first before inviting us to the table…’

Subsuming the social care sector into the NHS

In addition to systems that advocate a closer union between the healthand social care sectors, some have suggested a more radical solution. Many politicians have urged the Government to create a National Care Service, which, like the NHS, would be free to use and funded by the Government. But many believe that subsuming the social care sector into a national system or to the NHS itself, would not work.

Simon Bottery, a senior fellow at The King’s Fund, says, ’There are major cultural and philosophical differences between the way the two systems work.’ But he thinks that the practical reasons for not amalgamating the two sectors present the greatest barrier.

He explains, ‘Social care funding systems are far from perfect, but they do ensure that need and services are driven locally and not centrally. Most importantly, the people who ultimately make the decisions are elected by local people and that is a strong and important aspect of social care that many would be very reluctant to lose. There is a real benefit, for example, in having local authorities throughout England deciding how they spend money on social care. This means that, in theory at least, specific social care services can be attuned much more closely to local communities. Not only this, they can be linked into housing and leisure services, which all serves to create a much more community care-based care response with formal care services playing a key role.’

Helen Buckingham agrees that the NHS and the social care sector have different cultures and philosophies. She says, ‘The solution is not to wrap the social care system into the NHS. That would effectively mean that social care became an adjunct of the NHS rather than an important entity in its own right. By joining both services together, what you risk doing is medicalising needs that are social and not clinical.’

Looking back to the past, there is some evidence to suggest that this approach doesn’t work well. Helen points to a time when NHS Mental Health services were merged with social care mental health services.

She says, ‘In many cases, the services realised they were better off as separate entities working closely together. Both recognised they worked differently and, by running parallel services with strong lines of communication in place, they could provide a more effective service to the end user.’

A view from the front lines

Despite the profound and palpable differences between the two sectors, Anita, who has worked in the care sector for three decades, believes there is tangible evidence to suggest that integration can work.

Anita says, ‘While COVID-19 has placed great stress on the care sector, it has really stepped up to the plate, demonstrating great resilience and robustness, flexibility and adaptability. During the crisis, the care sector has consistently mobilised staff quickly and efficiently. Care homes have had to manage and care for very sick people without relying on the multi-disciplinary mechanisms that are normally there. It meant that during the first wave – and now the second wave – very few COVID-positive service users in care homes have been transferred or moved to hospitals.’

Anita believes that the hugely professional work carried out by the care workers during the pandemic has forced the Government to see the sector in a very different light.

She points to the Government’s decision in December to appoint a new Chief Nurse for Social Care (Professor Deborah Sturdy) as an example, saying, ‘Deborah’s appointment is a huge step forward, as it will give the care sector a much more powerful voice than before, when social care nurses were represented by the Chief Nursing Officer of England, a position created and funded by the NHS. I also think that having a designated Chief Nurse for the sector, sitting at the top table, not only gives our sector more autonomy, but will help to identify key areas for closer collaboration.’

However, that said, Anita recognises that it is not a given that a sea-change in thinking brought about by COVID-19 will bring about closer union in the form of Integrated Care Systems that deliver value.

She adds, ‘We have, I believe, a once-in-a-lifetime opportunity to effect real change, but I believe that the social care sector will have to do a lot of the running. When the pandemic finally ends, the NHS will have accumulated vast waiting lists. It will take several years to clear the backlog. It’s at that point that the NHS will look to the social care sector for greater support. I think it is up to the care sector to pre-empt this and to demonstrate – firstly internally and then with the NHS – how it can add value.’

However, if it is to do so, Anita says that more training needs to be given to nurses working in nursing homes – a point not lost on the British Geriatric Society, which, along with the care sector, has been urging the Government to provide more support and funding to those on the front lines.

Anita says, ‘Many nurses and GPs working in care homes feel ill-equipped to meet the complex needs of service users. We need to provide bespoke training for them and, most of all, we need those nurses to be recognised as specialists in their field. For too long, social care staff have been referred to by the Government as low-skilled. This is simply not true. The reality is they are highly skilled but low paid. It’s time we recognised the skills-base required to do this work well. The health and care sector needs to provide ongoing development and better wages in recognition of the importance of their roles.’

The role of CCGs needs to change

Eddie Coombes, a former director of Avaya and GE, who moved back into the care sector 17 years ago, agrees that simply subsuming the social care sector into the NHS would not work. So, if amalgamation, integration or closer union do not provide the answers, is there a way that the care sector can be funded so that it retains its person-centred culture, which differentiates it from other bodies?

Eddie, who is the Chief Executive and Founder of Optima Healthcare, and a National Care Association senior board member, has worked closely with NHS England, where he has participated in round table discussions around funding. He says, ‘There needs to be a starting point in simplifying the funding process, so that money can be distributed more quickly and in a more meaningful way.’

He adds, ‘We have been talking about revolutionising funding models for the last 20 years but sufficient change to make a difference has not been achieved. A big problem is how and who allocates funding, which is overly circuitous when it is distributed at local level, not to mention unequal. For example, in the summer, for instance, the Government provided the NHS with £12bn. In contrast, the adult social care sector received around £3.6bn, which was funded through local authorities with no clear guidance to fund the front line. A further £1.2bn was allocated to the Clinical Commissioning Groups (CCGs), with limited guidance to reach frontline services. But, in the first wave of the pandemic at least, this funding took a long time to trickle through to social care providers – if at all – depending on the local decision.

Eddie thinks that any future model needs to reassess the role of CCGs in the commissioning process. He explains, ‘The CCGs were originally set up as a body that commissions to NHS Trusts and independent hospitals. They connected the hospitals and the service providers to the care providers. While I think CCGs still work, I also think they cannot work separately to Social Care. Perhaps, therefore, a national commissioning body should be established that commissions directly into residential care homes, which combines funding of health and social care in non-hospital settings.’

And when it comes to community-based care, such as supported living, domiciliary care and extra care services, Eddie suggests, ’These kinds of service delivery model can be managed locally by the councils.’ He says that the fact they are social care related and local authority-intrinsic in nature ‘strikes a better equilibrium between how resources are allocated and redistributed between health care and social care statutory bodies.’

‘It would also free up the care sector managers to spend more time on care quality, as many of the funding discussions would be handled by a national commissioning body,’ he adds.

Hope for the future

Despite highlighting some of the problems attached to funding models, which currently stymie closer integration, Eddie believes that there are grounds for optimism.

‘When the chips were down,’ he says, ‘the Government showed a willingness to direct funding into the right areas. Secondly, there is tangible evidence that health and care sectors successfully collaborated when faced with significant challenges during the pandemic.’

Eddie cites the example of Kent County Council and the Kent Medway CCGs coalescing to put joint commissioning plans in place for the future. ‘They were only able to do that because of a shift in Government legislation, which allowed them to collaborate so they could deliver a joined-up package of health care and social care to meet the needs of the local population. In regard to future integration, I think, however, what this example best illustrates is that local authorities and CCGs should be left to manage local decisions. The Government’s job is to drive effective legislation, which enables funding streams to be easily accessed at local level, and to work with local Government to find more innovative ways in which these systems can work in greater harmony.’

But it isn’t what Mr Coombes has observed during the pandemic that has convinced him of the value of locally led, innovative partnerships. Instead, it is the first-hand experience gained from being a focal part of one in the crisis that has won him over. As a senior NCA board member, Eddie worked with Kent Council and a local trade association, KICA, to create an Infection Prevention and Control collaboration portal for Kent-based providers. The portal was funded by Kent County Council’s allocation of infection prevention control (IPC) money and provided support, guidance, webinars and updates to providers.

‘It has been a huge success,’ he says, ‘as it has linked different providers from both sectors together and, in my opinion, it has broken down barriers by encouraging a greater level of transparency and collaboration.’

If Eddie’s recent experiences are anything to go by, it would seem that there is a once-in-a-generation chance for change. However, it is an opportunity that the care and health sectors must not let slip out of their grasp.

[i] This figure provided by the UK government was accurate at the time of writing.


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