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Into perspective: Are the social care reforms enough

Are the social care reforms enough to sustain the sector and those it supports?

On 7th September, Government published its policy paper ‘Build Back Better: Our Plan for Health and Social Care’, outlining long-awaited sector reform and how it will be funded. Headlines included the introduction of a lifetime cap on personal care costs, the adjustment of local authority financial assessment thresholds, £5.4bn spending over three years, raised by the Health and Social Care Levy, to deliver Government’s commitments and £500m of this package to develop the sector’s workforce. While the introduction of the reforms goes significantly further than multiple previous Governments have been able to achieve and offers potential for growth, many in the sector have challenged their long-term ability to truly reform adult social care and improve the lives of people relying on services.

The story since September

Since Government published its policy paper in September, the sector has been subject to the Autumn Budget and Spending Review, which was poised to share further details about how the proposed social care reforms would be funded, particularly from a local authority perspective. The Chancellor’s primary announcement for the sector comprised £1.6bn of new grant funding in each of the next three years for English councils. In advance of this, an additional £162.5m of new funding was announced to help workforce retention and recruitment, available until the end of March 2022.

Although seemingly attractive on paper and, at the very least, an acknowledgement from Government that the sector needs additional support to enact its reform agenda, the announcement left most feeling underwhelmed about the prospect of the sector’s long-term sustainability. The greatest cause for concern seemed to be surrounding Government’s decision to not ringfence the new grant funding totalling £4.8bn for adult social care, meaning it is unclear exactly how much the sector will be able to get its hands on – unlike the additional workforce retention and recruitment funding, which aims to ensure there is the right number of staff with the skills to deliver high-quality care to meet increasing demands, but ‘amounts to only £100 per member of the care workforce’, according to Dr Jane Townson, CEO at the Homecare Association.

Despite the intention of the adult social care COVID-19 winter plan for 2021 to 2022 to address the sector’s ongoing response to COVID-19, it was difficult to prevent the conversation from circling back to the need for a long-term reform settlement and how the winter plan fell short of this. In summary, Karolina Gerlich, CEO of the Care Workers’ Charity, argued that ‘the winter plan glosses over and indeed, completely minimises the experiences of those working in social care’. The plan failed to mention any additional financial support for the sector’s workforce that had not already been announced, seen by many as an indication of Government’s short-sighted approach to reform.

White Paper wish list

As well as the now ubiquitous demands for greater financial investment in the sector and increased workforce support, the highly anticipated White Paper for adult social care faces a host of additional expectations that it must satisfy to enact sustainable long-term change for the better. Firstly, the White Paper must develop Government’s pledge to enhance service users’ choice, control, and independence when it comes to determining the best care options based on their needs. Other crucial areas the White Paper must build upon include the development of housing with care, taking advantage of the opportunities provided by technology, supporting unpaid carers and considering how best to join up social care and health services to ensure clear and person-centred care pathways are established across the sector.

Another broken pledge?

In September, the Government took a bold step by breaking a key manifesto commitment not to raise taxes with the announcement of the Health and Social Care Levy, funded by raising National Insurance contributions.

The levy will go towards supporting the NHS’s post COVID-19 recovery, including clearing the elective care backlog and reforming social care. A lifetime cap on social care costs of £86,000 and more generous means test was announced, supported by £5.4bn funding over the next three years.

As welcome as these reforms are, the levy does not help address the funding-related challenges plaguing the existing system: high levels of unmet need, staff shortages and poor workforce pay and conditions, and a fragile provider market. All of this awaited the Spending Review. So, what do we know now?

As a result of the local Government settlement, councils’ spending power is expected to increase by around 2% a year. But, with increasing demand on services and care provider prices rising to around 3.5% a year, the settlement is only enough to cover the future demand pressures if unspecified ‘efficiencies’ are made, or local authorities prioritise social care over other vital services.

In fact, 3.5% a year may be on the low side as providers face additional costs from the rise in National Insurance contributions and the National Living Wage. Around 21% of care workers are paid the National Living Wage, so this increase will hit care providers particularly hard.

If funding is barely sufficient to meet future demand, it will not begin to tackle the other challenges. Meeting future demand, increasing the prices paid for care so that providers can raise quality and wages and increasing the number of care packages by 10% to make some inroads into unmet need, would require additional funding of around £7.6bn in 2022/23. This would rise to £9.0bn in 2024/25, over and above that provided for in the Spending Review, including by the levy.

The cap is undoubtedly a long-overdue reform to the way we pay for social care. But without substantial extra money for the existing system, social care will limp on, failing many of those who need its help. The pledge to fix the crisis in social care once and for all may be another broken one.

Charles Tallack, Assistant Director for the REAL Centre, The Health Foundation

Government must set clear expectations

Investment in adult social care is an investment in all of us, enabling people to live the life they want to lead, contribute to society and in turn strengthen our local communities. The Government’s social care plan set out initial reforms for the sector and how extra funds will be raised, but the recent Spending Review was disappointing and has left councils concerned about the immediate and medium-term sustainability of care and support.

While we are supportive of reforms, including the introduction of a cap on care costs, there are still questions about the adequacy of the announced £5.4bn for social care through the new Health and Social Care Levy. It is troubling that only £200m has been made available in 2022/23 to support reform implementation, particularly if that includes the commitment to move towards councils paying a fair rate of care.

The Spending Review did not set out how much of the £5.4bn will be used to pay for other Government reform commitments, such as action to better support unpaid carers, investment in the Disabled Facilities Grant, supported housing, and improved information and advice. Councils urgently need this information, so they have a better understanding of what is expected of them over the coming months.

Since 2010, adult social care has had to manage a £6.1bn funding gap, £4.1bn of which was through savings. Social care’s core cost pressures amount to £1.1bn over each of the next three years and come on top of a pre-existing, annual pressure of £1.5bn to stabilise the care provider market. This is in addition to many other challenges, such as the need for greater investment in prevention and action on care worker pay and conditions.

The additional £4.8bn in the Spending Review for local Government overall needs to be seen in this context. The new Levy should be used to support front-line social care, to stave off the worst of the pressures and provide a degree of stability for the short- to medium-term.

Without proper long-term investment for adult social care, it is likely that councils will continue to struggle to meet their statutory duties under the Care Act, with real consequences for people.

Cllr David Fothergill, Chairman, LGA Community Wellbeing Board

About David Fothergill

Cllr David Fothergill is a Health and Social Care Spokesperson for the County Councils Network. David has a wide range of operational experience including manufacturing, Children’s Homes and Older P…

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eople care. Most recently, he has been Director of HR for a large South West employer operating across 43 sites. Before becoming Leader of the County Council in May 2017, David served two years as Cha irman of and a further two years as Cabinet Member.

About Charles Tallack

Charles Tallack has been Assistant Director for the REAL Centre at The Health Foundation since February 2019. Prior to this he was Head of Operational Research and Evaluation at NHS England, where he …

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led a multidisciplinary team of around 40 analysts. The majority of Charles’ career has been in the civil service where he worked on a diverse range of areas and learnt the art and science of policy analysis.

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