Growing concern for underfunded reforms

February 25, 2022

Councils could face a budget blackhole amid growing concern for underfunded social care reforms, says the Local Government Association (LGA).

As councils plan budgets for next year, the LGA's concerns are growing that the Government’s reforms to adult social care are underfunded and risk their implementation as well as exacerbating existing pressures.

Of the £36bn the new UK-wide health and social levy will raise over the next three years, only £5.4bn is to be ringfenced for social care in England. As councils plan their service budgets from April, the LGA said many are increasingly concerned that the funding allocated for reform falls far short of the likely costs involved.

The introduction of a ‘fair rate of care’ that councils will pay providers and tackling the issue of self-funders paying more for their care than those who access support at the council rate will be particular issues going forward, according to the LGA.

Without adequate funding to deliver these proposals, the LGA said some councils will face a battle to balance budgets, worsening existing pressures and running the serious risk of impacts on the ability to deliver timely and quality care to those who draw on it.

Adult social care would still face a funding gap for current services, increasing each year due to inflation and other costs even with these reforms fully funded. This is without considering the immediate need to address unmet and under met need on these overburdened systems. Adding unfunded reforms to an ongoing financial and service delivery crisis would be catastrophic for social care, the LGA claims.

Alongside adequate funding to meet the ambitions in the reforms, councils also need urgent clarity on their detail. The LGA is calling for Government to work closely with councils on detailed costings and publish at the earliest opportunity its consultation on the associated guidance.

Cllr Charles Margetts, Wokingham Borough Council’s Executive Member for health, wellbeing and adult services, said, 'The numbers on this are truly frightening. If the plans aren’t changed, our council alone is facing extra costs of about £29m – more than 20 per cent of our total budget. Frankly, I have no idea how we could afford that staggering cost and so we need an urgent conversation with the Government to make sure they understand the issue.

'We’ve joined neighbours at Royal Borough of Windsor and Maidenhead Council to write to the Government and are hoping to bring more authorities in to this as we raise awareness of the situation – we’ll continue to push on this and want to work with the Government to find good long-term solutions on adult social care.

'We are in favour of radical national reform to create a fair system – including a funding cap that protects people’s hard-earned savings. But the current proposals would put a burden on us and many other local authorities that cannot be borne.

'We believe we and other local authorities can help the Government achieve the aim of solving the social care crisis once and for all with a strong, properly-funded system that focusses on preventing problems and keeping people well without burdening individuals with huge costs. And the first step is a proper conversation with them.'

Cllr Richard Clewer, Leader of Wiltshire Council, said, 'We have already started planning for the introduction of these reforms and considering the potential cost of their implementation. The estimated costs are based on assumptions about how many people will benefit, to what degree and for how long; however, we don’t yet have the complete picture. For example, we do not hold information on how many Wiltshire people aged over 65 have assets between £23,250 and £100,000 and will therefore benefit from this change to the means test.

'We also don’t have details on how the Government intends to distribute funding for the reforms, or how much funding will be available nationally after 2024/25. As a council we already spend over £36 of every £100 on adult social care. Based on the planning assumptions we have made, we estimate the cost of the reforms will be £39m in 2024/25, which is the first full financial year following the introduction of these reforms and the last year of national funding for the reforms.

'We estimate the cost to rise to £61m by 2026/27, when we expect the cost of the reforms to plateau. Based on the current needs formula funding distribution, we could expect to receive £15m to fund those reforms, leaving a gap of £24m in 2024/25. It’s also important to add that within these overall headline figures is an estimated cost of £9.5m for implementing what is referred to as a fair cost of care, against a projected £4.5m of grant funding. This reform alone looks set to cost the council £5m.'

In other news, The Health and Social Care Committee has approved the former NHS Resolution head to be appointed as the new Chair of the Care Quality Commission (CQC).

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