NAO publishes adult social care market report

March 25, 2021

The National Audit Office (NAO) has published a new report today examining the current care market and the Department of Health and Social Care’s (DHSC) role in overseeing the market now and in the future.

The aim of the Adult Social Care Market in England report is to offer the DHSC recommendations ahead of future social care reforms. The report builds on a significant body of past NAO work on care, including on the care workforce, personalised commissioning and the interface between health and care.

In 2019-20, local authorities spent a net £16.5 billion on care. Current demographic trends suggest a greater demand for care and increasingly complex care needs in the future, resulting in care forming an ever-increasing proportion of public expenditure. The NAO said future reforms, promised for several years, will need to tackle these growing challenges.

The NAO’s main methods were analysis of available data, interviews with central and local Government, provider organisations and other stakeholders and a review of published research and relevant departmental documents. Most data refer to the market as of 31st March 2020, the latest point for comprehensive data.

Overview of some of the report’s key findings:

  • Increase in future demand for care – Based on long-term forecasts there will be large increases in future demand for care and therefore cost; 57% more adults aged 65 and over will require care in 2038 compared with 2018.
  • Cost increase predictions – Between 2018 and 2038, the total costs of care are projected to rise by 90% for adults aged 18 to 64, from £9.6 billion to £18.1 billion, and 106% for adults aged 65 and over from £18.3 billion to £37.7 billion.
  • Estimates suggest high levels of unpaid care and unmet need - In the Health Survey of England 2019, 17% of people aged 16 and over reported providing unpaid care.
  • Short-term funding settlements have hampered long-term planning, innovation and investment in care - Short-term and one-off funding initiatives for local government and successive one-year spending reviews have hampered local authorities’ ability to plan for care costs beyond the current financial year, constraining much-needed innovation and investment.
  • Significant workforce challenges remain – Around 1.5 million people work in care. NAO found the DHSC had not followed through on key commitments it had made to enhance. training and career development and to tackle recruitment and retention challenges. Stakeholders identified the need for central leadership to improve pay and conditions for care workers and to incentivise improved training and development. The DHSC has not had a social care workforce strategy since 2009.
  • No clear strategy to develop accommodation for adults with care needs – The DHSC does not monitor the condition of current accommodation for adults with care needs itself. Business intelligence estimates suggest at current rates it will take several decades to fully modernise care homes. Current funding for new investment in accommodation for adults with care needs is ad-hoc, with no co-ordinated, long-term vision across Government.
  • Lack of finance visibility – Despite the introduction of CQC’s market oversight function, stakeholders lack visibility of provider finances across the care market. In 2020, consultants commissioned to analyse provider viability advised the Department to improve the quality of financial data and its internal processes to track provider finances in real time. In view of local authority responsibilities for commissioning care and CQC’s market oversight role, the DHSC does not collect additional information on provider finances or their sustainability and therefore did not have processes in place to assess if providers received enough support at the start of COVID-19.

Simon Bottery, Senior Fellow in Social Care at The King’s Fund, told CMM that the National Audit Office report is a ‘sad testimony’ to the failures of successive Governments to tackle the problems in adult social care in England.  Bottery added, ‘The report demonstrates that reform is needed not just in social care funding but also in critical areas such as the workforce, the provider market, data and oversight. COVID-19 has exposed the pre-existing fault lines in social care still further and the Government should regard the report as a ‘to do’ list of some of the key problems that need tackling.’

Vic Rayner, CEO of the National Care Forum, said, ‘The report is clear that there needs to be a long-term solution, and it was important to hear the Prime Minister present to the Liaison Committee yesterday that he envisaged a 10-year plan for social care. This is a vital approach to ensure stability of reform and as the NAO report underlines, reform solutions must be endorsed cross party, and cross Government. Meaningful reform of social care will also need shifts in resourcing and attitudes towards housing, education, communities, health and more and must be focused on the long-term needs of people – not purely for the ballot box.’

Rayner added, ‘Decisions today to remove the potential for Care Act Easements further emphasise the imperative for authorities to be properly supported and funded to fulfil their legal obligations, full range of services must be afforded sustainability and ultimately that people are given the backing of the law to exercise their right to care.’

Stephen Chandler, ADASS Vice President, said, ‘This NAO report adds to the ever-growing body of evidence highlighting the increasingly perilous state of care markets, ongoing recruitment and retention challenges, and most importantly the impact on people including an increasing number of people with unmet needs. A situation that the onset of Coronavirus has only served to intensify further. This is why ADASS, along with other key sector partners, has called for Government to commit to the publication of promised reform proposal prior to the summer parliamentary recess, to end 25 years of inaction from successive Governments and to fix social care once and for all.’

Cllr David Fothergill, Health and Social Care Spokesperson for the County Councils Network, said, ‘The County Councils Network has long warned of a broken care market, with local authorities under significant financial pressure, which can only be addressed by financial reform of the system.

‘Coronavirus has understandably delayed the long-awaited social care green paper, but the impact the virus has had on the sector should provide Government with the impetus for its publication as soon as possible this year.

‘Once services are sustainably funded over the next decade, councils want to be put in the driving seat of local reform – with our recent report with Newton showing the art of the possible. Local authorities understand that with extra funding and powers comes extra scrutiny, and they want to work with Government in designing any new assurance framework.’

Visit the National Audit Office website to read the recommendations set out and to download the report in full.


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