Social care

But the NHS is not an island. It is part of a wider health and care system that includes adult social care for people who need care and support. Social care functions very differently to the NHS, with a highly restrictive ‘needs and means’ test. The NHS long term plan was developed with the clear expectation of a sustainable funding settlement for social care, stating that ‘the government … committed to ensure that adult social care funding is such that it does not impose any additional pressure on the NHS over the coming 5 years. That is the basis on which the demand, activity and funding in The NHS long term plan have been assessed’. Investing properly in social care is not just important for the NHS; social care services are relied upon by people for crucial aspects of daily life.

Overall public spending on adult social care in England reached its highest level in real terms in 2010/11. This was also the last time the means test thresholds – which define eligibility for publicly funded social care – were increased. Since then, spending has fallen in real terms, with a recent recovery to around £1bn less than in 2010/11 – £17.8bn in 2017/18 and a planned budget of £18.6bn in 2018/19. In that time, the population in England has aged and grown, with more people living into old age with multiple chronic conditions. The number of working age adults requiring social care for learning disabilities, physical support, sensory support and mental health support is projected to increase by almost 50% by 2040.

This has undoubtedly increased the demand for publicly funded social care. In a recent report, the Personal Social Services Research Unit (PSSRU) at the London School of Economics has estimated this growth in demand, projecting that publicly funded social care would need to grow by 3.6% between 2015/16 and 2023/24 in order to maintain the same level of care to the same proportion of the population. Planned budgetary increases announced recently imply an increase in real terms social care net expenditure to £19.3bn in 2023/24 – an annual average rate of 1.4% per year from 2017/18.

In addition to local authority core spending, publicly funded social care is funded through the Better Care Fund and the Social Care Precept, as well as the money from central government and the NHS, one-off winter pressures supplement (£240m) and, in 2020/21, the social care grant (£410m between adult and children's social care). These additions provide an extra £4.3bn to social care funding in 2020/21. From 2020/21, we assume that the Better Care Fund and the Social Care Precept are held constant in real terms, while the remainder of the budget grows in line with local authority net current expenditure from the Economic and Fiscal Outlook (March 2019).

Since 2015/16, funding has grown more slowly than projected demand. Unless further productivity gains are made, the number of people receiving publicly funded social care and/or the quality of that care will fall in future. If both demand and productivity increase in line with PSSRU’s projections, the funding gap in 2023/24 will be £2.7bn.

In fact, we have seen a fall in the number of people receiving long-term care to 857,770 in 2017/18. This has been mainly driven by a decrease in people aged 65 and over receiving long-term care, down 22,110 to 565,385 since 2015/16. Falling budgets have led to reduced provision of publicly funded services, with older adult social care activity falling 2% per year on average from 2015/16 to 2017/18. A consistently reduced service has meant that the ‘goal posts’ for funding-gap calculations keep changing, because they are based on ‘maintaining the current service’. For instance, providing the same access and quality of publicly funded social care as in 2015/16 would mean a bigger gap, of £3.9bn.

Pay

Social care is, like the NHS, a service delivered by people. However, pay and benefits are very different. Around two-thirds of staff are paid at the minimum wage, many are on zero-hours contracts, there is a significant reliance on staff recruited from overseas and staff turnover is high. But health and social care nonetheless compete for the same pool of potential workers, including nurses, occupational therapists and support staff.

The NHS is likely to appear increasingly attractive to workers compared with the care sector as a consequence of the recent NHS pay deal, which includes possible pay increases of up to 29% for some staff. This may cause further pay pressures in social care. The NHS exists as part of a local labour market and so local social care providers who try to match NHS pay increases will put more cost pressure on already financially distressed social care providers.

Our estimate suggests that the cost of social care staff receiving a similar uplift to those working in the NHS would be around £1.8bn, once you map current social care staff to equivalent current pay rates in the NHS, leading to a funding gap of £4.4bn in 2023/24. While this is a significant additional cost, it is hard to see how social care providers can recruit and retain staff when salaries are rising higher in competitor labour markets.

How has this been happening?

Access to public funding for social care is based on both need and financial means. If you are in need of social care, the government will provide some financial support if your total wealth (including your house in the case of residential care need) is below the threshold of £23,250. These thresholds have been held constant in cash terms since 2010/11 at a time when house prices and general inflation have been increasing. In real terms, these thresholds have fallen by 11% as a result of no nominal change. This has led to the fall in social care provision at a time when demand is increasing.

To put this in perspective, we also consider the spending levels that would have been required to meet projected demand increases, providing the same access and quality of publicly funded social care as in 2010/11. Funding has been consistently below levels of increasing demand, resulting in an estimated £6bn real-terms funding gap already by 2017/18 and a £10bn gap by 2023/24. This is half the size of the currently planned social care budget. The Dilnot Commission mapped out a plan to cap care costs for older people. This plan has since been postponed indefinitely. Introducing a care cap would add a further £2.8bn to the cost of social care in 2023/24.

Figure 13: Social care funding gap in 2023/24

Source: Authors' calculations, based on PSSRU projections.

What is happening to service users whose care is no longer funded?

Social care is an increasingly politically charged issue. Fully addressing the acknowledged problems has so far proven to be beyond government and those politicians who fear a public backlash when proposing reform of the current system. This has contributed to the lack of long-term funding decisions and a fall in the levels of publicly funded social care delivered.

Due to a lack of available information, it is very difficult to know exactly what happens to those in need of social care, but who don’t meet the means test. But possible outcomes include:

  • People paying for their own care from their own savings, until such times as those savings have reduced enough to meet the threshold.
  • People’s needs not being met formally, but through appropriate informal care from family members, neighbours and the charitable sector.
  • People’s care needs not being fully met to an appropriate quality or, in the worst cases, not met at all, with potential negative impacts on both individuals and the NHS acute sector.

It is not clear to what extent each of these scenarios occur. The health and social care system is under immense and growing pressure, and unmet social care needs must be met elsewhere. To alleviate pressure on the rest of the health care system as much as possible, more steps need to be taken to ensure that those in need are not falling into the last category.

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