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by GK Strategy 8th December, 2016
3 min read

The Tipping Point for Social Care Funding

There is no denying that Chancellor Philip Hammond’s first, and last, Autumn Statement was a disappointment for local government and the social care sector. The omission of even the words ‘social care’ from the speech and all associated documents was widely reported and there is no denying that the outlook for social care is bleak. Squeezed budgets compounded by rising demand is a recipe for disaster and it is clear the Government won’t act until its hand is forced.

It was speculated that the Chancellor would announce an increase in the optional social care precept – a policy announced during the 2015 Spending Review – which some would regard as an easy win for the Government. As it stands, the precept enables councils to increase council tax by up to 2% to fund adult social care. Last year, the Government estimated that this would raise £2bn – a figure that has been widely disputed across the sector.

A powerful statistic recently showed that the anticipated yield for the social care precept in Greater Manchester was around £18m, when a proportional share of £2bn would be closer to £100m. It is also unclear how often councils have used the precept to plug existing funding gaps as a short-term, one-off measure, rather than to improve social care outcomes. However, despite its flaws, the announcement of the precept indicated a welcome recognition of the challenges facing the sector, completely at odds with this year’s Autumn Statement.

A recent assessment by The Health Foundation, The King’s Fund and Nuffield Trust estimated a funding gap of £1.9bn next year, rising to £2.3bn by the end of the parliament – this is based on the assumption that every council will levy a full 2% precept on council tax every year for the next four years. Needless to say, this is highly unlikely. Boosting or bringing forward funding through the Better Care Fund, or a similar mechanism would have provided an alternative solution, as well as an opportunity for ministers to highlight their interest in social care.

Ahead of the Autumn Statement, widespread commentary and analysis from providers, regulators, charities, think tanks and sector bodies warned about the state of the sector. All of which were seemingly ignored…

Until a glimmer of hope surfaced following the Autumn Statement. Taking questions, the Chancellor advised that he had heard local government’s concerns and that talks on the issue were continuing. However, with a potentially light final Spring Budget next year, the Better Care Fund kicking in from 2019, and the Government consumed by the economics of leaving the EU, the prospect of more money for social care in the local government finance settlement seems unlikely, albeit not impossible amid serious lobbying.

The conclusion is sobering. Cuts to local authority social care budgets over the last five years have created a crisis in social care and will only exacerbate pressures on the NHS through delayed transfers of care. This not only flies in the face of years of government policy that has sought to enable vulnerable people to live independently in the community, it also impacts on access to services and quality of care. The sector is unsustainable. Sticking plasters are not helping. The system needs reform.

For more information on GK’s Social Care sector expertise, please contact Ella@gkstrategy.com

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