£1 billion social care funding gap threatens NHS care, warns The King's Fund

Local authority social care services face a funding gap in excess of £1 billion by 2015, despite the additional funding announced in the Spending Review,(1) according to a new paper from The King's Fund. With social care and the NHS facing an unprecedented funding squeeze, Social care funding and the NHS: an impending crisis? (2) calls for a single national settlement for health and social care and for budgets to be brought together.

Based on analysis of scenarios arising from the 27 per cent real-terms reduction in local government funding, the £1 billion spending gap will result in knock-on effects for the NHS: unless local authorities can achieve unprecedented efficiency savings, cuts to frontline social care services will see fewer people getting the help they need, causing more emergency admissions, delayed discharges and longer waiting times. (3) The paper also points to evidence suggesting that spending on the right kind of social care can counter these adverse effects, is better for service users (who are often NHS patients too) and can result in savings for the NHS. (4)

Against a backdrop of the demographic challenges of an ageing population and increasing demand for services, the paper calls for policy-makers to work towards creating a unified system of care that recognises the reciprocal relationship between health and social care and puts the needs of people using services first, ahead of organisational boundaries. It makes the following recommendations to achieve this:

  • adopting a unified national policy framework and replacing processes with a single strategic assessment of the funding needs of the NHS and social care
  • closer alignment of resources through locally pooled and place-based budgets
  • developing a better understanding of local patterns of need, spending and outcomes.

More immediately, the paper urges the NHS and social care to start working more closely together now to deliver better outcomes for patients and service-users and increase productivity for both services. It also argues that the government's plans for health and well-being boards could also provide local government with an opportunity to build a wider role in promoting health and well-being, helping to reduce demand for NHS and social care services.

Richard Humphries, the paper's author, said:

'The vital role played by social care in supporting the NHS to meet people’s needs is well known. However, health and care needs are in fact two sides of the same coin – social care should no longer be viewed as just a supportive handmaiden to the NHS.

'Attempts so far to make this reciprocal relationship work in practice have not gone far enough and vary widely from place to place. Without action, fewer people will receive the care and support they need with knock-on effects on those unable to access NHS care.'

Read the paper: Social care funding and the NHS: an impending crisis?

Notes to editors: 

1. The 2010 Spending Review provides a real-terms increase in grant funding for social care of around £875 million a year on average for the next four years, provided through the Department of Health’s Personal Social Services grant, merged into the local government formula grant. An additional £1 billion a year by 2014/15 will be set aside from the NHS budget for partnership working between the NHS and social care

2 Social care funding and the NHS: an impending crisis? by Richard Humphries is published on 17 March 2011.

3.A funding gap in social care spending of at least £1.2 billion could open up by 2014/15. This figure is based on an analysis looking at three scenarios arising from the 27 per cent real reduction in the central government grant to local authorities (HM Treasury 2010) that between 2011/12 and 2014/15, social care spending:
i) will be fully protected by all councils (a real-terms cut of 0 per cent)
ii) receive some protection (a real-terms cut of 7 per cent)
iii) or receive no protection (a real cut of 14 per cent)
Under scenario 2, a gap begins to appear in 2013/14, reaching estimated £1.23 billion in 2014/15.

4. For example, delayed transfers of care from acute hospitals have fallen from 3,600 a week in 2003/4 to 2,200 a week in 2008/9.