Skip to content
Blog

The Comprehensive Spending Review needs to be genuinely comprehensive: and that means investing in social care

Authors

The clue to what needs to happen in this year’s Comprehensive Spending Review (CSR) is in the first word of its title. While some areas of public spending have been largely protected in the past decade, others, including local authorities and adult social care, have seen heavy cuts. As social care reels from the impact of Covid-19, it is time to redress some of that balance and make public spending more comprehensive, focusing not just on health services but on care, and not just on spending by national government but by local government too.

The CSR is the opportunity to do that. It is happening at a time of obvious uncertainty, generating specific financial pressures in local government that must be addressed and making a long-term perspective harder. That may mean a pragmatic decision to limit the CSR to a one-year timeframe, and this may even be an advantage for social care if it is backed up with money to help the sector survive while long-term plans, and their cost, are worked out.

'As social care reels from the impact of Covid-19, it is time to... make public spending more comprehensive, focusing not just on health services but on care, and not just on spending by national government but by local government too.'

For there certainly will be a cost. The need for additional funding, for local authorities in general and social care in particular, is surely irrefutable. The Institute for Fiscal Studies (IFS) suggests that councils need an extra £3.2 billion in real terms in 2024–25 to maintain services at their 2019–20 level. This number reflects both the impact of Covid-19 and the longer-term pressures on adult social care that come from having more older people living longer, the increased need from working-age adults and the rising costs of delivering care.

As the IFS notes, that number is likely to be an underestimate, for several reasons. First, local authorities are underpaying for social care services by an estimated £1.2–£1.5 billion per year, thereby threatening the sustainability of an already fragile provider market. Second, this additional money would only return funding to its 2019/20 level, inadequate after a decade of cuts which has seen more people seeking social care support but fewer people getting it.

Finally, crucially, it includes none of the costs involved in properly reforming the current system – a pledge that successive governments have made and failed to keep (a dismal sequence that this government came into power explicitly promising to end).

Of course, having an irrefutable case does not guarantee that case will succeed: HM Treasury is infamously hard-hearted when it comes to social care. So arguments about spending precedents and the moral case for investment may not, in themselves, be enough. How then can these issues be addressed?

Well, parts of HM Treasury’s own stated priorities for the CSR chime with the need for investment in adult social care. Better social care would indeed ‘improve outcomes in public services, including supporting the NHS’. It can prevent admission to hospital, it contributes to reducing delays in discharging patients from hospital and, through preventive activity, it can reduce demand for both health and other social care services.

'The Institute for Fiscal Studies (IFS) suggests that councils need an extra £3.2 billion in real terms in 2024–25 to maintain services at their 2019–20 level.'

Adult social care can also ‘level up economic opportunity… by investing in people’, partly by ensuring that people who use it can play a full part in their communities, including by working. This argument also applies to family carers, where it surely cannot make sense for people to be forced to give up work to care for relatives (unless of course they choose to do so). Better social care can therefore create not just opportunity but also workforce efficiency. Economic opportunity is also created through employment in the social care workforce, particularly for those who might lack formal education qualifications. Properly funding social care – and a better paid workforce in particular – would indeed spread opportunity by providing a route to valuable, meaningful employment and – with reform – structured career paths.

Yet trying to demonstrate the need for social care investment in economic terms, speaking the language of HM Treasury, provokes at least one major challenge for the sector itself. The Treasury’s priorities for the CSR talk about not just spreading opportunity but ‘maximising productivity and improving the value add of each hour worked’. Social care needs to be much more willing to engage in the discussion about productivity and to challenge data that appears to show a long-term decline in productivity in the sector. This may be a quid pro quo for the extra investment needed.

These would be complex and difficult issues at the best of times (not for nothing has reform of social care funding been passed over for 20 years). The Covid-19 crisis amplifies those difficulties still further. Yet the issues will not resolve themselves and it is critical that this reflected in the CSR.