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Social care: a future we don’t yet know

Next month the government will set out its plans for public service spending through to 2020. As John Appleby explained in his recent blog, the likely outlook is likely to be the largest sustained fall in NHS spending as a share of GDP in any period since 1951. But what about social care?

Care services minister Alistair Burt recently told local authority chiefs that ‘funding is still unclear…I will find out what the funding is when you find out, when the Chancellor stands up in Westminster to deliver the Autumn Statement.’ While we are waiting, our analysis of past trends and future projections for social care makes disturbing reading.

In the 15 years to 2009, local authority net spending on adult social care for all age groups increased by an average of almost 6 per cent a year over and above inflation (figure 1). But because social care forms part of local government spending – which, unlike the NHS, was not ring-fenced in the 2010 Spending Review – this trend has reversed sharply over the past five years. Spending has dropped by an average of 2.2 per cent a year since 2009.

Money has been transferred from the NHS budget to social care (reaching £1 billion last year), which has helped a bit. Without this, the real-terms fall would have been 3.6 per cent. Most of this transferred money came from the NHS’s average annual real-terms increase of 0.84 per cent. Understandably, many are worried about further reliance on an increasingly cash-strapped NHS to prop up social care.

Figure 1: Annual real change in net adult social care spending in England, with and without transfers from the NHS budget, 1994/5 to 2014/15

Figure 1: Annual real change in net adult social care spending in England, with and without transfers from the NHS budget, 1994/5 to 2014/15

The picture becomes gloomier still when account is taken of our ageing population, especially people aged 85 years and over, who are likely to have the greatest need for social care support. Spending per capita on this group is now back to around what it was in 2002 (figure 2) and it would have been lower still without the NHS transfer. Funding has not kept pace with the 34 per cent increase in the over-85 population over this period.

Figure 2: Adult social care spending per person over 85 in England*, 1994/5 to 2014/15 (2014/15 prices)

Figure 2: Adult social care spending per person over 85 in England*, 1994/5 to 2014/15 (2014/15 prices)

These pressures have intensified over the past five years. Total spending on social care services for all age groups is over 10 per cent less than it was in 2009 (figure 3). It would have been 17 per cent without the NHS transfer.

It is no wonder that over the same period the number of people receiving services has plummeted by 25 per cent to 2013/14 (and possibly by 30 per cent to 2014/15), although it is important to note that there are wide variations across 152 local authorities and some of this fall could be explained by positive developments such as the expansion of re-ablement services that have reduced the need for long-term care. We will be exploring this further in our new social care research project with Nuffield Trust.

Figure 3: Adult social care demand, spending and activity*, 2009/10 to 2014/15

Figure 3: Adult social care demand, spending and activity*, 2009/10 to 2014/15

Against this bleak backdrop, the prospects for social care are grim. In our submission to the Spending Review we called for social care to be protected from further cuts and for the money previously agreed for the postponed Care Act funding reforms to be retained and invested in social care. But non-protected departments have been asked by HM Treasury to model cuts of 25 and 40 per cent – so further cuts seem inevitable.

What would happen if the spending cuts applied to social care over the past five years continue over the next five? Spending on social care for people of all ages as a share of GDP has already begun to fall. It was roughly 1.2 per cent in 2009 but if cuts continue at the same rate it will have halved by the end of this parliament to barely more than a half of one per cent of GDP (figure 4).

This would be an astonishing and unprecedented reduction at a time when we should be devoting a bigger share of our national wealth to our ageing population and when there are also more younger people with care and support needs. International comparisons suggest that spending is relatively low and there is no evidence that any other advanced country has contemplated scaling back the provision of care to this level.

Figure 4: Adult social care spending as a percentage of GDP* in England, 1994/5 to 2014/15

Figure 4: Adult social care spending as a percentage of GDP* in England, 1994/5 to 2014/15

With the Barker Commission having written to the Chancellor to reiterate their call for a new settlement for the NHS and social care – triggered by their alarm that the limited reforms to social care funding have now been returned to the political long grass – the human and financial cost of inaction will continue to accumulate. The impact will be greatest on the most vulnerable members of society. Without a new settlement, we face the prospect of an entirely different kind of social care system to the one we have now.