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What now for social care?

Widespread dismay greeted the omission of any reference in the 2016 Autumn Statement to the perilous state of social care funding. Richard Humphries looks at the options available.

Widespread dismay has greeted the omission of any reference in the 2016 Autumn Statement to the parlous state of social care funding. While few expected any fresh announcements about more money for the NHS, the level of unanimity in the calls for social care funding to be prioritised was impressive and unprecedented.

The Chancellor acknowledged in his Autumn Statement speech that in the next parliament, the government ‘will need to ensure we tackle the challenges of rising longevity and fiscal sustainability’ and that public spending priorities would be reviewed at the next Spending Review. But the social care system is assailed by pressures now, with record levels of delayed discharges from hospital due to waiting for care at home and fresh warnings about the fragility of some large providers.

With the government soon to announce the financial settlement for local government, might this offer a glimmer of hope? What could be done, given that the Autumn Statement has confirmed overall local government departmental expenditure totals?

One option that has attracted speculation is that councils could be given the power to levy a higher social care precept in 2017/18. Understandably, many councils might welcome this as the only realistic option available to prop up budgets that have shrunk by more than £5 billion in the past six years. Giving councils more flexibility to raise local revenue in order to meet local needs is a step in the right direction. It is consistent with the government’s policy shift towards councils becoming financially self-sufficient.

But our analysis of how the precept has been used by councils this year (2016/17) shows that it is deeply flawed as a way of securing sustainable funding for adult social care. It was used by 95 per cent of councils, but raised just £382 million – less than 3 per cent of what councils plan to spend on adult social care. It will not even cover the £612 million estimated cost of the National Living Wage this year, let alone demographic and other cost pressures. There is some evidence of public willingness to pay more for good care, but £23 added to the average annual band D Council Tax bill will not sort the social care funding crisis. Increasing the precept from 2 to 3 per cent would barely make a dent in this, and many councils will be mindful of the impact of council tax rises on working families with low incomes.

A second, deeper problem is how extra money raised by the precept is distributed, as the places with the greatest need for extra funding will raise the least through the precept. A reasonable proxy measure of social care need is the extent of income deprivation among older people. On this measure, the 10 least deprived council areas this year will raise almost two-and-a-half times as much from the precept as the 10 most deprived. The amount raised per head of the adult population varies from £5 in Newham and Manchester, to £15 in Richmond on Thames (£10 in the Prime Minister’s Maidenhead constituency). If anything, more deprived areas have suffered bigger cuts in spending, so the precept will widen existing inequalities. The government says it tends to equalise these differences through the new 'improved' Better Care Fund, but it is not clear how this will work in practice. If social care is part of the Prime Minister's promise of a more equal country that works for everyone, then the precept is a poor policy instrument to achieve it.

A better option is for the government to bring forward the new money it has already promised through the new ‘improved’ Better Care Fund – £100 million next year, rising to £800 million in 2018/19 and £1.5 billion in 2019/20. This is a serious injection of money and, unlike the existing Better Care Fund, would not mean robbing Peter to pay Paul by transferring money from the NHS. The Fund supports calls from the Local Government Association, the Association of Directors of Adult Social Services and others to bring forward at least £800 million to be available next year to ‘steady the ship’ and limit any further deterioration in the sector. Action on either front – the precept and the improved Better Care Fund – would somehow have to be squared with the fact that the Autumn Statement has already confirmed overall local government departmental expenditure totals.

And there should be no illusion that beyond any short-term action to forestall a full-blown crisis lies a much bigger challenge of achieving fundamental reform in how we fund and deliver social care. This is one of the most pressing public policy challenges of our time. England is one of the few advanced countries that has not faced up to the consequences of the success story of longer lives. Fundamental reform will take longer than a single parliament so will demand a cross-party approach and an open and honest public debate about options and choices, building on the ground work carried out by the Barker Commission in 2014. The fact that successive governments over the past 20 years have struggled to make little if any headway is testimony to just how hard this is. But without a long-term plan for reform, we will lurch from one crisis to the next with mounting human as well as financial costs.