Spending on adult social care in England has fallen by 3% since 2009/10. The number of adults receiving publicly funded care packages has decreased, even though demographic change would suggest that demand is increasing. It is clear that local authorities, which are responsible for adult social care, initially drove down the price of care they commission from private and voluntary sector providers.
However, difficulties measuring exactly what care is being purchased and provided with public money mean that it is not possible to say whether adult social care is more efficient now than in 2009/10. What is clear, is that any efficiencies made have not been sufficient to meet demand, and unpaid care has partially filled the gap.
In England, adult social care – the provision of support and personal care (as opposed to treatment) to meet needs arising from illness, disability or old age – is either paid for publicly or privately, or provided voluntarily, typically by family and friends.
Local authorities provide publicly funded care. They have a legal duty to provide care to those who pass centrally set needs and means tests. For those who pass these tests, local authorities commission services. The level of spending can differ between areas based on the amount of money that local authorities have, and their local priorities.
Although adult social care is delivered and mainly funded locally,* central government (meaning ministers and their Whitehall departments) in essence determines how much money local authorities have to spend – and what they are obliged to spend it on. It has significant influence over councils’ revenues, ability to borrow and legal obligations. Adult social care is therefore a national as well as a local responsibility.
* Local authority spending on publicly funded social care is funded primarily by Council Tax, business rates and grants from the Government.
Spending on adult social care has fallen by around 3% in real terms since 2009/10
Day-to-day spending on adult social care fell by nearly 10% in real terms between 2009/10 and 2014/15, but since then it has risen. This overall fall in spending from 2009/10 reverses some of the real-terms funding increase since 2001/02, which averaged 5.7% annually. Both the Association of Directors of Adult Social Services’ (ADASS) Budget Survey 2018 and the Ministry for Housing, Communities and Local Government’s budget estimates for 2018/19 suggest that spending on adult social care will continue increasing next year.
The spending increase since 2014/15 has been supported by four new grants and one policy change:
- the Improved Better Care Fund (a programme to join up health and care services), announced in the 2015 Spending Review,
- a commitment in the March 2017 Budget to top up the Improved Better Care Fund with an additional £2 billion(bn) by 2019/20
- the 2017/18 and 2018/19 Adult Social Care Support Grants
- a £240m grant for 2018/19 announced in October 2018
- the adult social care precept, which gives local authorities the ability to increase Council Tax and spend the extra money raised on adult social care, and almost all have used.*
The Ministry of Housing, Communities and Local Government has estimated that the improved Better Care Fund, Adult Social Care Support grants, and adult social care precept raised an additional £0.4bn in 2016/17 and £2.3bn in 2017/18, and will raise £3.3bn in 2018/19 and £3.7bn in 2019/20.
The spending increase also owes to local authorities protecting their spending on adult social care relative to spending in other areas. The ADASS Budget Survey 2018 found that adult social care made up 36.9% of council-controlled budgets** in 2017/18, up from 34% in 2010/11. It estimated that the share of council budgets spent on adult social care will rise to 37.8% in 2018/19. We look at the implications of this in our analysis of children’s social care (Chapter 2) and neighbourhood services (Chapter 3).
Yet despite the extra money, and spending cuts in their other services, local authorities still consistently overspent compared with their planned adult social care budgets between 2014/15 and 2016/17. In aggregate, councils spent £132 million (m) more on social care than they had budgeted for in 2014/15, rising to £526m – 3.7% of budgeted adult social care spending – in 2016/17. Recent funding injections may have made a difference, however, as ADASS has reported that there was no aggregate overspend in 2017/18.
Financial pressures persist: most analysis suggests that there is a funding gap*** – a gap between forecast spending and the social care needs of the eligible population. The Institute for Fiscal Studies has estimated that to maintain publicly funded social care at 2009/10 per head levels, the Government would have to spend between £2.8bn and £4bn more than it is forecast to in 2019/20. While the national picture obscures differences in council spending per person,**** all areas face some pressures.
* In 2016/17, 144 out of 152 local authorities used the precept, which subsequently increased to 147 in 2017/18 and 148 in 2018/19. See Ministry of Housing, Communities and Local Government, Council Tax Levels Set by Local Authorities: England 2018–19 – revised, Ministry of Housing, Communities and Local Government, 2018, p. 7.
** Council-controlled budgets are not total local authority spending, as they exclude councils without social care responsibilities, and spending that local authorities do not control.
*** The main estimates of the funding gap to maintain current levels of service provision in 2019/20 range from £1.1bn to £2.5bn. See Morse A, ‘Adult social care funding’, letter to Betts C, 30 January 2018, https://www.parliament.uk/documents/commons-committees/communities-and-local-government/Correspondence/Letter-from-National-Audit-Office-to-the-Chair-regarding-adult-social-care-funding-30-January-2018.pdf
**** The bottom decile of local authorities spent £325 per adult resident in comparison to £445 per adult resident in the top decile. See Phillips D and Simpson P, National Standards, Local Risks: The geography of local authority funded social care, 2009–10 to 2015–16, Institute for Fiscal Studies, 2017, p. 16.
Demand for adult social care has risen – but it is hard to say by how much
Most people who receive publicly funded social care are aged 65 or over: two-thirds in 2016/17. Between 2009/10 and 2017/18 the number of people in England aged over 65 grew by 19%, to 10m. Growth in the population aged 75–84 and 85+ is particularly important, as the older the population, the more likely they are to require social care. In 2016/17, 43% of people aged over 80 needed help with daily activities, in comparison with 19% of people aged 65–69.
But an increase in the over-65 population does not automatically translate into greater demand for social care. The number of people aged over 65 who needed help decreased 1%, by just over 26,000, between 2011/12 and 2016/17, when adjusting Health Survey for England estimates for the size of the population in England.
While the size of the over-65 population in need of social care appears to have decreased, overall demand has increased. This is because the number of working-age adults in need of social care has increased. Between 2010/11 and 2016/17 the number of working-age adults with a severe learning disability, mental health problem or physical disability rose almost 10%. Better health care has improved the life expectancy of people with physical and learning disabilities, but the capacity of parents to provide informal care declines with age. The needs of these groups are also often very complex – early-onset dementia is more prevalent in people with learning disabilities, for example.
Not all adults in need will approach their local authority for support. Indeed, while potential demand has increased, the number of people recorded as having requested support has stayed broadly flat: rising 2% between 2009/10 and 2013/14; then falling 2% between 2014/15 and 2016/17.
But a flat level of referrals does not mean that demand is flat. Professionals in other areas may have become more circumspect in their referrals, knowing the challenges the sector is facing. Local authorities act as gatekeepers, and there is evidence that some have increasingly encouraged older people to look to friends or charities before formally requesting publicly funded services.*
* The King’s Fund carried out interviews in four local authorities, which revealed that ‘signposting’ – pointing people towards non-state support – was a strategy that councils adopted as a way to make savings. See Humphries R, Thorlby R, Holder H, Hall P and Charles A, Social Care for Older People: Home truths, The King’s Fund, 2016, pp. 18–22
Input: the number of social care jobs has increased by 21% since 2009/10
The adult social care workforce – the managers, social workers, care workers and administrative staff who deliver social care – is increasing.* Skills for Care (the Department of Health and Social Care’s workforce data provider) has found that between 2009/10 and 2017/18, there was a 21% increase in the number of adult social care jobs,** to around 1.6m.
The composition of those jobs has changed over the past decade. Between 2009/10 and 2017/18, the number of jobs in the independent sector increased by 28%, while the number of jobs working directly for local authorities fell by 39% due to service closures and outsourcing.
The number of jobs is not the same as the number of staff hours. An increase in the number of jobs might not involve more staff time, if those jobs do not take as long, but there is little evidence to suggest that this is the case. The number of full-time equivalent (FTE) social care jobs, a measure of staff input, also increased. For the years we have data, FTE social care jobs increased 9.8% between 2012/13 and 2017/18, from 1.03m to 1.13m. The rate of growth in adult social care jobs between 2012/13 and 2017/18 was 8.1%, so the share of jobs that were full time increased slightly.
* We cannot distinguish between adult social care staff providing care for local authority-funded clients, and adult social care staff providing care for self-funders, but there is no reason to believe that they will differ significantly. This and the following input section refer to all social care workers.
** We measure jobs rather than workers to distinguish between the number of jobs and the number of people doing those jobs. Measuring workers would not account for people doing more than one job in adult social care.
Input: vacancy and turnover rates in social care are increasing
As the sector has grown, providers have found it harder to recruit staff, particularly care workers, registered managers* and nurses.
The vacancy rate among all social care jobs (the number of vacancies as a proportion of all filled and vacant jobs) increased from 5.5% to 8.0% between 2012/13 and 2017/18. In direct care – the largest part of the sector – the vacancy rate is higher, having increased from 6.4% to 8.6% between 2012/13 and 2017/18. In 2016/17, the largest vacancy rates were among social workers (10.8%), occupational therapists (9.8%) and care workers (7.7%).
Providers are also struggling to retain staff once they join. Between 2012/13 and 2017/18 staff turnover (the number of leavers as a percentage of the total number of directly employed adult social care staff) rose from 23.1% to 30.7%. Between 2012/13 and 2017/18 social worker turnover rose by 5.0%, care worker turnover rose by 9.1% and registered nurse turnover rose by 5.2%.
This data includes staff leaving their job, but remaining within the adult social care sector. In 2017/18, 40% of leavers left for another job within the adult social care sector, and 67% of new starters were recruited from within the adult social care sector. But even if staff remain with the sector, turnover is still disruptive and costly for individual providers, which in turn increases the total cost of care.
As a labour-intensive service, most adult social care spending is likely to go on staff,** but there is almost no data on the costs of other resources used to deliver care – such as the costs of running a care home, information and communications technology (ICT) equipment or home adaptations.
* In 2014, the CQC found that care homes with a manager in place were much better at meeting quality standards than those homes without a manager in place for more than six months. See Care Quality Commission, The State of Health Care and Adult Social Care in England 2013/14, Care Quality Commission, 2014, p. 46.
** The Care Quality Commission estimates that staff costs make up 60% of costs in care homes, and 80% of costs in home care. See Care Quality Commission, The State of Health Care and Adult Social Care in England 2015/16, Care Quality Commission, 2016, p. 44.
Output: the number of people receiving long-term, state- funded care fell by 27% between 2009/10 and 2013/14
Between 2009/10 and 2013/14 the total number of adults receiving long-term, publicly funded social care packages (care provided or commissioned by councils, delivered in residential or nursing homes or in clients’ own homes) fell by 27%. This reverses a previous trend: between 2000/01 and 2008/09 the number of people receiving this kind of care rose by 7.6%. Unfortunately, we cannot directly compare this with changes since 2014/15, as the way the data is collected and published has changed.
Most of the pre-2013/14 decrease in service provision was among ‘community care’ packages – including care that takes place within people’s own homes – which fell by 32% over the period. The number of more intensive and expensive care packages being provided, in residential and nursing homes, also fell, but by less: 6% and 4% respectively.
Fewer individuals are receiving social care packages, but that does not necessarily mean that social care providers are doing less work. There is some evidence that care workers are spending more time with individual clients, presumably performing more tasks, in response to the rising complexity of the needs of those who are eligible for care.
Between 2009/10 and 2013/14 the share of community care clients who had a care plan entailing more than 10 hours of planned care a week increased, while the share of clients receiving between five and 10 hours of care a week stayed flat, and the share of clients with care packages containing fewer than five hours’ care a week decreased.
Of course, adult social care does more than just provide long-term social care packages. It also provides short-term care – to support people facing short-term issues, or to help people with longer-term needs to manage independently, by providing a period of intensive advice, training or equipment (also called ‘re-ablement’). The proportion of adult social care referrals resulting in any kind of short-term care increased from 15.9% to 17.1% between 2014/15 and 2016/17. The number of referrals resulting in ‘re-ablement’ support rose 2.6% in the same period.
Not every request for social care will result in these kinds of formal arrangements. Local authorities have said that the decline in long-term packages is partly due to “providing services at point of first contact* (and therefore outside of the formal assessment process)”. The number of referrals resulting in a client’s “needs [being] attended to solely at or near the point of contact” increased 14% between 2009/10 and 2013/14. If these people had their needs met in a suitable way, then we can think of this trend of diverting people away from long-term care packages as an efficient use of resources.
The limited evidence that we have suggests that, for those who do receive care packages, the quality of those services has been maintained. Between 2016 and 2018, the only years for which we have consistent data, the share of all care providers that the CQC rated ‘outstanding’ or ‘good’ increased by 1% and 19% respectively, while the share of providers rated ‘requires improvement’ or ‘inadequate’ declined by 14% and 6% respectively.
The number of social care users who say they are satisfied** with their care and support has been consistently high – between 90% and 91% across this whole period. However, satisfaction among carers is lower, and falling: the percentage of carers who were satisfied with support and services they, and the person they cared for, received declined from 83% to 71% between 2009/10 and 2016/17.***
Of course, user satisfaction does not reflect the views of those who do not receive social care. Public concern with social care provides a proxy for overall satisfaction with social care. Public concern with social care has grown following the Conservative Government’s social care reform proposals in the 2017 general election. Meanwhile, the British Social Attitudes survey found that 23% of respondents were satisfied with social care in 2017, down from 30% in 2012.
* This includes front-of-house staff diverting people away from formal assessments to their families, neighbourhoods and the voluntary sector. See Local Government Association, LGA Adult Social Care Efficiency Programme: The final report, Local Government Association, 2014, p. 25.
** Very, extremely or quite satisfied.
*** To compare 2009/10 to later years, we excluded respondents who answered ‘not in receipt of services’ in the 2012/13, 2014/15 and 2016/17 results. In 2009/10 the ordering of the questions was different and the response rate was slightly lower than in later years, but the responses are otherwise broadly comparable. See NHS Digital, ‘Personal Social Services Survey of Adult Carers’, NHS Digital, no date, retrieved 14 September 2018, https://digital.nhs.uk/data-and-information/publications/statistical/personal-social-services-survey-of-adult-carers.
Has adult social care become more efficient and can that be maintained?
A crude comparison of adult social care spending and the number of care packages provided suggests that adult social care was less efficient in 2016/17 than it was in 2009/10. Between 2009/10 and 2013/14, the only years for which we have consistent spending and care data, spending fell by around 9%, while the number of people receiving long-term, state-funded care fell by around 27%.*
NHS Digital’s simple productivity index, which measures total spending and long-term public clients in this way, without adjusting for quality, similarly finds that adult social care productivity decreased. In contrast, the Office for National Statistics, adjusting for differences in care packages by weighting activities by their costs – assigning a greater value to activities that cost more to produce – and adjusting for how far social care affects quality of life, found that productivity increased by 2.6% between 2010/11 and 2016/17, although it was not able to measure the outputs of all spending.**
Two factors help reconcile the Office for National Statistics’ analysis with our analysis. The first part of the explanation for the seeming decline in efficiency in adult social care is that a greater proportion of publicly funded care packages is now going to more complex cases. Residential care and nursing care, which are more intensive and expensive than community care, made up a greater share of long-term care provided in 2013/14 than in 2009/10. Between 2009/10 and 2013/14 the share of community clients with more than 10 hours of planned care a week increased, while the share of clients with care packages containing fewer than five hours’ care a week decreased.
The second part of the explanation is that long-term care placements are not the only adult social care output. Local authorities also provide short-term care packages and signpost to other services, which, if they delay or remove the need for long-term care packages, are a more efficient use of resources. If we judge each instance of short- term care and referral signposting to other services as equivalent to a long-term client supported, then it appears that adult social care has become more efficient. Between 2014/15 and 2016/17 the total number of clients supported or signposted increased by 8%, while spending increased at a slower rate of 5%.
The theory that adult social care has become more efficient is consistent with evidence that local authorities initially made some reductions in staff costs and provider fees.
Wages among local authority care workers – which were initially higher than those in the independent sector – have decreased since September 2012. The average (mean) nominal hourly wage of a local authority care worker declined by 2%, and of a senior care worker by 1%, between September 2012 and September 2016.
However, most workers in this sector are employed in the independent sector – and more likely to be paid the minimum wage – and therefore to have seen their hourly pay increase. Skills for Care estimates that care workers’ median hourly wage, adjusting for inflation, declined from £7.37 to £7.32 between September 2012 and September 2014, but since then has increased to £7.82. This is equivalent to a 6% real-terms increase between September 2012 and February 2018, owing to the introduction of, and annual increases to, the National Living Wage – a new minimum wage for workers aged over 25, which was introduced in April 2016. These increases are putting pressure on the finances of local authorities and care providers.
Comparatively low pay and poor working conditions for care workers – in comparison to other low-paid sectors and to similar health care roles – are both factors hindering providers’ ability to recruit and retain staff. The Social Care Workforce Research Unit at King’s College London carried out a survey in 2018 and found that low levels of pay and status, and better remuneration in similar health and retail professions, contributed to recruitment and retention problems. Care worker retention difficulties are indeed more intense among the lowest paid. Nearly a third (29.8%) of care workers paid between £7.20 and £7.49 an hour left their job in 2016/17. The turnover rate was lower (at 17.9%) among those paid £8.70 to £8.99 an hour.
Local authorities also initially attempted to control costs by holding down the fees they pay to care providers. The CQC found that the fees they paid per week for residential and nursing care fell by 9% in real terms between 2010/11 and 2013/14. This does not look sustainable. Using care home location and resident mix as proxies to measure the effects of local authority fees, the Competition and Markets Authority (CMA) found that care homes most reliant on publicly funded residents covered the day-to-day costs of running a care home between 2009/10 and 2016/17, but did not cover total (operating and capital) costs. Since 2009/10, care homes with a greater share of local authority-funded clients have consistently made economic losses of between 2% and 8%. The CMA estimates that local authorities are paying approximately 10% below the total cost of care home places. Consequently, most investment in new care homes has focused on self-funders.
In terms of home care – care provided in people’s homes – there is limited evidence on trends but the United Kingdom Homecare Association (UKHCA) estimates that fees paid are unsustainable. In 2016 the average hourly price that English councils paid for home care was £14.66, with only 10% of all councils paying the £16.70 that the UKHCA estimated as the minimum sustainable price for home care services.*** The percentage of local authorities reporting that they had seen a home care contract handed back remained at just below 40% between 2016 and 2018, the only years for which we have data.
To date, local authorities have reduced care home and home care fees but there are limits on how far this can be pushed. Some local authorities have already increased fees owing to pressures on providers’ staff costs from the National Living Wage, alongside other factors. Two-thirds of councils increased provider fees between 2014/15 and 2015/16 and more than 60% of councils increased residential, nursing and home care fees by more than 3% in 2018.
Further reductions in care home and home care fees are unlikely to deliver sustainable efficiencies. Reductions risk providers focusing solely on self-funded clients, charging self-funders more to subsidise local authority clients, or closing. A decline in the total number of care home places would ultimately drive up costs for local authorities if supply becomes insufficient to meet demand. To date, the CQC estimates that care home closures increased from 260 in the first half of 2013, to 380 in the first six months of 2016.
* However, user satisfaction and CQC clinical standards data suggest that the quality of care that these adults received increased slightly.
** Between 2010/11 and 2013/14, the Office for National Statistics did not measure 24% of spending outputs; between 2014/15 and 2016/17, it did not measure 64% of spending outputs.
*** This is a slight decline since 2015, the only other year we have data for, when the average hourly price that English councils paid for domiciliary care was £13.77, with only 14% of all councils paying the £15.74 then estimated as the minimum sustainable price for home care services. See United Kingdom Homecare Association, The Homecare Deficit: A report on the funding of older people’s homecare across the United Kingdom, United Kingdom Homecare Association, 2015, p. 4.
Have efficiencies been enough to meet demand?
Increasing demand for social care and limited efficiencies have led to queueing for care and increasing unpaid care.
The clearest evidence of queueing is in delayed transfers of care due to social care – when someone is medically fit to be discharged from hospital, but they remain there longer than they need to. Delayed transfers – sometimes called ‘bed-blocking’ – put significant pressure on hospitals as they use up space that could be allocated to patients with clinical needs. They became the focal point of political debate about health and social care spending in early 2017.
But these delays do not just show pressures on hospitals – they also indicate a lack of capacity in social care. If local authorities were commissioning sufficient social care to meet growing demand, we would expect to see a low level of delayed transfers. Between August 2010 and March 2017 delayed days due to social care rose 94% from 38,324 to 74,288. The most common reason was that a patient was waiting for a care package in their own home; this rose from 12,777 days in August 2010 to 33,520 days in March 2017, an increase of over 160%.
Since then, delays due to social care have declined rapidly. After the £2bn cash injection in the March 2017 Budget, the Government mandated NHS England and local authorities to reduce delays by 3.5% by September 2017. This funding was conditional on following revised Better Care Fund guidance, which obliged local authorities to reduce delayed transfers. This is a clear improvement, but reductions in delayed transfers do not mean that local authorities are now commissioning enough care to meet demand. After reducing delayed transfers became an explicit target, the number of delayed transfers became less likely to give an accurate reflection of social care capacity. As a focus of political and operational attention, local authorities and NHS trusts may now be putting more effort into reducing delayed transfers than other important issues,* such as the sustainability of care providers.
As the number of long-term local authority care packages has decreased, adults in need of social care can either look to unpaid care or, where they have the resources to do so, self-fund care. In 2018 the National Audit Office estimated that informal and voluntary sector care accounted for most of the value of adult social care (£62bn to £103bn), followed by publicly funded care (£22bn) and self-funded care (£11bn).
The evidence on whether these alternatives to publicly funded care have been increasingly turned to since 2010 is mixed. We do not know whether the number of self-funders has increased or decreased, but we do know that unpaid care has increased since 2009/10. The Office for National Statistics estimates that the number of people receiving unpaid continuous care in the UK – 168 hours a week – grew 14.3% between 2009/10 and 2014/15. Across the UK, there was a 16.4% increase in hours of unpaid care between 2009/10 and 2013/14, from 7.3bn to 8.5bn. Since then, hours of unpaid care have declined but remain above 2009/10 levels – at 7.9bn in 2016/17. The value of unpaid care – how much it would cost to purchase care currently provided informally - increased consistently after 2009/10, but declined from £68.7bn to £68.3bn between 2015/16 and 2016/17.
If adults in need cannot access publicly funded care, self-fund or turn to unpaid care, they will not receive support – and unmet need will increase. Unmet need is harder to estimate. The ADASS Budget Survey 2018 found that only 21% of councils had arrangements to monitor unmet need. The evidence on the prevalence of unmet need is contradictory. The Health Survey for England found that the percentage of people aged over 65 with unmet need for activities of daily living (ADLs) fell from 26% to 22% from 2011/12 to 2015/16, although it increased to 24% in 2016/17. Ipsos MORI and NatCen found that need is often hidden, with half of those with care needs possessing at least one unmet need.
The evidence on the share of who provides care is mixed but the significant increase in unpaid care suggests that adults are relying on informal care instead of local authority services as demand rises.