Adult social care

The question of how to reform and fund adult social care has been asked of – and left unanswered by – successive governments. Over the past decade, as financial pressures on local authorities have increased, this question has become more pressing. Requests for support are increasing yet fewer adults are receiving publicly funded care.

Spending on adult social care in England has fallen by 2% in real terms since 2009/10. Local authorities, who provide publicly funded care, initially made efficiencies by freezing or cutting fees paid to private and charitable providers – but reversed course after 2015 when this approach proved unsustainable. The introduction of the national living wage in 2016 further limits councils’ ability to cut provider fees without reducing the quality of care they provide.

Despite any efficiencies they might have made, some local authorities have tightened their interpretation of eligibility criteria for care. As a result, adults with care needs have increasingly relied on care provided informally by family and friends.

Demand for publicly funded adult social care is likely to continue rising faster than money local authorities have to spend on it. Unless local authorities can make further efficiencies, the government will either have to spend more or accept that local authorities will have to reduce the quality of, or access to, care.

Adult social care in England – 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,[1] or provided voluntarily, typically by family and friends. The National  Audit Office (NAO) estimates that most social care is unpaid and provided by friends and family, equating to £62–103 billion (bn), followed by publicly funded care (£22bn) and self-funded care (£11bn).[2]

Local authorities have a legal duty to fund care for those who pass centrally set needs and means tests. Local authorities commission care services for any adults who meet the requirement of the tests. These services are often delivered by the private and charitable sectors, though some local authorities also provide care services directly themselves. Local authority spending differs between authorities based on the amount of money they have, and their local priorities.

Though adult social care is delivered and mainly funded locally,* decisions by central government strongly shape how much money local authorities have to do this – as well as what they are obliged to spend it on.** This makes adult social care a national as well as a local responsibility.

* Local authority spending on publicly funded social care is primarily funded by council tax, business rates and central government grants.

** Central government decides how much grant funding local authorities receive, which taxes they can levy and how much they can vary them. It also puts legal obligations on local authorities to do certain things, known as statutory duties.

Public spending on adult social care has fallen 2.1% in real terms since 2009/10

Change in adult social care expenditure in England since 2009/10 (real terms)

Councils cut spending on adult social care by nearly 9.3% in real terms between 2009/10 and 2014/15. This reversed the trend of increasing spending on adult social care in the 2000s, where, between 2001/02 and 2009/10, spending increased by an average of 5.7% in real terms each year.[3]

From 2014/15 on, councils started to increase spending – but spending is still 2.1% lower now than it was in 2009/10. Despite the uncertainty over their future funding,[4] local authorities plan to increase spending in 2019/20. Both the Association of Directors of Adult Social Services (ADASS) budget survey[5] and the Ministry of Housing, Communities and Local Government’s (MHCLG) budget estimates[6] for 2019/20 suggest that spending on adult social care will continue increasing.

Councils increased spending after the government introduced the council tax precept, allowing[7] them to increase council tax by an additional two percentage points without holding a referendum (with that revenue ringfenced to spend solely on adult social care),* and provided temporary grants, including:

  • the Improved Better Care Fund[8],[9] (a pot of money shared between councils and the NHS to buy care together), subsequently topped up with an additional £2bn in the 2017 March budget[10] and maintained for 2020/21 at the 2019 spending round
  • a £240 million (m) support grant for 2017/18, later topped up with an additional £150m for 2018/19[11]
  • a £240m winter pressures grant for 2018/19 and 2019/20,[12] announced at the 2018 budget, and maintained for 2020/21 at the 2019 spending round
  • a £410m social care support grant for 2019/20 which local authorities can spend on care for children and adults,[13]** announced at the 2018 budget, and maintained for 2020/21 at the 2019 spending round
  • a £1bn grant for 2020/21, also split between social care for children and adults, announced at the 2019 spending round.[14]

MHCLG estimates that these adult social care grants, alongside the council tax precept, gave local authorities an additional £0.4bn in 2016/17, £2.3bn in 2017/18 and £3.4bn in 2018/19, and will give an additional £3.9bn in 2019/20.[15] These temporary grants made up 8.9% of adult social care spending in 2018/19,*** up from 7.9% in 2017/18, when they first took effect.

Temporary grants helped councils provide care, but the way they were announced – as time-limited emergency funding in response to pressures – was not the most effective way to increase adult  social care funding.[16] With limited information about how much money they will be able to spend in future years, local authorities have not had the confidence to invest in schemes that would allow them  to address underlying problems[17] – such as better training offers to address declining care worker retention.

In addition to new grants, local authorities also partially protected adult social care spending – cutting spending in this area at a slower rate than on most other services they deliver.[18] As a result, the share of local authority spending devoted to adult social care increased.

According to a recent ADASS survey, adult social care made up 37.8% of council budgets**** in 2018/19,[19] up from 34.0% in 2010/11. ADASS estimates that the share of council budgets spent on adult social care will decline slightly, to 37.4%, in 2019/20.*****

It is not clear whether public funding for adult social care will increase after 2020/21. The government committed to “ensure that adult social care funding is such that it does not impose any additional pressures on the NHS over the coming five years”[20] in the NHS long-term plan, but there is no clear timetable for social care reform[21] and the 2019 spending round only confirmed grants for social care in 2020/21.

* In 2016/17, 144 out of 152 local authorities used the precept, which increased to 147 (2017/18) and 148 (2018/19). Only 85 local authorities used the precept in 2019/20, as some had reached the maximum level of increase (six percentage points) in 2018/19. See Ministry of Housing, Communities and Local Government, Council Tax Levels set by Local Authorities: England 2019-20 – revised, Ministry of Housing, Communities and Local Government, 2019, p. 8.

** Of 137 councils who provided data on where they spent the grant, just over half (53.6%) allocated the funds to adult social care. If this is typical of all councils, £220m of that £400m grant was spent on adult social care. See Association of Directors of Adult Social Care, ‘ADASS budget Survey 2019’, p. 15.

*** The percentage of spending funded by temporary grants is the annual value of the Improved Better Care Fund, adult social care support and winter pressures grants recorded in the local government finance settlement as a percentage of net current expenditure on adult social care recorded in the NHS Digital activity and finance report.

**** ADASS only includes the budgets of councils with social care responsibilities, and excludes schools budgets.

***** We look at the implications of this in our analysis of neighbourhood services.

Demand for adult social care is rising fastest among the working-age population

Increase in requests for support from new clients since 2015/16

Requests for support* have been rising since 2015/16, with the number for working-age clients rising faster than the number of people aged over 65.

As the most direct measure of frontline demand for adult social care, it is worth exploring why requests for support from working-age adults have risen. However, the majority (65% in 2018/19)[22] of people receiving adult social care are still aged 65 and over. The number of people in this age group  has increased significantly over the past decade, though on average people in this age group appear to be less in need of care than earlier generations were at the same age.

The rest of the people who receive adult social care services from local authorities are working-age adults with physical or mental health problems or learning disabilities. The share of working-age adults with such needs has grown over the past decade.

Between 2009/10 and 2018/19 the number of people in England aged 65 and over grew by 21.2%, while the population aged 75–84 and 85+ grew by 13.6% and 20.2% respectively. Growth in the oldest population has a particularly large impact on need for social care, as more elderly people are more likely to need help. In 2017, 44% of people aged over 80 needed help with two or more activities of daily living (an indicator of a need for social care), compared with 14% of people aged 65–69.[23]

But a larger older population does not automatically mean greater demand for local authority services because publicly funded social care is means and needs tested. There is some evidence that people turning 65 after 2010 owned more assets and were healthier than the people who preceded them – and were therefore less likely to require publicly funded care. The share of people aged 65 and over living in households with more than £25,000 of net financial wealth – the closest recorded category to the £23,250 threshold at which people have to pay for all the costs of their care – increased from 46% to 52% between 2010–12 and 2014–16.[24] This has likely lifted some older people out of the criteria for receiving publicly funded care.

The 2017 Health Survey for England found that a smaller proportion of people aged over 65 need help now than they did in 2011. The share of people aged 65 and over who say they need help with an activity of daily living such as eating or bathing – a reasonable indicator of need for social care[25] – declined from 32.0% in 2011 to 25.9% in 2017. This suggests that the total number of people aged 65 and over who needed help with at least one activity of daily living fell slightly, from 2,793,492 in 2011 to 2,594,105 in 2017.

There was a slight rise in the number of people aged 65 and over who needed help between 2015 and 2017, which is consistent with requests to local authorities from this age group. Data on requests for support is only available for the past three years; this shows that the number of older people requesting support from their local authority increased by 4% between 2015/16 and 2018/19.

There is clearer evidence of rising demand for care among working-age adults. Better health care has improved the life expectancy of people with some physical and learning disabilities,[26] meaning more working-age adults are now in need of social care. These adults are also less likely than older adults to have financial assets that disqualify them from receiving publicly funded care.**

The share of working-age adults in the UK reporting a disability increased from 15.0% to 18.0% between 2009/10 and 2017/18,[27] an increase of 20%. The NAO estimates that the number of working-age adults with a severe learning disability, mental health problem or physical disability rose by almost 10%[28] between 2010/11 and 2016/17.These trends have resulted in an increased number of working-age adults requesting support from their local authority: between 2015/16 and 2018/19, the number rose by 10%, from 500,655 to 550,435.

The directors of local authority adult social care services now identify providing care for working-age adults as a bigger pressure than providing care for older people. The share of directors identifying this as the greatest area of budgetary concern increased from 17% in 2017/18 to 39% in 2019/20; for older people it fell from 19% to 11% over the same period.[29]

Providing care for working-age adults is also more expensive than for people aged 65 and over. In 2018/19, weekly residential care placements for the working-age population were, on average, more than twice as expensive as weekly placements for people aged 65 and over.[30]

* A change in requests for support may underestimate growth in demand because some local authorities have increasingly encouraged older people to use non-state support as a way of making savings. See Humphries R, Thorlby R, Holder H, Hall P and Charles  A, Social Care for Older People: Home truths, The Kings Fund, 2016, pp. 18–22.

** This is difficult to show but is consistent with the lower share of working-age adults receiving council care who part-fund their care. In 2017/18, 7% of council spending on care for the working-age population was funded by sales, fees and charges – compared with 24% of council spending on care for the over-65 population. See Ministry of Housing, Communities and Local Government, ‘Revenue outturn summary (RS) 2017 to 2018 – revised’, 2019.

The number of adult social care jobs has steadily increased since 2009/10

Change in adult social care jobs since 2009/10

While the adult social care workforce – the managers, social workers, care workers and administrative staff who deliver social care – is growing, it is not possible to tell whether these additional workers are providing care for publicly funded clients or for self-funders.

The total number of adult social care jobs in England increased 22.7% between 2009/10 and 2018/19, to around 1.62 million.[31] As there is some evidence that local authorities are meeting a smaller share of care need (see below), the number of jobs helping self-funders may have risen faster than the local authority equivalent. This and the following sections refer to all social care workers.

As the number of jobs has increased, so too have the average hours worked. Between 2012/13 and 2018/19, the only years for which we have comparable data, the number of full-time-equivalent (FTE) social care jobs increased by 10.2%, (from 1.03m to 1.13m), compared with an 9.5% increase in the overall number of adult social care jobs.

The mix of whom these care workers are employed by has also changed. Between 2009/10 and 2018/19, the number of jobs in the independent sector increased (by 29.7%), while the number working directly for local authorities fell by 37.4%, due to councils closing and outsourcing services they provided.[32]

Not all areas of social care work have been growing. Between 2012/13 and 2018/19, the biggest growth in jobs were among care workers (15%), senior care workers (7%) and registered managers (7%). The number of social workers – who carry out assessments and help users navigate the social care system – increased by only 3%, while registered nurses working in social care fell, by 20%.[33]

Vacancy and turnover rates in adult social care are high – and increasing

Vacancy and turnover rates in social care jobsDespite the increase in the number of people employed in social care roles, there is a growing problem with both  recruitment and retention. The turnover rate of staff is far higher than in other public services, while vacancies have also increased over the past half decade. This has a detrimental effect  on the sector, and can be disruptive, costly and – crucially – mean those in need are receiving a lower standard of care. In 2018/19, the largest vacancy rates were for registered managers* (11.4%), registered nurses (9.9%) and care workers (9.0%), with the overall vacancy rate in social care (the number of vacancies as a percentage of all filled and vacant jobs) increasing from 5.5% to 7.8% between 2012/13 and 2018/19.

At the other end of the pipeline, providers and local authorities are struggling to retain staff. The average care worker has now spent more time in the sector than the 2012/13 equivalent – but has spent almost no more time in their current job. This reflects a core of older, experienced workers; the average experience that an adult social care worker has in adult social care increased from 7.7 to 8.2 years between 2012/13 and 2018/19. At the same time, average experience in a particular job was lower (4.2 years in 2018/19) and has been broadly flat since 2012/13 (4 years).

Between 2012/13 and 2018/19, staff turnover – the number of staff either moving between jobs or leaving the sector as a percentage of the total number of employed adult social care staff – rose from 23.1% to 32.2%.[34] In other words, more than three in 10 social care workers leave their jobs each year – far higher than in most other public services.

Between 2012/13 and 2018/19, turnover rose fastest among care workers (by 11.1 percentage points to 39.5%), senior care workers (by 8.4 percentage points to 22.0%) and registered nurses (by 6.9 percentage points to 34.0%). Research into factors contributing to high turnover is limited;[35] though turnover is, on average, higher among staff on lower-pay, zero-hours contracts, and younger age groups, suggesting that pay and working conditions are factors.[36]

Many of those leavers remained within the adult social care sector** – but turnover is still disruptive and costly for individual providers[37]  – which in turn increases the price and potentially reduces the quality of care commissioned by local authorities.

* Recruiting and retaining registered managers matters because there is evidence that care home managers can raise the quality of care provided. In 2014, the Care Quality Commission (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.

** In 2018/19, 13% of those leaving the profession did so by transferring to another employer, and 66% of new starters were recruited from within the adult social care sector. See Skills for Care, ‘Workforce Estimates’, 2019, Tables 4.3 and 4.11.

Councils have reduced the number of day centres and home adaptations they provide

Adult social care is a labour-intensive service. Accordingly, most adult social care budgets are spent on staff.* There is limited consistent data on other inputs used to provide care – whether facilities used to provide day or full-time care, ICT equipment or home adaptations – but what data there is suggests that the availability of these have been cut.

A Freedom of Information request submitted by ITV News found that 428 day centres closed between 2010 and 2018 – representing a 41% cut.[38] The limited government data available suggests that these closures were not offset by an increase in productivity; that is, local authorities were not able to provide the same services to users from fewer sites.

The number of older people receiving day care or day services declined 39.4% between 2010/11 and 2013/14, while the number of working-age people with learning disabilities, physical disabilities or mental health needs receiving such services fell 19.6%.[39] The number of completed home adaptations to help older people remain at home – such as installing stairlifts or providing ramps or hoists – fell around 10% between 2009/10 and 2015/16.*[40]

In contrast, the total number of care home beds remained flat between September 2010 and August 2018[41]  – suggesting that care home capacity has remained stable.[42] The number of beds is not an ideal proxy for the inputs purchased by local authorities, however. Some beds are funded by adults who pay for their care privately – a flat number of beds may reflect an increase in the number of self-funders compensating for a fall in the number of local authority-funded service users.

* The CQC 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, 2016, p. 44.

The number of people receiving long-term state-funded care declined by 2.6% after 2014/15

Number of people receiving long-term state-funded care packages at year-end, and number of referrals resulting in a short-term care package each year

Long-term care packages are the largest part of council spending on adult social care.** Following a rise in the 2000s, the total number of care packages fell dramatically in the first half of this decade, before spending increases slowed the pace of reduction.

The total number of long-term care packages – fell 27.0% between 2009/10 and 2013/14, then fell only 3.4% between 2014/15 and 2018/19. The rate of decline in long-term community and nursing care packages started after spending began to increase.

The reduction in the number of adults receiving long-term care packages[43]  between 2009/10 and 2013/14 reversed the trend seen in the 2000s. Between 2000/01 and 2008/09 the number of people receiving this kind of care rose by 7.6%.[44] The number receiving community care packages – care that takes place within people’s own homes such as home care, day care and ‘meals-on-wheels’ – reduced fastest, by 31.8% between 2009/10 and 2013/14.

Over the same time period, care in residential and nursing homes – which is more intensive and expensive – declined at slower rates: 6.0% and 4.3% respectively. After 2014/15, this pattern changed. The number of people receiving residential care fell furthest after 2014/15, by 4.6%, whereas the number of people receiving community care fell by only 1.7%. This may reflect an increased emphasis on providing “services that help prevent people developing needs for care and support or delay people deteriorating such that they would need ongoing care and support”[45] following the 2014 Care Act.

The decline in the number of long-term care packages does not mean that local authorities are doing less. Adults receiving care packages now have more complex needs. Care workers, for example, are spending more time on average with community clients than previously. 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 each week increased, while the share receiving between five and 10 hours  stayed flat; the share receiving fewer  than five hours decreased.[46]

As local authorities cut the number of long-term care packages, they increased the amount of short-term – or ‘reablement’ – care they provide. This typically involves providing advice, training or equipment to support people facing short-term problems, or helping people with longer-term needs to recover from a spell in hospital and manage independently.

For the years for which we have consistent data (2014/15 to 2018/19), the number of short-term care packages rose by 14.7%, from 293,000 to 336,000. The proportion of adult social care referrals resulting in short-term care increased from 15.9% to 17.6% over this period – reflecting decisions to prioritise recovery and independence over providing long-term care packages, where possible.

Local authorities have also tried to meet requests for support without providing formal care packages. Part of the reduction in long-term packages is because local authorities are providing more services at point of first contact**** and outside the formal assessment process.[47] In other words, they are signposting people to other sources of information and support rather than referring them on to local-authority- funded formal care.

Between 2009/10 and 2013/14, the number of referrals resulting in a client’s needs being  “attended to solely at or near the point  of contact” increased by 13.9%. The proportion of referrals to adult social care resulting in signposting increased from 48.5% to 54.0% over this period. The data collected by local authorities changed in 2014/15. Between then and 2018/19, the number of referrals resulting in clients being signposted to other services – the closest comparator following the change in methodology – declined by 10.3%, from 575,350 to 516,235.

For people who had their needs met in a suitable way, such signposting represents a more efficient use of resources; for those who did not, it represents a cut in service quality. Without knowing what happened to people requesting help who were signposted to other services, we cannot know. This a crucial evidence gap that the government needs to fill.

* The number of completed home adaptations rose substantially between 2015/16 and 2016/17, back to 2010/11 levels. This reflects an increase in temporary central government funding for adaptations. See Mackintosh D, Smith P, Garrett H, Davidson M, Morgan G and Russell R, Disabled Facilities Grant (DFG) and Other Adaptations – External Review, 2018, p . 21.

** In 2018/19, 78% of council adult social care spending went on long-term care support. See NHS Digital, ‘Adult Social Care Activity and Finance Report, England - 2018-19’, 2019, Table 14.

*** We do not know what happened to hours of community care after 2013/14, as local authorities stopped recording hours of care provided.

**** This includes front-of-house staff diverting people away from formal assessments and instead towards 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.

The quality of publicly funded adult social care has been maintained for those receiving care

Users satisfied with the care and support services they receive

While the quality of care for those who receive it has been maintained or improved, the declining scope of publicly funded care has led to an increase in complaints and public  dissatisfaction. The difference lies between those who receive care and those who do not receive care – and satisfaction rates are dropping among the latter.

The number of social care users who say they are satisfied* with their care and support has been consistently high – between 88.5% and 90.8% – since 2010/11. Satisfaction and standards statistics from care receivers and care givers do not paint such a rosy picture, however. Satisfaction among social care givers (carers) is lower, and steadily falling. The percentage of unpaid carers who were satisfied with support and services they, and the person they cared for, received steadily declined from 82.6% to 69.9% between 2009/10 and 2018/19.**

Between 2015 and 2019, the only years for which we have consistent data,* the share of care providers that the Care Quality Commission (CQC) rated Outstanding or Good increased by three and 21 percentage points respectively, while the share of providers rated Requires Improvement or Inadequate declined by 18 and six percentage points respectively.[48]

Satisfaction and standards do not, however, capture the views of those who have no interaction with adult social care at all, either directly or as a care giver. As the amount of publicly funded care has declined, it is important to consider how people not receiving social care perceive it in order to understand overall satisfaction with social care. The British Social Attitudes survey – which asks a randomly selected sample of the British public how satisfied or dissatisfied they are with social care provided by local authorities – found that 26.0% of respondents were satisfied with social care in 2018, down from 30.0% in 2012.[49]

Complaints data – which includes both those who do, and do not, receive publicly funded care – provides another metric. The number of complaints to the Local Government Ombudsman about adult social care has almost trebled since 2010/11, rising from 1,156 to 2,991.[50] While this may just reflect better awareness of how to file a complaint, the rising share of upheld complaints – from 43.0% in 2010/11 to 66.0% in 2018/19 – suggests that the additional number have not been spurious. Most complaints in 2018/19 were about “assessments and care planning”,[51] also suggesting that people are dissatisfied with access to care, rather than quality.

* Very, extremely or quite satisfied.

** To compare 2009/10 to later years, we exclude respondents who answered “not in receipt of services” in the 2012/13, 2014/15 and 2016/17 results. In 2009/10 the order of the questions was different and the response rate was slightly lower than later years, but the responses are otherwise comparable. See NHS Digital, ‘Personal Social Services Survey of Adult Carers’, 2019.

Has adult social care become more efficient – and if so, can that be maintained?

Cuts to social workers’ wages and the fees paid to independent care homes helped local authorities to limit cuts to adult social care services even as their budgets were squeezed. But some of these efforts to cut costs  proved unsustainable and have now started to be reversed. The government’s plan to increase the efficiency  of health and care services by integrating the two has yet to bear much fruit and most of the money allocated for this purpose has simply helped to prop up existing services.

At a superficial level, local authorities in England appear to have cut services more sharply than spending has been cut over the past nine years. Between 2009/10 and 2013/14, spending fell by 8.1% in real terms, while the number of people receiving long-term state- funded care fell by 27.0%.** Between 2014/15 and 2018/19, spending increased by 7.2% as the number of people receiving long-term state-funded care fell 3.4%.

Similarly, when looking at adult social care UK-wide, without adjusting for quality,*** the Office for National Statistics (ONS) finds that productivity decreased by 3.4% between 2010/11 and 2017/18.[52]

But this ignores the fact that local authorities have increasingly concentrated their support on providing higher-quality services to those with the greatest needs, as well as providing other services beyond care packages. Taking account of differences in the cost and quality of care packages provided, the ONS finds that productivity increased by 1.2% between 2010/11 and 2017/18.[53]

Local authorities have also tried to help residents in need of care at minimal cost by signposting them to other sources of information and support (see above). Signposting could be a more efficient use of resources if it removes the need for formal care packages. Between 2014/15 and 2018/19, the total number of clients supported or signposted to other services increased by 10%, while overall spending increased by only 7.2%.

The main way that local authorities have managed to provide higher-quality and more extensive care packages to some residents has been by holding down costs rather than raising productivity. The wages of care workers employed directly by local authorities – which were and remain higher than in the independent sector – have fallen.

Between September 2012 and September 2018, the average (mean) hourly wage of a local authority care worker declined by 7.6% – from £10.96 to £10.13 – and of a senior care worker by 11.0% – from £13.85 to £12.33 (both in 2018/19 prices).[54] Most care workers, however, are employed in the independent sector – where they are more likely to be paid the minimum wage.[55] Those workers have seen their hourly pay increase since the introduction of the national living wage, a new minimum wage for workers aged 25 and over, in April 2016.[56]

The median hourly wage of independent care workers declined from £7.72 to £7.65 (in 2018/19 prices) between September 2012 and September 2014, but subsequently rose to £8.41 by February 2019 – a 9.9% increase in real terms.[57]

During the first years of spending cuts, local authorities further controlled costs  by holding down the fees they paid to care providers. Between 2009/10 and 2013/14, local authorities cut the average amount they spent on a week of support for clients in residential, nursing or intense home care from £708.37 to £647.59 (2018/19 prices). Over the same period, local authorities cut the average amount they spent on an hour of home care provided by the independent sector from £17.54 to £16.62 (2018/19 prices). This equates to real-terms cuts of 8.6% and 5.3% respectively.[58]

As most of this care is provided privately, this resulted in a real-terms reduction in the fees paid to private providers.**** The UK Home Care Association (UKHCA) now estimates that the fees paid by local authorities are – on average – not enough to cover the cost of care. In 2018, the average price that English councils paid for home care was £16.12 per hour; only 14% of councils paid the £18.01 an hour that UKHCA estimated was the minimum sustainable price.[59]

But neither of these strategies – squeezing workers’ wages or providers’ fees – can be pushed any further.

Planned increases in the national living wage will further push up wages for many care workers: ADASS estimates that implementing the measures will cost local authorities £448m in 2019/20.[60] Even if the government had not introduced the national living wage, local authorities would have struggled to hold down or reduce staff pay further because low pay and poor working conditions for care workers are hindering providers’ ability to recruit and retain staff.*****[61]

Vacancy and turnover rates have consistently grown since 2012/13: a survey carried out by the King’s Social Care Workforce Research Unit in 2018 found that low levels of pay, status and better remuneration in similar health and other professions contributed to these problems.[62] More than one in four care workers leave their jobs each year, with the turnover rate being slightly higher among lower-paid carers.[63]

Local authorities also appear to have little scope to squeeze fees they pay to private providers any further without either compromising the quality of care or forcing care homes to close. The Competition and Markets Authority (CMA) found that care homes that were most reliant on publicly funded residents managed to cover their operating costs between 2009/10 and 2016/17,[64] but were not able to cover their total (operating and capital) costs. The CMA estimates that local authorities are paying approximately 10% below the total cost [65] of care home places.[66]

Self-funders are now effectively subsidising publicly  funded care – and paid fees, on average, 41% higher than local authority-funded clients.[67]

But those care homes with a high share of local authority-funded clients are less able to cross-subsidise in this way and have consistently made losses of between 2% and 8% since 2009/10.[68] As a result, those that are most reliant on local authority clients now risk financial failure. The CQC estimates that the number of care home closures increased from 260  in the first half of 2013 to 380 in the equivalent period of 2016,[69] while the accountancy firm BDO estimates that the number of care home companies entering insolvency rose from 69 between 2014 and 2016 to 123 in 2017, and 101 in 2018.[70]

Even if care providers do not cease trading entirely, they can refuse to bid for new – or hand back existing – public contracts. In 2016, four fifths (80.8%) of local authorities reported that a provider had handed back a home care contract within the past year.

The pressure of providers going bust and handing contracts back prompted some local authorities to reverse course and start increasing the fees they pay to providers. Two thirds of local authorities increased provider fees in 2015,[71] rising each year to 89% in 2019.[72] Between 2015/16 and 2018/19, the price of an hour of home care commissioned from the private sector increased by 16.6% in real terms, while a week of residential and nursing care for older people rose by 16.0% and 20.3% respectively.[73] Almost all local authorities used the Better Care Fund grant from central government to pay higher fees to providers in 2017/18[74] (91.4%) and 2018/19[75] (92.7%).

These increases appear to have gone some way to easing the immediate pressures: in 2019, just 29.0% of local authorities reported that a provider had handed a homecare contract back.[76] Any attempt to reduce fees again would risk providers focusing more on self-funded clients – and charging them 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 became insufficient to meet demand.[77]

The government has tried repeatedly since 2010 to increase the efficiency of health and care services by integrating the two.[78] But to date there is no evidence that this has led to financial savings or reductions in activity.[79] In part, this lack of evidence reflects the difficulty of tracking  patients through different care providers.

However, it is also likely to reflect a genuine absence of savings: health and social services have high fixed costs which can only be reduced by closing whole wards or units.

* The CQC introduced a new inspection regime in 2014 that prioritised inspections of services it had concerns about. Change between years reflects change in the number of providers inspected as well as a change in the quality of the same providers. Once a service is rated Good, it is inspected less frequently, which tends to push up reported standards. Services that have been rated Inadequate or Requires Improvement are more likely to close. See The King’s Fund, Social care 360: quality, (no date) retrieved 25 October 2019, www.kingsfund.org.uk/publications/social-care-360/quality

** Although user satisfaction and CQC clinical standards data suggests the quality of care these adults received slightly increased.

*** The ONS measures productivity  by comparing quantity of input to quantity of output. As it measures input as real-terms total public spending (local authority and NHS) on adult social care, its measure of productivity  is equivalent to our measurement of efficiency.

**** The Personal Social Services dataset breaks down some care by public and private provision. Where it does so, the data suggests that local authorities cut the cost of private and voluntary care faster than the cost of their own care. Between 2009/10 and 2013/14, the cost of local authority home care rose 18.4% in real terms, while the average cost of home care purchased from private providers reduced by 5.3% in real terms.

***** A 2018 study commissioned by the Department for Business, Energy and Industrial Strategy surveyed low-wage employers to understand how they would have paid staff in the absence of the national living wage. Most social care employers said they planned to increase pay, citing concerns about staff recruitment and retention. Only one social care employer stated that they would have paid staff less. See National Institute of Economic and Social Research, National Minimum Wage and National Living Wage Impact Assessment: Counterfactual research, Department for Business, Energy and Industrial Strategy, 2018, p. 39.

Have efficiencies been enough to meet demand for adult social care?

Even though local authorities did manage to cut costs, this was not enough to prevent them  also having to make difficult decisions about who should receive help, as the number of adults in need has risen substantially. Furthermore, despite restricting access to services, many local authorities have still overspent their social care budgets.

The number of adults receiving social care support from local authorities has fallen over the past nine years, even though the number of older adults – and of working- age adults with care needs – has risen. Though there has been some improvement in the average health of older  people, there is no evidence that this has been sufficient to reduce the overall need for social care. Indeed, the number of requests for care that local authorities receive has increased, while the number of people receiving support has fallen since 2015/16 – suggesting that local authorities have effectively raised the threshold at which people qualify for support.

Those who are no longer able to access publicly funded care can either look to unpaid (voluntary or family) care or – if they have the resources – self-fund. If they cannot do either, their needs go unmet.

There is no evidence on the number of self-funders,[80] but unpaid care has increased and this appears to have been sufficient to more than offset  the reduction in publicly funded care, meaning the scale of unmet need has reduced. The ONS estimates that across the UK there was a steady increase in hours of unpaid care provided between 2005 and 2013, from 6.4bn to 8.5bn hours per year.[81]

The replacement value of unpaid adult social care – how much it would cost to provide unpaid care at market prices – grew faster, until 2015,[82] the last year for which figures are available. Unmet need is hard to measure[83],[84] but in 2017, the Health Survey for England found that 22% of people aged 65 and over had an unmet need for an activity of daily living (such as eating and bathing)[85] – down from 26% in 2011. This implies there was a slight reduction in the total number of people aged 65 and over who had an unmet need – from 2,269,712 in 2011 to 2,256,587 in 2017.

During the first years of spending cuts, waiting times  for a social care assessment – where a local authority decides if someone meets the means and needs test for publicly funded care – increased. Between 2009/10 and 2011/12, the number of people waiting longer than four weeks for an assessment went up, while those waiting four weeks or less declined.[86] Unfortunately, the government no longer collects data on the timeliness of social care – either the time between referrals and assessments, or the time between assessments and the start of services.

Given that there is significant public concern[87] about waiting times for an assessment, the government should collect and publish data on the length of time between social care referrals and assessments – as it already does for children’s social care – and between assessments and care being provided.

There is some more recent evidence on delays in accessing care for those in need of social care following a spell in hospital. The number of delayed transfers from hospital – when someone is medically fit to be discharged from hospital, but remain there longer than they need to – due to a lack of social care rose sharply between 2014 and 2017 (see Figure 4.7).

Between August 2010 and February 2017, the average number of people delayed per day due to lack of social care rose by 95.9% from 1,236 to 2,421. The most common reason was that a patient remained in hospital while waiting for a package of care to be delivered in their own home: this rose from 12,777 days of delay in August 2010 to 39,401 days in February 2017, an increase of 222.7%.

This sort of ‘bed-blocking’ declined[88] from early 2017 onwards after this issue became the focal point of political debate about health and social care spending and integration in early 2017.[89] The government allocated an extra £2bn in the March 2017 budget[90] to help reduce delays, and mandated NHS England and local authorities to reduce delays by 3.5% by September 2017;[91] the extra funding was conditional on following this guidance.[92]

Average number of people delayed per day due to lack of suitable social care

Because ‘delayed transfers’, or the lack thereof, is now an explicit target,* these figures now provide a less useful guide. This is because local authorities and NHS trusts may now be putting more effort into reducing delayed transfers, diverting time and resources from addressing other important issues or other groups in need of assistance.** Responding to a 2018 ADASS survey of adult social services directors, over 80% said that the focus on reducing delayed transfers increased the number of discharges to short-term care home placements that became permanent, and over 60% said the focus had caused an increase in emergency readmissions to hospital.[93]

But delays in assessing applications and attempts to raise the threshold at which people qualify for support have not been sufficient to allow all councils to stay within their budgets. Local authorities consistently overspent compared with their planned adult social care budgets between 2014/15 and 2016/17.*** In aggregate, councils spent £132m more on adult social care than they had budgeted in 2014/15, rising to £525m – or 3.7% of budgeted adult social care spending – in 2016/17.

Recent  funding injections appear to have made a difference, however, as councils reported small underspends in 2017/18 and 2018/19.

* MHCLG’s evaluation of the improved Better Care Fund showed that delayed transfers were the most common council metric used to assess the success of schemes implemented using the Better Care Fund grant. See Ministry for Housing, Communities and Local Government, ‘Improved Better Care Fund: Quarterly and year-end reporting’, 2018, p. 14.

** Although the government’s Better Care Fund planning guidance stipulates that one of the national conditions for the fund is supporting “system-wide improvements in transfers of care” – which goes beyond the immediate issue of delayed transfers. See Department of Health and Department for Communities and Local Government, 2017-19 Integration and Better Care Fund: Policy framework, Department of Health and Department for Communities and Local Government, 2017, p. 29.

*** We measure overspending by comparing total local authority budgeted and actual net current expenditure from financial data local authorities submit to MHCLG. See Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing’, Ministry of Housing, Communities and Local Government, (no date), retrieved 25 October 2019, https://www.gov.uk/government/collections/local-authority-revenue-expenditure-and-financing

How will demand for adult social care change?

Demand for publicly funded adult social care is likely to continue to rise faster than the amount of money local authorities have to spend on it – and there appears to be little room left for local authorities to make further efficiencies. Something has to give.

If the government does not change the means- and needs-tested eligibility system for adult social care, we project that demand for publicly funded adult social care will increase by 11.3% between 2018/19 and 2023/24. This projection factors in a faster rate of growth in demand for care among those of working age than among those aged 65 and over, and is based on analysis and data from the Personal Social Services Research Unit (PSSRU)[94] and the Centre for Disability Research (CDR).[95]*

Projected spending and demand for adult social care

Adult social care

Projected increase in demand by 2023/24 11.3%
Spending scenario Local authority spending power Recent trajectory Meet demand
Change in real-terms spending by 2023/24 7.3% 7.7% 11.3%
Spending in 2023/24 (2018/19 prices) £19.2bn £19.3bn £19.9bn
Impact on unprotected government spending (2018/19 prices) £0.0bn -£0.1bn -£0.7bn
Projected gap (2018/19 prices) £0.7bn £0.6bn £0.0bn

Source: Institute for Government calculations. See Chapter 13, Methodology.

This means the government would need to spend 11.3% more in real terms in 2023/24 than it did in 2018/19 to continue providing the same scope and quality of adult  social care (unless local authorities and providers can find ways to deliver care more efficiently). This is faster than spending on adult social care has risen in recent years and faster than local authorities’ overall spending power is expected to grow between 2018/19 and 2023/24.

If the recent rate of growth of adult social care spending were to continue, it would be 7.7% higher in real terms in 2023/24 than in 2018/19. If local authorities were to increase this spending at the same rate as their overall spending power is set to increase, the figure would be 7.3% higher  in real terms in 2023/24 than in 2018/19.

If local authorities can deliver services more efficiently, then the government may be able to maintain the current scope and quality of care without increasing spending by as much as 11.3%. But, as described above, there is clear evidence that local authorities’ previous efforts to drive cost savings in social care have not been sustainable. Local authorities have used recent increases in social care spending to pay care providers more to try to stabilise the private market, but even so, rates of turnover among  care staff remain high and there continue to be large numbers of vacancies. This suggests there may be little scope to reduce costs again.

The government’s main strategy to provide health and care services more efficiently in recent years has been to encourage the integration of the two services. To achieve this the Department of Health and Social Care created the Better Care Fund in 2010. But so far local authorities have primarily used this to pay private care providers more, rather than to reduce the overall costs of providing care to those in need.

If the government wants to improve the quality or expand the scope of adult social care, then it will need to spend substantially more.

All the reforms that have been proposed by the main political parties in recent years – whether suggesting a cap on care costs, a limit on the depletion of personal assets to help pay for care or some form of universally available state-funded care – would increase public spending.

The performance of adult social care since 2012/13 suggests that increasing spending slower  than demand risks worsening care worker morale and providers’ financial sustainability, and could lead local authorities to further restrict access to these services to try to manage demand. If the government wanted to increase adult social care funding in line with demand, it would need to find £0.7bn a year of extra funding compared with treating adult social care on a par with other local authority services.

* See Chapter 13, Methodology.