The Local Government Association considers the impact of a funding gap on adult social care

policy digest

07 / 11 / 2017

Adult social care funding: state of the nation 2017
Local Government Association, October 2017

This report from the Local Government Association (LGA), assesses the state of local authority funding for adult social care. It states that local government as a whole faces a funding gap of £5.8 billion by 2020. Councils urgently require an additional £1 billion to cover unavoidable costs of demography, inflation and the National Living Wage, as well as a minimum of £1.3 billion to stabilise the adult social care provider market.

The paper looks first at local government funding overall, noting that “English councils will have managed reductions to their core funding from central government totalling £16 billion between 2010 and 2020”. The LGA estimates that local government faces a funding gap of £5.8 billion by 2020 that must be addressed. 

Focusing specifically on adult social care, the report states that £1 billion of the overall funding gap is attributable to social care. This includes only “the unavoidable costs of demography, inflation and the National Living Wage”. They stress that this is a minimum figure – it does not account for any new costs outside the control of local government, such as local government pay, remuneration for sleep-ins, or costs associated with meeting existing unmet or under-met need.

Beyond this, further annually recurring funds are needed to stabilise the increasingly fragile adult social care provider market. The paper puts the figure for this at £1.3 billion, and suggests it could be raised either through further business rates retention or additional grant funding. This money would enable councils to close the gap between what providers say they need and what they are currently paid.

The LGA also use this report to look in detail at the additional £2 billion allocated to adult social care in the Spring budget. Grant conditions and targets mean that this money cannot be viewed as a straightforward investment in social care. Grant conditions have given “disproportionate dominance to reducing pressures on the NHS” particularly reducing Delayed Transfers of Care (DTOCs). Targets set for reducing DTOCs are shared equally between the NHS and social care, despite social care only being responsible for 37 per cent of DTOCs (the NHS are responsible for 56 per cent). 

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