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When the nation emerged from the second world war, national debt was over 200% of GDP. Despite this, the NHS was born. As we emerge from this crisis the government has an opportunity to put action behind its commitment to 'build back better', and come up with a package of funding and reform for a social care sector that has been woefully neglected.

Yet, the Budget and last year’s Spending Review didn’t offer much optimism. The Spending Review’s 1-year funding settlement for social care was barely enough to meet demand for this vastly overstretched sector and the Budget was silent on social care. The sector desperately needs a longer term funding settlement and radical reform but is left with a familiarly vague government commitment to bring forward proposals 'later this year'. This compounds the disproportionate impact of the pandemic on people receiving care and working in the sector.

So, what is the impact of continued delay to social care reform and what should be included in the government’s proposals and Spending Review in 2021?

The major problems are well known by people working in the sector and policymakers. These were set out in the Health Foundation’s submissions to last year’s Commons health select committee inquiry on social care funding and workforce and a previous publication on social care priorities.

The first problem is money. Local authority budgets were reduced by around 21% in real terms over the last decade. Although social care was relatively protected compared to other services such as local libraries and street cleaning, spending on it still fell by 12% in real terms over the last 10 years, after adjusting for a growing and ageing population. Fewer people are getting the care they need, there’s a high burden on unpaid carers, the workforce is underpaid and undervalued, and many of the 25,000 care providers are not financially sustainable. 

The second problem is how care is paid for. While the NHS is free at the point of use, publicly funded social care is means-tested. It is only available for those who have significant needs with assets of less than £23,250 and insufficient income for their care requirements. This leaves people facing great uncertainty about the future costs they may incur – at least one in ten people face social care costs of more than £100,000 – and it is widely seen as unfair that those with the greatest care needs pay the most. This is a longstanding issue, which governments have repeatedly promised and then failed to address.

The third problem is that the way the social care system works can make change difficult. Most organisations providing day-to-day care are private companies and are free to set their own wages. This makes it hard to ensure that any additional funding would lead to higher pay for staff and to achieve any national consistency in employment terms, conditions or career structure. The structural issues associated with the social care market are often overlooked. These problems are not intractable but solving them requires political will and government spending.

The social care system also needs dedicated funding over the long term. The Health Foundation’s REAL Centre estimates that additional funding of around £14.4bn a year would be needed by 2030/31 to meet demands from an ageing population, increase access and raise the amount care workers are paid. This is an increase of 60% on current projections.

Yet without reform, additional funding won’t automatically give more people access to better care or lead to improved pay and terms and conditions for the workforce. Greater local authority accountability or some ringfencing of budgets could accompany longer term funding commitments. A combination of a national care tariff, care worker minimum wage or sectoral wage boards may be needed to ensure quality of care and pay increases. On funding reform, the Dilnot Commission’s proposal for a cap on care costs were accepted by the government and are on the statute books but have never been implemented. This would address the unfairness of how care is funded and could be implemented quickly at a cost of around £3.1bn per year by 2023/24 with a £46,000 cap. The cap would mean that an older person entering a care home would pay for the first two years of their stay, with the state paying after that.

In addition, almost 50% of local authority spending is on younger adults who are often forgotten in the debate. They have different needs – for example, they will need more help accessing employment than ever. Government must also increase support for unpaid carers who have taken on more during the pandemic. A genuine reform package would also involve joined up thinking on the post-Brexit immigration system on the sector, the pensions and benefits systems, reform of NHS Continuing HealthCare, funded nursing care and integration with the NHS.

The government must fulfil its promise to fix the crisis in social care 'once and for all'. The pandemic has illustrated the grave consequences of years of political neglect and under-investment in social care. The government should set out a generous financial settlement at the spending review later this year and urgently publish reform proposals.

This blog was originally published in Local Government Chronicle on 5 March 2021.

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