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The COVID-19 pandemic has shone a harsh light on adult social care. Between March 2020 and January 2021, there were 27,167 more deaths in England’s care homes than we would normally expect. The death rate among care homes residents was particularly marked early in the pandemic, although the proportional increase in deaths among those receiving home care was still higher. The sector has been beset by issues such as poor supplies of personal protective equipment, while the fragmented nature of the system has made coordination challenging. Many of these issues have deep roots and precede the pandemic.

Attention has inevitably turned to the question of whether the adult social care sector is adequately funded. While money is at the heart of many issues, extra money needs to be accompanied by reforms to improve the system for all those who need social care and the people who care for them.

Problems in the adult social care market

In the NHS most care is free at the point of use, state-funded and, usually, delivered by organisations in the public sector. Adult social care, by contrast, is a far more complicated mix of state-funded and privately financed care, provided by thousands of different organisations, most of which are independently-owned businesses, at prices determined by local market forces and the funding available to local authorities.

If the adult social care market worked well, as the Competition and Markets Authority (CMA) has explained in the case of care homes, it would match supply and demand, and people would make well-informed choices about how their care needs are met. Those working in the sector would be appropriately recompensed for their skills, the industry would be financially sustainable, providers would become more efficient and investment in the sector would continue.

However, the CMA concluded there were broad problems in the care home market. These problems are likely extend to other areas of adult social care provision, such as home care. The Health Foundation has identified issues with access, quality, workforce resilience and provider sustainability. Examples include:

  • Lack of public understanding, service availability and choice for care users, with complaints of ‘care deserts’ in some parts of England and an undersupply of services (such as housing with care).
  • Worrying rates of providers going out of business or leaving the market, including some high profile and hard-to-replace providers, with implications for continuity of care.
  • Problems with quality of care. While most of the care provided is good, one in six services still fall below the required quality standard set by the CQC, with a residue of providers that neither improve nor exit the market.
  • A failure to scale up some successful and high-quality types of provision (such as Shared Lives, for instance).
  • High turnover and vacancy rates among the care workforce, as the sector struggles to compete with other industries on pay and conditions.
  • Additional pressure on NHS services and family carers arising from under-provision of social care services.

On top of these issues – and perhaps even more fundamentally – there are continuing questions about whether the range and type of services that the market provides effectively meet the principles of personalisation and wellbeing at the heart of the Care Act 2014.

What’s the usual reaction to these problems?

There are two frequent responses to these problems. The first is to blame them on the very existence of a private market and therefore argue for full scale nationalisation. However, other countries, such as the Netherlands, have a social care system that works reasonably well with private provision, so it’s not clear this in itself is the problem. The second response is to argue that simply increasing state funding will resolve most problems.

While increased funding is needed, it is not the only requirement. For instance, if the reason some low-quality provision persists is that social care users don’t have the information they need to choose the best quality care, more funding will not necessarily solve this. These and other so-called market failures – such as a lack of planning owing to uncertainty over how much care will be needed and costs to society if people aren’t able to arrange appropriate care (eg the impact on unpaid carers or the NHS) – mean there is likely to be a case for further government intervention or regulation. The question is therefore how to respond to these failures in order to improve the planning, commissioning and provision of social care.

Overcoming these endemic challenges

How, then, do we reform the social care market? A first step is to understand it better. There is a dearth of timely data about the social care market generally, and a lack of knowledge about self-funders in particular (those who pay their own fees make up around 50% of care home users). There are some signs in a recent health and social care white paper that the government is addressing this problem, but more is needed.

To build an understanding of the adult social care sector, the following sorts of questions need to be tackled:

  • What does good care look like and is adequate information on quality available? How does quality care differ from the perspective of service users, carers, local authorities, the NHS?
  • Where are the main gaps in service provision and what causes them?
  • How do we ensure there are enough social care workers, sufficiently trained and fairly paid, to meet people’s care needs in the years ahead?
  • What has been the impact of marketisation of social care – a policy pursued since the 1980s – on price, quality and efficiency?
  • What level of capital investment (in buildings, for example) is needed in the sector, where should it come from and how do we make sure it happens?
  • How does the self-funder market work in comparison with the publicly funded market? Is one more effective than the other and how do they interact?
  • What is the extent of technological innovation and what causes difficulties in scaling them up?

To find solutions to the endemic failures of the current adult social care market, the Health Foundation’s REAL Centre and The King’s Fund are scoping a combined programme of work. We welcome contributions and engagement from others working in the sector to help answer these questions. Get in touch with us or sign up for updates from the REAL Centre to find out more about this project and our wider work.

Omar Idriss is a Senior Economist and Stephen Rocks (@rocks_stephen) is an Economist at the Health Foundation, and Simon Bottery (@blimeysimon) is a Senior Fellow at The King’s Fund.

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