Written evidence submitted by the Department for Health and Social Care (ASC0128)

Written evidence from the Department of Health and Social Care for the House of Commons Health and Social Care Committee inquiry into the ‘Cost of inaction on Adult Social Care reform’

Foreword

The Department of Health and Social Care (DHSC) welcomes this inquiry and the opportunity to collaborate with the Health and Social Care Select Committee to contribute towards building consensus for long-term reform in Adult Social Care (ASC). The questions asked in this inquiry include important areas for discussion and we have sought contributions from other relevant government Departments to inform our response.

In response to the questions: ‘How much is inaction on adult social care reform costing the NHS and local authorities, and what impact does this have on patients and the public?’ and ‘What NHS and local authority service reforms are not happening as a result of adult social care pressures, and what benefits are patients and the public missing out on?’ this note discusses the benefits of adult social care to individuals and their families, and the positive impacts that adult social care has on the services provided by both local authorities and the NHS.

In response to the question of ‘What is the cost of inaction to individuals and how might people’s lives change with action on adult social care reform?’ this note acknowledges the various inherited challenges the system is currently facing. These challenges include long waiting lists for care assessments, insufficient investment in prevention, and too many workforce vacancies.

In response to the question of ‘Where in the system is the cost of inaction on adult social care reform being borne the most?’ this note outlines the importance of adult social care services and the value of care where the impacts of inaction are being felt acutely.

In response to the question of ‘What contribution does adult social care make to the economy and HM Treasury and how might this change with action on reform?’ this note outlines the contribution that adult social care provides to the economy, including through supporting unpaid family carers, supporting working age disabled adults to find employment, and the valuable contributions of the adult social care. Driving innovation and adoption of new technologies can also contribute to productivity within the adult social care sector.

In response to the question ‘To what extent are the costs of inaction on adult social care reform considered by the Government when evaluating policies, including within the Budget and Spending Reviews? How should these costs be assessed and evaluated?’ this note outlines government considerations when making spending decisions, including at the recent Autumn Budget.

Introduction

1. This government recognises the vital importance of adult social care in nurturing local communities and helping people live independent and fulfilling lives. Adult social care has the power to improve the quality of life among older adults, help working age disabled people to participate in society and access employment, as well as support unpaid family carers.
2. This government inherited an adult social care system in crisis. People are not getting the right care and support they need, the sector struggles to recruit and retain a workforce of the right size with the right skills, there are delays to hospital discharge, and there are significant challenges placed on unpaid family carers. As highlighted by Lord Darzi’s report in recent decades “Social care has not been valued or resourced sufficiently, which has both a profound human cost and economic consequences”. By 2038-39, almost 400,000 more people are expected to need the support of long-term adult social care than today – that’s a 39% increase[1]. Skills for Care estimate that the adult social care workforce will need to rise by 29% to meet population projections by 2040[2].
3. The government also inherited the undeliverable commitment to deliver charging reforms in October 2025, which would cost nearly £1bn next year, rising to £4bn per year by the end of the decade. The previous government had not guaranteed the money to deliver these reforms and did not adequately prepare for them. As such it was impossible to implement charging reform in full by next October.
4. The adult social care sector needs reform that stands the test of time. We want to coproduce a plan with people who draw on care and support, their families, and staff and providers who deliver adult social care. We need to build cross-party consensus on a long-term solution to the challenges facing adult social care. We will develop a long-term plan for a National Care Service that sits alongside the 10 Year Plan for Health.
5. As the government works towards long-term reform, we are taking steps to improve the experiences of those drawing on adult social care and raise care quality. Recognising the importance of our committed and skilled social care workforce, we are rolling out the first ever career pathway for care workers and improving the training available to our workforce to build the skills we need for high quality, person-centred care. In addition to this, we have introduced legislation for the first ever Fair Pay Agreement to ensure care workers are rewarded and recognised for their crucial work. These measures are essential to fairly value the workforce and provide them with the skills and training needed to enhance the quality of care that people experience.
6. DHSC is also building on progress to digitise care records and boost adoption of care technologies, such as falls tech, to help people live safely and independently in their homes for longer. We have also launched the first national system to collect person-level social care data, providing better insight into how people's care is being delivered across health and care, enabling improved and tailored care.
7. The government is developing plans to move towards a Neighbourhood Health Service model, in which the NHS will work much more closely with local authorities, social care providers and the voluntary sector to provide more proactive, person-centred care in local communities. This will mean more integrated health and social care, particularly for people with complex health and care needs, helping people to live independently for as long as possible and reducing the risk of needing to spend unnecessary time in hospital or in long-term residential or nursing care.
8. The government recognises the importance of adequate funding for local government so councils can fulfil their adult social care duties. We are providing a projected real-terms uplift in core local government spending power by approximately 3.2%, as well as up to £3.5 billion of additional funding available for social care authorities.
9. At the Autumn Budget 2024, the government also bolstered its support for adult social care, announcing a 13.8% increase in the Disabled Facilities Grant from 2024-25 to 2025-26. This was alongside the largest ever increase in the Carer’s Allowance earnings limit from £151 a week to £196 - the equivalent of 16 hours at the National Living Wage.
10. Together, through extensive collaboration and codesign, we will establish a clear direction for a National Care Service that can meet the demands of an ageing population and where everyone who requires social care services can receive personalised, high-quality care and support.

The case for action & the impact of inaction

Challenges with the current system

11. The government recognises that the adult social care system faces significant challenges. People are not receiving the necessary standard of care, meaning their needs often go unmet. This puts pressure on other services, including the NHS. The system is failing to meet the needs of those who rely on it, with the 2023 British Social Attitudes survey finding only 13% of the public are satisfied with adult social care[3]. The system is in need of long-term reform to tackle the biggest challenges. Some key challenges include:

• Demand: With the population ageing and people living longer in ill health, there are more complex demands for care. According to Census data, the number of people aged 65 and over in England and Wales increased from 9.2 million in 2011 to over 11 million in 2021, with the proportion of people aged 65 years and over rising from 16.4% to 18.6%[4]. The Care Policy and Evaluation Centre at the London School of Economics projects that, as a consequence of demographic pressures, by 2038-39, almost 400,000 more people are expected to need the support of long-term adult social care than today – a 39% increase[5].
• Access: Despite an ageing population, we have seen a long-term trend of declining access to publicly funded adult social care. Lord Darzi's report indicates that squeezed budgets have meant that publicly funded adult social care is now being provided for fewer people. When people go without the care or support they need, this can put pressure on other services, including the NHS. There is an opportunity to address this trend by expanding adult social care services and improving coordination with NHS services, aiming to reduce unmet need and improve long-term outcomes for individuals. People’s needs are also often met too late, leading to higher costs for formal care as their needs have escalated by the time they receive support.
• Waiting lists: For the first time, over 2 million requests for adult social care support were received by local authorities in 2022-23[6]. Long waiting lists for both social care assessments and care packages once deemed eligible for adult social care, can prevent individuals from accessing timely care, leading to a backlog that can lead to deterioration of needs and contribute to unplanned hospital admissions.
• Workforce: The workforce faced an unprecedented reduction in 2021, and challenges remain regarding high turnover and limited career progression that impact the capacity of the adult social care workforce. Although improving, vacancy rates in the adult social care workforce remain more than twice the national average for other sectors (8.3% or 131,000 vacancies on any given day in 2023-24). Furthermore, turnover rates remain as high as 24.2% in 2023-24 – with implications for the quality and continuity of care individuals receive and increasing provider costs. While we are enhancing training opportunities and have introduced the first career pathway for the adult social care workforce, as of 2023-24 less than half (44%) of direct care staff held a relevant qualification at level 2 or higher[7].
• Unpaid family carers: There are approximately 4.7 million unpaid family carers in England according to the 2021 Census[8], with an increase in the proportion of unpaid family carers providing 20 to 49 hours and 50+ hours of unpaid family care per week since 2011[9]. Many carers report a lack of adequate recognition, resources, and support, leaving them to shoulder physical, emotional and financial challenges. Lord Darzi’s Review of the NHS emphasised the need for a fresh approach to empower unpaid family carers and improve outcomes for those they care for. Strengthening the visibility and support for unpaid family carers is essential to creating a sustainable health and social care system.
• Quality and standards: 83% of all social care settings were rated ‘Good’ or ‘Outstanding’ on 1 October 2024, but although data is limited, we know reports of poor-quality care are too common[10]. Standard ‘time and task’ commissioning can lead to rushed 15-minute visits, where people go too long without the connections and relationships that are essential for an enriching life. A focus on cost savings over outcome-based commissioning is exemplified by low fees that in many local authorities fall significantly short of meeting the full economic cost of providing care.   

12. The government recognises the significant pressures that local government is facing, including the challenge of meeting the care and support needs of their local populations. The government is aware that the changes to employer National Insurance contributions and increases to National Living Wage announced at the Autumn Budget are going to increase costs for providers and local authorities. Long-term reform of adult social care should aim to free up more time and resources within local authorities that will support our Health mission shifts from hospital to home and treatment to prevention - whether this be through greater investment in prevention to reduce the demand for care, or managing their ‘front-door’ more effectively to give individuals and their families information and advice on other support available to other services.

Impact on NHS:

13. Lord Darzi’s Review reveals pressing issues in our health and care system. For instance, too many people remain in hospital beyond the point at which they no longer need acute care, which can lead to worse outcomes for individuals and contributes to problems of hospital flow. In September, an average of 12,500 patients per day were medically fit for discharge but had not yet been discharged from hospital. This accounted for 13.4% of acute bed capacity[11].
14. A well-functioning adult social care system can reduce pressures on NHS services and improve patient outcomes, both by helping prevent avoidable hospital admissions and by supporting timely and effective discharge from hospital for people with more complex needs. This requires a "home-first" approach and strong coordination between health and social care.

Social contribution of adult social care

15. Adult social care provides a vital service to older people and disabled people with a care and support need, as well as their families. High quality social care offers substantial benefits to individuals and the public by enabling independence, promoting wellbeing, and supporting people with activities of daily living.
16. Adult social care is not just about older people. The government recognises that those of working age drawing on support have different ambitions and face different challenges to older adults. As of March 2024, 41% of local authority-arranged or provided long-term care users were working age (aged 18 to 64)[12]. When designed with people and working effectively, adult social care can help people to continue to participate in society while living with a physical or mental health condition, to rejoin communities they may have been cut off from, and supports family carers. This government wants to better support working age disabled people to participate in society, including in paid work where this best meets an individual’s personal ambitions. The voices of working age disabled adults will be crucial in building consensus on the long-term reform needed to create a National Care Service. 
17. Think Local Act Personal (TLAP) is an important organisation, which DHSC have supported with funding. TLAP represent people with lived experience of social care, advocating for personalised, community-based support. They have worked extensively with people with lived experience of social care to develop their ‘Making it Real’ framework, which outlines a set of statements that describe what good care and support looks like, and how it can benefit people[13]. Some of their ‘I statements’ include:
• I can live the life I want and do the things that are important to me as independently as possible.
• I have a place I can call home, not just a ‘bed’ or somewhere that provides me with care.
• I know about the activities, social groups, leisure and learning opportunities in my community, as well as health and care services.
• I have opportunities to learn, volunteer and work, and can do things that match my interests, skills and abilities.
• I can keep in touch and meet up with people who are important to me, including family, friends and people who share my interests, identity, and culture.
• I am supported by people who see me as a unique person with strengths, abilities, and aspirations.
18. These ‘I statements’ demonstrate some of the many ways adult social care contributes to people’s lives, helping them contribute to society and enabling their independence.
19. Adult social care also has an important role in relieving pressure on other public services such as Department for Work and Pensions (DWP) benefits through reducing isolation and encouraging participation in the community and contributes to HMG’s Growth Mission by encouraging participation in voluntary or paid work where it aligns with an individual’s aspirations.  

Economic contribution of adult social care

20. Adult social care not only plays a crucial role in supporting people in society but also supports our wider economy. Adult social care has an important role to play in supporting people drawing on care and support, as well as unpaid carers, to be economically active and in paid employment where this aligns with an individual’s ambitions. As part of our approach to Mission-led government, DHSC will work with DWP to explore how best to support working age disabled people.
21. Meanwhile, with an estimated 1.59 million people, the adult social care workforce is equivalent to around 5% of all adults in employment in England, as of 2023-24[14]. The adult social care workforce is larger than the workforce of the NHS, construction, transport or food and drink service industries[15]. With the workforce being geographically dispersed across the country and relatively low paid, the 6.7% increase to the National Living Wage (NLW) from April 2025 will support a significant proportion of the workforce.
22. Low pay constrains economic growth through lowering the consumption of workers, providing insufficient incentives for engagement and effort, and disincentivising investments in human capital. Higher pay may allow the adult social care workforce to increase their consumption and improve their standard of living. Low-income groups such as care workers have a higher marginal propensity to consume than the median household. A transfer in the form of additional pay would therefore be expected to generate a more positive effect on overall economic output than the median household. Increasing pay in adult social care can have a small but positive effect on productivity through higher motivation, a greater incentive to invest in human capital (and therefore increase productivity) and improved recruitment and retention.
23. This is why the government is committed to introducing the first ever Fair Pay Agreement (FPA) for the adult social care sector. The recently-introduced Employment Rights Bill establishes a framework for the FPA, through which an agreement for the adult social care sector can be negotiated and reached by employers, worker representatives and others in partnership. Therefore, an FPA can improve pay and conditions in the sector, and may allow the adult social care workforce to increase their consumption and improve their standard of living. It will also contribute towards improving their economic security and improve rates of recruitment and retention for care providers. This is crucial as high staff turnover undermines workforce capacity, leading to inconsistent and lower-quality care for those who rely on these services.
24. Increased pay in the sector is likely to lead to increased costs to the Exchequer, which will be subject to consideration by DHSC, Ministry of Housing, Communities & Local Government (MHCLG) and HM Treasury in the usual way. The extent of this, and how the costs are shared, depends on policy design and the outcome of negotiations, taking into account the objective of affordability for businesses, local authorities and self-funders.

25. Supporting unpaid carers is a cross-government policy. Adult social care, along with financial support provided by DWP and assistance to balance work and care provided by Department for Business and Trade (DBT), also supports those who provide unpaid care for their family and friends, financially and otherwise. There are an estimated 4.7 million people in England providing unpaid care. From April 2025, the government will increase the Carer's Allowance weekly earnings limit from £151 a week to £196 - the equivalent of 16 hours at the National Living Wage. This represents the largest increase in the earnings limit since Carer’s Allowance was introduced in 1976. This means carers can earn up to £10,000 a year whilst still retaining Carer's Allowance - this is around an additional £2,000 a year.
26. The Government is also committed to reviewing the implementation of Carer’s Leave and examining the benefits of introducing paid Carer’s Leave. The Employment Rights Bill includes provisions which will support all employees to achieve a better work life balance by making flexible working the default unless it is not reasonably feasible. This stands to make a particular difference to people combining work with unpaid care. Together, the financial and employment support provided to eligible unpaid family carers could make an important contribution to individuals.

Government Action

27. The government inherited an undeliverable commitment to deliver reforms to the adult social care charging system in October 2025, which would have cost nearly £1bn next year, rising to £4bn per year by the end of the decade. The previous government had not guaranteed the money needed to deliver these reforms and did not adequately prepare for them. This meant it was impossible to implement these reforms in full by next October.

Spending decisions

28. When determining spending priorities, including at Budgets and Spending Reviews, the government evaluates trade-offs across departments, with productivity and economic growth being critical factors in these decisions. The Spending Framework is designed to ensure public spending is controlled in support of the government’s objectives and provides good incentives for departments to manage spending well to provide value for money for taxpayers. The government has published an Impact Assessment which provides a detailed assessment of likely impacts, including financial, of the 2024 Autumn Budget.

Budget 2024 announcements

29. The government recognises the importance of adequate funding for local government so local authorities can fulfil their adult social care duties and meet the care and support needs of those in their local area. We are providing a projected real-terms uplift in core local government spending power by approximately 3.2%, as well as up to £3.5 billion of additional funding available for social care authorities. This includes £1.3 billion of new grant funding, as well as Council Tax flexibilities and the adult social care precept, which combined will raise up to £1.6 billion. We expect local authority spending on adult social care to increase to reflect demand and cost pressures.
30. To directly support our Health Mission to keep more people independent in their homes, we are providing an additional £86 million in 2025-26 for the Disabled Facilities Grant, totalling £771 million, to enable around 7,800 further home adaptations, promoting safety and independence for people with care needs and reducing hospital admissions.
31. As above, from April 2025, the government will increase the Carer's Allowance weekly earnings limit from £151 a week to £196 - the equivalent of 16 hours at the National Living Wage. This represents the largest increase in the earnings limit since Carer’s Allowance was introduced in 1976 and showcases the government’s commitment to supporting the unpaid family carers upon which the sector relies so heavily.

Adult social care reforms

32. Reform cannot just be about more money; the government needs to ensure that resources are used most effectively and efficiently to deliver the best outcomes for people. We are beginning to use our existing levers better, as well as developing new levers, to drive improvement and better outcomes within existing resources. These long-term reforms will contribute towards building a National Care Service, based on consistent national standards.
33. When it comes to new levers, we have introduced legislation (the Employment Rights Bill, which is currently at committee stage) to pave the way for the first ever Fair Pay Agreement (FPA) for care workers, so they are recognised and rewarded for the hugely important work they do.
34. Care professionals are essential to those who draw on care and support, helping them maintain their quality of life, independence and connection to the things that matter. High staff turnover undermines continuity and stability, leading to inconsistent and low-quality care for those who rely on these services. Implementing the first ever Fair Pay Agreement in adult social care will help address this issue by contributing towards the workforce’s financial security and improving rates of recruitment and retention for care providers, enabling better continuity of care for those who need it.
35. These agreements will work to empower worker representatives, trade unions, employers, and others in partnership to negotiate pay and terms and conditions - an important part of building towards a National Care Service. This is part of this government’s commitment to bolstering the workforce nationally and reducing our reliance on international recruitment. Changes to the visa sponsorship rules have been announced to maintain the integrity of the visa and immigration system and crack down on the exploitation of vulnerable workers in sectors like adult social care. This government is working to ensure that those who would seek to abuse the system face strong consequences.
36. Alongside the FPA, the government will continue to develop the adult social care workforce through professionalisation and skills. This includes the Care Workforce Pathway, where we are rolling out the first ever career pathway for care workers to recognise their professionalism. This work is reinforced by further funding that will support workforce training, and quality assurance work to ensure the training provided is of good quality. This action means that care workers can develop the skills they need to provide the best possible care and support, as well as equip them with the skills needed to progress in their careers.
37. New national standards will aim to improve consistency of care across the country, helping to build trust and confidence for those drawing on care and their families, as well as those delivering care including unpaid family carers. These will be co-produced with the sector and those using the social care system, to hold commissioners and providers of social care to account for delivering the outcomes that citizens should expect. We will also be working with the Care Quality Commission (CQC) to consider options for improving the quality of care, and the financial and workforce practices of regulated care providers.
38. We are also building on good progress by driving digitisation and care technology uptake to help people live independently and safely, improving their care and quality of life. With the right technology, people can remain independent at home for longer, reducing the risk of falls and other health issues. We have rolled out Digital Social Care Records to over 70% of providers. These save at least 20 minutes per shift per care worker and enable appropriate and secure access to GP data for personalised, safer care.
39. We are building the evidence base for new care technologies, including falls prevention and detection technology, which can significantly reduce wider system pressures including ambulance callouts and hospital admissions. Where there is more established evidence, we know that certain falls prevention initiatives have the potential to generate strong returns on investment, with every £1 spent on lower-cost home adaptations generating an estimated £7 in societal return on investment.
40. DHSC’s work with the CQC on its implementation of the Dash Review recommendations also continues, which improves and evolves their assessments of local authorities’ delivery of their Care Act duties. These assessments were launched last year, and will help us identify and share best practice, which will help local authorities improve their delivery of adult social care for those who draw on care and support. If the CQC identifies a local authority has failed or is failing to discharge its functions under the Care Act to an acceptable standard, the Secretary of State has powers to intervene. Alongside this, we are working with the CQC to ensure that the delivery of provider inspection is fit for purpose, keeping individuals in receipt of care and support safe.

Neighbourhood Health

41. The government is committed to reforming NHS and social care services to provide more care closer to home and increase the focus on prevention so that people are able to maintain their health and independence for as long as possible. Through the development of a Neighbourhood Health Service in all local areas, we will ensure that health, social care and other services, including those provided by the voluntary sector, work together to provide more integrated, proactive and person-centred care, particularly for people with complex health and care needs.
42. Local authorities now have person-led data on their interactions with services and the care provided to people in receipt of local authority funded care. By improving the quality of our data and putting in place the foundations for seamless information sharing between services, we can offer more proactive and integrated care to individuals, supporting the delivery of ‘Neighbourhood Health’ and ‘Home First’ care models. This is crucial for enabling care workers and health professionals to share information in a secure, fast, and efficient way reducing discharge delays and medication errors. We will work with councils, Integrated Care Systems, and the amazing home-grown businesses paving the way internationally on innovative care technology, to expand these benefits across social care.
43. The government’s health mission includes a commitment to “task regulators with assessing the role social care workers can play in health treatments and monitoring”, as part of our ambition to professionalise the adult social care workforce. We have recently published revised delegation guidance (“guiding principles”) following testing and evaluation with local projects. This guidance provides a foundation for delegated healthcare activities across the regulatory, legislative and governance landscape for health and care systems, aligning with professional codes of conduct and national standards.
44. As people are living longer, often with complex health and care conditions, this guidance can support local, integrated approaches to workforce planning and consider how to effectively meet local population need, with decision-making based around what matters most to the individual.
45. Neighbourhood health will mean different organisations across the NHS, social care, other statutory services, and the voluntary sector working together with members of the communities they serve to proactively identify, support and manage people’s health and care needs in their neighbourhoods. The workforce will be at the heart of these changes, with new opportunities to learn and share expertise across professional and organisational boundaries.
46. We will also explore how to reform the Better Care Fund to achieve a more effective way for the NHS and local authorities to agree how to fund integrated health and social care services for people with complex needs. 

Local Government reforms

47. MHCLG has set out its ambition to reform the local government finance system in Phase 2 of the Spending Review. This will be a long-term programme of recovery and reform. The plan sets out to update and improve the approach to funding allocations within the Local Government Finance Settlement by redistributing funding to ensure that it reflects an up-to-date assessment of need and local resources.
48. MHCLG will start with a deprivation-based approach in 2025-26 with additional funding targeted to the places that need it most. Broader redistribution of funding will follow through a multi-year settlement from 2026-27. This will provide long-term certainty and enable local government to focus on its priorities – delivering for residents and providing vital front-line services that people rely on every day. 

Long-term plan for adult social care

49. While this action represents meaningful progress, the government needs long-term reform that properly addresses the challenges facing adult social care improving the quality and standards for everyone who uses it. This will take time and that is why we need a long-term plan that is not just about fixing today’s system but transforms adult social care into a public service that meets the needs and expectations of the public long-term.
50. We must build cross-party consensus to deliver this, as those drawing on delivering adult social care have suffered through inaction and stalemate of successive Parliaments for too long. We also know how important it is to coproduce our long-term plans with people using the social care system, their families, and those who we rely on to deliver social care. We will develop a long-term plan for a National Care Service that sits alongside our 10 Year Plan for Health. This plan will help to deliver on our vision for ‘home first’ neighbourhood-based health and care.

December 2024